EXHIBIT 10.7
EXECUTION COPY
INDEMNITY AGREEMENT
dated as of July 10, 2000
among
THE INDUSTRIAL INVESTMENT COMPANY LIMITED,
CHASE ASIA INVESTMENT PARTNERS II (Y), LLC,
ASIA OPPORTUNITY FUND, L.P.,
ORCHID HONG KONG INVESTMENT HOLDINGS,
RESERVOIR-OLYMPUS II, L.P.,
OLYMPUS CAPITAL ASIA, L.P.,
OLYMPUS CAPITAL ASIA OFFSHORE, L.P.,
OLYMPUS HOLDINGS, L.P.,
OLYMPUS-ASAT I, L.L.C.
OLYMPUS-ASAT II, L.L.C.
and
ASAT HOLDINGS LIMITED
INDEMNITY AGREEMENT
AGREEMENT (the "Agreement") dated July 10, 2000 among THE INDUSTRIAL
INVESTMENT COMPANY LIMITED, CHASE ASIA INVESTMENT PARTNERS II (Y), LLC, ASIA
OPPORTUNITY FUND, L.P., ORCHID HONG KONG INVESTMENT HOLDINGS, RESERVOIR-OLYMPUS
II, L.P., OLYMPUS CAPITAL ASIA, L.P., OLYMPUS CAPITAL ASIA OFFSHORE, L.P., and
OLYMPUS HOLDINGS, L.P., (each a "Shareholder" and collectively, the
"Shareholders") and ASAT HOLDINGS LIMITED (the "Company").
W I T N E S S E T H :
WHEREAS, the Shareholders own all the currently issued ordinary
shares of the Company;
WHEREAS, the Shareholders have agreed to enable the Company to
raise additional equity funds through an initial public offering (the
"Offering") of American depositary receipts ("ADRs") representing ordinary
shares of the Company (the "Shares");
WHEREAS, the Shareholders have agreed to sell a portion of the
Shares held by them in the Offering in the form of ADRs; and
WHEREAS, the Company has prepared and filed with the United
States Securities and Exchange Commission (the "Commission"), in accordance with
the provisions of the United States Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder (collectively, the "Act"), a
registration statement on Form F-1, (File No. 333-12124), including a
preliminary prospectus, relating to the ADRs. As used in this Agreement, the
term "Registration Statement" means such registration statement as amended to
the date of this Agreement, and the term "Prospectus" means the prospectus
included in the Registration Statement as amended to the date of this Agreement
and as amended by a prospectus relating to the ADRs to be filed with the
Commission pursuant to Rule 424 under the Act. The Company has also entered into
an underwriting agreement of even date herewith with Chase Securities, Inc.,
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and Xxxxxxx Xxxxx Barney
Inc. (each, an "Underwriter" and such agreement, the "Underwriting Agreement")
as representatives for the several underwriters named therein.
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the parties hereto agree as follows:
1. The Company agrees to indemnify and hold harmless each
Shareholder, its directors, its officers and each person, if any, who controls
any Shareholder within the meaning of Section 15 of the Act or Section 20 of the
United States Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Exchange Act"),
from and against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with
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investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to such Shareholder furnished in
writing to the Company by such Shareholder to the Company and expressly for use
in the Registration Statement and appearing in the sections entitled "Principal
Shareholders" or "Related Party Transactions."
2. Each Shareholder agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Company's directors and officers
who sign the Registration Statement, each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act (other than a Shareholder) to the same extent as the foregoing
indemnity from the Company to such Shareholder but only with reference to
information relating to such Shareholder furnished in writing to the Company by
such Shareholder expressly for use in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto) or
any preliminary prospectus. Notwithstanding the foregoing, the aggregate
liability of any Shareholder pursuant to this section shall be limited to an
amount equal to the net proceeds received by such Shareholder from the sale of
the ADRs representing Shares sold by such Shareholder in the Offering.
3. In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 1 or 2 above (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred. Any
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by its counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for (i) the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all Shareholders, their officers and directors and all persons, if any, who
control any Shareholders within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act and (ii) the fees and
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expenses of more than one separate firm of attorneys (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and all persons, if any, who control the Company within the meaning of
either such Section (other than a Shareholder), and all such fees and expenses
shall be reimbursed as they are incurred. In the case of any such separate firm
for the Company and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of any such
separate firm for the Shareholders and such control persons of any Shareholders,
such firm shall be designated in writing by the Shareholders. If a Shareholder
is advised by its counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the other
Shareholders, such Shareholder may retain its own counsel, which shall be
designated in writing. The indemnifying party shall indemnify and hold harmless
the indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
4. To the extent the indemnification provided for in this
Agreement is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the relevant Shareholder or Shareholders on the
other hand from the Offering or (ii) if the allocation provided by clause 4(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 4(i) above but
also the relative fault of the Company on the one hand and the relevant
Shareholder or Shareholders on the other hand in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the relevant Shareholder or
Shareholders on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering received by the relevant Shareholder or
Shareholders bear to the total price to the public of the ADRs as set forth in
the table on the cover page of the Prospectus. The relative fault of the Company
on the one hand and the relevant Shareholder or Shareholders on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material
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fact relates to information supplied by the Company on the one hand or the
relevant Shareholder or Shareholders on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
5. The Company and the Shareholders agree that it would not be
just and equitable if contribution pursuant to Section 4 above were determined
by pro rata allocation (even if the Shareholders were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this section, the aggregate
liability of any Shareholder shall be limited to an amount equal to the total
net proceeds received by such Shareholder from the sale of the ADRs representing
Shares sold by such Shareholder in the Offering. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Shareholders' obligations to contribute pursuant to this
section are several in proportion to the respective number of ADRs representing
Shares sold by each of the Shareholders in the Offering and not joint or joint
and several.
