**EXHIBIT 10.23**

 

AMENDMENT 

TO 

LOAN ANDSECURITY AGREEMENT

 

This Amendment to Loanand Security Agreement is entered into as of August 15, 2001 (the “Amendment”), by and between BANK SINOPAC, LOS ANGELES BRANCH and FAR EAST NATIONAL BANK (individually, a “Lender” and collectively, the “Lenders”) andOSE USA, INC. (*fka* “INTEGRATED PACKAGING ASSEMBLY CORPORATION”), a Delaware corporation, and OSE, INC., a California corporation (individually a “Borrower” and collectively, the “Borrowers”). 

 

RECITALS

 

Borrowers and Lenders are parties to that certain Amended andRestated Loan and Security Agreement dated as of December l, 2000, as previously amended on February 15,2001 and as further amended (the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of thisAmendment. 

 

NOW. THEREFORE. the parties agree asfollows: 

 

1. The following definitions are herebyadded or shall replace existing definitions in Section 1.1 the Agreement as follows: 

 

“Revolving Committed Line” means the facility under which Borrowers may request Advances under Section 2.1.1 in an amount up to Fifteen Million Dollars ($15,000,000). 

 

“Revolving Maturity Date” means February 15,2002.

 

2. The following new paragraphs are hereby addedto the end of Section 6.3 of the Agreement 

 

“Within fifteen (15) days after the last day of each month and together with any Advance request pursuant to Section 2.1.1, Borrowers shall each deliver to Servicing Agent a Borrowing Base Certificate signed by a ResponsibleOfficer in substantially the form of Exhibit F hereto. 

 

Lenders shall have a right from time to time initially and thereafter to audit each of Borrower’s Accounts and appraise Collateral at such Borrower’s expense, provided that such audits will be conducted no more often thanevery twelve (12) months unless an Event of Default has occurred and is continuing.” 

 

3. As a condition to the effectiveness of this Amendment, Servicing Agent shall have received, in form and substance satisfactory to Servicing Agent, the following: 

 

(a) this Amendment, duly executed by Borrowers; 

 

(b) a certificate of the Secretary of each Borrower withrespect to incumbency and resolutions authorizing the execution and delivery of this Amendment; 

 

(c) corporate guarantee and resolutions duly executed by ORIENT SEMICONDUCTOR ELECTRONICS, LIMITED; 

 

(d) a nonrefundable loan fee of $75,000 (to be distributed by Servicing Agent to Lenders prorata), outstanding legal fees, plus any BankExpenses, including attorneys’ fees and expenses, relating to this Amendment; and 

 

(e) such other documents. and completion of such other matters. as Lenders may reasonably deem necessary or appropriate. 

 

4. ExhibitsA-l and A-2, and Exhibit D of the Agreement are hereby replaced in their entirety by the Exhibit A-l and A-2, and Exhibit D attached hereto and incorporated therein by this reference. 

 

5. Exhibit F attached hereto is hereby added to theAgreement and incorporated therein by this reference. 

 

6. Borrowers represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing. 

 

7. Unless otherwise defined, all initially capitalized termsin this Amendment shall be as defined in the Agreement as amended on February 15,2001. The Agreement. as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in allrespects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of. or as an amendment of, any right. power, or remedy of Lenders under the Agreement. as in effect prior to thedate hereof. Borrowers ratify and reaffirm the continuing effectiveness of all promissory notes, guaranties, security agreements, mortgages. deeds of trust, environmental agreements. and all other instruments, documents and agreements entered intoin connection with the Agreement. 

 

IN WITNESSWHEREOF, the undersigned have executed this Amendment as of the first date above written. 

