Exhibit 4.18
EXECUTION COPY
THIS PLEDGE AGREEMENT (the "Agreement") is entered as of this 20th day of June,
by and among:
(i) SIMMTECH CO. LTD, a company duly incorporated and existing under the
laws of Korea and having its principal place of business at 70-5
Songjung-Dong, Heung Duk-Ku, Choungju, Chungchongbuk-do, Korea 361-290 (the
"Pledgor"); and
(ii) ST ASSEMBLY TEST SERVICES LTD., a company duly incorporated and
existing under the law of Singapore and having a place of of business at 5
Yishun Street 23, Singapore 768442 (the "Pledgee").
RECITALS
WHEREAS:
A. By the Strategic Assistance Loan Agreement dated as of June 20, 2003 (the
"Loan Agreement") made by and between the Pledgor and the Pledgee, the
Pledgee has agreed, subject to and upon the terms and conditions contained
therein, to provide a loan to the Pledgor in the amount of USD 5 million;
B. The Pledgor is the legal and beneficial owner of the Securities (as defined
below);
C. For the purposes of securing the Secured Obligations (as defined below),
the Pledgor hereby agrees to, inter alia, deposit with and pledge to the
Pledgee the Securities (as defined below) pursuant to terms and conditions
herein.
NOW, THEREFORE, it is agreed as follows:
SECTION 1. INTERPRETATION
Words and expressions defined in the Loan Agreement shall, unless otherwise
defined herein or the context otherwise requires, have the same meaning when
used in this Agreement. References to any agreement or document shall be
construed as references to such agreement or document as
varied, amended, novated or supplemented from time to time. In addition thereto,
as used in this Agreement:
1.1 "Securities" shall mean the securities described in Schedule I hereto.
1.2. "Secured Obligations" shall mean (i) any and all obligations, liabilities
and indebtedness of the Pledgor owing to the Pledgee, presently existing or
to be incurred hereinafter under or with respect to the Loan Agreement,
(ii) moneys, obligations and liabilities owing and payable by the Pledgor
to the Pledgee under the Yangdo Tambo Agreement dated June 20, 2003 between
the Pledgor and the Pledgee and (iii) moneys, obligations and liabilities
owing and payable by the Pledgor to the Pledgee under this Agreement.
1.3. "Proceeds" means all proceeds of, and all other profits, income or
receipts, in whatever form and whatever currency, arising from the
ownership, collection, sale, exchange, assignment or other disposition of,
or realization of any of the Securities, and all interest, dividends (cash,
stock or otherwise) and other payments and distributions on or with respect
to such Securities or in exchange for such Securities.
SECTION 2. PLEDGE
2.1. The Pledgor hereby agrees to pledge the Securities to the Pledgee and
hereby agrees to grant in favor of the Pledge a first priority security
interest (jilkwon) in the Securities and the Pledgee shall accept the
security interest in the Securities for the due and punctual payment,
performance and discharge of the Secured Obligations. The Pledgor hereby
agrees that any Proceeds of any Securities on which a pledge under this
Agreement has been established and perfected shall be subject to the pledge
(jilkwon) on such Securities pursuant to this Agreement and that if any
such Proceeds may not be subject to such pledge, the Pledgor shall pledge
the Proceeds for the benefit of the Pledgee in the manner applicable to the
nature of it and perform any and all actions necessary for the
establishment and effectuation of such pledge under the laws of Korea.
2.2 Simultaneous with, or prior to the provision of the Loan on the Loan Date,
the Pledgor shall have the Pledgee's name and address recorded in the
shareholders' registry of the Pledgor (maintained with the Korea Securities
Depository) as a holder of the security interest (jilkwon) in the
Securities and have the Pledgee's name recorded on the share certificates
representing the Securities.
2.3 Immediately upon performance of Section 2.2 hereof and on or one (1)
business day prior to the provision of the Loan on the Loan Date, the
Pledgor shall deliver or cause to be delivered the share certificates
representing the Securities in physical form to the Pledgee or to the agent
of the Pledgee, as requested by the Pledgee together with a certified copy
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of the shareholders' registry of the Pledgor and any documents necessary to
constitute a legally valid delivery of the certificates.
