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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 20, 2001
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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NOTE EXCHANGE OFFER
ON
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMKOR TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 3674 23-1722724
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
1345 ENTERPRISE DRIVE
WEST CHESTER, PA 19380
(610) 431-9600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
KENNETH T. JOYCE
CHIEF FINANCIAL OFFICER
AMKOR TECHNOLOGY, INC.
1345 ENTERPRISE DRIVE
WEST CHESTER, PA 19380
(610) 431-9600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
BRUCE M. MCNAMARA, ESQ.
THOMAS I. SAVAGE, ESQ.
LINDA Y. SUNG, ESQ.
AISHA KELLEY, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE(1) REGISTRATION FEE
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9.25% Senior Notes due 2008... $500,000,000 100% $500,000,000 $125,000
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Total............... $500,000,000 100% $500,000,000 $125,000
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER AND SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED JUNE 20, 2001
PRELIMINARY PROSPECTUS
AMKOR TECHNOLOGY, INC.
OFFER TO EXCHANGE
ALL OUTSTANDING 9.25% SENIOR NOTES DUE FEBRUARY 15, 2008
FOR 9.25% SENIOR NOTES DUE FEBRUARY 15, 2008,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
The exchange offer will expire at 5:00 P.M., New York City time, on
, 2001, unless
we extend the deadline.
TERMS OF NEW SENIOR NOTES
- - MATURITY: The new Senior Notes will mature on February 15, 2008.
- - INTEREST PAYMENTS: Interest will be payable in cash in arrears semi-annually
on February 15 and August 15 of each year, commencing on August 15, 2001.
- - RANKING: The new Senior Notes will be our unsecured senior debt and rank
equally with all of our existing and future unsecured senior debt and rank
senior to all of our existing and future debt that expressly provides that it
is subordinated to the new Senior Notes, including our 10.5% Senior
Subordinated Notes due May 1, 2009, our 5.00% Convertible Subordinated Notes
due 2007 and our 5.75% Convertible Subordinated Notes due 2006. The new Senior
Notes will be effectively subordinated to all of our existing and future
secured debt, if any, to the extent of such security and to all existing and
future debt and other liabilities of our subsidiaries.
- - REDEMPTION: We may not redeem the new Senior Notes prior to maturity.
- - MANDATORY OFFER TO REPURCHASE: If we sell certain assets or experience
specific kinds of changes of control, we must offer to repurchase the new
Senior Notes at the prices and on the terms specified herein.
INVESTING IN THE SENIOR NOTES INVOLVES RISKS.
SEE "RISK FACTORS" ON PAGE 9.
TERMS OF THE EXCHANGE OFFER
- - We will exchange all old Senior Notes that are validly tendered and not
withdrawn prior to the expiration of the exchange offer.
- - We will not receive any proceeds from the exchange offer.
- - We will issue the new Senior Notes promptly after the expiration of the
exchange offer.
- - You may withdraw tenders of original Senior Notes at any time prior to the
expiration of the exchange offer.
- - We believe that the exchange of old Senior Notes will not be a taxable event
for federal income tax purposes, but you should see "Federal Income Tax
Considerations" on page 62 for more information.
WE ARE MAILING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL ON ,
2001.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the new Senior Notes or determined
that this prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
The date of this prospectus is , 2001
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TABLE OF CONTENTS
PAGE
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Available Information............................ ii
Documents Incorporated by Reference.............. ii
Disclosure Regarding Forward-Looking
Statements..................................... iii
Use of Certain Terms............................. iii
Prospectus Summary............................... 1
Risk Factors..................................... 9
Use of Proceeds.................................. 12
Our Indebtedness and Financing Agreements........ 12
PAGE
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The Exchange Offer............................... 14
Description of the Notes......................... 22
Additional Terms of the New Senior Notes......... 61
Federal Income Tax Considerations................ 62
Plan of Distribution............................. 62
Legal Matters.................................... 63
Experts.......................................... 63
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THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT US THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS DOCUMENT. THIS
INFORMATION IS AVAILABLE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST FROM:
AMKOR TECHNOLOGY, INC.
1345 ENTERPRISE DRIVE
WEST CHESTER, PA 19380
ATTN: KEVIN HERON, ESQ.
PHONE: (610) 431-9600
In order to ensure timely delivery of documents, any request for documents
should be made no later than five (5) business days prior to the expiration date
of the exchange offer.
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AVAILABLE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-4 covering the new Senior Notes to be issued in the exchange
offer. This prospectus does not contain all of the information included in the
registration statement. Statements contained in this prospectus concerning the
provisions of any document are not necessarily complete. You should refer to the
copy of these documents filed as an exhibit to the registration statement or
otherwise filed by us with the SEC for a more complete understanding of the
matter involved. Each statement concerning these documents is qualified in its
entirety by reference to the copy of the document filed by us with the SEC.
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended, and in accordance with the requirements of the Exchange
Act, we file reports and other information with the SEC. You may read and, for a
fee, copy any document that we file with the SEC: (1) at the public reference
facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, (2) at the regional office of the SEC
located at Seven World Trade Center, 13th Floor, New York, New York 10048 or (3)
at the regional office of the SEC located at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of these
documents may also be obtained at prescribed rates from the Public Reference
Section of the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also obtain
the documents that we file electronically from the SEC's web site at
http://www.sec.gov. Information concerning us is also available for inspection
at the offices of the Nasdaq National Market, Reports Section, 1735 K Street,
N.W., Washington, D.C. 20006.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the SEC by us pursuant to the Exchange
Act are incorporated by reference in this prospectus:
1. Our Annual Report on Form 10-K for the fiscal year ended December 31,
2000, filed with the SEC on April 2, 2001, the amendment thereto filed with
the SEC on April 30, 2001 and the amendment thereto filed with the SEC on
May 16, 2001;
2. Our Quarterly Reports on Form 10-Q for the quarter ended March 31,
2001, filed with the SEC on May 15, 2001;
3. Our Current Report on Form 8-K, filed with the SEC on May 11, 2001,
our Current Report on Form 8-K filed on May 3, 2001, our Current Report on
Form 8-K filed on April 2, 2001, our Current Report on Form 8-K filed on
February 16, 2001, our Current Report on Form 8-K filed on February 8, 2001
and our Current Report on Form 8-K filed on February 2, 2001; and
4. Our Definitive Proxy Statement on Schedule 14A filed on May 18, 2001.
All documents filed by us with the SEC pursuant to Sections 13(a) and (c),
14, or 15(d) of the Exchange Act after the date of this prospectus and prior to
the termination of the offering of the new Notes offered pursuant to this
prospectus shall be deemed to be incorporated by reference in this prospectus
and to be a part of this prospectus from the date when we file such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference in this prospectus shall be deemed to be modified or superseded for
purposes of this prospectus to the extent that a statement contained in this
prospectus or in any other subsequently filed document which also is or is
deemed to be incorporated by reference in this prospectus modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
As used herein, the term "prospectus" mean this prospectus, including the
documents or portions incorporated or deemed to be incorporated in this
prospectus by reference, as the same may be amended,
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supplemented or otherwise modified from time to time. Statements contained in
this prospectus as to the contents of any contract or other document referred to
herein do not purport to be complete, and where reference is made to the
particular provisions of a contract or other document, such provisions are
qualified in all respects by reference to all of the provisions of the contract
or other document.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. You may find these statements under the sections entitled
"Summary" or "Risk Factors," or by the use of forward-looking terminology such
as "believe," "expect," "anticipate," "estimate," "plan," "project," "may,"
"will" or other similar words. We have based these forward-looking statements on
our own information and on information from other sources that we believe are
reliable. Our actual results may differ materially from those expressed or
implied by these forward-looking statements as a result of risk factors and
other factors noted throughout this prospectus. Given this level of uncertainty,
you should not place undue reliance on such forward-looking statements.
USE OF CERTAIN TERMS
All references in this prospectus to "Amkor," "we," "us," "our" or the
"company" are to Amkor Technology, Inc. and its subsidiaries. We refer to the
offering of the old Notes as the "Transaction." We refer to the Republic of
Korea, which is also commonly known as South Korea, as "Korea." We define
"EBITDA" in footnote (4) on page 8.
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PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. You should
read this prospectus in its entirety for specific terms of the new Senior Notes
that we are offering in exchange for the old Senior Notes.
AMKOR TECHNOLOGY, INC.
Amkor is the world's largest independent provider of semiconductor packaging
and test services. We believe that we are also one of the leading developers of
advanced semiconductor packaging and test technology. We offer one of the
industry's broadest integrated sets of packaging and test services, which are
the final procedures necessary to prepare semiconductor devices for further use.
Our customers outsource the packaging and testing of semiconductor chips to us
in order to benefit from our expertise in the development and implementation of
our technology and our advanced manufacturing capabilities. We also market the
wafer fabrication services provided by a foundry owned by Anam Semiconductor,
Inc. ("ASI"). Our customers include, among others, Agere Systems, Inc., Altera
Corporation, Infineon Technologies AG, Intel Corporation, LSI Logic Corporation,
Motorola, Inc., Philips Electronics N.V., ST Microelectronics PTE, Texas
Instruments, Inc. and Toshiba Corporation.
We generate revenues primarily from the sale of semiconductor packaging and
test services. In addition, we generate revenue by marketing the wafer
fabrication services performed by the foundry owned by ASI. Historically, we
performed packaging and test services at our factories in the Philippines and
subcontracted for additional services with ASI, which operated four packaging
and test facilities in Korea. In May 1999, we acquired K4, one of ASI's
packaging and test facilities, for $582.0 million. In May 2000, we acquired
ASI's remaining three packaging and test facilities, K1, K2 and K3, for a
purchase price of $950.0 million. In connection with our purchase of K1, K2 and
K3, we made an additional equity investment in ASI of $459.0 million, and as a
result we now own 42% of ASI. With the completion of our acquisition of K1, K2
and K3, we no longer depend upon ASI for packaging or test services, although we
continue to market ASI's wafer fabrication services.
We were incorporated in Delaware in 1997. Our principal offices are located
at 1345 Enterprise Drive, West Chester, PA 19380. Information contained in our
website does not constitute part of this prospectus. Our telephone number is
(610) 431-9600 and our website can be accessed at www.amkor.com.
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THE EXCHANGE OFFER
Old Senior Notes.............. On February 20, 2001, we completed the offering
of $500,000,000 aggregate principal amount of
our 9.25% Senior Notes due 2008 to Salomon
Smith Barney Inc. and Deutsche Banc Alex. Brown
Inc., as initial purchasers. The initial
purchasers sold the old Senior Notes to
"qualified institutional buyers" as defined in
Rule 144A under the Securities Act of 1933 or
outside the United States in accordance with
Regulation S under the Securities Act. We have
filed the registration statement of which this
prospectus is a part to comply with a
registration rights agreement between us and
the initial purchasers.
Exchange Offer................ We are offering to exchange the old Senior
Notes for new Senior Notes in the aggregate
principal amount of up to $500,000,000 provided
that the old Senior Notes are properly tendered
and accepted for exchange. We will issue the
new Senior Notes promptly after the expiration
of the exchange offer. If you are not
prohibited from participating in the exchange
offer and you do not tender your old Senior
Notes prior to the completion of the exchange
offer, you will have no further exchange rights
under the registration rights agreement.
Accordingly, any old Senior Notes that are not
tendered for exchange will continue to be
subject to restrictions on transfer. See "Risk
Factors -- Consequences of Not Tendering Old
Senior Notes."
Expiration Date............... The exchange offer will expire at 5:00 p.m.,
New York City time, on , 2001, or
on a later extended date and time as we may
decide.
Conditions to the Exchange
Offer......................... The exchange offer is subject to certain
customary conditions. The conditions are
limited and relate in general to proceedings or
laws that might impair our ability to proceed
with the exchange offer. As of the date of this
prospectus, none of these events had occurred,
and we believe their occurrence to be unlikely.
If any such conditions do exist prior to the
expiration date, we may take the following
actions:
- refuse to accept any old Senior Notes and
return all previously tendered old Senior
Notes;
- extend the duration of the exchange offer; or
- waive such conditions.
Procedures for Tendering Old
Senior Notes.................. If you wish to participate in the exchange
offer, you must complete, sign and date the
letter of transmittal and send it, together
with your old Senior Notes to be exchanged and
any other required documentation to State
Street Bank and Trust Company, as exchange
agent, at the address set forth in the letter
of transmittal. Brokers, dealers, commercial
banks, trust companies and other nominees may
tender old Senior Notes which they hold as
nominee
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by book-entry transfer. Questions regarding the
tender of the old Senior Notes or the exchange
offer, generally, must be directed to the
exchange agent.
Special Procedures
for Beneficial Owners......... If you are the beneficial owner of old Senior
Notes which are registered in the name of a
broker, dealer, commercial bank, trust company
or other nominee and you wish to tender the old
Senior Notes in the exchange offer, you should
contact such registered holder promptly and
instruct such registered holder to tender the
old Senior Notes on your behalf. If you wish to
tender on your own behalf, you must, prior to
completing and executing the letter of
transmittal and delivering the old Senior
Notes, either make appropriate arrangements to
register ownership of the old Senior Notes in
your own name or obtain a properly completed
bond power from the registered holder. The
transfer of registered ownership may take
considerable time and it may not be possible to
complete prior to the expiration date.
Guaranteed Delivery
Procedures.................... If you wish to tender your old Senior Notes and
your old Senior Notes are not immediately
available or you cannot deliver your old Senior
Notes, the letter of transmittal or any other
documents required by the letter of transmittal
to the exchange agent, or you cannot complete
the procedure for book-entry transfer, then
prior to the expiration date you must tender
your old Senior Notes according to the
guaranteed delivery procedures set forth in
"The Exchange Offer -- Guaranteed Delivery
Procedures."
Withdrawal Rights............. Tenders of old Senior Notes may be withdrawn at
any time before 5:00 p.m., New York City time,
on the expiration date by delivering a written
notice of such withdrawal to the exchange agent
in conformity with the procedures set forth
under "The Exchange Offer -- Withdrawal of
Tenders."
Acceptance of Old Notes and
Delivery of New Notes......... Subject to the satisfaction or waiver of the
conditions of the exchange offer, we will
accept for exchange any and all old Senior
Notes that are properly tendered in the
exchange offer before 5:00 p.m., New York City
time, on the expiration date. We will deliver
the new Senior Notes promptly following the
expiration date. If we do not accept any of
your old Senior Notes for exchange, we will
return them to you as promptly as practicable
after the expiration or termination of the
exchange offer without any expense to you.
Certain Tax Considerations.... The exchange pursuant to the exchange offer
should not result in the recognition of income,
gain or loss to you or to us for federal income
tax purposes. See "Federal Income Tax
Considerations" for a discussion of the
material federal income tax consequences of the
exchange offer.
Exchange Agent................ State Street Bank and Trust Company, the
trustee under the Indenture, is serving as
exchange agent in connection with the exchange
offer.
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CONSEQUENCES OF NOT EXCHANGING OLD SENIOR NOTES
If you do not exchange your old Senior Notes for new Senior Notes, you will
be unable to offer, sell or otherwise transfer your old Senior Notes except:
- in compliance with the registration requirements of the Securities Act and
any other applicable securities laws; or
- pursuant to an exemption therefrom; or
- in a transaction not subject to such securities laws.
Old Senior Notes that you do not exchange for new Senior Notes in the
exchange offer will continue to bear a legend reflecting such restrictions on
transfer. In addition, upon consummation of the exchange offer, you will not be
entitled to any rights to have old Senior Notes registered under the Securities
Act. We do not intend to register under the Securities Act any old Senior Notes
that remain outstanding after completion of the exchange offer (subject to
limited exceptions, if applicable).
To the extent that old Senior Notes are tendered and accepted in the
exchange offer, any trading market for old Notes that remain outstanding after
the exchange offers could be adversely affected. See "Risk
Factors -- Consequences of Not Tendering Old Senior Notes."
The new Senior Notes and any old Senior Notes that remain outstanding after
consummation of the exchange offer will vote together as a single class for
purposes of determining whether holders of the requisite percentage in
outstanding principal amount thereof have taken certain actions or exercised
certain rights under the Indenture.
TERMS OF NEW SENIOR NOTES
The exchange offer applies to up to $500,000,000 aggregate principal amount
of our old Senior Notes. The new Senior Notes will evidence the same debt as the
old Senior Notes and will be entitled to the benefits of the same indenture as
the old Senior Notes. The terms of the new Senior Notes are the same as the
terms of the old Senior Notes in all material respects except that the new
Senior Notes:
- have been registered under the Securities Act,
- do not include certain rights to registration under the Securities Act,
and
- do not contain transfer restrictions or terms with respect to additional
interest payments applicable to the old Senior Notes.
New Senior Notes Offered...... $500,000,000 in aggregate principal amount of
9.25% Senior Notes due 2008.
Maturity...................... February 15, 2008.
Interest...................... Interest on the new Senior Notes will accrue at
the rate of 9.25% per annum and will be payable
in cash in arrears semi-annually on February 15
and August 15 of each year, commencing on
August 15, 2001.
Ranking....................... The new Senior Notes will be our unsecured
senior debt and will have the same ranking as
the old Senior Notes:
N The new Senior Notes will be effectively
subordinated to all of our existing and
future secured debt, if any, to the extent of
such
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security and to all existing and future debt
and other liabilities of our subsidiaries,
including trade payables;
N The new Senior Notes will rank equally with
all of our existing and future unsecured
senior debt, including the old Senior Notes
and our 9.25% Senior Notes due 2006; and
N The new Senior Notes will rank senior to all
of our existing and future debt that
expressly provides that it is subordinated to
the Senior Notes, including our 10.5% Senior
Subordinated Notes due 2009 (the "Senior
Subordinated Notes") and our outstanding
5.00% Convertible Subordinated Notes due 2007
and our 5.75% Convertible Subordinated Notes
due 2006 (collectively, the "Convertible
Notes").
At March 31, 2001, the old Senior Notes were:
N effectively subordinated to $346.5 million of
senior secured debt and $300.0 million of
liabilities of our subsidiaries;
N ranked equally with our 9.25% Senior Notes
due 2006; and
N senior to $566.5 million of subordinated
debt, including our 10.50% Senior
Subordinated Notes due 2009, our 5.00%
Convertible Subordinated Notes due 2007, and
our 5.75% Convertible Subordinated Notes due
2003.
Mandatory Offer to
Repurchase.................... If we sell certain assets or experience a
Change of Control (as defined in the
Indenture), we must offer to repurchase the new
Senior Notes at the prices listed in the
section entitled "Description of Notes --
Repurchase at the Option of Holders -- Offer to
Repurchase Upon a Change of Control."
Basic Covenants of the old and
new Senior Notes Indenture.... We will issue the new Senior Notes under an
indenture (the "Indenture") with State Street
Bank and Trust Company, as Trustee. The
Indenture will, among other things, restrict
our ability and the ability of our subsidiaries
to:
N incur additional indebtedness;
N pay dividends, repurchase stock, prepay
subordinated debt and make investments and
other restricted payments;
N create restrictions on the ability of our
subsidiaries to pay dividends or make other
payments;
N engage in sale and leaseback transactions;
N create liens;
N enter into transactions with affiliates; and
N sell assets or merge with or into other
companies.
These covenants are subject to important
exceptions which are described in the section
entitled "Description of the Notes --" under
the heading "Certain Covenants."
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Registration Rights........... Holders of the new Senior Notes (other than as
set forth below) are not entitled to any
registration rights with respect to the new
Senior Notes. Pursuant to the registration
rights agreement among the initial purchasers
of the old Senior Notes and us, we agreed to
file an exchange offer registration statement
with respect to an offer to exchange the old
Senior Notes for the new Senior Notes. The
registration statement of which this prospectus
is a part constitutes such exchange offer
registration statement. Under certain
circumstances, certain holders of old Senior
Notes (including holders of old Senior Notes
who may not participate in the exchange offer)
may in certain circumstances require us to
file, and cause to become effective, a shelf
registration statement under the Securities Act
which would cover resales of old Senior Notes
by such holders.
