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SECURITY AGREEMENT
This SECURITY AGREEMENT (as amended, supplemented, amended and restated or
otherwise modified from time to time, this "Security Agreement"), dated as of
July 6, 2000, is made by ADVANCED SEMICONDUCTOR MATERIALS (NETHERLANDS ANTILLES)
N.V., a company duly organized and existing under the laws of the Netherlands
Antilles (the "Grantor"), in favor of CANADIAN IMPERIAL BANK OF COMMERCE, a bank
organized and validly existing under the laws of Canada, acting through its New
York agency (the "Lender").
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 6, 2000 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among ASM International N.V., a company duly
organized and existing under the laws of the Netherlands (the "Borrower"), the
Grantor, as a Guarantor, and the Lender, the Lender has extended Commitments to
make Loans to the Borrower;
WHEREAS, Section 6 of the Credit Agreement provides, in relevant part,
that the Grantor is required to guarantee the payment obligations of the
Borrower thereunder;
WHEREAS, Section 7.01(j)(i) of the Credit Agreement provides, in relevant
part, that the Grantor is required to execute and deliver this Security
Agreement;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of its Guarantee and this Security Agreement; and
WHEREAS, it is in the best interests of the Grantor to execute this
Security Agreement inasmuch as the Grantor will derive substantial direct and
indirect benefits from the Loans made to the Borrower by the Lender pursuant to
the Credit Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lender
to make Loans to the Borrower pursuant to the Credit Agreement, the Grantor
agrees, for the benefit of the Lender, as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Borrower" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Common Stock" has the meaning set forth in the Financing Agreement.
"Control Agreement" means an agreement in form and substance satisfactory
to the Lender which provides for the Lender to have "control" (as defined in
Section 8-106 of the U.C.C.) as such term relates to Securities.
"Credit Agreement" is defined in the first recital.
"Distributions" means all stock dividends, liquidating dividends, shares
of stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Securities constituting Collateral, but
shall not include Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Securities constituting Collateral made in the ordinary course of business
and not a liquidating dividend.
"Financing Agreement" shall mean an Equity Line Financing Agreement
between the Borrower and the Canadian Imperial Holdings Inc., as Investor,
substantially in the form of Exhibit C to the Credit Agreement, as the same may
be modified and supplemented and in effect from time to time.
"Grantor" and "Grantors" are defined in the preamble.
"Lender" is defined in the first recital.
"Loan Documents" shall mean the Credit Agreement, this Security Agreement,
the Control Agreement and all exhibits and annexes thereto.
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"Securities" means any obligations of an issuer or any shares,
participations, or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of such issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c) (i) are, or are of a type,
dealt with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the U.C.C.
"Securities Intermediary" means CIBC World Markets Corp.
"Security Agreement" is defined in the preamble.
"U.C.C." means the Uniform Commercial Code, as in effect from time to time
in the State of New York.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or
in the Credit Agreement or the context otherwise requires, terms for which
meanings are provided in the U.C.C. are used in this Security Agreement,
including its preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security. The Grantor hereby assigns, pledges,
hypothecates, charges, mortgages, delivers, and transfers to the Lender, and
hereby grants to the Lender, a security interest in all of the following,
whether now or hereafter existing or acquired by the Grantor (the "Collateral"):
(a) all ASM Pacific Shares and Additional ASM Pacific Shares
described in Schedule I hereto and any Additional ASM Pacific Shares
identified in a supplement to this Security Agreement;
(b) all Dividends and Distributions with respect to any the
Securities described in clause (a) above;
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(c) cash as may be deposited with the Lender from time to time; and
(d) all profits, returns, income and proceeds of and from any and
all of the foregoing Collateral (including proceeds which constitute
property of the type described in clause (a) above).
SECTION 2.2. Treatment of Additional ASM Pacific Shares. The Lender
acknowledges and agrees that its ability to take any action with respect to the
Additional ASM Pacific Shares under this Security Agreement is subject to the
provisions of Section 9.08(a) of the Credit Agreement. To facilitate the
provisions of said Section 9.08(a), the Lender will maintain the Initial ASM
Pacific Shares and the Additional ASM Pacific Shares in separate securities
accounts with the Securities Intermediary.
