EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
Among
CHIPPAC LIMITED, A BRITISH VIRGIN ISLANDS CORPORATION,
CHIPPAC, INC., A CALIFORNIA CORPORATION,
SAPPHIRE WORLDWIDE INVESTMENTS, INC.,
A BRITISH VIRGIN ISLANDS CORPORATION,
and
INTERSIL CORPORATION, A DELAWARE CORPORATION
dated as of
June 30, 2000
TABLE OF CONTENTS
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Page
ARTICLE 1 DEFINITIONS.................................................................................... 1
ARTICLE 2 PURCHASE AND SALE OF STOCK; TRANSFER OF INTELLECTUAL PROPERTY RIGHTS........................... 4
2.1 Purchase and Sale of Stock; Transfer of Intellectual Property................................ 4
2.2 Consideration................................................................................ 5
2.3 Consideration Adjustment..................................................................... 5
2.4 Closing...................................................................................... 9
2.5 Cancellation of Intercompany Accounts; Withholding Taxes..................................... 10
ARTICLE 3 CONTINGENT INCENTIVE PAYMENTS; EXCLUDED CONTRACTS.............................................. 10
3.1 Contingent Incentive Payments for Currently Subcontracted Packages and PDIP/SOIC Packages
Currently Packaged for Parent by the Company................................................. 10
3.2 Excluded Contracts........................................................................... 11
ARTICLE 4 CONDITIONS TO CLOSING.......................................................................... 12
4.1 Conditions to Obligations of Seller and Parent............................................... 12
4.2 Conditions to Obligations of Buyer and ChipPAC............................................... 14
ARTICLE 5................................................................................................. 16
COVENANTS PRIOR TO CLOSING................................................................................ 16
5.1 Affirmative Covenants of Parent and Seller................................................... 17
5.2 Negative Covenants of Parent and Seller...................................................... 17
5.3 Nonsolicitation of ChipPAC Employees......................................................... 19
5.4 Pre-Closing Covenants of Buyer and ChipPAC................................................... 19
5.5 Nonsolicitation of Intersil Employees........................................................ 19
5.6 Financial Information........................................................................ 19
5.7 Title Certificates........................................................................... 20
5.8 Survey....................................................................................... 20
ARTICLE 6................................................................................................. 20
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY................................................ 20
6.1 Organization and Power; Subsidiaries and Investments......................................... 20
6.2 Authorization................................................................................ 21
6.3 Capitalization............................................................................... 21
6.4 No Breach.................................................................................... 21
6.5 Financial Statements......................................................................... 22
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6.6 Absence of Undisclosed Liabilities................................ 22
6.7 Absence of Certain Developments................................... 22
6.8 Title to Properties............................................... 25
6.9 Contracts and Commitments......................................... 26
6.10 Intellectual Property Rights...................................... 26
6.11 Government Licenses and Permits................................... 27
6.12 Litigation; Proceedings........................................... 27
6.13 Compliance with Laws.............................................. 28
6.14 Environmental and Safety Requirements............................. 28
6.15 Employees......................................................... 29
6.16 Employee Benefit Plans............................................ 30
6.17 Long-Term Liabilities............................................. 31
6.18 Insurance......................................................... 31
6.19 Tax Matters....................................................... 31
6.20 Brokerage......................................................... 32
6.21 Officers and Directors; Bank Accounts. ........................... 32
6.22 Affiliate Transactions............................................ 32
6.23 Closing Date...................................................... 33
ARTICLE 7.................................................................. 33
REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT........................ 33
7.1 Organization and Power............................................ 33
7.2 Authorization..................................................... 33
7.3 Absence of Conflicts.............................................. 33
7.4 Litigation........................................................ 34
7.5 Securities........................................................ 34
7.6 Closing Date...................................................... 34
ARTICLE 8.................................................................. 34
REPRESENTATIONS AND WARRANTIES OF BUYER AND CHIPPAC........................ 34
8.1 Organization and Power............................................ 34
8.2 Authorization..................................................... 35
8.3 Capitalization.................................................... 35
8.4 Absence of Conflicts.............................................. 35
8.5 Litigation........................................................ 36
8.6 Financial Capacity................................................ 36
8.7 Closing Date...................................................... 36
8.8 Brokerage......................................................... 36
8.9 Public Filings.................................................... 36
ARTICLE 9.................................................................. 37
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BUYER SECURITIES.......................................................... 37
9.1 Investment Representations of Seller............................ 37
9.2 Legend.......................................................... 37
ARTICLE 10................................................................ 37
TERMINATION............................................................... 37
10.1 Termination..................................................... 37
10.2 Effect of Termination........................................... 38
10.3 Waiver of Right to Terminate.................................... 38
ARTICLE 11................................................................ 38
ADDITIONAL AGREEMENTS; COVENANTS AFTER CLOSING............................ 38
11.1 Survival........................................................ 38
11.2 Indemnification................................................. 39
11.3 Mutual Assistance............................................... 45
11.4 Tax Matters..................................................... 45
11.5 Books and Records............................................... 48
11.6 Press Release and Announcements................................. 48
11.7 Expenses........................................................ 49
11.8 Restructuring Expenses.......................................... 49
11.9 Employee Benefits............................................... 49
11.10 Specific Performance............................................ 49
11.11 Dispute Resolution.............................................. 49
11.12 Further Transfers............................................... 50
11.13 Transition Assistance........................................... 50
11.14 Non-Competition; Non-Solicitation............................... 50
11.15 Confidentiality................................................. 51
11.16 Taxes; Recording Charges........................................ 52
11.17 Ancillary Agreements............................................ 52
11.18 Chinese Subsidiaries............................................ 52
ARTICLE 12................................................................ 53
MISCELLANEOUS............................................................. 53
12.1 Amendment and Waiver............................................ 53
12.2 Notices......................................................... 53
12.3 Assignment...................................................... 55
12.4 Severability.................................................... 55
12.5 No Strict Construction.......................................... 55
12.6 Captions........................................................ 55
12.7 No Third Party Beneficiaries.................................... 55
12.8 Complete Agreement.............................................. 56
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12.9 Counterparts..................................................... 56
12.10 Governing Law and Jurisdiction................................... 56
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STOCK PURCHASE AGREEMENT
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This STOCK PURCHASE AGREEMENT (this "Agreement") is made as of June
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30, 2000, by and among ChipPAC Limited, a British Virgin Islands corporation
("Buyer"), ChipPAC, Inc., a California corporation ("ChipPAC"), Sapphire
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Worldwide Investments, Inc., a British Virgin Islands corporation ("Seller") and
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Intersil Corporation, a Delaware corporation ("Parent"). Seller is a 100%
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indirectly wholly-owned Subsidiary of Parent. Buyer is a 100% indirectly
wholly-owned Subsidiary of ChipPAC.
Seller owns beneficially and legally 100% of the issued and
outstanding capital stock of Intersil Technology Sdn. Bhd. (f/k/a Xxxxxx
Advanced Technology (Malaysia) Sdn. Bhd.), a Malaysian corporation (the
"Company"), which consists of 211,275,680 fully paid up ordinary shares of RM
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1.00 each (the "Company Stock"). All of the Company's former redeemable
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preference shares have been converted into the aforementioned ordinary shares.
On the terms and subject to the conditions set forth in this
Agreement, Buyer desires to acquire from Seller, and Seller desires to sell to
Buyer, all of the outstanding shares of Company Stock.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
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1.1 Definitions. For purposes of this Agreement, the following terms
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shall have the meanings set forth below:
"Affiliate" of any particular Person shall mean any other Person
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directly or indirectly controlling, controlled by or under direct or indirect
common control with such Person. For purposes of this definition, a Person
shall be deemed to be in "control" if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the Person in question, whether through the ownership of voting
securities, by contract or otherwise.
"Affiliated Group" shall mean an affiliated group as defined in
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Section 1504 of the Code (or any analogous combined, consolidated or unitary
group defined under state, local or foreign income Tax law) of which the Company
is or has been a member.
"Ancillary Agreements" means (i) the Intellectual Property Rights
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Agreement, in the form attached hereto as Exhibit A, (ii) the Supply Agreement,
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in the form attached hereto as Exhibit C, (iii) the Shareholders Agreement, in
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the form attached hereto as Exhibit D, (iv) Amendment No. 1 to Registration
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Agreement, in the form attached hereto as Exhibit E and (v) the Services
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Agreement, in the form attached hereto as Exhibit F.
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"Assumed Liabilities" means (i) any liability or obligation set forth
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on the face of the Closing Working Capital Statement, as finally determined
pursuant to Section 2.3, (ii) the Company's obligations of performance after the
Closing under any Material Contract or under any other contract entered into by
the Company in the ordinary course of business and which is not required to be
set forth on the Schedules to this Agreement (except, in either case, (A) any
performance obligation arising out of, relating to, in the nature of or caused
by any pre-Closing breach of contract or breach of warranty or (B) any liability
or obligation arising out of, relating to or in any way resulting from any
Excluded Contract (as defined in Section 3.2)) and (iii) any other obligation
specifically undertaken by Buyer pursuant to this Agreement.
"Bank Negara Malaysia" means the Central Bank of Malaysia.
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"Chinese Subsidiaries" means, collectively, Guangzhou Xxxxxx
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Telecommunications Co., Ltd, Anshan Xxxxxx Broadcast Equipment Co. Ltd and
Xxxxxx Semiconductor (Suzhou) Co. Ltd.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
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the rules and regulations promulgated thereunder.
"Company Intellectual Property Rights" means all Intellectual Property
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Rights owned by, issued to or licensed to the Company, or used in the Company's
business (including those Intellectual Property Rights to be made available to
Buyer and the Company pursuant to the Intellectual Property Rights Agreement and
the Supply Agreement), along with all associated income, royalties, damages and
payments due from or payable by any third party at the Closing or thereafter
(including, without limitation, damages and payments for past, present, or
future infringements or misappropriations thereof), all other associated rights
(including, without limitation, the right to xxx and recover for past, present,
or future infringements or misappropriations thereof), and any and all
corresponding rights that, now or hereafter, may be secured throughout the
world, including without limitation the items set forth on the "Intellectual
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Property Rights Schedule" attached hereto.
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"GAAP" shall mean United States generally accepted accounting
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principles, as in effect on the date hereof.
"Government Licenses" shall mean all permits, licenses, franchises,
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orders, registrations, certificates, variances, approvals and other
authorizations obtained from foreign, federal, state or local governments or
governmental agencies or other similar rights, including, without limitation,
those listed on the attached "Government Licenses Schedule."
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"Guaranty" shall mean any agreement, undertaking or arrangement by
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which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon the debt, obligation or other liability or obligation of any other
Person (other than by endorsements of instruments in the ordinary course of
collection) or guarantees of the payment of dividends or other distributions
upon the shares of any other Person or pledges any of such Person's assets,
whether by contractual Lien or otherwise.
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"Indebtedness for Borrowed Money" shall mean, with respect to any
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Person at any date, without duplication: (i) all obligations of such Person for
borrowed money or in respect of loans or advances; (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments
(including, without limitation, banker's usances or shipper's usances); (iii)
all obligations in respect of letters of credit, whether or not drawn, and
bankers' acceptances issued for the account of such Person; (iv) all capitalized
lease obligations of such Person including, without limitation, any related
lease termination payments or charges; (v) any obligations of such Person for
the deferred purchase price of goods or services, including any such obligations
secured by a contractual Lien, but excluding trade payables or accrued expenses
incurred in the ordinary course of business; (vi) all interest rate protection
agreements of such Person (valued on a market quotation basis); (vii) any
accrued but unpaid interest or prepayment or other penalties upon any of the
foregoing; and (vii) all Guarantees of such Person in connection with any of the
foregoing.
"Intellectual Property Rights" shall have the meaning set forth in the
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Intellectual Property Rights Agreement.
"Knowledge" shall mean (i) in the case of an individual, to the best
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of such Person's knowledge, (ii) in the case of Seller and Parent, to the best
of Seller's and Parent's knowledge, after due inquiry of each of the individuals
set forth on the "Knowledge Schedule" attached hereto and (iii) in the case of
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Buyer and ChipPAC, to the best of Buyer's and ChipPAC's knowledge, after due
inquiry of each of Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxx Xxxxxxxxxxxx-Xxxx, Xxxxxx
Xxxxxxxx, Xxxxxx XxXxxxx and Xxxxx Xxxxxxxxx.
"Liens" shall mean any mortgage, pledge, security interest,
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conditional sale or other title retention agreement, encumbrance, lien,
easement, option, debt, charge, claim or restriction of any kind or nature.
"Material Adverse Effect" shall mean any material and adverse effect
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upon the financial condition or operating results of the Company, taken as a
whole.
"Person" shall mean any individual, sole proprietorship, partnership,
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joint venture, trust, unincorporated association, corporation, entity or
governmental entity (whether federal, state, county, city or otherwise and
including, without limitation, any instrumentality, division, agency or
department thereof).
"Permitted Liens" means (i) Liens for Taxes or other governmental
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charges, assessments or levies which are (A) not delinquent or (B) the validity
of which is being contested in good faith by appropriate proceedings and as to
which adequate reserves have been established on the Company's financial
statements in accordance with GAAP, (ii) landlord's, mechanic's, carrier's,
workmen's, repairmen's or other similar Liens arising or incurred in the
ordinary course of business, (iii) minor imperfections of title, conditions,
easements and reservations of rights, including easements and reservations of,
or rights of others for, rights of way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, encroachments, covenants and
restrictions
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and (iv) Liens that are set forth on the "Permitted Liens Schedule" attached
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hereto; provided that with respect to the items described in clauses (ii), (iii)
and (iv) hereof, such items do not materially impair the use or occupancy of any
asset or other property encumbered by such Lien.
"RM" shall mean Malaysian Ringgit.
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"Subsidiary" shall mean, with respect to any Person, any corporation,
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partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (irrespective
of whether, at the time, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof or
(ii) if a partnership, association or other business entity, a majority of the
partnership or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more Subsidiaries
of that Person or a combination thereof.
"Tax" shall mean any federal, state, local or foreign income, gross
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receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, real property gains, registration, value added, excise, natural
resources, severance, stamp, occupation, premium, windfall profit, customs,
duties, real property, personal property, capital stock, social security,
unemployment, disability, payroll, license, employee or other withholding or
other tax, of any kind whatsoever, including any interest, penalties or
additions to tax or additional amounts in respect of the foregoing; the
foregoing shall include any transferee or secondary liability for a Tax and any
liability assumed by agreement or arising as a result of being (or ceasing to
be) a member of any Affiliated Group (or being included (or required to be
included) in any Tax Return relating thereto).
"Tax Return" shall mean any return, declaration, report, claim for
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refund, information return or other document (including any related or
supporting schedule, statement or information) filed or required to be filed in
connection with the determination, assessment or collection of any Tax of any
party or the administration of any laws, regulations or administrative
requirements relating to any Tax.
"USD" shall mean United States Dollars.
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ARTICLE 2
PURCHASE AND SALE OF STOCK;
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TRANSFER OF INTELLECTUAL PROPERTY RIGHTS.
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2.1 Purchase and Sale of Stock; Transfer of Intellectual Property.
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Subject to the terms and conditions set forth in this Agreement, on the Closing
Date, (i) Buyer will purchase from Seller, and Seller will sell, transfer,
assign and convey to Buyer, all of the outstanding shares of
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Company Stock, free and clear of all Liens (other than Liens imposed by
applicable federal, state or foreign securities laws limiting the
transferability thereof) and certain other inventory transferred from Parent,
(ii) Parent and Buyer shall enter into and deliver the Intellectual Property
Rights Agreement attached hereto as Exhibit A, pursuant to which Buyer and
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Parent shall grant each other the rights specified therein, subject to the
obligations specified therein, all as more particularly defined in such
Intellectual Property Rights Agreement and (iii) Buyer will purchase, and Seller
will sell, up to $500,000 USD of cash, to the extent of such cash on hand in the
Company as of the Closing Date and available to the Company after the Closing
(the "Purchased Cash"). Immediately prior to the Closing, Seller shall cause the
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Company to repay and satisfy in full, or be released from without liability or
obligation to the Company, all of its outstanding third party Indebtedness for
Borrowed Money, and Seller shall deliver to Buyer payoff or release letters, as
the case may be, with respect to all such third party Indebtedness for Borrowed
Money, which payoff letters shall indicate that the creditors of such
Indebtedness for Borrowed Money shall immediately, upon receipt of the funds
indicated therein to be paid pursuant to this Section 2.1, release any and all
Liens in favor of such creditors relating to the assets of the Company.
2.2 Consideration.
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(a) Subject to the terms and conditions set forth in this Agreement,
the total consideration to be paid by Buyer to Seller for the Company Stock and
Parent's execution and delivery of the Intellectual Property Agreement as
specified in Section 2.1 above shall consist of: (i) delivery to Seller of $52.5
million USD, subject to adjustment in accordance with Section 2.3 hereof, to be
delivered by wire transfer of immediately available funds to such account or
accounts designated by Seller to Buyer prior to the Closing, (ii) delivery to
Seller of 8,750 shares of the Class C-1 Preferred Stock of ChipPAC, having the
rights and preferences set forth in the amendment to ChipPAC's Amended and
Restated Articles of Incorporation set forth in Exhibit B attached hereto and
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(iii) delivery to Seller of 8,750 shares of the Class C-2 Preferred Stock of
ChipPAC, having the rights and preferences set forth in the amendment to
ChipPAC's Amended and Restated Articles of Incorporation set forth in Exhibit B
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attached hereto. The shares of Preferred Stock to be delivered pursuant to
Section 2.2(a)(ii) and Section 2.2(a)(iii) above are referred to herein as the
"Buyer Securities."
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(b) In addition, subject to the terms and conditions contained in
this Agreement, Buyer shall deliver to Seller at the Initial Working Capital
Adjustment Date (as defined in Section 2.3(a) below) an amount of cash equal to
the amount of the Purchased Cash (in USD), as the same may subsequently be
adjusted to the lesser of (i) the actual balance thereof (as set forth on the
Closing Balance Sheet) and (ii) $500,000 USD, and any such adjustment shall be
paid at the same time as the other amounts described in Section 2.3(d) hereof
are to be paid. The cash payment to be made pursuant to the preceding sentence
and the cash payment to be made pursuant to Section 2.2(a)(i) above are together
referred to herein as the "Cash Portion."
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2.3 Consideration Adjustment.
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(a) No later than the tenth business day following the Closing (the
"Initial Working Capital Adjustment Date"), Buyer shall deliver to Seller: (i)
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an unaudited estimated balance sheet of the Company as of the close of business
on the Closing Date ("Estimated Closing Balance Sheet"), which shall reflect
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Buyer's reasonable good faith estimate of the amount of Working Capital on the
Company's balance sheet as of the Closing Date ("Estimated Closing Working
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Capital"), (ii) an unaudited statement of estimated capital expenditures made by
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the Company for the period beginning July 3, 1999 and ending as of the close of
business on the Closing Date ("Estimated Closing Capital Expenditures"), (iii) a
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statement of the calculations and supporting detail of the Estimated Closing
Balance Sheet, the Estimated Closing Working Capital and Estimated Closing
Capital Expenditures and (iv) a certificate signed by Buyer to the effect that
each of the foregoing items described in clauses (i), (ii) and (iii) were
determined in accordance with the procedures set forth in this Section 2.3.