Use of Proceeds............... We will not receive any proceeds from the
exchange offer.
RISK FACTORS
You should carefully consider all the information set forth in this
prospectus and, in particular, you should evaluate the specific risk factors set
forth under "Risk Factors," beginning on page 9, for a discussion of certain
risks involved in making an investment in the new Senior Notes.
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SUMMARY CONSOLIDATED FINANCIAL DATA
The following table sets forth our summary consolidated financial data for
the years ended December 31, 1998, 1999 and 2000 and for the three months ended
March 31, 2000 and 2001. The data for the years ended December 31, 1998, 1999
and 2000 have been derived from our audited consolidated financial statements,
and the data for the three months ended March 31, 2000 and 2001 and at March 31,
2001 have been derived from our unaudited consolidated financial statements. Our
audited and unaudited consolidated financial statements are incorporated by
reference into this offering memorandum. This summary historical financial data
should be read in conjunction with the information in "Management's Discussion
and Analysis of Financial Condition and Results of Operations" contained in our
Annual Report on Form 10-K for the year ended December 31, 2000 and our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2001 and our
consolidated audited and unaudited financial statements, including the notes
thereto.
The summary consolidated financial data below reflects the following
transactions on a historical basis: (i) our acquisition of K4 from ASI for
$582.0 million completed in May 1999, and (ii) our acquisition of K1, K2 and K3
from ASI for $950.0 million completed in May 2000, in each case together with
their related financings.
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------ -------------------
1998 1999 2000 2000 2001
---------- ---------- ---------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE)
INCOME STATEMENT DATA:
Net revenues................................................ $1,567,983 $1,909,972 $2,387,294 $554,811 $480,623
Cost of revenues -- including purchases from ASI............ 1,307,150 1,560,816 1,782,158 439,780 398,838
---------- ---------- ---------- -------- --------
Gross profit.............................................. 260,833 349,156 605,136 115,031 81,785
Selling, general and administrative......................... 118,392 144,538 192,623 41,897 53,994
Research and development.................................... 8,251 11,436 26,057 3,371 10,502
Amortization of goodwill and other acquired intangibles..... 1,454 17,105 63,080 6,362 21,912
---------- ---------- ---------- -------- --------
Operating income (loss)................................... 132,736 176,077 323,376 63,401 (4,623)
Interest expense, net....................................... 18,005 45,364 119,840 15,429 44,795
Foreign currency (gain) loss................................ 4,493 308 4,812 836 (1,310)
Other (income) expense, net(1).............................. 9,503 25,117 1,295 2,360 168
---------- ---------- ---------- -------- --------
Income (loss) before income taxes, equity in income (loss)
of investees and minority interest...................... 100,735 105,288 197,429 44,776 (48,276)
Provision (benefit) for income taxes(2)..................... 24,716 26,600 22,285 8,956 (5,310)
Equity in income (loss) of investees........................ -- (1,969) (20,991) 1,336 (26,248)
Minority interest(3)........................................ 559 -- -- -- --
---------- ---------- ---------- -------- --------
Net income (loss)(2)...................................... $ 75,460 $ 76,719 $ 154,153 $ 37,156 $(69,214)
========== ========== ========== ======== ========
Basic net income (loss) per common share.................... $ 0.71 $ 0.64 $ 1.06 $ 0.28 $ (0.45)
========== ========== ========== ======== ========
Diluted net income (loss) per common share.................. $ 0.70 $ 0.63 $ 1.02 $ 0.27 $ (0.45)
========== ========== ========== ======== ========
Shares used in computing basic net income per common
share..................................................... 106,221 119,341 145,806 130,872 152,185
Shares used in computing diluted net income per common
share..................................................... 116,596 135,067 153,223 138,538 152,185
PRO FORMA DATA (UNAUDITED):
Pro forma provision for income taxes(2)..................... $ 29,216
==========
Pro forma net income(2)..................................... $ 70,960
==========
Basic pro forma net income per common share(2).............. $ 0.67
==========
Diluted pro forma net income per common share(2)............ $ 0.66
==========
OTHER FINANCIAL DATA:
EBITDA(4)................................................... $ 241,252 $ 346,495 $ 648,006 $115,081 $103,423
Depreciation and amortization............................... $ 119,239 $ 180,332 $ 332,909 $ 54,612 $117,672
Capital expenditures........................................ $ 107,889 $ 242,390 $ 480,074 $104,082 $ 71,751
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MARCH 31,
2001
--------------
(UNAUDITED)
(IN THOUSANDS)
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 207,601
Working capital............................................. $ 262,886
Total assets................................................ $3,482,822
Total debt, including short-term debt and current portion of
long-term debt............................................ $1,838,026
Total liabilities........................................... $2,236,564
Stockholders' equity........................................ $1,246,258
- ---------------
(1) In 1999 we recognized a pre-tax loss of $17.4 million as a result of the
early conversion of $153.6 million principal amount of our 5.75% Convertible
Subordinated Notes due 2003.
(2) Prior to our reorganization in April 1998, our predecessor, Amkor
Electronics, Inc. ("AEI"), elected to be taxed as an S Corporation under the
Internal Revenue Code of 1986 (the "Code") and comparable state tax laws. As
a result, AEI did not recognize any provision for federal income tax expense
from January 1, 1994 through April 28, 1998. In accordance with applicable
Securities and Exchange Commission regulations, we have provided in our 1998
consolidated financial information the pro forma adjustments for income
taxes (unaudited) to reflect the additional U.S. federal income taxes which
we would have recorded if AEI had been a C Corporation during these periods.
(3) Represents ASI's 40% interest in the earnings of Amkor/Anam Pilipinas, Inc.
("AAP"), one of our subsidiaries in the Philippines. We purchased ASI's
interest in AAP with a portion of the proceeds from our initial public
offering in May 1998.
(4) We have calculated EBITDA by adding: (a) income (loss) before income taxes,
equity in income (loss) of investees and minority interest, (b) foreign
currency (gain) loss, (c) interest expense, net, (d) non-cash other (income)
expense, net and (e) depreciation and amortization. We have included data
concerning EBITDA because we understand that investors use it to evaluate
our historical ability to service debt. EBITDA is not determined in
accordance with U.S. GAAP. EBITDA is not indicative of cash flows from
operating activities, and you should not consider EBITDA in isolation, or as
an alternative to, or more meaningful than, measures of performance
determined in accordance with U.S. GAAP. In addition, EBITDA, as defined
here, may not be comparable to similarly titled measures used by other
companies.
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RISK FACTORS
You should carefully consider the risks described below and the other
information contained or incorporated by reference in this prospectus before
tendering your old Senior Notes for exchange. The risks and uncertainties
described below are not the only ones facing our company. Additional risks and
uncertainties that are presently unknown to us or that we currently deem
immaterial may also impair our business operations. We cannot assure you that
any of the events discussed in the risk factors below will not occur. If they
do, our business, financial condition or results of operations could be
materially adversely affected. In such case, the trading price of our securities
could decline, and you might lose all or part of your investment. You should
also carefully consider the risks described in "Risk Factors that May Affect
Future Operating Performance" in the section entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operation" in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2000 and other
documents incorporated by reference in this prospectus.
This prospectus contains forward-looking statements made as of the date of
this prospectus regarding our expected performance that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including
the risks faced by us described below and elsewhere in this prospectus.
RISKS RELATED TO AN INVESTMENT IN THE SENIOR NOTES
HIGH LEVERAGE AND RESTRICTIVE COVENANTS -- OUR SUBSTANTIAL INDEBTEDNESS COULD
ADVERSELY AFFECT THE FINANCIAL HEALTH OF OUR COMPANY AND PREVENT US FROM
FULFILLING OUR OBLIGATIONS UNDER THE NEW SENIOR NOTES.
Substantial Leverage
We now have, and after this exchange offer will continue to have, a
significant amount of debt. However, despite current debt levels, the terms of
the Indenture governing the new Senior Notes and our other securities do not
prohibit us or our subsidiaries from incurring substantially more debt,
including debt senior to the new Senior Notes. If new debt is added to our
consolidated debt level, the related risks that we now face could intensify. The
following table shows certain important financial data and credit ratios at
March 31, 2001 and for the twelve months ended March 31, 2001:
AT MARCH 31, 2001
-----------------
(IN THOUSANDS)
Total debt, including current maturities.................... $1,838,026
Stockholders' equity........................................ $1,246,258
Ratio of total debt to stockholders' equity................. 1.5x
TWELVE MONTHS ENDED
MARCH 31, 2001
-------------------
Ratio of EBITDA to cash interest expense.................... 4.3x
Ratio of total debt to EBITDA............................... 2.9x
Covenants in the agreements governing our existing debt, and debt we may
incur in the future, may materially restrict our operations, including our
ability to incur debt, pay dividends, make certain investments and payments, and
encumber or dispose of assets. In addition, financial covenants contained in
agreements relating to our existing and future debt could lead to a default in
the event our results of operations do not meet our plans. A default under one
debt instrument may also trigger cross-defaults under our other debt
instruments. An event of default under any debt instrument, if not cured or
waived, could have a material adverse effect on us.
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Our substantial indebtedness could have important consequences to holders of
the new Senior Notes. For example, it could:
- make it more difficult for us to satisfy our obligations with respect to
the new Senior Notes,
- increase our vulnerability to general adverse economic and industry
conditions,
- limit our ability to fund future working capital, capital expenditures,
research and development and other general corporate requirements,
- require us to dedicate a substantial portion of our cash flow from
operations to service payments on our debt,
- limit our flexibility to react to changes in our business and the industry
in which we operate,
- place us at a competitive disadvantage to any of our competitors that have
less debt, and
- limit, along with the financial and other restrictive covenants in our
debt, among other things, our ability to borrow additional funds.
Ability to Service Debt. We cannot assure you that our business will
generate cash in an amount sufficient to enable us to service our debt,
including the new Senior Notes, or to fund our other liquidity needs. We expect
that substantial amounts of our debt will come due prior to the final maturity
date of the new Senior Notes, which we will be required to repay or refinance.
For example, our 5.75% Convertible Subordinated Notes due 2006, our 5.00%
Convertible Subordinated Notes due 2007, our 9.25% Senior Notes due 2006 and all
amounts outstanding under our Credit Agreement will mature prior to the February
15, 2008 maturity of the new Senior Notes and will be payable in cash unless the
holders of the convertible notes elect to convert the principal amount of such
notes prior to their maturity into our common stock. In addition, we may need to
refinance all or a portion of our debt, including the new Senior Notes, on or
before their maturity, and we cannot assure you that we will be able to do so.
Additional Borrowings Available
Despite current debt levels, the terms of the Indenture do not prohibit us
or our subsidiaries from incurring substantially more debt. If new debt is added
to our consolidated debt level, the related risks that we now face could
intensify.
EFFECTIVE SUBORDINATION OF THE NEW SENIOR NOTES TO SENIOR SECURED DEBT -- THE
NEW SENIOR NOTES ARE EFFECTIVELY SUBORDINATED TO OUR EXISTING SENIOR SECURED
DEBT.
The new Senior Notes are not secured. Holders of secured debt will have
claims that are prior to claims of holders of new Senior Notes to the extent of
the assets securing such other debt. At March 31, 2001, the old Senior Notes
were effectively subordinated to $346.5 million of secured debt without
providing holders of the Senior Notes collateral on a pari passu basis or at
all. Under the terms of the Indenture, we are permitted to incur additional
secured debt without providing holders of the Senior Notes collateral on a pari
passu basis or at all.
EFFECTIVE SUBORDINATION OF THE NEW SENIOR NOTES TO LIABILITIES OF OUR
SUBSIDIARIES -- YOUR RIGHT TO RECEIVE PAYMENTS ON THE NEW SENIOR NOTES FROM
FUNDS PROVIDED BY OUR SUBSIDIARIES IS JUNIOR IN RIGHT OF PAYMENT TO THE CLAIMS
OF THE CREDITORS OF OUR SUBSIDIARIES.
We conduct a large portion of our operations through our subsidiaries.
Accordingly, our ability to meet our cash obligations is dependent upon the
ability of our subsidiaries to make cash payments to us. We expect distributions
from our subsidiaries to be a large source of funds for payment of interest on
the Senior Notes.
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The claims of creditors (including trade creditors) of any subsidiary will
generally have priority as to the assets of such subsidiary over the claims of
the holders of the Senior Notes. In the event of a liquidation of any of our
subsidiaries, our right to receive the assets of any such subsidiary (and the
resulting right of the holders of the Senior Notes to participate in the
distribution of the proceeds of those assets) will effectively be subordinated
by operation of law to the claims of creditors (including trade creditors) of
such subsidiary and holders of such subsidiary's preferred stock and any
guarantees by such subsidiary of our indebtedness. In the event of the
liquidation, bankruptcy, reorganization, insolvency, receivership or similar
proceeding or any assignment for the benefit of our creditors or a marshaling of
our assets or liabilities, holders of the Senior Notes may receive ratably less
than other such creditors or interest holders. At March 31, 2001, the Senior
Notes would have been effectively subordinated to $300.0 million of liabilities
(including trade payables) of our subsidiaries.
FINANCING CHANGE OF CONTROL OFFER -- WE MAY NOT HAVE THE ABILITY TO RAISE THE
FUNDS NECESSARY TO FINANCE THE CHANGE OF CONTROL OFFER REQUIRED BY THE
INDENTURE.
Upon the occurrence of certain specific kinds of change of control events,
we will be required to offer to repurchase all outstanding Senior Notes.
However, it is possible that we will not have sufficient funds at the time of
the change of control to make the required repurchases of Senior Notes or that
restrictions in our future credit facilities may not allow such repurchases.
CONSEQUENCES OF NOT TENDERING OLD SENIOR NOTES -- IF YOU DO NOT TENDER YOUR OLD
SENIOR NOTES, YOU WILL CONTINUE TO HOLD RESTRICTED SECURITIES.
Upon consummation of the exchange offer, we will have no further obligation
to register your old Senior Notes, except under limited circumstances.
Thereafter, if you do not tender your old Senior Notes in the exchange offer,
you will continue to hold restricted securities which may not be offered, sold
or otherwise transferred, pledged or hypothecated except pursuant to Rule 144
and Rule 144A under the Securities Act or pursuant to any other exemption from
registration under the Securities Act relating to the disposition of securities,
provided that an opinion of counsel is furnished to us that such an exemption is
available. These restrictions will likely limit the trading market and price for
the old Senior Notes.
LACK OF PUBLIC MARKET -- BECAUSE THERE IS NO PUBLIC MARKET FOR THE NEW SENIOR
NOTES, YOU MAY FIND IT DIFFICULT TO SELL THE NEW SENIOR NOTES.
The new Senior Notes are being offered to the holders of the old Senior
Notes. Prior to this exchange offer, there has been no existing trading market
for any of the old Senior Notes, and a trading market may not develop for the
new Senior Notes. We do not intend to apply for listing of the new Senior Notes
on any securities exchange or on the Nasdaq National Market. The new Senior
Notes may trade at a discount from their initial offering price, depending upon
prevailing interest rates, the market for similar securities, our performance
and other factors. In connection with the issuance of the old Senior Notes, we
were advised by the initial purchasers that they intended to make a market in
the new Senior Notes. However, the initial purchasers are not obligated to do so
and any such market-making activities may be discontinued at any time without
notice. Therefore, we cannot assure you that an active market for the new Senior
Notes will develop.
DIFFICULTIES IN ENFORCING JUDGMENTS IN FOREIGN JURISDICTIONS
Since a large portion of our assets are located outside the U.S., any
judgments obtained in the U.S. against us, including judgments with respect to
the payment of principal, premium, interest, offer price, or other amounts
payable with respect to the Senior Notes may be not collectible within the U.S.
If holders of Senior Notes intend to enforce a judgment obtained in the U.S.
against our assets located outside the U.S., they may be subject to additional
procedures and other difficulties which would not be required for enforcement of
such judgment in the U.S.
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USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the new Senior
Notes offered in exchange for old Senior Notes. The old Senior Notes will be
exchanged for new Senior Notes of like principal amount. Old Senior Notes that
are exchanged will be retired and canceled.
OUR INDEBTEDNESS AND FINANCING AGREEMENTS
As of March 31, 2001, the principal amount of all our indebtedness,
calculated on a consolidated basis, was approximately $1,838.0 million.
On April 28, 2000 we entered into a credit agreement with various lenders
which provided us with $900 million of secured credit facilities (the "Secured
Credit Facilities"). On March 30, 2001, the credit agreement was amended and
restated (as amended and restated, the "Credit Agreement") and the Senior
Secured Credit Facilities were reduced to $546.5 million. The Secured Credit
Facilities consist of a $200.0 million revolving credit facility, subject to
borrowing base availability, none of which was drawn as of March 31, 2001, and a
$346.5 million term loan. The revolving credit facility bears interest at LIBOR
plus 2.75% per annum and is payable in full on March 31, 2005. The term loan
currently bears interest at LIBOR plus 3.00% per annum and is payable in
quarterly installments with a final installment payable September 30, 2005. The
interest rates on the revolving credit facility and the term loan are subject to
reduction in the event of improvements in our leverage ratio. Amounts borrowed
under the revolving credit facility may be repaid and reborrowed.
Under the terms of the Secured Credit Facilities, we are required to make
mandatory prepayments with a portion of any excess cash flow, net proceeds of
any asset sales and net proceeds of any issuance of debt or equity securities,
subject to certain exceptions. The Secured Credit Facilities are secured by our
domestic assets and those of our domestic subsidiaries, and other investments
owned by us and our domestic subsidiaries, including certain intercompany loans
and 66% of the stock of our first-tier foreign subsidiaries. The Secured Credit
Facilities include various financial and other covenants and events of default,
including covenants that restrict our ability to incur debt, pay dividends, make
certain investments and payments, repurchase securities and encumber or dispose
of assets.
We have outstanding $425.0 million of 9.25% Senior Notes due May 1, 2006
that we issued in May 1999. On or after May 1, 2003, we have the right to redeem
such notes at the redemption prices specified in the indenture governing such
notes. The holders of such notes will have the right to require us to repurchase
such notes following the occurrence of a change of control or certain asset
sales.
We have outstanding $200.0 million of 10.50% Senior Subordinated Notes due
May 1, 2009 that we issued in May 1999. At any time prior to May 1, 2002, we
have the right to redeem up to 35% of such notes with the cash proceeds of
offerings of our common stock at the redemption prices specified in the
indenture governing such notes. On or after May 1, 2004, we have the right to
redeem such notes at the redemption prices specified in such indenture. The
holders of such notes will have the right to require us to repurchase such notes
following the occurrence of a change of control or certain asset sales.
We have outstanding $258.8 million of 5.00% Convertible Subordinated Notes
due March 15, 2007 that we issued in March 2000. The holders have the option to
convert such notes into our common stock at any time prior to maturity on March
15, 2007 at $57.34 per share. We have the right to redeem such notes after
September 20, 2001 and before March 20, 2003 at the redemption prices specified
in the indenture governing such notes, conditioned upon the closing price of our
common stock being at or above 150% of the conversion price of such notes for at
least 20 trading days within a period of 30 consecutive trading days prior to
the date we mail the notice of redemption. On or after March 20, 2003, we have
the right to redeem such notes at the prices specified in the indenture
governing such notes. The holders of such notes will have the right to require
us
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to repurchase such notes following the occurrence of a change of control or a
termination of trading of our common stock.
We have outstanding $250.0 million of 5.75% Convertible Subordinated Notes
due June 1, 2006 that we issued in May 2001. The holders have the option to
convert such notes into our Common Stock at any time prior to maturity on June
1, 2006 at $35.00 per share. We have the right to redeem such notes after June
4, 2004 at the redemption prices specified in the indenture governing such
notes. The holders of such notes will have the right to require us to repurchase
such notes following the occurrence of a change of control or certain asset
sales.
