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EXHIBIT 10.1
AMKOR TECHNOLOGY, INC.
$425,000,000 9 1/4% SERIES A SENIOR NOTES DUE 2006
$200,000,000 10 1/2% SERIES A SENIOR SUBORDINATED NOTES DUE 2009
PURCHASE AGREEMENT
May 6, 1999
SG COWEN SECURITIES CORPORATION
SALOMON SMITH BARNEY INC.
BT ALEX. BROWN INCORPORATED
NATIONSBANC MONTGOMERY SECURITIES LLC
BANCBOSTON ROBERTSON STEPHENS INC.
PRUDENTIAL SECURITIES INCORPORATED
c/o SG Cowen Securities Corporation
High Yield Syndicate
1221 Avenue of the Americas
13th Floor
New York, New York 10020
Dear Sirs:
1. INTRODUCTORY. Amkor Technology, Inc., a Delaware corporation
(the "Company"), proposes to sell, pursuant to the terms of this Agreement, to
the several initial purchasers named in Schedule A hereto (the "Initial
Purchasers," or, each, an "Initial Purchaser"), $425,000,000 principal amount of
its 9 1/4% Series A Senior Notes due 2006 (the "Series A Senior Notes") and
$200,000,000 principal amount of its 10 1/2% Series A Senior Subordinated Notes
due 2009 (the "Series A Senior Subordinated Notes," and together with the Series
A Senior Notes, the "Series A Securities"). The Series A Senior Notes are to be
issued pursuant to an Indenture dated as of May 13, 1999 (the "Senior Notes
Indenture") to be entered into between the Company and State Street Bank and
Trust Company, as trustee (the "Senior Notes Trustee"). The Series A Senior
Subordinated Notes are to be issued pursuant to an Indenture dated as of May 13,
1999 (the "Senior Subordinated Notes Indenture," and together with the Senior
Notes Indenture, the "Indentures") to be entered into between the Company and
State Street Bank and Trust Company, as trustee (the "Senior Subordinated Notes
Trustee," and together with the Senior Notes Trustee, the "Trustees"). The
Series A Securities and the Series B Securities (as defined below) issuable in
exchange therefor are collectively referred to herein as the "Securities."
The Series A Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon an exemption therefrom. The Company has
prepared a preliminary offering memorandum dated April 22, 1999 (the
"Preliminary Offering Memorandum") and will prepare an offering memorandum dated
the date hereof (the "Offering Memorandum") setting forth information concerning
the Company and the Securities. Copies of the Preliminary Offering Memorandum
have been, and copies of the Offering Memorandum will be, delivered by the
Company to the Initial Purchasers pursuant to the terms of this Agreement. Any
references herein to the Preliminary Offering Memorandum and the Offering
Memorandum shall be deemed to include all amendments and supplements thereto,
unless otherwise noted. The Company hereby confirms that it has authorized the
use of the Preliminary Offering
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Memorandum and the Offering Memorandum in connection with the offering and
resale of the Series A Securities by the Initial Purchasers solely in accordance
with Section 3.
Holders of the Series A Senior Notes (including the Initial
Purchasers and their direct and indirect transferees) will be entitled to the
benefits of a Senior Notes Registration Rights Agreement (the "Senior Notes
Registration Rights Agreement") to be dated, and executed on, the Closing Date.
Holders of the Series A Senior Subordinated Notes (including the Initial
Purchasers and their direct and indirect transferees) will be entitled to the
benefits of a Senior Subordinated Notes Registration Rights Agreement (the
"Senior Subordinated Notes Registration Rights Agreement," and together with the
Senior Notes Registration Rights Agreement, the "Registration Rights
Agreements") to be dated, and executed on, the Closing Date. Pursuant to the
Registration Rights Agreements the Company will agree to file with the
Securities and Exchange Commission (the "Commission") (i) one or more
registration statements under the Securities Act (the "Exchange Offer
Registration Statements") relating to the Company's 9 1/4% Series B Senior Notes
due 2006 (the "Series B Senior Notes") and the Company's 10 1/2% Series B Senior
Subordinated Notes due 2009 (the "Series B Senior Subordinated Notes," and
together with the Series B Senior Notes, the "Series B Securities") which are
identical in all material respects to the Series A Securities (except that the
Series B Securities will not contain terms with respect to transfer
restrictions), to be offered in exchange for the Series A Securities (such offer
to exchange being referred to as the "Exchange Offer"), and (ii) under certain
circumstances, one or more shelf registration statements pursuant to Rule 415
under the Securities Act (the "Shelf Registration Statements"), relating to the
resale by certain holders of the Series A Securities.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the several Initial Purchasers
that:
(a) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, did not, and on the Closing Date
(as defined below) the Offering Memorandum will not, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the foregoing representations and warranties shall not
apply to information contained in or omitted from the Preliminary Offering
Memorandum or the Offering Memorandum in reliance upon, and in conformity with,
written information furnished to the Company through the Initial Purchasers
specifically for inclusion therein.
(b) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, contains all of the information
that, if requested by a prospective purchaser of the Series A Securities, would
be required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act and the rules and regulations of the
Commission thereunder (the "Rules and Regulations").
(c) Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 3 and their compliance
with the agreements set forth therein, it is not necessary, in connection with
the issuance and sale of the Series A Securities to the Initial Purchasers and
the offer, resale and delivery of the Series A Securities by the Initial
Purchasers in the manner contemplated by this Agreement and the Offering
Memorandum, to register the Series A Securities under the Securities Act or to
qualify the Indentures under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act").
(d) The Company, each of its Subsidiaries (as defined
below), and, to the best of the
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Company's knowledge, without having made specific inquiry, Anam Semiconductor,
Inc. ("ASI"), have been duly incorporated or organized and are validly existing
as corporations or, in the case of AAAP (as defined below), as a limited
liability company, in good standing under the laws of their respective
jurisdictions of incorporation or organization, have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, and are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses requires such qualification, except where the failure to so qualify
could not reasonably be expected to have, singularly or in the aggregate, a
material adverse effect on the condition (financial or otherwise), results of
operations, business or prospects of the Company and its Subsidiaries taken as a
whole (a "Material Adverse Effect"), and no proceeding has been instituted in
any such jurisdiction, revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification, except such
proceedings which, if successful, could not reasonably be expected to have
individually or in the aggregate have a Material Adverse Effect. The Company
owns or controls, directly or indirectly, only the following corporations,
associations or other entities (each a "Subsidiary" and, collectively, the
"Subsidiaries"): AK Industries, Inc., Amkor International Holdings, Ltd., Amkor
Receivables Corp., Amkor Technology Inventory Co., Amkor Wafer Fabrications
Services, S.A.R.L., Amkor/Anam Advanced Packaging, Inc. ("AAAP"), Amkor
Technology EuroServices, S.A.R.L., Amkor/Anam Pilipinas, Inc. ("AAP"), C.I.L.
Limited, First Amkor Cayman Islands, Ltd., Guardian Assets, Inc., Second Amkor
Caymans, Inc., T.L. Limited, Amkor Technology Korea, Inc. ("AT Korea") and
P-Four, Inc. ("P-Four").
(e) The Company has an authorized capitalization as set
forth in the Offering Memorandum, and all of the issued shares of capital stock
of the Company, have been duly and validly authorized and issued, are fully paid
and non-assessable.
(f) All the outstanding shares of capital stock of each
Subsidiary of the Company have been duly authorized and validly issued, are
fully paid and nonassessable and, except (i) such shares of AAP and P-Four owned
by directors thereof, which shares in each case do not exceed 0.1% of the
outstanding shares of such Subsidiary, and (ii) to the extent set forth in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
(the "10-K"), are owned by the Company directly or indirectly through one or
more wholly-owned subsidiaries, free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any other claim of any
third party.
(g) The Company has full right, power and authority to execute
and deliver this Agreement, the Indentures, the Securities and the Registration
Rights Agreements (collectively, the "Transaction Documents"), and the Asset
Purchase Agreement, as amended prior to the date hereof (as defined in the
Indentures), the Transition Services Agreement (as defined in the Indentures)
and the Intellectual Property Rights Licensing Agreement (as defined in the
Indentures) (collectively, the "K4 Acquisition Documents"), and that certain
commitment letter dated April 9, 1999, between the Company and ASI relating to
certain equity investments by the Company in ASI (the "Equity Investment
Commitment Letter") and AT Korea has full right, power and authority to execute
and deliver the Transition Services Agreement (as defined in the Indentures),
and to perform their respective obligations hereunder and thereunder; all
corporate action required to be taken by the Company or AT Korea for the due and
proper authorization, execution and delivery of each of the Transaction
Documents, the K4 Acquisition Documents and the Equity Commitment Letter and the
consummation of the transactions contemplated thereby have been duly and validly
taken.
