AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 10, 2003
REGISTRATION 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMKOR TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 3674 23-1722724
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
1345 ENTERPRISE DRIVE
WEST CHESTER, PA 19380
(610) 431-9600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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KENNETH T. JOYCE
CHIEF FINANCIAL OFFICER
AMKOR TECHNOLOGY, INC.
1345 ENTERPRISE DRIVE
WEST CHESTER, PA 19380
(610) 431-9600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
BRUCE M. MCNAMARA
PERKINS COIE LLP
101 JEFFERSON DRIVE
MENLO PARK, CA 94025-1114
(650) 838-4300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER UNIT(2) OFFERING PRICE(2) FEE
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7.75% Senior Notes due 2013.................. $425,000,000 100% $425,000,000
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Total........................................ $425,000,000 $425,000,000 $34,382.50
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act of 1933.
(2) Equals the aggregate principal amount of the securities being registered.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER AND SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JULY 10, 2003
PRELIMINARY PROSPECTUS
AMKOR TECHNOLOGY, INC.
OFFER TO EXCHANGE
7.75% SENIOR NOTES DUE 2013
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
FOR ANY AND ALL OF ITS OUTSTANDING
7.75% SENIOR NOTES DUE 2013
THAT WERE ISSUED AND SOLD IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
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Amkor Technology, Inc., a Delaware corporation, hereby offers to exchange,
upon the terms and conditions set forth in this prospectus and the accompanying
letter of transmittal, up to $425 million in aggregate principal amount of its
7.75% senior notes due 2013, which we refer to as the "exchange notes," for the
same principal amount of its outstanding 7.75% senior notes due 2013, which we
refer to as the "original notes."
The terms of the exchange notes are substantially identical to the terms of
the original notes, except that the exchange notes will generally be freely
transferable and do not contain certain terms with respect to liquidated
damages. We will issue the exchange notes under the Indenture governing the
original notes. For a description of the principal terms of the exchange notes,
see "Description of the Notes."
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON
, 2003, UNLESS WE EXTEND THE OFFER. At any time prior to the
expiration date, you may withdraw your tender of any original notes; otherwise,
such tender is irrevocable. We will receive no cash proceeds from the exchange
offer.
The exchange notes constitute a new issue of securities for which there is
no established trading market. Any original notes not tendered and accepted in
the exchange offer will remain outstanding. To the extent original notes are
tendered and accepted in the exchange offer, your ability to sell untendered,
and tendered but unaccepted, original notes could be adversely affected.
Following consummation of the exchange offer, the original notes will continue
to be subject to their existing transfer restrictions and we will have no
further obligations to provide for the registration of the original notes under
the Securities Act of 1933, as amended (the "Securities Act"). We cannot
guarantee that an active trading market will develop or give assurances as to
the liquidity of the trading market for either the original notes or the
exchange notes.
This prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of exchange notes
received for original notes that were acquired by such broker-dealer for its own
account as a result of market-making activities or other trading activities. If
any holder of the original notes notifies us prior to the 20th business day
following the consummation of the exchange offer that it is prohibited by law or
policy of the Securities and Exchange Commission (the "SEC") from participating
in the exchange offer, that it may not resell the exchange notes acquired by it
in the exchange offer to the public without delivering a prospectus, and this
prospectus is not appropriate or available for such resales by it, or that it is
a broker-dealer and holds original notes acquired directly from us or our
affiliates, we will use commercially reasonable efforts to file with the SEC a
shelf registration statement to register for public resale the original notes
held by any such holder who provides us with certain information for inclusion
in the shelf registration statement, such shelf registration statement to be
effective by the SEC on or prior to 120 days after such obligation to file a
shelf registration statement arises.
INVESTING IN THE EXCHANGE NOTES INVOLVES CERTAIN RISKS. PLEASE READ "RISK
FACTORS" BEGINNING ON PAGE 9 OF THIS PROSPECTUS.
This prospectus and the letter of transmittal are first being mailed to all
holders of the original notes on , 2003.
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NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THE EXCHANGE NOTES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL
OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is , 2003.
FORWARD-LOOKING INFORMATION
This prospectus and the documents incorporated by reference in this
prospectus contain forward-looking statements within the meaning of the federal
securities laws, including but not limited to statements regarding: (1) the
condition and growth of the industry in which we operate, including trends
toward increased outsourcing, reductions in inventory and demand and selling
prices for our services, (2) our anticipated capital expenditures and financing
needs, (3) our belief as to our future capacity utilization rates, revenue,
gross margins and operating performance and (4) other statements that are not
historical facts. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," "continue," or the negative of
these terms or other comparable terminology. Because such statements include
risks and uncertainties, actual results may differ materially from those
anticipated in such forward-looking statements as a result of certain factors,
including those set forth in our Quarterly Report on Form 10-Q filed on May 9,
2003 under the heading "Risk Factors that May Affect Future Operating
Performance." You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this prospectus
or, as applicable, as of the date of any such document incorporated by reference
herein. Moreover, in the future, we may make forward-looking statements about
the matters described in this prospectus or about other matters concerning us.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, prospectuses and other
information with the SEC. You may read and copy any reports, statements or other
information that we file at the SEC's public reference rooms at 450 Fifth
Street, N.W., Washington, D.C. 20549, 7 World Trade Center, Suite 1300, New
York, New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference rooms. These SEC filings are also available
to the public from commercial document retrieval services and at the Internet
world wide web site maintained by the SEC at www.sec.gov.
On , 2003, we filed with the SEC a registration statement on Form
S-4 under the Securities Act, of which this prospectus is a part. This
prospectus does not contain all the information in the registration statement.
We have omitted parts of the registration statement, as permitted by the rules
and regulations of the SEC. You may inspect and copy the registration statement,
including exhibits, at the SEC's public reference facilities or its web site.
Our statements in this prospectus about the contents of any contract or other
document are not necessarily complete. You should refer to the copy of each
contract or other document we have filed as an exhibit to the registration
statement for complete information.
The SEC allows us to "incorporate by reference" into this prospectus the
information that we file with the SEC. This means that we can disclose important
information to you by referring you to those documents. The information we
incorporate by reference is considered a part of this prospectus, and later
information that we file with the SEC will automatically update and supersede
this information. We incorporate by reference the documents listed below, all
filings filed by us pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), after the date of the initial registration statement and
prior to effectiveness of the registration statement, and any future filings
that we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act until the exchange offer is completed:
- Our Annual Report on Form 10-K/A for the year ended December 31, 2003,
filed with the SEC on June 25, 2003;
- Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2003,
filed with the SEC on May 9, 2003; and
- Our Current Reports on Form 8-K and Form 8-K/A filed with the SEC on
January 31, April 23, April 29 and May 21, 2003.
You can obtain any of the documents incorporated by reference through us,
the SEC or the SEC's Internet world wide web site as described above. Documents
incorporated by reference are available from us
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without charge, excluding exhibits thereto unless we have specifically
incorporated by reference such exhibits in this prospectus. Any person,
including any beneficial owner, to whom this prospectus is delivered may obtain
documents incorporated by reference in, but not delivered with, this prospectus
by requesting them by telephone or in writing at the following address:
Amkor Technology, Inc.
1345 Enterprise Drive
West Chester, PA 19380
(610) 431-9600
Attn: Corporate Secretary
TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST THESE DOCUMENTS NO LATER THAN
FIVE BUSINESS DAYS BEFORE YOU MAKE YOUR INVESTMENT DECISION.
Copies of the documents listed above are also available free of charge
though our website (www.amkor.com) as soon as reasonably practicable after we
electronically file the material with, or furnish it to, the SEC.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with information different from that contained in
this prospectus. We are offering to exchange original notes for exchange notes
only in jurisdictions where such offer is permitted. You should not assume that
the information in the incorporated documents, this prospectus or any prospectus
supplement is accurate as of any other date other than the date on the front of
these documents.
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2
PROSPECTUS SUMMARY
This summary may not contain all the information that may be important to
you. You should read the entire prospectus, including the additional documents
to which we refer you, before making an investment decision. See "Where You Can
Find More Information." In this prospectus, unless otherwise noted, "we," "our,"
"us," and "Amkor" refer to Amkor Technology, Inc. and its consolidated
subsidiaries.
AMKOR TECHNOLOGY, INC.
We are the world's largest subcontractor of semiconductor packaging and
test services. We were incorporated in Delaware in 1997. The company has built a
leading position by:
- Providing a broad portfolio of packaging and test technologies and
services;
- Maintaining a leading role in the design and development of new package
and test technologies;
- Cultivating long-standing relationships with customers, including many of
the world's leading semiconductor companies;
- Developing expertise in high-volume manufacturing; and
- Diversifying our operational scope by establishing production
capabilities in China, Japan and Taiwan, in addition to long-standing
capabilities in Korea and the Philippines.
The semiconductors that we package and test for our customers ultimately
become components in electric systems used in communications, computing,
consumer, industrial, automotive and military applications. Our customers
include, among others, Agilent Technologies, Atmel Corporation, Intel
Corporation, LSI Logic Corporation, Mediatek Inc., Philips Electronics N.V.,
R.F. Microdevices, ST Microelectronics PTE, Sony Semiconductor Corporation and
Toshiba Corporation. The outsourced semiconductor packaging and test market is
very competitive. We also compete with the internal semiconductor packaging and
test capabilities of many of our customers.
Packaging and test are an integral part of the semiconductor manufacturing
process. Semiconductor manufacturing begins with silicon wafers and involves the
fabrication of electronic circuitry into complex patterns, thus creating
individual chips on the wafers. The packaging process creates an electrical
interconnect between the semiconductor chip and the system board. In packaging,
the fabricated semiconductor wafers are cut into individual chips which are then
attached to a substrate and encased in a protective material to provide optimal
electrical and thermal performance. Increasingly, packages are custom designed
for specific chips and specific end-market applications. The packaged chips are
then tested using sophisticated equipment to ensure that each packaged chip
meets its design specifications.
We historically marketed the output of fabricated semiconductor wafers
provided by a wafer fabrication foundry owned and operated by Anam
Semiconductor, Inc. (ASI). On February 28, 2003, we sold our wafer fabrication
services business to ASIand restated our historical results to reflect our wafer
fabrication services segment as a discontinued operation.
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SUMMARY OF THE EXCHANGE OFFER
In May 2003, we completed a private offering of the original notes. We
received aggregate net proceeds, before expenses and commissions, of $425
million from the sale of the original notes.
In connection with the offering of original notes, we entered into a
Registration Rights Agreement with the initial purchasers of the original notes
in which we agreed to use commercially reasonable efforts to deliver to you this
prospectus and to commence the exchange offer for the original notes within 210
days of their issuance. In the exchange offer, you are entitled to exchange your
original notes for exchange notes, with substantially identical terms as the
original notes. The exchange notes will be accepted for clearance through The
Depository Trust Company ("DTC") and Clearstream Banking SA ("Clearstream") or
Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"),
with a new CUSIP and ISIN number and common code. You should read the discussion
under the heading "Description of the Notes" beginning on page for more
information about the exchange notes. After the exchange offer is completed, you
will no longer be entitled to any exchange or, with limited exceptions,
registration rights for your original notes.
The Exchange Offer............ We are offering to exchange up to $425 million
principal amount of the exchange notes for up
to $425 million principal amount of the
original notes. Original notes may only be
exchanged in $1,000 increments.
The terms of the exchange notes are identical
in all material respects to those of the
original notes except the exchange notes will
not be subject to transfer restrictions and
holders of the exchange notes, with limited
exceptions, will have no registration rights.
Also, the exchange notes will not include
provisions contained in the original notes that
required payment of liquidated damages in the
event we failed to satisfy our registration
obligations with respect to the original notes.
Original notes that are not tendered for
exchange will continue to be subject to
transfer restrictions and, with limited
exceptions, will not have registration rights.
Therefore, the market for secondary resales of
original notes that are not tendered for
exchange is likely to be minimal.
We will issue registered exchange notes on or
promptly after the expiration of the exchange
offer.
Expiration Date............... The exchange offer will expire at 5:00 p.m. New
York City time, on , 2003, unless we
decide to extend the expiration date. Please
read "The Exchange Offer -- Extensions, Delay
in Acceptance, Termination or Amendment" on
page 15 for more information about extending
the expiration date.
Withdrawal of Tenders......... You may withdraw your tender of original notes
at any time prior to the expiration date. We
will return to you, without charge, promptly
after the expiration or termination of the
exchange offer any original notes that you
tendered but that were not accepted for
exchange.
Conditions to the Exchange
Offer......................... We will not be required to accept original
notes for exchange:
- if the exchange offer would be unlawful or
would violate any interpretation of the SEC
staff, or
- if any legal action has been instituted or
threatened that would impair our ability to
proceed with the exchange offer.
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The exchange offer is not conditioned on any
minimum aggregate principal amount of original
notes being tendered. Please read "The Exchange
Offer -- Conditions to the Exchange Offer" on
page 16 for more information about the
conditions to the exchange offer.
Procedures for Tendering
Original Notes................ If your original notes are held through DTC and
you wish to participate in the exchange offer,
you may do so through DTC's automated tender
offer program. If you tender under this
program, you will agree to be bound by the
letter of transmittal that we are providing
with this prospectus as though you had signed
the letter of transmittal. By signing or
agreeing to be bound by the letter of
transmittal, you will represent to us that,
among other things:
- any exchange notes that you receive will be
acquired in the ordinary course of your
business,
- you have no arrangement or understanding with
any person to participate in the distribution
of the original notes or the exchange notes,
- you are not our "affiliate," as defined in
Rule 405 under the Securities Act, or, if you
are our affiliate, you will comply with any
applicable registration and prospectus
delivery requirements of the Securities Act,
- if you are not a broker-dealer, you are not
engaged in and do not intend to engage in the
distribution of the exchange notes, and
- if you are a broker-dealer that will receive
exchange notes for your own account in
exchange for original notes that you acquired
as a result of market-making activities or
other trading activities, you will deliver a
prospectus in connection with any resale of
such exchange notes.
Special Procedures for
Beneficial Owner.............. If you own a beneficial interest in original
notes that are registered in the name of a
broker, dealer, commercial bank, trust company
or other nominee and you wish to tender the
original notes in the exchange offer, please
contact the registered holder as soon as
possible and instruct the registered holder to
tender on your behalf and to comply with our
instructions described in this prospectus.
Guaranteed Delivery
Procedures.................... You must tender your original notes according
to the guaranteed delivery procedures described
in "The Exchange Offer -- Guaranteed Delivery
Procedures" on page 19 if any of the following
apply:
- you wish to tender your original notes but
they are not immediately available,
- you cannot deliver your original notes, the
letter of transmittal or any other required
documents to the exchange agent prior to the
expiration date, or
- you cannot comply with the applicable
procedures under DTC's automated tender offer
program prior to the expiration date.
5
Resales....................... Except as indicated herein, we believe that the
exchange notes may be offered for resale,
resold and otherwise transferred without
compliance with the registration and prospectus
delivery requirements of the Securities Act,
provided that:
- you are acquiring the exchange notes in the
ordinary course of your business;
- you are not participating, do not intend to
participate and have no arrangement or
understanding with any person to participate
in the distribution of the exchange notes;
and
- you are not an affiliate of Amkor.
Our belief is based on existing interpretations
of the Securities Act by the SEC staff set
forth in several no-action letters to third
parties. We do not intend to seek our own
no-action letter, and there is no assurance
that the SEC staff would make a similar
determination with respect to the exchange
notes. If this interpretation is inapplicable,
and you transfer any exchange note without
delivering a prospectus meeting the
requirements of the Securities Act or without
an exemption from such requirements, you may
incur liability under the Securities Act. We do
not assume, or indemnify holders against, such
liability.
Each broker-dealer that is issued exchange
notes for its own account in exchange for
original notes that were acquired by such
broker-dealer as a result of market-making
activities or other trading activities must
acknowledge that it will deliver a prospectus
meeting the requirements of the Securities Act
in connection with any resale of the exchange
notes. To the extent described in "Plan of
Distribution" beginning on page 61, a
broker-dealer may use this prospectus for an
offer to resell, resale or other retransfer of
the exchange notes.
United States Federal Income
Tax Considerations............ The exchange of original notes for exchange
notes will not be a taxable exchange for United
States federal income tax purposes. Please read
"United States Federal Income Tax
Considerations" on page .
Use of Proceeds............... We will not receive any proceeds from the
issuance of the exchange notes pursuant to the
exchange offer. Except as described in "The
Exchange Offer -- Transfer Taxes," we will pay
certain expenses incident to the exchange
offer.
Registration Rights........... If we fail to complete the exchange offer as
required by the Registration Rights Agreement,
we may be obligated to pay additional interest
to holders of the original notes. Please read
"Description of the Notes -- Registration
Rights; Liquidated Damages" beginning on page
39 for more information regarding your rights
as a holder of the original notes.
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THE EXCHANGE AGENT
We have appointed U.S. Bank National Association as exchange agent for the
exchange offer. Please direct questions and requests for assistance, requests
for additional copies of this prospectus or of the letter of transmittal and
requests for the notice of guaranteed delivery to the exchange agent. If you are
not tendering under DTC's automated tender offer program, you should send the
letter of transmittal and any other required documents to the exchange agent as
follows:
U.S. BANK NATIONAL ASSOCIATION
By Mail (Registered or By Facsimile Transmission
Certified (Eligible Institutions Only):
Mail Recommended) or Courier:
U.S. Bank National Association (651) 244-1537 Confirm by Telephone:
Corporate Trust Services Attention: Specialized Finance (651) 244-1197
180 East Fifth Street
St. Paul, MN 55101
Attention: Specialized Finance
THE EXCHANGE NOTES
The form and terms of the exchange notes to be issued in the exchange offer
are the same as the form and terms of the original notes, except that the
exchange notes will be registered under the Securities Act and, therefore, will
not bear legends restricting their transfer, will not contain terms providing
for liquidated damages if we fail to perform our registration obligations with
respect to the original notes and, with limited exceptions, will not be entitled
to registration rights under the Securities Act. The exchange notes will
evidence the same debt as the original notes, and both the original notes and
the exchange notes are governed by the same Indenture.
Issuer........................ Amkor Technology, Inc., a Delaware corporation.
Notes Offered................. $425 million aggregate principal amount of
7.75% exchange notes due 2013.
Maturity...................... May 15, 2013.
Interest Payment Dates........ May 15 and November 15 of each year, beginning
on November 15, 2003.
Ranking....................... The exchange notes will be our unsecured senior
debt:
- the exchange notes will be effectively
subordinated to all our existing and future
secured debt, including debt under the new
senior secured credit facility, to the extent
of such security, and to all existing and
future debt and other liabilities of our
subsidiaries, including trade payables;
- the exchange notes will rank equally with all
our existing and future unsecured senior debt
including our 9.25% senior notes due 2008;
and
- the exchange notes will rank senior to all
our existing and future debt that expressly
provides that it is subordinated to the
exchange notes, including our 10.50% senior
subordinated notes due 2009, our 5.75%
convertible subordinated notes due 2006 and
our 5.00% convertible subordinated notes due
2007.
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Assuming we had completed the May 2003 note
offering to which this exchange offer relates,
redeemed our 9.25% senior notes due 2006,
closed our new senior secured credit facility
and repaid the Term B loan under our previous
senior secured credit facility with the
proceeds of the new senior secured credit
facility, as if each had occurred as of March
31, 2003, the exchange notes would have been:
- effectively subordinated to $170 million of
senior secured debt and $272.6 million of
indebtedness and other liabilities of our
subsidiaries, including trade payables but
excluding intercompany obligations;
- ranked equally with $500 million of our 9.25%
senior notes due 2008; and
- senior to $708.8 million of subordinated
debt, including our 10.50% senior
subordinated notes due 2009, our 5.75%
convertible subordinated notes due 2006 and
our 5.00% convertible subordinated notes due
2007.