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THE EXCHANGE OFFER
PURPOSES OF THE EXCHANGE OFFER
In issuing the old Senior Notes, we agreed to use our commercially
reasonable efforts to cause to become effective a registration statement with
respect to the exchange offer (the "Exchange Offer Registration Statement") on
or prior to September 18, 2001.
We will file with the Securities and Exchange Commission (the "SEC") a shelf
registration statement (the "Shelf Registration Statement") if:
(1) the exchange offer is not permitted by applicable law or SEC policy;
or
(2) any holder of old Senior Notes notifies us prior to the 20th day
following the consummation of the exchange offer that:
(a) it is prohibited by law or SEC policy from participating in the
exchange offer; or
(b) it may not resell the new Senior Notes it acquired in the
exchange offer to the public without delivering a prospectus and the
prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales; or
(c) it is a broker-dealer and owns old Senior Notes acquired directly
from us or one of our affiliates.
The Shelf Registration Statement will cover resales of old Senior Notes by
holders who have provided certain information required by us in connection with
the Shelf Registration Statement.
We are making the exchange offer to satisfy our obligations under the
registration rights agreement into which we entered in connection with the sale
of the Old Senior Notes. Once the exchange offer is complete, we will have no
further obligation to register any of the old Senior Notes not tendered by the
holders for exchange. See "Risk Factors -- Consequences of Not Tendering Old
Senior Notes." We filed a copy of the registration rights agreement as an
exhibit to the registration statement of which this prospectus is a part.
RESALE OF THE NEW SENIOR NOTES
We believe that new Senior Notes issued in the exchange offer in exchange
for old Senior Notes may be offered for resale, resold and otherwise transferred
by their holders without compliance with the registration and prospectus
delivery provisions of the Securities Act. Our belief is based on an
interpretation by the staff of the SEC set forth in the staff's Exxon Capital
Holdings Corp. SEC No-Action Letter (available April 13, 1989), Morgan Stanley &
Co., Inc. SEC No-Action Letter (available June 5, 1991), Shearman & Sterling SEC
No-Action Letter (available July 7, 1993), and other no-action letters issued to
third parties. Any holder who is an "affiliate" of ours or who intends to
participate in the exchange offers for the purpose of distributing the new
Senior Notes:
(1) cannot rely on the interpretation by the staff of the SEC set forth
in the above referenced no-action letters,
(2) cannot tender its old Senior Notes in the exchange offer, and
(3) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or transfer
of the old Senior Notes, unless such sale or transfer is made pursuant to an
exemption from such requirements.
In addition, each broker-dealer that holds old Senior Notes acquired for its
own account as a result of market-making or other trading activities (a
"Participating Broker-Dealer") that receives new Senior Notes for
14
20
its own account in exchange for old Senior Notes not acquired directly from us
must acknowledge that it will deliver a prospectus in connection with any resale
of such new Senior Notes. See "Plan of Distribution."
Except as described above, this prospectus may not be used for an offer to
resell, resale or other transfer of new Senior Notes.
TERMS OF THE EXCHANGE OFFER
General. Upon the terms and subject to the conditions of the exchange offer
described in this prospectus and the letter of transmittal, we will accept any
and all old Senior Notes validly tendered and not withdrawn before 5:00 p.m.,
New York City time, on the expiration date. We will issue $1,000 principal
amount of new Senior Notes in exchange for each $1,000 principal amount of
outstanding old Senior Notes accepted in the exchange offers amount of old
Senior Notes accepted in the exchange offer. You may tender some or all of your
old Senior Notes pursuant to the exchange offer. Old Senior Notes may be
tendered only in integral multiples of $1,000 principal amount.
As of June 20, 2001, there was $500,000,000 aggregate principal amount of
the old Senior Notes outstanding. We are sending this prospectus, together with
the letter of transmittal to such registered holders as of , 2001.
We arranged for the old Senior Notes to be issued and transferable in
book-entry form through the facilities of The Depository Trust Company acting as
depositary. The new Senior Notes will also be issued and transferable in
book-entry form through DTC. See "-- Book-Entry Transfer; Delivery and Form."
We will accept validly tendered old Senior Notes by giving oral (confirmed
in writing) or written notice of acceptance to the exchange agent. The exchange
agent will act as agent for the tendering holders of old Senior Notes for the
purpose of receiving the new Senior Notes from us.
If any tendered old Senior Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events described in this
prospectus or otherwise, the certificates for any such unaccepted old Senior
Notes will be returned, without expense, to the holder tendering them or the
appropriate book-entry transfer will be made, in each case, as promptly as
practicable after the expiration date.
You will not be required to pay brokerage commissions or fees or, subject to
the instructions in the letter of transmittal, transfer taxes with respect to
the exchange of old Senior Notes tendered in the exchange offer. We will pay the
expenses, other than certain applicable taxes, of the exchange offer.
WE ARE NOT MAKING, NOR IS OUR BOARD OF DIRECTORS MAKING, ANY RECOMMENDATION
TO YOU AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF
YOUR OLD SENIOR NOTES IN THE EXCHANGE OFFER. FURTHERMORE, NO ONE HAS BEEN
AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. YOU MUST MAKE YOUR OWN DECISION
WHETHER TO TENDER YOUR OLD SENIOR NOTES IN THE EXCHANGE OFFER AND, IF SO, THE
AGGREGATE AMOUNT OF OLD SENIOR NOTES TO TENDER AFTER READING THIS PROSPECTUS AND
THE LETTER OF TRANSMITTAL AND CONSULTING WITH YOUR ADVISERS, IF ANY, BASED ON
YOUR OWN FINANCIAL POSITION AND REQUIREMENTS.
Expiration Date; Extensions; Amendments. The "expiration date" is
, 2001. In our sole discretion, we may extend the exchange offer, in
which case the term "expiration date" means the latest date to which the
exchange offer is extended.
To extend the expiration date, we will notify the exchange agent and the
record holders of old Senior Notes of any extension by oral (followed by
written) notice, before 9:00 a.m., New York City time, on the business day
following the previously scheduled expiration date. We may extend the exchange
offer for a specified period of time or on a daily basis until 5:00 p.m., New
York City time, on the date on which a specified percentage of old Senior Notes
are tendered.
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We reserve the right to delay accepting any old Senior Notes, to extend the
exchange offer, to amend the exchange offer or to terminate the exchange offer
and not accept old Senior Notes not previously accepted if any of the conditions
described below in "-- Conditions" occurs and is not waived. Waiver must be
given by oral (confirmed in writing) or written notice to the exchange agent as
promptly as practicable. If the exchange offer is amended in a manner we
determine to be material, we will promptly disclose such amendment in a manner
reasonably calculated to inform the holders of such amendment. We will also
extend the exchange offer in such circumstances for a period of five to ten
business days, depending upon the significance of the amendment and the manner
of disclosure to holders of the old Senior Notes, if the exchange offer would
otherwise expire during such five to ten business day period.
We have no obligation to publish, advertise, or otherwise communicate any
public announcement of any delay, extension, amendment or termination of the
exchange offer, other than by making a timely release to the Dow Jones News
Service. We may make such announcement in any additional ways at our discretion.
INTEREST ON THE NEW NOTES AND THE OLD NOTES
The old Senior Notes will continue to accrue interest at the rate of 9.25%
per annum through (but not including) the date new Senior Notes are issued in
exchange for tendered old Senior Notes. Any old Senior Notes tendered or
accepted for exchange will continue to accrue interest at the rate of 9.25% per
annum in accordance with their terms. From and after the date of issuance of the
new Senior Notes, the new Senior Notes will accrue interest at the rate of 9.25%
per annum from the last date to which interest was paid on the old Senior Notes.
Interest on the new Senior Notes and any old Senior Notes not tendered or
accepted for exchange will be payable semi-annually in arrears on February 15
and August 15 of each year, commencing on August 15, 2001.
PROCEDURES FOR TENDERING
To tender in the exchange offer, you must follow these steps:
(a) complete, sign and date the letter of transmittal, or a facsimile of
it;
(b) have the signatures on the letter guaranteed if required by
Instruction 3 of the letter of transmittal; and
(c) mail or otherwise deliver such letter of transmittal or such
facsimile, together with the old Senior Notes and any other required
documents, to the exchange agent before 5:00 p.m., New York City time, on
the expiration date.
If delivery of the old Senior Notes is made through book-entry transfer into
the exchange agent's account at DTC, you must tender the old Senior Notes in
accordance with DTC's Automated Tender Offer Program (ATOP) procedures. See
"-- Book-Entry Transfer; Delivery and Form."
Your tender of old Senior Notes will constitute an agreement between us in
accordance with the terms and subject to the conditions set forth in this
prospectus and in the letter of transmittal.
You must deliver all documents for tender to the exchange agent at its
address set forth below. You may also request your brokers, dealers, commercial
banks, trust companies or nominees to effect the above transactions for you.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, IS AT YOUR OPTION AND YOUR SOLE RISK. DOCUMENTS ARE
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY
MAIL, WE RECOMMEND REGISTERED MAIL, RETURN RECEIPT REQUESTED, PROPERLY INSURED,
OR AN OVERNIGHT DELIVERY SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME
TO INSURE TIMELY DELIVERY.
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Only a holder of old Senior Notes may tender such old Senior Notes in the
exchange offer. The term "holder" with respect to the exchange offer means any
person in whose name old Senior Notes are registered on our books or any other
person who has obtained a properly completed bond power from the registered
holder.
If your old Senior Notes are registered in the name of your broker, dealer,
commercial bank, trust company or other nominee and you wish to tender your old
Senior Notes, you should contact such registered holder promptly and instruct
such registered holder to tender on your behalf. If your old Senior Notes are so
registered and you wish to tender on your own behalf, you must, prior to
completing and executing the letter of transmittal and delivering your old
Senior Notes, either make appropriate arrangements to register ownership of the
old Senior Notes in your name or obtain a properly completed bond power from the
registered holder. The transfer of record ownership may take considerable time.
Signatures on a letter of transmittal or notice of withdrawal must be
guaranteed by a member firm of a registered national securities exchange or of
the National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the U.S. (an "Eligible
Institution"). Signatures do not need to be guaranteed if the old Senior Notes
are tendered (1) by a registered Holder who has not completed the box entitled
"Special Payment Instructions" or "Special Delivery Instructions" on the letter
of transmittal or (2) for the account of an Eligible Institution.
If the letter of transmittal is signed by a person other than the registered
holder of any old Senior Notes listed on the letter, such old Senior Notes must
be endorsed or accompanied by appropriate bond powers signed as the name of the
registered holder or holders appears on the old Senior Notes.
If the letter of transmittal or any old Senior Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons must indicate their capacity when signing. Unless waived
by us, you must then submit evidence satisfactory to us of their authority to so
act with the letter of transmittal.
We will determine in our sole discretion all questions as to the validity,
form, eligibility (including time of receipt) and acceptance of tendered old
Senior Notes and withdrawal of tendered old Senior Notes. Our determination will
be final and binding. We reserve the absolute right to reject any and all old
Senior Notes not properly tendered or any old Senior Notes acceptance of which
would, in the opinion of our counsel, be unlawful for us to accept. We also
reserve the right to waive any defects, irregularities or conditions of tender
as to particular old Senior Notes. Our interpretation of the terms and
conditions of the exchange offer (including the instructions in the letter of
transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of old Senior Notes must be
cured within such time as we determine. No one is under any duty to give
notification of defects or irregularities with respect to tenders of old Senior
Notes, nor will any person incur any liability for failure to give such
notification. Old Senior Notes are not properly tendered until such
irregularities have been cured or waived. Any old Senior Notes received by the
exchange agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the exchange
agent to the tendering holders of such old Senior Notes, unless otherwise
provided in the letter of transmittal, as soon as practicable after the
expiration date.
In addition, we reserve the right in our sole discretion:
- to purchase or make offers for any old Senior Notes that remain
outstanding after the expiration date;
- to terminate the exchange offer as described in "-- Conditions;" and
- to the extent permitted by applicable law, purchase old Senior Notes in
the open market, in privately negotiated transactions or otherwise. The
terms of any such purchases or offers could differ from the terms of the
exchange offer.
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By tendering, you will represent to us, among other things, that:
- the new Senior Notes you acquire in the exchange offer are being obtained
in the ordinary course of your business;
- you have no arrangement with any person to participate in the distribution
of such new Senior Notes; and
- you are not an "affiliate," as defined under Rule 405 of the Securities
Act, of ours.
If you are a Participating Broker-Dealer that will receive new Senior Notes
for your own account in exchange for old Senior Notes that were not acquired
directly from us, by tendering you will acknowledge that you will deliver a
prospectus in connection with any resale of such new Senior Notes. See "Plan of
Distribution."
BOOK-ENTRY TRANSFER; DELIVERY AND FORM
The old Senior Notes were initially in the form of one or more registered
global notes without interest coupons and were registered in the name of the
Depository Trust Company ("DTC"). The new Senior Notes exchanged for the old
Notes represented by the global old Senior Notes will be represented by global
new Senior Notes in fully registered form, registered in the name of the nominee
of DTC.
The global new Senior Notes will be exchangeable for definitive new Senior
Notes in registered form, in denominations of $1,000 principal amount and
integral multiples of $1,000. The new Senior Notes in global form will trade in
DTC's same-day funds settlement system, and therefore secondary market trading
activity in the new Senior Notes will settle in immediately available funds.
We understand that the exchange agent will make a request promptly after the
date of this prospectus to establish an account with respect to the old Senior
Notes at DTC for the purpose of facilitating the exchange offer. Subject to the
establishment of this account, any financial institution that is a participant
in DTC's system may make book-entry delivery of old Senior Notes by causing DTC
to transfer such old Senior Notes into the exchange agent's account with respect
to the old Senior Notes in accordance with DTC's ATOP procedures for such
book-entry transfers. Although delivery of the old Senior Notes may be effected
through book-entry transfer into the exchange agent's account at DTC, the
exchange for old Senior Notes so tendered will be made only after the following
two conditions are met:
- First, DTC must timely confirm (a "Book-Entry Confirmation") such
book-entry transfer of the old Notes into the exchange agent's account.
- Second, the exchange agent must timely receive a Book-Entry Confirmation
with a message, transmitted by DTC and received by the exchange agent and
forming part of the Book-Entry Confirmation, which states that DTC has
received express acknowledgment from a participant tendering old Senior
Notes that such participant has received and agrees to be bound by the
terms of the letter of transmittal, and that such agreement may be
enforced against such participant.
GUARANTEED DELIVERY PROCEDURES
If your old Senior Notes are not immediately available or if you cannot
deliver your old Senior Notes, the letter of transmittal or any other required
documents to the exchange agent prior to the expiration date, you may effect a
tender if:
(1) the tender is made through an Eligible Institution;
(2) before the expiration date, the exchange agent receives from such
Eligible Institution a properly completed and duly executed notice of
guaranteed delivery (by facsimile transmission, mail or hand
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delivery) setting forth the name and address of the holder of the old Senior
Notes, the certificate number or numbers of such old Senior Notes and the
principal amount of old Senior Notes tendered, stating that the tender is
being made thereby and guaranteeing that, within three New York Stock
Exchange trading days after the expiration date, the letter of transmittal
(or facsimile of such letter) together with the certificate(s) representing
the old Senior Notes to be tendered in proper form for transfer and any
other documents required by the letter of transmittal, or a Book-Entry
Confirmation, as the case may be, will be delivered by the Eligible
Institution to the exchange agent; and
(3) such properly completed and executed letter of transmittal (or
facsimile of such letter), as well as the certificate(s) representing all
tendered old Senior Notes in proper form for transfer and all other
documents required by the letter of transmittal, or a Book-Entry
Confirmation, as the case may be, are received by the exchange agent within
three New York Stock Exchange trading days after the expiration date.
Upon request of the exchange agent, a notice of guaranteed delivery will be
sent to holders who wish to tender their old Senior Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise described in this prospectus, tenders of old Senior
Notes may be withdrawn at any time before 5:00 p.m., New York City time, on the
expiration date. To withdraw a tender of old Senior Notes in the exchange offer,
the exchange agent must receive a written or facsimile transmission notice of
withdrawal at its address set forth in this prospectus before 5:00 p.m., New
York City time, on the expiration date. See "-- Exchange Agent." Any such notice
of withdrawal must:
(1) specify the name of the person having deposited the old Senior Notes
to be withdrawn (the "Depositor");
(2) identify the old Senior Notes to be withdrawn (including the
certificate number or numbers and principal amount of such old Senior
Notes);
(3) be signed by the holder in the same manner as the original signature
on the letter of transmittal by which the old Senior Notes were tendered
(including any required signature guarantees) or be accompanied by documents
of transfer sufficient to have the trustee with respect to the old Senior
Notes register the transfer of the old Senior Notes into the name of the
person withdrawing the tender; and
(4) specify the name in which any the old Senior Notes are to be
registered, if different from that of the Depositor.
We will determine all questions as to the validity, form and eligibility
(including time of receipt) of such notices and our determination will be final
and binding on all parties. Any old Senior Notes so withdrawn will be deemed not
to have been validly tendered for purposes of the exchange offer and no new
Senior Notes will be issued with respect thereto unless the old Senior Notes so
withdrawn are validly retendered. Any old Senior Notes which have been tendered
but which are not accepted for exchange will be returned to their holder without
cost to such holder as soon as practicable after withdrawal, rejection of tender
or termination of the exchange offer. Properly withdrawn old Senior Notes may be
retendered by following one of the procedures, described above under
"-- Procedures for Tendering" at any time before the expiration date.
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CONDITIONS
Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or exchange new Senior Notes for, any old
Senior Notes not accepted for exchange. We may terminate the exchange offer as
provided in this prospectus before accepting old Senior Notes, if any of the
following conditions exist:
(1) the exchange offer, or the making of any exchange by a holder,
violates applicable law or any applicable interpretation of the SEC;
(2) any action or proceeding is instituted or threatened in any court or
by or before any governmental agency with respect to the exchange offer
which, in our sole judgment, might impair our ability to proceed with the
exchange offer;
(3) any law, statute, rule or regulation is adopted or enacted which, in
our sole judgment, might materially impair our ability to proceed with the
exchange offer;
(4) trading on the New York Stock Exchange or generally in the U.S.
over-the-counter market is suspended by order of the SEC or any other
governmental authority which, in our judgment, would reasonably be expected
to impair our ability to proceed with the exchange offer; or
(5) a stop order is issued by the SEC or any state securities authority
suspending the effectiveness of the registration statement or proceedings
are initiated or, to our knowledge, threatened for that purpose.
If any such conditions exist, we may
- refuse to accept any old Senior Notes and return all tendered old Senior
Notes to exchanging holders;
- extend the exchange offer and retain all old Senior Notes tendered prior
to the expiration of the exchange offers, subject, however, to the rights
of holders to withdraw such old Senior Notes (see "-- Withdrawal of
Tenders"); or
- waive certain of such conditions with respect to the exchange offers and
accept all properly tendered old Senior Notes which have not been
withdrawn or revoked.
If such waiver constitutes a material change to the exchange offer, we will
promptly disclose such waiver in a manner reasonably calculated to inform
holders of old Senior Notes of such waiver.
The conditions described above are for our sole benefit. We may assert any
condition regardless of the circumstances giving rise to any such condition. We
may waive any condition in whole or in part at any time and from time to time in
our sole discretion. We are not waiving these rights by failing to exercise
them. These rights are ongoing and may be asserted at any time and from time to
time.
EXCHANGE AGENT
We appointed State Street Bank and Trust Company as exchange agent for the
exchange offer. Send letters of transmittal and notices of guaranteed delivery
to the exchange agent addressed as follows:
By Mail/Hand Delivery or Overnight Delivery:
State Street Bank and Trust Company
Attn: Meaghan Haight, Corporate Actions
2 Avenue De Lafayette
Fifth Floor, Corporate Trust Window
Boston, Massachusetts 02111
By Facsimile: (617) 662-1452
To Confirm by telephone: (617) 662-1603
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FEES AND EXPENSES
We will pay the expenses of soliciting tenders. The principal solicitation
is being made by mail. Additional solicitation may be made by telegraph,
telephone or in person by officers and regular employees of ours and our
affiliates and by persons so engaged by the exchange agent. Also, we have
retained Skinner & Co. to assist us in soliciting tenders. The contact
information for the solicitor is as follows:
Skinner & Co.