(h) Each of the Indentures, when duly executed by the proper
officers of the
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Company and delivered by the Company, assuming due authorization, execution and
delivery thereof by the Trustee party thereto, will constitute a valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing. The Offering Memorandum contains a fair summary of the
principal terms of the Indentures. On the Closing Date, the Indentures will
conform in all material respects to the requirements of the Trust Indenture Act
and the Rules and Regulations applicable to an indenture which is qualified
thereunder.
(i) The Series A Securities, when duly executed,
authenticated, issued and delivered as provided in the Indentures, and upon
payment and delivery in accordance with this Agreement, and the Series B
Securities, when duly executed, authenticated, issued and delivered as provided
in the Indentures pursuant to the Exchange Offer, will be duly and validly
issued and outstanding and will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture applicable thereto and
enforceable in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing. The Offering Memorandum
contains a fair summary of the principal terms of the Securities.
(j) Each of this Agreement, the Registration Rights
Agreements and the Intellectual Property Rights License Agreement, when duly
executed by the proper officers of the Company and delivered by the Company,
assuming due authorization, execution and delivery thereof by the other parties
thereto, will constitute a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing. The
Transition Services Agreement, when duly executed by the proper officers of AT
Korea and delivered by AT Korea, assuming due authorization, execution and
delivery thereof by the other parties thereto, will constitute a valid and
binding agreement of AT Korea enforceable against AT Korea in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing. The Asset Purchase Agreement has been duly executed and
delivered by the proper officers of the Company and constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing. The Company has no reason to believe that the Memorandum
of Understanding for Workout of Affiliates of Anam Group dated April 1999, among
ASI, Anam Environmental Industry Co., Ltd., James J. Kim, the Council of
Creditor Financial Institutions identified in Attachment I thereto and Cho Hung
Bank (the "MOU"), has not been duly authorized, executed and delivered by ASI,
or does not constitute a valid and binding agreement of ASI, enforceable against
ASI, in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing. The Offering Memorandum
contains a fair summary of the
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principal terms of this Agreement, the Registration Rights Agreements, the Asset
Purchase Agreement, the Transition Services Agreement, the Intellectual Property
Rights Licensing Agreement, the Equity Investment Commitment Letter and the MOU.
(k) There is no franchise, lease, contract, agreement or
document required by the Securities Act or by the Rules and Regulations to be
described in the 10-K or to be filed as an exhibit thereto which is not
described or filed therein as required; and all descriptions of any such
franchises, leases, contracts, agreements or documents contained in the 10-K
and/or the Offering Memorandum, to the extent such franchises, leases,
contracts, agreements or documents are described therein, are accurate and
complete descriptions of such documents in all material respects.
(l) Neither the Company nor any of its Subsidiaries is or,
after giving effect to the offering of the Series A Securities and the
application of the proceeds thereof as described in the Offering Memorandum will
become, an "investment company" within the meaning of the Investment Company Act
of 1940, as amended and the rules and regulations of the Commission thereunder.
(m) Except for such consents, approvals, authorizations,
registrations or qualifications as may be required under applicable state
securities laws in connection with the purchase and distribution of the Series A
Securities by the Initial Purchasers in the manner contemplated by this
Agreement and the Offering Memorandum, no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental agency
or body is required for the execution, delivery and performance of the
Transaction Documents and the K4 Acquisition Documents by the Company and the
consummation of the transactions contemplated thereby.
(n) Neither the issuance and sale of the Securities by the
Company nor the performance of the Company's obligations under the Transaction
Documents or the K4 Acquisition Documents nor the fulfillment of the terms
hereof or thereof will conflict with, or result in a breach or violation of, or
constitute a default under, or result in the imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to (i) the charter or by-laws of the Company or any of its
Subsidiaries, (ii) the terms or provisions of any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the Company
or any of its Subsidiaries is subject, or (iii) any U.S. statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any of its
Subsidiaries of any court or governmental agency or body having jurisdiction
over the Company or any of its Subsidiaries or any of their properties or
assets, except any conflicts, breaches or violations which, singularly or in the
aggregate, would not have a Material Adverse Effect.
(o) Except as set forth in the Offering Memorandum, no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
Subsidiaries or its or their property or assets is pending or, to the best of
the Company's knowledge, threatened that could reasonably be expected to have,
singularly or in the aggregate, a material adverse effect on the performance of
the Transaction Documents, the K4 Acquisition Documents or the Equity Investment
Commitment Letter or the consummation of any of the transactions contemplated
thereby or a Material Adverse Effect.
(p) To the best of the Company's knowledge, without having
made specific inquiry, the Transition Services Agreement and the Intellectual
Property Rights License Agreement have been duly authorized by ASI and, when
duly executed by the proper officers of ASI and delivered by ASI, will
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be valid, binding and enforceable agreements of ASI, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing. To the best of the
Company's knowledge, without having made specific inquiry, no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving ASI or its property or assets is pending or threatened
that could reasonably be expected to have a material adverse effect on ASI's
performance of the Asset Purchase Agreement, the Transition Services Agreement
or the Intellectual Property Rights License Agreement or the consummation of any
of the transactions contemplated thereby.
(q) Each of the Company and its Subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations as
presently conducted, in each case free and clear of all liens, encumbrances,
claims and defects that may result in a Material Adverse Effect.
(r) Except as set forth in the Offering Memorandum, neither
the Company nor any of its Subsidiaries (i) is in violation of its charter or
by-laws, (ii) is in default in any respect, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any of its
property or assets is subject, (iii) is in violation in any respect of any
statute, law, rule, regulation, judgment order or decree of any court,
governmental body, arbitrator or other authority having jurisdiction over the
Company, any such Subsidiary or any of their respective properties or assets, or
(iv) is in non-compliance with any term or condition of, or has failed to obtain
and maintain in effect, any license, certificate, authorization or permit
required for the ownership or lease of its property or the conduct of its
business, except any violations, defaults, non-compliance or failures which,
singularly or in the aggregate, would not have a Material Adverse Effect.
(s) Arthur Andersen LLP, who has expressed its opinion on
the audited combined financial statements of the Company and related schedules
included in the Offering Memorandum are independent public accountants with
respect to the Company and its Subsidiaries within the meaning of the Securities
Act and the Rules and Regulations.
(t) To the best of the Company's knowledge, Samil Accounting
Corporation, an affiliate of Coopers & Lybrand LLP, who has expressed its
opinion on the audited financial statements of the ASI packaging and test
facility known as K4 ("K4") included in the Offering Memorandum are independent
public accountants with respect to ASI and its subsidiaries and K4, within the
meaning of the Securities Act and the Rules and Regulations.
(u) The historical consolidated financial statements of the
Company and its Subsidiaries, included in the Offering Memorandum present fairly
in all material respects the financial condition, results of operation and cash
flows of the Company and its Subsidiaries, on a consolidated basis, as of the
dates and for the periods indicated, comply as to form with the accounting
requirements of the Securities Act and the rules and regulations thereunder
applicable to a registration statement on Form S-1 and have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted therein). The
Company has no reason to believe that the historical condensed financial
statements of ASI included in the Offering Memorandum do not present fairly in
all material respects the financial condition and results of operation of ASI
and its subsidiaries on a consolidated basis, as of the dates and for the
periods indicated,
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or have not been prepared in conformity with generally accepted accounting
principles in the Republic of Korea applied on a consistent basis throughout the
periods involved. The pro forma financial information contained in the Offering
Memorandum has been prepared on a basis consistent with the historical financial
statements contained in the Offering Memorandum (except for the pro forma
adjustments specified therein), includes all material adjustments to the
historical financial information required by Rule 11-02 of Regulation S-X under
the Securities Act and the Exchange Act to reflect the transactions described in
the Offering Memorandum, gives effect to assumptions made on a reasonable basis
and fairly presents the historical and proposed transactions contemplated by the
Offering Memorandum, the Transaction Documents and the K4 Acquisition Documents.
The other historical financial and statistical information and data included in
the Offering Memorandum are, in all material respects, fairly presented.
(v) To the best of the Company's knowledge, there are no
transfer taxes or other similar fees or charges under Federal law or the laws of
any state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the sale by the
Company of the Securities.
(w) Neither the Company nor any of its Subsidiaries has been
or is in violation of any federal or state law or regulation relating to
occupational safety and health or to the storage, handling or transportation of
hazardous or toxic materials and the Company and its Subsidiaries have received
all permits, licenses or other approvals required of them under applicable
federal and state occupational safety and health and environmental laws and
regulations to conduct their respective businesses, and the Company and each of
its Subsidiaries is in compliance with all terms and conditions of any such
permit, license or approval, except any such violation of law or regulation,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
which could reasonably be expected to, singly or in the aggregate, have a
Material Adverse Effect, except as described in the Offering Memorandum.
(x) Except as described in the Offering Memorandum, the
Company and its Subsidiaries each (i) have filed all federal, state, local and
foreign income and franchise tax returns that are required to be filed or have
requested extensions thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect), (ii) have paid all federal, state,
local and foreign taxes shown as payable on such returns, to the extent that any
of the foregoing is due and payable, except for any such tax that is currently
being contested in good faith or as would not have a Material Adverse Effect,
and (iii) do not have any tax deficiency or claims outstanding or assessed or,
to the best of the Company's knowledge, proposed against it which could
reasonably be expected to have a Material Adverse Effect.