SECTION 2.3. Security for Obligations. This Security Agreement
secures the payment of all Guaranteed Obligations under the Credit Agreement.
SECTION 2.4. Delivery of Securities. All Collateral comprised of
Securities shall be delivered to and held by the Lender or on behalf of the
Lender pursuant hereto and to a Control Agreement, shall be in suitable form for
transfer by delivery, and shall be accompanied by all necessary instruments of
transfer or assignment, duly executed in blank.
SECTION 2.5. Dividends on Securities. In the event that any Dividend is to
be paid on any Security that constitutes Collateral at a time when no Default or
Event of Default has occurred and is continuing or would result therefrom, such
Dividend may be paid directly to the Grantor. If any such Default or Event of
Default has occurred and is continuing, then any such Dividend shall be paid
directly to the Lender for application in accordance with Section 4.01(c) of the
Credit Agreement.
SECTION 2.6. Continuing Security Interest; Transfer of Notes. This
Security Agreement shall create a continuing security interest in the
Collateral and shall
(a) remain in full force and effect until indefeasible payment in
full in cash of all Guaranteed Obligations and the termination of the
Commitment;
(b) be binding upon the Grantor, its successors, transferees and
assigns; and
(c) inure, together with the rights and remedies of the Lender
hereunder, to the benefit of the Lender.
Without limiting the generality of the foregoing clause (c), the Lender
may, subject to Section 11.07 of the Credit Agreement, assign or otherwise
transfer (in whole or in part) any
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Note or Loan held by it to any other Person (other than Persons that compete
directly with Lender in one of its principal lines of business), and such other
Person shall thereupon become vested with all the rights and benefits in respect
thereof granted to such Lender under the Credit Agreement (including this
Security Agreement). Upon (i) the sale, transfer or other disposition of
Collateral in accordance with this Security Agreement or (ii) the payment in
full in accordance with the Credit Agreement of all Guaranteed Obligations and
the termination of all Commitments, the security interests granted herein shall
automatically terminate with respect to (x) such Collateral (in the case of
clause (i)) or (y) all Collateral (in the case of clause (ii)). Upon any such
sale, transfer, disposition or termination, the Lender will, at the Grantor's
sole expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all applicable certificated and uncertificated
Securities, together with all other applicable Collateral held by the Lender
hereunder, and execute and deliver to the Grantor such documents as the Grantor
shall reasonably request to evidence such termination.
SECTION 2.7. Security Interest Absolute. All rights of the Lender and the
security interests granted to the Lender hereunder, and all obligations of the
Grantor hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of the Credit Agreement,
any Note, the Guarantee or any other Loan Document;
(b) the failure of the Lender to assert any claim or demand or to
enforce any right or remedy against the Borrower, the Guarantor or any
other Person under the provisions of the Credit Agreement, any Note or any
other Loan Document or otherwise;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
extension, compromise or renewal of any Guaranteed Obligations;
(d) any reduction, limitation, impairment or termination of any
Guaranteed Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to
(and the Grantor hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of
the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Guaranteed Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification of,
or any consent to departure from, any of the terms of the Credit
Agreement, any Note or any other Loan Document;
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(f) any addition, exchange, release, surrender or non-perfection of
any collateral (including the Collateral), or any amendment to or waiver
or release of or addition to or consent to departure from any guaranty,
for any of the Guaranteed Obligations; or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Borrower
or the Guarantor.