Attn: Mike McReynolds
225 South Cabrillo Hwy.
Suite 206C
Half Moon Bay, CA 94019-1738
By Facsimile: (650) 712-3933
To Confirm by telephone: (650) 712-3939
We will not make any payments to other brokers, dealers or others soliciting
acceptances of the exchange offer. We will pay the exchange agent and solicitor
reasonable and customary fees for their services and will reimburse it for its
reasonable out-of-pocket expenses in connection therewith. We may also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this prospectus
and related documents to the beneficial owners of the old Senior Notes, and in
handling or forwarding tenders for exchange.
We will pay the cash expenses to be incurred in connection with the exchange
offer. We estimate these cash expenses will aggregate approximately $150,000,
including fees and expenses of the exchange agent, the trustee under the
indenture, the solicitor and accounting and legal fees.
We will pay all transfer taxes, if any, applicable to the exchange of old
Senior Notes in the exchange offer. The amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder if:
(1) certificates representing new Senior Notes or old Senior Notes for
principal amounts at maturity not tendered or accepted for exchange are to
be delivered to, or are to be registered in the name of, any person other
than the registered holder of the old Senior Notes tendered;
(2) tendered old Senior Notes are registered in the name of any person
other than the person signing the letter of transmittal; or
(3) a transfer tax is imposed for any reason other than the exchange of
old Senior Notes in the exchange offer.
In such circumstances, you must submit satisfactory evidence of payment of
such taxes or exception from such taxes with the letter of transmittal or the
amount of such transfer taxes will be billed directly to you.
ACCOUNTING TREATMENT
The new Senior Notes will be recorded at the same carrying value as the old
Senior Notes, which is face value as reflected in our accounting records on the
date of the exchange offer. Accordingly, no gain or loss for accounting purposes
will be recognized upon completion of the exchange offers. The issuance costs
incurred in connection with the exchange offer will be capitalized and amortized
over the term of the new Senior Notes.
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DESCRIPTION OF THE NOTES
GENERAL
The new Senior Notes will be issued pursuant to an Indenture between the
Company and State Street Bank and Trust Company, as trustee. The terms of the
new Senior Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The new Senior Notes are subject to all such terms, and
holders of new Senior Notes are referred to the Indenture and the Trust
Indenture Act for a statement of such terms.
The following summary of the material provisions of the Indenture and the
Registration Rights Agreement does not purport to be complete and is qualified
in its entirety by reference to such agreements, including the definitions in
those agreements of certain terms used below. Copies of such agreements have
been filed as exhibits to our Quarterly Report on Form 10-Q for the quarter
ended March 31, 2001, which has been incorporated by reference in this
prospectus and is available from the SEC or as set forth under "Available
Information." The definitions of certain terms used in the following summary are
set forth below under "--Certain Definitions."
For purposes of the following summary, the term "Company" refers only to
Amkor Technology, Inc. and not to any of its Subsidiaries and the term "Senior
Notes" refers to the old and new Senior Notes.
DESCRIPTION OF THE SENIOR NOTES
RANKING
The Senior Notes:
- are general obligations of the Company;
- are effectively subordinated in right of payment to existing and future
secured debt, if any, including our obligations under our secured bank
facilities, to the extent of such security and to all existing and future
debt and other liabilities of our subsidiaries, including trade payables;
- are equal in right of payment with all of our existing and future
unsecured senior debt, including our 9.25% Senior Notes due May 1, 2006;
and
- are senior in right of payment to all of our existing and future debt that
expressly provides that it is subordinated to the Senior Notes, including
our 10.50% Senior Subordinated Notes due 2009, our 5.00% Convertible
Subordinated Notes due 2007 and our 5.75% Convertible Subordinated Notes
due 2006.
The Senior Notes are "Designated Senior Debt" for purposes of the indentures
governing our 10.50% Senior Subordinated Notes due 2009, our and our 5.00%
Convertible Subordinated Notes due 2007 and our 5.75% Convertible Subordinated
Notes due 2006.
As of March 31, 2001, the Company had total senior secured debt of
approximately $346.5 million. In addition, our subsidiaries would have had total
liabilities of approximately $300.0 million. The Indenture will permit us to
incur additional senior secured debt.
We conduct a large portion of our operations through our Subsidiaries.
Accordingly, our ability to meet our cash obligations is dependent upon the
ability of our Subsidiaries to make cash payments to us. Payments from our
Subsidiaries are expected to be a large source of funds for payment of interest
on the Senior Notes. The claims of creditors (including trade creditors) of any
Subsidiary will generally have priority as to the assets of such Subsidiary over
the claims of the holders of the Senior Notes. In the event of a liquidation of
any of our Subsidiaries, our right to receive the assets of any such Subsidiary
(and the resulting right of the Holders of the Senior Notes to participate in
the distribution of the proceeds of those assets) will effectively be
subordinated by
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operation of law to the claims of creditors (including trade creditors) of such
Subsidiary and holders of such Subsidiary's preferred stock and any Guarantees
by such Subsidiary of Indebtedness of the Company. If the Company were a
creditor of such Subsidiary or a holder of its preferred stock, we would be
entitled to participate in the distribution of the proceeds of such Subsidiary's
assets. Our claims would, however, remain subordinate to any Indebtedness or
preferred stock of such Subsidiary which is senior in right of payment to the
Indebtedness or preferred stock held by us. In the event of the liquidation,
bankruptcy, reorganization, insolvency, receivership or similar proceeding or
any assignment for the benefit of our creditors or a marshaling of our assets or
liabilities, Holders of the Senior Notes may receive ratably less than other
such creditors or interest holders.
As of the date of the Indenture, all of our Subsidiaries other than Amkor
Iwate, Co., Ltd., will be "Restricted Subsidiaries." However, under the
circumstances described below under the subheading "-- Certain
Covenants -- Designation of Restricted and Unrestricted Subsidiaries," we will
be permitted to designate certain of our Subsidiaries as "Unrestricted
Subsidiaries." Unrestricted Subsidiaries will not be subject to many of the
restrictive covenants in the Indenture.
PRINCIPAL, MATURITY AND INTEREST
The Senior Notes will mature on February 15, 2008.
Interest on the Senior Notes will accrue at the rate of 9.25% per annum and
will be payable semi-annually in arrears on February 15 and August 15,
commencing on August 15, 2001. The Company will make each interest payment to
the Holders of record of the Senior Notes on the immediately preceding February
1 and August 1.
Interest on the Senior Notes will accrue from the date of original issuance
or, if interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
The interest rate on the Senior Notes is subject to increase if the Company
does not file a registration statement relating to the Exchange Offer on a
timely basis, if the registration statement is not declared effective on a
timely basis or if certain other conditions are not satisfied, all as further
described under the caption "Registration Rights; Liquidation Damages." All
references to interest on the Senior Notes include any such Liquidated Damages
that may be payable. The Company will issue Senior Notes in denominations of
$1,000 and integral multiples of $1,000.
REDEMPTION
The Company is not entitled to redeem the Senior Notes prior to maturity.
REPURCHASE AT THE OPTION OF HOLDERS
Offer to Repurchase Upon Change of Control
If a Change of Control occurs, each Holder of Senior Notes will have the
right to require the Company to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of that Holder's Senior Notes pursuant to the
Change of Control Offer. In the Change of Control Offer, the Company will offer
a Change of Control Payment in cash equal to 101% of the aggregate principal
amount of Senior Notes repurchased plus accrued and unpaid interest thereon, if
any, to the date of purchase. Within 30 days following any Change of Control,
the Company will mail a notice to each Holder of Senior Notes describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Senior Notes on the date specified in such notice (the "Change of
Control Payment Date"), pursuant to the procedures required by the Indenture and
described in such notice. The Company will comply with the requirements of Rule
14e-1 under the
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Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Senior Notes as a result of a Change of Control.
On the Change of Control Payment Date, the Company will, to the extent
lawful:
(1) accept for payment all Senior Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Senior Notes or portions thereof so tendered;
and
(3) deliver or cause to be delivered to the Trustee the Senior Notes so
accepted together with an officers' certificate stating the aggregate
principal amount of Senior Notes or portions thereof being purchased by
the Company.
The Paying Agent will promptly mail to each Holder of Senior Notes so
tendered the Change of Control Payment for such Senior Notes, and the Trustee
will promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Senior Note equal in principal amount to any unpurchased
portion of the Senior Notes surrendered, if any; provided that each such new
Senior Note will be in a principal amount of $1,000 or an integral multiple
thereof.
The Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.
The provisions described above that require the Company to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether or not any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the Holders of the Senior Notes to require that
the Company repurchase or redeem the Senior Notes in the event of a takeover,
recapitalization or similar transaction.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Company and
purchases all Senior Notes validly tendered and not withdrawn under such Change
of Control Offer.
The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of the assets of the Company and its Subsidiaries taken as a whole. Although
there is a limited body of case law interpreting the phrase "substantially all,"
there is no precise established definition of the phrase under applicable law.
Accordingly, the ability of a Holder of Senior Notes to require the Company to
repurchase such Senior Notes as a result of a sale, lease, transfer, conveyance
or other disposition of less than all of the assets of the Company and its
Subsidiaries taken as a whole to another Person or group may be uncertain.
Offer to Repurchase by Application of Excess Proceeds of Asset Sales
The Company will not, and will not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) such fair market value is determined by the Company's Board of
Directors; and
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(3) at least 75% of the consideration therefor received by the Company or
such Restricted Subsidiary is in the form of cash or other Qualified
Proceeds.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds at its option:
(1) to repay Permitted Bank Debt, and if such Permitted Bank Debt is
revolving debt, to effect a corresponding commitment reduction
thereunder;
(2) to acquire all or substantially all of the assets of, or a majority of
the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure; or
(4) to acquire any other long-term assets that are used or useful in a
Permitted Business.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture.
Any Net Proceeds from any Asset Sale that are not applied or invested as
provided in the preceding paragraph within 365 days of such Asset Sale will
constitute Excess Proceeds. When the aggregate amount of Excess Proceeds exceeds
$10.0 million, the Company will make an Asset Sale Offer to all Holders of
Senior Notes and all holders of other Indebtedness that is pari passu with the
Senior Notes containing provisions similar to those set forth in the Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets to purchase the maximum principal amount of Senior Notes and such other
pari passu Indebtedness that may be purchased out of the Excess Proceeds. The
offer price in any Asset Sale Offer will be equal to 100.0% of principal amount
plus accrued and unpaid interest, if any, to the date of purchase, and will be
payable in cash. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Company may use such Excess Proceeds for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal amount of
Senior Notes and such other pari passu Indebtedness tendered into such Asset
Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the
Senior Notes and such other pari passu Indebtedness to be purchased on a pro
rata basis. Upon completion of each Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
CERTAIN COVENANTS
Restricted Payments
The Company will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on
account of the Company's or any of its Restricted Subsidiaries' Equity
Interests (including, without limitation, any payment in connection with
any merger or consolidation involving the Company or any of its
Restricted Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests in
their capacity as such (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or to
the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct
or indirect parent of the Company or any Restricted Subsidiary of the
Company (other than any such Equity Interests owned by the Company or
any Restricted Subsidiary of the Company);
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(3) make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes, except a payment of interest or principal at
the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other actions set
forth in clauses (1) through (4) above being collectively referred to as
"Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; and
(2) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Consolidated Interest Expense Coverage Ratio test set forth in the
first paragraph of the covenant described below under the caption
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock"; and
(3) such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Company and its Restricted Subsidiaries
after May 13, 1999 (the date of the indenture governing the last senior
notes we issued) (excluding Restricted Payments permitted by clauses
(2), (3), (4), (7) and (9) of the next succeeding paragraph), is less
than the sum, without duplication, of
(a) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the fiscal
quarter commencing on July 1, 1999 to the end of the Company's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of
such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company since
May 13, 1999 as a contribution to its common equity capital or from
the issue or sale of Equity Interests of the Company (other than
Disqualified Stock) (other than Equity Interests (or Disqualified
Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May
13, 1999 is sold for cash or otherwise liquidated or repaid for cash,
the lesser of (i) the cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if any) and (ii)
the initial amount of such Restricted Investment, plus
(d) the amount by which (i) Indebtedness (other than Disqualified Stock)
of the Company or any Restricted Subsidiary issued after May 13, 1999
is reduced on the Company's consolidated balance sheet (if prepared
in accordance with GAAP as of the date of determination) and (ii)
Disqualified Stock of the Company issued after May 13, 1999 (held by
any Person other than any Restricted Subsidiary) is reduced (measured
with reference to its redemption or repurchase price), in each case,
as a result of the conversion or exchange of any such Indebtedness or
Disqualified Stock into Equity Interests (other than Disqualified
Stock) of the Company, less, in each case, any cash distributed by
the Company upon such conversion or exchange, plus
(e) to the extent that any Investment in any Unrestricted Subsidiary that
was made after May 13, 1999 is sold for cash or otherwise liquidated,
repaid for cash or such Unrestricted Subsidiary is converted into a
Restricted Subsidiary, the lesser of (i) an amount equal to the sum
of (A) the net reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, repayments of loans or advances or other
transfers of assets, in each case to the Company or any Restricted
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Subsidiary from Unrestricted Subsidiaries, and (B) the fair market
value of the net assets of an Unrestricted Subsidiary at the time
such Unrestricted Subsidiary is designated a Restricted Subsidiary,
and (ii) the remaining amount of the Investment in such Unrestricted
Subsidiary which has not been repaid or converted into cash or
assets.
The preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration no Default has
occurred and is continuing or would be caused thereby and such payment
would have complied with the provisions of the Indenture;
(2) the making of any payment on or with respect to, or in connection with,
the redemption, repurchase, retirement, defeasance or other acquisition
of, any Indebtedness of the Company or any Restricted Subsidiary that
is subordinated to the Senior Notes or of any Equity Interests of the
Company or any Restricted Subsidiary in exchange for, or out of the net
cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity Interests (other than
Disqualified Stock) of the Company or any subordinated Indebtedness of
the Company; provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition shall be excluded from clause (3)(b) of
the preceding paragraph;
(3) the making of any payment on or with respect to, or in connection with,
the defeasance, redemption, repurchase or other acquisition of
Indebtedness of the Company or any Restricted Subsidiary that is
subordinated to the Senior Notes with the net cash proceeds from the
incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the Company
to the holders of its common Capital Stock on a pro rata basis;
(5) so long as no Default has occurred and is continuing or would be caused
thereby, the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any Restricted
Subsidiary of the Company held by any employee of the Company or any
Restricted Subsidiary pursuant to any employee equity subscription
agreement, stock ownership plan or stock option agreement in effect
from time to time; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $2.0 million in any twelve-month period and $10.0 million in the
aggregate;
(6) the making of any payment on or with respect to, or repurchase,
redemption, defeasance or other acquisition or retirement for value of
the 5.75% Subordinated Convertible Notes due 2003 or the 5.00%
Subordinated Convertible Notes due 2007 in connection with (i) so long
as no Event of Default has occurred and is continuing or would be
caused thereby, an optional redemption of such convertible notes on or
after May 3, 2001 or September 20, 2001, respectively pursuant to the
terms thereof, or (ii) the honoring by the Company of any conversion
request by a holder of either such convertible notes (including the
payment by the Company of any cash in lieu of fractional shares) in
accordance with their terms;
(7) that portion of Investments the payment for which consists exclusively
of Equity Interests (other than Disqualified Stock) of the Company;
(8) so long as no Default has occurred and is continuing or would be caused
thereby, other Restricted Payments in an aggregate amount not to exceed
$25.0 million;
(9) the repurchase of Equity Interests of the Company that may be deemed to
occur upon the exercise of stock options if such Equity Interests
represent a portion of the exercise price thereof;
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(10) any payments to one or more shareholders of the Company in connection
with settling shareholder obligations for income taxes in respect of
tax periods ending prior to the conversion of the Company from "S"
corporation status to "C" corporation status;
(11) in the case of an Asset Sale, any Asset Sale Offer after the Company
has complied with its obligations to the Holders of the Senior Notes
under the "Asset Sale" covenant contained in the Indenture; and
(12) in the case of a Change of Control, any Change of Control Offer to
repurchase the Senior Subordinated Notes after the Company has complied
with its obligations to the Holders of the Notes under the "Change of
Control" covenant contained in the Indenture.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
covenant with a fair market value in excess of $1.0 million but less than $5.0
million shall be evidenced by an Officer's Certificate which shall be delivered
to the Trustee. The fair market value of any assets or securities that are
required to be valued by this covenant with a fair market value in excess of
$5.0 million shall be determined by the Board of Directors whose resolution with
respect thereto shall be delivered to the Trustee.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Company will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and the
Company will not issue any Disqualified Stock and will not permit any of its
Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company and any Restricted Subsidiary that is a Guarantor may
incur Indebtedness (including Acquired Debt), and the Company may issue
Disqualified Stock, and any Restricted Subsidiary that is a Guarantor may issue
preferred stock, if the Consolidated Interest Expense Coverage Ratio for the
Company's most recently ended four full fiscal quarters (the "Reference Period")
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock is issued would have been at least 2.5 to 1, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred, or the Disqualified Stock or
preferred stock had been issued, as the case may be, at the beginning of such
four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of any
of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company and any Restricted Subsidiary of any
Permitted Bank Debt; provided that the aggregate principal amount of
all Permitted Bank Debt at any one time outstanding shall not exceed
$100.0 million plus 85% of the consolidated accounts receivable of the
Company plus 50% of the consolidated inventory of the Company;
(2) the incurrence by the Company and its Subsidiaries of Existing
Indebtedness;
(3) the incurrence by the Company and any Guarantor of Indebtedness
represented by the Senior Notes, and any Subsidiary Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of
(a) Indebtedness incurred for the purpose of financing all or any part
of the purchase price or cost of construction or improvement of
property, plant or equipment used in the business of the Company or
such Restricted Subsidiary
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and (b) Capital Lease Obligations, in an aggregate amount at any time
outstanding, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to
this clause (4), not to exceed 10% of the Company's Consolidated Net
Assets;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace, Indebtedness (other
than intercompany Indebtedness) that was permitted by the Indenture to
be incurred under the first paragraph of this covenant or clauses (2),
(3), (5), (13) or (14) of this paragraph;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Restricted Subsidiaries; provided, however, that:
(a) if the Company or any Guarantor is the obligor on such Indebtedness
and such Indebtedness is in favor of a Restricted Subsidiary other
than a Wholly Owned Restricted Subsidiary, such Indebtedness must be
expressly subordinated to the prior payment in full in cash of all
Obligations with respect to the Senior Notes, in the case of the
Company, or the Subsidiary Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other than
the Company or a Wholly Owned Restricted Subsidiary thereof and (ii)
any sale or other transfer of any such Indebtedness to a Person that
is not either the Company or a Wholly Owned Restricted Subsidiary
thereof; shall be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Company or such Restricted Subsidiary, as
the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or
hedging interest rate, commodity or currency risk in the ordinary
course of business for bona fide hedging purposes; provided that the
notional principal amount of any such Hedging Obligation with respect
to interest rates does not exceed the amount of Indebtedness or other
liability to which such Hedging Obligation relates;
(8) the Guarantee by the Company or any of the Guarantors of Indebtedness
of the Company or a Restricted Subsidiary of the Company that was
permitted to be incurred by another provision of this covenant;
(9) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt; provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such
event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (9);
(10) the incurrence of Indebtedness solely in respect of performance, surety
and similar bonds or completion or performance Guarantees, to the
extent that such incurrence does not result in the incurrence of any
obligation for the payment of borrowed money to others;
(11) the incurrence of Indebtedness arising from the agreements of the
Company or a Restricted Subsidiary of the Company providing for
indemnification, adjustment of purchase price or similar obligations,
in each case, incurred or assumed in connection with the disposition of
any business, assets or a Subsidiary; provided, however, that:
(a) such Indebtedness is not reflected as a liability on the balance
sheet of the Company or any Restricted Subsidiary of the Company; and
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(b) the maximum assumable liability in respect of all such Indebtedness
shall at no time exceed the gross proceeds, including non-cash
proceeds (the fair market value of such non-cash proceeds being
measured at the time received and without giving effect to any
subsequent changes in value), actually received by the Company and
its Restricted Subsidiaries in connection with such disposition;
(12) the accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of
dividends on Disqualified Stock in the form of additional shares of the
same class of Disqualified Stock; provided, in each such case, that the
amount thereof is included in Consolidated Interest Expense of the
Company as accrued;
(13) the incurrence of Indebtedness by Foreign Subsidiaries in an amount not
to exceed 10% of the Total Tangible Assets of the Foreign Subsidiaries,
taken as a whole; and
(14) the incurrence by the Company or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (14), not to exceed $25.0
million.