(y) No labor dispute with the employees of the Company or
any of its Subsidiaries exists or, to the best of the Company's knowledge, is
threatened that could reasonably be expected to have a Material Adverse Effect.
(z) The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent for the businesses in which they are engaged;
and neither the Company nor any such Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect, except as described in or contemplated in the Offering
Memorandum.
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(aa) No Subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to the Company or any
other Subsidiary of the Company, except as described in or contemplated in the
Offering Memorandum.
(bb) The Company and each of its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(cc) The Company and each of its Subsidiaries owns or has
obtained licenses for the patents, patent applications, trade and service marks,
trade secrets and other intellectual properties referenced or described in the
Offering Memorandum as being owned by or licensed to them (collectively, the
"Intellectual Property"). Except as set forth in or contemplated in the Offering
Memorandum, (i) to the best of the Company's knowledge, there are no rights of
third parties to any such Intellectual Property owned by the Company or any of
its Subsidiaries; (ii) to the best of the Company's knowledge, there is no
material infringement by third parties of any such Intellectual Property; (iii)
there is no pending or, to the best of the Company's knowledge, threatened
action, suit, proceeding or claim by others challenging the rights of the
Company or any of its Subsidiaries in or to any such Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis for any
such claim; (iv) there is no pending or, to the best of the Company's knowledge,
threatened action, suit, proceeding or claim by others challenging the validity
or scope of any such Intellectual Property; (v) there is no pending or, to the
best of the Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company or any of its Subsidiaries infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary
rights of others; (vi) to the best of the Company's knowledge, there is no U.S.
patent or published U.S. patent application which contains claims that dominate
or may dominate any Intellectual Property described in the Offering Memorandum
as being owned by or licensed to the Company or any of its Subsidiaries that
interferes with the issued or pending claims of any such Intellectual Property;
and (vii) there is no prior art of which the Company is aware that may render
any U.S. patent held by the Company or any of its Subsidiaries invalid or any
U.S. patent application held by the Company or any of its Subsidiaries
unpatentable which has not been disclosed to the U.S. Patent and Trademark
Office, in each case that could reasonably be expected to result in a Material
Adverse Effect. Each of the Company and its Subsidiaries owns or could obtain
the Intellectual Property or has the rights to the Intellectual Property that is
necessary to conduct the Company's business as described in the Offering
Memorandum.
(dd) None of the Company nor any of its affiliates or any
other person acting on its or their behalf has engaged, in connection with the
offering of the Series A Securities, in any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D
("Regulation D") under the Securities Act.
(ee) Neither the Company nor any of its affiliates has,
directly or through any agent, sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of, any security (as such term is defined in
the Securities Act), which is or will be integrated with the sale of the Series
A
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Securities in a manner that would require registration of the Series A
Securities under the Securities Act.
(ff) The Series A Securities satisfy the eligibility
requirements of Rule 144A(d)(3) under the Securities Act.
(gg) Neither the Company nor its affiliated purchasers, as
defined in Rule 100 of Regulation M ("Regulation M") under the Exchange Act,
either alone or with one or more other persons, (i) has taken, either directly
or indirectly, any action which was designed to cause or result in,
stabilization or manipulation of the price of any security of the Company
("Subject Securities") in connection with the offering of the Securities or (ii)
will bid for or purchase any Subject Securities of the Company or any other
covered securities (within the meaning of Regulation M) relating to the Subject
Securities (together with Subject Securities, "Covered Securities"), or attempt
to induce any person to bid for or purchase any Covered Securities, in either
case, for the purpose of creating actual or apparent active trading in, or
raising the price of the Securities.
(hh) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company or any of its Subsidiaries to or for the benefit
of any of the officers or directors of the Company or any of its Subsidiaries or
any of the members of the families of any of them, which loans, advances or
guarantees are required to be, and are not, disclosed in the 10-K.
(ii) There have not been, and there are not proposed, (i) any
transactions or agreements between the Company or any of its Subsidiaries on the
one hand and the officers, directors or stockholders of the Company or any of
its Subsidiaries on the other hand, or (ii) any transactions or agreements
between the Company on the one hand and any of its Subsidiaries on the other
hand, or among any of the Company's Subsidiaries, which transactions or
agreements are required to be, and are not, disclosed in the 10-K.
(jj) No officer or director of the Company is in breach or
violation of any employment agreement, non-competition agreement,
confidentiality agreement or other agreement restricting the nature or scope of
employment to which such officer or director is a party, other than such
breaches or violations which could reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect; neither the current conduct nor
the proposed conduct of the Company's business, as described in the Offering
Memorandum, could reasonably be expected to result in a breach or violation of
any such agreement.
(kk) Neither the Company nor any of its Subsidiaries has
sustained, since the date of the latest audited financial statements included in
the Offering Memorandum, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Offering Memorandum;
and, since such date, there has not been any change in the capital stock or
long-term debt of the Company or any of its Subsidiaries or any development
which could reasonably be expected to have a Material Adverse Effect, otherwise
than as set forth or contemplated in the Offering Memorandum.
(ll) No "prohibited transaction" (as defined in Section 406
of the Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time (the
"Code")) or "accumulated funding deficiency" (as defined in Section 302 of
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ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than
events with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived) has occurred with respect to any employee benefit plan
which could reasonably be expected to have a Material Adverse Effect; each
employee benefit plan is in compliance in all material respects with applicable
law, including ERISA and the Code; the Company has not incurred and does not
expect to incur liability under Title IV of ERISA with respect to the
termination of, or withdrawal from, any "pension plan"; and each "pension plan"
(as defined in ERISA) for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which could cause the loss of such qualification.
(mm) The minute books of the Company and each of its
Subsidiaries have been made available to the Initial Purchasers and counsel for
the Initial Purchasers, and such books contain a fair summary of all meetings
and actions of the directors and shareholders of the Company and each of its
Subsidiaries since the time of its respective incorporation through the date of
the latest meeting and action.
(nn) On and immediately after the Closing Date (as defined
below), the Company (after giving effect to the issuance of the Series A
Securities and to the other transactions related thereto as described in the
Offering Memorandum) will be Solvent. As used in this paragraph, the term
"Solvent" means, with respect to a particular date, that on such date (i) the
present fair market value (or present fair saleable value) of the assets of the
Company is not less than the total amount required to pay the probable
liabilities of the Company on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured, (ii) the
Company is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business, (iii) assuming the sale of the Series A
Securities as contemplated by this Agreement and the Offering Memorandum, the
Company is not incurring debts or liabilities beyond its ability to pay as such
debts and liabilities mature and (iv) the Company is not engaged in any business
or transaction, and is not about to engage in any business or transaction, for
which its property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which the Company is
engaged. In computing the amount of such contingent liabilities at any time, it
is intended that such liabilities will be computed at the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
(oo) Neither the Company nor any of its Subsidiaries own any
"margin securities" as that term is defined in Regulations of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"), and none
of the proceeds of the sale of the Securities will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which
might cause any of the Securities to be considered a "purpose credit" within the
meanings of Regulation T, U or X of the Federal Reserve Board.
(pp) Neither the Company nor any of its Subsidiaries is a
party to any contract, agreement or understanding with any person that would
give rise to a valid claim against the Company or the Initial Purchasers for a
brokerage commission, finder's fee or like payment in connection with the
offering and sale of the Series A Securities.
(qq) No forward-looking statement (within the meaning of
Section 27A of the
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Securities Act and Section 21E of the Exchange Act) contained in the Offering
Memorandum has been made for which the Company's management did not have a
reasonable basis.
(rr) The Company has reviewed its operations and that of its
Subsidiaries and any third parties with which the Company or any of its
Subsidiaries has a material relationship to evaluate the extent to which the
business or operations of the Company or any of its Subsidiaries will be
affected by the Year 2000 Problem. As a result of such review, the Company has
no reason to believe, and does not believe, that the Year 2000 Problem will have
a Material Adverse Effect, except as set forth in the Offering Memorandum. The
"Year 2000 Problem" as used herein means any significant risk that computer
hardware or software used in the receipt, transmission, processing,
manipulation, storage, retrieval, retransmission or other utilization of data or
in the operation of mechanical or electrical systems of any kind will not, in
the case of dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
(ss) Except as set forth in the Offering Memorandum, neither
the Company nor any of its Subsidiaries nor, to the best of the Company's
knowledge, any employee or agent of the Company of any of its Subsidiaries, has
made any contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law which could reasonably
be expected to have a Material Adverse Effect .