SECTION 2.8. Postponement of Subrogation, etc. Until the indefeasible
payment in full in cash of all Guaranteed Obligations and the termination of the
Commitment, the Grantor hereby agrees that it will not exercise any rights which
it may acquire by reason of any payment made hereunder, whether by way of
subrogation, reimbursement or otherwise. Any payment of Dividends or
Distributions to the Grantor during the existence of a Default or Event of
Default shall immediately be paid to the Lender and credited and applied against
the Guaranteed Obligations in accordance with this Security Agreement. In
furtherance of the foregoing, for so long as any Guaranteed Obligations or
Commitment remain in full force and effect, the Grantor shall refrain from
taking any action or commencing any proceeding against the Borrower (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in respect of payments made under this
Security Agreement to the Lender.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Grantor represents and warrants to the Lender as follows:
SECTION 3.1. As to Securities. (a) The Initial ASM Pacific Shares
constitute 33.07% of the total number of outstanding shares of common stock of
ASM Pacific. The Additional ASM Pacific Shares constitute 21.81% of the total
number of outstanding shares of common stock of ASM Pacific.
(b) The Securities included in the Collateral are duly authorized, validly
existing, fully paid, and non-assessable, and none of the Securities
constituting the Collateral is or will be subject to any contractual
restriction, or any restriction under the charter or by-laws of ASM Pacific, on
the transfer of such Securities.
(c) All of the Securities included in the Collateral are in certificated
form and Schedule 1 correctly identifies the class and par value of the
Securities included in the Collateral and the respective number of shares
evidenced by each certificate identified in said Schedule.
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(d) The Grantor is the sole beneficial and registered legal owner of all
of the Securities included in the Collateral and no Lien exists or will exist
upon such Securities at any time (except for Liens under this Security
Agreement).
SECTION 3.2. Place of Business. The Grantor has no place of business
in the United States of America or Canada.
SECTION 3.3. Ownership, No Liens, etc. The Grantor owns the Collateral
free and clear of any Lien, security interest, charge or encumbrance except for
the security interest created by this Security Agreement. No effective financing
statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any recording office, except such as may have been
filed in favor of the Lender relating to this Security Agreement or as to which
a duly executed termination statement relating to such financing statement or
other instrument has been delivered to the Lender on the Closing Date.
SECTION 3.4. Validity, etc. This Security Agreement creates a valid first
priority security interest in the Collateral securing the payment of the Secured
Obligations, and in the case of Collateral comprised of Securities or
instruments, upon the Lender obtaining "control" (as defined in Section 8-106 of
the U.C.C., as such term relates to certificated securities) with respect to
such Collateral, such security interest will be a valid first priority perfected
security interest.
SECTION 3.5. Authorization, Approval, etc. Except as have been obtained or
made and are in full force and effect (or otherwise provided for to the
satisfaction of the Lender), no authorization, approval or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required either
(a) for the grant by the Grantor of the security interest granted
hereby, the pledge by the Grantor of any Collateral pursuant hereto or for
the execution, delivery and performance of this Security Agreement by the
Grantor,
(b) for the perfection of or the exercise by the Lender of its
rights and remedies hereunder, or
(c) for the exercise by the Lender of the voting or other rights
provided for in this Security Agreement, or, except with respect to any
Securities issued by a Subsidiary of the Grantor, as may be required in
connection with a disposition of such Securities by laws affecting the
offering and sale of securities generally, the remedies in respect of the
Collateral pursuant to this Security Agreement.
SECTION 3.6. Compliance with Laws. The Grantor is in compliance with the
requirements of all applicable laws, rules, regulations and orders of every
governmental
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authority, the non-compliance with which could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to materially
adversely affect the value of the Collateral or the worth of the Collateral as
collateral security.
ARTICLE IV
COVENANTS
SECTION 4.1. Certain Covenants. The Grantor covenants and agrees that, so
long as any portion of the Secured Obligations shall remain unpaid or the
Commitment shall remain outstanding, the Grantor will perform, comply with and
be bound by the obligations set forth in this Article 4.
SECTION 4.2. Stock Powers, etc. The Grantor agrees that all certificated
Securities constituting Collateral delivered by the Grantor pursuant to this
Security Agreement will be accompanied by duly executed undated blank stock
powers, or other equivalent instruments of transfer acceptable to the Lender.
The Grantor will, from time to time upon the request of the Lender, promptly
deliver to the Lender such stock powers, instruments, and similar documents,
satisfactory in form and substance to the Lender, with respect to such
Collateral as the Lender may reasonably request and will, from time to time upon
the request of the Lender after the occurrence of any Event of Default, promptly
transfer any Securities constituting Collateral into the name of any nominee
designated by the Lender.