SECTION 3. REPRESENTATIONS AND WARRANTIES
The Pledgor hereby represents, warrants and covenants to the Pledgee that:
(a) the execution, delivery and performance by the Pledgor of this
Agreement have been duly authorized by the Pledgor, and are not in
conflict with any provision of any applicable laws or the articles of
incorporation of the Pledgor;
(b) the execution, delivery and performance by the Pledgor of this
Agreement does not violate or cause any default under any indenture,
agreement or undertaking by which the Pledgor is bound;
(c) all authorization required from any government or governmental agency
in connection with this Agreement have been obtained and are in full
force and effect;
(d) this Agreement constitutes valid obligations of the Pledgor, legally
binding upon it and enforceable in accordance with its terms, subject,
as to enforceability, to laws relating to bankruptcy, insolvency,
liquidation, reorganization, court schemes, moratoria, administration
and other laws generally affecting the rights of creditors;
(e) the Pledgor has full right, title and interest over the Securities;
(f) the Pledgor has not agreed to sell, assign, transfer, pledge or create
any other interest or other lien in or over all or any part of the
Securities other than in favor of the Pledgee hereunder or as
otherwise permitted under the Loan Agreement;
(g) no person (other than the Pledgor and the Pledgee) is exercising, has
exercised or attempted to exercise any ownership interest or other
lien over any of the Securities;
(h) to the knowledge of the Pledgor, there are no circumstances that would
diminish the value of the Securities;
(i) the Pledgor has not taken any corporate action nor have any other
steps been taken or legal proceedings been started by it or any third
party for its winding up, dissolution, reorganization or bankruptcy or
for the appointment of a receiver, trustee or similar officer over the
Pledgor or its assets or revenues, and there occurs or continues no
cause/event that may lead to such action or steps; and
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(j) the Pledgor has acquired the Securities in accordance with any
provision of any applicable laws or the articles of incorporation of
the Pledgor and has been, and during the term of the Loan Agreement
will be, permitted to have right, title and interest over the
Securities under such laws and articles of incorporation.
SECTION 4. COVENANTS OF THE PLEDGOR
The Pledgor covenants and undertakes the following with the Pledgee:
(a) duly and punctually to observe and perform all the conditions and
obligations imposed on it by the Loan Agreement and this Agreement;
(b) not, without the prior written consent of the Pledgee, to attempt to
sell, assign, transfer, create any lien over, or otherwise disposed of
any of the Securities to or in favor of any person other than the
Pledgee;
(c) to do or permit to be done each and every act or thing the Pledgee may
from time to time reasonably require to be done for the purpose of
enforcing the Pledgee's rights under this Agreement or in respect of
any of the Securities and to allow its name to be used as and when
required by the Pledgee for such purpose;
(d) to make all registrations, filings and recordings, and take all other
actions as are necessary or reasonably determined by the Pledgee to be
advisable to ensure the continued legality, validity, enforceability,
priority and admissibility in evidence of this Agreement;
(e) to be responsible for the resolution of any disputes with a third
party in connection with the Securities, including any disputes
involving claims against the Securities, and in connection therewith,
the Pledgor agrees not to take any action which might adversely affect
the enforcement of the Pledgee's rights or Pledgee's interests in the
Securities and to affirmatively protect and defend such rights and
interests in consultation with the Pledgee;
(f) to conduct its business in accordance with any applicable laws and
regulations;
(g) to pay all taxes, assessments and other governmental charges of any
kind imposed on or in respect of its income or any of its business
when due;
(h) to notify the Pledgee of any and all notices that the Pledgor has
provided to its shareholders in their capacity as shareholders, at the
same time as such notice;
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(i) if and when it is required to or entitled to vote, give any consent or
exercise any other rights with respect to the Securities, to first
notify such situation to the Pledgee immediately and act in accordance
with the instruction of the Pledgee;
(j) not to make or cause to make any action, procedure or event that would
diminish the value of the Securities; and
(k) to notify the Pledgee of any event that would result in or lead to a
breach of any representation and warranty provided under Section 3
immediately upon becoming aware of such event.
SECTION 5. ADMINISTRATION OF SECURITIES
5.1 Until there shall have occurred an Event of Default or an event which with
notice, lapse of time or both would constitute such an Event of Default,
the Pledgor shall be entitled to vote, give any consent or exercise any
other rights with respect to the Securities in any manner not inconsistent
with this Agreement and subject to applicable law.
5.2 Unless an Event of Default has occurred and is continuing, and without
prejudice to Section 2 hereof, the Pledgor shall receive or shall become
entitled to receive, any dividend, interest or any other distribution
whether in securities or property (including cash) with respect to the
Securities by way of stock-split, spin-off, split-up or reclassification,
combination of shares or the like. For the avoidance of doubt, any
distributions (whether in cash or in shares or other property) received by
the Pledgor shall be deemed to be the Proceeds and subject to the pledge
created under this Agreement, and if any such Proceeds may not be subject
to such pledge, the Pledgor shall pledge the Proceeds for the benefit of
the Pledgee in the appropriate manner and perform any and all actions
necessary for the establishment and effectuation of such pledge under the
laws of Korea.
SECTION 6. ATTORNEY-IN-FACT
The Pledgor shall be deemed to irrevocably appoint the Pledgee as its true and
lawful attorney-in-fact with full power to require, demand and receive any and
all moneys and claims for money due and to become due under or with respect to
the Securities to the extent pledged hereunder and to take any action or execute
any instrument which the Pledgee may deem necessary to accomplish the purpose
hereof.
