SYNDICATED LOAN AGREEMENT

 

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                                                                    EXHIBIT 99.4

 

                            SYNDICATED LOAN AGREEMENT

 

                                  (2005.11.28)

 

                   [Translation prepared by Baker & McKenzie]

                               [FOR REFERENCE ONLY]

 

 

 

 

 

 

 

 

 

                                    BORROWER:

                             Amkor Technology Taiwan

 

                             COORDINATING ARRANGERS:

                      Chinatrust Commercial Bank Co., Ltd.

                       Ta Chong Commercial Bank Co., Ltd.

 

                                     AGENT:

                      Chinatrust Commercial Bank Co., Ltd.

 

                             TOTAL FACILITY AMOUNT:

                   One Billion Eight Hundred and Forty Million

                     New Taiwan Dollars (NT$1,840,000,000)

                                      DATE:

                               November 30, 2005

 

 

 

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                            SYNDICATED LOAN AGREEMENT

 

THIS SYNDICATED LOAN AGREEMENT (the "Agreement") is made and entered into as of

November 30, 2005 by and among:

 

AMKOR TECHNOLOGY TAIWAN, a company organized and incorporated under the laws of

the Republic of China (the "Borrower");

 

The banks and banking institutions listed in SCHEDULE I attached hereto

(collectively, the "Banks" and severally, a "Bank");

 

CHINATRUST COMMERCIAL BANK CO., LTD. AND TA CHONG COMMERCIAL BANK CO., LTD.,

jointly acting as the coordinating arrangers of the Banks hereunder

(collectively, the "Coordinating Arrangers"); and

 

CHINATRUST COMMERCIAL BANK CO., LTD., acting as the facility agent and security

agent hereunder (the "Agent").

 

                                    WITNESSTH:

 

WHEREAS, to finance or refinance the capital expenditure of the Borrower's

project (the "Project") for developing and expanding an assembly and testing

plant in Hukou, Hsinchu, and Longtan, Taoyuan, and for purchasing machinery,

equipment and the relevant ancillary equipment, the Borrower has requested the

Coordinating Arrangers to arrange for the Banks to extend to the Borrower a

medium-term New Taiwan Dollar loan in an aggregate principal amount not to

exceed One Billion Eight Hundred and Forty Million New Taiwan Dollars

(NT$1,840,000,000) (the "Facility"); and

 

WHEREAS, the Coordinating Arrangers have discussed the above arrangement with

the Banks and obtained the Banks' consent to extend the Facility so requested to

the Borrower subject to the terms and conditions of this Agreement.

 

 

ARTICLE 1 DEFINITIONS

 

Unless otherwise defined elsewhere in this Agreement, as used herein the

following terms shall have the meanings set forth below:

 

 

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1.1 Total Facility Amount shall mean the total amount of the Facility which the

Banks commit to provide to the Borrower pursuant to this Agreement, or the

amount cancelled or reduced at any time by the Banks pursuant to this Agreement.

 

1.2 Facility Amount shall mean the amount of loan which each Bank commits to

provide to the Borrower with respect to the Facility, as shown in SCHEDULE I

hereto, provided the Facility Amount shall be cancelled or reduced in accordance

with the applicable provisions of this Agreement.

 

1.3 Majority Banks shall mean Banks whose then aggregate outstanding claims in

principal not yet repaid exceed two-thirds of the then aggregate outstanding

claims of all the Banks under this Agreement in principal not yet repaid or, if

Borrower has not drawn any of the Facility Amount yet, Banks whose aggregate

Facility Amount exceeds two-thirds of the Total Facility Amount under this

Agreement.

 

1.4 Commitment Ratio shall mean the ratio of the Facility Amount committed by

each Bank to the Total Facility Amount.

 

1.5 Loan shall mean each loan drawn by the Borrower pursuant to the applicable

provisions of this Agreement.

 

1.6 Drawdown Date shall mean the date the Borrower draws a Facility Amount

pursuant to this Agreement. "Initial Drawdown Date" shall mean the date the

Borrower draws a Facility Amount for the first time pursuant to this Agreement.

 

1.7 Business Day shall mean a banking business day in the Republic of China.

 

1.8 Interest Payment Date shall mean the date interest on a Loan under this

Agreement becomes payable by the Borrower, i.e., the last day of each Interest

Period.

 

1.9 Interest Period shall mean the period commencing on the Initial Drawdown

Date and having a duration of ninety (90) days and each ninety(90)-day period

thereafter; provided, that (i) the first Interest Period with respect to each

drawdown other than the Initial Drawdown shall commence on such Drawdown Date

and end on the last day of the then current Interest Period as established

above, (ii) the Interest Period commencing prior to any repayment date shall end

on such repayment date, and (iii) unless provided by this Agreement to the

contrary, if any Interest Period would otherwise end on a day which is not a

Business Day, such Interest Period shall be extended to the next succeeding

Business Day unless such next succeeding Business Day falls in another calendar

month, in which case such Interest Period shall end on the immediately preceding

Business Day.

 

 

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1.10 Reference Interest Rate shall mean, with respect to each Loan, the interest

rate to be determined in the following order of priority (i.e., the interest

rate in Article 1.10.2 will prevail if the interest rate in Article 1.10.1 is

unavailable and if the interest rate in Article 1.10.2 is also unavailable, the

interest in Article 1.10.3 will prevail):

 

1.10.1 The rate per annum determined on the basis of the fixing rate on 90-day

commercial papers in Taiwan's primary commercial paper market as appearing on

Page 51328 of the Reuters Telerate screen at or about 11:30 A.M. on the Business

Day prior to the commencement of such Interest Period.

 

1.10.2 The rate per annum determined on the basis of the fixing rate on 90-day

commercial papers in Taiwan's secondary commercial paper market as announced by

International Bills Finance Corporation, Chung Hsing Bills Finance Corporation

and China Bills Finance Corporation at or about 11:30 A.M. on the Business Day

prior to the commencement of such Interest Period.

