Crucial 2011 Annual Report Download - page 169

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INOTERA MEMORIES, INC.
NOTES TO FINANCIAL STATEMENTS
According to the above two long-
term loan agreements, the Company was required to maintain certain financial ratios. If
the Company fails to maintain these financial ratios, the syndicated banks may determine to declare the unpaid principal,
interest, fees and other sums payable by the Company under the Loan Agreement to be immediately due and payable.
These financial ratios are as follows:
In the event that any of the above financial covenants is breached, the Company is required to cure the breach, no later than
the end of November in the relevant calendar year, for a breach in respect of any semi-
annual financial statements, and for
a breach in respect of any annual financial statements, no later than the end of June of the following calendar year, or to
submit a formal letter to the managing bank at least two months prior to the expiration of the Remedial Period, so that the
managing bank can convene a meeting of the Banks to discuss the aforesaid breach and to resolve before the expiration of
the Remedial Period on whether a waiver of the breach will be granted.
On June 29, 2009, the syndicate banks formally agreed further to waive the Company’
s obligation to comply with its
financial loan covenants under its first syndicate loan of US$400,000 thousand and $27,000,000 relating to the financial
statements for the six-
month period ended June 30, 2009 and the full year ended December 31, 2009. Also, on October 21,
2010, the syndicate banks formally agreed further to waive the Company’
s obligation to comply with its financial loan
covenants under the syndicate loan relating to the financial statements for the six-month period ended June 30, 2010.
In addition, the long-
term loan agreements require that (i) no material adverse change shall be made to the supply
agreement signed by the Company, Nanya Technology Corporation (NTC), and Micron Technology Inc., and (ii) NTC and
Micron Technology Inc. and their affiliates, taken as a whole, directly or indirectly, shall remain the largest shareholders of
the Company and retain control over the Company. No such changes occurred as of December 31, 2010.
(Continued)
(a)
Current Ratio (total current assets to total current liabilities): not less than one (1) to one (1) (under the syndicated loan
agreement on May 27, 2010, compliance with the current ratio will commence from calendar year of 2012).
(b)
Leverage Ratio (total liabilities plus contingent liabilities to tangible net worth): not higher than one and a half (1.5) to
one (1).
(c)
Interest Coverage Ratio (EBITDA to interest expenses): shall not be less than four (4) to one (1).