SECTION 4.3. Continuous Pledge. The Grantor will, at all times, keep
pledged to the Lender pursuant hereto on a first priority perfected basis all
Securities constituting Collateral, all Dividends and Distributions with respect
thereto, and all other Collateral and other securities, instruments, proceeds,
and rights from time to time received by or distributable to the Grantor in
respect of any of the foregoing Collateral and will not permit any Subsidiary of
the Grantor to issue any Securities which have not been pledged hereunder on a
first priority perfected basis.
SECTION 4.4. Voting Rights; Dividends, etc. The Grantor agrees:
(a) after any Default or any Event of Default shall have occurred
and be continuing, promptly upon receipt of notice thereof by the Grantor
and without any request therefor by the Lender, to deliver (properly
endorsed where required hereby or requested by the Lender) to the Lender
all Dividends, Distributions, all interest, all principal, all other cash
payments, and all proceeds of the Collateral, all of which shall be held
by the Lender as additional Collateral for use in accordance with clause
(b) of Section 6.1; and
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(b) after any Event of Default shall have occurred and be continuing
and the Lender has notified the Grantor of the Lender's intention to
exercise its voting power under this Section 4.4(b):
(i) the Lender may exercise (to the exclusion of the Grantor)
the voting power and all other incidental rights of ownership with
respect to any Securities and the Grantor hereby grants the Lender
an irrevocable proxy, exercisable under such circumstances, to vote
such Securities; and
(ii) promptly to deliver to the Lender such additional proxies
and other documents as may be necessary to allow the Lender to
exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Grantor but which the
Grantor is then obligated to deliver to the Lender, shall, until delivery to the
Lender, be held by the Grantor separate and apart from its other property in
trust for the Lender. The Lender agrees that unless an Event of Default shall
have occurred and be continuing and the Lender shall have given the notice
referred to in Section 4.4(b), the Grantor shall have the exclusive voting power
with respect to any Securities constituting Collateral and the Lender shall,
upon the written request of the Grantor, promptly deliver such proxies and other
documents, if any, as shall be reasonably requested by the Grantor which are
necessary to allow the Grantor to exercise voting power with respect to any such
Securities; provided, however, that no vote shall be cast, or consent, waiver,
or ratification given, or action taken by the Grantor that would impair any such
Collateral or be inconsistent with or violate any provision of the Credit
Agreement or any other Loan Document (including this Security Agreement).
SECTION 4.5. Amendment of Constitutive Documents. The Grantor will not
amend, supplement or otherwise modify, or permit, consent or suffer to occur any
amendment, supplement or modification of any terms or provisions contained in,
or applicable to, any constitutive document of any issuer of any Security
comprising the Collateral in which it has an equity interest if the effect
thereof is to impair, or is in any manner adverse to, the rights or interests of
the Lender or any other Senior Secured Party hereunder or under the Credit
Agreement or any other Loan Document, without the prior written consent of the
Lender.
SECTION 4.6. Transfers and Other Liens. The Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral; or
(b) create or suffer to exist any Lien or other charge or
encumbrance upon or with respect to any of the Collateral to secure
Indebtedness of any Person or entity, except for
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the security interest created by this Security Agreement and except as
permitted by the Credit Agreement.
SECTION 4.7. Further Assurances, etc. The Grantor agrees that, from time
to time at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Lender may request, in order to perfect, preserve and
protect any security interest granted or purported to be granted hereby or to
enable the Lender to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing, the
Grantor will
(a) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices as may be
necessary or desirable, or as the Lender may request, in order to perfect
and preserve the security interests and other rights granted or purported
to be granted to the Lender hereby;
(b) promptly execute and deliver all further instruments, and take
all further action, that may be necessary or desirable, or that the Lender
may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the Lender
to exercise and enforce its rights and remedies hereunder with respect to
any Collateral; and
(c) furnish to the Lender, from time to time at the Lender's
request, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Lender may reasonably request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Lender to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of the Grantor where permitted by law. A
carbon, photographic or other reproduction of this Security Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
ARTICLE V
THE LENDER
SECTION 5.1. Lender Appointed Attorney-in-Fact. The Grantor hereby
irrevocably appoints the Lender the Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor
or otherwise, from time to time in the Lender's discretion, following the
occurrence and continuation of an Event of Default, to take any action
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and to execute any instrument which the Lender may deem necessary or advisable
to accomplish the purposes of this Security Agreement, including:
(a) to ask, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above;
(c) to file any claims or take any action or institute any
proceedings which the Lender may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Lender with respect to any of the Collateral; and
(d) to perform the affirmative obligations of the Grantor hereunder
(including all obligations of the Grantor pursuant to Section 4.4).