6. Except as otherwise provided herein, the provisions of this
Agreement may not be amended, modified or supplemented unless in writing signed
by the Company and each of the Shareholders. Each Shareholder shall be bound by
any consent obtained in the manner authorized by this section.
7. All communications provided for in connection with this
Agreement shall be sent by first-class mail or overnight courier and (a) if
addressed to the Shareholders, addressed to the Shareholders in the manner set
forth in Annex C to the Amended and Restated Shareholders Agreement to be dated
July 14, 2000 among the Company, the Shareholders and the other shareholders
named therein, or at such other address as the Shareholders shall have furnished
to the Company in writing, or (b) if addressed to the Company, to ASAT Holdings
Limited, QPL Industrial Building, 14th Floor, 138 Texaco Road, Tsuen Wan, New
Territories, Hong Kong, Attention: Xxxxxxx Xxxxxxxxx, Facsimile: (852) 2407-
1868, or at such other address, or to the attention of such other officer, as
the Company shall have furnished to each Shareholder in writing.
8. This Agreement shall be construed and enforced in accordance
with, and the rights and obligations of the parties shall be governed by, the
laws of the State of New York.
9. The parties of this Agreement irrevocably agree that the
courts of Hong Kong are to have exclusive jurisdiction to settle any disputes
which may arise out of or in connection with this Agreement and each party
submits to the jurisdiction of the Hong Kong courts. Any proceeding, suit or
action arising out of or in connection with this Agreement ("Proceedings") shall
be brought in the Hong Kong courts. Each of the parties to this Agreement
irrevocably
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waives (and irrevocably agrees not to raise) any objection which it may have now
or hereafter to the laying of the venue of any Proceedings in the Hong Kong
courts and any claim that such Proceedings have been brought in any inconvenient
forum.
10. The Company hereby appoints ASAT Limited, QPL Industrial
Building, 14th Floor, 138 Texaco Road, Tsuen Wan, New Territories, Hong Kong,
Attention: Xxxxxxx Xxxxxxxxx, Facsimile: (000) 0000-0000, as its agent to accept
service of process on its behalf in respect of any proceedings in Hong Kong and
agrees that any Proceedings may be commenced by service on such agent. Nothing
contained herein shall affect the right to serve process in any other manner
permitted by law.
11. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all such counterparts shall
together constitute one and the same agreement and shall become effective only
when one or more of the counterparts shall have been signed by each party and
delivered to the other party, it being understood that all the parties need not
sign the same counterpart.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their respective officers thereunto duly authorized
as of the date first above written.
ASAT HOLDINGS LIMITED
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
THE INDUSTRIAL INVESTMENT COMPANY LIMITED
By: /s/ Li Xxxx Xxx
-----------------------------
Name: Li Xxxx Xxx
Title: Director
CHASE ASIA INVESTMENT PARTNERS II (Y), LLC
By: Chase Asia Investment Partners, L.P., its member
By: Chase Asia Equity Partners, L.P., its general
partner
By: CCP Asia Equity Company, a managing general
partner
By: /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Managing Director
ASIA OPPORTUNITY FUND, L.P.
By: Asia Opportunity Company, its general partner
By: /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Managing Director
ORCHID HONG KONG INVESTMENT HOLDINGS
By: Orchid Asia II, L.P., its sole member
By: Orchid Asia Holdings, LLC, its general partner
By: /s/ Xxxxxxx Xx
----------------------------------
Name: Xxxxxxx Xx
Title: Vice President
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RESERVOIR-OLYMPUS II, L.P.
By: Olympus Capital Holdings Asia, L.L.C., its
general partner
By: Olympus Capital Holdings Asia, its
managing member
By: /s/ Xxxxxx Xxxxx
------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
OLYMPUS CAPITAL ASIA, L.P.
By: Olympus Capital Holdings Asia, L.L.C., its
general partner
By: Olympus Capital Holdings Asia, its managing
member
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
OLYMPUS CAPITAL ASIA OFFSHORE, L.P.
By: Olympus Capital Holdings Asia, L.L.C., its
general partner
By: Olympus Capital Holdings Asia, its
managing member
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
OLYMPUS HOLDINGS, L.P.
By: Olympus Management GP Corporation, its
general partner
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
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OLYMPUS-ASAT I, L.L.C.
By: Olympus Capital Holdings Asia, L.L.C., its managing
member
By: Olympus Capital Holdings Asia, its managing member
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
OLYMPUS-ASAT II, L.L.C.
By: Olympus Capital Holdings Asia, L.L.C., its managing
member
By: Olympus Capital Holdings Asia, its managing member
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
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