 

1.10.3 The rate per annum determined on the basis of the variable rate on

three-month time deposits as posted by the Agent on the Business Day prior to

the commencement of such Interest Period.

 

The Borrower and the Banks both agree not to raise any objection to the result

of such quotations obtained by the Agent.

 

1.11 Interest Rate shall mean the per annum interest rate determined on the

basis of the Reference Interest Rate plus 1.2%, exclusive of business tax and

stamp duty, which are to be borne by the Borrower.

 

1.12 Compensatory Interest Rate shall mean upon the occurrence of a circumstance

to which the Compensatory Interest Rate is applicable pursuant to this

Agreement, the per annum interest rate determined on the basis of the base rate

of the Agent plus 3% per annum, exclusive of business tax and stamp duty, which

are to be borne by the Borrower.

 

1.13 Drawdown Period shall mean the period for which the Facility Amount is

available to the Borrower for drawdown. "Expiration Date of Drawdown Period"

shall mean the last day of the sixth month from the date of this Agreement or

the day the Borrower draws the whole of the Facility Amount, whichever is

earlier.

 

 

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1.14 Land and Buildings shall mean collectively the land, factory buildings, and

the relevant ancillary factory work facilities of the assembly and testing plant

in Hukou, Xinzhu ("Plant 3") and that in Longtan, Taoyuan ("Plant 1"), which are

owned by the Borrower. The details are shown in SCHEDULE II to this Agreement.

"Factory Buildings" shall mean the factory buildings and relevant ancillary

factory work facilities of the Land and Buildings.

 

1.15 Equipment shall mean the machinery, equipment and the relevant ancillary

facilities purchased (including refinanced) and installed in the Factory

Buildings (Plant 3) by the Borrower with money obtained from the Facility.

 

1.16 Mortgage Agreements shall mean collectively the Real Estate Mortgage

Agreement and the Chattel Mortgage Agreement, as respectively defined in Article

9.2 of this Agreement.

 

1.17 Mortgages shall mean collectively a first priority real estate mortgage

over the Land and Buildings ("Real Estate Mortgage") and a first priority

chattel mortgage over the Equipment ("Chattel Mortgage"), as created in favor of

the Agent pursuant to this Agreement.

 

1.18 Mortgaged Objects shall mean collectively the Mortgaged Real Estate and the

Mortgaged Chattel.

 

1.19 Mortgaged Real Estate shall mean the Land and Buildings over which the Real

Estate Mortgage has been created in favor of the Agent pursuant to this

Agreement.

 

1.20 Mortgaged Chattel shall mean the Equipment over which the Chattel Mortgage

has been created in favor of the Agent pursuant to this Agreement.

 

1.21 Appraisal Report (a) with regard to each drawdown, the Appraisal Report

shall mean the appraisal report on the Land and Buildings issued by China Credit

Information Service Ltd. on September 2, 2005; (b) with regard to the adjustment

of the insurance coverage, the Appraisal Report shall mean the appraisal report

on the Land and Building as of a later date issued by China Credit Information

Service Ltd. or other appraiser recognized by the Agent. Net Value shall mean

the net value after the deduction of the prevailing land inspection value and

depreciation as determined on the basis of the government posted current value,

from the appraised value of the objects described in the Appraisal Report.

 

1.22 Original Loan Agreements shall mean (i) the General Credit Agreement and

Respective Provisions Agreement between the Borrower and Chinatrust Commercial

Bank as well as the General Credit Agreement between the Borrower and Ta Chong

Commercial Bank dated August 12, 2005;

 

 

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and (ii) the other agreements entered into by and between the Borrower and

Chinatrust Commercial Bank as well as the Borrower and Ta Chong Commercial Bank

based on the credit agreements listed in (i). Original Facility shall mean the

facility arising out of the Original Loan Agreement.

 

1.23 Original Mortgage shall mean the first priority mortgage over the Land and

Buildings created by the Borrower in favor of Chinatrust Commercial Bank to

secure the Original Facility.

 

1.24 Assignment Agreement shall be as defined in Article 9.3 of this Agreement.

 

1.25 Note and Note Authorization shall be as defined in Article 8.1 of this

Agreement.

 

1.26 Guarantor shall mean the parent company of the Borrower in the United

States, which is a company organized and incorporated under the laws of the

State of Delaware, with address at 1900 South Price Road, Chandler, AZ 85248,

U.S.A.

 

1.27 Letter of Guarantee shall mean the Letter of Guarantee issued by the

Guarantor in such form and substance as specified in EXHIBIT 5 of this

Agreement.

 

1.28 Security Documents shall mean collectively the following and all documents

relevant to the following: Note, Note Authorization, Letter of Guarantee,

Mortgage Agreements, and Assignment Agreement.

 

1.29 Risk Sharing Ratio shall be as defined in Article 4.6.1 of this Agreement.

 

1.30 Event of Default shall mean an event listed in Article 10.1 of this

Agreement.

 

ARTICLE 2 FACILITY AMOUNT

 

2.1 Facility Amount and Purposes

 

The principal of the Total Facility Amount is [One Billion Eight Hundred and

Forty Million New Taiwan Dollars (NT$1,840,000,000)], for the purposes of

financing and refinancing the Borrower's Project.

 

2.2 Term of Facility, Period of Drawdown, and Terms of Repayment

 

2.2.1 The Facility under this Agreement is a term of five years from the date of

this Agreement.

 

 

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2.2.2 The Facility Amount may be drawn down by installments but not on a

revolving basis.

 

2.2.3 The Facility Amount shall be fully drawn down within six (6) months of the

execution of this Agreement, if not, any balance of the Facility Amount will be

automatically cancelled upon the expiration of such six-month period and may no

longer be drawn once cancelled.

