EXHIBIT 4.19
This Agreement is dated the 26th day of December 2003
BETWEEN
ST ASSEMBLY TEST SERVICES LTD
AND
SIMMTECH CO. LTD
AND
SE-HO CHUN
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LOAN AGREEMENT
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C:\Simmtech\LoanAgreement
ST Assembly Test Services Ltd
5 Yishun Street 23
Singapore 768442
THIS AGREEMENT is made on December 26, 2003.
BETWEEN:
1. ST ASSEMBLY TEST SERVICES LTD, a company incorporated under the law of
Singapore and having a place of business at 5 Yishun Street 23, Singapore
768442 ("STATS")
2. SIMMTECH CO. LTD, a corporation organized and existing under the laws of
Korea and having its principal place of business at 70-5 Songjung-dong,
Heungduk-ku, Choungju, Chungchongbuk-do, Korea 361-290 ("SIMMTECH")
3. MR. SE-HO CHUN, a Korean national with resident number 560515-1005415,
holding 39.9% of the issued shares of Simmtech as of the date hereof
("MAJOR SHAREHOLDER")
WHEREAS:
Simmtech has requested STATS and STATS has agreed to grant a loan amounting to
United States Dollars Fifteen Million only (US$15,000,000.00) on the terms and
conditions hereinafter set out.
NOW IT IS HEREBY AGREED as follows:
1 DEFINITIONS
1.1 In this Agreement, unless the context otherwise requires, the following
words shall have the following meanings:-
"Agreement Term" means the period commencing from the Loan Date and ending
on the Loan Repayment Date;
"Banking Day" means a day on which banks are open for business in Seoul,
Korea and Singapore
"Borrowed money" includes any indebtedness (1) for or in respect of money
borrowed or raised (whether or not for cash), by whatever means (including
acceptances, deposits, discounting, factoring, finance leases, hire
purchase, sale-and-lease back, sale-and-repurchase and any form of
"off-balance sheet" financing) or (2) for the deferred purchase price of
assets or services;
"CTS Agreement" means the Capacity and Continuing Support agreement dated
as of the date hereof between Simmtech and STATS whereby Simmtech has
agreed to provide continuous cost improvement, technology support and other
services to STATS on the terms set out therein;
"Equipment" means the machinery and equipment listed in the list attached
hereto as Annex A which represents the equipment which Simmtech will
purchase with the Loan monies;
"Event of Default" means one of the events mentioned in Clause 9;
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"Factory Kun-Mortgage" means the mortgage agreement dated as of the date
hereof between Simmtech (as mortgagor) and STATS (as mortgagee) whereby
Simmtech will grant a kun-mortgage over certain property described therein
to STATS for the purpose of securing its obligations under this Agreement
and the Security Documents.
"Loan" means a sum of United States Dollars Fifteen Million only
(US$15,000,000.00) loaned to Simmtech under this Agreement, which is to be
repaid in full to STATS in accordance with the terms of this Agreement;
"Loan Date" means January 2, 2004;
"Loan Repayment Date" means the date when the Loan is to be repaid in full
(subject to Clauses 5.2), being a date not later than January 2, 2009;
"Potential Event of Default" means any event or circumstance which, if it
continued after the giving of any notice, the expiry of any grace period,
and/or the making of any determination by STATS (as the case may be),
provided for in Clause 9, would become an Event of Default;
"Repayment Dates" means the date falling one year after the Loan Date
(i.e., (on January 2, 2005) and the first day of each subsequent three (3)
month period thereafter during the Agreement Term, provided that any
Repayment Date falling after January 2, 2009 shall be accelerated to fall
on January 2, 2009;
"Security Documents" means the YT Agreement, Factory Kun-Mortgage Agreement
and the Share Pledge Agreement, each duly executed and signed by authorized
signatories of Simmtech and STATS and in the form required by STATS;
"Share Pledge Agreement" means the pledge agreement for the pledge of
Shares dated as of the date hereof between the Major Shareholder (as
pledgor) and STATS (as pledgee) whereby the Major Shareholder pledged the
Shares to STATS to secure Simmtech's obligations under this Agreement and
the Security Documents;
"Shares" means the 2,400,000 common shares of Simmtech which are pledged to
STATS under the Share Pledge Agreement;
"Total Indebtedness" means the sum total of Simmtech's liabilities to STATS
arising out of or in connection with the Loan including all sums agreed to
be paid under this Agreement and the Security Documents, at any given time;
and
"YT Agreement" means the Yangdo Tambo agreement dated as of the date hereof
between Simmtech (as transferor) and STATS (as transferee) whereby Simmtech
will transfer title over certain property described therein to STATS for
the purpose of securing its obligations under this Agreement and the
Security Documents.
1.2 The headings to the Clauses hereof shall not be deemed to be a part thereof
or be taken in consideration in the interpretation or construction thereof
or of this Agreement.
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2 LOAN
Subject to Clause 3 below, STATS will provide the Loan to Simmtech on the
Loan Date for the purposes and on the terms and conditions specified
herein.