Seller shall have the right to review any work papers relating to the
calculations described in the preceding sentence; provided that such review
shall not unreasonably interfere with the operations of Buyer or the Company.
The Estimated Closing Balance Sheet and the statements of Estimated Closing
Capital Expenditures shall be prepared in accordance with GAAP and in a manner
consistent with the Company's accounting policies used in the preparation of the
1999 Balance Sheet (as defined in Section 6.5(a) hereof) and the related
statements of operations and cash flows and shall take into account all actions
taken or required to be taken by Seller or Parent on or prior to the Closing on
the Closing Date, but without regard to actions taken by Buyer after the Closing
on the Closing Date. For purposes of this Agreement, "Working Capital" means an
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amount equal to the difference (positive or negative) between (i) the Company's
current assets (which for purposes of this Agreement shall consist of sundry
receivables, inventory and other current assets (but excluding, cash, cash
equivalents and short term investments, foreign exchange contracts, finished
goods inventories and inventories which have been consigned to the Company)) and
(ii) the Company's current liabilities (which for purposes of this Agreement
shall consist of trade accounts payable, book (cash) overdrafts, accrued
personnel expenses and other accrued expenses (but excluding any foreign
exchange contracts)), all as determined in accordance with GAAP. Schedule 2.3
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lists the components of Working Capital, it being agreed that in the event of
any inconsistency between such schedule and this Agreement, the terms and
conditions of this Agreement shall prevail. In no event will any determination
of Working Capital include any asset or any liability for Taxes (which shall be
paid or otherwise disposed of pursuant to Section 11.4), any asset or liability
related to any Excluded Contract, any asset or liability related to the Chinese
Subsidiaries, third party Indebtedness for Borrowed Money (which shall be repaid
pursuant to Section 2.1) or intercompany accounts, which shall either be
eliminated or canceled pursuant to Section 2.5. For purposes of this Section
2.3, capital expenditures will not include any lease termination payments or
charges described in clause (iv) of the definition of Indebtedness for Borrowed
Money. In making any computations pursuant to this Section 2.3, all proper
accounting entries will be taken into account, all known errors and omissions
will be corrected and all known proper adjustments will be made.
(b) As promptly as practicable, but in no event later than sixty (60)
days after the Closing Date, Buyer will deliver to Seller: (i) an audited
balance sheet of the Company as of the close of business on the Closing Date
("Closing Balance Sheet"), which Closing Balance Sheet will reflect actual
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Working Capital as of the close of business on the Closing Date ("Closing
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Working
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Capital") and (ii) an audited statement of capital expenditures made by
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the Company for the period beginning July 3, 1999 and ending as of the close of
business on the Closing Date ("Actual Capital Expenditures"). The Closing
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Balance Sheet and the statement of Actual Capital Expenditures are collectively
referred to as the "Closing Financial Statements." The Closing Financial
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Statements shall be audited by a PriceWaterhouseCoopers engagement team selected
by Buyer and shall be prepared in accordance with GAAP and in a manner
consistent with the Company's accounting policies used in the preparation of the
1999 Balance Sheet and the related statements of operations and cash flows.
Seller shall have the right, at its sole cost and expense, to engage another
international firm of independent public accountants to review the
PriceWaterhouseCoopers workpapers prepared in connection with the audited
Closing Financial Statements, so long as (i) such review does not unreasonably
interfere with the operations of Buyer or the Company and (ii) Seller and its
independent public accountants enter into a customary indemnification agreement
with PriceWaterhouseCoopers with respect to any such workpaper review.
(c) At the Initial Working Capital Adjustment Date, (i) if Estimated
Closing Working Capital is less than an amount equal to (A) the average month-
end Working Capital for the period commencing on December 31, 1999 and ending on
the Closing Date (assuming, for purposes hereof, that each of December 31, 1999
and the Closing Date is the end of a month) minus (B) $100,000 (the "Low-End
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Target"), then Seller shall pay Buyer the amount of such deficiency and (ii) if
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Estimated Closing Working Capital is greater than an amount equal to (A) the
average month-end Working Capital for the period commencing on December 31, 1999
and ending on the Closing Date (assuming, for purposes hereof, that each of
December 31, 1999 and the Closing Date is the end of a month) plus (B) $100,000
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(the "High-End Target"), then Buyer shall pay Seller the amount of such excess.
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The dollar amount between the High-End Target and the Low-End Target is referred
to herein as the "Relevant Range." In addition, at the Initial Working Capital
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Adjustment Date, if Estimated Closing Capital Expenditures are less than the
annualized agreed upon targeted spending amount of $15.1 million USD (prorated
on a weekly basis for the period beginning July 3, 1999 and ending on the
Closing Date), then Seller shall pay Buyer the amount of such shortfall (the
"CAPEX Shortfall").
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(d) Promptly following the determination of the Closing Balance
Sheet, the Closing Working Capital and the amount of Actual Capital
Expenditures, the consideration paid pursuant to Section 2.2 shall be adjusted
as follows and payment, by wire transfer of immediately available funds shall be
made by Seller or Buyer, as the case may be, not later than five (5) business
days following such determination:
(i) if Closing Working Capital is less than Estimated Closing Working
Capital, then Seller shall pay Buyer the amount of such shortfall, excluding the
extent of the dollar amount of such shortfall, if any, attributable to the
Relevant Range;
(ii) if Closing Working Capital is greater than Estimated Working
Capital, then Buyer shall pay Seller the amount of such excess, excluding the
extent of the dollar amount of such excess, if any, attributable to the Relevant
Range;
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(iii) if Actual Capital Expenditures are less than Estimated
Closing Capital Expenditures, then Seller shall pay Buyer the amount of such
shortfall; and
(iv) if Actual Capital Expenditures are greater than Estimated
Closing Capital Expenditures, then Buyer shall pay Seller the lesser of (A) the
amount of such excess or (B) the CAPEX Shortfall.
(e) The Closing Financial Statements (including the amount of
Closing Working Capital and the amount of Actual Capital Expenditures) shall
become final and binding upon each of the parties hereto unless Seller gives
written notice of its disagreement (a "Notice of Disagreement") to Buyer within
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30 days following receipt by Seller of the Closing Financial Statements. Any
such Notice of Disagreement shall specify in reasonable detail the nature of any
such disagreement so asserted. Buyer shall have 30 days following its receipt of
the Notice of Disagreement to review the Notice of Disagreement and to give
notice of any disagreement therewith (the "Counter-Notice of Disagreement") to
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Seller. If Buyer does not give a Counter-Notice of Disagreement within such 30
day period, the Closing Financial Statements (including the amount of Closing
Working Capital and the amount of Actual Capital Expenditures) shall be adjusted
as set forth in the Notice of Disagreement, and, as so adjusted, shall be final
and binding upon all parties. If Buyer gives timely Counter-Notice of
Disagreement, Buyer and Seller shall attempt in good faith to resolve their
disagreements. If Buyer and Seller are unable to resolve all of their
disagreements with respect to the Closing Financial Statements or the amount of
Closing Working Capital or the amount of Actual Capital Expenditures within 20
days following Buyer's delivery to Seller of a Counter-Notice of Disagreement,
they shall refer their remaining differences to the U.S. national office of an
internationally recognized firm of independent accountants mutually agreeable to
Buyer and Seller (the "CPA Firm"), which shall, acting as experts and not as
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arbitrators, determine, and only with respect to the remaining differences so
submitted, whether, and to what extent, if any, the Closing Financial Statements
or the amount of Closing Working Capital or Actual Capital Expenditures requires
adjustment. The parties shall direct the CPA Firm to use its best efforts to
render its determination within 30 days after the submission of any such dispute
to the CPA Firm. The CPA Firm's determination of the Closing Financial
Statements (including the amount of Closing Working Capital and the amount of
Actual Capital Expenditures) shall be conclusive and binding upon each of the
parties. The fees and disbursements of the CPA Firm shall be allocated between
Buyer and Seller in the same proportion that the aggregate amount of the
remaining disputed items so submitted to the CPA Firm that is unsuccessfully
disputed by each party as finally determined by the CPA Firm bears to the total
amount of such remaining disputed items.
(f) Seller shall cause the Company to settle and close all foreign
exchange contracts to which the Company is a party, effective prior to the
Closing. Any gains or losses with respect to such foreign exchange contracts
that remain unsettled as of the Closing shall be for the account of the Seller
and shall be treated as an adjustment to the Cash Portion pursuant to Section
2.2 when ultimately closed out, and in the event of any dispute, shall be
subject to resolution pursuant to the dispute resolution procedures set forth in
Section 2.3(e) above.
(g) The parties shall cause the Company to take and complete a 100%
physical inventory as soon as commercially practicable and as close in time to
the Closing Date as
-8-
commercially practicable. Each of the parties hereto and their respective
representatives shall be entitled to observe such physical inventory, and the
parties shall jointly plan and execute such physical inventory in a manner which
minimizes interference with the Company's operations.
(h) Immediately prior to the Closing, Seller shall cause the Company
to transfer title of all of the Company's finished goods inventory and all die
and wafer inventories to Parent. On the 30/th/ day following the Closing,
Parent shall receive a credit (by means of a reduction to be applied against any
then owing or subsequently issued invoices issued by Buyer to Parent) for the
aggregate cost of direct labor and factory overhead included within the work-in-
process inventories packaged by the Company's Kuala Lumpur facility on hand as
of the Closing Date (based upon such amount as reflected in the Estimated
Closing Balance Sheet, which will be finally adjusted upon final determination
of the Closing Balance Sheet pursuant to this Section 2.3); provided that the
full price for the value added by the Company of the related finished goods
inventory shall be invoiced by Buyer to Parent upon delivery of the related
finished packages to the product distribution center.
(i) Schedule 2.3(i) attached hereto contains a list of all equipment,
---------------
including burn-in ovens (described by type of equipment and including the net
book value of such equipment in connection with the transfer of ownership of
such equipment) which is owned by the Company as of the date hereof and which
Parent shall take title to on or prior to the Closing (the "Transferred
-----------
Equipment"). On or prior to the Closing, Seller shall cause the Company to
---------
transfer the ownership of the Transferred Equipment to Parent.
(j) Schedule 2.3(j) attached hereto contains a list of all equipment
---------------
(described by type of equipment) which is owned by the Company which is
consigned to, or in the possession of, a third party as of the date hereof and
which shall be returned to the Company following the Closing upon the earlier of
(i) completion of the relevant program with such third party or (ii) when any
services related to such equipment are transferred to Buyer (the "Consigned
---------
Equipment").
---------
2.4 Closing.
-------
(a) Subject to terms and conditions of this Agreement, the closing of
the transactions contemplated by Section 2.1 hereof (the "Closing") will occur
-------
at the offices of Buyer's financing sources in New York, New York, or such other
place upon which the parties may agree, at 11:59 p.m. Eastern Time on the later
of (i) June 30, 2000 and (ii) the first Friday following the date as of which
the conditions to each party's obligations (as set forth in Article 4 hereof)
have been satisfied or at such other time and on such other date as the parties
hereto mutually agree (the "Closing Date").
------------
(b) Subject to the terms and conditions contained in this Agreement,
the parties agree to consummate the following deliveries on the Closing Date:
(i) Seller will deliver to Buyer certificates representing the
Company Stock owned by Seller, duly endorsed for transfer and accompanied
by duly executed stock powers;
-9-
(ii) Buyer will deliver $52.5 million in cash to Seller and Parent,
collectively, for the delivery of the Company Stock and the execution and
delivery of the Intellectual Property Rights Agreement, to an account
designated by Parent prior to the Closing;
(iii) Buyer will deliver to Seller the Buyer Securities duly executed
by ChipPAC; and
(iv) Each of the parties shall deliver to the others the opinions,
certificates and other documents and instruments to be delivered under
Article 4 hereof.
2.5 Cancellation of Intercompany Accounts; Withholding Taxes.
--------------------------------------------------------
Immediately prior to the Closing, all remaining payables, indebtedness,
obligations and other liabilities ("Liabilities") (other than any Liabilities
-----------
created by this Agreement or any of the Ancillary Agreements) owed by Parent,
Seller or any of their respective Affiliates (other than the Company) to the
Company, whether or not reflected in the Company's financial statements, shall
be canceled without payment, in full and complete satisfaction of such
Liabilities, and all remaining Liabilities (other than any Liabilities created
by this Agreement or any of the Ancillary Agreements) owed by the Company to
Parent, Seller or any of their respective Affiliates shall be canceled without
payment, in full and complete satisfaction of such Liabilities, and each of
Parent and Seller shall indemnify and hold harmless each Buyer Indemnitee (as
defined in Section 11.2(a) hereof) from and against any and all Taxes incurred
as a result of the transactions contemplated by this Section 2.5. Nothing in
this Section 2.5 or elsewhere in this Agreement shall prevent Seller or Parent
from satisfying any such Liabilities in cash between the date hereof and the
Closing Date. Seller shall bear the cost of any withholding Taxes with respect
to the transactions contemplated by Article 2 of this Agreement.
ARTICLE 3
CONTINGENT INCENTIVE PAYMENTS; EXCLUDED CONTRACTS
-------------------------------------------------
3.1 Contingent Incentive Payments for Currently Subcontracted
---------------------------------------------------------
Packages and PDIP/SOIC Packages Currently Packaged for Parent by the Company.
----------------------------------------------------------------------------
Subject to the other terms and conditions of this Section 3.1, during the period
from the Closing Date to June 30, 2003, Parent shall be entitled to receive
additional contingent incentive payments (the "Contingent Incentive Payments")
-----------------------------
from Buyer based upon the achievement of the milestones set forth on Schedule
--------
3.1 attached hereto with respect to the transfer of packaging business currently
---
subcontracted by Parent to certain third parties and the transfer of PDIP/SOIC
packages currently packaged for Parent by the Company to one of Buyer's other
qualified facilities. The achievement of the milestones on Schedule 3.1 are
------------
based on (i) all lead counts for the packages shown on Schedule 3.1 that Buyer
------------
offers to assemble, (ii) the assumption that Buyer is fully approved by Parent
and Parent's customers to provide packaging services at the qualified Buyer
facility on or prior to the date specified on Schedule 3.1, (iii) the date of
------------
qualification being subject to a thirty (30) day grace period in the event of
unforeseen delays, (iv) the assumption that at least 95% of the packaging
services (based upon unit volumes) for each package type described on Schedule
--------
3.1 are transferred to Buyer based on
---
-10-
Parent's best efforts within sixty (60) days after the date specified on
Schedule 3.1 with respect to each such package type (other than immaterial
------------
packages which Buyer and Parent may subsequently mutually agree should not be
transferred), it being agreed that all parties will use best efforts to transfer
those packages sold through distribution sooner than the above milestones and
(v) the assumption that, with respect to all remaining packaging services for
each package type described on Schedule 3.1 that are not transferred to Buyer
------------
within the timeframe specified in clause (iv) above, Parent will continue to use
its best efforts to transfer all such remaining packaging services to Buyer as
soon as possible. Each of the parties hereto shall use best efforts to improve
the qualification process and schedule. If such milestones are achieved in
the case may be) specified on Schedule 3.1 under the heading "Contingent
------------
accordance with the requirements set forth in this Section 3.1 and Schedule 3.1,
------------
the amounts specified on Schedule 3.1 shall be paid to Parent by Buyer within
------------
five (5) business days after completion of each quarterly period (ending on
March 31, June 30, September 30 or December 31, as Incentive Payments."
3.2 Excluded Contracts.
------------------
(a) The contracts listed under "Item B - Subcontracting Contracts",
Contract No. 1 listed under "Item C - Services Contracts" and Contract No. 2
listed under "Item C - Services Contracts" listed on the Contracts Schedule are
------------------
collectively referred to herein as the "Excluded Contracts."
------------------
(b) Effective as of the Closing Date, each Excluded Contract that is
capable of being assigned from the Company to Parent without the waiver or
consent of the other party to any such contract, shall be assigned to Parent
effective as of the Closing Date, automatically, by reason of the consummation
of the transactions contemplated hereby.
(c) To the extent that any Excluded Contract is not capable of being
assigned from the Company to Parent without the waiver or consent of the other
party to any such contract (a "Retained Contract"), this Agreement shall not
-----------------
constitute an assignment thereof. In any such case where a waiver or consent to
assign any such Excluded Contract from the Company to Parent has not been
obtained at or prior to the Closing Date, to the extent permitted by law, Buyer
shall cause the Company to continue to receive the benefits under any such
Excluded Contract for the account of Parent, and Parent shall assume, perform,
pay and discharge all liabilities and obligations under any such Excluded
Contract.
(d) With respect to each Retained Contract, as soon as reasonably
practicable following the Closing (but in no event later than July 15, 2000),
Parent shall prepare and deliver notice to each third party to any such Retained
Contract notifying each such third party that (i) the transactions contemplated
by this Agreement have been consummated and (ii) Parent desires to amend,
restate or otherwise modify each such Excluded Contract to substitute Parent in
place of the Company and to release the Company from any further liability or
obligation pursuant to each such Retained Contract. Parent shall use
commercially reasonable efforts to effect such amendment, restatement or
modification and obtain the related release as soon as practicable following the
Closing Date.
-11-
(e) In consideration of the covenants undertaken by Buyer pursuant to
this Section 3.2, each of Parent and Seller, jointly and severally, agree to
pay, and to indemnify, defend and hold harmless each Buyer Indemnitee (as
defined in Section 11.2(a)) from all Losses (as defined in Section 11.2(a))
arising out of, relating to or in any way resulting from any Excluded Contract.
The indemnification obligations of Parent and Seller under this Section 3.2
shall be in addition to those obligations set forth in Section 11.2 of this
Agreement.