(tt) To the best of the Company's knowledge, without having
made specific inquiry, the MOU is in full force and effect as of the date hereof
and has not been modified or terminated by any of the parties thereto.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each Initial Purchaser, and each
Initial Purchaser agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 97.75% of the principal amount thereof with
respect to the Series A Senior Notes, and at a purchase price of 97.25% of the
principal amount thereof with respect to the Series A Senior Subordinated Notes,
plus accrued interest, if any, from May 13, 1999 to the Closing Date, the
principal amount of Series A Securities set forth opposite the name of such
Initial Purchaser on Schedule A hereto. The Company shall not be obligated to
deliver any of the Series A Securities except upon payment for all of the Series
A Securities to be purchased as provided herein.
Delivery of and payment for the Series A Securities shall be
made at the offices of Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road,
Palo Alto, California 94304, or at such other place as shall be agreed upon by
SG Cowen Securities Corporation ("SG Cowen") and the Company, at 10:00 A.M., New
York City time, on May 13, 1999, or at such other date or time as shall be
agreed upon by SG Cowen and the Company (such date and time being referred to
herein as the "Closing Date").
The Series A Securities to be purchased by each Initial
Purchaser hereunder and sold to Qualified Institutional Buyers (as defined
below) shall be represented by one or more global securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company or its designated custodian. On the Closing Date, the Company shall
deliver or cause to be delivered the Series A Securities to SG Cowen for the
account of each Initial Purchaser against payment to or upon the order of the
Company of the purchase price by wire transfer payable in Federal (same day)
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funds by causing The Depository Trust Company to credit the Series A Securities
to the account of SG Cowen at The Depository Trust Company.
(b) The Initial Purchasers have advised the Company that
they propose to offer the Series A Securities for resale upon the terms and
subject to the conditions set forth herein and in the Offering Memorandum. Each
Initial Purchaser, severally and not jointly, represents and warrants to, and
agrees with, the Company that (i) it is purchasing the Series A Securities
pursuant to a private sale exempt from registration under the Securities Act,
(ii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Series A Securities by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act and (iii) it has solicited and will solicit
offers for the Series A Securities only from, and has offered or sold and will
offer, sell or deliver the Series A Securities, as part of its initial offering,
only to persons whom it reasonably believes to be qualified institutional buyers
("Qualified Institutional Buyers") as defined in Rule 144A under the Securities
Act, or if any such person is buying for one or more institutional accounts for
which such person is acting as fiduciary or agent, only when such person has
represented to it that each such account is a Qualified Institutional Buyer to
whom notice has been given that such sale or delivery is being made in reliance
on Rule 144A and in each case, in transactions in accordance with Rule 144A.
Each Initial Purchaser, severally and not jointly, agrees that, prior to or
simultaneously with the confirmation of sale by such Initial Purchaser to any
purchaser of any of the Series A Securities purchased by such Initial Purchaser
from the Company pursuant hereto, such Initial Purchaser shall furnish to that
purchaser a copy of the Offering Memorandum (and any amendment or supplement
thereto that the Company shall have furnished to such Initial Purchaser prior to
the date of such confirmation of sale). In addition to the foregoing, each
Initial Purchaser acknowledges and agrees that the Company and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Sections
6(d), (e), (f), (g), (h) and (i), counsel for the Company and for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers and their compliance with their agreements
contained in this Section 3, and each Initial Purchaser hereby consents to such
reliance.
(c) The Company acknowledges and agrees that the Initial
Purchasers may sell Series A Securities to any affiliate of an Initial Purchaser
and that any such affiliate may sell Series A Securities purchased by it to an
Initial Purchaser.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with each
of the several Initial Purchasers:
(a) To advise the Initial Purchasers promptly and, if
requested, confirm such advice in writing, of the happening of any event which
makes any statement of a material fact made in the Offering Memorandum untrue or
which requires the making of any additions to or changes in the Offering
Memorandum (as amended or supplemented from time to time) in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; to advise the Initial Purchasers promptly of any order
preventing or suspending the use of the Preliminary Offering Memorandum or the
Offering Memorandum, of any suspension of the qualification of the Series A
Securities for offering or sale in any jurisdiction and of the initiation or
threatening of any proceeding for any such purpose; and to use its best efforts
to prevent the issuance of any such order preventing or suspending the use of
the Preliminary Offering Memorandum or the Offering Memorandum or suspending any
such qualification and, if any such suspension is issued, to obtain the lifting
thereof at the earliest possible time.
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(b) To furnish promptly to each of the Initial Purchasers
and to counsel for the Initial Purchasers, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (and any amendments
or supplements thereto) as may be reasonably requested.
(c) Prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to each of the Initial Purchasers
and counsel for the Initial Purchasers and not to effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by notice to
the Company after a reasonable period to review.
(d) If, at any time prior to completion of the resale of the
Series A Securities by the Initial Purchasers, any event shall occur or
condition exist as a result of which it is necessary, in the opinion of counsel
for the Initial Purchasers or counsel for the Company, to amend or supplement
the Offering Memorandum in order that the Offering Memorandum will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
existing at the time it is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Offering Memorandum to comply with
applicable law, to promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the Offering
Memorandum, as so amended or supplemented, will comply with applicable law.
(e) For so long as the Series A Securities are outstanding
and are "restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Series A Securities and prospective
purchasers of the Series A Securities designated by such holders, upon request
of such holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act, unless the
Company is then subject to and in compliance with Section 13 or 15(d) of the
Exchange Act (the foregoing agreement being for the benefit of the holders from
time to time of the Securities and prospective purchasers of the Series A
Securities designated by such holders).
(f) To promptly take from time to time such actions as the
Initial Purchasers may reasonably request to qualify the Series A Securities for
offering and sale under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchasers may designate and to continue such qualifications in
effect for so long as required for the distribution of the Series A Securities;
provided that the Company and its subsidiaries shall not be obligated to qualify
as foreign corporations in any jurisdiction in which they are not so qualified
or to file a general consent to service of process in any jurisdiction.
(g) During the period of five years from the date hereof,
the Company will deliver to the Initial Purchasers, (i) as soon as they are
available, copies of all reports or other communications furnished to
shareholders and (ii) as soon as they are available, copies of any reports and
financial statements furnished or filed with the Commission pursuant to the
Exchange Act or any national securities exchange or automatic quotation system
on which the Securities or any class of securities of the Company are listed or
quoted.
(h) During the period beginning from the date hereof and
continuing to and including the Closing Date, the Company will not offer for
sale, sell, contract to sell or otherwise dispose of directly or indirectly, or
file a registration statement for, or announce any offering of, any securities
of the Company that are substantially similar to the Series A Securities.
(i) To assist the Initial Purchasers in arranging for the
Securities to be designated Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") Market securities in
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accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL Market and
for the Series A Securities to be eligible for clearance and settlement through
The Depository Trust Company ("DTC").
(j) Not to, and use reasonable efforts to cause its
affiliates not to, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as such term is defined in the Securities
Act) which could be integrated with the sale of the Series A Securities in a
manner which would require registration of the Series A Securities under the
Securities Act.
(k) Except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
not to, and to cause its affiliates not to, and not to authorize or knowingly
permit any person acting on their behalf to, solicit any offer to buy or offer
to sell the Series A Securities by means of any form of general solicitation or
general advertising within the meaning of Regulation D or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act; and not to offer, sell, contract to sell or otherwise dispose of, directly
or indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section 4(2) of
the Securities Act to cease to be applicable to the offering and sale of the
Series A Securities as contemplated by this Agreement and the Offering
Memorandum.
(l) During the period from the Closing Date until two years
after the Closing Date, without the prior written consent of the Initial
Purchasers, not to, and not permit any of its affiliates (as defined in Rule 144
under the Securities Act) to, resell any of the Securities that have been
reacquired by them, except for Securities purchased by the Company or any of its
affiliates and resold in a transaction registered under the Securities Act.
(m) Prior to the Closing Date, the Company will furnish to
the Initial Purchasers, promptly following the time they have been publicly
released, copies of any unaudited interim consolidated financial statements of
the Company for any periods subsequent to the periods covered by the financial
statements appearing in the Offering Memorandum.
(n) Prior to the Closing Date, the Company will not issue
any press release or other public communication directly or indirectly or hold
any press conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except for
routine oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the Initial
Purchasers are notified), without consultation with SG Cowen, unless in the
judgment of the Company and its counsel, and after notification to the Initial
Purchasers, such press release or public communication is required by law.
(o) In connection with the offering of the Series A
Securities, until SG Cowen shall have notified the Company of the completion of
the resale of the Series A Securities, the Company will not, and will cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act) not
to, either alone or with one or more other persons, bid for or purchase, for any
account in which it or any of its affiliated purchasers has a beneficial
interest, any Series A Securities, or attempt to induce any person to purchase
any Series A Securities; and not to, and to cause its affiliated purchasers not
to, make bids or purchase for the purpose of creating actual, or apparent,
active trading in or of raising the price of the Series A Securities.
(p) The Company will not take any action prior to the
Closing Date which would require the Offering Memorandum to be amended or
supplemented pursuant to Section 4(b).