 

OSE USA, INC. (*fka* “INTEGRATED PACKAGING ASSEMBLY CORPORATION”) 

By:                                                                    

Title:                                                                 

 

OSE, INC 

By:                                                                    

Title:                                                                 

 

BANK SINOPAC, LOS ANGELES BRANCH 

By:                                                                    

Title:                                                                 

Maximum Commitment: $10,500,000 

Pro Rata Share: $70% 

 

FAR EAST NATIONAL BANK 

By:                                                                    

Title:                                                                 

Maximum Commitment: $4,500,000 

Pro Rata Share: $30% 

 

 

EXHIBIT A-l

OSE USA, INC., (*fka* “INTEGRATED PACKAGING ASSEMBLY CORPORATION”) 

AND OSE, INC. 

 

REVOLVING PROMISSORY NOTE 

 

$10,500,000
  
San Jose, California
   
August 15, 2001

 

FORVALUE RECEIVED, OSE USA, INC., (*fka* “ INTEGRATED PACKAGING ASSEMBLY CORPORATION”) a Delaware corporation, and OSE, INC., a California corporation {individually a “Borrower” and collectively, the “Borrowers”),jointly and severally, promise to pay to the order of Bank SinoPac, Los Angeles Branch the “Lender”) the principal amount of Ten Million Five Hundred Thousand Dollars {$10,500,000) or, if less, the aggregate amount of Advances as definedin the Loan Agreement referred to below) made by Lender to a Borrower pursuant to the Loan Agreement referred to below outstanding on the Revolving Maturity Date {as defined in the Loan Agreement referred to below). All unpaid amounts of principaland interest shall be due and payable in full on the Revolving Maturity Date. 

 

Borrowers also promises to pay interest on the unpaid principal amount hereof from the date hereof until paid at the rates and at the times which shall be determined in accordance with the provisionsof the Loan Agreement. Notwithstanding any other limitations contained in this Note, Lender does not intend to charge and Borrowers shall not be required to pay any interest or other fees or charges in excess of the maximum permitted by applicablelaw. Any payments in excess of such maximum shall be refunded to the a Borrower or credited against principal. 

 

All payments of principal and interest in respect of this Note shall be made in lawful money of the United States of America in same dayfunds at the office of Servicing Agent described in the Loan Agreement. Until notified of the transfer of this Note, each Borrower shall be entitled to deem Lender or such person who has been so identified by the transferor in writing to the aBorrower as the holder of this Note, as the owner and holder of this Note. 

 

This Note is referred to in, and is entitled to the benefits of, the Amended and Restated Loan and Security Agreement dated as of December 1, 2000, and amended by that certain Amendment to Loan andSecurity Agreement dated February 15, 2001, as further amended by the Amendment to Loan and Security Agreement dated August 15, 2001, and as amended from time to time (the “Loan Agreement”) among the Borrowers, the financial institutionsnamed therein and the Agents. The Loan Agreement, among other things, (i) provides for the making of advances (the “Advances”) by Lender to a Borrower from time to time in an aggregate amount not to exceed at any time outstanding the U.S.dollar amounts stated therein, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms andconditions therein specified. 

 

The terms of thisNote are subject to amendment only in the manner provided in the Loan Agreement 

 

No reference herein to the Loan Agreement and no provision of this Note or the Loan Agreement shall alter or impair the obligation of Borrowers, which is absolute and unconditional, to pay theprincipal of and interest on this Note at the place, at the respective times, and in the currency herein prescribed. 

 

Borrowers promise to pay all costs and expenses, including reasonable attorneys’ fees, incurred in the collection and enforcement ofthis Note. Borrowers hereby consent to renewals and extensions of time at or after the maturity hereof, without notice, and hereby waives diligence, presentment, protest, demand and notice of every kind and, to the full extent permitted by law, theright to plead any statute of limitations as a defense to any demand hereunder . 

 

This Noteshall be governed by, and construed in accordance with, the laws of the State of California without giving effect to its choice of law doctrine. 

 

IN WITNESS WHEREOF, each Borrower has caused this Note to be executed and delivered by its duly authorized officer, as of the date and theplace first above written. 