ARTICLE 4
CONDITIONS TO CLOSING
---------------------
4.1 Conditions to Obligations of Seller and Parent. Except as
----------------------------------------------
otherwise expressly provided herein, the obligation of each of Seller and Parent
to consummate the transactions contemplated by this Agreement is subject to
the satisfaction of the following conditions on or before the Closing Date:
(a) the representations and warranties set forth in Article 8 hereof
will be true and correct in all material respects at and as of the Closing as
though then made and as though the Closing Date were substituted for the date of
this Agreement or, in the case of any representations and warranties made as of
a specified date earlier than the Closing Date, on and as of such earlier date
(in either case, without taking into account any disclosures made by Buyer or
ChipPAC pursuant to Section 8.7 hereof);
(b) each of Buyer and ChipPAC will have performed in all material
respects all the covenants and agreements required to be performed by them under
this Agreement prior to the Closing;
(c) all material consents and approvals (which consents and approvals
apply to the transfer of the Company Stock from Seller to Buyer) by governmental
agencies that are required for the consummation of the transactions contemplated
hereby or the Ancillary Agreements will have been obtained, including, without
limitation, any required approval of (i) the Malaysian Ministry of International
Trade and Industry ("MITI"), (ii) Bank Negara Malaysia and (iii) the Malaysian
----
Foreign Investment Committee ("FIC");
---
(d) all necessary filings with regulatory authorities (including
Xxxx-Xxxxx-Xxxxxx filings and approvals, if necessary) will have been made and
all waiting periods will have expired or will have been terminated;
(e) Buyer shall have delivered to Seller for its execution and
delivery a copy of that certain Shareholders Agreement, executed and delivered
by ChipPAC and each of the shareholders listed therein other than Seller, in
form and substance as set forth in Exhibit D attached hereto (the "Shareholders
--------- ------------
Agreement"), and, assuming Seller's due execution and delivery thereof, the
---------
Shareholders Agreement shall be in full force and effect;
-12-
(f) Buyer shall have delivered to Seller for its execution and
delivery a copy of Amendment No. 1 to that certain Amended and Restated
Registration Agreement, executed and delivered by ChipPAC and each of the
shareholders listed therein other than Seller, in form and substance as set
forth in Exhibit E attached hereto (the "Registration Agreement"), and, assuming
--------- ----------------------
Seller's due execution and delivery thereof, the Registration Agreement shall be
in full force and effect;
(g) Buyer shall have delivered to Parent for its execution and
delivery copies of (A) the Intellectual Property Rights Agreement, (B) the
Supply Agreement and (C) the Services Agreement, and, assuming due execution and
delivery thereof by Parent, each such agreement shall be in full force and
effect;
(h) on or prior to the Closing Date, Buyer will have delivered to
Seller and Parent each of the following:
(i) a certificate from Buyer in the form and substance reasonably
satisfactory to Seller, dated the Closing Date, stating that, except as
expressly stated therein, the preconditions specified in Section 4.1(a) and
Section 4.1(b) above have been satisfied (taking into account any
disclosures made by Buyer or ChipPAC pursuant to Section 8.7 hereof);
(ii) certified copies of the resolutions duly adopted by the board of
directors of each of Buyer and ChipPAC authorizing the execution, delivery
and performance of this Agreement and the Ancillary Agreements and the
consummation of all the transactions contemplated by this Agreement and the
issuance to Seller of the Buyer Securities;
(iii) copies of all governmental consents, approvals and filings
required to be obtained pursuant to Section 4.1(c) hereof;
(iv) such other documents or instruments as Seller or Parent
reasonably request to effect the transactions contemplated hereby;
(i) no action or proceeding before any court or government body will
be in effect which restrains or prohibits the consummation of the transactions
contemplated by this Agreement;
(j) Seller and Parent will have received the opinion of counsel for
Buyer (including U.S. counsel and British Virgin Islands counsel) in form and
substance customary for transactions of this nature;
(k) Parent will have received from Xxxxxxxx, Xxxxx or another
reputable investment bank selected by Parent, an opinion that the transactions
contemplated hereby are fair, from a financial point of view, to Parent and
Seller; and
-13-
(l) all proceedings to be taken by Buyer in connection with the
consummation of the Closing and the other transactions contemplated hereby and
all certificates, opinions, instruments and other documents required to effect
the transactions contemplated hereby reasonably requested by Seller or Parent
will be reasonably satisfactory in form and substance to Seller, Parent and
their counsel.
Any condition specified in this Section 4.1 may be waived by Seller and Parent;
provided that no such waiver will be effective against Seller or Parent unless
it is set forth in a writing executed by each of Seller and Parent.
4.2 Conditions to Obligations of Buyer and ChipPAC. Except as
----------------------------------------------
otherwise expressly provided in this Agreement, the obligation of each of Buyer
and ChipPAC to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of the following conditions on or before the
Closing Date:
(a) the representations and warranties set forth in Articles 6 and 7
and Section 9.1 hereof will be true and correct in all respects at and as of the
Closing as though then made and as though the Closing Date were substituted for
the date of this Agreement or, in the case of any representations and warranties
that expressly relate to a date earlier than the Closing Date, on and as of such
earlier date (in either case, without taking into account any disclosures made
by Seller or Parent to Buyer pursuant to Section 5.1(f), Section 6.23 or Section
7.6 hereof), except where the failure of such representations and warranties to
be true and correct could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, it being agreed
that for purposes of determining such "Material Adverse Effect" for purposes of
this Section 4.2(a), all references to "materiality", "Material Adverse Effect"
and words of similar import contained in the representations and warranties of
each of Parent and Seller shall be disregarded;
(b) each of Seller and Parent will have performed in all material
respects all of the covenants and agreements required to be performed by them
under this Agreement prior to the Closing, including, without limitation, each
of the items set forth in Sections 5.6 through 5.8, inclusive;
(c) all material consents and approvals (which consents and approvals
apply to the transfer of the Company Stock from Seller to Buyer) by governmental
agencies that are required for the consummation of the transactions contemplated
hereby or the Ancillary Agreements will have been obtained, including, without
limitation, any required approval of (i) MITI, (ii) Bank Negara Malaysia and
(iii) FIC;
(d) (i) all consents and approvals by third parties that are required
to effect the transactions contemplated by this Agreement or any Ancillary
Agreement under any Material Contract which is set forth on the "Third Party
-----------
Consent Schedule" attached hereto will have been obtained and (ii) releases of
----------------
any and all Liens (other than Permitted Liens) held by third parties for which
the underlying indebtedness is required to be repaid by the Company on or prior
to the
-14-
Closing Date will have been obtained, in each case on terms and conditions
reasonably satisfactory to Buyer;
(e) all necessary filings with regulatory authorities (including
Xxxx-Xxxxx-Xxxxxx filings and approvals, if necessary) will have been made and
all waiting periods will have expired or will have been terminated;
(f) Seller shall have delivered all of the Company Stock, accompanied
by a duly executed stock power (or other appropriate instruments of transfer),
endorsed in blank, on the Closing Date;
(g) no action or proceeding before any court or government body will
be in effect which restrains or prohibits consummation of the transactions
contemplated by this Agreement;
(h) Seller shall have delivered to Buyer a copy of the Shareholders
Agreement, executed and delivered by Seller, and the Shareholders Agreement
shall be in full force and effect;
(i) Seller shall have delivered to Buyer a copy of the Registration
Agreement, executed and delivered by Seller, and the Registration Agreement
shall be in full force and effect;
(j) Parent shall have delivered to Buyer for its execution and
delivery copies of (A) the Intellectual Property Rights Agreement, (B) the
Supply Agreement and (C) the Services Agreement, and, assuming due execution and
delivery thereof by Buyer, each such agreement shall be in full force and
effect;
(k) no more than two (2) of the persons listed on the Key Employees
-------------
Schedule attached hereto shall fail to remain in the Company's employ as of the
--------
Closing Date;
(l) the Company will have received the resignations of all directors
of the Company (other than CB Teh and XX Xxxxx, each of whom shall remain a
director of the Company as of the Closing Date) on or prior to the Closing;
(m) on or prior to the Closing Date, Parent and Seller, as the case
may be, will have delivered to Buyer each of the following:
(i) a certificate from an officer of each of Parent and Seller in
form and substance reasonably satisfactory to Buyer, dated the Closing
Date, stating that, except as expressly stated therein, the preconditions
specified in Section 4.2(a) and Section 4.2(b) above have been satisfied
(taking into account any disclosures made by Seller or Parent to Buyer
pursuant to Section 5.1(f), Section 6.23 or Section 7.6 hereof);
(ii) (A) certified copies of the resolutions duly adopted by the board
of directors of Parent and the board of directors and shareholders of
Seller authorizing the execution, delivery and performance of this
Agreement and the Ancillary Agreements, and the consummation of all
transactions contemplated by this Agreement and the Ancillary Agreements,
(B) a certified copy of the resolution of the board of directors of the
Company
-15-
appointing such persons to the board of directors of the Company as
directed by Buyer, with effect from the Closing Date, (C) a certified copy
of the resolution of the board of directors of the Company authorizing the
transfer of the Company Stock from Seller to Buyer and the issue of fresh
certificates for the Company Stock registered in the name of Buyer or its
nominee and (D) all of the statutory and other books and records, articles
of association and other governing documents and common seals of the
Company;
(iii) copies of all governmental and third party consents, approvals,
releases and filings required to be obtained pursuant to Section 4.2(c) and
Section 4.2(d);
(iv) such instruments of transfer, in form and substance reasonably
satisfactory to counsel for Buyer, as are required in order to transfer to
Buyer good and marketable title to the Company Stock, free and clear of all
Liens;
(v) a PDS-6 stamp duty adjudication form, Part II, which has been
completed by the company secretary of the Company, in respect of the
transfer of the Company Stock together with the latest audited accounts of
the Company;
(vi) such other documents or instruments as Buyer reasonably requests
to effect the transactions contemplated hereby;
(n) Buyer's Affiliate, ChipPAC International Limited, shall have
received the consent of both its senior secured lending syndicate and the
holders of its 12.75% Senior Subordinated Notes due 2009 to the transactions
contemplated by this Agreement and the financing thereof, and ChipPAC
International Limited will have obtained financing proceeds pursuant to its
senior secured credit facility in an amount sufficient to permit Buyer to
consummate the transactions contemplated by this Agreement, and each of Buyer
and the Company shall have received all necessary governmental approvals and
consents for their financing to be arranged in connection with the transactions
contemplated hereby;
(o) Buyer will have received the opinion of counsel for Parent and
Seller (including U.S. counsel, British Virgin Islands counsel and Malaysian
counsel) in form and substance customary for transactions of this nature, which
shall be addressed to Buyer and Buyer's financing sources (or shall permit such
financing sources to rely thereon);
(p) ChipPAC will have received from Xxxxxxxx, Xxxxx & Company or
another reputable investment bank selected by ChipPAC, an opinion that the
transactions contemplated hereby are fair, from a financial point of view, to
ChipPAC and its shareholders; and
(q) all proceedings to be taken by each of Parent and Seller in
connection with the consummation of the Closing and the other transactions
contemplated hereby and all certificates, opinions, instruments and other
documents required to effect the transactions contemplated hereby reasonably
requested by Buyer will be reasonably satisfactory in form and substance to
Buyer and its counsel.
-16-
Any conditions specified in this Section 4.2 may be waived by Buyer and ChipPAC;
provided that no such waiver will be effective unless it is set forth in a
writing executed by Buyer and ChipPAC.
ARTICLE 5
COVENANTS PRIOR TO CLOSING
--------------------------
5.1 Affirmative Covenants of Parent and Seller. Between the date
------------------------------------------
hereof and the Closing Date, except as otherwise expressly provided herein, each
of Parent and Seller shall, and in the case of the Company, each of Parent and
Seller shall cause the Company to:
(a) conduct its business and operations only in the usual and
ordinary course of business in accordance with past custom and practice;
(b) permit Buyer and its employees, agents, financing sources,
environmental consultants and accounting and legal representatives to have
reasonable access, at reasonable times and upon reasonable notice (and
accompanied by representatives of the Company or Seller, at Seller's request) to
its books, records, invoices, contracts, leases, key personnel, independent
accountants, legal counsel, property, facilities, equipment and other things
reasonably related to the business or the operations of the Company during
mutually agreeable business hours; provided that from the date hereof through
the Closing Date, Buyer and its employees, agents, financing sources,
environmental consultants or other representatives shall not be permitted to
conduct any environmental sampling or testing without the consent of Parent;
(c) use their reasonable best efforts to keep in full force and
effect its corporate existence and all material Government Licenses necessary
for the conduct of its business;
(d) use commercially reasonable efforts to keep the Company's
business organization and material properties intact, including its present
business operations and physical facilities and the Company's present
relationships with material lessors, licensors, suppliers and customers and
others having material business relations with the Company, on the whole;
(e) provide prompt notice to Buyer of any key employee or key group
of employees which have given notice to the Company of his, her or their
intention to terminate employment with the Company;
(f) promptly inform Buyer in writing of any variances from the
representations and warranties contained in Article 6 or 7 or Section 9.1 hereof
or any breach of any covenant hereunder by Seller or Parent of which Seller or
Parent becomes aware; and
(g) cooperate with Buyer and use its commercially reasonable efforts
to cause the conditions to Buyer's and ChipPAC's obligations to close the
transactions hereunder to be satisfied (including, without limitation, the
execution and delivery of all agreements contemplated hereunder to be so
executed and delivered).
-17-
5.2 Negative Covenants of Parent and Seller.
---------------------------------------
(a) Between the date hereof and the Closing Date, except as
otherwise provided herein, neither Parent nor Seller shall, nor shall they
permit the Company to:
(i) except as disclosed on the attached "Developments Schedule" or
---------------------
permitted under Section 5.2(a)(iii) below, take any action that would
require disclosure under Section 6.7 hereof;
(ii) take any action that, or omit to take any action the omission of
which, could reasonably be expected to have a Material Adverse Effect;
(iii) without the prior written approval of the Buyer, (A) enter into
any contract providing for the payment by the Company of an amount in
excess of $50,000 USD per year which is not terminable by the Company
without penalty on 30 days or less notice, (B) make any loans other than
advances to employees for travel expenses in the usual and ordinary course
of business, (C) increase any officer's or employee's compensation,
incentive arrangements or other benefits, except for increases made in the
usual and ordinary course of business consistent with past custom and
practice or increases required by law or pre-existing contract, (D) except
as disclosed on the attached "Transferred Employees Schedule," reassign or
------------------------------
transfer (including, without limitation, by termination and rehiring) any
employee of the Company to Parent or any of its Affiliates (other than the
Company), (E) establish or, except in accordance with past practice or as
may be required by law or contract, contribute to any pension, retirement,
profit sharing or stock bonus plan or multiemployer plan covering employees
of the Company, (F) redeem, purchase or otherwise acquire directly or
indirectly any of the Company's issued and outstanding capital stock, or
any outstanding rights or securities exercisable or exchangeable for or
convertible into capital stock of the Company or otherwise make any
distribution, (G) amend its articles of association or other governing
documents or issue or agree to issue any capital stock or any rights to
acquire, or securities convertible into or exchangeable for, any of its
capital stock, (H) directly or indirectly engage in any transaction,
arrangement or contract with any officer, director, stockholder or other
insider or Affiliate of the Company which is not at arm's length, (I) make,
change or otherwise modify any Tax election affecting the Company, (J)
execute any Guarantee, issue any debt or borrow any money, except in the
ordinary course of business or (K) sell or transfer any assets (except (i)
inventory sold or transferred in the usual and ordinary course of business,
(ii) finished goods inventory and die and wafer inventories transferred to
Parent as required pursuant to Section 2.3(h), (iii) damaged or obsolete
equipment scrapped to a third party and not involving the receipt of any
consideration therefor by the Company or any of its Affiliates and (iv) the
transfer of the Transferred Equipment); or
(iv) enter into any transaction, arrangement or contract to do any of
the foregoing.
(b) During the period from the date hereof until the Closing or
until this Agreement is terminated in accordance with its terms, Parent shall
not, and shall not authorize or
-18-
permit any of its Affiliates or their respective officers, directors or
representatives to, take, directly or indirectly, any action with respect to the
Company to initiate, assist, solicit, negotiate, encourage, accept or otherwise
pursue any offer or inquiry from any Person (i) to engage in any Business
Combination (as defined below) other than the transactions contemplated by this
Agreement and the other agreements contemplated hereby or (ii) to reach any
agreement or understanding (whether or not such agreement or understanding is
absolute, revocable, contingent or conditional) for, or otherwise attempt to
consummate, any Business Combination other than the transactions contemplated by
this Agreement and the other agreements contemplated hereby. For purposes
hereof, "Business Combination" means any (i) merger, consolidation, sale of
--------------------
assets, business combination or similar transaction to which Parent or any of
its Affiliates is a party relating to any or all of the Company, its assets or
any interest therein or (ii) any sale or other disposition of the capital stock
of the Company or any sale, dividend or other disposition of all or any material
portion of the assets and properties of the Company.
5.3 Nonsolicitation of ChipPAC Employees. If this Agreement is
------------------------------------
terminated in accordance with Section 10.1, none of Parent, Seller or the
Company will, nor will any of their respective Affiliates, solicit, entice or
offer employment to any employees of ChipPAC or any of its Affiliates for a
period of one year from the date of this Agreement; provided that the foregoing
shall not prohibit Parent, Seller, the Company or any of their Affiliates from
employing any individuals who have received notice of termination from, or
ceased to be employed by, ChipPAC or any of its Affiliates prior to the first
time such individuals discussed, with any representative of Parent, Seller, the
Company or any of their Affiliates, as the case may be, employment by Parent,
Seller, the Company or any of their Affiliates, as the case may be.
5.4 Pre-Closing Covenants of Buyer and ChipPAC. Between the date
------------------------------------------
hereof and the Closing Date, except as otherwise expressly provided herein,
Buyer or ChipPAC, as applicable, will:
(a) promptly inform each of Parent and Seller in writing of any
variances from the representations and warranties contained in Article 8 hereof
or any breach of any covenant hereunder by Buyer or ChipPAC of which Buyer or
ChipPAC becomes aware; and
(b) cooperate with each of Seller and Parent and use its commercially
reasonable efforts to cause the conditions to Seller's and Parent's obligations
to close the transactions hereunder to be satisfied (including, without
limitation, the execution and delivery of all agreements contemplated hereunder
to be so executed and delivered).
5.5 Nonsolicitation of Intersil Employees. If this Agreement is
-------------------------------------
terminated in accordance with Section 10.1, none of Buyer or ChipPAC will, nor
will any of their respective Affiliates, solicit, entice or offer employment to
any employees of the Company for a period of one year from the date of this
Agreement; provided that the foregoing shall not prohibit Buyer, ChipPAC or any
of their Affiliates from employing any individuals who have received notice of
termination from, or ceased to be employed by, the Company prior to the first
time such individuals discussed, with any representative of Buyer, ChipPAC or
any of their Affiliates, as the case may be, employment by Buyer, ChipPAC or any
of their Affiliates, as the case may be.
-19-
5.6 Financial Information. As soon as practicable prior to the
---------------------
Closing, Parent shall furnish or shall cause Parent's independent accountants to
furnish to Buyer, such audited financial statements (and any related required
unaudited data) for the Company (reflecting, on a pro forma basis, the actual
business operations being transferred from Seller to Buyer) which would be
required to be filed in a Form S-1 with the Securities and Exchange Commission
prepared by ChipPAC, all prepared in accordance with GAAP and in a form meeting
the requirements of Regulation S-X of the Securities Act of 1933, as amended
(and the consent of Parent's independent accountants to the use of their reports
thereon in any filing contemplated by ChipPAC). The parties agree that time is
of the essence in the performance of the provisions of this Section 5.6. Buyer
shall pay the actual reasonable out-of-pocket fees and expenses incurred by
Parent's independent accountants in satisfying the requirements set forth in
this Section 5.6.
5.7 Title Certificates. On or prior to the Closing, Parent and
------------------
Seller shall deliver to Buyer, original issue documents of title to the
properties (collectively, the "Real Property") held under (i) HS (M) 2601 Xxx
-------------
0000, Xxxxx xx Xxxx Xxxxxx, Xxxxxxxx of Gombak, Locality XX0, Xxxxxx/Xxxx Xxxxx,
Xxxxx xx Xxxxxxxx; (ii) HS (M) 2603 Xxx 0000, Xxxxx xx Xxxx Xxxxxx, Xxxxxxxx of
Gombak, Locality XX0, Xxxxxx/Xxxx Xxxxxx, Xxxxx xx Xxxxxxxx; and (iii) PN 7128
Xxx 0000, Xxxxx xx Xxxx Xxxxxx, Xxxxxxxx xx Xxxxxx, Xxxxx of Selangor, and
collectively commonly known as Xx. 00, Xxxxx Xxxxxxx, Xxx Xxxxxx Free Trade
Xxxx, 00000 Xxxxx Xxxxxx, Malaysia, evidencing good, valid and undefeasible
leasehold title to the Real Property in the Company's name effective as of the
Closing Date, subject to no Liens other than Permitted Liens. Delivery of such
documents of title shall be made to Buyer's Malaysian counsel in Malaysia.