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SECTION 7. TERMINATION AND REASSIGNMENT
The term of this Agreement shall begin on the date of this Agreement and end on
the date on which all Secured Obligations shall have been unconditionally and
irrevocably paid and discharged in. Upon termination of this Agreement, the
Pledgee shall release the security interest in the Securities held by the
Pledgee, return the share certificates representing the Securities to the
Pledgor at the cost of the Pledgor and take any actions as may be reasonably
requested by the Pledgor to effectuate such release.
SECTION 8. ENFORCEMENT BY PLEDGEE
8.1 If any of the Secured Obligations becomes due and payable, the Pledgee
shall be entitled, as and when it may see fit, to put into force and to
exercise all or any of the rights and power possessed by it as pledgee of
the Securities under the applicable laws and this Agreement in or towards
satisfaction of the Secured Obligations, including without limitation, the
right and power to:
(a) sell, transfer or otherwise dispose of the Securities at such times
and at such prices as are generally recognized as appropriate in
custom and practice, without the necessity of any legal process or
procedure ;
(b) acquire title to the Securities in lieu of foreclosure of the
Securities in any manner in its discretion without notice to the
Pledgor ; and
(c) demand, sue for, collect or receive, in the name of the Pledgor, any
money or property at any time payable or receivable on account of or
in exchange for any of the Securities, but shall be under no
obligation to do so.
8.2 Upon the exercise of its rights pursuant to Section 8.1. hereof, the
Pledgee shall apply the Proceeds, after deducting the costs of such
exercise of rights, against the Secured Obligations. Any excess amount
shall be paid to the Pledgor and any Secured Obligations not fully covered
by the Proceeds shall remain due and owing and shall promptly be paid by
the Pledgor. In the case of acquisition of the title to the Securities
pursuant to Section 8.1.(b) hereof, the Pledgee shall value the Securities
based on commercially reasonable standards and return any excess amount
(net of any and all costs and taxes involving transfer of the ownership of
the Securities) to the Pledgor and any Secured Obligations not fully
covered by the value of the Securities shall remain due and owing and shall
promptly be paid by the Pledgor.
8.3 The Pledgor hereby consents to the procedures set out in Sections 8.1 and
8.2 above and waives any and all objections it may have thereto.
8.4 The Pledgee shall incur no liability as a result of the sale, acquisition
or any other disposition of the Securities or any part thereof by the
Pledgee pursuant to Section 8.1
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hereof conducted in a commercially reasonable manner. The Pledgor hereby
waives any claims against the Pledgee arising by reason of the fact that
the price at which the Securities has been sold at any private sale by the
Pledgee may be less than the price at which it could have been sold if the
Pledgee had not accepted the first offer received or had offered the
Securities to more than one offeree.
8.5 The application of the Proceeds shall be determined by the Pledgee in its
absolute discretion, subject only to any other agreements between the
Pledgee and the Pledgor relating thereto and to the requirements of any
applicable law.
8.6 In case where the Pledgor or a third party provides collateral (other than
the Securities) to the Pledgee to secure all or any part of the Secured
Obligations, the Pledgee shall in its sole discretion have the authority to
determine the priority and extent of enforcement between/among its rights
under this Agreement and such other collateral arrangements, without the
necessity of any legal process or consultation with the Pledgor.
SECTION 9. ASSIGNMENT
This Agreement and the security interest created hereunder shall be binding upon
and inure to the benefit of the Pledgor and the Pledgee and their respective
successors and assigns. The Pledgee may, in accordance with the Loan Agreement
and applicable laws, at any time assign all or any part of its rights or
obligations hereunder to any party (each an "Assignee"). The parties hereto
agree that to the extent of any transfer, the Assignee shall be deemed to have
the same rights and benefits under this Agreement as it would have had if it
were a Pledgee signatory hereunder. The Pledgor may not assign any of its rights
or obligations hereunder without the prior written consent of the Pledgee.
SECTION 10. FURTHER ASSURANCE
The Pledgor shall do all such acts as may be necessary or appropriate including,
but not limited to, the execution and delivery of all further instruments,
notices and documents and all further action (whilst acting in a commercially
reasonable manner) that may be necessary in order to perfect and/or protect any
lien granted or purported to be granted hereby or to enable the Pledgee to
exercise and enforce its rights and remedies hereunder with respect to the
Securities and the Proceeds.