 

2.2.4 The outstanding principal of the Facility shall be repaid and decrease by

ten equal repayment installments semi-annually from the last day of the sixth

month after the execution of this Agreement (such last day being the day of the

first installment). In the last installment all outstanding amount due and

payable shall be paid in full. The date of such repayment installment is

hereinafter called the "Repayment Installment Date". If such date does not fall

on a Business Day, the payment may be made on the next succeeding Business Day,

provided the schedule regarding the other prescribed Repayment Installment Dates

will not be affected.

 

2.2.5 The Borrower is responsible for making timely payment as necessary in

accordance with the Repayment Installment Dates and amounts prescribed in this

Agreement, to cause the outstanding amount of the Facility drawn down pursuant

to this Agreement, to be repaid and decrease by installments in accordance with

the provisions governing its repayment installments.

 

2.2.6 No Facility Amount which has been repaid and decreased in accordance with

the preceding provisions may be drawn anymore. The Facility Amount advanced by

each Bank shall be repaid, satisfied and accordingly decrease by a ratio of each

Bank's outstanding claims under the Facility which has been drawn, to the sum of

all the Banks' outstanding claims under the Facility which has been drawn (Risk

Sharing Ratio). The accounts Agent shall determine the distribution on the basis

of its own reasonable judgment, without objection from the Borrower and any of

the Banks, if it is technically impossible for the indebtedness to be repaid,

satisfied and decrease entirely by the above-cited ratio.

 

2.3 Drawdown

 

The Borrower shall draw down the Facility Amount to be advanced by each Bank,

based on the Commitment Ratio of each Bank, provided the Agent shall determine

the distribution portion of such drawdown amount for which the Borrower applies

on the basis of its own reasonable judgment, without objection from the Borrower

and any of the Banks, if it is technically impossible to draw down the Facility

Amount entirely by the above-cited ratio.

 

2.4 Repayment and Decrease, and Cancellation, of Facility Amount

 

 

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2.4.1 The Facility Amount under this Agreement shall be repaid and decrease, or

cancelled, in accordance with the applicable provisions of this Agreement.

 

2.4.2 Each Bank shall perform its relevant undertakings under this Agreement

based on its then valid Facility Amount and extend Loans to the Borrower

pursuant to the applicable provisions of this Agreement. Notwithstanding, a Bank

is not required to maintain or perform any undertaking under this Agreement if

it discovers prior to performing such undertaking that such maintenance or

performance will result in its violation of laws or regulations or if such Bank

is precluded by other applicable laws or regulations from maintaining or

performing the obligations under this Agreement (provided the Bank shall

immediately notify the Borrower and Agent). If the Bank discovers after

performing an undertaking that its maintenance of such undertaking constitutes

or will constitute a violation of law on its part, such Bank shall immediately

notify the Borrower and Agent with relevant documents sufficient to prove such

violation. The Borrower shall then make prepayment or try to relieve the Bank of

the relevant obligation(s) within sixty (60) Business Days of its receipt of the

notice from the Bank or a longer period permitted by laws and regulations for

cure. The Bank's Facility Amount shall immediately be cancelled or decrease to

the extent permitted by laws and regulations (no commitment fee is required for

any portion of the Facility Amount which the Borrower is precluded as a result

of the above from drawing, for the period of such preclusion). The Bank must

also make other arrangements for the Borrower for substitute financing under

terms comparable to those offered by this Agreement, if the violation of laws or

regulations mentioned above is attributable to the Bank. The Bank shall also

reimburse the Borrower for any additional funding costs (subject to relevant

supporting documents or evidence presented by the Borrower to substantiate its

claim of additional funding costs), if the Borrower needs to raise funds by

itself with costs higher than the financing costs under this Agreement as a

result of the Bank's failure to arrange for substitute financing in a timely

manner. However, the Bank shall still negotiate with the Borrower and to the

extent permissible by laws and regulations try as best as possible to arrange

for or assist the Borrower in obtaining other financing, if the above violation

of laws or regulations mentioned above is not attributable to the Bank, provided

neither the Agent nor the Bank is required to make any undertaking with respect

to whether such other financing may be procured or not.

 

2.4.3 No Facility Amount under this Agreement may be cancelled for convenience

absent the prior concurrence of all the Banks and the Borrower, unless otherwise

provided by this Agreement.

 

2.4.4 The Borrower may, on not less than thirty (30) days' prior written notice

to the Agent, request the Agent at any time prior to the Expiration Date of the

Drawdown Period to cancel in whole or in part the balance of the Facility

Amount, without premium or penalty, provided:

 

 

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2.4.4.1 the amount to be cancelled each time shall be in the minimum amount of

Two Hundred Million New Taiwan Dollars (NT$200,000,000), and the excess of Two

Hundred Million New Taiwan Dollars (NT$200,000,000) shall be a multiple of Fifty

Million New Taiwan Dollars (NT$50,000,000) (unless the then entire balance of

the Facility Amount is shy of Two Hundred Million New Taiwan Dollars

(NT$200,000,000), in which case such full balance must be cancelled);

 

2.4.4.2 the Facility Amount that is allowed to be cancelled must not have been

actually drawn; and

 

2.4.4.3 the Borrower shall pay an indemnity to each Bank in a lump sum at the

rate of 0.15% with respect to any portion of the Facility Amount which the

Borrower cancels in violation of the above provisions.

 

2.4.5 No Facility Amount may be drawn once cancelled pursuant to this Agreement.

The Facility Amount of each Bank shall decrease by its Commitment Ratio upon

cancellation, provided the Agent shall determine the distribution on the basis

of its own reasonable judgment, without objection from the Borrower and any of

the Banks, if it is technically impossible for the Facility Amount of each Bank

to decrease entirely by the above-cited ratio.