The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Lender May Perform. If any Grantor fails to perform any
agreement contained herein, the Lender may itself perform, or cause performance
of, such agreement, and the expenses of the Lender incurred in connection
therewith shall be payable by the Grantor pursuant to Section 6.3.
SECTION 5.3. Lender Has No Duty. The powers conferred on the Lender
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty on it to exercise any such powers. Except for reasonable care of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, the Lender shall have no duty as to any Collateral or
responsibility for:
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to
any Securities, whether or not the Lender has or is deemed to have
knowledge of such matters, or
(b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Lender is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Lender shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral, if it
takes such action for that purpose as any Grantor reasonably requests in
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writing at times other than upon the occurrence and during the continuance of
any Event of Default, but failure of the Lender to comply with any such request
at any time shall not in itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Lender may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected
Collateral) and also may, without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Lender's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Lender may
deem commercially reasonable. The Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days' prior notice
to the Grantor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Lender shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Lender may
adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Lender in respect of any sale
of, collection from, or other realization upon, all or any part of the
Collateral shall be applied by the Lender against, all or any part of the
Obligations as follows:
(i) first, to the payment of any amounts payable to the
Lender pursuant to Section 6.3;
(ii) second, to the equal and ratable payment of Guaranteed
Obligations, in accordance with Guaranteed Obligations owing to the
Lender under or pursuant to the Credit Agreement or
any other Loan Document, applied:
(A) first to fees and expense reimbursements then
due to the Lender,
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(B) then to interest due to the Lender,
(C) then to pay or prepay principal of the Loans owing
to the Lender, and
(D) then to pay the remaining outstanding Guaranteed
Obligations;
(iii) third, without duplication of any amounts paid pursuant
to clause (b)(ii) above, to the Indemnified Parties to the extent of
any amounts owing pursuant to Section 11.04 of the Credit Agreement;
and
(iv) fourth, to be held as additional collateral security
until the payment in full in cash of all of the Guaranteed
Obligations and the termination of the Commitment, after which such
remaining cash proceeds shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) The Lender may:
(i) transfer all or any part of the Collateral into the name
of the Lender or its nominee, with or without disclosing that such
Collateral is subject to the lien and security interest hereunder,
(ii) notify the parties obligated on any of the Collateral to
make payment to the Lender of any amount due or to become due
thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or
not longer than the original period) any obligations of any nature
of any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in the
Grantor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of the Grantor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
SECTION 6.2. Compliance with Restrictions. The Grantor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Lender
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is hereby authorized to comply with any limitation or restriction in connection
with such sale as it may be advised by counsel is necessary in order to avoid
any violation of applicable law (including compliance with such procedures as
may restrict the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and restrict
such prospective bidders and purchasers to Persons who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or resale of such Collateral), or in order to obtain
any required approval of the sale or of the purchaser by any governmental
regulatory authority or official, and the Grantor further agrees that such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, nor shall the Lender be liable
nor accountable to the Grantor for any discount allowed by the reason of the
fact that such Collateral is sold in compliance with any such limitation or
restriction.
SECTION 6.3. Indemnity and Expenses.
(a) The Grantor jointly and severally agrees to indemnify the Lender from
and against any and all claims, losses and liabilities arising out of or
resulting from this Security Agreement (including enforcement of this Security
Agreement), except claims, losses or liabilities resulting from the Lender's
gross negligence or wilful misconduct.