Indebtedness or preferred stock of any Person which is outstanding at the
time such Person becomes a Restricted Subsidiary of the Company (including upon
designation of any Subsidiary or other Person as a Restricted Subsidiary) or is
merged with or into or consolidated with the Company or a Restricted Subsidiary
of the Company shall be deemed to have been incurred at the time such Person
becomes such a Restricted Subsidiary of the Company or is merged with or into or
consolidated with the Company or a Restricted Subsidiary of the Company, as
applicable.
The Company will not incur any Indebtedness (including Permitted Debt) that
is contractually subordinated in right of payment to any other Indebtedness of
the Company unless such Indebtedness is also contractually subordinated in right
of payment to the Senior Notes on substantially identical terms; provided,
however, that no Indebtedness of the Company shall be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Company solely
by virtue of any Liens, Guarantees, maturity of payments or structural
seniority.
For purposes of determining compliance with this "Incurrence of Indebtedness
and Issuance of Preferred Stock" covenant, in the event that an item of proposed
Indebtedness meets the criteria of more than one of the categories of Permitted
Debt described in clauses (1) through (14) above, or is entitled to be incurred
pursuant to the first paragraph of this covenant, the Company will, in its sole
discretion, classify or reclassify such item of Indebtedness (or any part
thereof) in any manner that complies with this covenant, and such item of
Indebtedness shall be treated as having been incurred pursuant to only one of
such clauses or pursuant to the first paragraph of this covenant.
For purposes of determining any particular amount of Indebtedness under this
covenant, Guarantees, Liens or obligations in support of letters of credit
supporting Indebtedness shall not be included to the extent such letters of
credit are included in the amount of such Indebtedness.
Any increase in the amount of any Indebtedness solely by reason of currency
fluctuations shall not be considered an incurrence of Indebtedness for purposes
of this covenant.
Liens
The Company will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind securing Indebtedness on any asset now owned or
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hereafter acquired, except Permitted Liens, unless the Senior Notes are equally
and ratably secured with the obligations so secured for as long as such
Indebtedness will be so secured.
Dividend and Other Payment Restrictions Affecting Subsidiaries
The Company will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or permit to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock to
the Company or any of the Company's Restricted Subsidiaries, or with
respect to any other interest or participation in, or measured by, its
profits, or pay any indebtedness owed to the Company or any of the
Company's Restricted Subsidiaries;
(2) make loans or advances to the Company or any of the Company's Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of the
Company's Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date of the Indenture and any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such Existing
Indebtedness, as in effect on the date of the Indenture;
(2) the Indenture and the Senior Notes;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of
such acquisition), which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired,
provided that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of the Indenture to be incurred;
(5) customary non-assignment provisions in leases, licenses or other
contracts entered into in the ordinary course of business and
consistent with past practices;
(6) purchase money obligations or Capital Lease Obligations for property
acquired in the ordinary course of business that impose restrictions on
the property so acquired of the nature described in clause (3) of the
first paragraph of this section;
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts dividends, distributions, loans, advances or
transfers by such Restricted Subsidiary pending its sale or other
disposition;
(8) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being
refinanced;
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(9) agreements entered into with respect to Liens securing Indebtedness
otherwise permitted to be incurred pursuant to the provisions of the
covenant described above under the caption "-- Certain
Covenants -- Liens" that limit the right of the Company or any of its
Restricted Subsidiaries to dispose of the assets subject to such Lien;
(10) provisions with respect to the disposition or distribution of assets or
property in joint venture agreements and other similar agreements
entered into in the ordinary course of business;
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business;
(12) any Receivables Program; and
(13) any restriction imposed pursuant to contracts for the sale of assets
with respect to the transfer of the assets to be sold pursuant to such
contract.
Merger, Consolidation, or Sale of Assets
The Company may not, directly or indirectly: (1) consolidate or merge with
or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of its properties or assets, in one or more related
transactions, to another Person, unless:
(1) either: (a) the Company is the surviving corporation; or (b) the Person
formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, conveyance or
other disposition shall have been made is a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes
all the obligations of the Company under the Senior Notes, the Indenture
and the Registration Rights Agreement pursuant to agreements reasonably
satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default
exists;
(4) except in the case of the amalgamation, consolidation or merger of the
Company (a) with or into a Wholly Owned Restricted Subsidiary, or (b)
with or into any Person solely for the purpose of effecting a change in
the state of incorporation of the Company, the Company or the Person
formed by or surviving any such consolidation or merger (if other than
the Company) will, on the date of such transaction after giving pro
forma effect thereto and any related financing transactions as if the
same had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Interest Expense Coverage Ratio test set
forth in the first paragraph of the covenant described above under the
caption "-- Certain Covenants -- Incurrence of Indebtedness and Issuance
of Preferred Stock;" and
(5) the Company shall have delivered to the Trustee an Officer's Certificate
stating that such consolidation, merger, sale, assignment, transfer,
conveyance or other disposition complies with the Indenture.
In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This "Merger, Consolidation, or Sale of
Assets" covenant will not apply to a sale, assignment, transfer, conveyance or
other disposition of assets by the Company to any of its Wholly Owned Restricted
Subsidiaries.
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Transactions with Affiliates
The Company will not, and will not permit any of its Restricted Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any transaction, contract, agreement, understanding, loan,
advance or Guarantee with, or for the benefit of, any Affiliate (each, an
"Affiliate Transaction"), unless:
(1) such Affiliate Transaction (when viewed together with related Affiliate
Transactions, if any) is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$10.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction
complies with this covenant and that such Affiliate Transaction has
been approved by a majority of the disinterested members of the Board
of Directors (of which there must be at least one); and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$25.0 million, an opinion as to the fairness to the Holders of such
Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national
standing;
provided that (i) the Company and its Restricted Subsidiaries may enter into
Affiliate Transactions pursuant to the Supply Agreement, the Foundry Agreement,
the Asset Purchase Agreement, the Transition Services Agreement and the
Intellectual Property Rights Licensing Agreement, and may amend, modify and
supplement such agreements from time to time, so long as the Company shall have
determined that any such amendment, modification or supplement will not have a
material adverse economic effect on the Company and its Subsidiaries, taken as a
whole, and (ii) the Company and its Restricted Subsidiaries may only enter into
transactions pursuant to the Supply Agreement, the Foundry Agreement, the Asset
Purchase Agreement, the Transition Services Agreement and the Intellectual
Property Rights Licensing Agreement, and amend, modify and supplement such
agreements from time to time, in circumstances in which clause (i) is not
applicable, if a majority of the disinterested members of the Board of Directors
(of which there must be at least one) shall have approved such transaction,
amendment, modification or supplement; provided, further, that in the case of
both clauses (i) and (ii), the Company shall deliver to the Trustee within 30
days of such transaction, amendment, modification or supplement an Officer's
Certificate (A) describing the transaction, amendment, modification or
supplement approved, (B) in the case of transactions, amendments, modifications
and supplements to which clause (i) is applicable, setting forth the
determination of the Company required pursuant to clause (i), and (C) in the
case of transactions, amendments, modifications and supplements to which clause
(ii) is applicable, attaching a resolution of the Board of Directors certifying
that such Affiliate Transaction complies with this covenant.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraphs:
(1) any employment agreement or arrangement entered into by the Company or
any of its Restricted Subsidiaries or any employee benefit plan
available to employees of the Company and its Subsidiaries generally, in
each case in the ordinary course of business and consistent with the
past practice of the Company or such Restricted Subsidiary;
(2) Affiliate Transactions between or among the Company and/or its
Restricted Subsidiaries;
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(3) payment of reasonable directors fees to Persons who are not otherwise
Affiliates of the Company and indemnity provided on behalf of officers,
directors and employees of the Company or any of its Restricted
Subsidiaries as determined in good faith by the Board of Directors of
the Company;
(4) Any Affiliate Transactions pursuant to which the Company makes
short-term advances or otherwise makes short-term loans to ASI, which
advances or loans are to be repaid by ASI (i) within three months from
the date of such advance or loan and (ii) by offsets by the Company of
amounts payable by the Company to ASI pursuant to the Supply Agreement,
if a majority of the disinterested members of the Board of Directors (of
which there must be at least one) shall have approved such transaction,
amendment, modification or supplement; provided that the total amount of
such advances and loans outstanding at any one time shall not exceed
$50.0 million; and
(5) Any Restricted Payments that are permitted as described above under the
caption "-- Certain Covenants -- Restricted Payments."
For purposes of this "Transactions with Affiliates" covenant, any
transaction or series of related Affiliate Transactions between the Company or
any Restricted Subsidiary and an Affiliate that is approved by a majority of the
disinterested members of the Board of Directors (of which there must be at least
one to utilize this method of approval) and evidenced by a board resolution or
for which a fairness opinion has been issued shall be deemed to be on terms that
are no less favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person and thus shall be
permitted under this "Transactions with Affiliates" covenant.
Sale and Leaseback Transactions
The Company will not, and will not permit any of its Subsidiaries to, enter
into any sale and leaseback transaction; provided that the Company or any
Restricted Subsidiary may enter into a sale and leaseback transaction if:
(1) the Company or such Restricted Subsidiary, as applicable, could have
incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction (if the lease is in the
nature of an operating lease, otherwise the amount of Indebtedness)
under the Consolidated Interest Expense Coverage Ratio test in the first
paragraph of the covenant described above under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock;" and
(2) the transfer of assets in that sale and leaseback transaction is
permitted by, and the Company applies the proceeds of such transaction
in compliance with, the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Offer to Repurchase by
Application of Excess Proceeds of Asset Sales."
The foregoing restriction shall not apply to any sale and leaseback
transaction if (i) the transaction is solely between the Company and any
Restricted Subsidiary or between Restricted Subsidiaries or (ii) the sale and
leaseback transaction is consummated within 180 days after the purchase of the
assets subject to such transaction.
No Amendment to Subordination Provisions
Without the consent of the Holders of at least a majority in aggregate
principal amount of the Senior Notes then outstanding, the Company will not
amend, modify or alter the indenture governing the 10.25% Senior Subordinated
Notes due 2009 in any way to:
(1) increase the rate of or change the time for payment of interest on any
10.25% Senior Subordinated Notes due 2009;
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(2) increase the principal of, advance the final maturity date of or shorten
the Weighted Average Life to Maturity of any 10.25% Senior Subordinated
Notes due 2009;
(3) alter the redemption provisions or the price or terms at which the
Company is required to offer to purchase any 10.25% Senior Subordinated
Notes due 2009; or
(4) amend the subordinated provisions of Article 10 contained in the
indenture governing the 10.25% Senior Subordinated Notes due 2009.
Subsidiary Guarantees
If the Company or any of its Restricted Subsidiaries acquires, creates or
capitalizes a Domestic Subsidiary after the date of the Indenture that is a
Significant Subsidiary, then that newly acquired, created or capitalized
Subsidiary must become a Guarantor and execute a supplemental indenture
satisfactory to the Trustee and deliver an Opinion of Counsel to the Trustee
within 10 Business Days of the date on which it was acquired or created. Each
Subsidiary Guarantee will be subordinated to the prior payment in full of all
Permitted Bank Debt of that Subsidiary Guarantor, and senior in right of payment
to any future subordinated Indebtedness of such Subsidiary Guarantor.
Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, all
outstanding Investments owned by the Company and its Restricted Subsidiaries in
the Subsidiary so designated will be deemed to be an Investment made as of the
time of such designation and will reduce the amount available for Restricted
Payments under covenant described above under the caption "-- Certain
Covenants -- Restricted Payments" or Permitted Investments, as applicable. All
such outstanding Investments will be valued at their fair market value at the
time of such designation. That designation will only be permitted if such
Restricted Payment would be permitted at that time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The
Board of Directors may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if the redesignation would not cause a Default.
Limitation on Issuances and Sales of Equity Interests in Wholly Owned Restricted
Subsidiaries
The Company will not, and will not permit any of its Wholly Owned Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Wholly Owned Restricted Subsidiary of the Company to any
Person (other than the Company or a Wholly Owned Restricted Subsidiary of the
Company), unless:
(1) such transfer, conveyance, sale, lease or other disposition is of all
the Equity Interests in such Wholly Owned Restricted Subsidiary or
immediately following such transfer, conveyance, sale, lease or other
disposition, the Wholly Owned Restricted Subsidiary is a Restricted
Subsidiary; and
(2) the cash Net Proceeds from such transfer, conveyance, sale, lease or
other disposition are applied in accordance with the covenant described
above under the caption "-- Repurchase at the Option of Holders -- Offer
to Repurchase by Application of Excess Proceeds of Asset Sales."
In addition, the Company will not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company unless immediately following such issuance the Wholly
Owned Restricted Subsidiary is a Restricted Subsidiary.
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METHODS OF RECEIVING PAYMENTS ON THE SENIOR NOTES
If a Holder has given wire transfer instructions to the Company, the Company
will make all principal, premium and interest payments on those Senior Notes in
accordance with those instructions. All other payments on the Notes will be made
at the office or agency of the Paying Agent and Registrar within the City and
State of New York unless the Company elects to make interest payments by check
mailed to the Holders at their address set forth in the register of Holders.
PAYING AGENT AND REGISTRAR FOR THE SENIOR NOTES
The Trustees will initially act as Paying Agent and Registrar. The Company
may change the Paying Agent or Registrar without prior notice to the Holders of
the Senior Notes, and the Company or any of its Subsidiaries may act as Paying
Agent or Registrar.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Senior Notes in accordance with the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture.
The registered Holder of a Senior Note will be treated as the owner of it
for all purposes.
PAYMENTS FOR CONSENT
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Senior Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of the Indenture or the
Senior Notes unless such consideration is offered to be paid and is paid to all
Holders of the Senior Notes that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
REPORTS
Whether or not required by the Commission, so long as any Senior Notes are
outstanding, the Company shall file with the Commission (if permitted) all of
the reports and other information as it would be required to file with the
Commission by Sections 13(a) and 15(d) under the Securities Exchange Act of
1934, as amended, as if it were subject thereto. The Company shall supply the
Trustees and each Holder of Senior Notes, or shall supply to the Trustees for
forwarding to each Holder of Senior Notes, without cost to any such Holder,
copies of such reports and other information (whether or not so filed).
EVENTS OF DEFAULT AND REMEDIES
With respect to the Senior Notes, each of the following is an "Event of
Default":
(1) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Senior Notes;
(2) default in payment when due of the principal of or premium, if any, on
the Senior Notes;
(3) failure by the Company or any of its Subsidiaries to make any payment
required to be made under the provisions described under the caption
"-- Repurchase at the Option of Holders -- Offer to Repurchase Upon
Change of Control" or "-- Repurchase at the Option of Holders -- Offer
to Repurchase by Application of Excess Proceeds of Asset Sales;"
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(4) failure by the Company or any of its Restricted Subsidiaries for 60 days
after notice to comply with any covenant, representations, warranty or
other agreements in the Indenture is provided to the Company by the
Trustees or the Holders of at least 25% in principal amount of then
outstanding Senior Notes;
(5) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries) whether such Indebtedness or
Guarantee now exists, or is created after the date of the Indenture, in
an aggregate principal amount of $10.0 million or more, if that default:
(a) is caused by a failure to pay principal of such Indebtedness at the
Stated Maturity thereof (a "Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to the Stated
Maturity thereof;
(6) failure by the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, to pay final judgments aggregating in excess of
$10.0 million (other than amounts covered by insurance), which judgments
are not paid, discharged or stayed for a period of 60 days; and
(7) certain events of bankruptcy or insolvency with respect to the Company
or any of its Significant Subsidiaries, or any group of Subsidiaries
that, taken together, would constitute a Significant Subsidiary.
In the case of an Event of Default arising from certain events of bankruptcy
or insolvency, with respect to the Company, any Subsidiary that is a Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Senior Notes will become due and payable
immediately without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Senior Notes may declare all the Senior
Notes to be due and payable immediately.
Holders of the Senior Notes may not enforce their respective Indentures or
the Senior Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Senior Notes may direct a Trustee in its exercise of any trust or power. A
Trustee may withhold from Holders of the Senior Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice
is in their interest.
The Holders of a majority in aggregate principal amount of the Senior Notes
then outstanding by notice to a Trustee may on behalf of the Holders of all of
the Senior Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Senior Notes.
The Company is required to deliver to the Trustees annually a statement
regarding compliance with the Indenture. Upon becoming aware of any Default or
Event of Default, the Company is required to deliver to the Trustees a statement
specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Company
or any Guarantor, as such, shall have any liability for any obligations of the
Company or the Guarantors under the Senior Notes, the Indenture, the Subsidiary
Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Senior Notes by accepting a Senior
Note waives and releases all such liability. The
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waiver and release are part of the consideration for issuance of the Senior
Notes. The waiver may not be effective to waive liabilities under the federal
securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Senior Notes and all
obligations of the Guarantors discharged with respect to their Subsidiary
Guarantees ("Legal Defeasance"), except for:
(1) the rights of Holders of outstanding Senior Notes to receive payments in
respect of the principal of, premium, if any, and interest and
Liquidated Damages on such Senior Notes when such payments are due from
the trust referred to below;
(2) the Company's obligations with respect to the Senior Notes concerning
issuing temporary Senior Notes, registration of Senior Notes, mutilated,
destroyed, lost or stolen Senior Notes and the maintenance of an office
or agency for payment and money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee, and
the Company's obligations in connection therewith; and
(4) the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect to have
the Obligations of the Company and the Guarantors released with respect to
certain covenants that are described in the Indenture ("Covenant Defeasance")
and thereafter any omission to comply with those covenants shall not constitute
a Default or Event of Default with respect to the Senior Notes. In the event
Covenant Defeasance occurs, certain events (other than non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default" will no longer constitute an Event of Default with respect to the
Senior Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Senior Notes, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium
and Liquidated Damages, if any, and interest and Liquidated Damages on
the outstanding Senior Notes on the stated maturity or on the applicable
redemption date, as the case may be, and the Company must specify
whether the Senior Notes are being defeased to maturity or to a
particular redemption date;
(2) in the case of Legal Defeasance, the Company shall have delivered to the
Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (a) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the
date of the Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon
such opinion of counsel shall confirm that, the Holders of the
outstanding Senior Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Company shall have delivered to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Senior Notes will not
recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same
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manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be continuing
either: (a) on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit); or (b) or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the
91st day after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not result in a breach
or violation of, or constitute a default under any material agreement or
instrument (other than the Indenture) to which the Company or any of its
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;
(6) the Company must have delivered to the Trustee an opinion of counsel to
the effect that after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(7) the Company must deliver to the Trustee an Officers' Certificate stating
that the deposit was not made by the Company with the intent of
preferring the Holders of Senior Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others;
(8) the Company must deliver to the Trustee an Officers' Certificate and an
opinion of counsel, each stating that all conditions precedent relating
to the Legal Defeasance or the Covenant Defeasance have been complied
with; and
(9) release any Guarantor from any of its Obligations under its Guarantee of
the Senior Notes or the Indenture, except in accordance with the terms
of the Indenture.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject to the exceptions specified in the following paragraphs, the
Indenture may be amended with the consent of the Holders of a majority of the
aggregate outstanding principal amount of the Senior Notes and any Default or
compliance with any provision of the Indenture may be waived with the consent of
the Holders of a majority of the aggregate outstanding principal amount of the
Senior Notes.