Redemption.................... We may redeem the exchange notes issued under
the Indenture (as defined below), in whole or
in part, beginning on May 15, 2008, at the
redemption prices specified in this prospectus
under "Description of the Notes -- Optional
Redemption."
Change in Control............. If we experience a change in control, we will
be required to make an offer to repurchase the
exchange notes at a price equal to 101% of the
principal amount plus accrued and unpaid
interest, if any, to the date of repurchase.
For more detailed information, see "Description
of the Notes -- Repurchase at the Option of
Holder -- Offer to Repurchase Upon Change of
Control."
Covenants..................... We will issue the exchange notes under an
indenture (the "Indenture") with U.S. Bank
National Association, as Trustee. The Indenture
will, among other things, restrict our ability
and the ability of our subsidiaries to:
- incur additional indebtedness;
- pay dividends, repurchase stock, prepay
subordinated debt and make investments and
other restricted payments;
- create restrictions on the ability of our
subsidiaries to pay dividends or make other
payments;
- engage in sale and leaseback transactions;
- create liens;
- enter into transactions with affiliates; and
- sell assets or merge with or into other
companies.
These covenants are subject to important
exceptions that are described in the section
entitled "Description of the Notes -- Certain
Covenants."
8
RISK FACTORS
You should carefully consider each of the following risks and uncertainties
associated with our company and the exchange offer, as well as all the other
information set forth in this prospectus or incorporated by reference into this
prospectus, including the information set forth in our Quarterly Report on Form
10-Q filed on May 9, 2003, under the heading "Risk Factors that May Affect
Future Operating Performance," which is specifically incorporated herein by
reference.
RISKS RELATING TO THE EXCHANGE OFFER
BECAUSE THERE IS NO PUBLIC MARKET FOR THE EXCHANGE NOTES, YOU MAY NOT BE ABLE
TO SELL YOUR EXCHANGE NOTES
The exchange notes will be registered under the Securities Act, but will
constitute a new issue of securities with no established trading market, and
there can be no assurance as to:
- the liquidity of any trading market that may develop;
- the ability of holders to sell their exchange notes; or
- the price at which the holders would be able to sell their exchange
notes.
If a trading market were to develop, the exchange notes might trade at
higher or lower prices than their principal amount or purchase price, depending
on many factors, including prevailing interest rates, the market for similar
securities and our financial performance.
Any market-making activity in the exchange notes will be subject to the
limits imposed by the Securities Act and the Exchange Act. There can be no
assurance that an active trading market will exist for the exchange notes or
that any trading market that does develop will be liquid.
In addition, any original note holder who tenders in the exchange offer for
the purpose of participating in a distribution of the exchange notes may be
deemed to have received restricted securities and, if so, will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction.
YOUR ORIGINAL NOTES WILL NOT BE ACCEPTED FOR EXCHANGE IF YOU FAIL TO FOLLOW
THE EXCHANGE OFFER PROCEDURES
We will issue exchange notes pursuant to the exchange offer only after a
timely receipt of your original notes, a properly completed and duly executed
letter of transmittal and all other required documents. Therefore, if you want
to tender your original notes, please allow sufficient time to ensure timely
delivery. If we do not receive your original notes, letter of transmittal and
other required documents by the expiration date of the exchange offer, we will
not accept your original notes for exchange. We are under no duty to give
notification of defects or irregularities with respect to the tenders of
original notes for exchange. If there are defects or irregularities with respect
to your tender of original notes, we will not accept your original notes for
exchange.
IF YOU DO NOT EXCHANGE YOUR ORIGINAL NOTES, YOUR ORIGINAL NOTES WILL CONTINUE
TO BE SUBJECT TO THE EXISTING TRANSFER RESTRICTIONS AND YOU MAY BE UNABLE TO
SELL YOUR OUTSTANDING ORIGINAL NOTES
We did not register the original notes, nor do we intend to do so following
the exchange offer. Original notes that are not tendered will therefore continue
to be subject to the existing transfer restrictions and may be transferred only
in limited circumstances under applicable securities laws. If you do not
exchange your original notes, you will lose your right to have your original
notes registered under the federal securities laws. As a result, if you hold
original notes after the exchange offer, you may be unable to sell your original
notes. We have no obligation, except in limited circumstances, nor do we
currently intend, to file an additional registration statement to cover the
resale of original notes that did not tender in the exchange offer or to re-
offer to exchange the exchange notes for original notes following the expiration
of the exchange offer.
9
RISKS RELATED TO AN INVESTMENT IN THE NOTES
THE FOLLOWING RISK FACTORS APPLY TO BOTH THE ORIGINAL NOTES AND THE EXCHANGE
NOTES.
HIGH LEVERAGE AND RESTRICTIVE COVENANTS -- OUR SUBSTANTIAL INDEBTEDNESS COULD
ADVERSELY AFFECT OUR FINANCIAL CONDITION AND PREVENT US FROM FULFILLING OUR
OBLIGATIONS UNDER THE NOTES
Substantial Leverage. We now have, and after this offering will continue
to have, a significant amount of indebtedness. In addition, despite current debt
levels, the terms of the indentures governing the notes and our other securities
do not prohibit us or our subsidiaries from incurring substantially more debt.
If new debt is added to our consolidated debt level, the related risks that we
now face could intensify. The following table shows certain important financial
data and credit ratios (assuming we had completed the May 2003 note offering to
which this exchange offer relates, redeemed our 9.25% senior notes due 2006,
closed our new senior secured credit facility and repaid the Term B loan under
our previous senior secured credit facility with the proceeds of the new senior
secured credit facility, as if each had occurred as of March 31, 2003):
AT MARCH 31, 2003
-----------------
(IN THOUSANDS)
Total debt, including current maturities.................... $1,873,378
Stockholders' equity(1)..................................... 209,214
Ratio of total debt to stockholders' equity................. 8.95x
---------------
(1) We adjusted stockholders' equity of $240.8 million at March 31, 2003 by
$31.6 million to reflect the 4.625% premium paid in connection with, and
additional interest accruing prior to, the redemption of our 9.25% senior
notes due 2006 and write-offs of unamortized deferred debt issuance costs
associated with such notes and our previous senior secured credit facility.
Covenants in the agreements governing our existing debt, and debt we may
incur in the future, may materially restrict our operations, including our
ability to incur debt, pay dividends, make certain investments and payments, and
encumber or dispose of assets. In addition, financial covenants contained in
agreements relating to our existing and future debt could lead to a default in
the event our results of operations do not meet our plans. A default under one
debt instrument may also trigger cross-defaults under our other debt
instruments. An event of default under any debt instrument, if not cured or
waived, could have a material adverse effect on us.
Our substantial indebtedness could have important consequences to holders
of the notes. For example, it could:
- make it more difficult for us to satisfy our obligations with respect to
the notes;
- increase our vulnerability to general adverse economic and industry
conditions;
- limit our ability to fund future working capital, capital expenditures,
research and development and other general corporate requirements;
- require us to dedicate a substantial portion of our cash flow from
operations to service payments on our debt;
- limit our flexibility to react to changes in our business and the
industry in which we operate;
- place us at a competitive disadvantage to any of our competitors that
have less debt; and
- limit, along with the financial and other restrictive covenants in our
indebtedness, among other things, our ability to borrow additional funds.
Ability to Service Debt. We cannot assure you that our business will
generate cash in an amount sufficient to enable us to service our debt,
including the notes, or to fund our other liquidity needs. We expect that
substantial amounts of our debt will come due prior to the final maturity date
of the notes, which we will be required to repay or refinance. Our 5.75%
convertible subordinated note due 2006, our 5% convertible subordinated notes
due 2007, our 9.25% senior note due 2008 and our 10.5% convertible subordinated
notes
10
due 2009 and amounts outstanding under our new senior secured credit facility
will mature prior to the 2013 maturity date of the notes and will be payable in
cash unless the holders of the convertible notes elect to convert the principal
amount of such notes into our common stock. In addition, we may need to
refinance all or a portion of our debt, including the notes, on or before
maturity. In June 2003 we repurchased our 9.25% senior notes due 2006 using the
proceeds of the May 2003 note offering to which this exchange offer relates. We
cannot assure you that we will be able to refinance any of our debt on
commercially reasonable terms or at all.
EFFECTIVE SUBORDINATION OF THE NOTES TO LIABILITIES OF OUR SUBSIDIARIES -- YOUR
RIGHT TO RECEIVE PAYMENTS ON THE NOTES FROM FUNDS PROVIDED BY OUR SUBSIDIARIES
IS JUNIOR IN RIGHT OF PAYMENT TO THE CLAIMS OF THE CREDITORS OF OUR
SUBSIDIARIES
We conduct a large portion of our operations through our subsidiaries.
Accordingly, our ability to meet our cash obligations is dependent upon the
ability of our subsidiaries to make cash payments to us. We expect distributions
from our subsidiaries to be a large source of funds for payment of interest on
the notes. The claims of creditors (including trade creditors) of any subsidiary
will generally have priority as to the assets of such subsidiary over the claims
of the holders of the notes. In the event of a liquidation of any of our
subsidiaries, our right to receive the assets of any such subsidiary (and the
resulting right of the holders of the notes to participate in the distribution
of the proceeds of those assets) will effectively be subordinated by operation
of law to the claims of creditors (including trade creditors) of such subsidiary
and holders of such subsidiary's preferred stock and any guarantees by such
subsidiary of our indebtedness. In the event of the liquidation, bankruptcy,
reorganization, insolvency, receivership or similar proceeding or any assignment
for the benefit of our creditors or a marshaling of our assets or liabilities,
holders of the notes may receive ratably less than other such creditors or
interest holders. Assuming we had completed the May 2003 note offering to which
this exchange offer relates, redeemed our 9.25% senior notes due 2006, closed
the new senior secured credit facility and repaid the Term B loan under our
previous senior secured credit facility with the proceeds of the new senior
credit facility, as if each had occurred as of March 31, 2003, the notes would
have been effectively subordinated to $272.6 million of indebtedness and other
liabilities of our subsidiaries, including trade payables but excluding
intercompany obligations.
FINANCING CHANGE OF CONTROL OFFER -- WE MAY NOT HAVE, OR BE ABLE TO RAISE, THE
FUNDS NECESSARY TO FINANCE AN OFFER TO REPURCHASE THE NOTES FOLLOWING A CHANGE
OF CONTROL OR WE MAY BE PROHIBITED FROM DOING SO BY OUR SECURED CREDIT
FACILITIES.
Upon the occurrence of a change of control, we must offer to repurchase all
outstanding notes. However, it is possible that we will not have sufficient
funds at the time of the change of control to make the required repurchases of
notes or that restrictions in our credit facilities or other debt agreements may
not allow such repurchases.
DIFFICULTIES IN ENFORCING JUDGMENTS IN FOREIGN JURISDICTIONS
Since a large portion of our assets are located outside the U.S., any
judgments obtained in the U.S. against us, including judgments with respect to
the payment of principal, premium, interest, offer price, or other amounts
payable with respect to the notes may be not collectible within the U.S. If
holders of notes intend to enforce a judgment obtained in the U.S. against our
assets located outside the U.S., they may be subject to additional procedures
and other difficulties which would not be required for enforcement of such
judgment in the U.S.
PRIVATE PLACEMENT
We issued $425 million in principal amount of the original notes dated as
of May 8, 2003 to the initial purchasers of those notes and received proceeds
that after deducting expenses and commissions represented an aggregate of $416.2
million in net proceeds. We issued the original notes to the initial purchasers
in a transaction exempt from or not subject to registration under the Securities
Act. The initial purchasers then
11
offered and resold the original notes to qualified institutional buyers in
compliance with Rule 144A or non-U.S. persons in compliance with Regulation S
under the Securities Act.
USE OF PROCEEDS
We are making the exchange offer to satisfy our obligations under the
original notes, the Indenture and the Registration Rights Agreement. We will not
receive any cash proceeds from the exchange offer. In consideration of issuing
the exchange notes in the exchange offer, we will receive an equal principal
amount of original notes. Any original notes that are properly tendered and
accepted in the exchange offer will be canceled and retired and cannot be
reissued.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the periods indicated.
YEAR ENDED DECEMBER 31,
THREE MONTHS ENDED --------------------------------
MARCH 31, 2003 2002 2001 2000 1999 1998
------------------ ---- ---- ---- ---- ----
Ratio........................... --x(1) --x(1) --x(1) 2.2x 2.3x 4.1x
---------------
(1) The ratio of earnings to fixed charges was less than 1:1 for the three
months ended March 31, 2003. In order to achieve a ratio of earnings to
fixed charges of 1:1, we would have had to generate an additional $40.7
million of earnings in the three months ended March 31, 2003. The ratio of
earnings to fixed charges was less than 1:1 for the year ended December 31,
2002. In order to achieve a ratio of earnings to fixed charges of 1:1, we
would have had to generate an additional $564.3 million of earnings in the
year ended December 31, 2002. The ratio of earnings to fixed charges was
less than 1:1 for the year ended December 31, 2001. In order to achieve a
ratio of earnings to fixed charges of 1:1, we would have had to generate an
additional $438.5 million of earnings in the year ended December 31, 2001.
12
CAPITALIZATION
The following table sets forth our cash and cash equivalents and total
capitalization as of March 31, 2003 (1) on a historical basis and (2) as
adjusted to give effect to this offering, the redemption of our 9.25% senior
notes due 2006, the closing of the new senior secured credit facility and the
repayment of the Term B loan under our previous senior secured credit facility
with the proceeds of the new senior secured credit facility, as if each had
occurred as of March 31, 2003. You should read the as adjusted capitalization
data set forth in the table below in conjunction with "Use of Proceeds,"
"Selected Consolidated Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and our consolidated financial
statements and the notes thereto, incorporated by reference into this
Registration Statement.
AT MARCH 31, 2003
------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
Cash and cash equivalents................................... $ 351,485 $ 390,409
========== ==========
Long-term debt and short-term borrowings:
Old senior secured credit facilities:
Term B loan due September 2005, LIBOR plus 4.00%....... $ 96,868 $ --
$100.0 million revolving line of credit due March 2005,
LIBOR plus 3.75%..................................... -- --
New senior secured credit facilities:
Term loan due January 2006, LIBOR plus 4.00%........... -- 170,000
$30.0 million revolving line of credit due October
2005, LIBOR plus 4.25%............................... -- --
9.25% Senior notes due May 2006........................... 425,000 --
9.25% Senior notes due February 2008...................... 500,000 500,000
7.75% Senior notes due May 2013........................... -- 425,000
10.50% Senior subordinated notes due May 2009............. 200,000 200,000
5.75% Convertible subordinated notes due June 2006........ 250,000 250,000
5.00% Convertible subordinated notes due March 2007....... 258,750 258,750
Other debt................................................ 69,628 69,628
---------- ----------
Total debt................................................ 1,800,246 1,873,378
---------- ----------
Total stockholders' equity(1)............................... 240,811 209,214
---------- ----------
Total capitalization........................................ $2,041,057 $2,082,592
========== ==========
---------------
(1) We adjusted stockholders' equity of $240.8 million at March 31, 2003 by
$31.6 million to reflect the 4.625% premium to be paid in connection with,
and additional interest accruing prior to, the redemption of our 9.25%
senior notes due 2006 and write-offs of unamortized deferred debt issuance
costs associated with such notes and our previous senior secured credit
facility.
13
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the original notes, we entered into a
Registration Rights Agreement with the initial purchasers of the original notes.
In that agreement, we agreed to file a registration statement relating to an
offer to exchange the original notes for the exchange notes. We also agreed to
use commercially reasonable efforts to have the SEC declare that registration
statement effective by December 5, 2003. We are offering the exchange notes
under this prospectus in an exchange offer for the original notes to satisfy our
obligations under the Registration Rights Agreement. We refer to our offer to
exchange the exchange notes for the original notes as the "exchange offer."
RESALE OF EXCHANGE NOTES
Based on interpretations of the SEC staff in no-action letters issued to
third parties, we believe that each exchange note issued in the exchange offer
may be offered for resale, resold and otherwise transferred by you without
compliance with the registration and prospectus delivery requirements of the
Securities Act if:
- you are not our affiliate within the meaning of Rule 405 under the
Securities Act,
- you acquire such exchange notes in the ordinary course of your business,
- you do not intend to participate in the distribution of exchange notes,
and
- you are not a broker-dealer that will receive exchange notes for your own
account in exchange for original notes that you acquired as a result of
market-making activities or other trading activities.
If you tender your original notes in the exchange offer with the intention
of participating in any manner in a distribution of the exchange notes, you:
- cannot rely on such interpretations of the SEC staff, and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction of
the exchange notes.
Unless an exemption from registration is otherwise available, the resale by
any security holder intending to distribute exchange notes should be covered by
an effective registration statement under the Securities Act containing the
selling security holder's information required by Item 507 or Item 508, as
applicable, of Regulation S-K under the Securities Act. This prospectus may be
used for an offer to resell, a resale or other retransfer of exchange notes only
as specifically described in this prospectus. Each broker-dealer that receives
exchange notes for its own account in exchange for original notes, where that
broker-dealer acquired such original notes as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. Please read
"Plan of Distribution" for more details regarding the transfer of exchange
notes.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions described in this prospectus
and in the letter of transmittal, we will accept for exchange any original notes
properly tendered and not withdrawn prior to the expiration date of the exchange
offer. We will issue $1,000 principal amount of exchange notes in exchange for
each $1,000 principal amount of original notes surrendered under the exchange
offer and accepted by us. Original notes may be tendered only in integral
multiples of $1,000.
The exchange offer is not conditioned on any minimum aggregate principal
amount of original notes being tendered for exchange.
As of the date of this prospectus, $425 million principal amount of
original notes are outstanding. This prospectus and the letter of transmittal
are being sent to all registered holders of the original notes. There will
14
be no fixed record date for determining registered holders of the original notes
entitled to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions
of the Registration Rights Agreement, the applicable requirements of the
Securities Act and the Exchange Act, and the SEC rules and regulations. Original
notes that are not tendered for exchange in the exchange offer:
- will remain outstanding,
- will continue to accrue interest, and
- will be entitled to the rights and benefits that holders have under the
Indenture relating to the notes and, under limited circumstances, the
Registration Rights Agreement.
We will be deemed to have accepted for exchange properly tendered original
notes when we have given oral or written notice of the acceptance to the
exchange agent and complied with the applicable provisions of the Registration
Rights Agreement. The exchange agent will act as agent for the tendering holders
for the purposes of receiving the exchange notes from us.
If you tender original notes in the exchange offer, you will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
original notes. We will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the exchange offer. It is
important that you read "The Exchange Offer -- Fees and Expenses" for more
details about fees and expenses incurred in the exchange offer.
We will return any original notes that we do not accept for exchange for
any reason without expense to the tendering holder as promptly as practicable
after the expiration or termination of the exchange offer.
EXPIRATION DATE
The exchange offer will expire at 5:00 p.m., New York City time, on
, 2003, unless at our sole discretion we extend the offer.