5.8 Survey. Each of Seller and Parent shall, and shall cause the
------
Company to, cooperate with Buyer to assist Buyer in obtaining, at Buyer's cost,
prior to Closing, an as-built survey of the Real Property in accordance with
local Malaysian standards.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY
----------------------------------------------------------
As an inducement to Buyer to enter into this Agreement, each of Parent
and Seller jointly and severally represent and warrant to Buyer that:
6.1 Organization and Power; Subsidiaries and Investments. The Company
----------------------------------------------------
is a Sendirian Berhad duly organized, validly existing and in good standing
under the laws of Malaysia. The Company has all requisite corporate power and
corporate authority and possesses all licenses, permits and authorizations
necessary to own and operate its assets and to carry on its business as now
conducted. Each of Parent and Seller has all requisite corporate power and
corporate authority to execute and deliver this Agreement and the Ancillary
Agreements and to perform its obligations hereunder and thereunder. Except as
set forth on the "Corporate Organization Schedule" attached hereto, the Company
-------------------------------
does not own or control and has not, within the last three (3) years, owned or
-20-
controlled, whether directly or indirectly, any stock, partnership interest,
joint venture interest, equity participation or other security or interest in
any other Person. The articles of association and each other governing document
of the Company that have previously been furnished to Buyer reflect all
amendments thereto and are correct and complete. The minutes books containing
the records of meetings of the shareholders and board of directors, the share
certificate books and the share record books of the Company are correct and
complete. The Company is not in default under or in violation of any provision
of its articles of association or other governing documents.
6.2 Authorization. The execution, delivery and performance by each of
-------------
Seller and Parent of this Agreement, the Ancillary Agreements and each of the
transactions contemplated hereby or thereby have been duly and validly
authorized by each of Seller and Parent and no other corporate act or proceeding
on the part of Seller, Parent or their respective board of directors or
shareholders is necessary to authorize the execution, delivery or performance by
Seller or Parent of this Agreement or any of the Ancillary Agreements or the
consummation of any of the transactions contemplated hereby or thereby,
including, without limitation, any shareholder approval of any of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of Seller and Parent, and this Agreement constitutes, and each
of the Ancillary Agreements to which Parent or Seller is a party, upon execution
and delivery by Parent or Seller, will each constitute, a valid and binding
obligation of Parent or Seller, as the case may be, enforceable against Parent
or Seller, as the case may be, in accordance with its terms.
6.3 Capitalization. The recitals to this Agreement accurately set
--------------
forth the authorized and outstanding capital stock of the Company and the name
and number of shares of capital stock held by each stockholder of the Company.
All of the issued and outstanding shares of capital stock of the Company have
been duly authorized, are validly issued, fully paid and nonassessable, are not
subject to, nor were they issued in violation of, any preemptive rights, and are
owned of record and beneficially by Seller, free and clear of any Liens or other
restrictions on transfer (except for the current pledge of the capital stock of
the Company to Parent's senior secured lenders (the "Bank Pledge"), which pledge
-----------
shall be released prior to Closing, at Parent's sole cost and expense). Except
for this Agreement, there are no outstanding or authorized options, warrants,
rights, contracts, calls, puts, rights to subscribe, conversion rights or other
agreements or commitments to which Seller or Parent is a party or which are
binding upon Seller or Parent providing for the issuance, disposition or
acquisition of any of the Company's capital stock or any rights or interests
exercisable therefor. There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to the Company.
There are no voting trusts, proxies or any other agreements or understandings
with respect to the voting of the capital stock of the Company. The Company is
not party to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital stock.
6.4 No Breach. Except as set forth on the attached "Restrictions
--------- ------------
Schedule," the execution, delivery and performance by each of Seller and Parent
--------
of this Agreement and each of the Ancillary Agreements and the consummation of
each of the transactions contemplated hereby or thereby do not and will not (a)
violate, conflict with, result in any breach of, constitute a default under,
result in the termination or acceleration of, create in any party the right to
accelerate,
-21-
terminate, modify or cancel, or require any notice under the Company's, Seller's
or Parent's certificate of incorporation or bylaws, articles of association or
similar governing documents or any Material Contract, (b) result in the creation
or imposition of any Lien upon any of the Company's assets, (c) require any
authorization, consent, approval, exemption or other action by or notice to any
court, other governmental body or other Person under, the provisions of any
material law, statute, rule, regulation, judgment, order or decree or any
Material Contract or (d) violate or require any consent or notice under any law,
statute, regulation, rule, judgment, decree, order, injunction or other
restriction of any government, governmental agency or court to which Parent,
Seller or the Company is subject or any of the Company's assets are subject.
Except for (i) a filing with the Federal Trade Commission and/or the Department
of Justice under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, (ii) the approval and consent of MITI, (iii) the approval and consent
of Bank Negara Malaysia, (iv) the approval and consent of FIC and (v) any matter
set forth on the attached "Restrictions Schedule," no permit, consent, approval
---------------------
or authorization of, declaration to or filing with, or notice to, any
governmental authority or any third party is required in connection with the
execution, delivery or performance by Parent or Seller of this Agreement or the
Ancillary Agreements or the consummation by Parent or Seller of the transactions
contemplated hereby or thereby.
6.5 Financial Statements. The attached "Financial Statements
-------------------- --------------------
Schedule" contains the following financial statements (the "Financial
---------
Statements"):
----------
(a) the audited balance sheet of the Company as of July 2, 1999 (the
"1999 Balance Sheet") and July 3, 1998 and the related statements of income,
------------------
changes in owner's equity and cash flow for the years ended July 2, 1999, July
3, 1998 and June 27, 1997; and
(b) the unaudited balance sheet of the Company as of March 31, 2000
(the "Latest Balance Sheet") and December 31, 1999 and the related statements of
--------------------
income for the nine-month period and six-month period then ended, respectively.
Each of the foregoing Financial Statements (including in all cases the notes
thereto, if any) is consistent with the books and records of the Company (which,
in turn, are accurate and complete) and presents fairly the financial condition
and results of operations of the Company in accordance with GAAP throughout the
periods covered thereby, subject in the case of unaudited financial statements
to changes resulting from normal year-end adjustments (which will not be
material individually or in the aggregate) and to the absence of footnote
disclosure.
6.6 Absence of Undisclosed Liabilities. The Company has no obligation
----------------------------------
or liability (in any case, whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated or due
or to become due) arising out of or related to facts, events, transactions,
occurrences or actions or inactions arising on or prior to the Closing Date,
other than: (i) liabilities and obligations set forth on face of the 1999
Balance Sheet, (ii) liabilities and obligations incurred in the ordinary course
of business (none of which is a liability resulting from, arising out of,
relating to, in the nature of, or caused by any breach of contract, breach of
warranty, tort, infringement, violation of law, environmental matter, claim or
lawsuit) and (iii)
-22-
other liabilities and obligations expressly disclosed as such in one of the
Disclosure Schedules attached hereto.
6.7 Absence of Certain Developments.
-------------------------------
(a) Except (i) as required for Seller or Parent to comply with their
obligations under this Agreement, (ii) as permitted by this Agreement or (iii)
as set forth in the attached "Developments Schedule," since December 31, 1999,
---------------------
the Company has conducted its business only in the ordinary course of business
consistent with past custom and practice (including, without limitation, with
respect to the offering of special sales, price or incentive programs), has
incurred no liabilities other than in the ordinary course of business consistent
with past custom and practice, and the Company has not:
(i) suffered a Material Adverse Effect;
(ii) discharged or satisfied any material Lien or encumbrance
or paid any material obligation or liability or cancelled,
compromised, waived or released any material right or claim other
than (i) liabilities paid in the ordinary course of business and
(ii) the release of the Bank Pledge;
(iii) transferred any material portion of its production to
another facility operated by Parent, any of its Affiliates or any
third party (except for transfers to third-party subcontractors in
the ordinary course of business);
(iv) sold, assigned or transferred any of its assets, except
for sales of inventory in the ordinary course of business, or
mortgaged, pledged or subjected them to any material Lien, except
for the Bank Pledge and except for Liens for current property Taxes
not yet due and payable, or cancelled out of the ordinary course of
business any material debts or claims owing to or held by it;
(v) sold, assigned, transferred, abandoned or permitted to
lapse any Government Licenses which are material to the Company's
business, or sold, assigned or transferred any of its Intellectual
Property Rights or other intangible assets on an exclusive basis,
or disclosed any material proprietary confidential information to
any Person, except in the ordinary course of business consistent
with past custom and practice, or granted any exclusive license or
sublicense of any rights under or with respect to any Intellectual
Property Rights;
(vi) made or granted any bonus or any wage or salary increase
to any employee, officer or director, or made any other material
change in employment terms for any employee, officer or director,
other than scheduled bonuses under the Company's 13 month bonus
plan or the Company's annual incentive bonus plan and increases in
the ordinary course of business or reassigned or transferred
(including, without limitation, by terminating and rehiring) any
-23-
employee of the Company to Parent or any of its Affiliates (other
than the Company);
(vii) made or granted any increase in, or amended or
terminated, any existing plan, program, policy or arrangement,
employee benefit plan or arrangement or adopted any new employee
benefit plan or arrangement, or amended or renegotiated any
existing collective bargaining agreement or entered into any new
collective bargaining agreement or multiemployer plan;
(viii) except for any such items included in the Company's
1999-2000 capital budget aggregating $14.8 million USD, made any
capital expenditures or commitments therefor such that the
aggregate outstanding amount of unpaid obligations and
commitments with respect thereto shall comprise in excess of
$50,000.00 USD on the Closing Date;
(ix) made any loans or advances to, or guarantees for the
benefit of, or entered into any transaction in excess of
$50,000.00 USD with any Affiliate, employee, officer or director
of the Company, except for the transactions contemplated by this
Agreement and for advances consistent with past custom and
practice made to employees, officers and directors for travel
expenses incurred in the ordinary course of business or entered
into any transaction, arrangement or contract (including, without
limitation, any transfer of any assets or placing a Lien on any
assets) except on an arms'-length basis in the ordinary course of
business;
(x) suffered any material extraordinary loss, damage,
destruction or casualty loss or waived any rights of material
value, whether or not covered by insurance and whether or not in
the ordinary course of business;
(xi) received written notification from any material
supplier that such supplier will stop doing business with the
Company or allocate its supply of materials or products to the
Company;
(xii) issued or sold or agreed to issue or sell any notes,
bonds or other debt securities or any equity securities or any
securities convertible, exchangeable or exercisable into any
equity securities;
(xiii) borrowed any amount, except current liabilities
incurred in the ordinary course of business;
(xiv) created, incurred, assumed or guaranteed any
Indebtedness for Borrowed Money other than Indebtedness for
Borrowed Money to be paid off at the Closing;
-24-
(xv) purchased, redeemed or otherwise acquired any shares of
its capital stock or any warrants, options or other rights to
acquire such capital stock;
(xvi) made any capital investment in, any loan to, or any
acquisition of the securities or assets of any other Person (other
than advances to employees of the Company for travel expenses in
the ordinary course of business) or incorporated any Subsidiary;
(xvii) amended or authorized the amendment of its articles of
association or similar governing documents; or
(xviii) settled or compromised any litigation for an amount in
excess of $50,000.00 USD or involving any injunctive relief or
other form of equitable relief.
(b) No party (including the Company) has accelerated, terminated,
modified or cancelled any Material Contract required to be set forth on the
attached "Contracts Schedule."
------------------
6.8 Title to Properties.
-------------------
(a) Leased Properties. The attached Leases Schedule lists and
----------------- ---------------
describes briefly all real property that is used or occupied by the Company in
connection with its business but not owned by the Company and the leases and
agreements by which such property is used and occupied. Except as otherwise
described on the Leases Schedule, with respect to each such parcel of leased
---------------
real property: (i) the leases and agreements described on the Leases Schedule
---------------
constitute all of the leases and agreements under which the Company holds any
interest in any real estate used in connection with its business; (ii the
Company has delivered to the Buyer and its counsel true, correct and complete
copies of all of the leases and agreements described on the attached Leases
------
Schedule; (ii neither the Company nor, to Parent's or Seller's Knowledge, any
--------
other third party to any such lease or agreement is in breach or default
thereof, and no event has occurred which, with notice or the lapse of time, or
both, would constitute such a breach or default by the Company or, to Seller's
or Parent's Knowledge, any such other party, or permit termination, modification
or acceleration thereof or thereunder; (iv) neither the Company, nor to Seller's
or Parent's Knowledge, any third party to any such lease or agreement has
repudiated any provision thereof; (v) there are no disputes, oral agreements or
forbearance programs in effect as to any such lease or agreement; (vi) no such
lease or agreement has been modified in any respect, except to the extent
disclosed in documents delivered to the Buyer and its counsel; (vii) the Company
has not assigned, transferred, conveyed, mortgaged, created any deed of trust or
encumbered any interest in any leasehold; (viii) none of the buildings,
improvements and other property on the leased property are in violation of any
applicable zoning, building code or subdivision ordinance, regulation, order or
law or restrictions or covenants of record; (ix) all buildings, improvements and
other property thereon are supplied with utilities and other services necessary
for the operation thereof (including gas, electricity, water, telephone,
sanitary and storm sewers); (x) there are no pending (or, to Seller's or
Parent's Knowledge, threatened) condemnation proceedings or other similar
administrative actions
-25-
relating to such parcel; (xi) the land does not serve any adjoining property for
any purpose inconsistent with the use of the land, and the property is not
located within any flood plain; (xii) there are no leases, subleases, licenses,
concessions or other agreements, written or oral, granting to any Person the
right of use or occupancy of any portion of such properties; and (xiii) no
Person (other than the Company) is in possession of such properties. The Company
does not own any real property in fee.
(b) Title. The Company owns good and marketable title, free and clear
-----
of all Liens (other than Permitted Liens and Liens granted to Parent's third
party senior secured banking syndicate ("Bank Liens"), which Bank Liens Parent
----------
shall cause to be released on or prior to Closing), to all of the personal,
tangible and intangible personal property and assets of the Company shown on the
Company's December 31, 1999 balance sheet or acquired thereafter. At the
Closing, the assets of the Company, together with any rights, properties or
interests to be made available to Buyer and the Company pursuant to the
Ancillary Agreements, will include all of those assets (real, personal, tangible
and intangible) necessary to conduct the Company's business as presently
conducted.
6.9 Contracts and Commitments.
-------------------------
(a) The Company is not a party to, bound by or subject to any
contract, agreement or arrangement, whether written or oral, except for (i) any
oral contract for employment at the will of the Company, (ii) any customer or
employee nondisclosure agreements, (iii) any contract with the same party
involving payments of less than $50,000 USD per annum which are terminable by
the Company on 30 days or less notice without penalty, (iv) the leases and
agreements required to be disclosed on the attached Leases Schedule and (v)
---------------
those contracts, agreements and arrangements described on the attached
"Contracts Schedule" (all of the foregoing collectively, the "Material
------------------ --------
Contracts").
---------
(b) Except as disclosed on the attached "Contracts Schedule": (i) no
------------------
Material Contract has been breached in any respect or canceled by the other
party that has not been duly cured or reinstated, (ii) the Company has performed
all of its obligations required to be performed by it under such Material
Contracts and the Company is not in receipt of any written claim of default
under any such Material Contract, (iii) no event has occurred which with the
passage of time or the giving of notice or both would result in a breach or
default under any such Material Contract and (iv) the Company is not a party to
any contract(s), agreement(s) or arrangement(s) which, individually or in the
aggregate, could have a Material Adverse Effect. Each Material Contract is in
full force and effect and is valid, binding and enforceable in accordance with
its terms. Buyer has been supplied with a true and correct copy of all written
Material Contracts requested by Buyer, together with all amendments, waivers or
other changes thereto.
6.10 Intellectual Property Rights.
----------------------------
(a) The attached "Intellectual Property Rights Schedule" contains a
-------------------------------------
complete and accurate list of all: (i) patented or registered Company
Intellectual Property Rights and pending
-26-
patent applications and other applications for registration of Company
Intellectual Property Rights owned or filed by or on behalf of the Company; (ii)
trade names, corporate names and material unregistered trademarks and service
marks owned or used by the Company; (iii) material unregistered copyrights owned
or used by the Company; (iv) material software and databases owned or used by
the Company; and (v) material licenses or other rights granted by the Company to
any third party with respect to any Company Intellectual Property Rights, and
all licenses or other rights granted by any third party to the Company with
respect to any Company Intellectual Property Rights, in each case identifying
the subject Company Intellectual Property Right.
(b) The Company owns all right, title and interest in and to, or has
a valid and enforceable license to use (whether pursuant to the Intellectual
Property Rights Agreement, the Supply Agreement or otherwise), the Company
Intellectual Property Rights and the Company Intellectual Property Rights
comprise all of the Intellectual Property Rights necessary for the operation of
the Company's business as currently conducted. None of the licenses described in
Section (b) of the attached Intellectual Property Rights Schedule are exclusive
-------------------------------------
licenses.
(c) Except as indicated on the attached Intellectual Property Rights
----------------------------
Schedule: (i) there have been no claims made against the Company asserting the
--------
invalidity, misuse or unenforceability of any Company Intellectual Property
Rights or alleging that the Company infringed, misappropriated or otherwise
conflicted with any intellectual property rights of any third party (including,
without limitation, any demand or request that the Company cease using any
Company Intellectual Property Rights or license any intellectual property rights
from any third party); (ii) the conduct of the Company's business has not
infringed, misappropriated or otherwise violated, and does not infringe,
misappropriate or otherwise violate the intellectual property rights of any
third party, nor would the continued conduct of the Company's business as
currently conducted or as currently proposed to be conducted infringe,
misappropriate or otherwise violate the intellectual property rights of any
third party; (iii) the Company has not received any notices of any infringement,
misappropriation or other violation by any third party, with respect to the
Company Intellectual Property Rights; (iv) the Company is not in breach of any
license or other grant of rights with respect to the Company Intellectual
Property Rights; and (v) the transactions contemplated by this Agreement will
not have a Material Adverse Effect on the Company's right, title and interest in
and to the Company Intellectual Property Rights.
6.1 Government Licenses and Permits. The attached "Government
------------------------------- ----------
Licenses Schedule" contains a complete listing and summary description of all
-----------------
material Government Licenses used by the Company in the conduct of its business.
Except as indicated on the attached "Government Licenses Schedule," the Company
----------------------------
owns or possesses all right, title and interest in and to all of the Government
Licenses that are necessary to own and operate the assets of the Company and to
conduct its business as presently conducted. The Company is in compliance with
the terms and conditions of such Government Licenses and the Company has not
received any written notice that it is in violation of any of the terms or
conditions of such Government Licenses. The Company has taken all necessary
action to maintain such Government Licenses. No loss or expiration of any such
Government License is pending, or to the Knowledge of Seller or Parent,
threatened, other than expiration in accordance with the terms thereof. Except
as indicated on the attached "Government
----------
-27-
Licenses Schedule," all of the Government Licenses shall remain in full force
-----------------
and effect immediately after the consummation of the transactions contemplated
hereby.