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Senior Notes whose Holders must consent
to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Senior Note
or alter the provisions with respect to the redemption of the Senior
Notes (other than provisions relating to the covenants described above
under the caption "-- Repurchase at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest, including
default interest, on any Senior Note;
(4) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Senior Notes (except a rescission of
acceleration of the Senior Notes by the Holders of at least a majority
in aggregate principal amount of the Senior Notes and a waiver of the
payment default that resulted from such acceleration);
(5) make any Senior Note payable in money other than that stated in the
Senior Notes;
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(6) make any change in the provisions of the Indenture relating to waivers
of past Defaults or the rights of Holders of Senior Notes to receive
payments of principal of or premium, if any, or interest on the Senior
Notes;
(7) waive a payment required by one of the covenants described above under
the caption "-- Repurchase at the Option of Holders;" or
(8) make any change in the preceding amendment and waiver provisions.
Notwithstanding the preceding, without the consent of any Holder of Senior
Notes, the Company and the Trustee may amend or supplement the Indenture or the
Senior Notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Senior Notes in addition to or in place of
certificated Senior Notes;
(3) to provide for the assumption of the Company's obligations to Holders of
Senior Notes in the case of a merger or consolidation or sale of all or
substantially all of the Company's assets;
(4) to make any change that would provide any additional rights or benefits
to the Holders of Senior Notes or that does not adversely affect the
legal rights under the Indenture of any such Senior Holder; or
(5) to comply with requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture
Act.
CONCERNING THE TRUSTEE
If a Trustee becomes a creditor of the Company or any Guarantor, the
Indenture limit its right to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security or
otherwise. Such Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue or resign.
The Holders of a majority in principal amount of the then outstanding Senior
Notes will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to a Trustee, subject to certain
exceptions. The Indenture provides that in case an Event of Default shall occur
and be continuing, the Trustees will be required, in the exercise of their
power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the Trustees will be under no obligation to
exercise any of their rights or powers under the Indenture at the request of any
Holder of Senior Notes, unless such Holder shall have offered to the Trustees
security and indemnity satisfactory to it against any loss, liability or
expense.
ADDITIONAL INFORMATION
Anyone who receives this prospectus may obtain a copy of the registration
statement and the exhibits to the registration statement, which include the
Indenture and Registration Rights Agreement, without charge by writing to Amkor
Technology, Inc., 1345 Enterprise Drive, West Chester, Pennsylvania 19380,
Attention: Kevin Heron, Esq.
GOVERNING LAW
The Indenture provides that they and the Senior Notes will be governed by,
and construed in accordance with, the laws of the State of New York without
giving effect to applicable principles of conflicts of laws to the extent that
the application of the law of another jurisdiction would be required thereby.
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ENFORCEABILITY OF JUDGMENTS
Since most of the assets of the Company are outside the United States, any
judgments obtained in the United States against the Company, including judgments
with respect to the payment of principal, premium, interest, Liquidated Damages,
Change of Control Payment, offer price, redemption price or other amounts
payable under the Senior Notes, may be not collectible within the United States.
The Company has been informed by its Korean counsel, Kim & Chang, that the
laws of the Republic of Korea permit an action to be brought in a court of
competent jurisdiction in the Republic of Korea (a "Korean Court") on any final
and conclusive judgment in personam of any federal or state court located in the
Borough of Manhattan in The City of New York ("New York Court") that is not
impeachable as void or voidable under the internal laws of the State of New York
for a sum certain in respect of the enforcement of the Indentures or the Notes
provided that (i) such judgment was final, conclusive and non-appelable and was
rendered by the New York Court having valid jurisdiction, (ii) the defendant
against whom such judgment was awarded received service of process in conformity
with the laws of the jurisdiction of the New York Court rendering judgment
otherwise than by publication or responded to the action without having been
served with process, (iii) recognition and enforcement of such judgment is not
contrary to the public policy of Korea, and (iv) judgments of the courts of
Korea would be similarly recognized and enforced in the courts of the State of
New York which had given such judgement.
The Company has been informed by its Philippines counsel, Ortega, Del
Castillo, Bacorro, Odulio, Calma & Carbonell Law Offices, that the Rules of
Court of the Republic of the Philippines and jurisprudence related thereto
permit an action to be brought in a court of competent jurisdiction in the
Republic of the Philippines (a "Philippines Court") on any final and conclusive
judgment in personam of any New York Court that is not impeachable as void or
voidable under the internal laws of the State of New York for a sum certain in
respect of the enforcement of the Indenture or the Senior Notes if (i) the court
rendering such judgment had jurisdiction over the subject matter and the
judgment debtor, as recognized by the Philippines Court (and submission by the
Company in the Indentures to the non-exclusive jurisdiction of the New York
Court will be sufficient for that purpose), (ii) such judgment was not obtained
by want of jurisdiction or lack of notice to any affected party or collusion or
fraud or clear mistake of law or fact and the enforcement thereof would not be
inconsistent with public policy, as these terms are interpreted by a Philippines
Court, (iii) the enforcement of such judgment does not constitute, directly or
indirectly, the enforcement of such foreign revenue, expropriatory or penal laws
and (iv) the action to enforce such judgment is commenced within the applicable
limitation period. Provided conditions (i) through (iv) as set forth above are
satisfied, the Company has been advised by Ortega, Del Castillo, Bacorro,
Odulio, Calma & Carbonell that it knows of no reason, based upon public policy
under the federal laws of the Republic of the Philippines for avoiding
recognition of a judgment of a New York Court to enforce the Indenture or the
Senior Notes.
BOOK-ENTRY, DELIVERY AND FORM AND TRANSFER
The old Senior Notes were initially in the form of one or more registered
global notes without interest coupons (collectively, the "old Global Notes").
Upon issuance, the old Global Notes were deposited with the Trustee, as
custodian for The Depository Trust Company ("DTC"), in New York, New York, and
registered in the name of DTC or its nominee for credit to the accounts of DTC's
Direct Participants and Indirect Participants (as defined below). Beneficial
interests in all old Global Notes and all old Certificated Notes (as defined
below), if any, will be subject to certain restrictions on transfer and will
bear a restrictive legend. See "Risk Factors -- Consequences of Not Tendering
Old Senior Notes." In addition, transfer of beneficial interests in any Global
Notes will be subject to the applicable rules and procedures of DTC and its
Direct or Indirect Participants, which may change from time to time.
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The new Senior Notes initially will be in the form of one or more registered
global notes without interest coupons (collectively, the "new Global Notes").
Upon issuance, the new Global Notes will be deposited with the Trustee as,
custodian for DTC, in New York, New York, and registered in the name of DTC or
its nominee for credit to the accounts of DTC's Direct Participants and Indirect
Participants. Transfer of beneficial interests in new Global Notes will be
subject to the applicable rules and procedures of DTC and its Direct or Indirect
Participants, which may change from time to time.
The old and new Global Notes may be transferred, in whole and not in part,
only to another nominee of DTC or to a successor of DTC or its nominee in
certain limited circumstances. Beneficial interests in the old and new Global
Notes may be exchanged for Senior Notes in certificated form in certain limited
circumstances. See "-- Transfer of Interests in Global Notes for Certificated
Notes."
Initially, the Trustee will act as Paying Agent and Registrar. The Senior
Notes may be presented for registration of transfer and exchange at the offices
of the Registrar.
Depositary Procedures
DTC has advised the Company that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Direct Participants") and to facilitate the clearance and settlement of
transactions in those securities between Direct Participants through electronic
book-entry changes in accounts of Participants. The Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. Access to DTC's system is also available to
other entities that clear through or maintain a direct or indirect, custodial
relationship with a Direct Participant (collectively, the "Indirect
Participants").
DTC has advised the Company that, pursuant to DTC's procedures, DTC will
maintain records of the ownership interests of Direct Participants in the old
and new Global Notes and the transfer of ownership interests by and between
Direct Participants. DTC will not maintain records of the ownership interests
of, or the transfer of ownership interests by and between, Indirect Participants
or other owners of beneficial interests in the old and new Global Notes. Direct
Participants and Indirect Participants must maintain their own records of the
ownership interests of, and the transfer of ownership interests by and between,
Indirect Participants and other owners of beneficial interests in the old and
new Global Notes.
Investors in the old and new Global Notes may hold their interests therein
directly through DTC if they are Direct Participants in DTC or indirectly
through organizations that are Direct Participants in DTC. All ownership
interests in any old or new Global Notes may be subject to the procedures and
requirements of DTC.
The laws of some states in the United States require that certain persons
take physical delivery in definitive, certificated form, of securities that they
own. This may limit or curtail the ability to transfer beneficial interests in
an old or new Global Note to such persons. Because DTC can act only on behalf of
Direct Participants, which in turn act on behalf of Indirect Participants and
others, the ability of a person having a beneficial interest in an old or new
Global Note to pledge such interest to persons or entities that are not Direct
Participants in DTC, or to otherwise take actions in respect of such interests,
may be affected by the lack of physical certificates evidencing such interests.
For certain other restrictions on the transferability of the Senior Notes see
"-- Transfers of Interests in Global Notes for Certificated Notes."
EXCEPT AS DESCRIBED IN "-- TRANSFERS OF INTERESTS IN GLOBAL NOTES FOR
CERTIFICATED NOTES", OWNERS OF BENEFICIAL INTERESTS IN THE OLD AND NEW GLOBAL
NOTES WILL NOT HAVE SENIOR NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE
PHYSICAL DELIVERY OF SENIOR NOTES IN CERTIFICATED FORM AND WILL NOT BE
CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE INDENTURE FOR ANY
PURPOSE OTHER THAN WITH RESPECT TO THE PAYMENT OF LIQUIDATED DAMAGES.
Under the terms of the Indenture, the Company and the Trustees will treat
the persons in whose names the Senior Notes are registered (including Senior
Notes represented by the old and new Global Notes) as the
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owners thereof for the purpose of receiving payments and for any and all other
purposes whatsoever. Payments in respect of the principal, premium, Liquidated
Damages, if any, and interest on old and new Global Notes registered in the name
of DTC or its nominee will be payable by the Trustees to DTC or its nominee as
the registered holder under the Indenture. Consequently, neither the Company,
the Trustees nor any agent of the Company or the Trustees has or will have any
responsibility or liability for (i) any aspect of DTC's records or any Direct
Participant's or Indirect Participant's records relating to or payments made on
account of beneficial ownership interests in the Global Notes or for
maintaining, supervising or reviewing any of DTC's records or any Direct
Participant's or Indirect Participant's records relating to the beneficial
ownership interests in any Global Note or (ii) any other matter relating to the
actions and practices of DTC or any of its Direct Participants or Indirect
Participants.
DTC has advised the Company that its current payment practice (for payments
of principal, interest and the like) with respect to securities such as the
Senior Notes is to credit the accounts of the relevant Direct Participants with
such payment on the payment date in amounts proportionate to such Direct
Participant's respective ownership interests in the old and new Global Notes as
shown on DTC's records. Payments by Direct Participants and Indirect
Participants to the beneficial owners of the Senior Notes will be governed by
standing instructions and customary practices between them and will not be the
responsibility of DTC, the Trustee or the Company. Neither the Company nor the
Trustees will be liable for any delay by DTC or its Direct Participants or
Indirect Participants in identifying the beneficial owners of the Senior Notes,
and the Company and the Trustees may conclusively rely on and will be protected
in relying on instructions from DTC or its nominee as the registered owner of
the Senior Notes for all purposes.
The old and new Global Notes will trade in DTC's Same-Day Funds Settlement
System and, therefore, transfers between Direct Participants in DTC will be
effected in accordance with DTC's procedures, and will be settled in immediately
available funds. Transfers between Indirect Participants who hold an interest
through a Direct Participant will be effected in accordance with the procedures
of such Direct Participant but generally will settle in immediately available
funds.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Senior Notes only at the direction of one or more Direct
Participants to whose account interests in the old and new Global Notes are
credited and only in respect of such portion of the aggregate principal amount
of the Notes to which such Direct Participant or Direct Participants has or have
given direction. However, if there is an Event of Default under the Notes, DTC
reserves the right to exchange old and new Global Notes (without the direction
of one or more of its Direct Participants) for Senior Notes in certificated
form, and to distribute such certificated forms of Senior Notes to its Direct
Participants. See "-- Transfers of Interests in Global Notes for Certificated
Notes."
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the old and new Global Notes among Direct Participants, it is
under no obligation to perform or to continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Company nor the
Trustees shall have any responsibility for the performance by DTC or its Direct
and Indirect Participants of their respective obligations under the rules and
procedures governing any of their operations.
The information in this section concerning DTC and its book-entry systems
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
Transfers of Interests in Global Notes for Certificated Notes
An entire old or new Global Note may be exchanged for definitive Senior
Notes in registered, certificated form without interest coupons ("Certificated
Notes") if (i) DTC (x) notifies the Company that it is unwilling or unable to
continue as depositary for the old and new Global Notes and the Company
thereupon fails to appoint a successor depositary within 90 days or (y) has
ceased to be a clearing agency registered under the
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Exchange Act, (ii) the Company, at its option, notifies the appropriate Trustee
in writing that it elects to cause the issuance of Certificated Notes or (iii)
there shall have occurred and be continuing a Default or an Event of Default
with respect to the Notes. In any such case, the Company will notify the
appropriate Trustee in writing that, upon surrender by the Direct and Indirect
Participants of their interest in such Global Note, Certificated Notes will be
issued to each person that such Direct and Indirect Participants and the DTC
identify as being the beneficial owner of the related Senior Notes.
Beneficial interests in old and new Global Notes held by any Direct or
Indirect Participant may be exchanged for Certificated Notes upon request to
DTC, by such Direct Participant (for itself or on behalf of an Indirect
Participant), to the appropriate Trustee in accordance with customary DTC
procedures. Certificated Notes delivered in exchange for any beneficial interest
in any old or new Global Note will be registered in the names, and issued in any
approved denominations, requested by DTC on behalf of such Direct or Indirect
Participants (in accordance with DTC's customary procedures).
Neither the Company nor the Trustees will be liable for any delay by the
holder of any old or new Global Note or DTC in identifying the beneficial owners
of Senior Notes, and the Company and the Trustees may conclusively rely on, and
will be protected in relying on, instructions from the holder of an old or new
Global Note or DTC for all purposes.
Same Day Settlement and Payment
The Indenture will require that payments in respect of the Senior Notes
represented by the old and new Global Notes (including principal, premium, if
any, and interest and Liquidated Damages, if any) be made by wire transfer of
immediately available same day funds to the accounts specified by the holder of
interests in such old or new Global Note. With respect to Certificated Notes,
the Company will make all payments of principal, premium, Liquidated Damages, if
any, and interest by wire transfer of immediately available same day funds to
the accounts specified by the holders thereof or, if no such account is
specified, by mailing a check to each such holder's registered address. The
Company expects that secondary trading in the Certificated Notes will also be
settled in immediately available funds.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The Company and the Initial Purchasers entered into the Registration Rights
Agreement on February 20, 2001. Pursuant to the Registration Rights Agreement,
the Company agreed to use commercially reasonable efforts to file with the
Commission the Exchange Offer Registration Statement on the appropriate form
under the Securities Act with respect to the Exchange Notes. The registration
statement of which this prospectus forms a part constitutes such Exchange Offer
Registration Statement. Pursuant to the Exchange Offer Registration Statement of
which this prospectus forms a part, the Company is offering to the Holders of
Transfer Restricted Securities who are able to make certain representations the
opportunity to exchange their Transfer Restricted Securities for new Senior
Notes. As described above, the terms of new Senior Notes will be identical in
all material respects to those of the old Senior Notes, except that the new
Senior Notes will not contain terms with respect to transfer restrictions,
registration rights or payment of Liquidated Damages. See "Additional Terms of
New Senior Notes."
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If (i) the Exchange Offer is not permitted by applicable law or Commission
policy or (ii) any Holder of Senior Notes which are Transfer Restricted
Securities notifies the Company prior to the 20th business day following the
consummation of the Exchange Offer that (a) it is prohibited by law or
Commission policy from participating in the Exchange Offer, (b) it may not
resell the Exchange Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus, and the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales by
it, or (c) it is a broker-dealer and holds Senior Notes acquired directly from
the Company or any of the Company's affiliates, the Company will file with the
Commission a Shelf Registration Statement to register for public resale the
Transfer Restricted Securities held by any such Holder who provides the Company
with certain information for inclusion in the Shelf Registration Statement.
For the purposes of the Registration Rights Agreement, "Transfer Restricted
Securities" means each Senior Note until:
(1) the date on which such Senior Note has been exchanged by a Person other
than a broker-dealer for an Exchange Note in the Exchange Offer;
(2) following the exchange by a broker-dealer in the Exchange Offer of a
Senior Note for an Exchange Note, the date on which such Exchange Note
is sold to a purchaser who receives from such broker-dealer on or prior
to the date of such sale a copy of the prospectus contained in the
Exchange Offer Registration Statement;
(3) the date on which such Senior Note has been effectively registered under
the Securities Act and disposed of in accordance with the Shelf
Registration Statement; or
(4) the date on which such Senior Note is distributed to the public pursuant
to Rule 144 under the Securities Act.
The Registration Rights Agreement provides that:
(1) the Company will use commercially reasonable efforts to file an Exchange
Offer Registration Statement with the Commission on or prior to the
120th day after the Closing Date;
(2) the Company will use commercially reasonable efforts to have the
Exchange Offer Registration Statement declared effective by the
Commission on or prior to the 210th day after the Closing Date;
(3) unless the Exchange Offer would not be permitted by applicable law or
Commission policy, the Company will
(a) commence the Exchange Offer; and
(b) use commercially reasonable efforts to issue on or prior to 30
business days, or longer, if required by the federal securities laws,
after the date on which the Exchange Offer Registration Statement was
declared effective by the Commission, Exchange Notes in exchange for
all Senior Notes tendered prior thereto in the Exchange Offer; and
(4) if obligated to file the Shelf Registration Statement, the Company will
use commercially reasonable efforts to file the Shelf Registration
Statement with the Commission on or prior to 60 days after such filing
obligation arises and to cause the Shelf Registration to be declared
effective by the Commission on or prior to 120 days after such
obligation arises.
If:
(1) the Company fails to file any of the registration statements required by
the Registration Rights Agreement on or before the date specified for
such filing; or
(2) any of such registration statements is not declared effective by the
Commission on or prior to the date specified for such effectiveness (the
"Effectiveness Target Date"); or
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(3) the Company fails to consummate the Exchange Offer within 30 business
days of the Effectiveness Target Date with respect to the Exchange Offer
Registration Statement; or
(4) the Shelf Registration Statement or the Exchange Offer Registration
Statement is declared effective but thereafter ceases to be effective or
usable in connection with resales of Transfer Restricted Securities
during the periods specified in the Registration Rights Agreement (each
such event referred to in clauses (1) through (4) above, a "Registration
Default"),
then the Company will pay Liquidated Damages to each Holder of Senior Notes,
with respect to the first 90-day period immediately following the occurrence of
the first Registration Default, at a rate equal to 0.25% per annum in principal
amount of Transfer Restricted Securities held by such Holder for each week or
portion thereof. The rate of such Liquidated Damages will increase by 0.25% per
annum with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of Liquidated Damages for all
Registration Defaults of 1.00% per annum. If, after the cure of all Registration
Defaults then in effect, there is a subsequent Registration Default, the rate of
Liquidated Damages for such subsequent Registration Default shall initially be
0.25%, regardless of the Liquidated Damages rate in effect with respect to any
prior Registration Default at the time of the cure of such Registration Default.