EXTENSIONS, DELAY IN ACCEPTANCE, TERMINATION OR AMENDMENT
We expressly reserve the right, at any time or at various times, to extend
the period of time during which the exchange offer is open. We may delay
acceptance for exchange of any original notes by giving oral or written notice
of the extension to their holders. During any such extensions, all original
notes you have previously tendered will remain subject to the exchange offer for
that series, and we may accept them for exchange.
To extend the exchange offer, we will notify the exchange agent orally or
in writing of any extension. We also will make a public announcement of the
extension no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date.
If any of the conditions described below under "The Exchange
Offer -- Conditions to the Exchange Offer" have not been satisfied with respect
to the exchange offer, we reserve the right, at our sole discretion:
- to extend the exchange offer,
- to delay accepting for exchange any original notes, or
- to terminate the exchange offer.
We will give oral or written notice of such extension, delay or termination
to the exchange agent. Subject to the terms of the Registration Rights
Agreement, we also reserve the right to amend the terms of the exchange offer in
any manner.
Any such extension, delay in acceptance, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to the
registered holders of the original notes. If we amend the exchange offer in a
manner that we determine to constitute a material change, we will promptly
disclose that
15
amendment by means of a prospectus supplement. We will distribute the supplement
to the registered holders of the original notes. Depending on the significance
of the amendment and the manner of disclosure to the registered holders, we will
extend the exchange offer if the exchange offer would otherwise expire during
such period.
Without limiting the manner in which we may choose to make public
announcements of any extension, delay in acceptance, termination or amendment of
the exchange offer, we have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
CONDITIONS TO THE EXCHANGE OFFER
Despite any other term of the exchange offer, we will not be required to
accept for exchange, or exchange any exchange notes for any original notes, and
we may terminate the exchange offer as provided in this prospectus before
accepting any original notes for exchange, if in our reasonable judgment:
- the exchange offer, or the making of any exchange by a holder of the
original notes, would violate applicable law or any applicable
interpretation of the SEC staff, or
- any action or proceeding has been instituted or threatened in any court
or by or before any governmental agency with respect to the exchange
offer that, in our judgment, would reasonably be expected to impair our
ability to proceed with the exchange offer.
In addition, we will not be obligated to accept for exchange the original
notes of any holder that has not made to us:
- the representations described under "The Exchange Offer -- Procedures for
Tendering" and "Plan of Distribution," and
- such other representations as may be reasonably necessary under
applicable SEC rules, regulations or interpretations to make available to
us an appropriate form for registering the exchange notes under the
Securities Act.
We expressly reserve the right to amend or terminate the exchange offer,
and to reject for exchange any original notes not previously accepted for
exchange in the exchange offer, upon the occurrence of any of the conditions to
the exchange offer specified above. We will give oral or written notice of any
extension, non-acceptance, termination or amendment to the holders of the
original notes as promptly as practicable.
These conditions are for our sole benefit, and we may assert them or waive
them in whole or in part at any time or at various times at our sole discretion.
Our failure at any time to exercise any of these rights will not mean that we
have waived our rights. Each right will be deemed an ongoing right that we may
assert at any time or at various times.
In addition, we will not accept for exchange any original notes tendered,
and will not issue exchange notes in exchange for any such original notes, if at
such time any stop order has been threatened or is in effect with respect to the
registration statement of which this prospectus constitutes a part or the
qualification of the Indenture relating to the notes under the Trust Indenture
Act of 1939.
PROCEDURES FOR TENDERING
HOW TO TENDER GENERALLY
Only a holder of the original notes may tender such original notes in the
exchange offer. To tender in the exchange offer, a holder must either (1) comply
with the procedures for physical tender or (2) comply with the automated tender
offer program procedures of The Depository Trust Company, or "DTC," described
below.
16
To complete a physical tender, a holder must:
- complete, sign and date the letter of transmittal or a facsimile of the
letter of transmittal,
- have the signature on the letter of transmittal guaranteed if the letter
of transmittal so requires,
- mail or deliver the letter of transmittal or facsimile to the exchange
agent prior to the expiration date, and
- deliver the original notes to the exchange agent prior to the expiration
date or comply with the guaranteed delivery procedures described below.
To be tendered effectively, the exchange agent must receive any physical
delivery of the letter of transmittal and other required documents at its
address provided above under "The Exchange Agent" prior to the expiration date.
To complete a tender through DTC's automated tender offer program, the
exchange agent must receive, prior to the expiration date, a timely confirmation
of book-entry transfer of such original notes into the exchange agent's account
at DTC according to the procedure for book-entry transfer described below or a
properly transmitted agent's message.
The tender by a holder that is not withdrawn prior to the expiration date
and our acceptance of that tender will constitute an agreement between the
holder and us in accordance with the terms and subject to the conditions
described in this prospectus and in the letter of transmittal.
THE METHOD OF DELIVERY OF ORIGINAL NOTES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK.
RATHER THAN MAIL THESE ITEMS, WE RECOMMEND THAT YOU USE AN OVERNIGHT OR HAND
DELIVERY SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE
DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. YOU SHOULD NOT SEND
THE LETTER OF TRANSMITTAL OR ORIGINAL NOTES TO US. YOU MAY REQUEST YOUR BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE ABOVE
TRANSACTIONS FOR YOU.
HOW TO TENDER IF YOU ARE A BENEFICIAL OWNER
If you beneficially own original notes that are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and you wish to
tender those notes, you should contact the registered holder as soon as possible
and instruct the registered holder to tender on your behalf. If you are a
beneficial owner and wish to tender on your own behalf, you must, prior to
completing and executing the letter of transmittal and delivering your original
notes, either:
- make appropriate arrangements to register ownership of the original notes
in your name, or
- obtain a properly completed bond power from the registered holder of your
original notes.
The transfer of registered ownership may take considerable time and may not
be completed prior to the expiration date.
SIGNATURES AND SIGNATURE GUARANTEES
You must have signatures on a letter of transmittal or a notice of
withdrawal described below under "The Exchange Offer -- Withdrawal of Tenders"
guaranteed by an eligible institution unless the original notes are tendered:
- by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the letter
of transmittal, or
- for the account of an eligible institution.
17
An "eligible institution" is a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States, or an eligible guarantor institution within the meaning of Rule
17Ad-15 under the Exchange Act, that is a member of one of the recognized
signature guarantee programs identified in the letter of transmittal.
WHEN ENDORSEMENTS OR BOND POWERS ARE NEEDED
If a person other than the registered holder of any original notes signs
the letter of transmittal, the original notes must be endorsed or accompanied by
a properly completed bond power. The registered holder must sign the bond power
as the registered holder's name appears on the original notes. An eligible
institution must guarantee that signature.
If the letter of transmittal or any original notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact, or
officers of corporations or others acting in a fiduciary or representative
capacity, those persons should so indicate when signing. Unless we waive this
requirement, they also must submit evidence satisfactory to us of their
authority to deliver the letter of transmittal.
TENDERING THROUGH DTC'S AUTOMATED TENDER OFFER PROGRAM
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may use DTC's automated tender offer
program to tender. Accordingly, participants in the program may, instead of
physically completing and signing the letter of transmittal and delivering it to
the exchange agent, transmit their acceptance of the exchange offer
electronically. They may do so by causing DTC to transfer the original notes to
the exchange agent in accordance with its procedures for transfer. DTC will then
send an agent's message to the exchange agent.
An agent's message is a message transmitted by DTC to and received by the
exchange agent and forming part of the book-entry confirmation, stating that:
- DTC has received an express acknowledgment from a participant in DTC's
automated tender offer program that is tendering original notes that are
the subject of such book-entry confirmation,
- the participant has received and agrees to be bound by the terms of the
letter of transmittal, or, in the case of an agent's message relating to
guaranteed delivery, the participant has received and agrees to be bound
by the applicable notice of guaranteed delivery, and
- we may enforce the agreement against such participant.
DETERMINATIONS UNDER THE EXCHANGE OFFER
We will determine at our sole discretion all questions as to the validity,
form, eligibility, time of receipt, acceptance of tendered original notes and
withdrawal of tendered original notes. Our determination will be final and
binding. We reserve the absolute right to reject any original notes not properly
tendered or any original notes our acceptance of which, in the opinion of our
counsel, might be unlawful. We also reserve the right to waive any defects,
irregularities or conditions of the exchange offer as to particular original
notes. Our interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be final and
binding on all parties.
Unless waived, any defects or irregularities in connection with tenders of
original notes must be cured within such time as we determine. Neither we, the
exchange agent nor any other person will be under any duty to give notification
of defects or irregularities with respect to tenders of original notes, nor will
we or those persons incur any liability for failure to give such notification.
Tenders of original notes will not be deemed made until such defects or
irregularities have been cured or waived. Any original notes received by the
exchange agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned to the tendering
holder, unless otherwise provided in the letter of transmittal, as soon as
practicable following the expiration date.
18
WHEN WE WILL ISSUE EXCHANGE NOTES
In all cases, we will issue exchange notes for original notes that we have
accepted for exchange in the exchange offer only after the exchange agent timely
receives:
- original notes or a timely book-entry confirmation of transfer of such
original notes into the exchange agent's account at DTC, and
- a properly completed and duly executed letter of transmittal and all
other required documents or a properly transmitted agent's message.
RETURN OF ORIGINAL NOTES NOT ACCEPTED OR EXCHANGED
If we do not accept any tendered original notes for exchange for any reason
described in the terms and conditions of the exchange offer or if original notes
are submitted for a greater principal amount than the holder desires to
exchange, we will return the unaccepted or non-exchanged original notes without
expense to their tendering holder. In the case of original notes tendered by
book-entry transfer into the exchange agent's account at DTC according to the
procedures described below, such non-exchanged original notes will be credited
to an account maintained with DTC. These actions will occur as promptly as
practicable after the expiration or termination of the exchange offer.
YOUR REPRESENTATIONS TO US
By signing or agreeing to be bound by the letter of transmittal, you will
represent to us that, among other things:
- any exchange notes you receive will be acquired in the ordinary course of
your business,
- you have no arrangement or understanding with any person to participate
in the distribution of the original notes or the exchange notes within
the meaning of the Securities Act,
- you are not our affiliate, as defined in Rule 405 under the Securities
Act, or, if you are our affiliate, you will comply with the applicable
registration and prospectus delivery requirements of the Securities Act,
- if you are not a broker-dealer, you are not engaged in and do not intend
to engage in the distribution of the exchange notes, and
- if you are a broker-dealer that will receive exchange notes for your own
account in exchange for original notes that you acquired as a result of
market-making activities or other trading activities, you will deliver a
prospectus in connection with any resale of such exchange notes.
BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account with respect
to the original notes at DTC for purposes of the exchange offer promptly after
the date of this prospectus. Any financial institution participating in DTC's
system may make book-entry delivery of original notes by causing DTC to transfer
such original notes into the exchange agent's account at DTC in accordance with
DTC's procedures for transfer. If you are unable to deliver confirmation of the
book-entry tender of your original notes into the exchange agent's account at
DTC or all other documents required by the letter of transmittal to the exchange
agent on or prior to the expiration date, you must tender your original notes
according to the guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
If you wish to tender your original notes but they are not immediately
available or if you cannot deliver your original notes, the letter of
transmittal or any other required documents to the exchange agent or comply with
the applicable procedures under DTC's automated tender offer program prior to
the expiration date, you may tender if:
- the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., a commercial bank or trust company having an office or
correspondent in the United States, or an eligible guarantor institution,
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- prior to the expiration date, the exchange agent receives from such
member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., commercial bank or
trust company having an office or correspondent in the United States, or
eligible guarantor institution either a properly completed and duly
executed notice of guaranteed delivery by facsimile transmission, mail or
hand delivery or a properly transmitted agent's message and notice of
guaranteed delivery:
- stating your name and address, the registered number(s) of your original
notes and the principal amount of original notes tendered,
- stating that the tender is being made thereby, and
- guaranteeing that, within three Nasdaq trading days after the expiration
date, the letter of transmittal or facsimile thereof or agent's message
in lieu thereof, together with the original notes or a book-entry
confirmation, and any other documents required by the letter of
transmittal will be deposited by the eligible guarantor institution with
the exchange agent,
- the exchange agent receives such properly completed and executed letter
of transmittal or facsimile or agent's message, as well as all tendered
original notes in proper form for transfer or a book-entry confirmation,
and all other documents required by the letter of transmittal, within
three Nasdaq trading days after the expiration date.
Upon request to the exchange agent, the exchange agent will send a notice
of guaranteed delivery to you if you wish to tender your original notes
according to the guaranteed delivery procedures described above.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, you may withdraw your
tender at any time prior to 5:00 p.m., New York City time, on the expiration
date.
For a withdrawal to be effective:
- the exchange agent must receive a written notice of withdrawal at one of
the addresses listed above under "The Exchange Agent," or
- the withdrawing holder must comply with the appropriate procedures of
DTC's automated tender offer program.
Any notice of withdrawal must:
- specify the name of the person who tendered the original notes to be
withdrawn,
- identify the original notes to be withdrawn, including the registration
number or numbers and the principal amount of such original notes,
- be signed by the person who tendered the original notes in the same
manner as the original signature on the letter of transmittal used to
deposit those original notes or be accompanied by documents of transfer
sufficient to permit the Trustee to register the transfer in the name of
the person withdrawing the tender, and
- specify the name in which such original notes are to be registered, if
different from that of the person who tendered the original notes.
If original notes have been tendered under the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn original notes
and otherwise comply with the procedures of DTC.
We will determine all questions as to the validity, form, eligibility and
time of receipt of notice of withdrawal, and our determination shall be final
and binding on all parties. We will deem any original notes so withdrawn not to
have been validly tendered for exchange for purposes of the exchange offer.
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Any original notes that have been tendered for exchange but that are not
exchanged for any reason will be returned to their holder without cost to the
holder, or, in the case of original notes tendered by book-entry transfer into
the exchange agent's account at DTC according to the procedures described above,
such original notes will be credited to an account maintained with DTC for the
original notes. This return or crediting will take place as soon as practicable
after withdrawal, rejection of tender or termination of the exchange offer. You
may retender properly withdrawn original notes by following one of the
procedures described under "The Exchange Offer -- Procedures for Tendering" at
any time on or prior to 5:00 p.m., New York City time, on the expiration date.
FEES AND EXPENSES
WE WILL BEAR THE EXPENSES OF SOLICITING TENDERS. THE PRINCIPAL SOLICITATION IS
BEING MADE BY MAIL; HOWEVER, WE MAY MAKE ADDITIONAL SOLICITATION BY FACSIMILE,
EMAIL, TELEPHONE OR IN PERSON BY OUR OFFICERS AND REGULAR EMPLOYEES AND THOSE
OF OUR AFFILIATES.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker-dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and reimburse it for its related
reasonable out-of-pocket expenses. We may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this prospectus, letters of transmittal
and related documents to the beneficial owners of the original notes and in
handling or forwarding tenders for exchange.
We will pay the cash expenses to be incurred in connection with the
exchange offer. They include:
- SEC registration fees for the exchange notes,
- fees and expenses of the exchange agent and the Trustee,
- accounting and legal fees,
- printing costs, and
- related fees and expenses.
TRANSFER TAXES
If you tender your original notes for exchange, you will not be required to
pay any transfer taxes. We will pay all transfer taxes, if any, applicable to
the exchange of original notes in the exchange offer. The tendering holder will,
however, be required to pay any transfer taxes, whether imposed on the
registered holder or any other person, if:
- certificates representing exchange notes or original notes for principal
amounts not tendered or accepted for exchange are to be delivered to, or
are to be issued in the name of, any person other than the registered
holder of the original notes tendered,
- tendered original notes are registered in the name of any person other
than the person signing the letter of transmittal, or
- a transfer tax is imposed for any reason other than the exchange of
original notes for exchange notes in the exchange offer.
If satisfactory evidence of payment of any transfer taxes payable by a
tendering holder is not submitted with the letter of transmittal, the amount of
such transfer taxes will be billed directly to that tendering holder. The
exchange agent will retain possession of exchange notes with a face amount equal
to the amount of the transfer taxes due until it receives payment of the taxes.
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CONSEQUENCES OF FAILURE TO EXCHANGE
If you do not exchange your original notes for exchange notes in the
exchange offer, you will remain subject to the existing restrictions on transfer
of the original notes. In general, you may not offer or sell the original notes
unless either they are registered under the Securities Act or the offer or sale
is exempt from or not subject to registration under the Securities Act and
applicable state securities laws. Except as required by the Registration Rights
Agreement, we do not intend to register resales of the original notes under the
Securities Act. We have no obligation to re-offer to exchange the exchange notes
for original notes following the expiration of the exchange offer.
The tender of original notes in the exchange offer will reduce the
outstanding principal amount of the original notes. Due to the corresponding
reduction in liquidity, this may have an adverse effect on, and increase the
volatility of, the market price of any original notes that you continue to hold.
OTHER
Participation in the exchange offer is voluntary, and you should carefully
consider whether to accept. You are urged to consult your financial and tax
advisors in making your decision on what action to take. In the future, we may
seek to acquire untendered original notes in open market or privately negotiated
transactions, through subsequent exchange offers or otherwise. We have no
present plan to acquire any original notes that are not tendered in the exchange
offer or to file a registration statement to permit resales of any untendered
original notes, except as required by the Registration Rights Agreement.
DESCRIPTION OF THE NOTES
You can find the definitions of certain terms used in this description
under the caption "-- Certain Definitions." In this description, the word
"Amkor" refers only to Amkor Technology, Inc. and not to any of its Subsidiaries
and the term "Notes" refers to both the original notes and the exchange notes.
Amkor will issue the exchange notes under the Indenture (the "Indenture")
between itself and U.S. Bank National Association, as trustee (the "Trustee").
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939.
The following description is a summary of the material provisions of the
Indenture. It does not restate that agreement in its entirety. We urge you to
read the Indenture because it, and not this description, defines your rights as
holders of the Notes. Copies of the Indenture are available as described below
under the caption "Available Information."
RANKING
The Notes are:
- general obligations of Amkor;
- effectively subordinated in right of payment to existing and future
secured debt, if any, including our obligations under our secured bank
facilities, to the extent of such security, and to all existing and
future debt and other liabilities of our subsidiaries, including trade
payables;
- equal in right of payment with all our existing and future unsecured
senior debt, including our 9.25% senior notes due February 15, 2008; and
- senior in right of payment to all our existing and future debt that
expressly provides that it is subordinated to the Notes, including our
10.50% senior subordinated notes due 2009, our 5.75% convertible
subordinated notes due 2006 and our 5.00% convertible subordinated notes
due 2007.
The Notes are "Designated Senior Debt" for purposes of the indentures
governing our 10.50% senior subordinated notes due 2009, our 5.75% convertible
subordinated notes due 2006 and our 5.00% convertible subordinated notes due
2007.
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Assuming we had completed the May 2003 note offering to which this exchange
offer relates, redeemed our 9.25% senior notes due 2006, closed our new senior
secured credit facility and repaid the Term B loan under our previous senior
secured credit facility with the proceeds of the new senior secured credit
facility, as if each occurred as of March 31, 2003, Amkor would have had total
senior secured debt of $170 million on that date. In addition, our subsidiaries
would have had total liabilities of approximately 272.6 million, including trade
payables but excluding intercompany obligations. The Indenture will permit us to
incur additional senior secured debt and subsidiary indebtedness.
We conduct a large portion of our operations through our Subsidiaries.