 

2.4.6 Unless otherwise provided by this Agreement, the Borrower may, on not less

than thirty (30) days' prior written notice to the Agent, prepay in whole or in

part the outstanding Facility Amount drawn (Outstanding Loan), without premium

or penalty, provided:

 

2.4.6.1 each prepayment shall be in the minimum amount of One Hundred Million

New Taiwan Dollars (NT$100,000,000), and the excess of One Hundred Million New

Taiwan Dollars (NT$100,000,000) shall be a multiple of Fifty Million New Taiwan

Dollars (NT$50,000,000) (unless the then entire outstanding Facility Amount is

shy of One Hundred Million New Taiwan Dollars (NT$100,000,000), in which case

such full outstanding amount must be prepaid);

 

2.4.6.2 prepayment may be made only on the Interest Payment Date;

 

2.4.6.3 prepayment must be made together with payment in full of all outstanding

interest and other sums associated with such prepayment which are then payable;

and

 

2.4.6.4 the Borrower shall bear all losses in fund operation and interest rate

differential as suffered by each Bank from the Borrower's prepayment (subject to

relevant supporting documents or evidence presented by each Bank to substantiate

its claim of losses and costs).

 

2.4.7 Prepayments of Loans shall be applied against repayment installments of

Loans in inverse order of maturity (i.e., in principle the last Loan to mature

shall be first prepaid).

 

 

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2.4.8 No Facility Amount may be reborrowed once prepaid pursuant to this

Agreement. The Facility Amount of each Bank shall decrease by a ratio of the

Bank's outstanding claims under the Facility which has been drawn, to the sum of

all the Banks' outstanding claims under the Facility which has been drawn (Risk

Sharing Ratio). Notwithstanding, the Agent shall determine the distribution on

the basis of its own reasonable judgment, without objection from the Borrower

and any of the Banks, if it is technically impossible for the Facility Amount of

each Bank to decrease entirely by the above-cited ratio.

 

ARTICLE 3 LOAN

 

3.1 Commitment

 

3.1.1 Subject to the Borrower having complied with the conditions precedent set

out in this Agreement, the Borrower may, within the Drawdown Period, draw a Loan

to the extent valid, in New Taiwan Dollars, pursuant to this Agreement.

 

3.1.2 The Facility Amount may be drawn down by installments within the Drawdown

Period, but not on a revolving basis.

 

3.1.3 Each Bank agrees to advance Loans under the Facility Amount to the

Borrower pursuant to this Agreement.

 

3.1.4 Unless otherwise agreed by the Agent, the amount to be drawn by the

Borrower each time shall be in the minimum amount of Two Hundred Million New

Taiwan Dollars (NT$200,000,000), and the excess of Two Hundred Million New

Taiwan Dollars (NT$200,000,000) shall be a multiple of Fifty Million New Taiwan

Dollars (NT$50,000,000), provided, however, that the amount to be drawn shall be

the then entire balance of the Facility Amount if the such balance is shy of the

minimum amount to the drawn, unless otherwise provided by the Agreement.

 

3.2 Drawdowns

 

3.2.1 Subject to the Borrower having totally complied with or performed the

conditions precedent to drawdown as set out in this Agreement, the Borrower may

at any time request, in the form of EXHIBIT 1 hereto ("Drawdown Request"), a

drawdown of a Loan hereunder from the Agent, in accordance with the terms and

conditions and also schedule set out in this Agreement, unless otherwise

provided by the Agreement. Each Bank shall, to the extent of its Facility

Amount,

 

 

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advance payment to the Borrower by its Commitment Ratio, in the event of a

request for drawdown by the Borrower, provided its obligation to advance Loans

hereunder is contingent upon none of the following circumstances having occurred

to the request for drawdown: (a) the time or duration of the drawdown does not

conform to this Agreement; (b) the drawdown is in an amount which would cause

the Loans outstanding under the Facility to exceed the then valid Total Facility

Amount, or the advances outstanding hereunder of each Bank to exceed its

Facility Amount; (c) the amount of the drawdown will exceed the secured debt

value or commitment restriction prescribed by this Agreement; (d) the drawdown

otherwise does not conform to the other requirements provided for in Article 6

of this Agreement.

 

3.2.2 Provided that the conditions described above have been met with respect to

the requested drawdown, the Agent shall immediately accept the Drawdown Request

of the Borrower on behalf of the Banks. Each Drawdown Request, once accepted by

the Agent, shall be irrevocable and binding on the Borrower. The Borrower shall

reimburse the Banks, at any time upon the Agent's demand, for any costs and

losses incurred by the Banks in the event that the Borrower subsequently fails

to continue to maintain the relevant conditions precedent to its drawdown or

satisfy other conditions precedent to such drawdown to the extent that the

amount of drawdown it has requested cannot be advanced in whole or in part

(subject to relevant calculations or documentary evidence presented by the

Bank(s) claiming such losses and costs).

 

3.2.3 Upon its receipt of a Drawdown Request from the Borrower, the Agent shall

request each Bank by a written notice at least one Business Day prior to the

Drawdown Date specified in the Drawdown Request, to advance payment according to

the Agent's distribution, stating the date on which each Bank is to make

available its Loan and the amount to be advanced by each Bank pursuant to the

Drawdown Request. Each Bank shall, pursuant to such notice and this Agreement,

make available its advance in immediately available funds not later than 12 a.m.

on the Drawdown Date specified in the Drawdown Request, to the account

designated by the Agent. The Agent supposedly may assume that each Bank is

capable of advancing payment pursuant to the Agreement and, on the basis of such

assumption, may further, but is not obligated to, make available the funds to

the Borrower on schedule, unless the Agent has received a written notice from

any of the Banks prior to the Drawdown Date stating that the Bank is unable to

advance the Loan by its Commitment Ratio. Notwithstanding, the Agent is under no

obligation to make available or advance any sum to the Borrower on behalf of the

Banks, until the Agent actually receives the payment made available by the Banks

pursuant to the Agreement. If the Agent makes available to the Borrower the

amount of any advance to be made by any Bank which such Bank fails to make

available to the Agent pursuant to the Agreement, the Borrower shall at any time

upon the Agent's demand refund such amount to the Agent together with daily

interest at the highest overnight loan rate posted on Reuters' PIBC page after

the close of business each day, for the period from the Drawdown Date to the

date of the Agent's actual receipt of the refund.