All accrued Liquidated Damages will be paid by the Company on each Damages
Payment Date to the Global Note Holder by wire transfer of immediately available
funds or by federal funds check and to Holders of Certificated Notes by wire
transfer to the accounts specified by them or by mailing checks to their
registered addresses if no such accounts have been specified.
Holders of Senior Notes will be required to make certain representations to
the Company (as described in the Registration Rights Agreements) in order to
participate in the Exchange Offer and will be required to deliver certain
information to be used in connection with the Shelf Registration Statement and
to provide comments on the Shelf Registration Statement within the time periods
set forth in the Registration Rights Agreement in order to have their Senior
Notes included in the Shelf Registration Statement and benefit from the
provisions regarding Liquidated Damages set forth above. Holders of Senior Notes
will also be required to suspend their use of the prospectus included in the
Shelf Registration Statement under certain circumstances upon receipt of written
notice to that effect from the Company. By acquiring Transfer Restricted
Securities, a Holder will be deemed to have agreed to indemnify the Company
against certain losses arising out of information furnished by such Holder in
writing for inclusion in any Shelf Registration Statement.
CONSENT TO JURISDICTION AND SERVICE
The Indentures provide that the Company will irrevocably appoint CT
Corporation System as its agent for service of process in any suit, action, or
proceeding with respect to the Indentures or the Notes and for actions brought
under federal or state securities laws in any federal or state court located in
the Borough of Manhattan in The City of New York, and submits to such
jurisdiction.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indentures. Reference
is made to the Indentures for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
Cross references to captions shall mean the respective caption, as appropriate,
under the subsections "-- Description of the Notes."
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person
is merged with or into or became a Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in
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connection with, or in contemplation of, such other Person merging with
or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more, or an
agreement, obligation or option to purchase 10% or more, of the Voting Stock of
a Person shall be deemed to be control. For purposes of this definition, the
terms "controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Asset Purchase Agreement" means that certain Asset Purchase Agreement dated
as of December 30, 1998, between the Company and ASI, as the same may be
extended or renewed from time to time without alteration of the material terms
thereof.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or rights
(including by way of a sale-and-leaseback) other than sales of inventory
in the ordinary course of business (provided that the sale, lease
conveyance or other disposition of all or substantially all of the
assets of the Company and its Restricted Subsidiaries taken as a whole
will be governed by the provisions of the Indenture described above
under the caption "-- Repurchase at the Option of Holders -- Offer to
Repurchase Upon Change of Control" and/or the provisions described above
under the caption "-- Certain Covenants -- Merger, Consolidation or Sale
of Assets" and not by the provisions described above under the caption
"-- Repurchase at the Option of Holders -- Offer to Repurchase by
Application of Excess Proceeds of Asset Sales");
(2) with respect to the Company, the sale of Equity Interests in any of its
Subsidiaries;
(3) with respect to the Company's Restricted Subsidiaries, the issuance of
Equity Interests.
Notwithstanding the preceding, the following items shall not be deemed to be
Asset Sales:
(1) any single transaction or series of related transactions that: (a)
involves assets having a fair market value of less than $2.0 million; or
(b) results in net proceeds to the Company and its Restricted
Subsidiaries of less than $2.0 million;
(2) a transfer of assets between or among the Company and any Restricted
Subsidiary;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the
Company or to another Wholly Owned Restricted Subsidiary;
(4) the sale, lease, conveyance or other disposition of any Receivable
Program Assets by the Company or any Restricted Subsidiary in connection
with a Receivables Program;
(5) the sale, lease, conveyance or other disposition of any inventory,
receivables or other current assets by the Company or any of its
Restricted Subsidiaries in the ordinary course of business;
(6) the granting of a Permitted Lien;
(7) the licensing by the Company or any Restricted Subsidiary of
intellectual property in the ordinary course of business or on
commercially reasonable terms;
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(8) the sale, lease, conveyance or other disposition of obsolete or worn out
equipment or equipment no longer useful in the Company's business; and
(9) the making or liquidating of any Restricted Payment or Permitted
Investment that is permitted by the covenant described above under the
caption "-- Certain Covenants -- Restricted Payments".
"Attributable Debt" in respect of a sale and leaseback transaction involving
an operating lease means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as such term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire, whether such
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership
or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or direct and fully guaranteed or insured by the full
faith and credit of the United States government or any agency or
instrumentality thereof having maturities of not more than 12 months
from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with maturities of
12 months or less from the date of acquisition, bankers' acceptances
with maturities not exceeding 12 months and overnight bank deposits, in
each case with any domestic commercial bank having capital and surplus
in excess of $500.0 million and a Thompson Bank Watch Rating of "B" or
better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition; and
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(6) money market funds at least 95.0% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the adoption of a plan relating to the liquidation or dissolution of the
Company;
(2) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as
defined above), other than a Permitted Holder, becomes the Beneficial
Owner, directly or indirectly, of more than 35% of the Voting Stock of
the Company, measured by voting power rather than number of shares, and
such percentage represents more than the aggregate percentage of the
Voting Stock of the Company, measured by voting power rather than number
of shares, as to which any Permitted Holder is the Beneficial Owner; or
(3) the first date during any consecutive two year period on which a
majority of the members of the Board of Directors of the Company are not
Continuing Directors.
For purposes of this definition, any transfer of an Equity Interest of an
entity that was formed for the purpose of acquiring Voting Stock of the Company
will be deemed to be a transfer of such portion of Voting Stock as corresponds
to the portion of the equity of such entity that has been so transferred.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale, to the extent such losses were deducted
in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income; plus
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions,
discounts and other fees and charges incurred in respect of letter of
credit or bankers' acceptance financings, and net payments, if any,
pursuant to Hedging Obligations), to the extent that any such expense
was deducted in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person and
its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; plus
(5) non-cash items (other than any non-cash items that will require cash
payments in the future or that relate to foreign currency translation)
decreasing such Consolidated Net Income for such period, other than
items that were accrued in the ordinary course of business, in each
case, on a consolidated basis and determined in accordance with GAAP;
minus
(6) non-cash items (other than any non-cash items that will require cash
payments in the future or that relate to foreign currency translation)
increasing such Consolidated Net Income for such period, other
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than items that were accrued in the ordinary course of business, in each
case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash charges
of, a Restricted Subsidiary of the Company shall be added to Consolidated Net
Income to compute Consolidated Cash Flow of the Company only to the extent that
a corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior approval
(that has not been obtained), pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Subsidiary or its stockholders.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect
to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance
financings, and net payments, if any, pursuant to Hedging Obligations;
plus
(2) the consolidated interest of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus
(3) interest actually paid by the Company or any Restricted Subsidiary under
any Guarantee of Indebtedness of another Person; plus
(4) the product of all dividend payments, whether or not in cash, on any
series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable
solely in Equity Interests of the Company (other than Disqualified
Stock) or to the Company or a Restricted Subsidiary of the Company.
"Consolidated Interest Expense Coverage Ratio" means with respect to any
specified Person for any period, the ratio of the Consolidated Cash Flow of such
Person and its Restricted Subsidiaries for such period to the Consolidated
Interest Expense of such Person for such period. In the event that the specified
Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees or
redeems any Indebtedness (other than revolving credit borrowings) or issues or
redeems preferred stock subsequent to the commencement of the period for which
the Consolidated Interest Expense Coverage Ratio is being calculated but prior
to the date on which the event for which the calculation of the Consolidated
Interest Expense Coverage Ratio is made (the "Calculation Date"), then the
Consolidated Interest Expense Coverage Ratio shall be calculated giving pro
forma effect to such incurrence, assumption, Guarantee or redemption of
Indebtedness, or such issuance or redemption of preferred stock, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Consolidated Interest Expense
Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior
to the Calculation Date shall be deemed to have occurred on the first
day of the four-quarter reference period and Consolidated Cash Flow for
such reference period shall be calculated without giving effect to
clause (3) of the proviso set forth in the definition of Consolidated
Net Income;
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(2) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded; and
(3) the Consolidated Interest Expense attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be excluded,
but only to the extent that the obligations giving rise to such
Consolidated Interest Expense will not be obligations of the specified
Person or any of its Restricted Subsidiaries following the Calculation
Date.
"Consolidated Net Assets" means, with respect to any specified Person as of
any date, the total assets of such Person as of such date less (i) the total
liabilities of such Person as of such date, (ii) the amount of any Disqualified
Stock as of such date and (iii) any minority interests reflected on the balance
sheet of such Person as of such date.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Restricted
Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to the
extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall
be excluded;
(4) the Net Income (but not loss) of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the specified Person or one of
its Subsidiaries; and
(5) the cumulative effect of a change in accounting principles shall be
excluded.
"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of the Indenture; or
(2) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members
of such Board at the time of such nomination or election.
"Credit Facilities" means, with respect to the Company or any Subsidiary,
one or more debt facilities or commercial paper facilities with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"Default" means any event that is, or with the passage of time or the giving
of notice or both would be, an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or
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otherwise, or redeemable at the option of the holder thereof, in whole or in
part, on or prior to the date that is 91 days after the date on which the Notes
mature. Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Company to repurchase such Capital Stock upon the occurrence of a
change of control or an asset sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with the covenant described above under the caption
"-- Certain Covenants -- Restricted Payments."
"Domestic Subsidiary" means a Restricted Subsidiary that is (1) formed under
the laws of the United States of America or a state or territory thereof or (2)
as of the date of determination, treated as a domestic entity or a partnership
or a division of a domestic entity for United State federal income tax purposes;
and, in either case, is not owned, directly or indirectly, by an entity that is
not described in clauses (1) or (2) above.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any offering for cash of common stock of the Company
or options, warrants or rights with respect to its common stock so long as
shares of the common stock of the Company remain listed on a national securities
exchange or quoted on the National Association of Securities Dealers Automated
Quotation System.
"Exchange Notes" means the Company's 9.25% Senior Notes due 2008 issued
pursuant to the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and its Restricted
Subsidiaries in existence on the date of the Indenture, until such amounts are
repaid.
"Foreign Subsidiary" means a Subsidiary of the Company that is not a
Domestic Subsidiary.
"Foundry Agreement" means that certain Foundry Agreement dated as of January
1, 1998, among the Company, our predecessor company (Amkor Electronics, Inc.),
Amkor Technology Limited (f/k/a C.I.L. Limited), ASI and Anam USA, Inc., as the
same may be extended or renewed from time to time without alteration of the
material terms thereof.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, through letters of credit
or reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
"Guarantor" means any future Domestic Subsidiary of the Company formed or
capitalized after the date of the Indenture that is a Significant Subsidiary and
that is required by the terms of the Indenture to execute a Subsidiary
Guarantee, in accordance with the provisions of the Indenture, and its
successors and assigns.
"Hedging Obligations" means, with respect to any Person, the Obligations of
such Person under:
(1) swap agreements, cap agreements and collar agreements relating to
interest rates, commodities or currencies; and
(2) other agreements or arrangements designed to protect such Person against
fluctuations in interest rates, commodities or currencies.
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"Holder" means the Person in whose name a Note is registered.
"Indebtedness" means, with respect to any specified Person, any indebtedness
of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any property,
except any such balance that constitutes an accrued expense or trade
payable; or
(6) Hedging Obligations,
if and to the extent any of such indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability on a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person measured as the lesser of the fair market value of the
assets of such Person so secured or the amount of such Indebtedness) and, to the
extent not otherwise included, the Guarantee by such Person of any indebtedness
of any other Person.
The amount of any Indebtedness outstanding as of any date shall be the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount. In addition, the amount of any Indebtedness shall also include
the amount of all Obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or, with respect to any
Restricted Subsidiary of the Company, any preferred stock of such Restricted
Subsidiary.
"Intellectual Property Rights Licensing Agreement" means that certain
Intellectual Property Rights Licensing Agreement to be entered into by and
between the Company and ASI in connection with the Asset Purchase Agreement, as
the same may be extended or renewed from time to time without alteration of the
material terms thereof.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the final paragraph of the covenant described above under the
caption "-- Certain Covenants -- Restricted Payments."
"Lien" means, with respect to any asset, any mortgage, lien, pledge, fixed
or floating charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof; provided that the term "Lien" shall
not include any lease properly classified as an operating lease in accordance
with GAAP.
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"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person and its Restricted Subsidiaries, determined in accordance with GAAP
and before any reduction in respect of preferred stock dividends, excluding,
however:
(1) any gain (but not loss), together with any related provision for taxes
on such gain (but not loss), realized in connection with: (a) any Asset
Sale; or (b) the disposition of any securities by such Person or any of
its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries;
(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss);
(3) any gain or loss relating to foreign currency translation or exchange;
and
(4) any income or loss related to any discontinued operation.
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case after taking into account any available tax credits or deductions and any
tax sharing arrangements and amounts required to be applied to the repayment of
Indebtedness, other than Permitted Bank Debt, secured by a Lien on the asset or
assets that were the subject of such Asset Sale.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any obligation that
would constitute Indebtedness), or (b) is directly or indirectly liable
as a guarantor or otherwise, other than in the form of a Lien on the
Equity Interests of an Unrestricted Subsidiary held by the Company or
any Restricted Subsidiary in favor of any holder of Non-Recourse Debt of
such Unrestricted Subsidiary;
(2) no default with respect to which (including any rights that the holders
thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder
of any other Indebtedness (other than the Notes) of the Company or any
of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its
Restricted Subsidiaries (other than against the Equity Interests of such
Unrestricted Subsidiary, if any).
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Bank Debt" means Indebtedness incurred by the Company or any
Restricted Subsidiary other than a Foreign Subsidiary pursuant to the Credit
Facilities, any Receivables Program, or one or more other term loan and/or
revolving credit or commercial paper facilities (including any letter of credit
subfacilities) entered into with commercial banks and/or financial institutions,
and any replacement, extension, renewal, refinancing or refunding thereof.
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"Permitted Business" means the business of the Company and its Subsidiaries,
taken as a whole, operated in a manner consistent with past operations, and any
business that is reasonably related thereto or supplements such business or is a
reasonable extension thereof.
"Permitted Holder" means James J. Kim and his estate, spouse, siblings,
ancestors, heirs and lineal descendants, and spouses of any such persons, the
legal representatives of any of the foregoing, and the trustee of any bona fide
trust of which one or more of the foregoing are the principal beneficiaries or
the grantors or any other Person that is controlled by any of the foregoing.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of the
Company in a Person, if as a result of such Investment or in connection
with the transaction pursuant to which such Investment is made:
(a) such Person becomes a Restricted Subsidiary of the Company; or
(b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the
Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Offer to Repurchase by
Application of Excess Proceeds of Asset Sales";
(5) any acquisition of assets solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company;
(6) any Investment in the TSTC Joint Venture; provided that the aggregate
amount of any such Investment, when taken together with all other
Investments made pursuant to this clause (6) since May 13, 1999, does
not exceed $30 million;
(7) any Investment in connection with Hedging Obligations;
(8) any Investments received (a) in satisfaction of judgments, or (b) as
payment on a claim made in connection with any bankruptcy, liquidation,
receivership or other insolvency proceeding;
(9) Investments in (a) prepaid expenses and negotiable instruments held for
collection, (b) accounts receivable arising in the ordinary course of
business (and Investments obtained in exchange or settlement of
accounts receivable for which the Company or any Restricted Subsidiary
has determined that collection is not likely), and (c) lease, utility
and worker's compensation, performance and other similar deposits
arising in the ordinary course of business;
(10) any Investment in ASI's Voting Stock pursuant to the general terms of
the commitment letter dated April 9, 1999, between the Company and ASI
entered into in connection with the consummation of ASI's "Workout"
program with certain of its creditors, together with such modifications
thereto as shall be approved by the Board of Directors of the Company;
provided that the aggregate amount of any such Investment, when taken
together with all other Investments made pursuant to this clause (10)
since May 13, 1999, does not exceed $150.0 million; and
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(11) any Strategic Investment; provided that the aggregate amount of all
Investments by the Company and any Restricted Subsidiaries in Strategic
Investments shall not exceed $75.0 million; provided, further, that,
except with respect to the first $25.0 million of Strategic Investments
made by the Company, the Company would, at the time of such Strategic
Investment and after giving pro forma effect thereto as if such
Strategic Investment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Consolidated Interest Expense
Coverage Ratio test set forth in the first paragraph of the covenants
described above under the caption "-- Certain Covenants -- Incurrence
of Indebtedness and Issuance of Preferred Stock";
provided that, notwithstanding the preceding, any extension of credit or advance
by the Company or any of its Subsidiaries to a customer or supplier of the
Company or its Subsidiaries shall not be a Permitted Investment.
"Permitted Liens" means:
(1) Liens on the assets of the Company and any Restricted Subsidiary
securing Permitted Bank Debt that was permitted by the terms of the
Indenture to be incurred;
(2) Liens on the assets of any Foreign Subsidiary securing Indebtedness and
other Obligations under Indebtedness of such Foreign Subsidiary that
were permitted by the terms of the Indenture to be incurred;
(3) Liens in favor of the Company or any Restricted Subsidiary;
(4) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided that such Liens were not incurred
in contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated
with the Company or the Restricted Subsidiary;
(5) Liens on property existing at the time of acquisition thereof by the
Company or any Restricted Subsidiary of the Company, provided that such
Liens were not incurred in contemplation of such acquisition;
(6) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(7) Liens to secure Obligations in respect of Indebtedness (including
Capital Lease Obligations) permitted by clause (4) of the second
paragraph of "-- Certain Covenants -- Incurrence of Indebtedness and
Issuance of Preferred Stock" covering only the assets acquired with
such Indebtedness, including accessions, additions, parts, attachments,
improvements, fixtures, leasehold improvements or proceeds, if any,
related thereto;
(8) Liens existing on the date of this Indenture;
(9) Liens securing Obligations of the Company and/or any Restricted
Subsidiary in respect of any Receivables Program;
(10) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by
appropriate proceedings; provided that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been
made therefor;
(11) Liens imposed by law or arising by operation of law, including, without
limitation, landlords', mechanics', carriers', warehousemen's,
materialmen's, suppliers' and vendors' Liens, Liens for master's and
crew's wages and other similar Liens, in each case which are incurred
in the ordinary course of business for sums not yet delinquent or being
contested in good faith, if such reserves or other
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appropriate provisions, if any, as shall be required by GAAP shall have
been made with respect thereto;
(12) Liens incurred or pledges and deposits made in the ordinary course of
business in connection with workers' compensation and unemployment
insurance and other types of social security;
(13) Liens to secure any extension, renewal, refinancing or refunding (or
successive extensions, renewals, refinancings or refundings), in whole
or in part, of any Indebtedness secured by Liens referred to in the
foregoing clauses (4), (5), (7) and (8) of this definition; provided
that such Liens do not extend to any other property of the Company or
any Restricted Subsidiary of the Company and the principal amount of
the Indebtedness secured by such Lien is not increased;
(14) judgment Liens not giving rise to an Event of Default so long as such
Lien is adequately bonded and any appropriate legal proceedings that
may have been initiated for the review of such judgment, decree or
order shall not have been finally terminated or the period within which
such proceedings may be initiated shall not have expired;
(15) Liens securing obligations of the Company under Hedging Obligations
permitted to be incurred under clause (7) of the second paragraph of
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" or any collateral for the Indebtedness to which such
Hedging Obligations relate;
(16) Liens upon specific items of inventory or other goods and proceeds of
any Person securing such Person's obligations in respect of banker's
acceptances issued or credited for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or
goods;
(17) Liens securing reimbursement obligations with respect to commercial
letters of credit which encumber documents and other property relating
to such letters of credit and products and proceeds thereof;
(18) Liens arising out of consignment or similar arrangements for the sale
of goods in the ordinary course of business;
(19) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with the
importation of goods;
(20) Liens securing other Indebtedness not exceeding $10.0 million at any
time outstanding;
(21) Liens securing Permitted Refinancing Indebtedness, provided that such
Liens do not extend to any other property of the Company or any
Restricted Subsidiary of the Company and the principal amount of the
Indebtedness secured by such Lien is not increased; and
(22) Liens on the Equity Interests of Unrestricted Subsidiaries securing
obligations of Unrestricted Subsidiaries not otherwise prohibited by
the Indentures.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
of (or accreted value, if applicable), plus accrued interest or premium
(including any make-whole premium), if any, on, the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable expenses incurred in connection therewith);
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(2) such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; provided that if the original maturity date of
such Indebtedness is after the Stated Maturity of the Notes, then such
Permitted Refinancing Indebtedness shall have a maturity at least 180
days after the Notes;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and is subordinated in right of
payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, or
government or any agency or political subdivision thereof.