Accordingly, our ability to meet our cash obligations is dependent upon the
ability of our Subsidiaries to make cash payments to us. Payments from our
Subsidiaries are expected to be a large source of funds for payment of interest
on the Notes. The claims of creditors (including trade creditors) of any
Subsidiary will generally have priority as to the assets of such Subsidiary over
the claims of the holders of the Notes. In the event of a liquidation of any of
our Subsidiaries, our right to receive the assets of any such Subsidiary (and
the resulting right of the holders of the Notes to participate in the
distribution of the proceeds of those assets) will effectively be subordinated
by operation of law to the claims of creditors (including trade creditors) of
such Subsidiary and holders of such Subsidiary's preferred stock and any
Guarantees by such Subsidiary of Indebtedness of Amkor. If Amkor were a creditor
of such Subsidiary or a holder of its preferred stock, we would be entitled to
participate in the distribution of the proceeds of such Subsidiary's assets. Our
claims would, however, remain subordinate to any Indebtedness or preferred stock
of such Subsidiary that is senior in right of payment to the Indebtedness or
preferred stock held by us. In the event of the liquidation, bankruptcy,
reorganization, insolvency, receivership or similar proceeding or any assignment
for the benefit of our creditors or a marshaling of our assets or liabilities,
holders of the Notes may receive ratably less than other such creditors or
interest holders.
As of the date of the Indenture, all our Subsidiaries will be "Restricted
Subsidiaries." However, under the circumstances described below under the
caption "-- Certain Covenants -- Designation of Restricted and Unrestricted
Subsidiaries," we will be permitted to designate certain of our Subsidiaries as
"Unrestricted Subsidiaries." Unrestricted Subsidiaries will not be subject to
many of the restrictive covenants in the Indenture.
PRINCIPAL, MATURITY AND INTEREST
The Notes will mature on May 15, 2013.
Interest on the Notes will accrue at the rate of 7.75% per annum and will
be payable semiannually in arrears on May 15 and November 15, commencing on
November 15, 2003. Amkor will make each interest payment to the Holders of
record of the Notes on the immediately preceding May 1 and November 1.
Interest on the Notes will accrue from the date of original issuance or, if
interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
The interest rate on the Notes is subject to increase if Amkor does not
file a registration statement relating to the exchange offer on a timely basis,
if the registration statement is not declared effective on a timely basis or if
certain other conditions are not satisfied, all as further described under the
caption "Registration Rights; Liquidated Damages."
All references to interest on the Notes include any such Liquidated Damages
that may be payable. Amkor will issue Notes in denominations of $1,000 and
integral multiples of $1,000.
OPTIONAL REDEMPTION
Except as set forth below, the Notes will not be redeemable at the option
of Amkor prior to May 15, 2008. Starting on that date, Amkor may redeem all or
any portion of the Notes, at once or over time, after giving the required notice
under the Indenture. The Notes may be redeemed at the redemption prices set
forth below, plus accrued and unpaid interest and Liquidated Damages, if any, to
the redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest
23
payment date). The following prices are for Notes redeemed during the 12-month
period commencing on May 15 of the years set forth below, and are expressed as
percentages of principal amount:
REDEMPTION YEAR PRICE
--------------- -------
2008........................................................ 103.875%
2009........................................................ 102.583%
2010........................................................ 101.292%
2011 and thereafter......................................... 100.000%
REPURCHASE AT THE OPTION OF HOLDERS
OFFER TO REPURCHASE UPON CHANGE OF CONTROL
If a Change of Control occurs, each holder of the Notes will have the right
to require Amkor to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of that holder's Notes pursuant to an offer made by Amkor (the
"Change of Control Offer"). In the Change of Control Offer, Amkor will offer to
make a payment (the "Change of Control Payment" in cash equal to 101% of the
aggregate principal amount of Notes repurchased, plus accrued and unpaid
interest thereon and Liquidated Damages, if any, to the date of purchase. Within
30 days following any Change of Control, Amkor will mail a notice to each holder
of the Notes describing the transaction or transactions that constitute the
Change of Control and offering to repurchase Notes on the date specified in such
notice (the "Change of Control Payment Date"), pursuant to the procedures
required by the Indenture and described in such notice. Amkor will comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control.
On the Change of Control Payment Date, Amkor will, to the extent lawful:
(1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so tendered;
and
(3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by Amkor.
The Paying Agent will promptly mail to each holder of the Notes so tendered
the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note will be in a principal
amount of $1,000 or an integral multiple thereof.
Amkor will publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
The provisions described above that require Amkor to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether or not any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the holders of the Notes to require that Amkor
repurchase or redeem the Notes in the event of a takeover, recapitalization or
similar transaction.
Amkor will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in the
Indenture applicable to a Change of Control Offer made by Amkor and purchases
all Notes validly tendered and not withdrawn under such Change of Control Offer.
24
The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of the assets of Amkor and its Subsidiaries taken as a whole. Although there is
a limited body of case law interpreting the phrase "substantially all," there is
no precise established definition of the phrase under applicable law.
Accordingly, the ability of a holder of the Notes to require Amkor to repurchase
such Notes as a result of a sale, lease, transfer, conveyance or other
disposition of less than all the assets of Amkor and its Subsidiaries taken as a
whole to another Person or group may be uncertain.
OFFER TO REPURCHASE BY APPLICATION OF EXCESS PROCEEDS OF ASSET SALES
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale unless:
(1) Amkor (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or otherwise
disposed of;
(2) such fair market value is determined by the Board of Directors;
and
(3) at least 75% of the consideration therefor received by Amkor or
such Restricted Subsidiary is in the form of cash or other Qualified
Proceeds.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
Amkor may apply such Net Proceeds at its option:
(1) to repay Permitted Bank Debt, and if such Permitted Bank Debt is
revolving debt, to effect a corresponding commitment reduction thereunder;
(2) to acquire all or substantially all the assets of, or a majority
of the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure; or
(4) to acquire any other long-term assets that are used or useful in a
Permitted Business.
Pending the final application of any such Net Proceeds, Amkor may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture.
Any Net Proceeds from any Asset Sale that are not applied or invested as
provided in the preceding paragraph within 365 days of such Asset Sale will
constitute "Excess Proceeds". When the aggregate amount of Excess Proceeds
exceeds $10 million, Amkor will make an offer (the "Asset Sale Offer") to all
holders of the Notes and all holders of other Indebtedness that is pari passu
with the Notes containing provisions similar to those set forth in the Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets to purchase the maximum principal amount of Notes and such other pari
passu Indebtedness that may be purchased out of the Excess Proceeds. The offer
price in any Asset Sale Offer will be equal to 100% of principal amount plus
accrued and unpaid interest, if any, to the date of purchase, and will be
payable in cash. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, Amkor may use such Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and such
other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and such other
pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of
each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
25
CERTAIN COVENANTS
RESTRICTED PAYMENTS
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of Amkor's or any of its Restricted Subsidiaries'
Equity Interests (including, without limitation, any payment in connection
with any merger or consolidation involving Amkor or any of its Restricted
Subsidiaries) or to the direct or indirect holders of Amkor's or any of its
Restricted Subsidiaries' Equity Interests in their capacity as such (other
than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of Amkor or to Amkor or a Restricted Subsidiary of
Amkor);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving Amkor) any Equity Interests of Amkor or any direct
or indirect parent of Amkor or any Restricted Subsidiary of Amkor (other
than any such Equity Interests owned by Amkor or any Restricted Subsidiary
of Amkor);
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes, except a payment of interest or principal at the
Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other
actions set forth in clauses (1) through (4) above being collectively
referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(2) Amkor would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Interest Expense Coverage Ratio test set forth in the first
paragraph of the covenant described below under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock";
and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by Amkor and its Restricted Subsidiaries
after the Issue Date (excluding Restricted Payments permitted by clauses
(2), (3), (4), (7) and (9) of the next succeeding paragraph), is less than
the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of Amkor for the period
(taken as one accounting period) from the beginning of the fiscal
quarter commencing on April 1, 2003 to the end of Amkor's most recently
ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus
(b) 100% of the aggregate net cash proceeds received by Amkor since
the Issue Date as a contribution to its common equity capital or from
the issue or sale of Equity Interests of Amkor (other than Disqualified
Stock) (other than Equity Interests (or Disqualified Stock or debt
securities) sold to a Subsidiary of Amkor), plus
(c) to the extent that any Restricted Investment that was made
after the Issue Date is sold for cash or otherwise liquidated or repaid
for cash, the lesser of (i) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and
(ii) the initial amount of such Restricted Investment, plus
(d) the amount by which (i) Indebtedness (other than Disqualified
Stock) of Amkor or any Restricted Subsidiary issued after the Issue Date
is reduced on Amkor's consolidated balance sheet (if prepared in
accordance with GAAP as of the date of determination) and (ii)
Disqualified Stock
26
of Amkor issued after the Issue Date (held by any Person other than any
Restricted Subsidiary) is reduced (measured with reference to its
redemption or repurchase price), in each case, as a result of the
conversion or exchange of any such Indebtedness or Disqualified Stock
into Equity Interests (other than Disqualified Stock) of Amkor, less, in
each case, any cash distributed by Amkor upon such conversion or
exchange, plus
(e) to the extent that any Investment in any Unrestricted
Subsidiary that was made after the Issue Date is sold for cash or
otherwise liquidated, repaid for cash or such Unrestricted Subsidiary is
converted into a Restricted Subsidiary, the lesser of (i) an amount
equal to the sum of (A) the net reduction in Investments in Unrestricted
Subsidiaries resulting from dividends, repayments of loans or advances
or other transfers of assets, in each case to Amkor or any Restricted
Subsidiary from Unrestricted Subsidiaries, and (B) the fair market value
of the net assets of an Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary, and (ii)
the remaining amount of the Investment in such Unrestricted Subsidiary
which has not been repaid or converted into cash or assets.
The preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration no Default has occurred
and is continuing or would be caused thereby and such payment would have
complied with the provisions of the Indenture;
(2) the making of any payment on or with respect to, or in connection
with, the redemption, repurchase, retirement, defeasance or other
acquisition of, any Indebtedness of Amkor or any Restricted Subsidiary that
is subordinated to the Notes or of any Equity Interests of Amkor or any
Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary of Amkor) of,
Equity Interests (other than Disqualified Stock) of Amkor or any
subordinated Indebtedness of Amkor; provided that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause
(3)(b) of the preceding paragraph;
(3) the making of any payment on or with respect to, or in connection
with, the defeasance, redemption, repurchase or other acquisition of
Indebtedness of Amkor or any Restricted Subsidiary that is subordinated to
the Notes with the net cash proceeds from the incurrence of Permitted
Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of Amkor to
the holders of its common Capital Stock on a pro rata basis;
(5) so long as no Default has occurred and is continuing or would be
caused thereby, the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of Amkor or any Restricted
Subsidiary of Amkor held by any employee of Amkor or any Restricted
Subsidiary pursuant to any employee equity subscription agreement, stock
ownership plan or stock option agreement in effect from time to time;
provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $2 million in any
twelve-month period and $10 million in the aggregate;
(6) the making of any payment on or with respect to, or repurchase,
redemption, defeasance or other acquisition or retirement for value of the
5.75% subordinated convertible notes due 2006 or the 5% subordinated
convertible notes due 2007 in connection with (i) so long as no Event of
Default has occurred and is continuing or would be caused thereby, an
optional redemption of such convertible notes on or after the dates such
notes become redeemable, or (ii) the honoring by Amkor of any conversion
request into Capital Stock (other than Disqualified Stock) by a holder of
either such convertible notes or any future convertible notes of Amkor
(including the payment by Amkor of any cash in lieu of fractional shares)
in accordance with their terms;
27
(7) that portion of Investments the payment for which consists
exclusively of Equity Interests (other than Disqualified Stock) of Amkor;
(8) so long as no Default has occurred and is continuing or would be
caused thereby, other Restricted Payments in an aggregate amount not to
exceed $25 million;
(9) the repurchase of Equity Interests of Amkor that may be deemed to
occur upon the exercise of stock options if such Equity Interests represent
a portion of the exercise price thereof;
(10) any payments to one or more stockholders of Amkor in connection
with settling stockholder obligations for income taxes in respect of tax
periods ending prior to the conversion of Amkor from "S" corporation status
to "C" corporation status;
(11) in the case of an Asset Sale, any Asset Sale Offer after Amkor
has complied with its obligations to the holders of the Notes under the
"Asset Sale" covenant contained in the Indenture; and
(12) in the case of a Change of Control, any Change of Control Offer
to repurchase the senior subordinated notes after Amkor has complied with
its obligations to the holders of the Notes under the "Change of Control"
covenant contained in the Indenture.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the assets or securities
proposed to be transferred or issued by Amkor or such Restricted Subsidiary, as
the case may be, pursuant to the Restricted Payment. The fair market value of
any assets or securities that are required to be valued by this covenant with a
fair market value in excess of $1 million but less than $5 million shall be
evidenced by an Officer's Certificate which shall be delivered to the Trustee.
The fair market value of any assets or securities that are required to be valued
by this covenant with a fair market value in excess of $5 million shall be
determined by the Board of Directors whose resolution with respect thereto shall
be delivered to the Trustee.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and Amkor
will not issue any Disqualified Stock and will not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock; provided, however, that
Amkor and any Restricted Subsidiary that is a Guarantor may incur Indebtedness
(including Acquired Debt), and Amkor may issue Disqualified Stock, and any
Restricted Subsidiary that is a Guarantor may issue preferred stock, if the
Consolidated Interest Expense Coverage Ratio for Amkor's most recently ended
four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock or preferred stock is issued would have been at least
2.5 to 1, determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Stock or preferred stock had been issued, as the
case may be, at the beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by Amkor and any Restricted Subsidiary of any
Permitted Bank Debt; provided that the aggregate principal amount of all
Permitted Bank Debt at any one time outstanding shall not exceed $100
million plus 85% of the consolidated accounts receivable of Amkor plus 50%
of the consolidated inventory of Amkor;
(2) the incurrence by Amkor and its Subsidiaries of Existing
Indebtedness;
(3) the incurrence by Amkor and any Guarantor of Indebtedness
represented by the Notes, and any Subsidiary Guarantees;
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(4) the incurrence by Amkor or any of its Restricted Subsidiaries of
(a) Indebtedness incurred for the purpose of financing all or any part of
the purchase price or cost of construction or improvement of property,
plant or equipment used in the business of Amkor or such Restricted
Subsidiary and (b) Capital Lease Obligations, in an aggregate amount at any
time outstanding, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to this
clause (4), not to exceed 10% of Amkor's Consolidated Net Assets;
(5) the incurrence by Amkor or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace Indebtedness (other than
intercompany Indebtedness) that was permitted by the Indenture to be
incurred under the first paragraph of this covenant or clause (2), (3),
(5), (13) or (14) of this paragraph;
(6) the incurrence by Amkor or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among Amkor and any of its Restricted
Subsidiaries; provided, however, that:
(a) if Amkor or any Guarantor is the obligor on such Indebtedness
and such Indebtedness is in favor of a Restricted Subsidiary other than
a Wholly Owned Restricted Subsidiary, such Indebtedness must be
expressly subordinated to the prior payment in full in cash of all
Obligations with respect to the Notes, in the case of Amkor, or the
Subsidiary Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other than
Amkor or a Wholly Owned Restricted Subsidiary thereof and (ii) any sale
or other transfer of any such Indebtedness to a Person that is not
either Amkor or a Wholly Owned Restricted Subsidiary thereof shall be
deemed, in each case, to constitute an incurrence of such Indebtedness
by Amkor or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (6);
(7) the incurrence by Amkor or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate, commodity or currency risk in the ordinary course of
business for bona fide hedging purposes; provided that the notional
principal amount of any such Hedging Obligation with respect to interest
rates does not exceed the amount of Indebtedness or other liability to
which such Hedging Obligation relates;
(8) the Guarantee by Amkor or any of the Guarantors of Indebtedness of
Amkor or a Restricted Subsidiary of Amkor that was permitted to be incurred
by another provision of this covenant;
(9) the incurrence by Amkor's Unrestricted Subsidiaries of
Non-Recourse Debt; provided, however, that if any such Indebtedness ceases
to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of Amkor that was not permitted by this clause (9);
(10) the incurrence of Indebtedness solely in respect of performance,
surety and similar bonds or completion or performance Guarantees, to the
extent that such incurrence does not result in the incurrence of any
obligation for the payment of borrowed money to others;
(11) the incurrence of Indebtedness arising from the agreements of
Amkor or a Restricted Subsidiary of Amkor providing for indemnification,
adjustment of purchase price or similar obligations, in each case, incurred
or assumed in connection with the disposition of any business, assets or a
Subsidiary; provided, however, that:
(a) such Indebtedness is not reflected as a liability on the
balance sheet of Amkor or any Restricted Subsidiary of Amkor; and
(b) the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds, including
non-cash proceeds (the fair market value of such non-cash proceeds being
measured at the time received and without giving effect to any
subsequent changes in
29
value), actually received by Amkor and its Restricted Subsidiaries in
connection with such disposition;
(12) the accrual of interest, accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends
on Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock; provided, in each such case, that the amount thereof is
included in Consolidated Interest Expense of Amkor as accrued;
(13) the incurrence of Indebtedness by Foreign Subsidiaries in an
amount not to exceed 10% of the Total Tangible Assets of the Foreign
Subsidiaries, taken as a whole; and
(14) the incurrence by Amkor or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (14), not to exceed $25
million.
Indebtedness or preferred stock of any Person that is outstanding at the
time such Person becomes a Restricted Subsidiary of Amkor (including upon
designation of any Subsidiary or other Person as a Restricted Subsidiary) or is
merged with or into or consolidated with Amkor or a Restricted Subsidiary of
Amkor shall be deemed to have been incurred at the time such Person becomes such
a Restricted Subsidiary of Amkor or is merged with or into or consolidated with
Amkor or a Restricted Subsidiary of Amkor, as applicable.
Amkor will not incur any Indebtedness (including Permitted Debt) that is
contractually subordinated in right of payment to any other Indebtedness of
Amkor unless such Indebtedness is also contractually subordinated in right of
payment to the Notes on substantially identical terms; provided, however, that
no Indebtedness of Amkor shall be deemed to be contractually subordinated in
right of payment to any other Indebtedness of Amkor solely by virtue of any
Liens, Guarantees, maturity of payments or structural seniority.
For purposes of determining compliance with this "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, in the event that an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (14) above, or is
entitled to be incurred pursuant to the first paragraph of this covenant, Amkor
will, at its sole discretion, classify or reclassify such item of Indebtedness
(or any part thereof) in any manner that complies with this covenant, and such
item of Indebtedness shall be treated as having been incurred pursuant to only
one of such clauses or pursuant to the first paragraph of this covenant.
For purposes of determining any particular amount of Indebtedness under
this covenant, Guarantees, Liens or obligations in support of letters of credit
supporting Indebtedness shall not be included to the extent such letters of
credit are included in the amount of such Indebtedness.
Any increase in the amount of any Indebtedness solely by reason of currency
fluctuations shall not be considered an incurrence of Indebtedness for purposes
of this covenant.
LIENS
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien of any
kind securing Indebtedness on any asset now owned or hereafter acquired, except
Permitted Liens, unless the Notes are equally and ratably secured with the
obligations so secured for as long as such Indebtedness will be so secured.