 

 

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3.2.4 Failure by any Bank to make available its advances pursuant to the

Agreement shall not relieve the other Banks of their undertakings to make

advances pursuant to the Agreement and shall not relieve the Borrower of its

obligations under this Agreement, but, in no event, no other Bank or the Agent

shall be liable for the default of the defaulting Bank. Any Bank which fails to

make Borrower to substantiate its claim of losses and costs). The Borrower is

not required to pay any commitment fee with respect to the amount not yet drawn

as a result of any Bank's failure to make available funds pursuant to the

Agreement.

 

ARTICLE 4 FEES, TERMS OF PAYMENT AND GUARANTEE OF PROCEEDS

 

4.1 Commitment Fee

 

4.1.1 A commitment fee of 0.2% per annum is payable to each Bank on the actual

undrawn amount each day from the date of this Agreement to the Expiration Date

of the Drawdown Period, calculated on the basis of a year of Three Hundred

Sixty-Five (365) days and actual number of days elapsed. The Borrower shall pay

such fee in a lump sum on the Expiration Date of the Drawdown Period, in the

form of immediately available funds in New Taiwan Dollars, to the Agent, for

distribution and forwarding by the Agent to the Banks pursuant to the applicable

provisions of this Agreement.

 

4.1.2 The business tax and stamp duty arising out of the above commitment fee

shall be borne by the Banks.

 

4.2 Loan Interest

 

4.2.1 The Borrower shall, on each Interest Payment Date, pay the Agent interest

at the applicable Interest Rate, calculated on the basis of a year of Three

Hundred Sixty-Five (365) days and actual number of days elapsed, on the then

outstanding principal amount of each Loan extended by each Bank. The Borrower

shall still pay the principal together with the relevant interest in full even

if the date the Borrower repays the principal pursuant to the Agreement

(Repayment Installment Date) is not an Interest Payment Date. The Agent will

notify each Bank and the Borrower of the Interest Rate of a Loan on the date

each Loan is drawn down and thereafter upon the commencement of each Interest

Period, after consulting the relevant units. If there is any variation of the

Reference Interest Rate, the Interest Rate will not be adjusted until the

commencement date of the next Interest Period.

 

 

 

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4.2.2 The Borrower shall pay interest on schedule for each Interest Period from

the Initial Drawdown Date. The last day of each Interest Period shall be the

Interest Payment Date. The Agent will calculate interest at the applicable

Interest Rate by the actual duration of the Loan and notify the Borrower of such

interest. The Borrower shall pay interest to the Agent in immediately available

funds in New Taiwan Dollars on each Interest Payment Date, for distribution and

forwarding by the Agent to the Banks pursuant to the applicable provisions of

this Agreement.

 

4.2.3 The business tax and stamp duty arising out of the above interest shall be

borne by the Borrower.

 

4.2.4 The Borrower hereby agrees enterprises engaged in banking are still

required by the applicable provisions of the Value-Added and Non-Value-Added

Business Tax Law to allocate 3% of their sales for writing off overdue loans or

setting aside allowances for bad debts, notwithstanding the prescription by such

law of a 2% business tax rate for the bank industry. Thus, the business tax

which the Borrower shall bear pursuant to this Agreement remains payable at the

rate of 5%. In the event of a change to the business tax rate in the future, the

new rate shall apply, provided the portion associated with the required

allowances for bad debts shall still be borne by the Borrower as long as the

requirement for such allowances to be set aside by enterprises engaged in

banking exists.

 

4.3 Other Payments

 

The Borrower shall pay the Coordinating Arrangers and Agent all fees associated

with the Coordinating Arrangers' formation of the Banks and the Agent's

management of all affairs pertaining to this Agreement. The contents will be

determined through agreement by the Borrower with the Coordinating Arrangers and

Agent.

 

4.4 Terms of Payment and Compensatory Interest

 

4.4.1 The Borrower shall pay, pursuant to the applicable provisions of this

Agreement, all sums which it is required by this Agreement or related documents

to pay, in immediately available funds in New Taiwan Dollars, before 12 noon on

the due date, according to the type and nature of its indebtedness, such as

principal, interest or fee. All interest rates or rates under this Agreement

will be rounded up to the nearest fourth decimal, and interests or fees will be

rounded up to the New Taiwan Dollar.

 

4.4.2 If the Borrower or Guarantor makes payment in a currency other than New

Taiwan Dollars or (for whatever reason) the repayment actually received by the

Agent or Banks is in a currency other than New Taiwan Dollars, the

above-mentioned payment or repayment will not be deemed paid pursuant to the

Agreement and will not relieve the Borrower or Guarantor of its liability unless

such

 

 

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other currency has been fully converted into New Taiwan Dollars and the

converted New Taiwan Dollars have been remitted to the account or place

designated by the Agent; the Borrower or Guarantor shall further assume the

relevant foreign exchange risk. The Borrower or Guarantor shall also be

responsible for securing in a timely fashion all approvals, including foreign

exchange approvals, necessary for making all relevant payments in New Taiwan

Dollars, and shall make no defense based on its default on payment pursuant to

the Agreement due to its failure to secure the relevant approvals. If the Agent

or a Bank is required to calculate its claims in a currency other than New

Taiwan Dollars for the purposes of exercising its rights, the Borrower or

Guarantor shall be responsible for any shortfall and the Agent, and the Bank are

further entitled to claim against the Borrower or Guarantor, if the amount after

conversion into New Taiwan dollars is actually shy of the amount payable to the

Agent or Bank.