(b) The Grantor will upon demand pay to the Lender the amount of any and
all reasonable expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, which the Lender may incur in connection
with
(i) the administration of this Security Agreement,
(ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the Lender
or the Lender hereunder, and
(iv) the failure by any Grantor to perform or observe any of the
provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
-14-
<PAGE> 15
SECTION 7.2. Amendments; etc. No amendment to or waiver of any provision
of this Security Agreement nor consent to any departure by any Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Lender (on behalf of the Lenders, as the case may be), and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 7.3. Protection of Collateral. The Lender may from time to time,
at its option, perform any act which the Grantor agrees hereunder to perform and
which the Grantor shall fail to perform after being requested in writing so to
perform (it being understood that no such request need be given after the
occurrence and during the continuance of an Event of Default) and the Lender may
from time to time take any other action which the Lender reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest in the Collateral.
SECTION 7.4. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and, if to any Grantor, mailed or telecopied or delivered to it, addressed to it
in care of the Borrower at the address of the Borrower specified in the Credit
Agreement, if to the Lender, mailed or telecopied or delivered to it, addressed
to it at the address of the Lender specified in the Credit Agreement. All such
notices and other communications, when mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any such notice or communication, if
transmitted by telecopier, shall be deemed given when transmitted and
electronically confirmed.
SECTION 7.5. Section Captions. Section captions used in this
Security Agreement are for convenience of reference only, and shall not
affect the construction of this Security Agreement.
SECTION 7.6. Severability. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.
SECTION 7.7. Counterparts. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall constitute together but one and the same
agreement.
SECTION 7.8. Governing Law, Entire Agreement, etc. THIS SECURITY AGREEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK, EXCEPT
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<PAGE> 16
TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE INTERNAL LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK. THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND THEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
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<PAGE> 17
IN WITNESS WHEREOF, the Grantor has caused this Security Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
ADVANCED SEMICONDUCTOR MATERIALS
(NETHERLANDS ANTILLES) N.V.
as Grantor
By__________________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
Acting through its New York
agency, as Lender
By__________________________________
Name:
Title:
<PAGE> 18
SCHEDULE I
to Security Agreement
INITIAL ASM PACIFIC SHARES
<TABLE>
<CAPTION>
Certificate
Number Date Shares
<S> <C> <C>
74300 Oct. 1, 1990 4,750,000
274820 Dec. 5, 1995 10,000,000
274821 Dec. 5, 1995 10,000,000
274822 Dec. 5, 1995 10,000,000
274823 Dec. 5, 1995 10,000,000
274824 Dec. 5, 1995 10,000,000
274825 Dec. 5, 1995 10,000,000
274826 Dec. 5, 1995 10,000,000
274827 Dec. 5, 1995 10,000,000
274828 Dec. 5, 1995 10,000,000
274829 Dec. 5, 1995 10,000,000
274830 Dec. 5, 1995 10,000,000
274831 Dec. 5, 1995 10,000,000
278008 to
278132* May 12, 1998 250,000
Total number of shares 125,000,000
</TABLE>
--------
* Each certificate represents 2,000 shares.
<PAGE> 19
SCHEDULE I
to Security Agreement
Page 2
ADDITIONAL ASM PACIFIC SHARES*
<TABLE>
<CAPTION>
Certificate
Number Date Number of Shares
<S> <C> <C>
167191 May 1, 1991 1,250,000
199996 Apr. 7, 1992 3,600,000
274819 Dec. 5, 1995 6,500,000
274832 Dec. 5, 1995 10,000,000
274833 Dec. 5, 1995 10,000,000
274834 Dec. 5, 1995 10,000,000
274835 Dec. 5, 1995 10,000,000
274836 Dec. 5, 1995 10,000,000
278133 to
279222** May 12, 1998 2,180,000
Total number of shares 63,530,000
</TABLE>
* 18,897,500 Additional ASM Pacific Shares will be indicated in a supplement to
this Security Agreement no later than 10 days following the Closing Date.
** Each certificate represents 2,000 shares.