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DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or permit to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
to Amkor or any of Amkor's Restricted Subsidiaries, or with respect to any
other interest or participation in, or measured by, its profits, or pay any
indebtedness owed to Amkor or any of Amkor's Restricted Subsidiaries;
(2) make loans or advances to Amkor or any of Amkor's Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to Amkor or any of
Amkor's Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date of the Indenture
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof; provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such Existing Indebtedness, as
in effect on the date of the Indenture;
(2) the Indenture and the Notes;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by Amkor or any of its Restricted Subsidiaries as in effect at the
time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the Indenture
to be incurred;
(5) customary nonassignment provisions in leases, licenses or other
contracts entered into in the ordinary course of business and consistent
with past practices;
(6) purchase money obligations or Capital Lease Obligations for
property acquired in the ordinary course of business that impose
restrictions on the property so acquired of the nature described in clause
(3) of the first paragraph of this section;
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts dividends, distributions, loans, advances or
transfers by such Restricted Subsidiary pending its sale or other
disposition;
(8) Permitted Refinancing Indebtedness; provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced;
(9) agreements entered into with respect to Liens securing
Indebtedness otherwise permitted to be incurred pursuant to the provisions
of the covenant described above under the caption "-- Certain
Covenants -- Liens" that limit the right of Amkor or any of its Restricted
Subsidiaries to dispose of the assets subject to such Lien;
(10) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business;
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
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(12) any Receivables Program; and
(13) any restriction imposed pursuant to contracts for the sale of
assets with respect to the transfer of the assets to be sold pursuant to
such contract.
MERGER, CONSOLIDATION OR SALE OF ASSETS
Amkor may not, directly or indirectly consolidate or merge with or into
another Person (whether or not Amkor is the surviving corporation) or sell,
assign, transfer, convey or otherwise dispose of all or substantially all of its
properties or assets, in one or more related transactions, to another Person,
unless:
(1) either (a) Amkor is the surviving corporation or (b) the Person
formed by or surviving any such consolidation or merger (if other than
Amkor) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(2) the Person formed by or surviving any such consolidation or merger
(if other than Amkor) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all
the obligations of Amkor under the Notes, the Indenture and the
Registration Rights Agreement pursuant to agreements reasonably
satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default
exists;
(4) except in the case of the amalgamation, consolidation or merger of
Amkor (a) with or into a Wholly Owned Restricted Subsidiary or (b) with or
into any Person solely for the purpose of effecting a change in the state
of incorporation of Amkor, Amkor or the Person formed by or surviving any
such consolidation or merger (if other than Amkor) will, on the date of
such transaction after giving pro forma effect thereto and any related
financing transactions as if the same had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Consolidated Interest Expense
Coverage Ratio test set forth in the first paragraph of the covenant
described above under the caption "-- Certain Covenants -- Incurrence of
Indebtedness and Issuance of Preferred Stock"; and
(5) Amkor shall have delivered to the Trustee an Officer's Certificate
stating that such consolidation, merger, sale, assignment, transfer,
conveyance or other disposition complies with the Indenture.
In addition, Amkor may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This "Merger, Consolidation or Sale of
Assets" covenant will not apply to a sale, assignment, transfer, conveyance or
other disposition of assets by Amkor to any of its Wholly Owned Restricted
Subsidiaries.
TRANSACTIONS WITH AFFILIATES
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or Guarantee with, or for the benefit of, any Affiliate (each, an
"Affiliate Transaction"), unless:
(1) such Affiliate Transaction (when viewed together with related
Affiliate Transactions, if any) is on terms that are no less favorable to
Amkor or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by Amkor or such Restricted Subsidiary
with an unrelated Person; and
(2) Amkor delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$10 million, a resolution of the Board of Directors set forth in an
Officer's Certificate certifying that such Affiliate Transaction
complies with this covenant and that
32
such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors (of which there must be
at least one); and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$25 million, an opinion as to the fairness to the holders of such
Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing;
provided that (i) Amkor and its Restricted Subsidiaries may enter into Affiliate
Transactions pursuant to the Supply Agreement, the Foundry Agreement, the Asset
Purchase Agreement, the Transition Services Agreement and the Intellectual
Property Rights Licensing Agreement, and may amend, modify and supplement such
agreements from time to time, so long as Amkor shall have determined that any
such amendment, modification or supplement will not have a material adverse
economic effect on Amkor and its Subsidiaries, taken as a whole, and (ii) Amkor
and its Restricted Subsidiaries may only enter into transactions pursuant to the
Supply Agreement, the Foundry Agreement, the Asset Purchase Agreement, the
Transition Services Agreement and the Intellectual Property Rights Licensing
Agreement, and amend, modify and supplement such agreements from time to time,
in circumstances in which clause (i) is not applicable, if a majority of the
disinterested members of the Board of Directors (of which there must be at least
one) shall have approved such transaction, amendment, modification or
supplement; provided, further, that in the case of both clauses (i) and (ii),
Amkor shall deliver to the Trustee within 30 days of such transaction,
amendment, modification or supplement an Officer's Certificate (A) describing
the transaction, amendment, modification or supplement approved, (B) in the case
of transactions, amendments, modifications and supplements to which clause (i)
is applicable, setting forth the determination of Amkor required pursuant to
clause (i), and (C) in the case of transactions, amendments, modifications and
supplements to which clause (ii) is applicable, attaching a resolution of the
Board of Directors certifying that such Affiliate Transaction complies with this
covenant.
The following items shall not be deemed Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraphs:
(1) any employment agreement or arrangement entered into by Amkor or
any of its Restricted Subsidiaries or any employee benefit plan available
to employees of Amkor and its Subsidiaries generally, in each case in the
ordinary course of business and consistent with the past practice of Amkor
or such Restricted Subsidiary;
(2) Affiliate Transactions between or among Amkor and/or its
Restricted Subsidiaries;
(3) payment of reasonable directors' fees to Persons who are not
otherwise Affiliates of Amkor and indemnity provided on behalf of officers,
directors and employees of Amkor or any of its Restricted Subsidiaries as
determined in good faith by the Board of Directors of Amkor;
(4) Any Affiliate Transactions pursuant to which Amkor makes
short-term advances or otherwise makes short-term loans to ASI, which
advances or loans are to be repaid by ASI (i) within three months from the
date of such advance or loan and (ii) by offsets by Amkor of amounts
payable by Amkor to ASI pursuant to the Supply Agreement, if a majority of
the disinterested members of the Board of Directors (of which there must be
at least one) shall have approved such transaction, amendment, modification
or supplement; provided that the total amount of such advances and loans
outstanding at any one time shall not exceed $50 million; and
(5) Any Restricted Payments that are permitted as described above
under the caption "-- Certain Covenants -- Restricted Payments."
For purposes of this "Transactions With Affiliates" covenant, any
transaction or series of related Affiliate Transactions between Amkor or any
Restricted Subsidiary and an Affiliate that is approved by a majority of the
disinterested members of the Board of Directors (of which there must be at least
one to utilize this method of approval) and evidenced by a Board resolution or
for which a fairness opinion has been issued shall be deemed to be on terms that
are no less favorable to Amkor or the relevant Restricted Subsidiary than those
33
that would have been obtained in a comparable transaction by Amkor or such
Restricted Subsidiary with an unrelated Person and thus shall be permitted under
this "Transactions With Affiliates" covenant.
SALE AND LEASEBACK TRANSACTIONS
Amkor will not, and will not permit any of its Subsidiaries to, enter into
any sale and leaseback transaction; provided that Amkor or any Restricted
Subsidiary may enter into a sale and leaseback transaction if:
(1) Amkor or such Restricted Subsidiary, as applicable, could have
incurred Indebtedness in an amount equal to the Attributable Debt relating
to such sale and leaseback transaction (if the lease is in the nature of an
operating lease, otherwise the amount of Indebtedness) under the
Consolidated Interest Expense Coverage Ratio test in the first paragraph of
the covenant described above under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock";
and
(2) the transfer of assets in that sale and leaseback transaction is
permitted by, and Amkor applies the proceeds of such transaction in
compliance with, the covenant described above under the caption "--
Repurchase at the Option of Holders -- Offer to Repurchase by Application
of Excess Proceeds of Asset Sales."
The foregoing restriction shall not apply to any sale and leaseback
transaction if (i) the transaction is solely between Amkor and any Restricted
Subsidiary or between Restricted Subsidiaries or (ii) the sale and leaseback
transaction is consummated within 180 days after the purchase of the assets
subject to such transaction.
NO AMENDMENT TO SUBORDINATION PROVISIONS
Without the consent of the holders of at least a majority in aggregate
principal amount of the Notes then outstanding, Amkor will not amend, modify or
alter the indenture governing the 10.50% senior subordinated notes due 2009 in
any way to:
(1) increase the rate of or change the time for payment of interest on
any 10.50% senior subordinated notes due 2009;
(2) increase the principal of, advance the final maturity date of or
shorten the Weighted Average Life to Maturity of any 10.50% senior
subordinated notes due 2009;
(3) alter the redemption provisions or the price or terms at which
Amkor is required to offer to purchase any 10.50% senior subordinated notes
due 2009; or
(4) amend the subordinated provisions of Article 10 contained in the
indenture governing the 10.50% senior subordinated notes due 2009.
SUBSIDIARY GUARANTEES
If Amkor or any of its Restricted Subsidiaries acquires, creates or
capitalizes a Domestic Subsidiary after the date of the Indenture that is a
Significant Subsidiary, then that newly acquired, created or capitalized
Subsidiary must become a Guarantor and execute a supplemental indenture
satisfactory to the Trustee and deliver an opinion of counsel to the Trustee
within 10 business days of the date on which it was acquired or created.
DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, all
outstanding Investments owned by Amkor and its Restricted Subsidiaries in the
Subsidiary so designated will be deemed to be an Investment made as of the time
of such designation and will reduce the amount available for Restricted Payments
under the covenant described above under the caption "-- Certain
34
Covenants -- Restricted Payments" or Permitted Investments, as applicable. All
such outstanding Investments will be valued at their fair market value at the
time of such designation. That designation will only be permitted if such
Restricted Payment would be permitted at that time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The
Board of Directors may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if the redesignation would not cause a Default.
LIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN WHOLLY OWNED
RESTRICTED SUBSIDIARIES
Amkor will not, and will not permit any of its Wholly Owned Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Wholly Owned Restricted Subsidiary of Amkor to any
Person (other than Amkor or a Wholly Owned Restricted Subsidiary of Amkor),
unless:
(1) such transfer, conveyance, sale, lease or other disposition is of
all the Equity Interests in such Wholly Owned Restricted Subsidiary or
immediately following such transfer, conveyance, sale, lease or other
disposition, the Wholly Owned Restricted Subsidiary is a Restricted
Subsidiary; and
(2) the cash Net Proceeds from such transfer, conveyance, sale, lease
or other disposition are applied in accordance with the covenant described
above under the caption "-- Repurchase at the Option of Holders -- Offer to
Repurchase by Application of Excess Proceeds of Asset Sales."
In addition, Amkor will not permit any Wholly Owned Restricted Subsidiary
of Amkor to issue any of its Equity Interests (other than, if necessary, shares
of its Capital Stock constituting directors' qualifying shares) to any Person
other than to Amkor or a Wholly Owned Restricted Subsidiary of Amkor unless
immediately following such issuance the Wholly Owned Restricted Subsidiary is a
Restricted Subsidiary.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
If a holder has given wire transfer instructions to Amkor, Amkor will make
all principal, premium and interest payments on those Notes in accordance with
those instructions. All other payments on the Notes will be made at the office
or agency of the Paying Agent and Registrar within the City and State of New
York unless Amkor elects to make interest payments by check mailed to the
holders at their addresses set forth in the register of holders.
PAYING AGENT AND REGISTRAR FOR THE NOTES
The Trustee will initially act as Paying Agent and Registrar. Amkor may
change the Paying Agent or Registrar without prior notice to the holders of the
Notes, and Amkor or any of its Subsidiaries may act as Paying Agent or
Registrar.
TRANSFER AND EXCHANGE
A holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee may require a holder, among other things, to
furnish appropriate endorsements and transfer documents and Amkor may require a
holder to pay any taxes and fees required by law or permitted by the Indenture.
The registered holder of a Note will be treated as its owner for all
purposes.
PAYMENTS FOR CONSENT
Amkor will not, and will not permit any of its Subsidiaries to, directly or
indirectly, pay or cause to be paid any consideration to or for the benefit of
any holder of the Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of the Indenture or the Notes unless
such consideration is offered to be paid and is paid to all holders of the Notes
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
35
REPORTS
Whether or not required by the SEC, so long as any Notes are outstanding,
Amkor shall file with the SEC (if permitted) all the reports and other
information as it would be required to file with the SEC by Sections 13(a) and
15(d) under the Exchange Act, as if it were subject thereto. Amkor shall supply
the Trustee and each holder of the Notes, or shall supply to the Trustee for
forwarding to each holder of the Notes, without cost to any such holder, copies
of such reports and other information (whether or not so filed).
EVENTS OF DEFAULT AND REMEDIES
With respect to the Notes, each of the following is an "Event of Default":
(1) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes;
(2) default in payment when due of the principal of or premium, if
any, on the Notes;
(3) failure by Amkor or any of its Subsidiaries to make any payment
required to be made under the provisions described above under the caption
"-- Repurchase at the Option of Holders -- Offer to Repurchase Upon Change
of Control" or "-- Repurchase at the Option of Holders -- Offer to
Repurchase by Application of Excess Proceeds of Asset Sales;"
(4) failure by Amkor or any of its Restricted Subsidiaries for 60 days
after notice to comply with any covenant, representations, warranty or
other agreements in the Indenture is provided to Amkor by the Trustee or
the holders of at least 25% in principal amount of then outstanding Notes;
(5) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by Amkor or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by Amkor or any of its
Restricted Subsidiaries) whether such Indebtedness or Guarantee now exists,
or is created after the date of the Indenture, in an aggregate principal
amount of $10 million or more, if that default:
(a) is caused by a failure to pay principal of such Indebtedness at
the Stated Maturity thereof (a "Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to the
Stated Maturity thereof;
(6) failure by Amkor or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken together, would constitute a Significant
Subsidiary, to pay final judgments aggregating in excess of $10 million
(other than amounts covered by insurance), which judgments are not paid,
discharged or stayed for a period of 60 days; and
(7) certain events of bankruptcy or insolvency with respect to Amkor
or any of its Significant Subsidiaries, or any group of Subsidiaries that,
taken together, would constitute a Significant Subsidiary.
In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to Amkor, any Subsidiary that is a
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee or the holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately.
Holders of the Notes may not enforce their respective indentures or the
Notes except as provided in the Indenture. Subject to certain limitations,
holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest.
The holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the holders of all of the
Notes waive any existing Default or Event of Default and its
36
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Notes.
Amkor is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture. Upon becoming aware of any Default or Event of
Default, Amkor is required to deliver to the Trustee a statement specifying such
Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of Amkor or any
Guarantor, as such, shall have any liability for any obligations of Amkor or the
Guarantors under the Notes, the Indenture, the Subsidiary Guarantees or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each holder of the Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes. The waiver may not be effective to waive liabilities
under the federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Amkor may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes and all obligations
of the Guarantors discharged with respect to their Subsidiary Guarantees ("Legal
Defeasance"), except for:
(1) the rights of holders of outstanding Notes to receive payments in
respect of the principal of, premium, if any, and interest and Liquidated
Damages on such Notes when such payments are due from the trust referred to
below;
(2) Amkor's obligations with respect to the Notes concerning issuing
temporary Notes, registration of Notes, mutilated, destroyed, lost or
stolen Notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee,
and Amkor's obligations in connection therewith; and
(4) the Legal Defeasance provisions of the Indenture.
In addition, Amkor may, at its option and at any time, elect to have the
Obligations of Amkor and the Guarantors released with respect to certain
covenants that are described in the Indenture ("Covenant Defeasance"), and
thereafter any omission to comply with those covenants shall not constitute a
Default or Event of Default with respect to the Notes. In the event Covenant
Defeasance occurs, certain events (other than nonpayment, bankruptcy,
receivership, rehabilitation and insolvency events) described under the caption
"-- Events of Default and Remedies" will no longer constitute an Event of
Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) Amkor must irrevocably deposit with the Trustee, in trust, for the
benefit of the holders of the Notes, cash in United States dollars,
noncallable government securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium
and Liquidated Damages, if any, and interest and Liquidated Damages on the
outstanding Notes at the Stated Maturity or on the applicable redemption
date, as the case may be, and Amkor must specify whether the Notes are
being defeased to maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, Amkor shall have delivered to the
Trustee an opinion of counsel reasonably acceptable to the Trustee
confirming that (a) Amkor has received from, or there has been published
by, the Internal Revenue Service a ruling or (b) since the date of the
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be
37
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal Defeasance had
not occurred;
(3) in the case of Covenant Defeasance, Amkor shall have delivered to
the Trustee an opinion of counsel reasonably acceptable to the Trustee
confirming that the holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing either (a) on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to
such deposit) or (b) insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the
91st day after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the Indenture) to which Amkor or any of
its Restricted Subsidiaries are parties or by which Amkor or any of its
Restricted Subsidiaries are bound;
(6) Amkor must have delivered to the Trustee an opinion of counsel to
the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(7) Amkor must deliver to the Trustee an Officer's Certificate stating
that the deposit was not made by Amkor with the intent of preferring the
holders of the Notes over the other creditors of Amkor with the intent of
defeating, hindering, delaying or defrauding creditors of Amkor or others;
(8) Amkor must deliver to the Trustee an Officer's Certificate and an
opinion of counsel, each stating that all conditions precedent relating to
the Legal Defeasance or the Covenant Defeasance have been complied with;
and
(9) except as otherwise provided in the Indenture, each Guarantor
shall have been released from any of its Obligations under its Guarantee of
the Notes.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject to the exceptions specified in the following paragraphs, the
Indenture may be amended with the consent of the holders of a majority of the
aggregate outstanding principal amount of the Notes and any Default or
compliance with any provision of the Indenture may be waived with the consent of
the holders of a majority of the aggregate outstanding principal amount of the
Notes.
Without the consent of each holder affected, an amendment or waiver may not
(with respect to any Notes held by a nonconsenting holder):
(1) reduce the principal amount of Notes whose holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other
than provisions relating to the covenants described above under the caption
"-- Repurchase at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the Payment Default
that resulted from such acceleration);
(5) make any Note payable in money other than that stated in the
Notes;
38
(6) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of holders of the Notes to receive
payments of principal of or premium, if any, or interest on the Notes;
(7) waive a payment required by one of the covenants described above
under the caption "-- Repurchase at the Option of Holders;" or
(8) make any change in the preceding amendment and waiver provisions.
Notwithstanding the preceding, without the consent of any holder of the
Notes, Amkor and the Trustee may amend or supplement the Indenture or the Notes
to:
(1) cure any ambiguity, defect or inconsistency;
(2) provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) provide for the assumption of Amkor's obligations to holders of
the Notes in the case of a merger or consolidation or sale of all or
substantially all of Amkor's assets;
(4) make any change that would provide any additional rights or
benefits to the holders of Notes or that does not adversely affect the
legal rights under the Indenture of any such holder; or
(5) comply with requirements of the SEC in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act of 1939.
CONCERNING THE TRUSTEE
If the Trustee becomes a creditor of Amkor or any Guarantor, the Indenture
limits its right to obtain payment of claims in certain cases, or to realize on
certain property received in respect of any such claim as security or otherwise.
Such Trustee will be permitted to engage in other transactions, but if it
acquires any conflicting interest, it must eliminate such conflict within 90
days, apply to the SEC for permission to continue or resign.
The holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur and be continuing, the Trustee will be required, in the exercise of
its power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
holder of the Notes, unless such holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
AVAILABLE INFORMATION
Anyone who receives this prospectus may obtain a copy of the Indenture and
Registration Rights Agreement without charge by writing to Amkor Technology,
Inc., 1345 Enterprise Drive, West Chester, Pennsylvania 19380, Attention:
Secretary.
GOVERNING LAW
The Indenture provides that it and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to applicable principles of conflicts of laws to the extent that the
application of the law of another jurisdiction would be required thereby.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
We and the initial purchasers have entered into the Registration Rights
Agreement on or prior to May 8, 2003. Pursuant to the Registration Rights
Agreement, we agreed to use commercially reasonable efforts to file with the SEC
the exchange offer registration statement on the appropriate form under the
Securities Act with respect to the exchange notes. Pursuant to the exchange
offer registration statement of which this prospectus is
39
a part, we are offering to the holders of Transfer Restricted Securities
pursuant to the exchange offer who are able to make certain representations the
opportunity to exchange their Transfer Restricted Securities for exchange notes.
If (1) the exchange offer is not permitted by applicable law or SEC policy
or (2) any holder of Notes that are Transfer Restricted Securities notifies us
prior to the 20th business day following the consummation of the exchange offer
that (a) it is prohibited by law or SEC policy from participating in the
exchange offer, (b) it may not resell the exchange notes acquired by it in the
exchange offer to the public without delivering a prospectus, and the prospectus
contained in the exchange offer Registration Statement is not appropriate or
available for such resales by it, or (c) it is a broker-dealer and holds Notes
acquired directly from us or any of our Affiliates, we will file with the SEC a
Shelf Registration Statement to register for public resale the Transfer
Restricted Securities held by any such holder who provides us with certain
information for inclusion in the Shelf Registration Statement.
For the purposes of the Registration Rights Agreement, "Transfer Restricted
Securities" means each Note until:
(1) the date on which such Note has been exchanged by a Person other
than a broker-dealer for an exchange note in the exchange offer;
(2) following the exchange by a broker-dealer in the exchange offer of
a Note for an exchange note, the date on which such exchange note is sold
to a purchaser who receives from such broker-dealer on or prior to the date
of such sale a copy of the prospectus contained in the exchange offer
Registration Statement;
(3) the date on which such Note has been effectively registered under
the Securities Act and disposed of in accordance with the Shelf
Registration Statement; or
(4) the date on which such Note is distributed to the public pursuant
to Rule 144 under the Securities Act.
The Registration Rights Agreement will provide that:
(1) we will use commercially reasonable efforts to file an exchange
offer Registration Statement with the SEC on or prior to September 6, 2003;
(2) we will use commercially reasonable efforts to have the exchange
offer Registration Statement declared effective by the SEC on or prior to
December 5, 2003;
(3) unless the exchange offer would not be permitted by applicable law
or SEC policy, we will:
(a) commence the exchange offer and
(b) use commercially reasonable efforts to issue on or prior to 30
business days, or longer, if required by the federal securities laws,
after the date on which the exchange offer Registration Statement was
declared effective by the SEC, exchange notes in exchange for all Notes
tendered prior thereto in the exchange offer; and
(4) if obligated to file the Shelf Registration Statement, we will use
commercially reasonable efforts to file the Shelf Registration Statement
with the SEC on or prior to 60 days after such filing obligation arises and
to cause the Shelf Registration to be declared effective by the SEC on or
prior to 120 days after such obligation arises.
If:
(1) we fail to file any of the registration statements required by the
Registration Rights Agreement on or before the date specified for such
filing; or
(2) any of such registration statement is not declared effective by
the SEC on or prior to the date specified for such effectiveness (the
"Effectiveness Target Date"); or
40
(3) we fail to consummate the exchange offer within 30 business days
of the Effectiveness Target Date with respect to the exchange offer
Registration Statement; or
(4) the Shelf Registration Statement or the exchange offer
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted
Securities during the periods specified in the Registration Rights
Agreement (each such event referred to in clauses (1) through (4) above, a
"Registration Default"),
then we will pay Liquidated Damages to each holder of the Notes, with respect to
the first 90-day period immediately following the occurrence of the first
Registration Default, at a rate equal to 0.25% per annum in principal amount of
Transfer Restricted Securities held by such holder for each week or portion
thereof. The rate of such Liquidated Damages will increase by 0.25% per annum
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of Liquidated Damages for all
Registration Defaults of 1.00% per annum. If, after the cure of all Registration
Defaults then in effect, there is a subsequent Registration Default, the rate of
Liquidated Damages for such subsequent Registration Default shall initially be
0.25%, regardless of the Liquidated Damages rate in effect with respect to any
prior Registration Default at the time of the cure of such Registration Default.
All accrued Liquidated Damages will be paid by us on each interest payment
date to the holder of the global securities (as defined below) by wire transfer
of immediately available funds or by federal funds check and to holders of
certificated securities (as defined below) by wire transfer to the accounts
specified by them or by mailing checks to their registered addresses if no such
accounts have been specified.
Holders of the Notes will be required to make certain representations to us
(as described in the Registration Rights Agreements) in order to participate in
the exchange offer and will be required to deliver certain information to be
used in connection with the Shelf Registration Statement and to provide comments
on the Shelf Registration Statement within the time periods set forth in the
Registration Rights Agreement in order to have their Notes included in the Shelf
Registration Statement and benefit from the provisions regarding Liquidated
Damages set forth above. Holders of the Notes will also be required to suspend
their use of the prospectus included in the Shelf Registration Statement under
certain circumstances upon receipt of written notice to that effect from us. By
acquiring Transfer Restricted Securities, a holder will be deemed to have agreed
to indemnify us against certain losses arising out of information furnished by
such holder in writing for inclusion in any Shelf Registration Statement.
CONSENT TO JURISDICTION AND SERVICE
The Indenture will provide that Amkor will irrevocably appoint CT
Corporation System as its agent for service of process in any suit, action or
proceeding with respect to the Indenture or the Notes and for actions brought
under federal or state securities laws in any federal or state court located in
the Borough of Manhattan in The City of New York, and submits to such
jurisdiction.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided. Cross
references to subcaptions shall mean the respective subcaption, as appropriate,
under the caption "Description of the Notes."
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with, or
in contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
41
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more, or an
agreement, obligation or option to purchase 10% or more, of the Voting Stock of
a Person shall be deemed to be control. For purposes of this definition, the
terms "controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Asset Purchase Agreement" means that certain Asset Purchase Agreement
dated as of December 30, 1998, between Amkor and ASI, as the same may be
extended or renewed from time to time without alteration of the material terms
thereof.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights (including by way of a sale-and-leaseback) other than sales of
inventory in the ordinary course of business (provided that the sale, lease
conveyance or other disposition of all or substantially all the assets of
Amkor and its Restricted Subsidiaries taken as a whole will be governed by
the provisions of the Indenture described above under the caption
"-- Repurchase at the Option of Holders -- Offer to Repurchase Upon Change
of Control" and/or the provisions described above under the caption
"-- Certain Covenants -- Merger, Consolidation or Sale of Assets" and not
by the provisions described above under the caption "-- Repurchase at the
Option of Holders -- Offer to Repurchase by Application of Excess Proceeds
of Asset Sales");
(2) with respect to Amkor, the sale of Equity Interests in any of its
Subsidiaries;
(3) with respect to Amkor's Restricted Subsidiaries, the issuance of
Equity Interests.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales:
(1) any single transaction or series of related transactions that: (a)
involves assets having a fair market value of less than $2 million; or (b)
results in net proceeds to Amkor and its Restricted Subsidiaries of less
than $2 million;
(2) a transfer of assets between or among Amkor and any Restricted
Subsidiary;
(3) an issuance of Equity Interests by a Restricted Subsidiary to
Amkor or to another Wholly Owned Restricted Subsidiary;
(4) the sale, lease, conveyance or other disposition of any Receivable
Program Assets by Amkor or any Restricted Subsidiary in connection with a
Receivables Program;
(5) the sale, lease, conveyance or other disposition of any inventory,
receivables or other current assets by Amkor or any of its Restricted
Subsidiaries in the ordinary course of business;
(6) the granting of a Permitted Lien;
(7) the licensing by Amkor or any Restricted Subsidiary of
intellectual property in the ordinary course of business or on commercially
reasonable terms;
(8) the sale, lease, conveyance or other disposition of obsolete or
worn out equipment or equipment no longer useful in Amkor's business; and
(9) the making or liquidating of any Restricted Payment or Permitted
Investment that is permitted by the covenant described above under the
caption "-- Certain Covenants -- Restricted Payments."
"Attributable Debt" in respect of a sale and leaseback transaction
involving an operating lease means, at the time of determination, the present
value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
including any period for which such lease has been extended or may, at the
option of the lessor, be extended. Such present value shall be
42
calculated using a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as such term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire, whether such
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or direct and fully guaranteed or insured by the
full faith and credit of the United States government or any agency or
instrumentality thereof having maturities of not more than 12 months from
the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of 12 months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding 12 months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million and a Thompson Bank Watch Rating of "B"
or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Corporation and in each case
maturing within six months after the date of acquisition; and
(6) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the adoption of a plan relating to the liquidation or dissolution
of Amkor;
(2) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than a Permitted holder, becomes the
Beneficial Owner, directly or indirectly, of more than 35% of the Voting
Stock of Amkor, measured by voting power rather than number of shares, and
such percentage represents more than the aggregate percentage of the Voting
Stock of Amkor, measured by voting power rather than number of shares, as
to which any Permitted holder is the Beneficial Owner; or
43
(3) the first date during any consecutive two-year period on which a
majority of the members of the Board of Directors of Amkor are not
Continuing Directors.
For purposes of this definition, any transfer of an Equity Interest of an
entity that was formed for the purpose of acquiring Voting Stock of Amkor will
be deemed to be a transfer of such portion of Voting Stock as corresponds to the
portion of the equity of such entity that has been so transferred.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized in connection with an Asset Sale, to the extent such losses were
deducted in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and
its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income;
plus
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments, if any, pursuant to Hedging Obligations), to
the extent that any such expense was deducted in computing such
Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a prepaid
cash expense that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; plus
(5) non-cash items (other than any non-cash items that will require
cash payments in the future or that relate to foreign currency translation)
decreasing such Consolidated Net Income for such period, other than items
that were accrued in the ordinary course of business, in each case, on a
consolidated basis and determined in accordance with GAAP; minus
(6) non-cash items (other than any non-cash items that will require
cash payments in the future or that relate to foreign currency translation)
increasing such Consolidated Net Income for such period, other than items
that were accrued in the ordinary course of business, in each case, on a
consolidated basis and determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash charges
of, a Restricted Subsidiary of Amkor shall be added to Consolidated Net Income
to compute Consolidated Cash Flow of Amkor only to the extent that a
corresponding amount would be permitted at the date of determination to be
dividended to Amkor by such Restricted Subsidiary without prior approval (that
has not been obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations,
44
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net payments, if
any, pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) interest actually paid by Amkor or any Restricted Subsidiary under
any Guarantee of Indebtedness of another Person; plus
(4) the product of all dividend payments, whether or not in cash, on
any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable
solely in Equity Interests of Amkor (other than Disqualified Stock) or to
Amkor or a Restricted Subsidiary of Amkor.
"Consolidated Interest Expense Coverage Ratio" means, with respect to any
specified Person for any period, the ratio of the Consolidated Cash Flow of such
Person and its Restricted Subsidiaries for such period to the Consolidated
Interest Expense of such Person for such period. In the event that the specified
Person or any of its Restricted Subsidiaries incurs, assumes, guarantees or
redeems any Indebtedness (other than revolving credit borrowings) or issues or
redeems preferred stock subsequent to the commencement of the period for which
the Consolidated Interest Expense Coverage Ratio is being calculated but prior
to the date on which the event for which the calculation of the Consolidated
Interest Expense Coverage Ratio is made (the "Calculation Date"), then the
Consolidated Interest Expense Coverage Ratio shall be calculated giving pro
forma effect to such incurrence, assumption, Guarantee or redemption of
Indebtedness, or such issuance or redemption of preferred stock, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Consolidated Interest Expense
Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to
the Calculation Date shall be deemed to have occurred on the first day of
the four-quarter reference period, and Consolidated Cash Flow for such
reference period shall be calculated without giving effect to clause (3) of
the proviso set forth in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be excluded;
and
(3) the Consolidated Interest Expense attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date shall be excluded, but
only to the extent that the obligations giving rise to such Consolidated
Interest Expense will not be obligations of the specified Person or any of
its Restricted Subsidiaries following the Calculation Date.
"Consolidated Net Assets" means, with respect to any specified Person as of
any date, the total assets of such Person as of such date less (1) the total
liabilities of such Person as of such date, (2) the amount of any Disqualified
Stock as of such date, and (3) any minority interests reflected on the balance
sheet of such Person as of such date.
45
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends
or distributions paid in cash to the specified Person or a Restricted
Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded;
(4) the Net Income (but not loss) of any Unrestricted Subsidiary shall
be excluded, whether or not distributed to the specified Person or one of
its Subsidiaries; and
(5) the cumulative effect of a change in accounting principles shall
be excluded.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors who:
(1) was a member of such Board of Directors on the date of the
Indenture or
(2) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
"Credit Facilities" means, with respect to Amkor or any Subsidiary, one or
more debt facilities or commercial paper facilities with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require Amkor to repurchase such Capital Stock
upon the occurrence of a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that Amkor may not
repurchase or redeem any such Capital Stock pursuant to such provisions unless
such repurchase or redemption complies with the covenant described above under
the caption "-- Certain Covenants -- Restricted Payments."
"Domestic Subsidiary" means a Restricted Subsidiary that is (1) formed
under the laws of the United States of America or a state or territory thereof
or (2) as of the date of determination, treated as a domestic entity or a
partnership or a division of a domestic entity for United States federal income
tax purposes; and, in either case, is not owned, directly or indirectly, by an
entity that is not described in clause (1) or (2) above.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
46
"Existing Indebtedness" means Indebtedness of Amkor and its Restricted
Subsidiaries in existence on the date of the Indenture, until such amounts are
repaid.
"Foreign Subsidiary" means a Subsidiary of Amkor that is not a Domestic
Subsidiary.
"Foundry Agreement" means that certain Foundry Agreement dated as of
January 1, 1998, among Amkor, our predecessor company (Amkor Electronics, Inc.),
Amkor Technology Limited (f/k/a C.I.L. Limited), ASI and Anam USA, Inc., as the
same may be extended or renewed from time to time without alteration of the
material terms thereof.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner, including, without limitation, through letters of
credit or reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
"Guarantor" means any future Domestic Subsidiary of Amkor formed or
capitalized after the date of the Indenture that is a Significant Subsidiary and
that is required by the terms of the Indenture to execute a Subsidiary
Guarantee, in accordance with the provisions of the Indenture, and its
successors and assigns.
"Hedging Obligations" means, with respect to any Person, the Obligations of
such Person under:
(1) swap agreements, cap agreements and collar agreements relating to
interest rates, commodities or currencies and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates, commodities or currencies.
"holder" means the Person in whose name a Note is registered.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or
trade payable; or
(6) Hedging Obligations,
if and to the extent any of such indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability on a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person measured as the lesser of the fair market value of the
assets of such Person so secured or the amount of such Indebtedness) and, to the
extent not otherwise included, the Guarantee by such Person of any indebtedness
of any other Person.
The amount of any Indebtedness outstanding as of any date shall be the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount. In addition, the amount of any Indebtedness shall also include
the amount of all Obligations of such Person with respect to the redemption,
repayment or other
47
repurchase of any Disqualified Stock or, with respect to any Restricted
Subsidiary of Amkor, any preferred stock of such Restricted Subsidiary.
"Intellectual Property Rights Licensing Agreement" means that certain
Intellectual Property Rights Licensing Agreement to be entered into by and
between Amkor and ASI in connection with the Asset Purchase Agreement, as the
same may be extended or renewed from time to time without alteration of the
material terms thereof.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If Amkor or any Restricted Subsidiary of Amkor sells or otherwise disposes of
any Equity Interests of any direct or indirect Restricted Subsidiary of Amkor
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of Amkor, Amkor shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the fair
market value of the Equity Interests of such Restricted Subsidiary not sold or
disposed of in an amount determined as provided in the final paragraph of the
covenant described above under the caption "-- Certain Covenants -- Restricted
Payments."
"Issue Date" means the date on which the Notes are initially issued.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, fixed
or floating charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof; provided that the term "Lien" shall
not include any lease properly classified as an operating lease in accordance
with GAAP.
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person and its Restricted Subsidiaries, determined in accordance with GAAP
and before any reduction in respect of preferred stock dividends, excluding,
however:
(1) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with (a) any
Asset Sale or (b) the disposition of any securities by such Person or any
of its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries;
(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss);
(3) any gain or loss relating to foreign currency translation or
exchange; and
(4) any income or loss related to any discontinued operation.
"Net Proceeds" means the aggregate cash proceeds received by Amkor or any
of its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale, including, without limitation, legal, accounting and investment
banking fees, and sales commissions, and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof, in each case after
taking into account any available tax credits or deductions and any tax sharing
arrangements and amounts required to be applied to the repayment of
Indebtedness, other than Permitted Bank Debt, secured by a Lien on the asset or
assets that were the subject of such Asset Sale.
48
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither Amkor nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any obligation that
would constitute Indebtedness), or (b) is directly or indirectly liable as
a guarantor or otherwise, other than in the form of a Lien on the Equity
Interests of an Unrestricted Subsidiary held by Amkor or any Restricted
Subsidiary in favor of any holder of Non-Recourse Debt of such Unrestricted
Subsidiary;
(2) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
any other Indebtedness (other than the Notes) of Amkor or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of Amkor or any of its
Restricted Subsidiaries (other than against the Equity Interests of such
Unrestricted Subsidiary, if any).
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Bank Debt" means Indebtedness incurred by Amkor or any
Restricted Subsidiary other than a Foreign Subsidiary pursuant to the Credit
Facilities, any Receivables Program, or one or more other term loan and/or
revolving credit or commercial paper facilities (including any letter of credit
subfacilities) entered into with commercial banks and/or financial institutions,
and any replacement, extension, renewal, refinancing or refunding thereof.
"Permitted Business" means the business of Amkor and its Subsidiaries,
taken as a whole, operated in a manner consistent with past operations, and any
business that is reasonably related thereto or supplements such business or is a
reasonable extension thereof.
"Permitted holder" means James J. Kim and his estate, spouse, siblings,
ancestors, heirs and lineal descendants, and spouses of any such Persons, the
legal representatives of any of the foregoing, and the trustee of any bona fide
trust of which one or more of the foregoing are the principal beneficiaries or
the grantors or any other Person that is controlled by any of the foregoing.