 

4.4.3 Any sum payable may be paid on the next succeeding Business Day if the due

date thereof is not a Business Day, unless such next succeeding Business Day

falls in another calendar month, in which case the payment shall be made on the

immediately preceding Business Day (and interest payable on such sum if such sum

is principal, will be payable for the actual number of days elapsed).

 

4.4.4 If any of the above payments is not paid on schedule when payable, the

Borrower shall make immediate payment pursuant to the Agreement along with

interest to each Bank and/or the Agent at the Compensatory Interest Rate,

calculated on the basis of a year of Three Hundred Sixty-Five (365) days and

actual number of days elapsed, on the outstanding sum, for the period from the

due date to the date of actual receipt by each Bank and/or the Agent of the

payment. However, if the outstanding sum is interest, the default interest will

be 10% and 20% of the sum overdue for not more than six (6) months and in excess

of six (6) months respectively. The Agent may determine the amount of such

payment based on its calculation from time to time and notify the determined

amount to the Borrower. Within three (3) days after receiving the

above-mentioned notice from the Agent, the Borrower shall immediately make the

payment to the Agent for forwarding by the Agent to the Banks pursuant to the

applicable provisions of this Agreement.

 

4.4.5 Unless otherwise provided by this Agreement, no other payment payable by

the Borrower under this Agreement will carry the effect of repayment unless paid

by the Agent to each Bank in accordance with this Agreement or other relevant

contracts. The Agent shall distribute and forward the above payments to each

Bank upon its receipt of such payments, save payments to be collected solely by

the Coordinating Arrangers or the Agent, provided each Bank shall issue a

receipt or proof and directly send the same to the Borrower with respect to each

payment collected by the Bank.

 

4.5 Cost Increase, Taxes and Change of Law

 

 

                                                                              14

<PAGE>

 

 

4.5.1 In the event a change in laws or regulations or in the interpretation of

laws or regulations by the competent authority, or a direction or requirement of

the competent authority, results in: (a) a change in the rate or tax base of the

taxes payable by the Banks on the transaction contemplated under this Agreement

or on the payments payable by the Borrower to the Banks pursuant to this

Agreement (except changes in the mandatory tax rate imposed on the net income of

the Banks by the R.O.C. government or the jurisdiction of the incorporation of

the Banks); (b) an increase or change in the Facility, or an application of any

reserve, special deposit or similar regulations to the Facility; or (c) an

increase in the costs for the Banks or Agent to perform or maintain

undertakings, or a decease in the amounts otherwise receivable by the Banks or

Agent under this Agreement, to the extent that the Majority Banks or Agent deems

material, then the Borrower shall, upon demand by the Banks or Agent, pay within

ten (10) days or before the deadline mutually agreed by the Agent and the

Borrower, the additional sums to the Banks or Agent as indemnity for the

increase in costs or decease in revenue to the Banks or Agent. The impact of the

above change of law shall be based upon relevant documentary evidence presented

by the affected Bank(s) or Agent of the increase in costs or decrease in

revenue. Notwithstanding the above, the Borrower may, on not less than fifteen

(15) days' prior written notice to the Agent, prepay in whole (but not in part)

the outstanding Facility Amount drawn (outstanding Loan) and is not subject to

fees, penalties or any obligations under Article 2.4.6 (a), and (b), but is

still subject to Article 2.4.6 (d) if the Borrower prepays the outstanding

Facility Amount drawn without giving no less than thirty (30) days' prior

written notice.

 

4.5.2 The Borrower shall neither make any withholdings or deductions off any

payment which it pays pursuant to this Agreement, nor offset any payment which

it pays pursuant to this Agreement against the indebtedness to any Bank. In

addition to taxes which the Banks or Agent is required by the above provision to

bear, if the Borrower shall be required by law to make any such withholding from

any payment under this Agreement, the sum payable by the Borrower shall be

increased so that after all required withholdings, including additional

withholdings in response to the increase in the sum paid under this

subparagraph, the Banks and Agent receive an amount equal to the sum they would

have received had no such withholdings been made.

 

4.5.3 All other present and future taxes and fees payable or incurred from the

execution or registration of this Agreement, Security Documents or other related

documents shall be borne by the Borrower, unless otherwise expressly provided by

this Agreement. If the Banks or Agent pays such taxes on the Borrower's behalf,

the Borrower shall reimburse the exact amount within ten (10) days or before the

deadline mutually agreed by the Agent and the Borrower after receipt of

notification, or it shall pay interest at the Compensatory Interest Rate for the

period from the date the Banks or Agent gives the above-mentioned notification

to the Borrower to the date the Borrower actually pays full reimbursement.

 

 

                                                                               15

<PAGE>

 

 

4.6 Application of Payments

 

4.6.1 Any sums received by the Agent from its exercise of rights pursuant to

this Agreement, Letter of guarantee, Mortgage Agreements, Security Documents and

all other associated documents shall be applied in the following order of

priority: (a) first, to all expenses and fees, including a facility fee payable

to the Agent, incurred by the Agent from its exercise of rights pursuant to this

Agreement, Letter of guarantee, Mortgage Agreements, Security Documents and all

other associated documents, which expenses and fees have been reimbursed by

neither the Borrower nor any Bank; (b) then to all outstanding fees and

interests, including interests or default interests to be calculated at the

Compensatory Interest Rate, payable by the Borrower to the Agent and the Banks

under this Agreement; (c) then to distribution to each Bank pursuant to the

applicable provisions of this Agreement (or to the decision of the Agent in the

absence of an express agreement), by the Agent on the basis of the nature of

each sum received, by a ratio of each Bank's outstanding claims under the

Facility which has been drawn, to the sum of all the Banks' outstanding claims

under the Facility which has been drawn (Risk Sharing Ratio).