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(q) The Company will apply the net proceeds from the sale of
the Series A Securities as set forth in the Offering Memorandum under the
heading "Use of Proceeds".
(r) The Company will not, for so long as the Series A
Securities are outstanding, be or become, or be or become owned by, an open-end
investment company, unit investment trust or face-amount certificate company
that is or is required to be registered under Section 8 of the Investment
Company Act, and will not be or become, or be or become owned by, a closed-end
investment company required to be registered, but not registered thereunder.
(s) In connection with the offering of the Series A
Securities, until the earlier to occur of (i) the date SG Cowen shall have
notified the Company of the completion of the resale of the Series A Securities
or (ii) 30 days following the Closing Date, the Company will make its officers,
employees, independent accountants and legal counsel reasonably available upon
request by SG Cowen.
(t) To not take any action prior to the execution and
delivery of the Indentures which, if taken after such execution and delivery,
would have violated any of the covenants contained in the Indentures.
(u) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-198,
An Act Relating to Disclosure of Doing Business with Cuba, and the Company
further agrees that if it commences engaging in business with the government of
Cuba or with any person or affiliate located in Cuba after the date of the
Offering Memorandum, or if the information reported in the 10-K, if any,
concerning the Company's business with Cuba or with any person or affiliate
located in Cuba changes in any material way, the Company will provide the
Florida Department of Banking and Finance (the "Department") notice of such
business or change, as appropriate, in a form acceptable to the Department.
5. PAYMENT OF EXPENSES. The Company agrees with the Initial
Purchasers to pay (a) the costs incident to the authorization, issuance, sale,
preparation and delivery of the Series A Securities and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and
distribution of the Preliminary Offering Memorandum, Offering Memorandum and any
amendments and exhibits thereto, the costs of printing, reproducing and
distributing the applicable Transaction Documents by mail, telex or other means
of communications; (c) all expenses incurred in connection with the application
for quotation of the Series A Securities on the PORTAL Market and the approval
of the Series A Securities for book-entry transfer by the Depository Trust
Company; (d) any applicable listing or other fees; (e) the fees and expenses of
qualifying the Series A Securities under the securities laws of the several
jurisdictions as provided in Section 4(f) and of preparing, printing and
distributing Blue Sky Memoranda and Legal Investment Surveys (including related
fees and expenses of counsel to the Initial Purchasers); (f) all fees and
expenses of the Trustees or any agent thereof; (g) any fees charged by
securities rating services for rating the Series A Securities; and (h) all other
costs and expenses incident to the performance of the obligations of the Company
under this Agreement (including, without limitation, the fees and expenses of
the Company's counsel and the Company's independent accountants); provided that,
except as otherwise provided in this Section 5 and in Section 9, the Initial
Purchasers shall pay their own costs and expenses, including the fees and
expenses of their counsel, any transfer taxes on the Series A Securities which
they may sell and the expenses of advertising any offering of the Series A
Securities made by the Initial Purchasers.
6. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The respective
obligations of the several Initial Purchasers hereunder are subject to the
accuracy in all material respects, when made and
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on the Closing Date, of the representations and warranties of the Company
contained herein, to the accuracy in all material respects of the statements of
the Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or
supplements thereto) shall have been printed and copies distributed to the
Initial Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Company and the Initial
Purchasers may agree; and no stop order suspending the sale of the Series A
Securities in any jurisdiction shall have been issued and no proceeding for that
purpose shall have been commenced or shall be pending or threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of counsel for the Initial Purchasers, is
material or omits to state any fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading, which has not been corrected in an amendment
or supplement to the Offering Memorandum prior to the Closing Date as required
pursuant to Section 4(d) hereof.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of each of each of the
Transaction Documents, the K4 Acquisition Documents, the Offering Memorandum and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Initial Purchasers, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable
them to pass upon such matters.
(d) Wilson, Sonsini, Goodrich & Rosati Professional
Corporation shall have furnished to the Initial Purchasers such counsel's
written opinion, as counsel to the Company, addressed to the Initial Purchasers
and dated the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, to the effect that:
i. Each of the Company and its Subsidiaries
incorporated or organized under the laws of any state of the United States (the
"U.S. Subsidiaries") has been duly incorporated or organized and is validly
existing as a corporation or, in the case of AAAP, a limited liability company,
in good standing under the laws of their respective jurisdictions of
incorporation or organization, with full power and authority to own or hold its
properties and to conduct its business as described in the Offering Memorandum.
ii. The Company has an authorized capitalization as
set forth in the Offering Memorandum, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform as to legal matters in all material respects
to the description thereof contained in the Offering Memorandum.
iii. All the outstanding shares of capital stock of
each U.S. Subsidiary have been duly authorized and validly issued, are fully
paid and nonassessable.
iv. The Company has full right, power and authority
to execute and deliver each of the Transaction Documents, the K4 Acquisition
Documents to which it is a party and the Equity
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Investment Commitment Letter and to perform its obligations thereunder; and all
corporate action required to be taken for the due and proper authorization,
execution and delivery of each of the Transaction Documents to which the Company
is a party and the consummation of the transactions contemplated thereby have
been duly and validly taken.
v. This Agreement, the Indentures, the Registration
Rights Agreements, the Asset Purchase Agreement and the Intellectual Property
Rights Licensing Agreement have been duly executed and delivered by the Company.
vi. The Equity Investment Commitment Letter has been
duly executed and delivered by the Company.
vii. The statements made in the Offering Memorandum
under the headings "Description of Notes" and "Plan of Distribution," insofar as
they purport to constitute a summary of the legal matters or documents referred
to therein, fairly summarize such legal matters and the principal terms of the
Transaction Documents in all material respects.
viii. Except for such consents, approvals,
authorizations, registrations or qualifications as may be required under
applicable state securities laws in connection with the purchase and
distribution of the Series A Securities by the Initial Purchasers in the manner
contemplated by this Agreement and the Offering Memorandum, no consent,
approval, authorization or order of, or filing or registration with, any U.S.
court, governmental agency or body is required for the execution, delivery and
performance of the Transaction Documents or the K4 Acquisition Documents to
which the Company is a party by the Company and the consummation of the
transactions contemplated thereby, except where the failure to obtain such
consents, approvals, authorizations or orders or make such filings or
registrations could not reasonably be expected to have a Material Adverse
Effect.
ix. Neither the issue and sale of the Series A
Securities nor the performance of the Company's obligations under the
Transaction Documents or the K4 Acquisition Documents nor the fulfillment of the
terms thereof will result in a breach or violation of or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of the
U.S. Subsidiaries pursuant to (i) the charter or by-laws of the Company or any
U.S. Subsidiary, or (ii) any U.S., California or Delaware statute, law, rule,
regulation, judgment, order or decree known to such counsel applicable to the
Company or any of the U.S. Subsidiaries of any U.S., California or Delaware
court or governmental agency or body having jurisdiction over the Company or any
of the U.S. Subsidiaries or any of their property or assets.
x. The Company is not and, after giving effect to
the offering and sale of the Series A Securities and the application of the
proceeds thereof as described in the Offering Memorandum under the heading "Use
of Proceeds," will not be an "investment company" within the meaning of the
Investment Company Act and the rules and regulations of the Commission
thereunder.
xi. Assuming the accuracy of the representations,
warranties and agreements of the Company and of the Initial Purchasers contained
in this Agreement, no registration of the Series A Securities under the
Securities Act or qualification of the Indenture under the Trust Indenture Act
is required in connection with the issuance and sale of the Series A Securities
of the Company and the offer, resale and delivery of the Series A Securities by
the Initial Purchasers in the manner contemplated by this Agreement and the
Offering Memorandum.
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Such counsel has participated in conferences with officers and
other representatives of the Company, representatives of the independent
certified public accountants of the Company and the Initial Purchasers and its
representatives at which the contents of the Preliminary Offering Memorandum and
the Offering Memorandum and related matters were discussed and, although such
counsel is not passing upon, and assumes no responsibility for, the accuracy,
completeness or fairness of the statements contained in the Preliminary Offering
Memorandum or the Offering Memorandum (except as indicated above), on the basis
of the foregoing, no facts have come to such counsel's attention which led such
counsel to believe that the Offering Memorandum, as of its date or the Closing
Date, contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact required or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (except as to financial statements and schedules and other financial
and statistical data included therein).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
State of California, the United States or the corporate laws of the State of
Delaware, to the extent they deem proper and specify in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Initial Purchasers and (B) as to matters
of fact, to the extent they deem proper, on certificates of responsible officers
of the Company and the U.S. Subsidiaries and public officials. Such opinion may
also contain customary qualifications and limitations. References to the
Offering Memorandum in this paragraph (d) include any amendments or supplements
thereto at the Closing Date.