"Permitted Investments" means:
(1) any Investment in Amkor or in a Restricted Subsidiary;
(2) any Investment in Cash Equivalents;
(3) any Investment by Amkor or any Restricted Subsidiary of Amkor in a
Person, if as a result of such Investment or in connection with the
transaction pursuant to which such Investment is made:
(a) such Person becomes a Restricted Subsidiary of Amkor or
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, Amkor or a Restricted Subsidiary of Amkor;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Offer to Repurchase by
Application of Excess Proceeds of Asset Sales;"
(5) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of Amkor;
(6) any Investment in connection with Hedging Obligations;
49
(7) any Investments received (a) in satisfaction of judgments or (b)
as payment on a claim made in connection with any bankruptcy, liquidation,
receivership or other insolvency proceeding;
(8) Investments in (a) prepaid expenses and negotiable instruments
held for collection, (b) accounts receivable arising in the ordinary course
of business (and Investments obtained in exchange or settlement of accounts
receivable for which Amkor or any Restricted Subsidiary has determined that
collection is not likely), and (c) lease, utility and workers'
compensation, performance and other similar deposits arising in the
ordinary course of business;
(9) any Strategic Investment; provided that the aggregate amount of
all Investments by Amkor and any Restricted Subsidiaries in Strategic
Investments shall not exceed $75 million;
(10) Investments purchased or received in exchange for Permitted
Investments existing as of the Issue Date or made thereafter; provided that
any additional consideration provided by Amkor or any Restricted Subsidiary
in such exchange shall not be permitted pursuant to this clause (10); and
provided, further, that such purchased or exchanged Investments shall have
a fair market value (as determined by an officer of Amkor unless such fair
market value exceeds $25 million in which case, as determined by Amkor's
Board of Directors) equal to or exceeding the Permitted Investments
exchanged therefor;
provided that, notwithstanding the preceding, any extension of credit or advance
by Amkor or any of its Subsidiaries to a customer or supplier of Amkor or its
Subsidiaries shall not be a Permitted Investment.
"Permitted Liens" means:
(1) Liens on the assets of Amkor and any Restricted Subsidiary
securing Permitted Bank Debt that was permitted by the terms of the
Indenture to be incurred;
(2) Liens on the assets of any Foreign Subsidiary securing
Indebtedness and other Obligations under Indebtedness of such Foreign
Subsidiary that were permitted by the terms of the Indenture to be
incurred;
(3) Liens in favor of Amkor or any Restricted Subsidiary;
(4) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with Amkor or any Restricted Subsidiary
of Amkor; provided that such Liens were not incurred in contemplation of
such merger or consolidation and do not extend to any assets other than
those of the Person merged into or consolidated with Amkor or the
Restricted Subsidiary;
(5) Liens on property existing at the time of acquisition thereof by
Amkor or any Restricted Subsidiary of Amkor; provided that such Liens were
not incurred in contemplation of such acquisition;
(6) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(7) Liens to secure Obligations in respect of Indebtedness (including
Capital Lease Obligations) permitted by clause (4) of the second paragraph
of "-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" covering only the assets acquired with such Indebtedness,
including accessions, additions, parts, attachments, improvements,
fixtures, leasehold improvements or proceeds, if any, related thereto;
(8) Liens existing on the date of this Indenture;
(9) Liens securing Obligations of Amkor and/or any Restricted
Subsidiary in respect of any Receivables Program;
(10) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings; provided that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been made
therefor;
(11) Liens imposed by law or arising by operation of law, including,
without limitation, landlords', mechanics', carriers', warehousemen's,
materialmen's, suppliers' and vendors' Liens, Liens for master's
50
and crew's wages and other similar Liens, in each case that are incurred in
the ordinary course of business for sums not yet delinquent or being
contested in good faith, if such reserves or other appropriate provisions,
if any, as shall be required by GAAP shall have been made with respect
thereto;
(12) Liens incurred or pledges and deposits made in the ordinary
course of business in connection with workers' compensation and
unemployment insurance and other types of social security;
(13) Liens to secure any extension, renewal, refinancing or refunding
(or successive extensions, renewals, refinancings or refundings), in whole
or in part, of any Indebtedness secured by Liens referred to in the
foregoing clauses (4), (5), (7) and (8) of this definition; provided that
such Liens do not extend to any other property of Amkor or any Restricted
Subsidiary of Amkor and the principal amount of the Indebtedness secured by
such Lien is not increased;
(14) judgment Liens not giving rise to an Event of Default so long as
such Lien is adequately bonded and any appropriate legal proceedings that
may have been initiated for the review of such judgment, decree or order
shall not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired;
(15) Liens securing obligations of Amkor under Hedging Obligations
permitted to be incurred under clause (7) of the second paragraph of
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" or any collateral for the Indebtedness to which such
Hedging Obligations relate;
(16) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
banker's acceptances issued or credited for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or goods;
(17) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(18) Liens arising out of consignment or similar arrangements for the
sale of goods in the ordinary course of business;
(19) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(20) Liens securing other Indebtedness not exceeding $10 million at
any time outstanding;
(21) Liens securing Permitted Refinancing Indebtedness, provided that
such Liens do not extend to any other property of Amkor or any Restricted
Subsidiary of Amkor and the principal amount of the Indebtedness secured by
such Lien is not increased; and
(22) Liens on the Equity Interests of Unrestricted Subsidiaries
securing obligations of Unrestricted Subsidiaries not otherwise prohibited
by the Indenture.
"Permitted Refinancing Indebtedness" means any Indebtedness of Amkor or any
of its Restricted Subsidiaries issued in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of Amkor or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable), plus accrued interest or premium
(including any make-whole premium), if any, on, the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable expenses incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
51
provided that if the original maturity date of such Indebtedness is after
the Stated Maturity of the Notes, then such Permitted Refinancing
Indebtedness shall have a maturity at least 180 days after the Notes;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the
Notes on terms at least as favorable to the holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by Amkor or by the Restricted
Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, or
government or any agency or political subdivision thereof.
"Qualified Proceeds" means any of the following or any combination of the
following:
(1) any Cash Equivalents;
(2) any liabilities (as would be shown on Amkor's or such Restricted
Subsidiary's balance sheet if prepared in accordance with GAAP on the date
of the corresponding Asset Sale) of Amkor or any Restricted Subsidiary
(other than contingent liabilities and liabilities that are by their terms
subordinated to the Notes) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases or
indemnifies Amkor or such Restricted Subsidiary from further liability;
(3) any securities, notes or other obligations received by Amkor or
any such Restricted Subsidiary from such transferee that are converted by
Amkor or such Restricted Subsidiary into cash within 90 days after such
Asset Sale (to the extent of the cash received in that conversion);
(4) long-term assets that are used or useful in a Permitted Business;
and
(5) all or substantially all of the assets of, or a majority of the
Voting Stock of, any Permitted Business;
provided, however, that in the case of clauses (4) and (5) above, the Asset Sale
transaction shall be with a non-Affiliate and the amount of long-term assets or
Voting Stock received in the Asset Sale transaction shall not exceed 10% of the
consideration received.
"Receivables Program" means, with respect to any Person, an agreement or
other arrangement or program providing for the advance of funds to such Person
against the pledge, contribution, sale or other transfer of encumbrances of
Receivables Program Assets of such Person or such Person and/or one or more of
its Subsidiaries.
"Receivables Program Assets" means all of the following property and
interests in property, including any undivided interest in any pool of any such
property or interests, whether now existing or existing in the future or
hereafter arising or acquired:
(1) accounts;
(2) accounts receivable, general intangibles, instruments, contract
rights, documents and chattel paper (including, without limitation, all
rights to payment created by or arising from sales of goods, leases of
goods, or the rendition of services, no matter how evidenced, whether or
not earned by performance);
(3) all unpaid seller's or lessor's rights (including, without
limitation, rescission, replevin, reclamation and stoppage in transit)
relating to any of the foregoing or arising therefrom;
(4) all rights to any goods or merchandise represented by any of the
foregoing (including, without limitation, returned or repossessed goods);
(5) all reserves and credit balances with respect to any such accounts
receivable or account debtors;
(6) all letters of credit, security or Guarantees of any of the
foregoing;
52
(7) all insurance policies or reports relating to any of the
foregoing;
(8) all collection or deposit accounts relating to any of the
foregoing;
(9) all books and records relating to any of the foregoing;
(10) all instruments, contract rights, chattel paper, documents and
general intangibles relating to any of the foregoing; and
(11) all proceeds of any of the foregoing.
"Receivables Program Debt" means, with respect to any Person, the
unreturned portion of the amount funded by the investors under a Receivables
Program of such Person.
"Registration Rights Agreement" means the Registration Rights Agreement by
and among us and the initial purchasers, as such agreement may be amended,
modified or supplemented from time to time.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated by
the SEC, as such Regulation is in effect on the date hereof assuming that Amkor
were the "registrant" for purposes of such definition; provided that in no event
shall a "Significant Subsidiary" include (i) any direct or indirect Subsidiary
of Amkor created for the primary purpose of facilitating one or more Receivables
Programs or holding or purchasing inventory, (ii) any non-operating Subsidiary
which does not have any liabilities to Persons other than Amkor or its
Subsidiaries, or (iii) any Unrestricted Subsidiary.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Strategic Investment" means any Investment in any Person (other than an
Unrestricted Subsidiary) whose primary business is related, ancillary or
complementary to a Permitted Business, and such Investment is determined in good
faith by the Board of Directors (or senior officers of Amkor to whom the Board
of Directors has duly delegated the authority to make such a determination),
whose determination shall be conclusive and evidenced by a resolution, to
promote or significantly benefit the businesses of Amkor and its Restricted
Subsidiaries on the date of such Investment; provided that, with respect to any
Strategic Investment or series of related Strategic Investments involving
aggregate consideration in excess of $10 million, Amkor shall deliver to the
Trustee a resolution of the Board of Directors of Amkor set forth in an
Officer's Certificate certifying that such Investment qualifies as a Strategic
Investment pursuant to this definition.
"Subsidiary" means, with respect to any Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means a Guarantee endorsed on the Notes by a
Guarantor.
53
"Supply Agreement" means that certain Packaging & Test Services Agreement
dated as of January 1, 1998, among Amkor, our predecessor company (Amkor
Electronics, Inc.), Amkor Technology Limited (f/k/a C.I.L. Limited), ASI and
Anam USA, Inc., as the same may be extended or renewed from time to time without
alteration of the material terms thereof.
"Total Tangible Assets of the Foreign Subsidiaries" means, as of any date,
the total assets of the Foreign Subsidiaries of Amkor as of such date less the
amount of the intangible assets of the Foreign Subsidiaries of Amkor as of such
date.
"Transition Services Agreement" means that certain Transition Services
Agreement entered into by and between Amkor and ASI in connection with the Asset
Purchase Agreement, as the same may be extended or renewed from time to time
without alteration of the material terms thereof.
"Unrestricted Subsidiary" means any Subsidiary of Amkor that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is a Person with respect to which neither Amkor nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results;
(3) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of Amkor or any of its Restricted
Subsidiaries; and
(4) has at least one director on its Board of Directors that is not a
director or executive officer of Amkor or any of its Restricted
Subsidiaries and has at least one executive officer that is not a director
or executive officer of Amkor or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of Amkor as an Unrestricted Subsidiary
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board resolution giving effect to such designation and an Officer's
Certificate certifying that such designation complied with the preceding
conditions and was permitted under "-- Certain Covenants -- Restricted
Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the
preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of the Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of Amkor as of such date and, if such Indebtedness is not permitted
to be incurred as of such date under "-- Certain Covenants -- Incurrence of
Indebtedness and Issuance of Preferred Stock," Amkor shall be in default of such
covenant. The Board of Directors of Amkor may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of Amkor of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (1) such Indebtedness
is permitted under "-- Certain Covenants -- Incurrence of Indebtedness and
Issuance of Preferred Stock," calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period,
and (2) no Default or Event of Default would be in existence following such
designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by
(2) the then outstanding principal amount of such Indebtedness.
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"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares or similar
shares required by law to be held by third parties) shall at the time be owned
by such Person and/or by one or more Wholly Owned Restricted Subsidiaries of
such Person.
ADDITIONAL TERMS OF THE EXCHANGE NOTES
The terms of the exchange notes will be identical in all material respects
to those of the original notes except that the exchange notes:
- will have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer applicable to the original
notes and
- will not be entitled to certain registration rights under the
Registration Rights Agreement, including the provision for Liquidated
Damages of up to 1.00% per annum on the original notes.
Holders of original notes should review the information set forth under
"Risk Factors" and "The Exchange Offer -- Consequences of Failure to Exchange."
55
BOOK-ENTRY; DELIVERY AND FORM
THE GLOBAL SECURITIES
The original notes are, and the exchange notes will be, issued in the form
of one or more global certificates, known as "global securities." The global
securities will be deposited on the date of the acceptance for exchange of the
original notes and the issuance of the exchange notes with, or behalf of, DTC
and registered in the name of Cede & Co., as DTC's nominee.
Exchange notes that are issued as described below under "Issuance of
Certificated Securities" will be issued in the form of registered definitive
certificates, known as "certificated securities." Upon the transfer of
certificated securities, such certificated securities may, unless the global
securities have previously been exchanged for certificated securities, be
exchanged for an interest in the global securities representing the principal
amount of exchange notes being transferred.
Persons holding interests in the global securities may hold their interests
directly through DTC or indirectly through organizations that are participants
in DTC.
The descriptions of the operations and procedures of DTC, Euroclear and
Clearstream set forth below are provided solely as a matter of convenience.
These operations and procedures are solely within the control of the respective
settlement systems and are subject to change by them from time to time. Neither
we, the trustee, nor any paying agent or registrar takes any responsibility for
these operations or procedures, and holders of securities are urged to contact
the relevant system or its participants directly to discuss these matters.
DTC has advised us that it is (1) a limited purpose trust company organized
under the laws of the State of New York, (2) a "banking organization" within the
meaning of the New York Banking Law, (3) a member of the Federal Reserve System,
(4) a "clearing corporation" within the meaning of the Uniform Commercial Code,
as amended, and (5) a "clearing agency" registered pursuant to Section 17A of
the Exchange Act. DTC was created to hold securities for its participants and
facilitates the clearance and settlement of securities transactions between
participants through electronic book-entry changes to the accounts of its
participants, thereby eliminating the need for physical transfer and delivery of
certificates. DTC's participants include securities brokers and dealers,
including the initial purchasers, banks and trust companies, clearing
corporations and certain other organizations. Indirect access to DTC's system is
also available to other entities such as banks, brokers, dealers and trust
companies, referred to as "indirect participants," that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly. Investors who are not participants may beneficially own securities
held by or on behalf of DTC only through participants or indirect participants.
Ownership of the exchange notes will be shown on, and the transfer of
ownership thereof will be effected only through, records maintained by DTC, with
respect to the interests of participants, and the records of participants and
the indirect participants, with respect to the interests of persons other than
participants.
The laws of some jurisdictions may require that some types of purchasers of
exchange notes take physical delivery of the securities in definitive form.
Accordingly, the ability to transfer interests in exchange notes represented by
a global security to these persons may be limited. In addition, because DTC can
act only on behalf of its participants, who in turn act on behalf of persons who
hold interests through participants, the ability of a person having an interest
in securities represented by a global security to pledge or transfer the
interest to persons or entities that do not participate in DTC's system, or to
otherwise take actions in respect of the interest, may be affected by the lack
of a physical definitive security in respect of the interest.
So long as DTC or its nominee is the registered owner of a global security,
DTC or such nominee, as the case may be, will be considered the sole owner or
holder of the exchange notes represented by the global security for all purposes
under the indenture. Except as provided below, owners of beneficial interests in
a global security will not be entitled to have securities represented by the
global security registered in their names, will not receive or be entitled to
receive physical delivery of certificated securities, and will not be considered
the owners or holders thereof under the indenture for any purpose, including
with respect to the
56
giving of any direction, instruction or approval to the trustee under the
indenture. Accordingly, each holder owning a beneficial interest in a global
security must rely on the procedures of DTC and, if the holder is not a
participant or an indirect participant, on the procedures of the participant
through which the holder owns its interest, to exercise any rights of a holder
of exchange notes under the indenture or the global security.
We understand that under existing industry practice, in the event that we
request any action of holders of exchange notes, or a holder that is an owner of
a beneficial interest in a global security desires to take any action that DTC,
as the holder of such global security, is entitled to take, DTC would authorize
the participants to take the action and the participants would authorize holders
owning through the participants to take the action or would otherwise act upon
the instruction of the holders. Neither we nor the trustee will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of securities by, DTC, or for maintaining, supervising
or reviewing any records of DTC relating to the exchange notes.
Payments with respect to the principal of, and premium, if any, and
interest on, any exchange notes represented by a global security registered in
the name of DTC or its nominee on the applicable record date will be payable by
the trustee to or at the direction of DTC or its nominee in its capacity as the
registered holder of the global security representing the exchange notes under
the indenture. Under the terms of the indenture, we may treat, and the trustee
may treat, the persons in whose names the exchange notes, including the global
securities, are registered as the owners of the exchange notes for the purpose
of receiving payment on the exchange notes and for any and all other purposes
whatsoever. Accordingly, neither we nor the trustee has or will have any
responsibility or liability for the payment of these amounts to owners of
beneficial interests in the global security, including principal, premium, if
any, and interest. Payments by the participants and the indirect participants to
the owners of beneficial interests in the global securities will be governed by
standing instructions and customary industry practice and will be the
responsibility of the participants or the indirect participants and DTC.
Transfers between participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
participants in Euroclear or Clearstream will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the
securities, cross-market transfers between the participants in DTC, on the one
hand, and Euroclear or Clearstream participants, on the other hand, will be
effected through DTC in accordance with DTC's rules on behalf of Euroclear or
Clearstream, as the case may be, by its respective depositary; however, such
cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in the system in accordance
with the rules and procedures and within the established deadlines (Brussels
time) of the system. Euroclear or Clearstream, as the case may be, will, if the
transaction meets its settlement requirements, deliver instructions to its
respective depositary to take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant global securities in DTC, and
making or receiving payment in accordance with normal procedures for same-day
funds settlement applicable to DTC. Euroclear participants and Clearstream
participants may not deliver instructions directly to the depositaries for
Euroclear or Clearstream.
Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in a global security from a
participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or Clearstream participant, during the securities
settlement processing day, which must be a business day for Euroclear and
Clearstream, immediately following the settlement date of DTC. Cash received in
Euroclear or Clearstream as a result of the sale of an interest in a global
security by or through a Euroclear or Clearstream participant to a participant
in DTC will be received with value on the settlement date of DTC but will be
available in the relevant Euroclear or Clearstream cash account only as of the
business day for Euroclear or Clearstream following DTC's settlement date.
Although DTC, Euroclear and Clearstream have agreed to the foregoing
procedures to facilitate transfers of interests in the global securities among
participants in DTC, Euroclear and Clearstream, they are under no obligation to
perform or to continue to perform such procedures, and such procedures may be
discontinued at any time. Neither we nor the trustee will have any
responsibility for the performance by DTC, Euroclear or
57
Clearstream or their respective participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
ISSUANCE OF CERTIFICATED SECURITIES
If (1) we notify the trustee in writing that DTC, Euroclear or Clearstream
is no longer willing or able to act as a depositary or clearing system for the
exchange notes or DTC ceases to be registered as a clearing agency under the
Exchange Act, and a successor depositary or clearing system is not appointed
within 90 days of this notice or cessation, (2) we, at our option, notify the
trustee in writing that we elect to cause the issuance of exchange notes in
definitive form under the indenture, or (3) upon the occurrence and continuation
of an event of default under the indenture with respect to any series of
exchange notes, then, upon surrender by DTC of the global securities,
certificated securities will be issued to each person that DTC identifies as the
beneficial owner of the exchange notes represented by the global securities.
Upon any such issuance, the trustee is required to register the certificated
securities in the name of the person or persons or the nominee of any of these
persons and cause the same to be delivered to these persons.