6.12 Litigation; Proceedings. Except as set forth on the attached
-----------------------
"Litigation Schedule," there are no actions, suits, proceedings, hearings,
--------------------
orders, investigations, complaints or claims pending or, to the Knowledge of
Seller or Parent, threatened against the Company or any of its assets (or, to
the Knowledge of Seller or Parent, pending or threatened against any of the
officers, directors, employees or stockholders of the Company in their
capacities as such), or to which the Company or its assets may be bound at law
or in equity, or before or by any federal, state, municipal, foreign or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign; the Company is not subject to any judgment, order or decree
of any court or governmental agency which has not been satisfied or complied
with in accordance with its terms; and the Company is not engaged in any legal
action to recover monies due it or for damages sustained by it involving in
excess of $50,000.00 USD.
6.13 Compliance with Laws. Except as set forth on the attached
--------------------
"Compliance Schedule" or the "Environmental and Safety Schedule," the Company
-------------------- ---------------------------------
has complied with and is in compliance with all applicable laws, rules and
regulations of all applicable federal, state, local and foreign governments and
all agencies thereof, except for any such noncompliance which has been
heretofore duly cured and for which there is no remaining liability.
6.14 Environmental and Safety Requirements. Except as disclosed on
-------------------------------------
the "Environmental and Safety Schedule" attached hereto:
---------------------------------
(a) The Company and each of its Affiliates has complied with and is
in compliance with, in all material respects, all Environmental, Health and
Safety Requirements. Without limiting the generality of the foregoing, the
Company and each of its Affiliates has obtained and complied with, and is in
compliance with, in all material respects, all permits, licenses and other
authorizations that are required pursuant to Environmental, Health and Safety
Requirements for the occupation of its facilities located on the Real Estate
(the "Facilities") and the operation of its business.
----------
(b) Neither the Company nor any of its Affiliates has received any
written notice, report or other information regarding any actual or alleged
violation of Environmental, Health and Safety Requirements, or any liabilities
or potential liabilities (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any investigatory, remedial or corrective obligations, relating to any of them
or the Facilities arising under Environmental, Health and Safety Requirements.
(c) None of the following exists at the Facilities: (i) underground
storage tanks, (ii) asbestos-containing material in any friable or damaged form
or condition which requires remediation or other protective action to reasonably
protect occupants of the Facility, or (iii) landfills, surface impoundments, or
disposal areas.
-28-
(d) Neither the Company nor any of its Affiliates has treated,
stored, disposed of, arranged for or permitted the disposal of, transported,
handled, or released any substance, including, without limitation, any hazardous
substance, or owned or operated any property or facility (and no such property
or facility owned or operated by the Company or any such Affiliate is
contaminated by any such substance), in a manner that has given or would
reasonably be expected to give rise to material or potentially material
obligations or liabilities, including, without limitation, any obligation or
liability for response costs, corrective action costs, personal injury, property
damage or natural resources damages pursuant to any applicable Environmental,
Health and Safety Requirements.
(e) To the Knowledge of Seller and Parent, neither this Agreement nor
the consummation of the transactions that are the subject of this Agreement will
result in any material obligations for site investigation or cleanup, or
notification to or consent of government agencies or third parties, pursuant to
any Environmental, Health and Safety Requirements.
(f) Neither the Company nor any of its Affiliates has knowingly
assumed or, pursuant to Environmental, Health and Safety Requirements is
knowingly required to undertake, any obligation or liability, including, without
limitation, any obligation or liability for corrective or remedial action, of
any other Person relating to Environmental, Health and Safety Requirements.
(g) For purposes of this Agreement, "Environmental, Health and Safety
--------------------------------
Requirements" shall mean all applicable federal, state, local and foreign
------------
statutes, regulations, ordinances and other provisions having the force or
effect of law, all judicial and administrative orders and determinations, all
contractual obligations and all common law concerning public health and safety,
worker health and safety, and pollution or protection of the environment, each
as amended and now in effect, including, without limitation, all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation.
6.15 Employees.
---------
(a) The Company has complied, and is in compliance, with all
applicable laws relating to the employment of labor, including provisions
thereof relating to wages, hours, equal opportunity, collective bargaining and
the payment of social security and other Taxes. Except as set forth on the
attached "Litigation Schedule," there are no administrative charges or court
-------------------
complaints pending or, to the Knowledge of Parent or Seller, threatened against
the Company before any state, federal, local or foreign court or agency
concerning alleged employment discrimination or any other matters relating to
the employment of labor. There is no unfair labor practice charge or complaint
pending or threatened against the Company before any state, federal, local or
foreign court or agency. To the Knowledge of Parent or Seller, within the last
three (3) years, except as disclosed on the attached Employees Schedule, the
------------------
Company has not experienced any union organization attempts, labor disputes or
work stoppage or slowdowns due to labor disagreements. There is no
-29-
labor strike, dispute, work stoppage or slowdown pending or threatened. There is
no request for representation pending. There is no grievance or arbitration
proceeding pending. The Company is not a party to any labor or union agreement.
At the Closing, the employees of the Company, together with the services of any
persons to be made available to Buyer and the Company pursuant to the Ancillary
Agreements, will include the services of all persons used to conduct the
Company's business as presently conducted.
(b) The Company is not party to any agreement which could require the
Company to pay any additional compensation, bonuses (including, without
limitation, any retention bonuses) or other amounts as a result, in whole or in
part, of the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, to any employee of the Company.
6.16 Employee Benefit Plans.
----------------------
(a) Except as set forth on the attached "Employee Benefits Schedule,"
--------------------------
with respect to current or former employees of the Company, independent
contractors, or the spouses, beneficiaries or dependents thereof, the Company
does not maintain and has not maintained, does not contribute to and has not
contributed to, does not have and has not had any obligation to contribute to,
and does not have and has not had any liability or potential liability with
respect to any bonus, incentive compensation, profit sharing, retirement,
pension, group insurance, death benefit, health, disability, stock option, stock
purchase, savings, deferred compensation, severance pay or termination pay,
welfare or other employee benefit or fringe benefit plan, program or
arrangement, excluding the Employees Provident Xxxx Xxx, 0000 and any
regulations and rules thereunder and the Employees Social Security Act, 1969 and
any regulations and rules thereunder and any other Malaysian government
sponsored or mandated plan, program or arrangement affecting such employees
("Government Sponsored or Mandated Plans"). The plans, programs and
----------------------------------------
arrangements required to be set forth on the Employee Benefits Schedule are
--------------------------
referred to herein as the "Plans."
-----
(b) With respect to each Plan, Seller has made available to Buyer
true and complete copies of (i) the plan documents, including any related trust
agreements or insurance contracts, including amendments thereto, or a written
summary of the terms and conditions of the plan if there is no such written plan
document; and (ii) the most recent actuarial valuation, if any.
(c) The Plans and the Government Sponsored or Mandated Plans
administered by the Company have been administered and are in compliance with
all requirements of applicable law and the terms of each such plan; any Plan
which is intended to be qualified under applicable law or registered or approved
by a governmental authority has been determined to be so qualified, registered
or approved by the appropriate governmental authority; and nothing has occurred
between the date of the last such determination and the Closing Date to cause
the appropriate governmental authority to revoke such determination or which
would adversely affect the continuing qualified, registered or approved status
of such Plan.
-30-
(d) All contributions (including premiums) required by law or
contract to have been paid or accrued, under or with respect to the Plans and
Government Sponsored or Mandated Plans to the Closing Date (including periods
from the first day of the then current plan year to the Closing Date) will have
been paid or accrued prior to the Closing Date.
(e) The accrued benefits provided under each Plan and Government
Sponsored or Mandated Plan providing retirement, severance or similar benefits,
determined as of the Closing Date, will not exceed the fair market value as of
such date of the assets applicable to such Plan or Government Sponsored or
Mandated Plan, or the book reserve, balance sheet reserve or other reserve with
respect thereto as of the Closing Date. For this purpose, "accrued benefits"
means the present value of all retirement, severance or similar benefits (as
described above) under a plan recognizing salary and service to Closing.
(f) There are no pending or, to the Knowledge of Seller or Parent,
threatened claims (other than routine claims for benefits), investigations,
litigation or other enforcement actions against the Company or any of its
officers, directors, employees or agents, with respect to any of the Plans, nor
is there any other liability with respect to such plans except those incurred in
the ordinary course of business.
6.17 Long-Term Liabilities. The Company is not subject to any long-
---------------------
term liabilities (as determined in accordance with GAAP), except for any such
liabilities which are required to be satisfied, canceled or paid pursuant to the
other terms and conditions of this Agreement.
6.18 Insurance. The attached "Insurance Schedule" sets forth a list of
--------- ------------------
each insurance policy to which the Company has been a party, a named insured or
otherwise the beneficiary of coverage at any time since August 13, 1999. All of
such insurance policies are legal, valid, binding and enforceable and in full
force and effect, and the Company has not been notified in writing that it is in
breach or default of its obligations under such insurance policies.
6.19 Tax Matters.
-----------
(a) The Company has timely filed all Tax Returns required to be filed
by it, each such Tax Return has been prepared in compliance with all applicable
laws and regulations, and all such Tax Returns are true and accurate in all
respects. All Taxes due and payable by the Company have been paid. Seller has
delivered to Buyer correct and complete copies of all Tax examination reports,
and statements of deficiencies assessed against or agreed to by the Company
within the past five years.
(b) Except as set forth in the attached "Taxes Schedule:"
--------------
(i) with respect to each taxable period of the Company, either
such taxable period has been audited by the relevant taxing
authority or the time for assessing or collecting income Tax with
respect to each such taxable period has
-31-
closed and such taxable period is not subject to review by any
relevant taxing authority;
(ii) no deficiency or proposed adjustment which has not been
settled or otherwise resolved for any amount of Tax has been
proposed, asserted or assessed by any taxing authority in writing
against the Company;
(iii) the Company has not consented to extend the time in which
any Tax may be assessed or collected by any taxing authority;
(iv) the Company has not requested or been granted an extension
of the time for filing any Tax Return to a date later than the
Closing Date;
(v) there is no action, suit, taxing authority proceeding or
audit now in progress, pending or, to the Knowledge of Seller or
Parent based upon personal contact with an agent of the relevant
Taxing authority, threatened against or with respect to the Company
with respect to any Tax;
(vi) the Company has not been a member of an Affiliated Group
or filed or been included in a combined, consolidated or unitary
income Tax Return;
(vii) the Company is not a party to or bound by any Tax
allocation or Tax sharing agreement, and the Company has no
contractual obligation to indemnify any other Person with respect to
Taxes;
(viii) no claim has ever been made in writing by a taxing
authority in a jurisdiction where the Company does not pay Tax or
file Tax Returns that the Company is or may be subject to Taxes
assessed by such jurisdiction;
(ix) the Company has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or owing
to any employee, creditor, independent contractor or other third
party;
(x) neither Parent nor any of its Affiliates (A) has ever
filed an election under the Code to treat the Company as an
association for Tax purposes or (B) has filed a consent under Code
Section 341(f) with respect to the Company concerning collapsible
corporations;
(xi) the Company has never owned a United States real property
interest within the meaning of Code Section 897(c);
(xii) with respect to the Company, neither Parent nor any of its
Affiliates has ever entered into an advance pricing agreement or any
other agreement, whether arising upon audit or otherwise, relating
to Section 482 of the Code; and
-32-
(xiii) the Company files Tax Returns only in Malaysia.
6.20 Brokerage. Except as disclosed on the "Company Brokerage
--------- -----------------
Schedule" attached hereto, there are no claims for brokerage commissions,
--------
finders fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of Parent, Seller or the Company.
6.21 Officers and Directors; Bank Accounts. The "Officers and
------------------------------------- ------------
Directors Schedule" attached hereto lists all officers and directors of the
------------------
Company and all of the Company's bank accounts (designating each authorized
signatory and the level of each signatory's authorization).
6.22 Affiliate Transactions. Except as disclosed on the "Affiliate
---------------------- ---------
Transactions Schedule" attached hereto, neither Seller, Parent or any director,
---------------------
officer or key employee of Parent or any of its Affiliates (any of the
foregoing, an "Insider") is a party to any agreement, contract, commitment or
-------
transaction with the Company.
6.23 Closing Date. All of the representations and warranties of Parent
------------
and Seller contained in this Article 6 and all information delivered in any
schedule, attachment or exhibit hereto or in any certificate delivered by Parent
or Seller to Buyer shall be true and correct on the Closing Date, except to the
extent that Parent or Seller has advised Buyer otherwise in writing prior to the
Closing.
-33-
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT
---------------------------------------------------
As an inducement to Buyer to enter into this Agreement, each of Seller
and Parent, jointly and severally represent and warrant to Buyer and ChipPAC
that:
7.1 Organization and Power. Seller is a corporation duly organized,
----------------------
validly existing and in good standing under the laws of the British Virgin
Islands. Parent is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of Parent and Seller has
all requisite corporate power and corporate authority to execute and deliver
this Agreement and the Ancillary Agreements to which it is a party and to
perform its obligations hereunder and thereunder.
7.2 Authorization. The execution, delivery and performance by each
-------------
of Seller and Parent of this Agreement and the Ancillary Agreements to which it
is a party and the consummation of each of the transactions contemplated hereby
or thereby have been duly and validly authorized by all requisite corporate
action on the part of Seller and Parent, and no other corporate act or
proceeding on the part of Seller, Parent or their respective board of directors
or shareholders is necessary to authorize the execution, delivery or performance
by Seller or Parent of this Agreement or the Ancillary Agreements to which each
of Seller and Parent is a party or the consummation of any of the transactions
contemplated hereby or thereby, including, without limitation, any shareholder
approval of any of the transactions contemplated hereby or thereby. This
Agreement has been duly executed and delivered by each of Seller and Parent, and
this Agreement constitutes, and the Ancillary Agreements to which Parent or
Seller is a party, upon execution and delivery by Parent or Seller, as the case
may be, will each constitute, a valid and binding obligation of Parent and/or
Seller, as the case may be, enforceable against Parent and/or Seller, as the
case may be, in accordance with its terms.
7.3 Absence of Conflicts. Except for (i) a filing with the Federal
--------------------
Trade Commission and/or the Department of Justice under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended and (ii) the approvals of the
financing sources and other governmental approvals described in Article 4
hereof, neither the execution and the delivery of this Agreement and the
Ancillary Agreements to which Seller or Parent is a party, nor the consummation
of the transactions contemplated hereby and thereby, will (a) conflict with,
result in a breach of any of the provisions of, (b) constitute a default under,
(c) result in the violation of, (d) give any third party the right to terminate
or to accelerate any obligation under, (e) result in the creation of any Lien
upon the Company Stock under or (f) require any authorization, consent,
approval, execution or other action by or notice to any court or other
governmental body under, any material indenture, mortgage, lease, loan agreement
or other agreement or instrument to which Seller or Parent is a party which
relates to the Company, Parent's or Seller's certificate of incorporation or
bylaws, articles of association or similar governing documents or any statute,
regulation, rule, judgment, order, decree or other restriction of any
government, governmental agency or court to which Seller or Parent is subject.
-34-
7.4 Litigation. There are no actions, suits, proceedings, orders or
----------
investigations pending or, to the Knowledge of Seller or Parent, threatened
against or affecting Seller or Parent, at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which would adversely
affect Seller's or Parent's performance under this Agreement, the Ancillary
Agreements to which Seller or Parent is a party or the consummation of the
transactions contemplated hereby or thereby.
7.5 Securities. Seller holds of record and owns beneficially all of
----------
the shares of Company Stock, free and clear of Liens or any other restrictions
on transfer (other than any restrictions under the Securities Act of 1933, as
amended, and state securities laws). Neither Parent, Seller nor any of their
respective Affiliates is a party to any option, warrant, right, contract, call,
put or other agreement or commitment providing for the disposition or
acquisition of any capital stock of the Company (other than this Agreement).
Neither Parent, Seller nor any of their respective Affiliates is a party to any
voting trust, proxy or other agreement or understanding with respect to the
voting of any capital stock of the Company.
7.6 Closing Date. All of the representations and warranties of Seller
------------
and Parent contained in this Article 7 and elsewhere in this Agreement and all
information delivered in any schedule, attachment or exhibit hereto or in any
certificate delivered by Seller or Parent to Buyer shall be true and correct on
the Closing Date, except to the extent that Seller or Parent has advised Buyer
otherwise in writing prior to the Closing.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF BUYER AND CHIPPAC
---------------------------------------------------
As an inducement to Seller and Parent to enter into this Agreement,
each of Buyer and ChipPAC, jointly and severally represent and warrant to each
of Parent and Seller that:
8.1 Organization and Power. Buyer is a corporation duly organized,
----------------------
validly existing and in good standing under the laws of the British Virgin
Islands. ChipPAC is a corporation duly organized, validly existing and in good
standing under the laws of the State of California. Buyer has all requisite
corporate power and corporate authority necessary to own the Company Stock.
Each of Buyer and ChipPAC has all requisite corporate power and corporate
authority to execute and deliver this Agreement and the Ancillary Agreements to
which it is a party and to perform its obligations hereunder and thereunder.
8.2 Authorization. The execution, delivery and performance by each
-------------
of Buyer and ChipPAC of this Agreement and the Ancillary Agreements to which it
is a party and the consummation of each of the transactions contemplated hereby
or thereby have been duly and validly authorized by all requisite corporate
action on the part of Buyer and ChipPAC, and no other corporate act or
proceeding on the part of Buyer, ChipPAC or their respective board of directors
or
-35-
shareholders is necessary to authorize the execution, delivery or performance
by Buyer or ChipPAC of this Agreement or the Ancillary Agreements to which each
of Buyer and ChipPAC is a party or the consummation of any of the transactions
contemplated hereby or thereby, except for shareholder approval of the amendment
to ChipPAC's Amended and Restated Articles of Incorporation set forth in Exhibit
-------
B. This Agreement has been duly executed and delivered by each of Buyer and
-
ChipPAC, and this Agreement constitutes, and the Ancillary Agreements to which
Buyer or ChipPAC is a party, upon execution and delivery by Buyer or ChipPAC,
will each constitute, a valid and binding obligation of Buyer and/or ChipPAC,
as the case may be, enforceable against Buyer and/or ChipPAC, as the case may
be, in accordance with its terms.
8.3 Capitalization. As of the date hereof, the authorized, issued
--------------
and outstanding capital stock of ChipPAC consists of (i) 10,000 shares of Class
A Convertible Preferred Stock, 10,000 shares of which are issued and
outstanding, (ii) 105,000 shares of Class B Preferred Stock, 70,000 shares of
which are issued and outstanding, (iii) 20,000,000 shares of Class L Common
Stock, 10,523,500 shares of which are issued and outstanding, (iv) 180,000,000
shares of Class A Common Stock, 97,256,500 shares of which are issued and
outstanding and (v) 180,000,000 shares of Class B Common Stock, none of which
are issued and outstanding. Effective as of the Closing Date, ChipPAC's
Articles of Incorporation will be amended to incorporate the terms of the Class
C-1 Preferred Stock and the Class C-2 Preferred Stock described in Exhibit B
---------
hereto. As of the Closing Date, all of ChipPAC's issued and outstanding shares
of capital stock will be duly authorized, validly issued, fully paid and
nonassessable and, except as set forth in any shareholders agreement between
ChipPAC and its shareholders, not subject to, nor will they have been issued in
violation of, any preemptive rights.