 

 

OSE USA, INC (*fka* “INTEGRATED PACKAGING

ASSEMBLY CORPORATION”)
   
OSE, INC

BY:                                                                    
   
BY:                                                                    

 

TITLE:                                                              
   
 

TITLE:                                                              

 

EXHIBIT A-2

OSE USA, INC. (*fka* “INTEGRATED PACKAGING ASSEMBLY CORPORATION”) 

AND OSE, INC. 

 

REVOLVING PROMISSORY NOTE 

 

$4,500,000
  
San Jose, California
   
August 15, 2001

 

FORVALUE RECEIVED, OSE USA, INC (*fka* “ INTEGRATED PACKAGING ASSEMBLY CORPORATION”), a Delaware corporation, and OSE, INC., a California corporation (individually a “Borrower” and collectively, the “Borrowers”),jointly and severally, promise to pay to the order of Far East National Bank (the “Lender”) the principal amount of Four Million Five Hundred Thousand Dollars ($4,500,000) or, if less, the aggregate amount of Advances (as defined in theLoan Agreement referred to below) made by Lender to a Borrower pursuant to the Loan Agreement referred to below outstanding on the Revolving Maturity Date (as defined in the Loan Agreement referred to below). All unpaid amounts of principal andinterest shall be due and payable in full on the Revolving Maturity Date. 

 

Borrowers also promises to pay interest on the unpaid principal amount hereof from the date hereof until paid at the rates and at the times which shall be determined in accordance with the provisions of the Loan Agreement.Notwithstanding any other limitations contained in this Note, Lender does not intend to charge and Borrowers shall not be required to pay any interest or other fees or charges in excess of the maximum permitted by applicable law. Any payments inexcess of such maximum shall be refunded to the Borrower or credited against principal. 

 

All payments of principal and interest in respect of this Note shall be made in lawful money of the United States of America in same day funds at the office of Servicing Agent described in the LoanAgreement. Until notified of the transfer of this Note, each Borrower shall be entitled to deem Lender or such person who has been so identified by the transferor in writing to the a Borrower as the holder of this Note, as the owner and holder ofthis Note. 

 

This Note is referred to in, and isentitled to the benefits of, the Amended and Restated Loan and Security Agreement dated as of December 1, 2000, and amended by that certain Amendment to Loan and Security Agreement dated February 15, 2001, as further amended by the Amendment to Loanand Security Agreement dated August 15, 2001 and as amended from time to time (the “Loan Agreement”) among the Borrowers, the financial institutions named therein and the Agents. The Loan Agreement, among other things, (i) provides for themaking of advances (the “Advances”) by Lender to a Borrower from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amounts stated therein, and (ii) contains provisions for acceleration of thematurity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. 

 

The terms of this Note are subject to amendment only in themanner provided in the Loan Agreement 

 

Noreference herein to the Loan Agreement and no provision of this Note or the Loan Agreement shall alter or impair the obligation of Borrowers, which is absolute and unconditional, to pay the principal of and interest on this Note at the place, at therespective times, and in the currency herein prescribed. 

 

Borrowers promise to pay all costs and expenses, including reasonable attorneys’ fees, incurred in the collection and enforcement of this Note. Borrowers hereby consent to renewals and extensions of time at or after the maturityhereof, without notice, and hereby waives diligence, presentment, protest, demand and notice of every kind and, to the full extent permitted by law, the right to plead any statute of limitations as a defense to any demand hereunder. 

 

This Noteshall be governed by, and construed in accordance with, the laws of the State of California without giving effect to its choice of law doctrine. 

 

IN WITNESS WHEREOF, each Borrower has caused this Note to be executed and delivered by its duly authorized officer. as of the date and theplace first above written. 