 

4.6.2 Unless otherwise provided by this Agreement, the Agent shall forward to

the Banks pursuant to the Agreement all sums received from the Borrower that

shall be forwarded to the Banks, upon actual receipt of such sums, for the Banks

to apply towards the indebtedness due from the Borrower to the Banks in the

order of priority prescribed by this Agreement or laws and regulations. In the

event that the sums mentioned above are insufficient to pay all sums in a

specific category to the relevant Banks in the same order of priority, the Agent

shall distribute such sums to each Banks pro-rata to the claims to which each

Bank is entitled under such category (Risk Sharing Ratio).

 

4.7 Facility Records

 

The Agent shall maintain records relevant to the Facility, documenting the

drawdowns of the Facility Amount by the Borrower and the payments made by the

Borrower and Guarantor to each of the Banks. Details of the outstanding sums due

from the Borrower under this Agreement shall be as documented in the Agent's

records above, unless the Borrower can present specific evidence of manifest

errors in such records. Whether the records are compiled by the computer or

manually, unless the contents are wrong and must be corrected, the Borrower

agrees to acknowledge the entire contents of the records. The Borrower further

agrees to issue a new negotiable instrument or certificate of claims to the

Agent according to the Agent's records if any negotiable instrument or other

certificate of claims provided by the Borrower to the Agent pursuant to the

Agreement is lost, damaged or destroyed. The Borrower shall further lend its

unconditional support at all times in the event the Agent is required by laws or

regulations to report loss and proceed with other relevant formalities due to

the loss, damage or destruction of any negotiable instrument or other

certificate of claims.

 

 

                                                                              16

<PAGE>

 

 

ARTICLE 5 INTERESTED PARTIES

 

5.1 Several Obligations of the Banks

 

The relevant obligations of the Banks under this Agreement are all independent

and several of one another. Each Bank shall perform its own undertaking to

extend facilities in accordance with this Agreement. No action or inaction on

the part of any Bank will result in any right or obligation on the part of

another Bank. The Banks are not jointly liable with one another for the

obligations under this Agreement.

 

5.2 Joint and Several Claims of the Banks

 

5.2.1 All claims of a Bank and the Agent under this Agreement and the relevant

contracts against the Borrower, Guarantor and relevant obligors are joint and

several claims under Article 283 of the Civil Code, notwithstanding the several

and independent obligations of the Banks to perform their respective

undertakings to the Borrower pursuant to this Agreement to the extent of their

respective Facility Amounts. Any of the Banks and the Agent are entitled by law

to claim performance in whole or in part of the above claims against the

Borrower, Guarantor and relevant obligors, provided all the Banks and the Agent

agree to share their rights and interests and exercise their rights under this

Agreement, in accordance with the applicable provisions of this Agreement. (In

other words, except in their exercise of the right to set-off under this

Agreement, no Bank may take any action with respect to any matter under this

Agreement absent the written concurrence of the Majority Banks, or perform any

action or inaction that conflicts or is inconsistent with the decisions of the

Majority Banks.)

 

5.2.2 The Borrower, Banks and Agent all agree that the Agent shall be payee of

the Notes issued by the Borrower pursuant to this Agreement, and also the

mortgagee, assignee or security right holder entitled to hold, control, manage

and exercise in the capacity of a joint and several creditor pursuant to this

Agreement, the Mortgage Rights, Assignment Agreement, Letter of Guarantee and

other warranties provided by the Borrower pursuant to this Agreement, and to

further share the above interests with the Banks in accordance with this

Agreement in the Agent's capacity of a joint and several creditor.

 

5.2.3 Each of the Banks and the Agent shall, pursuant to this Agreement, share

the risks as well as the security interests under the Facility by the Risk

Sharing Ratio applicable to each Bank.

 

 

 

                                                                              17

<PAGE>

 

ARTICLE 6 CONDITIONS PRECEDENT TO DRAWDOWN

 

6.1 Initial Drawdown

 

The Borrower's initial drawdown of the Facility Amount under this Agreement is

subject to the conditions precedent that at least seven (7) Business Days prior

to the requested date for such drawdown the Agent shall have received all of the

following documents in form and substance satisfactory to the Agent:

 

6.1.1 Evidence, including, without limitation, resolutions and minutes of board

of directors' meetings that the Borrower has completed all necessary internal

corporate acts and is authorized to enter into, deliver and perform this

Agreement, the Security Documents and other associated contracts or documents;

and evidence that the person signing this Agreement, the Security Documents and

other associated contracts or documents on behalf of the Borrower has been duly

authorized by the Borrower;

 

6.1.2 The Borrower's Articles of Incorporation, business license and amended

incorporation registration form, including roster of directors and supervisors;

 

6.1.3 Letter of guarantee issued by the Guarantor in form and substance

consistent with EXHIBIT 5 of this Agreement;

 

6.1.4 The Guarantor's incorporation registration documents and resolutions and

minutes of board of directors' meetings, that the Guarantor has completed all

necessary corporate acts and is authorized to enter into, deliver and perform

the Letter of guarantee and evidence that the person signing the Letter of

guarantee on behalf of the Guarantor has been duly authorized by the Guarantor;

 

6.1.5 Evidence that the Guarantor has designated a service agent in accordance

with the Letter of Guarantee.