8.4 Absence of Conflicts. Except for (i) a filing with the Federal
--------------------
Trade Commission and/or the Department of Justice under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended and (ii) the approvals of the
financing sources and other governmental approvals described in Article 4
hereof, neither the execution and the delivery of this Agreement and the
Ancillary Agreements to which Buyer or ChipPAC is a party, nor the consummation
of the transactions contemplated hereby and thereby, will (a) conflict with,
result in a breach of any of the provisions of, (b) constitute a default under,
(c) result in the violation of, (d) give any third party the right to terminate
or to accelerate any obligation under or (e) require any authorization, consent,
approval, execution or other action by or notice to any court or other
governmental body under, any material indenture, mortgage, lease, loan agreement
or other agreement or instrument to which ChipPAC or Buyer is a party, ChipPAC's
or Buyer's articles of incorporation or bylaws, articles of association or
similar governing documents or any statute, regulation, rule, judgment, order,
decree or other restriction of any government, governmental agency or court to
which Buyer or ChipPAC is subject.
8.5 Litigation. There are no actions, suits, proceedings, orders or
----------
investigations pending or, to the Knowledge of Buyer or ChipPAC, threatened
against or affecting Buyer or ChipPAC, at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which would adversely
affect Buyer's or ChipPAC's performance under this Agreement, the Ancillary
-36-
Agreements to which Buyer or ChipPAC is a party or the consummation of the
transactions contemplated hereby or thereby.
8.6 Financial Capacity. Buyer has heretofore communicated to Parent
------------------
an accurate description of its planned financing of the transactions
contemplated hereby through its senior secured credit facilities, in an amount
sufficient to pay the cash portion of the consideration and to pay expenses in
connection with the transactions contemplated hereby.
8.7 Closing Date. Except as expressly provided herein, all of the
------------
representations and warranties contained in this Article 8 and elsewhere in this
Agreement shall be true and correct on the Closing Date, except to the extent
that Buyer or ChipPAC has expressly advised Seller and Parent otherwise in
writing prior to the Closing.
8.8 Brokerage. There are no claims for brokerage commissions,
---------
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of Buyer or ChipPAC.
8.9 Public Filings.
--------------
(a) Each of the registration statements, reports or information
statements and all exhibits thereto prepared by ChipPAC and filed with the SEC
(collectively, the "ChipPAC SEC Reports") were filed with the SEC in a timely
-------------------
manner (except as noted therein) and constitute all forms, reports and documents
required to be filed by ChipPAC under the Securities Act of 1933, as amended and
the Securities Exchange Act of 1934, as amended and the regulations promulgated
thereunder (collectively, the "Securities Laws"). As of their respective dates,
---------------
the ChipPAC SEC Reports (i) complied as to form in all material respects with
the applicable requirements of the Securities Laws and (ii) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements of ChipPAC
contained in the ChipPAC SEC Reports (i) complies as to form in all material
respects with the applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, (ii) is in accordance with the
books and records of ChipPAC and its Subsidiaries and (iii) fairly presents in
accordance with GAAP consistently applied the consolidated financial position of
ChipPAC and its Subsidiaries as at the dates thereof, and the consolidated
results of their operations for the periods covered thereby.
ARTICLE 9
BUYER SECURITIES
----------------
9.1 Investment Representations of Seller. In connection with the
------------------------------------
issuance of the Buyer Securities to Seller hereunder, Seller hereby represents
and warrants to ChipPAC that:
-37-
(a) Seller has had an opportunity to ask questions and receive
answers concerning the terms and conditions of the offering of the Buyer
Securities, has had full access to such other information concerning ChipPAC and
each of its Affiliates as Seller has requested and possesses substantial
information about, and familiarity with, ChipPAC as a result of the information
provided to Seller.
(b) Seller is able to bear the economic risk of the investment
in the Buyer Securities for an indefinite period of time.
(c) Seller is acquiring the Buyer Securities hereunder for its
own account with the present intention of holding such securities for investment
purposes and has no intention of selling such security in a public distribution
in violation of federal or state securities laws.
9.2 Legend. The Buyer Securities will be imprinted with a
------
legend in substantially the following form:
The _____________ represented by this [security] has not been
registered under the Securities Act of 1933, as amended (the
"Act"), and may not be sold or transferred in the absence of an
---
effective registration statement under the Act or an exemption
from registration thereunder. Prior to any sale or transfer of
this [security], except pursuant to an effective registration
statement under the Act covering such sale or transfer, the
holder hereof shall have delivered to the issuer hereof (the
"Company") an opinion of counsel reasonably satisfactory to the
-------
Company to the effect that such sale or transfer is exempt from
registration under the Act.
ARTICLE 10
TERMINATION
-----------
10.1 Termination. This Agreement may be terminated at any time
-----------
prior to the Closing only as follows:
(a) by mutual consent of Buyer and ChipPAC, on the one hand, and
Seller and Parent, on the other hand;
(b) by Buyer and ChipPAC if (i) there has been a
misrepresentation or breach of warranty or breach of covenant on the part of
Parent or Seller in the representations and warranties or covenants set forth in
this Agreement which has had or could reasonably be expected to have a Material
Adverse Effect or (ii) events have occurred which have made it impossible to
satisfy a
-38-
condition precedent to the obligation of Buyer and ChipPAC to consummate the
transactions contemplated hereby, unless Buyer's or ChipPAC's breach of this
Agreement has caused the condition to be unsatisfied;
(c) by Seller and Parent if (i) there has been a material
misrepresentation or breach of warranty or breach of covenant on the part of
Buyer or ChipPAC in the representations and warranties or covenants set forth in
this Agreement or (ii) events have occurred which have made it impossible to
satisfy a condition precedent to the obligation of Seller and Parent to
consummate the transactions contemplated hereby, unless Seller's or Parent's
breach of this Agreement has caused the condition to be unsatisfied; or
(d) by either Buyer and ChipPAC, on the one hand, or Parent and
Seller, on the other hand, if the Closing has not occurred by July 31, 2000;
provided that a party will not be entitled to terminate this Agreement
pursuant to this subsection (d) if (i) that party's breach of this Agreement has
prevented the consummation of the transactions contemplated hereby at or prior
to such time or (ii) that party has failed to satisfy any condition set forth in
Article 4 hereof that such party was required to satisfy.
10.2 Effect of Termination. In the event of termination of this
---------------------
Agreement as provided in Section 10.1 hereof, this Agreement will forthwith
become void and there will be no liability or obligation hereunder on the part
of any party hereto, except for the provisions of Sections 11.7 (Expenses) and
11.15 (Confidentiality) hereof and except for liability for any breach of this
Agreement prior to the time of such termination.
10.3 Waiver of Right to Terminate. Each of the parties hereto shall
----------------------------
be deemed to have waived their respective rights to terminate this Agreement
upon consummation of the Closing. No such waiver shall constitute a waiver of
any other rights arising from the non-fulfillment of any condition precedent set
forth in Article 4 hereof or any misrepresentation or breach of any warranty,
covenant or agreement contained herein unless such waiver is made in writing and
then any such written waiver shall only constitute a waiver of the specific
matters set forth therein.
ARTICLE 11
ADDITIONAL AGREEMENTS; COVENANTS AFTER CLOSING
----------------------------------------------
11.1 Survival. All representations, warranties, covenants and
--------
agreements set forth in this Agreement will survive the Closing Date and the
consummation of the transactions contemplated hereby for the periods set forth
in Section 11.2 and will not be affected by any examination made for or on
behalf of any of the parties hereto, the knowledge of any of their officers,
directors, stockholders, employees or agents or the acceptance of any
certificate or opinion.
11.2 Indemnification.
---------------
-39-
(a) Seller and Parent Indemnification. Seller and Parent, jointly and
---------------------------------
severally, agree to indemnify Buyer, the Company and ChipPAC and their
respective officers, directors, employees and representatives (the "Buyer
-----
Indemnitees"), and hold them harmless against any loss, liability, deficiency,
-----------
damage or expense (including reasonable legal fees and expenses and including
interest and penalties) (a "Loss") which any Buyer Indemnitee may suffer,
----
sustain or become subject to, as a result of (i) the breach by Seller or Parent
of any representation, warranty, covenant or agreement made by Seller or Parent
contained in this Agreement or in the closing certificate delivered pursuant to
Section 4.2(m)(i) of this Agreement (without taking into account any disclosures
made by Seller or Parent pursuant to Section 5.1(f), Section 6.23 or Section 7.6
hereof), (ii) any action, demand, proceeding, investigation or claim by a third
party (including governmental agencies) against or affecting any Buyer
Indemnitee which, if successful, would give rise to or evidence the existence of
or relate to a breach of any of the aforementioned representations, warranties,
covenants or agreements of Seller or Parent, (iii) any claims of any brokers or
finders claiming by, through or under Seller or Parent or (iv) except for any
Assumed Liabilities, any liability or obligation of the Company or any of its
Affiliates of any nature or kind whatsoever (in any case, whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated, due or to become due or otherwise) arising out of or
related to facts, events, transactions, occurrences or actions or inactions
arising on or prior to the Closing Date, including, without limitation, any such
liability or obligation resulting from, arising out of, relating to, in the
nature of, or caused by any breach of contract, breach of warranty, tort,
infringement, violation of law, environmental matter (including, without
limitation, any of the matters set forth on the "Known Environmental Liabilities
-------------------------------
Schedule" attached hereto), claim or lawsuit (any of the foregoing items
--------
described in clauses (i) through (iv) inclusive an "Intersil Liability").
------------------
To the extent an Intersil Liability was retained or indemnified
contractually by any prior direct or indirect owner of the Company (other than
Parent or any of its Affiliates) or any predecessor of Seller or Parent, Buyer
shall use commercially reasonable efforts to assist Seller or Parent to pursue a
claim against such prior owner or predecessor, it being agreed that Buyer shall
not be obligated to become a party to any litigation, arbitration or other
proceeding involving any such claim.
With respect to any claim for breaches of representations and
warranties contained in Article 6 or Article 7 hereof or of the covenants of
Seller and Parent contained in Article 5 hereof (except for breaches of
representations and warranties contained in Section 6.1, 6.2, 6.3, 6.8(b), 6.14,
6.15(b), 6.16, 6.17, 6.19 or Section 6.23, to the extent related to any of the
aforementioned Article 6 representations and warranties, or Section 7.1, 7.2,
7.5 or Section 7.6, to the extent related to any of the aforementioned Article 7
representations and warranties), neither Seller nor Parent will be liable with
respect to any such claim unless written notice of a possible claim for
indemnification with respect to such matter is given by the claiming Buyer
Indemnitee to Seller and Parent on or before the first anniversary of the
Closing Date (the "Survival Date"), it being understood that so long as such
-------------
written notice is given on or prior to the Survival Date, such representations
and warranties shall continue to survive until such matter is resolved.
Notwithstanding the foregoing, any breaches or alleged breaches of the
representations and
-40-
warranties contained in Section 6.1, 6.2, 6.3, 6.8(b), 6.14, 6.15(b), 6.16,
6.17, 6.19 or Section 6.23, to the extent related to any of the aforementioned
Article 6 representations and warranties, Section 7.1, 7.2, 7.5 or Section 7.6,
to the extent related to any of the aforementioned Article 7 representations and
warranties, Section 9.1 and any breaches of the covenants or agreements
contained herein (other than the covenants of Seller and Parent contained in
Article 5 hereof) shall survive the Closing until 30 days after the expiration
of the relevant statute of limitations.
With respect to any claim for breaches of representations and
warranties contained in Article 6 or Article 7 hereof (except for any claim
pursuant to Section 6.15(b) (Change-of-Control Payments) or Section 6.17 (Long-
Term Liabilities)), neither Seller nor Parent will have any obligation to
indemnify any Buyer Indemnitee from and against such Losses by reason of all
such claims until the Buyer Indemnitees have suffered Losses by reason of all
such claims in excess of $400,000.00 USD, and then only to the extent that such
Losses exceed such amount. Neither Seller nor Parent will be liable for any
Losses of the Buyer Indemnitees resulting from any breach or alleged breach of
any of the representations or warranties contained in Article 6 or Article 7 or
Section 9.1 hereof in an amount in excess of $35 million USD (except for any
breach of the representations and warranties contained in Section 7.5 or 7.6, to
the extent related to Section 7.5).
(b) Buyer and ChipPAC Indemnification. Buyer and ChipPAC, jointly and
---------------------------------
severally, agree to indemnify Seller and Parent and their respective officers,
directors, employees and representatives (the "Seller Indemnitees") and hold
------------------
them harmless against any Loss which any Seller Indemnitee may suffer, sustain
or become subject to, as the result of (i) the breach by Buyer or ChipPAC of any
representation, warranty, covenant or agreement made by Buyer or ChipPAC
contained in this Agreement or in the closing certificate delivered pursuant to
Section 4.1(h)(i) of this Agreement (without taking into account any disclosures
made by Buyer or ChipPAC pursuant to Section 8.7 hereof), (ii) any action,
demand, proceeding, investigation or claim by a third party (including
governmental agencies) against or affecting any Seller Indemnitee which, if
successful, would give rise to or evidence the existence of or relate to a
breach of any of the aforementioned representations, warranties, covenants or
agreements of Buyer or ChipPAC, (iii) any claims of any brokers or finders
claiming by, through or under Buyer or ChipPAC or (iv) the assertion against any
Seller Indemnitee of any liability or obligation of the Company (including,
without limitation, any Assumed Liability), except for any liability or
obligation for which Seller or Parent are required to indemnify any Buyer
Indemnitee pursuant to this Agreement.
With respect to any claim for breaches of representations and warranties
contained in Article 8 hereof or of the covenants of Buyer and ChipPAC contained
in Article 5 hereof (except for breaches of representations and warranties
contained in Section 8.1, 8.2, 8.3 or 8.7, to the extent related to any of the
aforementioned Article 8 representations and warranties), neither Buyer nor
ChipPAC will be liable with respect to any such claim unless written notice of a
possible claim for indemnification with respect to such matter is given by the
claiming Seller Indemnitee to Buyer and ChipPAC on or before the Survival Date,
it being understood that so long as such written notice is given on or prior to
the Survival Date, such representations and warranties shall continue to survive
until such matter is resolved. Notwithstanding the foregoing, any breaches of
the representations and warranties contained in Section 8.1, 8.2, 8.3 or Section
8.7, to the extent related to any of the
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aforementioned Article 8 representations and warranties and any breaches of the
covenants or agreements contained herein (other than the covenants of Buyer and
ChipPAC contained in Article 5 hereof) shall survive the Closing until 30 days
after the expiration of the relevant statute of limitations.
With respect to any claim for breaches of representations and warranties
contained in Article 8 hereof, neither Buyer nor ChipPAC will have any
obligation to indemnify any Seller Indemnitee from and against such Losses by
reason of all such claims until the Seller Indemnitees have suffered Losses by
reason of all such claims in excess of $400,000.00 USD, and then only to the
extent that such Losses exceed such amount.
(c) Defense of Claims. If a party hereto seeks indemnification under
-----------------
this Section 11.2, such party (the "Indemnified Party") shall give written
-----------------
notice as soon as reasonably practicable to the other party (the "Indemnifying
------------
Party") of the facts and circumstances giving rise to the claim. In that regard,
-----
if any suit, action, claim, liability or obligation (a "Proceeding") shall be
----------
brought or asserted by any third party which, if adversely determined, would
entitle the Indemnified Party to indemnity pursuant to this Section 11.2, the
Indemnified Party shall within 30 days notify the Indemnifying Party of the same
in writing, specifying in detail the basis of such claim and the facts
pertaining thereto; provided that the failure to so notify an Indemnifying Party
shall not relieve the Indemnifying Party of its obligations hereunder except to
the extent such failure shall have prejudiced the Indemnifying Party. The
Indemnifying Party, if it so elects, shall assume and control the defense of
such Proceeding or permit its predecessors (a "Permitted Designee") to assume
------------------
such defense if the Indemnifying Party is required to permit such Permitted
Designee to assume and control such defense pursuant to any agreement it has
made with such Permitted Designee (provided that, in either case, the
Indemnifying Party and, if applicable, its Permitted Designee shall consult with
the Indemnified Party with respect thereto and keep the Indemnified Party fully
apprised of such defense), including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of expenses; provided that
in the event any Proceeding shall be brought or asserted by any third party
which, if adversely determined, would not entitle the Indemnified Party to full
indemnity pursuant to Section 11.2, the Indemnified Party may elect to
participate in a joint defense of such Proceeding (a "Joint Defense Proceeding")
------------------------
for which the expenses of such joint defense will be shared by such parties in
proportion to each party's liability and the employment of counsel shall be
reasonably satisfactory to both parties; provided further that if the
participation of such Indemnified Party would void any indemnity to which any
Indemnifying Party may be entitled to receive from any third party, upon receipt
of an unconditional written undertaking from the Indemnifying Party to
compensate the Indemnified Party for any and all Losses in connection with such
Proceeding, the Indemnifying Party may elect to exclude the Indemnified Party
from participation in such Proceeding. If the Indemnifying Party elects to
assume and control the defense of a Proceeding (either directly or through its
Permitted Designee), it will provide notice thereof within 30 days after the
Indemnified Party has given notice of the matter and if such Proceeding is not a
Joint Defense Proceeding, the Indemnified Party shall have the right to employ
counsel separate from counsel employed by the Indemnifying Party or its
Permitted Designee, as the case may be, in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel employed by the
Indemnified Party shall be at the expense of the Indemnified Party unless
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(i) the employment thereof has been specifically authorized by the Indemnifying
Party or its Permitted Designee, as the case may be, in writing or (ii) the
Indemnifying Party or its Permitted Designee, as the case may be, has failed to
assume the defense and employ counsel. The Indemnifying Party shall not be
liable for any settlement of any Proceeding, the defense of which it (either
directly or through its Permitted Designee) has elected to assume, which
settlement is effected without the written consent of the Indemnifying Party;
provided that no settlement of a Joint Defense Proceeding may be effected
without the written consent of both the Indemnifying Party and the Indemnified
Party. If there shall be a settlement to which the Indemnifying Party consents
or a final judgment for the plaintiff in any Proceeding, the defense of which
the Indemnifying Party has elected to assume, the Indemnifying Party shall
indemnify the Indemnified Party with respect to the settlement or judgment. If
the Indemnifying Party (either directly or through its Permitted Designee)
elects to assume and control the defense or in the event of a Joint Defense
Proceeding, the Indemnified Party shall take all reasonable efforts necessary to
assist the Indemnifying Party in such defense.
(d) Payments. Any payment pursuant to a claim for indemnification
--------
shall be made not later than 30 days after receipt by the Indemnifying Party of
written notice from the Indemnified Party stating the amount of the claim,
unless the claim is subject to defense as provided in Section 11.2(c) or is a
dispute, claim or controversy which is the subject of an unresolved arbitration
proceeding pursuant to Section 11.11, in which case payment shall be made not
later than 30 days after the amount of the claim is finally determined. Any
payment required under this Section 11.2(d) which is not made when due shall
bear interest at the rate of 10.0% per annum, compounded monthly.