3. CONDITIONS PRECEDENT
3.1 Subject to the terms and conditions herein contained, the obligation of
STATS to provide the Loan to Simmtech under Clause 2 above is subject to
the fulfilment, as determined by STATS, of the following conditions
precedent on or 1 Banking Day prior to the Loan Date (unless otherwise
waived by STATS in its absolute discretion):
(a) STATS has received the following documents and has found them
satisfactory in both form and substance:
(i) a certified copy of the most recent Articles of Incorporation
of Simmtech;
(ii) a duly authenticated copy of the minutes of the board of
directors' meeting of Simmtech at which resolutions authorizing
the execution, delivery and performance of this Agreement, the
CTS Agreement and the Security Documents, including but not
limited to incurring the debt obligations hereunder and
providing the collateral as contemplated under the Security
Documents, and authorizing the person(s) who signed, or will
sign, this Agreement, the CTS Agreement and the YP Agreement or
all other documents in connection thereto on Simmtech's behalf
to do so, were adopted and any power of attorney executed in
connection therewith;
(iii) seal certificate of the Representative Director of Simmtech and
specimen signature(s) of the person(s) authorized to execute
this Agreement, the CTS Agreement, the YT Agreement and all
other documents in connection therewith;
(iv) the executed Security Documents duly signed or sealed by the
authorized person(s) on behalf of Simmtech;
(v) certified copies of each approval of any governmental
authorities of Korea and Singapore necessary or advisable in
connection with the execution, delivery and performance of this
Agreement and the CTS Agreement or the provision of the
collateral contemplated under the Security Documents, in form
and substance satisfactory to STATS and its legal counsel,
including but not limited to the relevant foreign exchange
reporting/approval requirements set forth in any applicable
laws and regulations;
(vi) evidence as may be requested by STATS and its legal counsel
that all obligations of Simmtech under the YT Agreement shall
be
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satisfied prior to or simultaneously with the provision of the
Loan on the Loan Date, including but not limited to
satisfaction of relevant foreign exchange reporting/approval
requirement; (vii) evidence as may be requested by STATS and
its legal counsel that all obligations of the Major Shareholder
under the Share Pledge Agreement shall be satisfied prior to or
simultaneously with the provision of the Loan on the Loan Date,
including but not limited to (1) registration of STATS'
security interest over the Shares in Simmtech's shareholders'
registry, (2) delivery of the share certificates representing
the Shares to STATS or its agent and (3) satisfaction of
relevant foreign exchange reporting/approval requirements, as
provided in the Share Pledge Agreement;
(viii) the executed CTS Agreement duly signed or sealed by the
authorized person(s) on behalf of Simmtech; and
(ix) such other documents that STATS may reasonably require;
(b) all acts, conditions and things required to be done and performed and
to have happened precedent to the execution and delivery of this
Agreement, the CTS Agreement and the Security Documents and to
constitute the same legal, valid and binding obligations enforceable
in accordance with their respective terms, shall have been done and
performed and have happened in due and strict compliance with all
applicable laws and regulations;
(c) there is no material adverse change in the business, properties,
assets, operations, management or financial condition of Simmtech or
any material adverse change in the property charged under the Security
Documents or other conditions which in the opinion of STATS will
materially and adversely affect the ability of Simmtech or the Major
Shareholder to perform its respective obligations under this
Agreement, the CTS Agreement and the Security Documents; and
(d) no Event of Default or Potential Event of Default has occurred.
3.2 Unless otherwise waived by STATS, in case of Simmtech's failure to comply
with any of the foregoing conditions, STATS shall have no obligation to
provide the Loan on the Loan Date.
4. USE OF LOAN PROCEEDS
4.1 Subject to repayment of the Loan in full on the Repayment Dates falling
due, Simmtech shall be entitled to use the Loan monies solely for the
purposes of acquiring the Equipment listed in Appendix A and subject to
STATS' prior written consent, such other purposes as Simmtech may require
for use of the Loan monies for its ordinary course of business.
4.2 Simmtech hereby agrees and confirms that the Loan monies may be used solely
for the purposes set out in Clause 4.1 and that nothing herein shall cause
STATS to be construed to fall within the definition of a moneylender or to
be presumed to be a
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moneylender under Sections 2 and 3 of the Moneylending Act of Singapore
respectively.
4.3 Simmtech agrees between the Loan Date and December 31, 2004, to use the
Loan (or necessary portion thereof) to purchase the Equipment and to
immediately provide STATS with evidence satisfactory to STATS or its legal
counsel of the purchase of the Equipment. Immediately after Simmtech takes
legal title to the Equipment, Simmtech shall take all necessary action so
that the Equipment will be subject to the YT Agreement, and shall cause (a)
the placement of a plaque or sign on the Equipment stating STATS' title and
interest thereon and (b) maintain adequate insurance over the Equipment, as
provided in the YT Agreement.
5 REPAYMENT, PAYMENT AND INTEREST
5.1 Subject to Clauses 5.2, on each Repayment Date, Simmtech shall repay a
portion of the Loan in the amount and currency of United States Dollars
Eight Hundred and Eighty Two Thousand Three Hundred and Fifty Three only
(US$882,353.00), provided that, the amount to be repaid on the Loan
Repayment Date shall be the balance amount of the Loan outstanding and
repayable as of such date.
5.2 If a Repayment Date (and/or January 2, 2009) does not fall on a Banking
Day, such payment in respect of that Repayment Date shall be made on the
immediately succeeding Banking Day.
5.3 On each date on which any sum is due from Simmtech, it shall make that sum
available to STATS in United States Dollars and in immediately available
and freely transferable funds by 11 a.m. on the day in question, by
crediting such account of STATS with such bank as STATS shall have
designated for the purpose.
5.4 STATS shall make the Loan to Simmtech by payment before close of business
in Singapore on the Loan Date to such account with such bank as Simmtech
may specify in writing.
5.5 Simmtech authorises STATS to apply (without prior notice) any sums from
time to time due or owing from STATS to Simmtech howsoever arising in or
towards satisfaction of any sum then due from Simmtech to STATS in respect
of the Total Indebtedness. For that purpose, STATS is authorised to use all
or any part of any such sums to buy such other currencies as may be
necessary to effect such application. STATS shall not be obliged to
exercise any of its rights under this Clause which shall be without
prejudice and in addition to any right of set-off, lien or other right to
which it is at any time otherwise entitled (whether by operation of law,
contract or otherwise).