 

 

OSE USA, INC (*fka* “INTEGRATED PACKAGING

ASSEMBLY CORPORATION”)
   
OSE, INC

BY:                                                                    
   
BY:                                                                    

 

TITLE:                                                              
   
 

TITLE:                                                              

 

**EXHIBIT D**

**COMPLIANCE CERTIFICATE**

 

TO:          FAR EAST NATIONAL BANK, as Servicing Agent 

 

FROM:    OSE USA, INC. (*fka* “INTEGRATED PACKAGING ASSEMBLY CORPORATION”) and OSE, INC. 

 

 

The undersigned authorized officer of OSE USA, INC. (*fka* “ Integrated Packaging Assembly Corporation”) hereby certifies that in accordance with the terms and conditions of the Amended and Restated Loan and SecurityAgreement among each Borrower, Agents and Lenders (the “Agreement”), (i) each Borrower is in complete compliance for the period ending                 with all required covenants except as noted below and (ii) all representations and warranties of each Borrower stated in the Agreement are true and correct in all material respects as of the date hereof. Attached herewith are the required documentssupporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in anaccompanying letter or footnotes. 

 

**Pleaseindicate compliance status by circling Yes/No under “Complies” column.**

 

**Reporting Covenant**
  
**Required**
  
**Complies**

FYE Financial Statements, 1OK
  
Annually within 15 days of filing
  
**Yes**
  
**No**

Quarterly Financial Statements, 1OQ
  
Quarterly within 15 days of filing
  
**Yes**
  
**No**

A/R & A/P Agings, Borrowing Base Cert.
  
Monthly within 15 days
  
**Yes**
  
**No**

Guarantor FYE Financial Statements
  
Annually within 120 days of FYE
  
**Yes**
  
**No**

Guarantor Quarterly Financial Statements AR Audit
  
Quarterly within 90 days of quarter end Initial and Annual
  
**Yes**
  
**No**

Intellectual Property acquired/developed
  
Reporting (Section 6.8)
  
**Yes**
  
**No**

 

**Comments Regarding Exceptions:** See Attached
  
**BANK USE ONLY**

 

Sincerely,
  
ReceivedBy:                                                    
  
                        Authorized Signer

SIGNATURE
  
Date:                                                                
  
Verified:                                                          

TITLE
  
                        Authorized Signer
  
Date:                                                                

DATE                                            
  
 

ComplianceStatus                        Yes    No

EXHIBIT F 

BORROWING BASE CERTIFICATE 

 

 

Borrower:                                

Lenders: BANK SINOPAC, LOS ANGELES 

 BRANCH and FAR EAST NATIONAL BANK 

 

Commitment Amount: $15,000,000 

 

ACCOUNTS RECEIVABLE 

            1.
  
Accounts Receivable Book Value as of            
     
 

$                

            2.
  
Additions (please explain on reverse)
     
 

$                

            3.
  
TOTAL ACCOUNTS RECEIVABLE
     
 

$                

ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
       
            4.
  
Amounts over 90 days due
  
$                
    
            5.
  
Demo Accounts
  
$                
    
            6.
  
Intercompany/Employee Accounts
  
$                
    
            7.
  
Other (please explain on reverse)
  
$                
    
            8.
  
TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS
     
$

                

            9.
  
Eligible Accounts (#3 minus #8)
     
$

                

            10.
  
LOAN V ALUE OF ACCOUNTS (80% of #9)
     
$

                

BALANCES
       
            11.
  
Maximum Loan Amount
     
$

15,000,000

            12.
  
Total Funds Available [Lesser of #11 or #10]
     
$

                  

            13.
  
Present balance owing on Line of Credit)
     
$

                  

            14.
  
Outstanding under Sublimits (Letters of Credit)
     
$

                  

            15.
  
RESERVE POSITION (#12 minus #13 and #14)
     
$

                  

*The undersigned represents and warrants that the foregoing is true, complete and correct, andthat the information reflected in this Borrowing Base Certificate complies with the representations and warranties set forth in the Amended and Restated Loan and Security Agreement between the undersigned and Lenders.*

 

[BORROWER]

By:
   
Authorized Signer