 

6.1.6 Evidence that the Guarantor and other shareholder of the Borrower has

increased its cash investment in the Borrower by not less than Two Hundred

Million New Taiwan Dollars (NT$200,000,000) and caused the Borrower to complete

capital increase by cash, raising the Borrower's paid-in capital to Seven

Billion One Hundred Eighty-Nine Million Three Hundred and Eight Thousand Four

Hundred and Ninety New Taiwan Dollars (NT$5,389,308,490);

 

6.1.7 Assignment Agreement duly executed by the Borrower in accordance with this

Agreement;

 

 

                                                                              18

<PAGE>

 

 

6.1.8 Note and Note Authorization issued by the Borrower in accordance with this

Agreement;

 

6.1.9 Favorable written legal opinions of the Banks' counsel on legal matters

relevant to the Facility under the laws of the Republic of China, New York State

and Delaware State; and

 

6.2 Each Drawdown

 

With respect to each drawdown, including the initial drawdown, of the Facility

Amount by the Borrower, the obligations of the Banks to perform their

undertakings pursuant to this Agreement are subject to the following conditions

precedent (photocopies presented must have been certified by the document

provider as true, accurate and complete copies):

 

6.2.1 The Agent shall have received the following documents at least five (5)

Business Days prior to the requested date for each drawdown by the Borrower (or

seven (7) Business Days prior to the requested date for initial drawdown):

 

6.2.1.1 The Drawdown Request submitted by the Borrower in accordance with this

Agreement;

 

6.2.1.2 The Borrower shall submit the following if it desires to draw the

Facility Amount with the Land and Buildings as collateral:

 

6.2.1.2.1 Appraisal Report obtained by the Borrower with respect to the Land and

Buildings;

 

6.2.1.2.2 Evidence that with respect to the Original Mortgage over the Land and

Buildings, the Borrower has entered into a Real Estate Mortgage Agreement (and

Supplement) in the form and content indicated in EXHIBIT 6 hereto with

Chinatrust Commercial Bank as well as duly executed other relevant documents

required by the Agent, and has completed the registration of the amendments to

the mortgage registration amount, security scope, and valid term in connection

with the mortgage over the Land and Buildings pursuant to the above-mentioned

Real Estate Mortgage Agreement (and Supplement) and relevant documents.

 

6.2.1.2.3 Evidence that the amount of drawdown requested by the Borrower is not

less than the outstanding amount of the Original Facility and such drawdown will

first be used to fully repay the outstanding amount of the Original Facility.

 

6.2.1.2.3 Evidence that the Borrower has, with respect to the Factory Buildings,

duly arranged insurances pursuant to this Agreement (the insured amount and

coverage shall conform to this Agreement); assigned all rights and interests in

the insurances to the Agent pursuant to the

 

 

                                                                               19

<PAGE>

 

 

Assignment Agreement, naming the Agent as the loss payee of such insurances on a

priority basis; and obtained the relevant undertakings from the insurance

company and delivered the same to the Agent.

 

6.2.1.3 The Borrower shall submit the following if it desires to draw the

Facility Amount with the Equipment as collateral:

 

6.2.1.3.1 Evidence of drawdown of the particular Loan to obtain funds for

financing the Borrower's purchase of the Equipment, including invoices, details

of the equipment, import declaration, auditor's report issued by a CPA, or other

relevant supporting documents demanded or recognized by the Agent, collectively

called "Evidence of Drawdown"), which evidence is dated not more than twelve

(12) months of the requested Drawdown Date;

 

6.2.1.3.2 Evidence that the Equipment has been installed and the Borrower has,

pursuant to the applicable provisions of this Agreement, duly executed a Chattel

Mortgage Agreement and created a first priority Chattel Mortgage capped at 145%

of the amount drawn on such occasion in favor of the Agent with respect to the

Equipment; and

 

6.2.1.3.3 Evidence that the Borrower has, with respect to the Equipment, duly

arranged insurances pursuant to this Agreement (the insured amount and coverage

shall conform to this Agreement); assigned all rights and interests in the

insurances to the Agent pursuant to the Assignment Agreement, naming the Agent

as the sole loss payee of such insurances on a priority basis; and obtained the

relevant undertakings from the insurance company and delivered the same to the

Agent.

 

6.2.2 Up until each Drawdown Date, (a) no Event of Default described in this

Agreement or no possible Event of Default due to a lapse of time has occurred;

(b) the representations and warranties made by the Borrower in this Agreement

are all true and accurate; (c) the Borrower has fully paid all costs and sums

required by this Agreement to be paid by the Borrower to each Bank; and (d) no

event entitling the Banks to disrupt funding under the Facility Amount pursuant

to this Agreement has occurred.

 

6.3 Restrictions on Commitment

 

The amount of Loan which the Borrower is to actually draw shall be limited as

follows ("Secured Debt Value"):

 

 

 

                                                                               20

<PAGE>

 

6.3.1 The amount of Loan to be drawn by the Borrower with the Equipment as

collateral is capped at 70% of the purchase price of the Equipment as specified

on the Evidence of Drawdown after depreciation. For the purpose of such

calculation:

 

<Table>

 

<S>                                                                     <C>   

         DEPRECIATION = PURCHASE PRICE SPECIFIED ON THE EVIDENCE OF DRAWDOWN

         DIVIDED BY 5 (YEARS) X   

 

         NUMBER OF MONTHS FROM THE DATE OF THE EVIDENCE OF DRAWDOWN TO THE DRAWDOWN DATE

</Table>

 

6.3.2 The amount of Loan to be drawn by the Borrower with the Land and Buildings

as collateral is capped at 70% of the Net Value.

 

6.3.3 The entire Loan amount to be drawn by the Borrower is capped at the sum of

the amounts in Articles 6.3.1 and 6.3.2.

 

6.3.4 Any conversion of currencies involved in the calculation of the amounts

above shall be made on the basis of the exchange rate specified in the relevant

import declaration.

 

ARTICLE 7 BORROWER'S REPRESENTATIONS AND WARRANTIES

 

The Borrower hereby represents and warrants as follows:

 

7.1 The Borrower is a duly incorporated and legally existing company under the

laws of the Republic of China with all lawful power and authority to own its

assets and conduct its business.

 

7.2 The Borrower has obtained all necessary authorizations in accordance with

the company's internal procedure to execute, deliver and perform this Agreement,

the Mortgage Agreements, Security Documents and all other documents relevant to

this Agreement.

 

7.3 The execution, delivery and performance by the Borrower of this Agreement,

the Mortgage Agreements, Security Documents and all other relevant documents do

not violate any law or regulation, the Articles of Incorporation or other

internal rules of the Borro