5.6 If the amount received by STATS from Simmtech on any date is less than the
total sum remaining or becoming due under this Agreement and the Security
Documents on that date, then regardless of any appropriation of all or part
of that amount by Simmtech, STATS shall apply that amount in or towards
payment of such part of the Total Indebtedness (whether principal,
interest, fees or any other amounts due under this Agreement or the
Security Documents) as it deems fit.
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5.7 The parties hereto acknowledge Simmtech's intention to transfers all of its
assets, equipment and facilities comprising its substrate manufacturing
operations, including but not limited to all licences, contracts, rights
and consents and employees relating to such operations ("Concerned
Business"), by way of a spin-off or other methods permissible under Korean
law and to form a new company ("NewCo") as a result of such transfer. STATS
shall have the option, but not the obligation, to make an equity investment
in NewCo up to 30 per cent. of the total number of shares of NewCo with the
Loan repaid by Simmtech to STATS ("Option"). Simmtech shall complete the
legal formation of NewCo as soon as practicable, but in any event, no less
than three (3) months from the date STATS notifies Simmtech in writing of
its election to exercise the Option. The specific terms of the investment
in NewCo by STATS, including the timing of the investment, shall be agreed
to by the parties separately, provided that, unless otherwise agreed and to
the extent not prohibited by applicable law, the parties will for the
purposes of STATS exercising its option to make an equity investment in
NewCo, seek a valuation on an arm's length, willing seller and buyer basis,
of the shares of the new company by one or more international investment
banks or other persons of internationally recognized standing to be jointly
or severally appointed by the parties.
6. TAXES
6.1 All sums payable by Simmtech under this Agreement and the Security
Documents shall be paid (a) free of any restriction or condition, (b) free
and clear of and (except to the extent required by law) without any
deduction or withholding on account of any tax and (c) without deduction or
withholding (except to the extent required by law) on account of any other
amount, whether by way of set-off or otherwise.
6.2 If (a) Simmtech or STATS is required by law to make any deduction or
withholding on account of any such tax or other amount from any sum paid or
payable by Simmtech to STATS under this Agreement and the Security
Documents or (b) STATS (or any person on its behalf) is required by law to
make any deduction or withholding from, or (except on account of tax on the
overall net income of STATS) any payment on or calculated by reference to
the amount of, any sum received or receivable by STATS under this Agreement
and the Security Documents:
(i) Simmtech shall notify STATS of any such requirement or any change in
any such requirement as soon as it becomes aware of it;
(ii) Simmtech shall pay any such tax or other amount before the date on
which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on Simmtech) for its own account or (if
that liability is imposed on STATS) on behalf of and in the name of
STATS or (if STATS makes such payment) shall reimburse it on demand
for the amount paid by it;
(iii) the sum payable by Simmtech in respect of which the relevant
deduction, withholding or payment is required shall (except, in the
case of any such payment, to the extent that its amount is not
ascertainable when that sum is
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paid) be increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, STATS receives on
the due date and retains (free from any liability in respect of any
such deduction, withholding or payment) a net sum equal to what it
would have received and so retained had no such deduction,
withholding or payment been required or made; and
(iv) Simmtech shall, as soon as it is required by law, make any deduction
or withholding, and immediately after the due date of payment of any
tax or other amount which it is required by Clause 6.2(ii) above to
pay, Simmtech shall deliver evidence satisfactory to STATS of such
deduction, withholding or payment and (where remittance is required)
of the remittance thereof to the relevant taxing or other authority.
6.3 Without prejudice to the survival of any other agreement of Simmtech
hereunder, the agreements and obligations of Simmtech contained in Clauses
6.1 and 6.2 above shall survive the payment in full of the Loan and under
any instrument delivered hereunder.
7. WARRANTIES AND REPRESENTATIONS
7.1 Simmtech hereby warrants and represents to STATS as follows:-
(a) that it is lawfully incorporated, validly existing and in good
standing under the laws of the Republic of Korea;
(b) that it has the corporate power and authority to own assets and to
carry on the business which it conducts and/or purports to conduct;
(c) that it has the corporate power to execute and perform this Agreement,
the CTS Agreement and the YT Agreement;
(d) that the certified copies of the Articles of Incorporation and the
board resolutions of Simmtech delivered to STATS are true and accurate
copies of the corporate records of Simmtech;
(e) that the execution, delivery and performance of this Agreement, the
CTS Agreement and the Security Documents (i) have been duly authorised
by all requisite corporate action (where applicable) and (ii) do not
and will not violate any provision of any agreement or other
instrument to which Simmtech or the Major Shareholder is a party or
which is binding on each of them or its or his assets, or result in
the existence of, or oblige them to create, any security over those
assets;
(f) there has been no material adverse change in the business, properties,
assets, operations, management or financial condition of Simmtech
since the lasted audited accounts;
(g) there are no actions, suits or proceedings pending or, to the
knowledge of Simmtech, threatened against Simmtech or the Major
Shareholder, at law or in equity before any court or competent body
adjudicating such matters or before any government agency or
administrative body (i) to restrain the
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entry into, exercise of Simmtech or the Major Shareholder's rights