"Qualified Proceeds" means any of the following or any combination of the
following:
(1) any Cash Equivalents;
(2) any liabilities (as would be shown on the Company's or such Restricted
Subsidiary's balance sheet if prepared in accordance with GAAP on the
date of the corresponding Asset Sale), of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are
by their terms subordinated to the Notes) that are assumed by the
transferee of any such assets pursuant to a customary novation agreement
that releases or indemnifies the Company or such Restricted Subsidiary
from further liability;
(3) any securities, notes or other obligations received by the Company or
any such Restricted Subsidiary from such transferee that are converted
by the Company or such Restricted Subsidiary into cash within 90 days
after such Asset Sale (to the extent of the cash received in that
conversion);
(4) long-term assets that are used or useful in a Permitted Business; and
(5) all or substantially all of the assets of, or a majority of the Voting
Stock of, any Permitted Business;
provided, however, that in the case of clauses (4) and (5) above, the Asset Sale
transaction shall be with a non-Affiliate and the amount of long-term assets or
Voting Stock received in the Asset Sale transaction shall not exceed 10% of the
consideration received.
"Receivables Program" means, with respect to any Person, an agreement or
other arrangement or program providing for the advance of funds to such Person
against the pledge, contribution, sale or other transfer of encumbrances of
Receivables Program Assets of such Person or such Person and/or one or more of
its Subsidiaries.
"Receivables Program Assets" means all of the following property and
interests in property, including any undivided interest in any pool of any such
property or interests, whether now existing or existing in the future or
hereafter arising or acquired:
(1) accounts;
(2) accounts receivable, general intangibles, instruments, contract rights,
documents and chattel paper (including, without limitation, all rights
to payment created by or arising from sales of goods, leases
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of goods, or the rendition of services, no matter how evidenced,
whether or not earned by performance);
(3) all unpaid seller's or lessor's rights (including, without limitation,
rescission, replevin, reclamation and stoppage in transit) relating to
any of the foregoing or arising therefrom;
(4) all rights to any goods or merchandise represented by any of the
foregoing (including, without limitation, returned or repossessed
goods);
(5) all reserves and credit balances with respect to any such accounts
receivable or account debtors;
(6) all letters of credit, security or Guarantees of any of the foregoing;
(7) all insurance policies or reports relating to any of the foregoing;
(8) all collection or deposit accounts relating to any of the foregoing;
(9) all books and records relating to any of the foregoing;
(10) all instruments, contract rights, chattel paper, documents and general
intangibles relating to any of the foregoing; and
(11) all proceeds of any of the foregoing.
"Receivables Program Debt" means, with respect to any Person, the unreturned
portion of the amount funded by the investors under a Receivables Program of
such Person.
"Registration Rights Agreement" means the Registration Rights Agreement by
and among us and the initial purchasers, as such agreement may be amended,
modified or supplemented from time to time.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Act, as such Regulation is in effect on the date hereof assuming
that the Company were the "registrant" for purposes of such definition; provided
that in no event shall a "Significant Subsidiary" include (i) any direct or
indirect Subsidiary of the Company created for the primary purpose of
facilitating one or more Receivables Programs or holding or purchasing
inventory, (ii) any non-operating Subsidiary which does not have any liabilities
to Persons other than the Company or its Subsidiaries or (iii) any Unrestricted
Subsidiary.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Strategic Investment" means any Investment in any Person (other than an
Unrestricted Subsidiary) whose primary business is related, ancillary or
complementary to a Permitted Business, and such Investment is determined in good
faith by the Board of Directors (or senior officers of the Company to whom the
Board of Directors has duly delegated the authority to make such a
determination), whose determination shall be conclusive and evidenced by a
resolution, to promote or significantly benefit the businesses of the Company
and its Restricted Subsidiaries on the date of such Investment; provided that,
with respect to any Strategic Investment or series of related Strategic
Investments involving aggregate consideration in excess of $10 million, the
Company shall deliver to the Trustee a resolution of the Board of Directors of
the Company set forth in an
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Officer's Certificate certifying that such Investment qualifies as a Strategic
Investment pursuant to this definition.
"Subsidiary" means, with respect to any Person:
(1) any corporation, association or other business entity of which more than
50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned
or controlled, directly or indirectly, by such Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means a Guarantee endorsed on the Notes by a
Guarantor.
"Supply Agreement" means that certain Packaging & Test Services Agreement
dated as of January 1, 1998, among the Company, our predecessor company (Amkor
Electronics, Inc.), Amkor Technology Limited (f/k/a C.I.L. Limited), ASI and
Anam USA, Inc., as the same may be extended or renewed from time to time without
alteration of the material terms thereof.
"Total Tangible Assets of the Foreign Subsidiaries" means, as of any date,
the total assets of the Foreign Subsidiaries of the Company as of such date less
the amount of the intangible assets of the Foreign Subsidiaries of the Company
as of such date.
"Transition Services Agreement" means that certain Transition Services
Agreement to be entered into by and between the Company and ASI in connection
with the Asset Purchase Agreement, as the same may be extended or renewed from
time to time without alteration of the material terms thereof.
"TSTC Joint Venture" means the joint venture created by the Shareholders'
Agreement dated as of April 10, 1998, among Acer Incorporated, Taiwan
Semiconductor Manufacturing Company Ltd., Chinfon Semiconductor & Technology
Co., Ltd., Scientek International Investment Co. Ltd., ASI (as successor in
interest to Anam Industrial Co. Ltd.), and the Company, including all amendments
thereof through the date of the Indenture.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results;
(3) has not Guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of its Restricted
Subsidiaries; and
(4) has at least one director on its board of directors that is not a
director or executive officer of the Company or any of its Restricted
Subsidiaries and has at least one executive officer that is not a
director or executive officer of the Company or any of its Restricted
Subsidiaries.
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Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the preceding
conditions and was permitted by under "-- Certain Covenants -- Restricted
Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the
preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of the Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock," the
Company shall be in default of such covenant. The Board of Directors of the
Company may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (1) such Indebtedness is permitted under "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock,"
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares or similar
shares required by law to be held by third parties) shall at the time be owned
by such Person and/or by one or more Wholly Owned Restricted Subsidiaries of
such Person.
ADDITIONAL TERMS OF THE NEW SENIOR NOTES
The terms of the new Senior Notes will be identical in all material respects
to those of the old Senior Notes except that the new Senior Notes:
- will have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer applicable to the old
Senior Notes; and
- will not be entitled to certain registration rights under the Registration
Rights Agreement, including the provision for Liquidated Damages of up to
1.00% per annum on the old Senior Notes. Holders of old Senior Notes
should review the information set forth under "Prospectus
Summary -- Consequences of Failure to Exchange Old Senior Notes" and
"-- Terms of New Senior Notes."
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FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a general summary of the material U.S. federal
income tax considerations relating to the exchange offers and to the purchase,
ownership and disposition of the new Senior Notes. The discussion of the federal
income tax consequences set forth below is based upon the Internal Revenue Code
of 1986, as amended (the "Code"), and judicial decisions and administrative
interpretations thereunder, as of the date hereof, and such authorities may be
repealed, revoked or modified or interpreted differently so as to result in
federal income tax consequences different from those discussed below. We cannot
assure you that the Internal Revenue Service will not successfully challenge one
or more of the tax consequences described herein, and we have not obtained, nor
do we intend to obtain, a ruling from the IRS or an opinion of counsel with
respect to the U.S. federal income tax consequences of acquiring or holding new
Senior Notes.
This discussion does not purport to deal with all aspects of U.S. federal
income taxation that may be relevant to a particular holder in light of the
holder's circumstances (for example, persons subject to the alternative minimum
tax provisions of the Code). Also, it is not intended to be wholly applicable to
all categories of investors, such as foreign persons, dealers in securities,
banks, insurance companies, tax-exempt organizations, and persons holding new
Senior Notes as part of a hedging or conversion transaction or straddle or
persons deemed to sell new Senior Notes under the constructive sale provisions
of the Code, some of which may be subject to special rules. The discussion below
is premised upon the assumption that the new Senior Notes and old Senior Notes
are held (or would be held if acquired) as capital assets within the meaning of
Section 1221 of the Code. The discussion also does not discuss any aspect of
state, local or foreign law.
EACH HOLDER OR PROSPECTIVE HOLDER OF NEW SENIOR NOTES IS STRONGLY URGED TO
CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO ITS PARTICULAR TAX SITUATION
INCLUDING THE TAX EFFECT OF ANY STATE, LOCAL, FOREIGN, OR OTHER TAX LAWS AND
POSSIBLE CHANGES IN THE TAX LAWS.
EXCHANGE OF SENIOR NOTES
The exchange of old Senior Notes for new Senior Notes pursuant to the
exchange offers should not be a taxable exchange for U.S. federal income tax
purposes. Accordingly, a holder should have the same adjusted issue price,
adjusted basis and holding period in the new Senior Notes as it had in the old
Senior Notes immediately before the exchange.
PLAN OF DISTRIBUTION
Each broker-dealer that holds any old Senior Notes acquired for its own
account as a result of market-making or other trading activities (a
"Participating Broker-Dealer") may exchange old Senior Notes for new Senior
Notes. Each Participating Broker-Dealer receiving new Senior Notes for its own
account in connection with the exchange offer must acknowledge that it will
deliver a prospectus in connection with any resale of such new Senior Notes.
Participating Broker-Dealers may use this prospectus during the period referred
to below in connection with resales of the new Notes received in exchange for
old Senior Notes if such old Senior Notes were acquired by such Participating
Broker-Dealers for their own accounts. We agreed that this prospectus may be
used by a Participating Broker-Dealer in connection with resales of such new
Senior Notes for a period ending 180 days after the effective date of the
registration statement (subject to extension under certain limited circumstances
described herein) or, if earlier, when all such new Senior Notes have been
disposed of by such Participating Broker-Dealer. See "The Exchange
Offer -- Terms of the Exchange Offer."
We will not receive any cash proceeds from the issuance of the new Senior
Notes offered by this prospectus. New Senior Notes received by Participating
Broker-Dealers for their own accounts in connection with the exchange offer may
be sold from time to time in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the new
Senior Notes or a combination of
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such methods of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or at negotiated prices. Any
resale of the new Senior Notes may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any broker-dealer and/or the purchasers of any
new Senior Notes. Any Participating Broker-Dealer that resells new Senior Notes
that were received by it for its own account in the exchange offers and any
broker or dealer that participates in a distribution of such new Senior Notes
may be deemed to be an "underwriter" within the meaning of the Securities Act.
Any profit on any such resale of new Senior Notes and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
LEGAL MATTERS
Our counsel, Wilson Sonsini Goodrich & Rosati, Palo Alto, California will
issue a legal opinion regarding the legality of the new Senior Notes and certain
other matters. Our Korean counsel, Kim & Chang, has advised us regarding the
matters set forth under the caption "Description of Notes -- Enforceability of
Judgements," and our Philippines counsel, Ortega, Del Castillo, Bacorro, Odulio,
Calma & Carbonell Law Offices, has advised us as to the matters set forth under
the caption "Description of Notes -- Enforceability of Judgements."
EXPERTS
The audited consolidated financial statements of Amkor Technology, Inc. and
its subsidiaries as of December 31, 1999 and for the years ended December 31,
1998 and 1999, included in our Annual Report on Form 10-K incorporated by
reference in this prospectus, have been audited by Arthur Andersen LLP,
independent public accountants. In their report, that firm states that with
respect to the investment in ASI and with respect to Amkor Technology Korea,
Inc. ("ATK"), one of our wholly-owned subsidiaries, its opinion is based on the
report of Samil Accounting Corporation.
On September 11, 2000, we dismissed Arthur Andersen LLP as our independent
public accountants. We engaged PricewaterhouseCoopers LLP as our new independent
public accountants as of September 18, 2000.
The consolidated financial statements of Amkor Technology, Inc. and its
subsidiaries as of and for the year ended December 31, 2000, included in our
Annual Report on Form 10-K incorporated by reference in this prospectus, except
as they relate to Amkor Technology Philippines (P1/P2), Inc. and Amkor
Technology Philippines (P3/P4), Inc. (both wholly-owned subsidiaries of ours),
have been audited by PricewaterhouseCoopers LLP, independent accountants, and
insofar as they relate to Amkor Technology Philippines (P1/P2), Inc. and Amkor
Technology Philippines (P3/P4), Inc., by SyCip Gorres Velayo & Co., as stated in
their report which is included in our Annual Report on Form 10-K, incorporated
by reference in this prospectus.
63
69
- --------------------------------------------------------------------------------
OFFER TO EXCHANGE
ALL OUTSTANDING 9.25% SENIOR NOTES DUE FEBRUARY 15, 2008
FOR 9.25% SENIOR NOTES DUE FEBRUARY 15, 2008,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AMKOR TECHNOLOGY, INC.
PROSPECTUS
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must not
rely on any unauthorized information. This prospectus does not offer to sell or
buy any Notes in any jurisdiction where it is unlawful. The information in this
prospectus is current as of , 2001.
- --------------------------------------------------------------------------------
70
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permits a corporation to
include in its charter documents, and in agreements between the corporation and
its directors and officers, provisions expanding the scope of indemnification
beyond that specifically provided by the current law. The Company's Amended and
Restated Certificate of Incorporation provides for the indemnification of
directors to the fullest extent permissible under Delaware law. The Company's
Bylaws provide for the indemnification of officers, directors and third parties
acting on behalf of the Company if such person acted in good faith and in a
manner reasonably believed to be in and not opposed to the best interest of the
Company, and with respect to any criminal action or proceeding, the indemnified
party had no reason to believe his conduct was unlawful. The Company has entered
into indemnification agreements with its directors and executive officers, in
addition to indemnification provided for in the Company's Bylaws, and intends to
enter into indemnification agreements with any new directors and executive
officers in the future.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.1 Articles of Incorporation.**
3.2 Bylaws.**
4.1 Senior Notes Indenture dated as of February 20, 2001 between
the Registrant and State Street Bank and Trust Company,
including form of 9.25% Senior Note Due 2008.*
4.2 Senior Notes Registration Rights Agreement dated as of
February 20, 2001 among the Registrant and the Initial
Purchasers.*
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
10.1 Material Contracts.**
12.1 Calculation of Ratio of Earnings to Fixed Charges.**
21.1 List of Subsidiaries of the Registrant.**
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of SyCip Gorres Velayo & Co.
23.3 Consent of Samil Accounting Corporation.
23.4 Consent of Arthur Andersen LLP.
23.5 Consent of Siana Carr & O'Connor, LLP.
23.6 Consent of Ahn Kwon & Co.
23.7 Consent of Wilson Sonsini Goodrich & Rosati (included in
Exhibit 5.1).
23.8 Consent of Kim & Chang.
23.9 Consent of Ortega, Del Castillo, Bacorro, Odulio, Colma &
Carbonell.
24.1 Power of Attorney (Included on page II-4).
25.1 Statement of Eligibility of Trustee.
99.1 Form of Letter of Transmittal with respect to Exchange
Offer.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Exchange Agent Agreement.
- -------------------------
* Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
the period ended March 31, 2001.
** Incorporated by reference to the Company's Annual Report on Form 10-K for the
period ended December 31, 2000.
(b) Financial Statement Schedules
Schedules not listed above have been omitted because the information to be
set forth therein is not applicable or is shown in the financial statements or
Notes thereto.
II-1
71
ITEM 22. UNDERTAKING
1. We hereby undertake that, for purposes of determining any liability under
the Securities Act of 1933, each filing of our annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
2. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than our payment of expenses
incurred or paid by one of our directors, officers or controlling persons in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
3. We hereby undertake to respond to requests for information that is
incorporated by reference into this prospectus pursuant to Items 4, 10(b), 11 or
13 of this Form, within one business day of receipt of such request, and to send
the incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of this registration statement through the date of responding to
the request.
4. We hereby undertake to supply by means of a post-effective amendment all
information concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in this registration statement
when it became effective.
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72
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we have duly
caused this registration statement to be signed on our behalf by the
undersigned, thereunto duly authorized, in the City of West Chester, State of
Pennsylvania on June 20, 2001.
AMKOR TECHNOLOGY, INC.
By: /s/ JAMES J. KIM
------------------------------------
James J. Kim
Chairman and Chief Executive Officer
(Principal Executive Officer)
II-3
73
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James J. Kim and Kenneth T. Joyce, and each of
them, his attorneys-in-fact, each with the power of substitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to sign any registration statement for the same offering covered by this
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) promulgated under the Securities Act, and all post-effective amendments
thereto, and to file the same, with all exhibits thereto in all documents in
connection therewith, with the SEC, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that such attorneys-in-fact and
agents or any of them, or his or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on June 20, 2001
in the capacities indicated.
SIGNATURE TITLE
--------- -----
/s/ JAMES J. KIM Chief Executive Officer and Chairman
- ------------------------------------------------
James J. Kim
/s/ JOHN N. BORUCH President and Director
- ------------------------------------------------
John N. Boruch
/s/ KENNETH JOYCE Chief Financial Officer (Principal Financial and
- ------------------------------------------------ Accounting Officer)
Kenneth Joyce
/s/ WINSTON J. CHURCHILL Director
- ------------------------------------------------
Winston J. Churchill
/s/ THOMAS D. GEORGE Director
- ------------------------------------------------
Thomas D. George
/s/ GREGORY K. HINCKLEY Director
- ------------------------------------------------
Gregory K. Hinckley
/s/ JUERGEN KNORR Director
- ------------------------------------------------
Juergen Knorr
/s/ JOHN B. NEFF Director
- ------------------------------------------------
John B. Neff
II-4
74
AMKOR TECHNOLOGY, INC.
REGISTRATION STATEMENT ON FORM S-4
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
3.1 Articles of Incorporation.**
3.2 Bylaws.**
4.1 Senior Notes Indenture dated as of February 20, 2001 between
the Registrant and State Street Bank and Trust Company,
including form of 9.25% Senior Note Due 2008.*
4.2 Senior Notes Registration Rights Agreement dated as of
February 20, 2001 among the Registrant and the Initial
Purchasers.*
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
10.1 Material Contracts.**
12.1 Calculation of Ratio of Earnings to Fixed Charges.**
21.1 List of Subsidiaries of the Registrant.**
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of SyCip Gorres Velayo & Co.
23.3 Consent of Samil Accounting Corporation.
23.4 Consent of Arthur Andersen LLP.
23.5 Consent of Siana Carr & O'Connor, LLP.
23.6 Consent of Ahn Kwon & Co.
23.7 Consent of Wilson Sonsini Goodrich & Rosati (included in
Exhibit 5.1).
23.8 Consent of Kim & Chang.
23.9 Consent of Ortega, Del Castillo, Bacorro, Odulio, Colma &
Carbonell.
24.1 Power of Attorney (Included on page II-4).
25.1 Statement of Eligibility of Trustee.
99.1 Form of Letter of Transmittal with respect to Exchange
Offer.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Exchange Agent Agreement.
- -------------------------
* Incorporated by reference to the Company's Quarterly Report on Form 10-Q for
the period ended March 31, 2001.
** Incorporated by reference to the Company's Annual Report on Form 10-K for the
period ended December 31, 2000.