(e) Winthrop, Stimson, Putnam & Roberts, special New York
counsel to the Company, shall have furnished to the Initial Purchasers such
counsel's written opinion, addressed to the Initial Purchasers and dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, to the effect that:
i. Assuming due authorization, execution and
delivery thereof by all the parties thereto, each of the Indentures constitutes
a valid and legally binding agreement of the Company enforceable against the
Company in accordance with its terms, except to the extent limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at law).
ii. The Series A Securities, when executed and
issued by the Company and, assuming due authorization, execution and delivery
thereof by the Company and the Trustees, and upon payment and delivery in
accordance with this Agreement, will constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except to the extent limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) and entitled to the
benefits of the Indenture under which they are issued.
iii. Assuming due authorization, execution and
delivery thereof by all the parties thereto, the Registration Rights Agreements
constitute the valid and legally binding agreements of the Company enforceable
against the Company in accordance with their terms, except to the extent limited
by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally and by
general equitable principles (whether
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considered in a proceeding in equity or at law).
iv. Neither the issue and sale of the Series A Securities nor
the performance of the Company's obligations under the Transaction Documents nor
the fulfillment of the terms thereof will conflict with, or result in a breach
or violation of or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the U.S. Subsidiaries pursuant to
any New York statute, law, rule, regulation, judgment, order or decree known to
such counsel applicable to the Company or any of the U.S. Subsidiaries of any
New York court or governmental agency or body having jurisdiction over the
Company or any of the U.S. Subsidiaries or any of their property or assets.
In rendering such opinion, such counsel may relay (A) as to
matters involving the application of laws of any jurisdiction other than the
State of New York or the United States, to the extent they deem proper and
specify in such opinion, upon the opinion of other counsel of good standing whom
they believe to be reliable and who are satisfactory to counsel for the Initial
Purchasers and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and the U.S. Subsidiaries
and public officials. Such opinion may also contain customary qualifications and
limitations. References to the Offering Memorandum in this paragraph (e) include
any amendments or supplements thereto at the Closing Date.
(f) Kevin Heron, Esq., the General Counsel of the Company,
shall have furnished to the Initial Purchasers such counsel's written opinion,
as counsel to the Company, addressed to the Initial Purchasers and dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, to the effect that:
i. Neither the issue and sale of the Securities nor
the performance of the Company's obligations under this Agreement, the
Indentures, the Securities or the Registration Rights Agreements nor the
fulfillment of the terms hereof or thereof will conflict with, or result in a
breach or violation of, constitute a default under, or result in the imposition
of any lien, charge or encumbrance upon any property or assets of the Company or
any of the U.S. Subsidiaries pursuant to (i) the charter or by-laws of the
Company or any U.S. Subsidiary, or (ii) the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any U.S. Subsidiary is a party or bound or to
which any of the property or assets of the Company or any U.S. Subsidiary is
subject, except breaches or violations which, either individually or in the
aggregate, would not have a Material Adverse Effect, or (iii) any Pennsylvania
statute, law, rule, regulation, judgment, order or decree applicable to the
Company or any U.S. Subsidiary of any Pennsylvania court or governmental agency
or body having jurisdiction over the Company or any of its Subsidiaries or any
of their properties or assets.
ii. Neither the performance of the Company's or the
U.S. Subsidiary Parties' obligations under the Asset Purchase Agreement, the
Transition Services Agreement or the Intellectual Property Rights License
Agreement nor the fulfillment of the terms thereof will conflict with, or result
in a breach or violation of, constitute a default under, or result in the
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of the U.S. Subsidiary Parties pursuant to (i) the charter or
by-laws of the Company or any U.S. Subsidiary Party, or (ii) the terms or
provisions of any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument which is filed as an exhibit to the 10-K, except
breaches or violations which, either individually or in the aggregate, would not
have a Material Adverse Effect, or (iii) any Pennsylvania statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any U.S.
Subsidiary Party of any Pennsylvania court or governmental agency or body having
jurisdiction over the Company or any of the
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U.S. Subsidiary Parties or any of their properties or assets. Except for any
consent, approval, authorization or order or filing which has been obtained or
made by the Company or any of the U.S. Subsidiary Parties, no consent, approval,
authorization or order of, or filing or registration with, any U.S. court or
governmental agency or body is required in connection with the consummation of
the transactions contemplated by the Asset Purchase Agreement, the Transition
Services Agreement or the Intellectual Property Rights License Agreement.
iii. To the best of such counsel's knowledge and
other than as set forth in the Offering Memorandum, no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of the U.S. Subsidiaries or its or
their property or assets is pending which, singularly or in the aggregate, if
determined adversely to the Company or any of the U.S. Subsidiaries, might have
a Material Adverse Effect or would prevent or adversely affect the ability of
the Company to perform its obligations under the Transaction Documents, the K4
Acquisition Documents or the Equity Investment Commitment Letter; and, to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
iv. Except to the extent set forth in the 10-K, all
the outstanding shares of capital stock of each U.S. Subsidiary are owned by the
Company directly or indirectly through one or more wholly owned subsidiaries,
free and clear of any claim, lien, encumbrance, security interest, restriction
upon voting or transfer or any other claim of any third party. The Company owns
all of the outstanding common stock of C.I.L. Limited free and clear of any
claim, lien, encumbrance, security interest, restriction upon voting or transfer
or any other claim of any third party, and to the best of such counsel's
knowledge, C.I.L. Limited has not transferred or encumbered the shares of common
stock of AT Korea owned by it.
In rendering such opinion, such counsel may rely as to matters
involving the application of laws of any jurisdiction other than the State of
Pennsylvania, the United States or the corporate laws of the State of Delaware,
to the extent he deems proper and specifies in such opinion, upon the opinion of
other counsel of good standing whom he believes to be reliable and who are
satisfactory to counsel for the Initial Purchasers. Such opinion may also
contain customary qualifications and limitations. References to the Offering
Memorandum in this paragraph (f) include any supplements thereto at the Closing
Date.
(g) Ortega, Del Castillo, Bacorro, Odulio, Calma & Carbonell
Law Offices, Philippines counsel for the Company, shall have furnished to the
Initial Purchasers such counsel's written opinion, as counsel to the Company,
addressed to the Initial Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers, to the effect that:
i. Each of AAP, AAAP and P-Four (the "Philippines
Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Philippines, with full
corporate power and authority to own or hold its properties and to conduct the
businesses in which it is engaged.
ii. All the outstanding shares of capital stock of
each Philippines Subsidiary have been duly authorized and validly issued, are
fully paid and nonassessable and, except such shares of each Philippines
Subsidiary owned by directors thereof, which shares in each case do not exceed
0.1% of the outstanding shares of such Subsidiary, are owned by the Company
directly or indirectly through one or more wholly-owned subsidiaries, free and
clear of any claim, lien, encumbrance, security interest,
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restriction upon voting or transfer or any other claim of any third party.
iii. The statements made in the Offering Memorandum
in the third paragraph under the heading "Enforceability of Judgments" in the
section entitled "Description of Notes," as they purport to constitute a summary
of the legal matters referred to therein, fairly summarize such legal matters in
all material respects.
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent they deem proper on certificates of responsible officers
of the Company and public officials. Such opinion may also contain customary
qualifications and limitations. References to the Offering Memorandum in this
paragraph (g) include any amendments or supplements thereto at the Closing Date.
(h) Kim & Chang, Korean Counsel for the Company, shall have
furnished to the Initial Purchasers such counsel's written opinion, as counsel
to the Company, addressed to the Initial Purchasers and dated the Closing Date,
in form and substance reasonably satisfactory to the Initial Purchasers to the
effect that:
i. Each of AT Korea and ASI has been duly
incorporated and is validly existing as a corporation under the laws of the
Republic of Korea, with full corporate power and authority to own or hold its
properties and to conduct the businesses in accordance with its Articles of
Incorporation.
ii. All the outstanding shares of capital stock of
AT Korea have been duly authorized and validly issued, are fully paid and
nonassessable, and the Shareholders Registry provides that C.I.L. Limited, a
corporation incorporated under the laws of the Cayman Islands, owns all of such
outstanding shares of capital stock of AT Korea without being subject to any
liens thereon.
iii. The Asset Purchase Agreement constitutes a valid
and legally binding obligation of the Company, enforceable against the Company
in accordance with its terms.
iv. Each of the Transition Services Agreement and
the Intellectual Property Rights License Agreement constitutes a valid and
legally binding obligation of AT Korea, enforceable against AT Korea in
accordance with its terms.
v. Notwithstanding that certain other licenses and
permits may be required for AT Korea to conduct its business, no separate
consent, approval, authorization, filing with or order of any court or
governmental agency or body in the Republic of Korea is required in connection
with the consummation of the transactions contemplated by the Asset Purchase
Agreement, the Transition Services Agreement, the Intellectual Property Rights
License Agreement, the Equity Investment Commitment Letter or the MOU, except
for (i) those that have already been obtained or made and are in full force and
effect and (ii) with respect to the equity investment by the Company into ASI
under the Equity Investment Commitment Letter and the MOU, a foreign investment
report must be filed with a foreign exchange bank in the Republic of Korea under
the Foreign Investment Promotion Law.
vi. Neither the performance of the Company's
obligations under the Asset Purchase Agreement and the Equity Investment
Commitment Letter nor the fulfillment of the terms thereof will conflict with,
or result in a breach or violation of any statute, law, rule, regulation, order
or decree having the force of law in the Republic of Korea.