under and/or performance or enforcement of or compliance with its or
his respective obligations under this Agreement, the CTS Agreement and
the Security Documents to which it or he is a party; or (ii) which may
result in any material adverse change in the business, operations,
properties, assets or management, or in the condition, financial or
otherwise of Simmtech;
(h) that no steps have been taken or are being taken nor have any legal
proceedings been started or threatened for the dissolution, winding up
or bankruptcy of Simmtech or for the bankruptcy of the Major
Shareholder or similar procedures with respect to Simmtech or the
Major Shareholder for the appointment of a receiver and/or manager or
judicial manager, liquidator or trustee or any other person over it or
him or the whole or any part of its or his assets;
(i) that this Agreement, the CTS Agreement and the Security Documents when
executed are the legal, valid and binding obligations of Simmtech and
the Major Shareholder enforceable in accordance with their respective
terms;
(j) that all actions, conditions and things required to be taken,
fulfilled and done (including the obtaining of any necessary consents)
in order (i) to enable Simmtech and the Major Shareholder lawfully to
enter into, exercise their respective rights and perform and comply
with their respective obligations under this Agreement, the CTS
Agreement and the Security Documents to which it or he is a party,
(ii) to ensure that those obligations are legally binding and
enforceable and (iii) to make this Agreement, the CTS Agreement and
the Security Documents admissible in evidence in the courts of
Singapore have been taken, fulfilled and done;
(k) that Simmtech's and the Major Shareholder's entry into, exercise of
its or his respective rights and/or performance of or compliance with
its or his respective obligations under this Agreement, the CTS
Agreement and the Security Documents to which it or he is a party do
not and will not violate (i) any law or regulations to which each is
subject or (ii) any of the documents constituting Simmtech.;
(l) that Simmtech and the Major Shareholder have filed all tax returns
which each of them is required by law to file and have paid all taxes,
assessments, respective fees and other governmental charges assessed
against each of them or upon any of its or his respective properties,
assets or income;
(m) that no Event of Default or Potential Event of Default has occurred;
(n) that Simmtech or the Major Shareholder is not in default in the
payment or performance of any of its or his respective obligations for
Borrowed money or in respect of other liabilities which may have a
material adverse effect on Simmtech or the Major Shareholder;
(o) that the audited financial statements of Simmtech and all other
information which have previously been submitted by Simmtech to STATS
are complete and correct and that the audited financial statements
fairly represent the financial condition of Simmtech and the results
of its
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operations for the period stated in accordance with generally accepted
accounting principles applied on a consistent basis.
7.2 Each of the warranties and representations contained in the preceding
sub-clause shall survive and continue to have full force and effect after
the execution of this Agreement. Simmtech hereby warrants to STATS and that
the above representations and warranties will be true and correct and fully
observed as if repeated with reference to the then existing circumstances
until the Total Indebtedness is fully paid.
8. UNDERTAKING
8.1 Simmtech and the Major Shareholder hereby undertake and agree with STATS,
for as long as the Loan has not been repaid in full, as follows:-
(a) that the Loan shall be used solely for the purpose and in the manner
herein before stipulated and not for any other purpose or manner;
(b) that Simmtech will, and the Major Shareholder will cause Simmtech to,
carry on and conduct its business and affairs with due diligence and
efficiency in accordance with sound technical financial industrial and
managerial standards and practices and pay all taxes as they fall due;
(c) that Simmtech will not, and the Major Shareholder will cause Simmtech
not to, materially change the scope or nature of its business, whether
by disposal, acquisition or otherwise;
(d) that Simmtech will, and the Major Shareholder will cause Simmtech to,
keep the Equipment and the property charged under the YT Agreement in
good and substantial repair and proper working condition to the
satisfaction of STATS;
(e) that Simmtech shall, and the Major Shareholder shall cause Simmtech
to, give to STATS such written authorization or directions and provide
such facilities and access as STATS may require for the inspection of
the Equipment;
(f) that Simmtech and the Major Shareholder will not (whether by a single
transaction or a number of related or unrelated transactions and
whether at the same time or over a period of time) sell, assign,
transfer, pledge, mortgage, encumber or dispose of (or cause, attempt
or purport to do any of the foregoing) any of the Equipment or Shares
or other property charged under the Security Documents or of any part
of its or his assets which, when aggregated with all other disposals
by it or him required to be taken into account under this Clause
8.1(f), is material in relation to its or his respective assets or the
disposal of which (when so aggregated) may have a material adverse
effect on it or him, (as may be relevant) nor do, or fail to do,
anything whereby STATS' rights in respect of the Equipment or Shares
or other property charged under the Security Documents or their
respective value may be diminished, and shall notify STATS if Simmtech
or the
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Major Shareholder becomes aware of any diminution in the rights
attaching to, or the value of, the same or any circumstances whereby
such rights or such value may be diminished;
(g) that Simmtech will not, and the Major Shareholder will cause Simmtech
not to, amend or alter any provisions of its Articles of Incorporation
relating to its borrowing powers, powers to guarantee and charge its
assets and its principal business activities;
(h) that Simmtech will not, and the Major Shareholder will cause Simmtech
not to, effect any form of reconstruction or amalgamation by way of a