SECTION 11. EXPENSES, TAXES AND INDEMNIFICATION
The Pledgor shall be liable for and shall indemnify the Pledgee on demand
against, and shall pay, (a) the reasonable costs, expenses, taxes and other
liabilities incurred by the Pledgee to protect or
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enforce the Pledgee's interest in the Securities and the Pledgee's rights
against the Pledgor under this Agreement, provided that any such enforcement
shall be in a commercially reasonable manner; (b) all withholding, excise and
other taxes and duties, and all reasonable costs, expenses and other
liabilities, incurred by the Pledgee in connection with, or otherwise
attributable to, receipt by the Pledgee of, or payment by Pledgor of, any
reasonable costs, expenses and other liabilities and indemnities provided for in
this Section or any other provision of this Agreement, other than taxes imposed
on overall net income of the Pledgee.
SECTION 12. MISCELLANEOUS
12.1 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective, shall be in writing and shall be personally
delivered or sent by facsimile (with subsequent written confirmation) or by
registered or certified first class mail, postage prepaid, return receipt
requested, or by overnight (or next business day) courier service shall be
deemed to have been duly given or made when delivered by hand, on the day
that such facsimile is transmitted, or, if by first class mail, five days
following the date on which such writing is deposited with the postal
service, or the day after the date when deposited with an overnight (or
next business day) courier service, addressed as follows, or to such other
address as either party hereto may hereafter specify in writing to the
other party:
To: ST Assembly Test Services Ltd
5 Yishun Street 23
Singapore 768442
Attention: Director, Legal
DID: 65 6824 1948
Fax: 65 822 7837
To: SimmTech Co. Ltd
70-5 Songjung-Dong
Hueng Duk-Ku
Choungju, Chungchongbuk-Do
Korea
Attention: Chief Marketing Officer
DID: 82-43-269 9280
Fax: 82-43-269 9048
12.2 Severability. If any of the provisions of this Agreement shall contravene
any law or regulation or be held invalid, this Agreement shall be construed
as if not containing those provisions, and the rights and obligations of
the parties hereto shall be construed and enforced accordingly.
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12.3 Amendments, Changes and Modifications. This Agreement shall not be
amended, changed, modified, altered or terminated, unless the prior
written approval of each of the Pledgor and the Pledgee is obtained. This
Agreement shall not be amended by an oral agreement.
12.4 Counterparts. This Agreement may be executed in multiple counterparts,
each of which, when executed, shall constitute an original but all of
which together shall constitute one and the same instrument.
12.5 Heading. Headings and titles herein are for convenience only and shall not
affect the construction or interpretation of this Agreement.
12.6 Entire Agreement. This Agreement is intended by the parties as the written
final expression of each party's obligations and rights in connection with
the Securities and supersedes all prior and contemporaneous understandings
or agreements concerning the subject matter hereof.
12.7 Conflict. In the case of a conflict between the provisions of this
Agreement and the provisions of the Loan Agreement, the Loan Agreement
shall prevail.
12.8 No Waiver. The Pledgee shall not, by any act, delay, indulgence, omission
or otherwise, except by an express written instrument clearly indicating
an intention to waive, be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Event of Default. No failure to
exercise, nor any delay in exercising on the part of the Pledgee, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power, privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
12.9 Remedies Cumulative. The rights and remedies provided herein are
cumulative and may be exercised individually or concurrently, and are not
exclusive of any other rights or remedies provided by law.
12.10 Currencies. All Secured Obligations under this Agreement are payable in
United States dollars ("the Required Currency"). If the Pledgee receives
or recovers any moneys in any other currency, whether upon enforcement of
its rights under this Agreement or otherwise, the Pledgor shall indemnify
the Pledgee against the difference (if any) between the amount received by
the Pledgee when it converts amounts received in currencies other than the
Required Currency to the Required Currency and the amount due in the
Required Currency. The Pledgor shall assist the Pledgee at all times to
obtain any exchange conversion approval required by the Pledgee in
connection with this Agreement or the Secured Obligations.
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12.11 Governing Law and Jurisdiction. This Agreement and the security created
pursuant hereto shall be governed by the laws of Korea in all respects,
including matters of construction, validity and performance. The parties
hereto agree to submit to the non-exclusive jurisdiction of Seoul District
Court for the purpose of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be
duly executed as of the day and year first above written.
PLEDGOR: SIMMTECH CO. LTD
By /s/ Se-Ho Chun
---------------------------------------------
Name: Se-Ho Chun
Title: Representative Director
In the presence of: /s/ C. H. Oh
----------------------------
PLEDGEE: ST ASSEMBLY TEST SERVICES LTD
By /s/ Tan Lay Koon
---------------------------------------------
Name: Mr. Tan Lay Koon
Title: President and CEO
In the presence of: /s/ Suh Tae Suk
----------------------------
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SCHEDULE I
Description of Securities
700,000 shares of common stock of the Pledgor in denominations as the following:
Serial Number Denomination Number of share certificate(s)
- ------------- ------------ ------------------------------
A-Je 000443~000482 10,000 shares 40
A-Je 000881~000890 10,000 shares 10
A-Je 000905~000924 10,000 shares 20
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