Neither we nor the trustee shall be liable for any delay by DTC or any
participant or indirect participant in identifying the beneficial owners of the
related exchange notes and each such person may conclusively rely on, and shall
be protected in relying on, instructions from DTC for all purposes, including
with respect to the registration and delivery, and the respective principal
amounts, of the exchange notes to be issued.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of the material United States federal
income tax consequences relating to the exchange of original notes for exchange
notes in the exchange offer and the ownership and disposition of the exchange
notes. This discussion is based on, as of the date hereof, the applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury Regulations promulgated or proposed thereunder, judicial decisions and
current positions of the Internal Revenue Service contained in published revenue
rulings, revenue procedures and announcements, all of which are subject to
change either prospectively or retroactively, or are subject to different
interpretations. We have not obtained, nor do we intend to obtain, a ruling from
the Internal Revenue Service as to any United States federal income tax
consequences discussed below and there can be no assurances that the Internal
Revenue Service will not take contrary positions.
This discussion is limited to U.S. and Non-U.S. Holders who exchange
original notes for exchange notes pursuant to the exchange offer and who hold
the exchange notes as capital assets. This discussion does not deal with all
aspects of United States federal income taxation that might be relevant to
holders in light of their particular circumstances, nor does it address the tax
consequences to holders subject to special treatment under the United States
federal income tax laws, such as:
- certain financial institutions;
- insurance companies;
- tax-exempt organizations;
- dealers in securities or foreign currencies;
- persons who hold the exchange notes as part of a hedge, conversion
transaction, straddle or other integrated transaction;
- U.S. Holders whose functional currency is not the United States dollar;
- partnerships or other entities classified as partnerships for United
States federal income tax purposes;
- certain former citizens or residents of the United States; and
- persons subject to the alternative minimum tax.
58
This discussion does not address the tax consequences arising under the
laws of any foreign, state or local jurisdiction. PROSPECTIVE INVESTORS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE UNITED STATES FEDERAL TAX
CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING OF THE EXCHANGE NOTES, AS WELL
AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN
TAXING JURISDICTION.
As used herein, the term "U.S. Holder" means a beneficial owner of a note
that is for United States federal income tax purposes:
- a citizen or resident of the United States;
- a corporation, or other entity taxable as a corporation for United States
federal income tax purposes, created or organized in or under the laws of
the United States or any political subdivision thereof;
- an estate, the income of which is subject to United States federal income
taxation regardless of its source;
- a trust that either (1) is subject to the supervision of a court within
the United States and has one or more United States persons with
authority to control all substantial decisions or (2) has a valid
election in effect under applicable Treasury Regulations to be treated as
a United States person; or
- not otherwise a U.S. Holder but whose income from a note is effectively
connected with the holder's conduct of a trade or business in the United
States.
As used herein, the term "Non-U.S. Holder" means a beneficial owner of a
note that is not a U.S. Holder for United States federal income tax purposes.
THE EXCHANGE OFFER
An exchange of original notes for exchange notes pursuant to the exchange
offer will not be a taxable event for United States federal income tax purposes.
Consequently, U.S. Holders and Non-U.S. Holders will not recognize any taxable
gain or loss as a result of exchanging original notes for exchange notes
pursuant to the exchange offer. The holding period of the exchange notes will
include the holding period of the original notes, and the tax basis in the
exchange notes will be the same as the basis in the original notes immediately
before the exchange.
TAX CONSEQUENCES TO U.S. HOLDERS
TREATMENT OF INTEREST
Interest on an exchange note will be taxable to a U.S. Holder as ordinary
interest income at the time it accrues or is received in accordance with the
U.S. Holder's regular method of accounting for United States federal income tax
purposes.
SALE, EXCHANGE OR RETIREMENT OF EXCHANGE NOTES
In general, upon the sale, exchange, retirement or other taxable
disposition of an exchange note, a U.S. Holder will recognize taxable gain or
loss equal to the difference between:
(1) the amount of cash and the fair market value of other property
received in the sale, exchange, retirement or other taxable disposition
(less any amount attributable to accrued but unpaid interest on the
exchange note not previously included in gross income by the U.S. Holder,
which will be taxable as such); and
(2) the U.S. Holder's adjusted tax basis in such exchange note.
Gain or loss recognized by a U.S. Holder on the sale, exchange, retirement
or other taxable disposition of an exchange note generally will be capital gain
or loss. The gain or loss will be long-term capital gain or loss, if
59
the exchange note has been held for more than 12 months. The deductibility of
capital losses is subject to certain limitations.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Information returns will be filed with the Internal Revenue Service in
connection with payments on the exchange notes and the proceeds from a sale or
other disposition of the exchange notes. A U.S. Holder will not be subject to a
28% backup withholding tax on these payments if the U.S. Holder provides its
taxpayer identification number to the paying agent and complies with certain
certification procedures or is otherwise exempt from backup withholding. The
amount of any backup withholding withheld from a payment to a U.S. Holder will
be allowed as a credit against the U.S. Holder's United States federal income
tax liability and may entitle the U.S. Holder to a refund, provided that the
required information is furnished to the Internal Revenue Service.
TAX CONSEQUENCES TO NON-U.S. HOLDERS
TREATMENT OF INTEREST
Subject to the discussion below concerning backup withholding, payments of
interest on the exchange notes to any Non-U.S. Holder will not be subject to
United States federal income tax, or 30% withholding, provided that:
(1) the interest is not effectively connected with the conduct by the
Non-U.S. Holder of a trade or business in the United States;
(2) the Non-U.S. Holder does not own, actually or constructively, 10%
or more of the combined voting power of all classes of our stock entitled
to vote;
(3) the Non-U.S. Holder is not a controlled foreign corporation
(within the meaning of the Code) that is related, directly or indirectly,
to us through stock ownership; and
(4) either (A) the beneficial owner of an exchange note certifies on
Internal Revenue Service Form W-8BEN, under penalties of perjury, that the
Non-U.S. Holder is not a United States person or (B) the Non-U.S. Holder
holds its exchange note through certain foreign intermediaries and
satisfies the certification requirements of applicable United States
Treasury Regulations.
SALE, EXCHANGE OR RETIREMENT OF EXCHANGE NOTES
Subject to the discussion below concerning backup withholding, a Non-U.S.
Holder of an exchange note will not be subject to United States federal income
tax on any gain realized on the sale, exchange, retirement or other taxable
disposition of an exchange note unless (1) the Non-U.S. Holder is an individual
who is present in the United States for 183 days or more during the taxable year
of disposition and certain other conditions are met or (2) the gain is
effectively connected with the conduct by the Non-U.S. Holder of a trade or
business in the United States.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Information returns will be filed with the Internal Revenue Service in
connection with payments on the exchange notes and the proceeds from a sale,
exchange, retirement or other taxable disposition of the exchange notes. In
order to avoid information reporting and backup withholding tax requirements, a
Non-U.S. Holder of an exchange note may have to comply with certification
procedures to establish that the Non-U.S. Holder is not a United States person.
The certification procedures required to claim the portfolio interest exemption
described under the heading "Treatment of Interest" generally will satisfy the
certification requirements necessary to avoid the 28% backup withholding tax as
well. The amount of any backup withholding tax withheld from a payment to a
Non-U.S. Holder will be allowed as a credit against the Non-U.S. Holder's United
States federal income tax liability and may entitle the holder to a refund,
provided that the required information is furnished to the Internal Revenue
Service.
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PLAN OF DISTRIBUTION
Based on interpretations of the SEC staff in no-action letters issued to
third parties, we believe that you may resell or otherwise transfer exchange
notes issued in the exchange offer without further compliance with the
registration and prospectus delivery requirements of the Securities Act if:
- you acquire exchange notes in the ordinary course of your business, and
- you are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of exchange notes.
We believe that you may not transfer exchange notes issued in the exchange
offer without further compliance with such requirements or an exemption from
such requirements if you are:
- our affiliate within the meaning of Rule 405 under the Securities Act, or
- a broker-dealer that acquired original notes as a result of market-making
or other trading activities.
The information described above concerning interpretations of and positions
taken by the SEC staff is not intended to constitute legal advice.
Broker-dealers should consult their own legal advisors with respect to these
matters.
If you wish to exchange your original notes for exchange notes in the
exchange offer, you will be required to make representations to us as described
in "The Exchange Offer -- Procedures for Tendering" and "-- Your Representations
to Us" of this prospectus and in the letter of transmittal. In addition, if a
broker-dealer receives exchange notes for its own account in exchange for
original notes that were acquired by it as a result of market-making activities
or other trading activities, it will be required to acknowledge that it will
deliver a prospectus in connection with any resale by it of such exchange notes.
A broker-dealer may use this prospectus, as we may amend or supplement it, in
connection with these resales. We have agreed that, for a period of 180 days
after the closing date of the exchange offer, we will make this prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.
We will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own account
in the exchange offer may be sold from time to time in one or more transactions:
- in the over-the-counter market,
- in negotiated transactions,
- through the writing of options on the exchange notes, or
- a combination of such methods of resale.
The prices at which these sales occur may be:
- at market prices prevailing at the time of resale,
- at prices related to such prevailing market prices, or
- at negotiated prices.
Any such resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such exchange
notes. Any broker-dealer that resells exchange notes that it received for its
own account in the exchange offer and any broker or dealer that participates in
a distribution of exchange notes may be deemed to be an underwriter within the
meaning of the Securities Act. Any profit on any resale of exchange notes and
any commission or concessions received by any such persons may be deemed to be
underwriting compensation. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an underwriter within the
meaning of the Securities Act.
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LEGAL MATTERS
The validity of the exchange notes being offered hereby will be passed upon
for Amkor Technology, Inc. by Perkins Coie LLP, Menlo Park, California.
EXPERTS
The audited consolidated financial statements of Amkor Technology, Inc. and
its subsidiaries as of December 31, 2002 and 2001 and for each of the three
years in the period ended December 31, 2002, incorporated in this Prospectus by
reference to the annual report on Form 10-K/A have been audited by
PricewaterhouseCoopers LLP, independent accountants, as indicated in their
report with respect thereto. PricewaterhouseCoopers LLP did not audit the
financial statements of Amkor Technology Philippines, Inc. (formerly Amkor
Technology (P1/P2), Inc., which subsequently merged with Amkor Technology
Philippines (P3/P4), Inc. and Anam/Amkor Precision Machine Company
(Philippines), Inc. with Amkor Technology (P1/P2), Inc. as the surviving
entity), a wholly owned subsidiary, referred to as ATP, which financial
statements reflect total assets of 14% and 17% and operating expenses of 14%,
18% and 17% of the related consolidated totals as of December 31, 2002 and 2001
and for the each of the three years in the period ended December 31, 2002. The
financial statements of ATP for 2002 were audited by SyCip Gorres Velayo & Co.,
a member practice of Ernst & Young Global, whose report thereon dated January
15, 2003 has been furnished to PricewaterhouseCoopers LLP. Such financial
statements have been so included in reliance on the reports of such independent
accountants given on the authority of such firms as experts in auditing and
accounting.
The combined financial statements of Amkor Technology Philippines (P1/P2),
Inc. and Amkor Technology Philippines (P3/P4), Inc. as of December 31, 2001 and
for each of the two years in the period ended December 31, 2001 were audited by
Andersen Worldwide (through its then Philippine member firm, SyCip Gorres Velayo
& Co.), who prior to cessation of its operations in August 2002 had expressed an
unqualified opinion on those financial statements in its report dated March 19,
2002.
With the cessation of its operations, Andersen Worldwide can no longer
consent to the use of its audit report in, or participate in the preparation of,
the registration statement of which this prospectus is a part. Accordingly, your
ability to seek damages from Andersen Worldwide in connection with the exchange
offer will be limited.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE EXCHANGE
OFFER, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY AMKOR TECHNOLOGY, INC. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT
RELATES OR AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF AMKOR TECHNOLOGY, INC. SINCE THE DATE HEREOF.
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TABLE OF CONTENTS
PAGE
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Forward-Looking Information............. 1
Where You Can Find More Information..... 1
Prospectus Summary...................... 3
Amkor Technology........................ 3
Summary of the Exchange Offer........... 4
The Exchange Agent...................... 7
The Exchange Notes...................... 7
Risk Factors............................ 9
Private Placement....................... 11
Use of Proceeds......................... 12
Ratio of Earnings to Fixed Charges...... 12
Capitalization.......................... 13
The Exchange Offer...................... 14
Description of the Notes................ 22
Book-Entry; Delivery and Form........... 56
United States Federal Income Tax
Considerations........................ 58
Plan of Distribution.................... 61
Legal Matters........................... 62
Experts................................. 62
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AMKOR TECHNOLOGY, INC.
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OFFER TO EXCHANGE ITS
7.75% SENIOR NOTES DUE 2013
THAT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED
FOR ANY AND ALL OF ITS OUTSTANDING
7.75% SENIOR NOTES DUE 2013
THAT WERE ISSUED AND SOLD IN A TRANSACTION
EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
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PROSPECTUS
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, 2003
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses including attorneys' fees, judgments, fines and
amounts paid in settlement in connection with various actions, suits or
proceedings, whether civil, criminal, administrative or investigative, other
than an action by or in the right of the corporation, a derivative action, if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, if they had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses including
attorneys' fees incurred in connection with the defense or settlement of such
actions, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's by-laws, disinterested
director vote, stockholder vote, agreement or otherwise.
Our Certificate of Incorporation provides for the indemnification of
directors to the fullest extent permissible under Delaware law. Our Bylaws
provide for the indemnification of officers, directors and third parties acting
on behalf of Amkor if such person acted in good faith and in a manner reasonably
believed to be in and not opposed to the best interest of Amkor, and with
respect to any criminal action or proceeding, the indemnified party had no
reason to believe his conduct was unlawful. We have entered into indemnification
agreements with our directors and executive officers, in addition to
indemnification provided for in our Bylaws, and intend to enter into
indemnification agreements with any new directors and executive officers in the
future. Our certificate of incorporation also provides that we shall pay the
expenses incurred in defending any such proceeding in advance of its final
disposition, subject to the provisions of the Delaware General Corporation Law.
Such rights are not exclusive of any other right which any person may have or
thereafter acquire under any statute, provision of the certificate, by-law,
agreement, vote of stockholders or disinterested directors or otherwise. No
repeal or modification of such provision will in any way diminish or adversely
affect the rights of any director, officer, employee or agent of us thereunder
in respect of any occurrence or matter arising before any such repeal or
modification.
The Delaware General Corporation Law permits a corporation to provide in
its certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability for:
- any breach of the director's duty of loyalty to the corporation or its
stockholders,
- acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
- payments of unlawful dividends or unlawful stock repurchases or
redemptions, or
- any transaction from which the director derived an improper personal
benefit.
Our certificate of incorporation provides that none of our directors will
be personally liable to us or our stockholders for monetary damages for breach
of fiduciary duty as a director, except, if required by the Delaware General
Corporation Law as amended from time to time, for liability
- for any breach of the director's duty of loyalty to us or our
stockholders,
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
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- under Section 174 of the Delaware General Corporation Law, which concerns
unlawful payments of dividends, stock purchases or redemptions, or
- for any transaction from which the director derived an improper personal
benefit.
Neither the amendment nor repeal of such provision will eliminate or reduce
the effect of such provision in respect of any matter occurring, or any cause of
action, suit or claim that, but for such provision, would accrue or arise,
before such amendment or repeal.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
Reference is made to the Exhibit Index on page E-1.
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended (the
"Securities Act"), each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act),
that is incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form S-4, within one business day of receipt
of such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of West Chester, State of Pennsylvania, on the 9th day
of July, 2003.
AMKOR TECHNOLOGY, INC.
By: /s/ JAMES J. KIM
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Name: James J. Kim
Title: Chairman and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
James J. Kim and Kenneth T. Joyce and each of them, his true and lawful
attorneys in fact and agents with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments), any registration
statement relating to the same offering as this Registration Statement that is
to be effective upon filing pursuant to Rule 462(b), and any and all additions
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys in fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys in fact
and agents or his substitute or substitutes may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on July 9, 2003.
SIGNATURE TITLE
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/s/ JAMES J. KIM Chairman and Chief Executive Officer
---------------------------------------------------------- (Principal Executive Officer)
James J. Kim
/s/ JOHN N. BORUCH President and Director
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John N. Boruch
/s/ KENNETH T. JOYCE Chief Financial Officer (Principal Financial
---------------------------------------------------------- and Accounting Officer)
Kenneth T. Joyce
/s/ WINSTON J. CHURCHILL Director
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Winston J. Churchill
/s/ THOMAS D. GEORGE Director
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Thomas D. George
/s/ GREGORY K. HINCKLEY Director
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Gregory K. Hinckley
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SIGNATURE TITLE
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/s/ JOHN B. NEFF Director
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John B. Neff
/s/ JUERGEN KNORR Director
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Juergen Knorr
/s/ JAMES W. ZUG Director
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James W. Zug
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
1.1 Purchase Agreement, dated May 1, 2003, related to $425
million 7.75% Senior Notes due 2013 (incorporated by
reference from Amkor's quarterly report on Form 10-Q for the
quarter ended March 31, 2003).
4.1 Indenture, dated as of May 8, 2003, between Amkor
Technology, Inc. and U.S. Bank National Association
(incorporated by reference from Amkor's quarterly report on
Form 10-Q for the quarter ended March 31, 2003).
4.2 Registration Rights Agreement, dated as of May 8, 2003,
between Amkor Technology, Inc. and Citigroup Global Markets
Inc., Deutsche Bank Securities, Inc. and J.P. Morgan
Securities, Inc.
4.3 Form of 7.75% Exchange Note due 2013
5.1 Opinion of Perkins Coie LLP as to legality of the Exchange
Notes issued by Amkor Technology, Inc.
8.1 Opinion of Perkins Coie LLP, special tax counsel, as to
certain federal income tax matters
12.1 Computation of ratio of earnings to fixed charges
(incorporated by reference from Amkor's quarterly report on
Form 10-Q for the quarter ended March 31, 2003).
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of SyCip Gorres Velayo & Co., a member practice of
Ernst & Young Global
23.3 Consent of SyCip Gorres Velayo & Co., a member firm of
Arthur Andersen(1)
23.4 Consent of Samil Accounting Corporation
23.5 Consent of Perkins Coie LLP (included in Exhibit 5.1 and
Exhibit 8.1)
24.1 Power of Attorney (contained on the signature page hereto)
25.1 Form T-1 Statement of Eligibility of U.S. Bank National
Association to act as trustee under the Indenture
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Letter to DTC Participants
99.4 Form of Letter to Clients
All schedules are omitted because they are inapplicable or the requested
information is shown in the consolidated financial statements of the registrant
or related notes thereto.
(1) The financial statements of Amkor Technology Philippines (P1/P2), Inc. and
Amkor Technology Philippines (P3/P4), Inc., consolidated subsidiaries of the
Registrant, for each of the two years in the period ended December 31, 2002,
have been audited by the independent public accountants SyCip Gorres Velayo
& Co., a member firm of Arthur Andersen, (referred to herein as Arthur
Worldwide). However, the Registrant has been unable to obtain the written
consent of Arthur Worldwide with respect to the incorporation by reference
of such financial statements in this Registration Statements on Form S-4
(the "Registration Statement"). Therefore, the Registrant has dispensed with
the requirement to file the written consent of Arthur Andersen in reliance
on Rule 437a under the Securities Act of 1933, as amended. As a result, you
may not be able to recover damages from Arthur Worldwide under Section 11 of
the Securities Act of 1933, as amended, for any untrue statements of
material fact or any omissions to state a material fact, if any, contained
in the financial statements of the Registrant for the aforementioned
financial statements, which are incorporated by reference in the
Registration Statement.
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