scheme of arrangement or otherwise and shall not approve, permit or
suffer any change of ownership (whether legal or beneficial) or
transfer of any part of its issued capital;
(i) that Simmtech will not, and the Major Shareholder will cause Simmtech
not to, obtain any borrowings from other banks or financial
institutions without the consent of STATS;
(k) that Simmtech will not, and the Major Shareholder will cause Simmtech
not to, incur any liability by way of guarantee, assign its account
receivables or take any action which may substantially and adversely
affect its financial condition;
(l) that Simmtech shall, and the Major Shareholder shall cause Simmtech
to, furnish and provide STATS with and permit STATS to obtain all such
statements, information, explanation and data as STATS may require
regarding its or his respective business, properties, assets,
operations, management or financial condition or other condition or
regarding the business, properties, assets, operations, management or
financial condition or other condition of Simmtech, as permitted under
relevant Korean laws and regulations;
(q) that Simmtech shall obtain all necessary licences and comply with all
laws, regulations, rules and orders relating to the carrying on of its
business;
(r) that Simmtech and the Major Shareholder shall at its own expense,
execute, sign, perfect, and if required register every document, or do
or procure the doing of any act or thing which in the opinion of STATS
may be necessary or desirable for giving full effect to the terms and
provisions of this Agreement, the CTS Agreement and the Security
Documents and the benefit of the rights, powers and remedies conferred
upon STATS under the same;
(s) that Simmtech will, and the Major Shareholder will cause Simmtech to,
deliver to STATS from time to time on reasonable request by STATS a
duly signed certificate of no Event of Default or Potential Event of
Default;
(t) that Simmtech and the Major Shareholder will observe and comply with
the terms and conditions of the Security Documents and all consents
and approvals issued by relevant authorities in connection with the
Loan;
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(u) that Simmtech will, and the Major Shareholder will cause Simmtech to,
notify STATS of the occurrence of any Event of Default and/or
Potential Event of Default immediately upon becoming aware of it and
thereupon, on request, deliver to STATS a certificate setting out
details of any Event of Default and/or Potential Event of Default and
the action taken or proposed to be taken to remedy it;
(v) that Simmtech will, and the Major Shareholder will cause Simmtech to,
ensure that Simmtech's obligations under this Agreement will rank at
all times at least pari passu with all its other existing and future
unsubordinated indebtedness, obligations and liabilities actual or
contingent from time to time (save for those which are preferred by
the mandatory operation of law);
(w) if so and for so long as is required by STATS, Simmtech will, and the
Major Shareholder will cause Simmtech to, at its own cost and expenses
maintain or ensure the maintenance of a policy of insurance with a
reputable insurance carrier over the Equipment and the property
charged under the YT Agreement and will duly pay all premiums and
other moneys necessary for effecting and keeping up such insurances
and on demand produce to STATS such insurances and receipt for such
payments. Such insurances shall:
(i) be for such sum or sums adequately covering STATS' interest in
the Equipment and the property charged under the YT Agreement;
(ii) be taken out in the name of Simmtech;
(iii) name STATS as loss payee or beneficiary;
(iv) acknowledge that Simmtech is the sole party liable to pay the
premium in respect thereof;
(v) provide for the insurers or underwriters to give to STATS at
least 30 days' prior notice of cancellation by reason of
non-payment of calls, premiums or otherwise and allow STATS an
opportunity of paying such calls or premiums which may be in
default;
(vi) provide that they may not be altered or amended without the
prior consent in writing of STATS;
(vii) acknowledge that all proceeds shall, irrespective of any other
provisions therein contained, be paid to STATS without
deduction, set-off or counterclaim in respect of any
outstanding premiums or calls on Simmtech;
(viii) contain a loss payee and non-cancellation clause, a notice of
assignment signed in accordance with the relevant policy rules
and such other terms and conditions as STATS may require; and
(ix) be in all other respects in form and substance acceptable to
STATS,
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and if Simmtech fails to comply with the provisions of this Clause 8.1(w),
STATS may at its discretion (but without any obligation on its part to do
so) have such insurance effected at the cost of Simmtech and all moneys
paid by STATS in respect of such insurances shall be paid by Simmtech on
demand;
8.2 Simmtech and the Major Shareholder hereby undertake and agree with STATS
that it and the Major Shareholder shall not create or permit to arise or
subsist, any mortgage, charge (whether fixed or floating), pledge, lien or
other encumbrances whatsoever on the Equipment or the Shares or the
property charged under the Security Documents or on any of Simmtech and the
Major Shareholder's assets, properties and undertaking both present and
future and wheresoever situate.
8.3 For as long as the Loan remains outstanding and has not be repaid in full,
STATS shall have the right to nominate for election one non-standing member
of the board of directors of Simmtech. Such director shall be compensated
by Simmtech on substantially the same terms (including salaries, benefits,
reimbursement of out-of-pocket expenses in connection with the foregoing,
etc.), manner and policies as other members serving in similar capacities.
8.4 If STATS desires to exercise its nomination right pursuant to Section 8.3
above, STATS shall submit a notice of nomination of such nominee (a
"Nomination Notice") to Simmtech, and Simmtech and the Major Shareholder
shall cause the election of such nominee at the general shareholders
meeting of Simmtech, which shall be held by Simmtech in March 2004,
including voting all of the Major Shareholder's common shares of Simmtech
in favor of such applicable nominee.