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vii. Neither the performance of AT Korea's
obligations under the Transition Services Agreement and the Intellectual
Property Rights License Agreement nor the fulfillment of the terms thereof will
conflict with, or result in a breach or violation of any statute, law, rule,
regulation, order or decree having the force of law in the Republic of Korea.
viii. The statements made in the Offering Memorandum
in the second paragraph under the heading "Enforceability of Judgments" in the
section entitled "Description of Notes," as they purport to constitute a summary
of the legal matters referred to therein, fairly summarize such legal matters in
all material respects.
In rendering such opinion, such counsel may rely as to matters
of fact, the extent they deem proper, on certificates of responsible officers of
ASI, AT Korea and the Company and public officials. Such opinion may also
contain customary qualifications and limitations. References to the Offering
Memorandum in this paragraph (h) include any amendments and supplements thereto
at the Closing Date.
(i) The Initial Purchasers shall have received from Latham &
Watkins, counsel for the Initial Purchasers, such opinion or opinions, dated the
Closing Date, with respect to such matters as the Initial Purchasers may
reasonably require, and the Company shall have furnished to such counsel such
documents as they request for enabling them to pass upon such matters.
(j) At the time of the execution of this Agreement, the
Initial Purchasers shall have received from Arthur Andersen LLP a letter,
addressed to the Initial Purchasers and dated such date, in form and substance
satisfactory to the Initial Purchasers (i) confirming that they are the
independent certified public accountants with respect to the Company and its
Subsidiaries within the meaning of the Securities Act and the Rules and
Regulations and (ii) stating the conclusions and findings of such firm with
respect to the financial statements and certain financial information contained
in the Offering Memorandum.
(k) At the time of the execution of this Agreement, the
Initial Purchasers shall have received from Samil Accounting Corporation, an
affiliate of Coopers & Lybrand LLP, a letter, addressed to the Initial
Purchasers and dated such date, in form and substance satisfactory to the
Initial Purchasers (i) confirming that they are the independent certified public
accountants with respect to ASI and K4 within the meaning of the Securities Act
and the Rules and Regulations and (ii) stating the conclusions and findings of
such firm with respect to the financial statements and certain financial
information contained in the Offering Memorandum.
(l) On the Closing Date, the Initial Purchasers shall have
received a letter (the "bring-down letter") from Arthur Andersen LLP, addressed
to the Initial Purchasers and dated the Closing Date confirming, as of the date
of the bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Offering Memorandum as of a date not more than three
business days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by its letter delivered to the Initial Purchasers concurrently
with the execution of this Agreement pursuant to Section 6(j).
(m) On the Closing Date, the Initial Purchasers shall have
received a letter (the "bring-down letter") from Samil Accounting Corporation,
an affiliate of Coopers & Lybrand LLP, addressed to the Initial Purchasers and
dated the Closing Date confirming, as of the date of the bring-
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down letter (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given in the
Offering Memorandum as of a date not more than three business days prior to the
date of the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by its letter
delivered to the Initial Purchasers concurrently with the execution of this
Agreement pursuant to Section 6(k).
(n) The Company shall have furnished to the Initial
Purchasers a certificate, dated the Closing Date, of its Chairman of the Board,
its President or a Vice President or its chief financial officer stating that
(i) such officers have carefully examined the Offering Memorandum and, in their
opinion, the Offering Memorandum, as of its date, did not include any untrue
statement of a material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(ii) since the date of the Offering Memorandum no event has occurred which
should have been set forth in a supplement or amendment to the Offering
Memorandum, (iii) as of the Closing Date, the representations and warranties of
the Company in this Agreement are true and correct in all material respects and
the Company has complied in all material respects with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date, (iv) subsequent to the date of the most recent
financial statements in the Offering Memorandum, there has been no development
which could reasonably be expected to have a Material Adverse Effect, except as
set forth in the Offering Memorandum, and (v) to the best of the Company's
knowledge, without having made specific inquiry, as of the Closing Date, the MOU
is in full force and effect and has not been modified or terminated.
(o) Subsequent to the dates as of which information is given
in the Offering Memorandum (exclusive of any amendment or supplement thereof),
there shall not have been any change, or any development involving a prospective
change, in or affecting the business or properties of the Company and its
Subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated by the
Offering Memorandum, the effect of which is, in the sole judgment of the Initial
Purchasers, so material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Series A Securities as contemplated
in the Offering Memorandum.
(p) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Series A Securities; and no injunction, restraining
order or order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would prevent
the issuance or sale of the Series A Securities.
(q) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review (other than an announcement
with positive implications of a possible upgrading), its rating of any of the
Company's debt securities.
(r) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or in the over-the-counter
market, or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended (other than pursuant to
automatic suspension criteria currently in place) or minimum prices shall have
been established on any such exchange or such market
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by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or state authorities, (iii) the United States shall
have become engaged in hostilities (other than in Yugoslavia or Kosovo), there
shall have been an escalation in hostilities involving the United States (other
than in Yugoslavia or Kosovo) or there shall have been a declaration of a
national emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial markets
in the United States shall be such) as to make it, in the judgment of a majority
in interest of the several Initial Purchasers, impracticable or inadvisable to
proceed with the sale or delivery of the Series A Securities on the terms and in
the manner contemplated in this Agreement and the Offering Memorandum.
(s) The Indentures shall have been duly executed and
delivered by the Company and the Trustees, and the Series A Securities shall
have been duly executed and delivered by the Company and duly authenticated by
the applicable Trustee.
(t) Each condition to closing contemplated by the Asset
Purchase Agreement (other than the issuance and sale of the Securities pursuant
hereto) shall have been satisfied or waived. There shall exist at and as of the
Closing Date (after giving effect to the transactions contemplated by this
Agreement and the other Transaction Documents) no conditions that would
constitute a default (or an event that with notice or the lapse of time, or
both, would constitute a default), breach or violation of the K4 Acquisition
Documents, which default, breach or violation could reasonably be expected to
have a Material Adverse Effect. On the Closing Date, each of the Asset Purchase
Agreement, the Transition Services Agreement and the Intellectual Property
Rights License Agreement shall have been entered into on terms that conform in
all material respects to the descriptions thereof in the Offering Memorandum and
the Initial Purchasers shall have received evidence satisfactory to them of the
execution thereof and the contemplated consummation of the transactions
contemplated thereby, including the acquisition by the Company of the
manufacturing facility known as K4 from ASI. All documents necessary to
consummate the closing of the transactions contemplated by the K4 Acquisition
Documents shall have been executed by all parties thereto and shall have been
placed in escrow such that the Initial Purchasers shall be reasonably satisfied
that the closing of the transactions contemplated by the Asset Purchase
Agreement will occur contemporaneously with the closing of the transactions
contemplated hereunder.
(u) The Initial Purchasers shall have received counterparts
of the Registration Rights Agreements which shall have been executed and
delivered by a duly authorized officer of the Company.
(v) The Series A Securities shall have been approved by the
NASD for trading in the PORTAL Market.
(w) The Initial Purchasers shall have received a letter from
ASI, addressed to the Initial Purchasers, in form and substance satisfactory to
the Initial Purchasers, attaching the selected pro forma financial information
for the year ended December 31, 1998 and at December 31, 1998 of ASI, which
reflects the effect of the workout, the sale of K4, the elimination of the
accounts of Anam Construction, Inc., and the initial equity investment by the
Company pursuant to the Equity Investment Commitment Letter and stating that the
assumptions and adjustments used in preparing such pro forma information are
reasonable and fairly present, in all material respects, the workout, the sale
of K4, the elimination of the accounts of Anam Construction, Inc., and the
initial equity investment by the Company pursuant to the Equity Investment
Commitment Letter and that such pro forma financial information has been
reviewed by Samil Accounting Corporation and that they have not advised ASI that
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they believe any adjustments or changes to the pro forma information are
required for a fair presentation of such pro forma information.
All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company shall
indemnify and hold harmless each Initial Purchaser, its officers, employees,
representatives and agents and each person, if any, who controls any Initial
Purchaser within the meaning of the Securities Act (collectively the "Initial
Purchaser Indemnified Parties" and each an "Initial Purchaser Indemnified
Party") against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which that Initial Purchaser Indemnified Party may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum or in any amendment
or supplement thereto or (ii) the omission or alleged omission to state in the
Preliminary Offering Memorandum or the Offering Memorandum or in any amendment
or supplement thereto a material fact required to be stated therein or necessary
to make the statements therein not misleading and shall reimburse each Initial
Purchaser Indemnified Party promptly upon demand for any legal or other expenses
reasonably incurred by that Initial Purchaser Indemnified Party in connection
with investigating or preparing to defend or defending against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon (i) an untrue
statement or alleged untrue statement in or (ii) omission or alleged omission
from the Preliminary Offering Memorandum or the Offering Memorandum or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company through SG Cowen by or on behalf of any
Initial Purchaser specifically for use therein, which information the parties
hereto agree is limited to the Initial Purchasers' Information (as defined in
Section 16). This indemnity agreement is not exclusive and will be in addition
to any liability which the Company might otherwise have and shall not limit any
rights or remedies which may otherwise be available at law or in equity to each
Initial Purchaser Indemnified Party.