(e) Mitigation. Each of the parties shall take, and Buyer shall cause
----------
the Company to take, all commercially reasonable steps within their control to
mitigate any Losses as soon as reasonably practicable after such party becomes
aware of any event which does, or could reasonably be expected to, give rise to
any such Losses.
(f) Losses Net of Insurance Proceeds, Etc. The amount of any Loss for
-------------------------------------
which indemnification is provided under this Section 11.2 shall be net of (i)
any amount previously paid or otherwise settled among the parties pursuant to
the Consideration Adjustment procedures of Section 2.3, (ii) any amounts, as and
when recovered, by an Indemnified Party pursuant to any indemnification by or
indemnification agreement with any third party, including any insurer or any
other sources of cash proceeds available to offset such Loss (it being agreed
that nothing in this Agreement shall impair any right of subrogation to which
such third party may be entitled) (any such third party referred to in this
clause (ii), a "Collateral Source") and (iii) any Tax benefits attributable to
-----------------
any such Loss, as and when realized. If the amount to be netted hereunder from
any payment required pursuant to this Section 11.2 is determined after such
payment, the Indemnified Party shall repay the Indemnifying Party, promptly
after such determination, any amount that the Indemnifying Party would not have
had to pay pursuant to this Section 11.2 had such determination been made at the
time of such payment.
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(g) Exclusive Remedy. The indemnification provided in this Section
----------------
11.2 shall be the sole and exclusive remedy after the Closing Date for monetary
damages available to Buyer, ChipPAC, Parent and Seller for breaches of any of
the terms, conditions, representations, warranties or covenants contained in
this Agreement. As between Seller and Parent, on the one hand, and Buyer and
ChipPAC, including without limitation after the Closing, the Company, on the
other hand, the rights and obligations set forth in this Agreement will be the
exclusive rights and obligations with respect to the subject matter of this
Agreement, the events giving rise to this Agreement and the transactions
provided for in this Agreement (excluding, for avoidance of doubt, any of the
subject matter, events giving rise to or transactions provided for in any of the
Ancillary Agreements). Without limiting the generality or effect of the
foregoing, as a material inducement to the other parties hereto entering into
this Agreement, and in light of, among other factors, the acknowledgments
contained in this Section 11.2(g), each of the parties to this Agreement hereby
waives any claim or cause of action, known or unknown, foreseen or unforeseen,
which exists or may arise in the future, or which it otherwise might assert,
including without limitation under the common law or federal or state securities
laws, trade regulation laws, Environmental Health and Safety Requirements or
other laws, by reason of this Agreement or its subject matter, the events giving
rise to this Agreement and the transactions provided for in this Agreement,
except for (i) claims or causes of action brought under and subject to the terms
and conditions of this Agreement or (ii) injunctive relief or other equitable
relief (other than for rescission).
(h) Collateral Sources. An Indemnified Party shall use commercially
------------------
reasonable efforts to seek recovery from any Collateral Source in connection
with any Losses for which indemnification is provided under this Section 11.2,
it being agreed that nothing in this Agreement shall require such Indemnified
Party to proceed against such Collateral Source prior to making a demand for
indemnification from the Indemnifying Party. If requested by the Indemnifying
Party, and so long as any such assignment is permitted pursuant to the terms of
any agreement between the Indemnified Party and its Collateral Source, the
Indemnified Party shall assign to the Indemnifying Party the right of such
Indemnified Party to assert a claim against such Collateral Source. In the
event of such an assignment, the Indemnifying Party may pursue such claim at its
own expense.
(i) Adjustments. Amounts paid as indemnification shall be treated as
-----------
adjustments to the consideration paid for the Company Stock.
(j) Environmental Procedures.
------------------------
(i) With respect to any Loss for which any of the Buyer
Indemnitees is indemnified under Section 11.2 of this Agreement, the resolution
of which involves environmental investigation, cleanup, remedial action or other
response action ("Remediation") on any real property used or occupied at any
-----------
time by the Company in connection with its business, Seller or Parent shall have
the right, upon timely written notice, to conduct or control the Remediation, or
permit their Permitted Designee to conduct or control such Remediation (if
either Seller or Parent is required to permit such Permitted Designee to assume
and control such defense pursuant to any agreement it had made with such
Permitted Designee as in effect as of the date hereof), and such Remediation
shall only be required to meet the "Minimum Cleanup Standard." For purposes of
------------------------
this Agreement,
-44-
the "Minimum Cleanup Standard" shall mean the least stringent standard
------------------------
acceptable under all Environmental, Health and Safety Requirements (for
this purpose as in effect upon completion of the Remediation) and all
enforceable requirements of governmental authorities with jurisdiction
("Governmental Authorities") or, if no such standard has been adopted,
------------------------
promulgated or imposed by the applicable Governmental Authority or by
Environmental, Health and Safety Requirements (for this purpose as in effect
upon the completion of the Remediation) as of the date such Remediation is being
conducted, the standard to which the parties, in good faith, agree; provided,
however, that in none of the foregoing cases shall the Minimum Cleanup Standard
be at or below a standard for which (A) Buyer or the Company would be required
to impose or implement controls or restrictions which would impair the use of
the affected property as used as of the Closing Date, (B) for which additional
Remediation would be required in the future to achieve and maintain compliance
with Environmental, Health and Safety Requirements or to meet the requirements
of Governmental Authorities, as such Environmental, Health and Safety
Requirements and requirements exist as of the date of the completion of the
Remediation or (C) which does not fully resolve any liability of the Buyer
Indemnitees with respect to such matter; provided further that with respect to
any Remediation at any property leased by the Company, the Minimum Cleanup
Standard shall also meet the requirements of the landlord/lessor of such
property.
(ii) Remediation conducted by Seller or Parent or a Permitted
Designee shall be conducted in a manner which minimizes interference to the
business of the Company after the Closing Date, and if and to the extent various
Remediation alternatives are available, Seller and Parent shall, and shall cause
any Permitted Designee to, implement or pay for the implementation, as the case
may be, of such Remediation which imposes the least interruption, interference
or disruption (taking into account the cost effectiveness, regulatory and legal
constraints) unless (A) the Buyer Indemnitees consent to a different alternative
or (B) Seller and Parent indemnify and reimburse the Buyer Indemnitees for all
Losses arising from such interruption, interference or disruption.
(iii) With respect to Remediation performed by Seller, Parent or a
Permitted Designee, Seller and Parent shall, and shall cause any Permitted
Designee to: (A) diligently and expeditiously perform or cause to be performed
such Remediation to completion; (B) provide the Buyer Indemnitees reasonable
prior notice of their access requirements and obtain the Company's consent
before commencing or performing any Remediation (which consent shall not be
unreasonably withheld); (C) keep the Buyer Indemnitees reasonably informed of
the progress of the on-site activities and provide the Buyer Indemnitees with
copies of any results of sampling and analytical data (including any status
reports of work-in-progress or reports required to be submitted to any
Governmental Authorities in connection with conducting the Remediation); (D)
provide the Buyer Indemnitees a reasonable opportunity to review and comment on
any submittal to Governmental Authorities and consider in good faith the Buyer
Indemnitees' reasonable comments which must be expeditiously provided (and
Seller and Parent acknowledge that any comments, which relate to the
interruption, interference or disruption with the operation of the business of
the Company, damage to the Company's property, the safety of Company personnel
or compliance with Environmental, Health or Safety Requirements shall be deemed
reasonable); (E) provide the Buyer Indemnitees with the opportunity to observe
all of the activities undertaken by or on behalf of Seller,
-45-
Parent or any Permitted Designee in implementing the Remediation; (F) provide
reasonable advance notice to the Buyer Indemnitees of any meetings with any
Governmental Authorities concerning the Remediation and permit the Buyer
Indemnitees to attend such meetings; (G) comply with all applicable
Environmental, Health and Safety Requirements and other laws and Buyer's and the
Company's reasonable health and safety requirements; and (H) promptly upon
completion of any on-site activities, restore any adversely affected portions of
the property to its predisturbed condition such that Buyer and the Company can
continue the operation of the Company's business in the manner in which such
business was conducted prior to the commencement of the on-site activities.
(iv) Seller and Parent shall indemnify, defend and hold harmless
the Buyer Indemnitees against any Losses asserted against or incurred by the
Buyer Indemnitees arising out of or relating to activities conducted by Seller,
Parent or any Permitted Designee or their respective employees, agents,
contractors and their subcontractors in connection with the performance of the
Remediation or the fulfillment of Seller's and Parent's obligations hereunder.
Buyer and the Company shall indemnify and hold harmless Seller and Parent
against any Losses to the extent arising out of or relating to Buyer's or the
Company's interference with or disruption of Seller's or Parent's Remediation,
or any release or violation caused by Buyer or the Company after the Closing
Date.
11.3 Mutual Assistance. Each of the parties hereto agrees that they
-----------------
will mutually cooperate in the expeditious filing of all notices, reports and
other filings with any governmental authority required to be submitted jointly
by any of the parties hereto in connection with the execution and delivery of
this Agreement, the Ancillary Agreements and the consummation of the
transactions contemplated hereby or thereby. Subsequent to the Closing, each of
the parties hereto, at their own cost, will assist each other (including by the
provision of access to relevant records) in the preparation of their respective
Tax Returns and the filing and execution of Tax elections, if required, as well
as in the defense of any audits or litigation that may ensue as a result of the
filing thereof, to the extent that such assistance is reasonably requested.
11.4 Tax Matters.
-----------
(a) Tax Periods Ending on or Before the Closing Date. Seller and
------------------------------------------------
Parent shall prepare or cause to be prepared and file or cause to be filed all
Malaysian income Tax Returns for the Company for all periods ending on or prior
to the Closing Date or for which the date of measurement for such Tax occurs on
or prior to the Closing Date which are filed after the Closing Date (any such
period, a "Pre-Closing Tax Period"), which shall be reasonably satisfactory to
----------------------
Buyer and the Company, and Buyer shall prepare or cause to be prepared and file
or cause to be filed all Tax returns (other than Malaysian income Tax returns)
for all Pre-Closing Tax Periods, which shall be reasonably satisfactory to
Seller and Parent. Subject to Seller's and Parent's reimbursement obligations
with respect thereto, the Company shall pay all Taxes shown on all Tax Returns
for any Pre-Closing Tax Period. Buyer shall provide, or shall cause the Company
to provide, any documents reasonably requested by Seller or Parent in order to
enable Seller and Parent to complete such Malaysian income Tax Returns. Seller
and Parent shall permit Buyer to review and comment on each such Malaysian
income Tax Return described in this Section 11.4(a) prior to filing. Seller and
-46-
Parent shall reimburse Buyer and the Company for, and shall indemnify and hold
Buyer and the Company harmless against and from, all Taxes of the Company with
respect to any Pre-Closing Tax Periods within fifteen (15) days prior to any
payment by Buyer or the Company of such Taxes and Buyer shall pay or cause to be
paid to Seller any refund of any Taxes with respect to any Pre-Closing Tax
Periods within fifteen (15) days after receipt of such refund.
(b) Tax Periods Beginning Before and Ending After the Closing Date.
--------------------------------------------------------------
Seller and Parent shall prepare or cause to be prepared and file or cause to be
filed all Malaysian income Tax Returns for the Company for all Tax periods which
begin before the Closing Date and end after the Closing Date (any such period, a
"Straddle Tax Period"), which shall be reasonably satisfactory to Buyer and the
-------------------
Company, and Buyer shall prepare or cause to be prepared and file or cause to be
filed all Tax Returns (other than Malaysian income Tax returns) for all Straddle
Tax Periods, which shall be reasonably satisfactory to Seller and Parent. Buyer
shall provide, or shall cause the Company to provide, any documents reasonably
requested by Seller or Parent in order to enable Seller and Parent to complete
such Malaysian income Tax Returns. Seller and Parent shall permit Buyer to
review and comment on each such Malaysian income Tax Return described in this
Section 11.4(b) prior to filing. Any portion of any Tax which must be paid in
connection with any Straddle Tax Period, to the extent attributable to any
period or portion of a period ending after the Closing Date, shall be referred
to herein as "Post-Closing Taxes." Buyer shall pay, or cause the Company to
------------------
pay, an amount equal to the Post-Closing Taxes due with any Tax Returns for any
Straddle Tax Period upon the filing of any such Tax Return with the appropriate
governmental authorities, and Buyer and the Company shall indemnify and hold
Seller and Parent harmless against and from all Post-Closing Taxes. Any Taxes
due related to any Straddle Tax Period other than Post-Closing Taxes are
referred to herein as "Pre-Closing Taxes." Seller and Parent shall pay an
-----------------
amount equal to the Pre-Closing Taxes due with any Tax Return for any Straddle
Tax Period upon the filing of any such Tax Return with the appropriate
governmental authorities, and Seller and Parent shall indemnify and hold Buyer
and the Company harmless against and from all Pre-Closing Taxes. Where the
Post-Closing Taxes involve a period which begins before and ends after the
Closing Date, such Post-Closing Taxes shall be calculated as though the taxable
year of the Company terminated as of the close of business on the Closing Date;
provided that in the case of any Tax not based on income or receipts, such Post-
Closing Taxes shall be equal to the amount of such Tax for the taxable year,
multiplied by a fraction, the numerator of which shall be the number of days
from the day after the Closing Date through the end of the taxable year and the
denominator of which shall be the number of days in the taxable year.
-47-
(c) Cooperation on Tax Matters.
--------------------------
(i) Each of the parties hereto shall, and Buyer shall cause the
Company to, cooperate fully, as and to the extent reasonably requested by the
other party, in connection with the filing of Tax Returns pursuant to this
Section 11.4 and any audit, litigation or other proceeding with respect to
Taxes. Such cooperation shall include signing any Tax Return, amended Tax
Returns, claims or other documents necessary to settle any Tax controversy, the
retention and (upon the other party's request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. Following the Closing, Seller and Parent shall, and Buyer shall
cause the Company to, retain all books and records with respect to Tax matters
pertinent to the Company relating to any taxable period beginning before the
Closing Date until the expiration of the statute of limitations (and, to the
extent notified by any party, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with any
taxing authority.
(ii) Seller and Parent shall have the right to direct any audit
or other Tax proceeding with respect to a Pre-Closing Tax Period, at their sole
cost and expense. Buyer shall cause the Company to execute powers of attorney
and any other documents necessary to allow the Seller and Parent to direct such
Tax proceeding. Notwithstanding the foregoing, Buyer and the Company shall have
the right to participate in any Tax proceeding related to a Pre-Closing Tax
Period of the Company which may have the effect of increasing Buyer's or the
Company's Tax liability, and neither Seller nor Parent shall settle or
compromise any such proceeding without Buyer's prior written consent, which
consent shall not be unreasonably withheld or delayed; provided that Buyer
hereby agrees to consent if Seller and Parent fully indemnify Buyer and the
Company for any increase in Buyer's or the Company's Tax liability resulting
from such Tax proceeding.
(iii) Seller and Parent shall have the right to direct any audit
or other Tax proceeding with respect to a Straddle Tax Period, and the cost
thereof shall be shared by Seller and Parent, on the one hand, and Buyer and the
Company, on the other hand, in proportion to their respective liability for
Taxes ultimately determined to be owing with respect to such Straddle Tax
Period. Buyer shall cause the Company to execute powers of attorney and other
documents necessary to allow the Seller and Parent to direct such Tax
proceeding. Notwithstanding the foregoing, Buyer and the Company shall have the
right to participate in any Tax proceeding related to a Straddle Tax Period
which may have the effect of increasing Buyer's or the Company's Tax liability,
and neither Seller nor Parent shall settle or compromise any such proceeding
without Buyer's prior written consent, which consent shall not be unreasonably
withheld or delayed; provided that Buyer hereby agrees to consent if Seller and
Parent fully indemnify Buyer and the Company for any increase in Buyer's or the
Company's Tax liability resulting from such Tax proceeding.
(iv) The parties further agree, upon request, to use
commercially reasonable efforts to obtain any certificate or other document from
any governmental authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the transactions contemplated hereby).
-48-
(v) Without the prior written consent (which shall not be
unreasonably withheld or delayed) of Buyer, Seller shall not make or change any
election, change an annual accounting period, file any amended Tax Return, enter
into any closing agreement, settle any Tax claim or assessment relating to the
Company, surrender any right to claim a refund of Taxes, or take any other
similar action, or omit to take any action relating to the filing of any Tax
Return or the payment of any Tax, if such action or omission would have the
effect of increasing the Tax liability of the Company, Buyer or any Affiliate of
Buyer, with respect to any Tax period (or portion thereof) beginning after the
Closing Date. Seller shall notify Buyer of any consent to any extension or
waiver of the limitation period applicable to any Tax claim or assessment
relating to the Company within 15 days of making such consent or waiver.
(vi) Without the prior written consent (which shall not be
unreasonably withheld or delayed) of Seller, neither Buyer nor the Company shall
make or change any election, change an annual accounting period, file any
amended Tax Return, enter into any closing agreement, settle any Tax claim or
assessment relating to the Company, surrender any right to claim a refund of
Taxes, or take any similar action, or omit to take any action relating to the
filing of any Tax Return or the Payment of any Tax, if such action or omission
would have the effect of increasing the liability of Seller or any of its
Affiliates under this Section 11.4 with respect to any Pre-Closing Tax Period or
with respect to any Pre-Closing Taxes.
(d) Tax Sharing Agreements. All tax-sharing agreements or similar
----------------------
agreements with respect to or involving the Company shall be terminated as of
the Closing Date and, after the Closing Date, the Company shall not be bound
thereby nor shall it have any liability thereunder.
(e) Certain Taxes. Except as set forth in Section 11.16, each of Seller
-------------
and Parent shall be jointly and severally liable for, and shall indemnify each
Buyer Indemnitee against, any liability for the Taxes of any Person (other than
the Company) as transferee or successor, by contract or otherwise.
(f) Transfer Pricing Agreements. Parent will supply Buyer with a copy of
---------------------------
all closing or other agreements in its possession or control related to the
Company entered into with the Internal Revenue Service, the Malaysian taxing
authority or any other state, local or foreign taxing authorities relating in
whole or in part to Code Section 482 or any other comparable transfer pricing
provision set forth under state, local or foreign tax law that arise from any
transaction between (i) the Company with (ii) Parent or any of its Affiliates or
their respective predecessors, and Parent will use its best efforts to supply,
with respect thereto, any supporting documentation including, but not limited
to, any transfer pricing or economic studies obtained for, or in anticipation
of, any such proceeding.
11.5 Books and Records. Except as otherwise provided in Section 11.4(c)(i)
-----------------
hereof, unless otherwise consented to in writing by Seller or Buyer (as the case
may be), Seller will not, and Buyer shall not permit the Company to, for a
period of seven (7) years following the date hereof, destroy, alter or otherwise
dispose of any of the books and records of the Company retained by the Company
or Seller as of the Closing without first offering to surrender to Seller or
Buyer such
-49-
books and records or any portion thereof of which Seller or Buyer may intend to
destroy, alter or dispose. Without limiting the provisions of Section 11.4(c)(i)
hereof, Seller will, and Buyer will cause the Company to, allow the other
party's representatives, attorneys and accountants access to such books and
records, upon reasonable request and during such party's normal business hours,
for the purpose of examining and copying the same in connection with any matter
arising out of this Agreement or the transactions contemplated hereby.