9. EVENTS OF DEFAULT
9.1 If any one or more of the following Events of Defaults shall occur, that is
to say:
(a) if Simmtech or the Major Shareholder fails to repay any sums of money
payable under this Agreement or any of the Security Documents (as the
case may be) on the due date therefor or on demand if payable on
demand (as the case may be) and such default shall not be rectified
within three (3) Banking Days after the date of receipt by Simmtech or
the Major Shareholder (as the case may be) of written notice of such
default from STATS;
(b) if any representation or warranty made by Simmtech or the Major
Shareholder in or in pursuance of this Agreement, the CTS Agreement or
any of the Security Documents or in any certificate, statement or
other document delivered by Simmtech or the Major Shareholder in
connection with the execution and delivery hereof or in pursuance of
this Agreement, the CTS Agreement or any of the Security Documents
shall be or become incorrect or untrue in any respect;
(c) if Simmtech or the Major Shareholder defaults in the due performance
of any undertaking, condition or obligation on its part to be
performed and observed under this Agreement (other than the failure to
pay any sum when due or on demand pursuant to Clause 9.1(a) above),
the CTS Agreement or
13
the Security Documents and such default (if capable of being rectified
in STATS' opinion) shall not be rectified for a period of fourteen
(14) Days after the date of receipt by Simmtech or the Major
Shareholder (as the case may be) of written notice of such default
from STATS;
(d) if any steps have been taken or are being taken or any legal
proceedings have been started or threatened for the dissolution or
winding up of Simmtech or for the bankruptcy of the Major Shareholder
or for the appointment of a receiver and/or manager or judicial
manager, liquidator or trustee or any other person over Simmtech or
the Major Shareholder (as applicable) or the whole or any part of its
or his respective assets;
(e) if a distress or execution is levied or enforced upon or sued out
against any part of the property or assets of Simmtech or the Major
Shareholder;
(f) if a judgement or order is made against Simmtech or the Major
Shareholder and STATS is in that case of the opinion that the said
judgement may materially affect Simmtech's or the Major Shareholder's
ability to perform and observe its or his respective obligations under
this Agreement, the CTS Agreement or any of the Security Documents;
(g) if Simmtech or the Major Shareholder becomes insolvent or is unable or
deemed unable to pay its or his respective debts or admits in writing
its or his inability to pay its or his respective debts as they fall
due, stops, suspends or threatens to stop or suspend payment of its or
his respective debts, begins negotiations or takes any proceeding or
other step with a view to readjustment, rescheduling or deferral of
all of its or his respective indebtedness (or of any part of its or
his respective indebtedness which it or he will or might otherwise be
unable to pay when due), or proposes or enters into reorganization,
composition, corporate restructuring, compromise or arrangement with
its or his creditors or proposes or makes a general assignment for the
benefit of its creditors or a moratorium is agreed or declared in
respect of or affecting its or his indebtedness;
(h) if Simmtech ceases or threatens to cease to carry on its respective
business or any part thereof or a situation shall have arisen, which
shall make it improbable that Simmtech or the Major Shareholder will
be able to perform its or his respective obligations under this
Agreement, the CTS Agreement and the Security Documents;
(i) if any other indebtedness in respect of Borrowed moneys of Simmtech or
the Major Shareholder (i) is not paid when due or within the
applicable grace period in any agreement relating to that indebtedness
or (ii) becomes due and payable before its normal maturity by reason
of a default or event of default howsoever described;
(j) if there are any actions, suits or proceedings pending or threatened
against Simmtech or the Major Shareholder, at law or in equity before
any court or competent body adjudicating such matters or before any
government agency or administrative body (i) to restrain the entry
into, exercise of Simmtech or the Major Shareholder's rights under
and/or performance or enforcement of or compliance with its or his
respective obligations under
14
this Agreement, the CTS Agreement and the Security Documents; or (ii)
which may result in any material adverse change in the business,
operations, properties, assets or management, or in the condition,
financial or otherwise of Simmtech or the Major Shareholder;
(k) if any present or future security on or over the assets of Simmtech or
the Major Shareholder becomes enforceable;
(l) if it is or will become unlawful for Simmtech or the Major Shareholder
to perform or comply with any one or more of its or his respective
obligations under this Agreement, the CTS Agreement or any of the
Security Documents;
(m) if there shall occur a material adverse change in the business,
properties, assets, operations, management or financial position of
Simmtech or the Major Shareholder;
(n) if anything shall be done or suffered or omitted to be done by
Simmtech, or the Major Shareholder which in the opinion of STATS,
imperils or may imperil the securities created by this Agreement or
any of the Security Documents respectively;
(o) any agency of any state seizes, compulsorily acquires, expropriates or
nationalises all or a material part of the assets or shares of
Simmtech or the Major Shareholder and, in the opinion of STATS, such
event has or could have a material adverse effect on Simmtech or the
Major Shareholder;
(p) any change in the financial, economic or political conditions in Korea
or Singapore which in the opinion of STATS renders it inadvisable or
impracticable for STATS to continue to extend the Loan;
(q) any actions, condition or thing (including the obtaining of any
necessary consent) of any time required to be taken, fulfilled or done
for any of the purposes stated in Clause 7.1(j) is not taken,
fulfilled or done or any such consent ceases to be in full force and
effect or any condition in or relating to any such consent is not
complied with; or
(r) if any event occurs which, under the laws of any applicable
jurisdiction, has an analogous or equivalent effect to any of the
events referred to in this Clause 9.1,
then and in any of such event, STATS may, by notice in writing to Simmtech
declare that an Event of Default has occurred and such declaration shall be
deemed to take effect from the date of occurrence of such an Event of
Default.
9.2 Upon the declaration by STATS that an Event of Default has occurred (by
sending notification to Simmtech of such declaration pursuant to
Clause 9.1):-
(a) the Total Indebtedness shall immediately become due and payable
without any demand or notice of any kind by STATS to Simmtech; and
15
(b) STATS shall be entitled to exercise forthwith all or any rights,
powers or remedies under this Agreement, the CTS Agreement, the
Security Documents or any one or more of them.
The rights hereunder are cumulative and may be exercised concurrently or in
any order as STATS may in its absolute discretion think fit. Nothing in
this Clause 9.2 shall limit any right, powers or remedies of STATS under
this Agreement, the CTS Agreement and the Security Documents.
10. INDEMNITIES
10.1 Simmtech and the Major Shareholder shall on demand indemnify STATS against
any funding or other cost, loss, expense or liability sustained or incurred
by it as a result of:
(a) the Loan not being made by reason of non-fulfilment of any of the
conditions in Clause 3;
(b) the occurrence or continuance of any Event of Default or Potential
Event of Default;
(c) the accelerated repayment of the Total Indebtedness under Clause
9.2(a);
(d) the receipt or recovery by STATS of all or any part of any amount
payable by Simmtech hereunder otherwise than on its due date; and
(e) any default in the payment of the Total Indebtedness or any portion
thereof, or any other amounts payable under this Agreement or under
the Security Documents, or on account of the non-observance of all or
any of the terms, stipulations, agreements and provisions on the part
of Simmtech or the Major Shareholder contained herein or under the CTS
Agreement or the Security Documents, and such losses, damages and
expenses shall include but are not limited to such amount as STATS
shall certify (which shall be conclusive and binding upon Simmtech
save for any manifest error).