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, its officers, employees,
representatives, agents, directors and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively the "Company
Indemnified Parties" and each a "Company Indemnified Party") against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company Indemnified Parties may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum or
the Offering Memorandum or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through the Initial
Purchasers specifically for use therein, and shall reimburse the Company
Indemnified Parties for any legal or other expenses reasonably incurred by such
parties in connection with investigating or preparing to defend or defending
against or appearing as third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided that
the parties hereto
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hereby agree that such written information provided by the Initial Purchasers
consists solely of the Initial Purchasers' Information. This indemnity agreement
is not exclusive and will be in addition to any liability which the Initial
Purchasers might otherwise have and shall not limit any rights or remedies which
may otherwise be available at law or in equity to the Company Indemnified
Parties.
(c) Promptly after receipt by an indemnified party under
this Section 7 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent it has
been materially prejudiced by such failure; and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 7.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel or (ii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties, which firm shall be designated in writing by SG Cowen, if the
indemnified parties under this Section 7 consist of any Initial Purchaser
Indemnified Party, or by the Company if the indemnified parties under this
Section 7 consist of any Company Indemnified Parties. Each indemnified party, as
a condition of the indemnity agreements contained in Sections 7(a) and (b),
shall use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under Section
7(a) or 7(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in
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such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Initial Purchasers on the other
from the offering of the Series A Securities or if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the Initial
Purchasers on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Initial Purchasers on the other
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Series A Securities purchased
under this Agreement (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Initial
Purchasers with respect to the Series A Securities purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Initial Purchasers on
the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission; provided that the parties hereto agree that the written information
furnished to the Company through the Initial Purchasers for use in the
Preliminary Offering Memorandum or the Offering Memorandum consists solely of
the Initial Purchasers' Information. The Company and the Initial Purchasers
agree that it would not be just and equitable if contributions pursuant to this
Section 7(d) were to be determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 7(d) shall be deemed to include, for purposes
of this Section 7(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7(d), (i) no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Series A Securities purchased and resold by
it were resold to Qualified Institutional Buyers less the amount of any damages
which such Initial Purchaser has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission, and (ii) any amount the Company would otherwise be required to
contribute shall be reduced by the amount the Company has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The Initial Purchasers' obligations to contribute as provided in
this Section 7(d) are several in proportion to their respective underwriting
obligations and not joint.
8. TERMINATION. The obligations of the Initial Purchasers hereunder
may be terminated by SG Cowen, in its absolute discretion by notice given to and
received by the Company prior to delivery of and payment for the Series A
Securities if, prior to that time, (a) any of the events described in Sections
6(n), 6(o), 6(p), 6(q), 6(r), or 6(t) have occurred or (b) this Agreement
terminates pursuant to Section 10.
9. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. If (a) this
Agreement shall have been terminated pursuant to Section 8(a), (b) the Company
shall fail to tender the Series A Securities for delivery to the Initial
Purchasers for any reason permitted under this Agreement, or (c) the Initial
Purchasers shall decline to purchase the Series A Securities for any reason
permitted under this
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Agreement the Company shall reimburse the Initial Purchasers for the fees and
expenses of their counsel and for such other out-of-pocket expenses as shall
have been reasonably incurred by them in connection with this Agreement and the
proposed purchase of the Series A Securities, and upon demand the Company shall
pay the full amount thereof to the SG Cowen.
10. SUBSTITUTION OF INITIAL PURCHASERS. If any Initial Purchaser or
Initial Purchasers shall default in its or their obligations to purchase shares
of Series A Securities hereunder and the aggregate number of shares which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase
does not exceed ten percent (10%) of the principal amount of Series A Securities
purchased, the other Initial Purchasers shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Securities
which such defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase. If any Initial Purchaser or Initial Purchasers shall so default and
the aggregate principal amount with respect to which such default or defaults
occur is more than ten percent (10%) of the total principal amount to be
purchased and arrangements satisfactory to the Initial Purchasers and the
Company for the purchase of such Series A Securities by other persons are not
made within forty-eight (48) hours after such default, this Agreement shall
terminate.
If the remaining Initial Purchasers or substituted Initial
Purchasers are required hereby or agree to take up all or part of the Series A
Securities of a defaulting Initial Purchaser or Initial Purchasers as provided
in this Section 10, (i) the Company shall have the right to postpone the Closing
Date for a period of not more than five (5) full business days in order that the
Company may effect whatever changes may thereby be made necessary in the
Offering Memorandum, or in any other documents or arrangements, and (ii) the
respective principal amount to be purchased by the remaining Initial Purchasers
or substituted Initial Purchasers shall be taken as the basis of their
underwriting obligation for all purposes of this Agreement. Nothing herein
contained shall relieve any defaulting Initial Purchaser of its liability to the
Company or the other Initial Purchasers for damages occasioned by its default
hereunder. Any termination of this Agreement pursuant to this Section 10 shall
be without liability on the part of any non-defaulting Initial Purchaser or the
Company, except expenses to be paid or reimbursed pursuant to Sections 5 and 9
and except the provisions of Section 7 shall not terminate and shall remain in
effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This
Agreement shall inure to the benefit of and be binding upon the several Initial
Purchasers, the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company contained in
this Agreement shall also be for the benefit of the Initial Purchaser
Indemnified Parties, and the indemnities of the several Initial Purchasers shall
also be for the benefit of the Company Indemnified Parties.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the several Initial Purchasers, as set forth
in this Agreement or made by them respectively, pursuant to this Agreement,
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any Initial Purchaser, the Company or any person controlling any
of them and shall survive delivery of and payment for the Series A Securities.
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13. NOTICES. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail, telex or facsimile transmission to SG Cowen Securities Corporation
Attention: High Yield Syndicate, 1221 Avenue of the Americas, 13th Floor, New
York, New York 10020, Attention: William Frauen (Fax: 212-278-5076);
(b) if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to Amkor Technology, Inc., 1345 Enterprise
Drive, West Chester, Pennsylvania 19380, Attention: Chief Financial Officer
(Fax: 610-431-3990).
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement,
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading.
15. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
16. INITIAL PURCHASERS' INFORMATION. The parties hereto acknowledge
and agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the following information in the Offering
Memorandum: (i) the information on the cover page concerning the terms of the
offering by the Initial Purchasers; and (ii) the statements concerning the
Initial Purchasers contained under the heading "Plan of Distribution."
17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
18. GENERAL. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. In this Agreement, the masculine, feminine and neuter
genders and the singular and the plural include one another. The section
headings in this Agreement are for the convenience of the parties only and will
not affect the construction or interpretation of this Agreement. This Agreement
may be amended, modified or assigned, and the observance of any term of this
Agreement may be waived, only by a writing signed by the Company and the Initial
Purchasers.
19. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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If the foregoing is in accordance with your understanding of the
agreement among the Company and the several Initial Purchasers, kindly indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
AMKOR TECHNOLOGY, INC.
By: /s/
-------------------------------------
Name:
Title:
SIGNATURE PAGE TO PURCHASE AGREEMENT
31
Accepted as of
the date first above written:
SG COWEN SECURITIES CORPORATION
By: /s/
----------------------------------
Name:
Title:
SALOMON SMITH BARNEY INC.
By: /s/
----------------------------------
Name:
Title:
BT ALEX. BROWN INCORPORATED
By: /s/
----------------------------------
Name:
Title:
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/
----------------------------------
Name:
Title:
BANCBOSTON ROBERTSON STEPHENS INC.
By: /s/
----------------------------------
Name:
Title:
PRUDENTIAL SECURITIES INCORPORATED
By: /s/
----------------------------------
Name:
Title:
SIGNATURE PAGE TO PURCHASE AGREEMENT
32
SCHEDULE A
Principal
Amount of
Principal Series A
Amount of Senior
Series A Subordinated
Senior Notes Notes
to be to be
Name Purchased Purchased
---- ------------ ------------
SG Cowen Securities Corporation $252,875,000 $119,000,000
Salomon Smith Barney Inc. $95,625,000 $45,000,000
BT Alex. Brown Incorporated $25,500,000 $12,000,000
NationsBanc Montgomery Securities LLC $25,500,000 $12,000,000
BancBoston Robertson Stephens Inc. $12,750,000 $6,000,000
Prudential Securities Incorporated $12,750,000 $6,000,000
----------- ----------
Total $425,000,000 $200,000,000
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