11.6 Press Release and Announcements. Unless required by law or any
-------------------------------
rule or regulation of any securities exchange upon which the securities of any
party or any of its Affiliates are registered (in which case each of the parties
agrees to use reasonable efforts to consult with the others prior to any such
disclosure as to the form and content of such disclosure), after the date
hereof, through and including the Closing Date, no press releases, announcements
to the employees, customers or suppliers of the Company or other releases of
information related to this Agreement or the transactions contemplated hereby
will be issued or released without the consent of both Buyer and Parent.
11.7 Expenses. Except as otherwise expressly provided herein, Buyer
--------
and ChipPAC, on the one hand, and Seller and Parent, on the other hand, shall
bear its own expenses (including, without limitation, fees and expenses of legal
counsel, accountants, investment bankers, brokers, finders or other
representatives and consultants) incident to its obligations under and in
respect of this Agreement, each of the other agreements contemplated hereby and
the transactions contemplated hereby and thereby, whether or not the
transactions contemplated hereby are consummated.
11.8 Restructuring Expenses. On October 1, 2000, Parent shall pay
----------------------
ChipPAC $1,500,000.00 USD in cash, by wire transfer of immediately available
funds, to assist ChipPAC in the restructuring of the Company's operations
(including, without limitation, the restructuring of the Hermetic and MOV and
other product lines).
11.9 Employee Benefits. On October 1, 2000, Parent shall pay ChipPAC
-----------------
$300,000.00 USD in cash, by wire transfer of immediately available funds, to
assist ChipPAC to fund stock options and/or other employee benefits to be made
available to employees of the Company.
11.10 Specific Performance. Each of the parties hereto acknowledges
--------------------
and agrees that Buyer and ChipPAC would be damaged irreparably in the event the
Closing is not consummated in accordance with the terms and conditions of this
Agreement. Accordingly, each of the parties hereto agrees that Buyer and ChipPAC
shall be entitled to an injunction or injunctions to prevent any breach of the
terms and conditions of this Agreement which would prevent or delay the Closing
pursuant to the terms and conditions of this Agreement and to enforce such
obligations of Seller and Parent to consummate the transactions contemplated
hereby in any action instituted in any court having jurisdiction over the
parties and the matter in addition to any other remedy to which Buyer or ChipPAC
may be entitled pursuant hereto.
-50-
11.11 Dispute Resolution.
------------------
(a) Each of the parties hereto agrees that they will attempt to settle
any dispute, claim or controversy arising out of this Agreement through good
faith negotiations in the spirit of mutual cooperation between senior business
executives with authority to resolve the controversy.
(b) Any dispute, claim or controversy that cannot be resolved by the
parties through good faith negotiations within 30 days of the notification to
the other party of the commencement of the dispute resolution procedures of this
Section 11.11 will then, upon the written request of any party hereto, be
resolved by binding arbitration conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association by a sole arbitrator.
Such arbitrator shall be mutually agreeable to the parties. If the parties
cannot mutually agree upon the selection of an arbitrator, the arbitrator shall
be selected in accordance with the rules of the then effective Commercial
Arbitration Rules of the American Arbitration Association. To the extent not
governed by such rules, such arbitrator shall be directed by the parties to set
a schedule for determination of such dispute, claim or controversy that is
reasonable under the circumstances. Such arbitrator shall be directed by the
parties to determine the dispute in accordance with this Agreement and the
substantive rules of law (but not the rules of procedure or evidence) that would
be applied by a federal court required to apply the internal law (and not the
law of conflicts) of the State of New York. The arbitration will be conducted
in the English language in New York, New York. Judgment upon the award rendered
by the arbitrator may be entered by any court having jurisdiction.
(c) Nothing contained in this Section 11.11 shall prevent any party
hereto from resorting to judicial process if injunctive or other equitable
relief from a court is necessary to prevent injury to such party or its
Affiliates. The use of arbitration procedures will not be construed under the
doctrine of laches, waiver or estoppel to affect adversely the rights of any
party hereto to assert any claim or defense.
11.12 Further Transfers. Each of the parties hereto will execute and
-----------------
deliver such further instruments of conveyance and transfer and take such
additional action as any other party may reasonably request to effect,
consummate, confirm or evidence the transfer to Buyer of the Company Stock and
any other transactions contemplated hereby.
11.13 Transition Assistance. Neither Parent nor Seller will, nor will
---------------------
they permit the Company to, in any manner take any action which is designed or
intended to have the effect of discouraging customers, suppliers, lessors,
licensors and other business associates from maintaining the same business
relationships with the Company after the date of this Agreement as were
maintained with the Company prior to the date of this Agreement.
11.14 Non-Competition; Non-Solicitation. As condition precedent to
---------------------------------
each of Buyer and ChipPAC to enter into and perform their respective obligations
under this Agreement, Parent agrees, on behalf of Intersil Holding Corporation
and each of Intersil Holding Corporation's controlled Affiliates (any of
Intersil Holding Corporation or Intersil Holding Corporation's controlled
Affiliates hereafter referred to as a "Restricted Person") that:
-----------------
-51-
(a) except as otherwise expressly permitted pursuant to this Agreement
or any of the Ancillary Agreements, for a period of five (5) years from the
Closing Date (the "Non-Competition Period"), no Restricted Person shall,
----------------------
directly or indirectly, either for itself or for any other Person, (i) engage in
any Competing Business or (ii) own, manage, operate, join, control or
participate in the ownership, management, operation or control of any Person who
or which at any relevant time during such period is engaged in any Competing
Business or permit its name to be used in connection with any Competing
Business. As used herein, "Competing Business" means the provision of products
------------------
or services in the semiconductor packaging or test business anywhere in the
world, excluding (i) the provision of such assembly and test services for
Parent's current military product line serviced at Parent's Palm Bay, Florida
facility or (ii) the provision of such products or services for prototypes (in
non-production quantities). Nothing in this Section 11.14 shall prevent any
Restricted Person from acquiring and operating any business, a portion of which
may consist of the business of providing back-end packaging or test services for
the internal use of such acquired business (as opposed to providing such
services to third parties); it being agreed that such acquired business may
continue to provide such packaging or test services, but only for the internal
use of such acquired business (and not for any Restricted Person or any third
party).
(b) During the Non-Competition Period, no Restricted Person will,
directly or indirectly, offer employment to or hire (in any capacity) any
employee of the Company as of the Closing Date or any person who was an employee
of the Company at any time during the six-month period immediately preceding the
Closing Date without the prior written consent of Buyer.
(c) If, at the time of enforcement of this Section 11.14, a court
shall hold that the duration, scope, geographic area or other restrictions
stated herein are unreasonable under circumstances then existing, the parties
agree that the maximum duration, scope, geographic area or other restrictions
deemed reasonable under such circumstances by such court shall be substituted
for the stated duration, scope, geographic area or other restrictions.
(d) Parent recognizes and affirms that in the event of breach by any
Restricted Person of any of the provisions of this Section 11.14, money damages
would be inadequate and none of ChipPAC, Buyer or the Company would have an
adequate remedy at law. Accordingly, Parent agrees, on behalf of itself and
each other Restricted Person, that each of ChipPAC, Buyer and the Company shall
have the right, in addition to any other rights and remedies existing in their
favor, to enforce their rights and the Restricted Persons' obligations under
this Section 11.14 not only by an action or actions for damages, but also by an
action or actions for specific performance, injunctive and/or other equitable
relief in order to enforce or prevent any violations (whether anticipatory,
continuing or future) of the provisions of this Section 11.14 (including,
without limitation, the extension of the Non-Competition Period by a period
equal to (i) the length of the violation of this Section 11.14 plus (ii) the
length of any court proceedings necessary to stop such violation). In the event
of a breach or violation by any Restricted Person of any of the provisions of
this Section 11.14, the running of the Non-Competition Period (but not of the
Restricted Persons' obligations under this Section 11.14) shall be tolled with
respect to each Restricted Person during the continuance of any actual breach or
violation.
-52-
11.15 Confidentiality. After the Closing, Parent shall, and shall
---------------
cause each of its Affiliates to, continue to maintain the confidentiality of all
confidential or proprietary information, documents and materials relating to the
Company or relating to Buyer or any of its Affiliates, except to the extent
disclosure of any such information is required by law or regulation (including
any regulation of any securities exchange on which any such Person's securities
are traded) or authorized by Buyer. After the Closing, Buyer shall, and shall
cause each of its Affiliates to, continue to maintain the confidentiality of all
confidential or proprietary information, documents and materials relating to
Parent or any of its Affiliates (other than, for avoidance of doubt, the
Company) which has been disclosed to any of them, except to the extent
disclosure of any such information is required by law or regulation (including
any regulation of any securities exchange on which any such Person's securities
are traded) or authorized by Parent. In the event that any party reasonably
believes after consultation with counsel that it is required by law to disclose
any confidential information described in this Section 11.15 the disclosing
party will (a) provide the other party with prompt notice before such disclosure
in order that any party may attempt to obtain a protective order or other
assurance that confidential treatment will be accorded such confidential
information and (b) cooperate with the other party in attempting to obtain such
order or assurance. The provisions of this Section 11.15 shall not apply to any
information, documents or materials which are, as shown by appropriate written
evidence, in the public domain or, as shown by appropriate written evidence,
shall come into the public domain, other than by reason of breach by the
applicable party bound hereunder or its Affiliates.
11.16 Taxes; Recording Charges. All documentary, sales, use, stamp,
------------------------
registration, conveyance or similar transfer Taxes arising out of the sale of
the Company Stock or otherwise incurred in connection with this Agreement, the
other agreements contemplated hereby or the consummation of the transactions
contemplated hereby and thereby and all charges for or in connection with the
recording of any document or instrument contemplated hereby shall be borne
equally by Seller and Buyer, including, without limitation, the cost of the 0.3%
stamp duty required to transfer the Company's capital stock from Seller to
Buyer. Buyer shall cause the Company to file all necessary Tax Returns and
other documentation in connection with the Taxes encompassed in this Section
11.16 and, if required by law, any of the other parties hereto will execute and
join in any such filing.
11.17 Ancillary Agreements. Following the Closing Date, Parent and
--------------------
Buyer shall, and shall cause their respective Affiliates to, perform their
respective obligations under the Ancillary Agreements.
11.18 Chinese Subsidiaries.
--------------------
(a) The Company and certain Affiliates of Xxxxxx Corporation
(collectively, "Xxxxxx") are parties to three separate purchase agreements
------
regarding the transfer of the beneficial interests in, and transfer of title to,
the Chinese Subsidiaries (as the same are in effect as of the date hereof, the
"Chinese Purchase Agreements"). As of the date of this Agreement, none of the
---------------------------
transfers of the Chinese Subsidiaries to Xxxxxx contemplated by the Chinese
Purchase Agreements has been consummated. Buyer shall cause the Company to
comply with its obligations under the Chinese
-53-
Purchase Agreements. Parent agrees that it will arrange for and consummate the
sale, liquidation or other disposition of all of the Chinese Subsidiaries or the
assets thereof or the transfer to Xxxxxx of title to the shares of such Chinese
Subsidiaries as soon as commercially practicable.
(b) In consideration of the covenants undertaken pursuant to Section
11.18(a), each of Parent and Seller, jointly and severally, agree to pay, and to
indemnify, defend and hold harmless the Company, Buyer, ChipPAC and each of
their Affiliates from all costs, losses, liabilities, claims and expenses,
including any fees and expenses of attorneys or other advisors (but excluding
any loss of investment value in the Chinese Subsidiaries) related to, or in any
way resulting from, (i) the ownership or transfer by the Company of any Chinese
Subsidiary or (ii) the ownership or operation or transfer by any Chinese
Subsidiary of any of its assets or liabilities, including any and all Taxes
incurred by the Company or any of its Affiliates in connection with such
ownership, operation or transfer (including all Transfer taxes) and any
contributions or payments the Company or any of its Affiliates are required to
make in connection with such ownership provided that any Taxes or other expenses
or Losses arising as a result of the sale of any Chinese Subsidiary or the
distribution of funds from any Chinese Subsidiary as a result of liquidation or
otherwise shall be paid, in the first instance, from such proceeds or
distributions. The indemnification obligations of Parent and Seller under this
Section 11.18 shall be in addition to those obligations set forth in Section
11.2 of this Agreement.
ARTICLE 12
MISCELLANEOUS
-------------
12.1 Amendment and Waiver. This Agreement may be amended, and any
--------------------
provision of this Agreement may be waived; provided that any such amendment or
waiver will be binding on the party to be charged therewith only if such
amendment or waiver is set forth in a writing executed by such party. No course
of dealing between or among any Persons having any interest in this Agreement
will be deemed effective to modify, amend or discharge any part of this
Agreement or any rights or obligations of any Person under or by reason of this
Agreement. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute, a waiver of any other provisions, whether or not similar,
nor shall any waiver constitute a continuing waiver.
12.2 Notices. All notices, demands and other communications to be
-------
given or delivered to any party to this Agreement under or by reason of the
provisions of this Agreement will be in writing and will be deemed to have been
given when personally delivered, sent by reputable overnight courier or
transmitted by facsimile or telecopy, to the addresses and/or telecopy number
indicated below (unless another address is so specified in writing):
If to Parent, to:
----------------
Intersil Corporation
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
-54-
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
If to Seller, to:
----------------
Sapphire Worldwide Investments, Inc.
0/xx/ Xxxxx, Xxxxxxxx House
Wickhams Cay 1
P.O. Box 3340
Road Town, Tortola
British Virgin Islands
Attention: Xxxxx X. Xxxx
Facsimile No.: (000) 000-0000
with a copy to:
--------------
Intersil Corporation
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
and, in the case of any notice sent to Parent or Seller, with a copy
--------------------------------------------------------------------
to:
--
Intersil Corporation
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
and a copy to:
-------------
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Buyer, to:
-------------------
ChipPAC Limited
Xxxxxxxxx Xxxxxxxx
-00-
Xxxx Xxxx, Xxxxxxx
Xxxxxxx Xxxxxx Xxxxxxx
Attention: Xxxxxxx Xxxxxxx -- Resident Director
Facsimile No.: (000) 000-0000
with a copy to:
--------------
ChipPAC, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
If to ChipPAC, to:
-----------------
ChipPAC, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
and, in the case of any notice sent to Buyer or ChipPAC, with a copy
--------------------------------------------------------------------
to:
--
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Xxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
12.3 Assignment. This Agreement and all of the provisions hereof shall
----------
be binding upon and inure to the benefit of each of the parties hereto and their
respective successors and assigns. Neither this Agreement nor any rights,
benefits or obligations set forth herein may be assigned by any party hereto
without the consent of each of the other parties hereto, except that Buyer or
ChipPAC may assign their rights under this Agreement for collateral security
purposes to any lenders providing financing to Buyer or ChipPAC (or their
permitted assignees) without the consent of Parent or Seller.
12.4 Severability. Whenever possible, each provision of this Agreement
------------
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
-56-
12.5 No Strict Construction. The language used in this Agreement
----------------------
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
Person. The use of the word "including" in this Agreement or in any of the
agreements contemplated hereby shall be by way of example rather than by
limitation.
12.6 Captions. The captions used in this Agreement are for
--------
convenience of reference only and do not constitute a part of this Agreement and
shall not be deemed to limit, characterize or in any way affect any provision of
this Agreement, and all provisions of this Agreement shall be enforced and
construed as if no caption had been used in this Agreement.
12.7 No Third Party Beneficiaries. Nothing herein expressed or
----------------------------
implied is intended or shall be construed to confer upon or give to any Person,
other than the parties hereto, their respective permitted successors and assigns
and where expressly set forth herein, the Company, any rights or remedies under
or by reason of this Agreement, such third parties specifically including,
without limitation, employees or creditors of the Company.
12.8 Complete Agreement. This document and the documents referred to
------------------
herein contain the complete agreement between the parties and supersede any
prior understandings, agreements or representations by or between the parties,
written or oral, which may have related to the subject matter hereof in any way.
12.9 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which taken together shall constitute one and the same
instrument (any one of which may be delivered by facsimile).
12.10 Governing Law and Jurisdiction. Any claim arising under or
------------------------------
relating to this Agreement shall be governed by the internal substantive laws of
the State of New York or federal courts located in New York, without regard to
principles of conflict of laws. Each party hereby submits to the co-exclusive
jurisdiction of the United States District Court located in the City of New
York, Borough of Manhattan and any state court located therein for all disputes
and litigation under or relating to this Agreement and waives any objection
based on venue or forum non conveniens with respect to any action instituted
therein. Each party hereby waives the necessity for personal service of any and
all process upon it and consents that all such service of process may be made by
registered or certified mail (return receipt requested), with a copy also being
sent by facsimile (with receipt confirmed), in each case directed to such party
at its address set forth in, and with copies sent as required by, Section 12.2
of this Agreement, and service so made shall be deemed to be completed on the
date of actual receipt. Each party hereby consents to service of process as
aforesaid. Nothing in this Section 12.10 will prohibit personal service in lieu
of the service by mail contemplated herein.
* * * * *
-57-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
CHIPPAC LIMITED
By: /s/ Xxxxxxx Xxxxxxx
_______________________________________
Its: Director
_______________________________________
CHIPPAC, INC.
By: /s/ Xxxxxx XxXxxxx
_______________________________________
Its: Chief Executive Officer and President
_______________________________________
SAPPHIRE WORLDWIDE INVESTMENTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
_______________________________________
Its: President and Chief Executive Officer
_______________________________________
INTERSIL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
_______________________________________
Its: President and Chief Executive Officer
_______________________________________
-58-
LIST OF DISCLOSURE SCHEDULES
----------------------------
Knowledge Schedule 1.0
Permitted Liens Schedule 1.0
Working Capital Schedule 2.3
Transferred Equipment Schedule 2.3(i)
Consigned Equipment Schedule 2.3(j)
Transfer Milestones for Subcontracted Packages
and PDIP/SOIC Packages Currently Packaged by
the Company and Related Contingent Incentive Payments 3.1
Third Party Consent Schedule 4.2
Key Employees Schedule 4.2
Transferred Employees Schedule 5.2
Corporate Organization Schedule 6.1
Restrictions Schedule 6.4
Financial Statements Schedule 6.5
Developments Schedule 6.7
Leases Schedule 6.8
Contracts Schedule 6.9
Intellectual Property Rights Schedule 6.10
Government Licenses Schedule 6.11
Litigation Schedule 6.12
Compliance Schedule 6.13
Environmental and Safety Schedule 6.14
-59-
Employees Schedule 6.15
Employee Benefits Schedule 6.16
Insurance Schedule 6.18
Taxes Schedule 6.19
Company Brokerage Schedule 6.20
Officers and Directors Schedule 6.21
Affiliate Transactions Schedule 6.22
Known Environmental Liabilities Schedule 11.2
-60-
LIST OF EXHIBITS
----------------
Exhibit A - Form of Intellectual Property Rights Agreement
Exhibit B - Form of Amendment to ChipPAC's Amended and Restated Articles of
Incorporation
Exhibit C - Form of Supply Agreement
Exhibit D - Form of Shareholders Agreement
Exhibit E - Form of Amendment No. 1 to Registration Agreement
Exhibit F - Form of Services Agreement
-61-