10.2 Each of the above indemnities constitutes a separate and independent
obligation from the other obligations in this Agreement, shall give rise to
a separate and independent cause of action, shall apply irrespective of any
indulgence granted by STATS and shall continue in full force and effect
despite any judgment, order, claim or proof for a liquidated amount in
respect of any sum due under this Agreement or any judgment or other order.
No proof or evidence of any actual loss may be required.
11. CALCULATIONS AND EVIDENCE
A certificate by STATS as to any sum payable to it under this Agreement and/or
the Security Documents shall be conclusive and binding on Simmtech save for
manifest error
16
12. DISCLOSURE
The parties agree that neither will disclose confidential information relating
to the business and operations of the other party, the existence of this
Agreement, the CTS Agreement and the Security Documents, nor any of their
details or the existence of the relationship created by this Agreement, the CTS
Agreement and the Security Documents to any third party without the specific,
written consent of the other, provided that STATS may disclose to any government
or regulatory authority, the Major Shareholder, a potential assignee or
transferee or such other persons as STATS may think necessary or appropriate
such information about Simmtech or this Agreement, the CTS Agreement or the
Security Documents as STATS may think fit and Simmtech hereby consents to such
disclosure made now or hereafter.
13. NOTICES
13.1 Except as otherwise expressly provided herein, any notice, request, demand
or other communication to be given or served hereunder by one of the
parties hereto to or on the others may be delivered at or sent by prepaid
registered post or by facsimile to the address or addresses herein
specified of the other party or parties and shall be deemed to be duly
served:
(a) if it is delivered, at the time of delivery;
(b) if it is sent by prepaid registered post, one (1) day after posting
thereof, or
(c) if it is sent by facsimile, immediately after transmission thereof, if
the date of transmission is a working day, and if such a date is not a
working day, then the notice by facsimile shall be deemed to be served
on the immediately next succeeding working day.
Except as otherwise expressly provided herein, all notices, requests,
demands or other communications which are required by this Agreement to be
in writing may be made by facsimile.
13.2 For the purpose of this Clause 13 each of the parties hereto shall from
time to time notify the other party in writing of an address where such
notice, request, demand or other communication as aforesaid can be given or
served and such notification shall be effective only when it is actually
received. In the absence of such notification, the notice, request, demand
or other communication aforesaid may be given or served to the concerned
party as stated below.
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. and/or Mr. Se-Ho Chun
70-5 Songjung-dong
Huengduk-ku
17
Choungju, Chungchongbuk-Do
Korea
Attention: Chief Marketing Officer
DID: 82-43-269 9280
Fax: 82-43-269 9048
14. WAIVER NOT TO PREJUDICE RIGHT OF STATS
14.1 No neglect or forbearance of STATS to require and enforce payment of any
moneys hereunder or the performance and observance of any undertaking,
stipulation, term or condition herein contained, nor any time which may be
given to Simmtech shall in any way prejudice or affect any of the rights,
power or remedies of STATS at any time afterwards to act strictly in
accordance with the provisions hereof. No such waiver of any such breach as
aforesaid shall prejudice the rights of STATS in respect of any other or
subsequent breach of any of the undertakings, stipulations, terms or
conditions aforesaid. The rights and remedies provided in this Agreement,
the CTS Agreement and the Security Documents are cumulative and not
exclusive of any rights or remedies (whether provided by law or otherwise).
14.2 Any provision of this Agreement may be amended only if Simmtech and STATS
so agrees in writing and any Event of Default or Potential Event of
Default, provision or breach of any provision of this Agreement may be
waived before or after it occurs only if STATS so agrees in writing. Any
such waiver, and any consent by STATS under any provision of this
Agreement, must be in writing and may be given subject to any conditions as
STATS thinks fit. Any waiver or consent shall be effective only in the
instance and for the purpose for which it is given.
15. SEVERABILITY
In case any provision in this Agreement shall be, or at any time shall
become invalid, illegal or unenforceable in any respect under any law, such
invalidity, illegality or unenforceability shall not in any way affect or
impair the other provisions of this Agreement but this Agreement shall be
construed as if such invalid or illegal or unenforceable provision
contained herein did not from a part of this Agreement.
16. GOVERNING LAW AND DISPUTE RESOLUTION
This Agreement shall be governed by and construed in all respects in
accordance with the laws of the Republic of Singapore.
Any dispute arising out of or in connection with this Agreement, including
any questions regarding its existence, validity or termination, shall be
referred to and finally resolved by arbitration in Singapore in accordance
with the Arbitration
18
Rules of the Singapore International Arbitration Centre for the time being
in force which rules are deemed to be incorporated by reference to this
Clause 16.
17. MISCELLANEOUS
17.1 Legal and other professional fees on a full indemnity basis, out-of-pocket
expenses, charges and expenses of and in connection with this Agreement and
the matters contemplated hereunder, including professional fees incurred
for the purposes of STATS' making an equity investment in the new company,
the CTS Agreement and the Security Documents incurred by either party,
including STATS up to an amount not exceeding USD Twenty Thousand
(USD20,000) ("Fee Cap") shall be paid by Simmtech upon demand by STATS,
except that this Fee Cap shall not apply to expenses and charges that are
incurred as a result of STATS' decision to not make the Loan on the Loan
Date due to Simmtech's failure to fulfil its obligations under this
Agreement.
17.2 Simmtech shall further pay all legal fees on a full indemnity basis and
other costs and disbursements incurred in connection with or demanding and
enforcing payment of moneys due under this Agreement and the Security
Documents and otherwise howsoever in enforcing the performance of any other
undertakings, stipulations, terms, conditions or provisions hereof and
thereof.
17.3 This Agreement shall be binding upon the successors of Simmtech and shall
enure to the benefit of STATS and its successors and assigns.
17.4 Simmtech shall have no right to assign or transfer any of its rights under
this Agreement. STATS may assign all or any part of its rights or transfer
all or any part of its obligations under this Agreement without the consent
of Simmtech. Any such assignee or transferee shall be and be treated as a
party for all purposes of this Agreement and shall be entitled to the full
benefit of this Agreement to the same extent as if it were an original
party in respect of the rights or obligations assigned or transferred to
it.
17.5 This Agreement may be executed by each of the parties hereto in any number
of counterparts, and by each party hereto on separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be
an original, but all such counterparts shall together constitute one and
the same instrument.
18. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT (CAP. 53B)
A person who is not a party to this Agreement shall have no right under the
Contracts (Rights of Third Parties) Act (Cap. 53B) to enforce any of its
terms.
SIGNATURE PAGE TO FOLLOW
19
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the date
stated above.
ST ASSEMBLY TEST SERVICES LTD
By: /s/ Suh Tae Suk
-----------------------
Name: Mr. Tan Lay Koon
Title: President and CEO
In the presence of: /s/ Juliana Ho
---------------------------
SIMMTECH CO. LTD
By: /s/ Se-Ho Chun
----------------------
Name: Se-Ho Chun
Title: Representative Director
In the presence of: /s/ Young Goo Kim
---------------------------
SE-HO CHUN
By: /s/ Se-Ho Chun
---------------------
Name: Se-Ho Chun
In the presence of: [/s/ Young Goo Kim]
---------------------------
20
ANNEX A
DESCRIPTION OF EQUIPMENT
- -----------------------------------------------------------------------------------------------------------
EQUIPMENT UNIT PRICE (US$) QUANTITY PRICE (KUS$)
- -----------------------------------------------------------------------------------------------------------
DESMEAR+PTH+PNL LINE 4,275,000 1 4,275
- -----------------------------------------------------------------------------------------------------------
DEBURRING (CHEMICAL) 380,000 1 380
- -----------------------------------------------------------------------------------------------------------
EXPOSURE 598,500 1 599
- -----------------------------------------------------------------------------------------------------------
SCAN 304,000 3 912
- -----------------------------------------------------------------------------------------------------------
VRS 114,000 5 570
- -----------------------------------------------------------------------------------------------------------
SEMI AUTO PRINTER 47,500 2 95
- -----------------------------------------------------------------------------------------------------------
ROLL COATER WITH TUNNEL OVEN 532,000 1 532
- -----------------------------------------------------------------------------------------------------------
AUTO PRINTING SYSTEM 182,000 2 364
- -----------------------------------------------------------------------------------------------------------
TUNNEL OVEN FOR PRECURE 228,000 2 456
- -----------------------------------------------------------------------------------------------------------
AUTO EXPOSURE SYSTEM 349,600 1 350
- -----------------------------------------------------------------------------------------------------------
TUNNEL OVEN FOR FINAL CURE 199,500 1 200
- -----------------------------------------------------------------------------------------------------------
JET SCRUBBING FOR PRETREATMENT 277,400 1 277
- -----------------------------------------------------------------------------------------------------------
SOFT AU PLATING LINE 748,885 1 749
- -----------------------------------------------------------------------------------------------------------
BBT (FOR PBGA) 190,000 1 190
- -----------------------------------------------------------------------------------------------------------
BBT (FOR CSP) 475,000 1 475
- -----------------------------------------------------------------------------------------------------------
AVI 211,600 3 635
- -----------------------------------------------------------------------------------------------------------
VRS 28,500 3 86
- -----------------------------------------------------------------------------------------------------------
ROUTING RINSING 190,000 1 190
- -----------------------------------------------------------------------------------------------------------
EXPOSURE SYSTEM 19,000 1 19
- -----------------------------------------------------------------------------------------------------------
DEVELOP 152,000 1 152
- -----------------------------------------------------------------------------------------------------------
ALKALINE ETCHING WITH R/STRIPPING 228,000 1 228
- -----------------------------------------------------------------------------------------------------------
S/W GENESIS LICEN. 46,474 5 232
-----------------------------------------------------------------------------------
GENESIS GRAHP. 12,350 8 99
-----------------------------------------------------------------------------------
WORKSTATION 19,627 13 255
-----------------------------------------------------------------------------------
STELLAR 95,000 1 95
- -----------------------------------------------------------------------------------------------------------
MACHINE LASER PLOTTER 250,000 3 750
-----------------------------------------------------------------------------------
DEVELOPER 30,970 3 93
-----------------------------------------------------------------------------------
FILM AOI 213,300 2 427
- -----------------------------------------------------------------------------------------------------------
HAST 45,108 1 45
- -----------------------------------------------------------------------------------------------------------
IR REFLOW 42,505 1 43
- -----------------------------------------------------------------------------------------------------------
TC 73,733 1 74
- -----------------------------------------------------------------------------------------------------------
MEASURING SCOPE 30,000 1 30
- -----------------------------------------------------------------------------------------------------------
VACUUM LAMINATOR 562,500 1 563
- -----------------------------------------------------------------------------------------------------------
YAG LASER 562,500 1 563
- -----------------------------------------------------------------------------------------------------------
TOTAL 15,000
- -----------------------------------------------------------------------------------------------------------
21