Exhibit 4(b)
Advanced Semiconductor Engineering, Inc.
ASE (Xxxxx Xx), Inc.
June 5, 2002
Motorola, Inc.
Motorola Electronics Taiwan, Ltd.
c/c Motorola, Inc.
MD: TX30/OE60
0000 Xxxxxxx Xxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000 XXX
Attn: Xxxx Xxxxxxxx
Fax:(000) 000-0000
(followed by overnight courier)
Ladies and Gentlemen:
Reference is made to the Asset Purchase Agreement dated July 4, 1999,
as amended, among ASE (Xxxxx Xx), Inc. ("Buyer"), Advanced Semiconductor
Engineering, Inc. ("ASE"), Motorola Electronics Taiwan, Ltd. ("Seller") and
Motorola, Inc. ("Motorola") (the "Asset Purchase Agreement"). Capitalized terms
used without definition in this letter agreement will have the meaning assigned
to them in the Asset Purchase Agreement.
Pursuant to Section 2.09(b)(ii)(D) of the Asset Purchase Agreement,
Seller was eligible to earn $23,333,333 plus interest as a result of meeting
certain financial milestones for the period ending on the Third Anniversary. In
the interest of strengthening the overall relationship between ASE and
Motorola, and increasing the potential level of Motorola business with the
Buyer and the other subsidiaries of ASE, including, without limitation, ASE
(Korea) Ltd. (together with Buyer, collectively, the "ASE Group"), the Parties
have agreed to substitute the following earn-out arrangement for the
arrangement provided for in Section 2.09(b)(ii)(D) of the Asset Purchase
Agreement:
Seller shall be eligible to receive up to an additional US$23,333,333
for the Base Assets, payable as follows:
(A) Third Year Period. If and only if the total purchase price of all
products and services purchased by the Motorola Group during the
year commencing on the Second Anniversary and ending on the Third
Anniversary (the "Third Year Period") is at least $160,000,000 from
the ASE Group and US$75,000,000 from Buyer, Buyer shall deliver to
Seller within 30 days following the Third Anniversary an amount
calculated as follows:
(1) If the total purchase price of all products and services
purchased from the ASE Group during the Third Year Period
(the "Third Year ASE Group Total") is more than $200,000,000
then the amount shall be $7,333,333;
(2) If the Third Year ASE Group Total is more than $185,000,000
but less than or equal to $200,000,000 then the amount shall
be calculated as follows: (Third Year ASE Group Total/
$600,000,000) x $23,333,333);
(3) If the Third Year ASE Group Total is more than $170,000,000
but less than or equal to $185,000,000 then the amount shall
be calculated as follows: ((Third Year ASE Group Total/
$600,000,000) x $23,333,333) x 87.5%; or
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(4) If the Third Year ASE Group Total is more than $160,000,000 but
less than or equal to $170,000,000 then the amount shall be
calculated as follows: ((Third Year ASE Group Total/ $600,000) x
$23,333,333) x 80%.
(B) Fourth Year Period. If and only if the total purchase price of all
products and services purchased by the Motorola Group during the
year commencing on the Third Anniversary and ending on the fourth
anniversary of the Closing Date (the "Fourth Anniversary") (the
"Fourth Year Period") is at least $155,000,000 from the ASE Group
and US$75,000,000 from Buyer, Buyer shall deliver to Seller within
30 days following the Fourth Anniversary an amount calculated as
follows:
(1) If any portion of the $23,333,333 was paid for the Third Year
Period:
i. If the Third Year ASE Group Total plus the total
purchase price of all products and services purchased
from the ASE Group during the Fourth Year Period (the
"Fourth Year ASE Group Total") is more than
$375,000,000 then the amount shall be calculated as
follows: (((Third Year ASE Group Total + Fourth Year
ASE Group Total)/ $600,000,000) x $23,333,333)--the
portion of the $23,333,333 paid for the Third Year
Period (the "Third Year Payment");
ii If the Third Year ASE Group Total plus the Fourth
Year ASE Group Total is more than $345,000,000 but
less than or equal to $375,000,000 then the amount
shall be calculated as follows: ((((Third Year ASE
Group Total + Fourth Year ASE Group Total)/
$600,000,000) x $23,333,333) x 87.5%)--Third Year
Payment; or
iii. If the Third Year ASE Group Total plus the Fourth
Year ASE Group Total is more than $315,000,000 but
less than or equal to $345,000,000 then the amount
shall be calculated as follows: ((((Third Year ASE
Group Total + Fourth Year ASE Group Total)/ $600,000)
x $23,300,000) x 80%)--Third Year Payment.
iv. In no event shall the total amount paid in the Third
Year Period and the Fourth Year Period combined
exceed $15,333,333.
(2) If no amount was paid for the Third Year Period:
i. If the Fourth Year ASE Group Total is $200,000,000 or
more then the amount shall be $8,000,000;
ii. If the Fourth Year ASE Group Total is more than
$190,000,000 but less than $200,000,000 then the
amount shall be calculated as follows: ((Fourth Year
ASE Group Total/ $400,000,000) x $16,000,000);
iii. If the Fourth Year ASE Group Total is more than
$175,000,000 but less than or equal to $190,000,000
then the amount shall be calculated as follows:
((Fourth Year ASE Group Total/ $400,000,000) x
$16,000,000) x 87.5%; or
iv. If the Fourth Year ASE Group Total is more than
$155,000,000 but less than or equal to $175,000,000
then the amount shall be calculated as follows:
((Fourth Year ASE Group Total/ $400,000) x
$16,000,000) x 80%.
(C) Fifth Year Period. If and only if the total purchase price of all
products and services purchased by the Motorola Group during the
year commencing on the Fourth Anniversary and ending on the fifth
anniversary of the Closing Date (the "Fifth Anniversary") (the
"Fifth Year Period") is at least $155,000,000 from the ASE Group,
Buyer shall deliver to Seller within 30 days following the Fifth
Anniversary an amount calculated as follows:
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(1) If any portion of the $23,333,333 was paid for both the Third
Year Period and the Fourth Year Period:
i. if the Third Year ASE Group Total plus the Fourth
Year ASE Group Total plus the total purchase price of
all products and services purchased from the ASE
Group during the Fifth Year Period (the "Fifth Year
ASE Group Total") is more than $565,000,000 then the
amount shall be calculated as follows: (((Third Year
ASE Group Total + Fourth Year ASE Group Total + Fifth
Year ASE Group Total)/ $600,000,000) x
$23,333,333)--Third Year Payment--Fourth Year
Payment;
ii. If the Third Year ASE Group Total plus the Fourth
Year ASE Group Total plus the Fifth Year ASE Group
Total is more than $520,000,000 but less than or
equal to $565,000,000 then the amount shall be
calculated as follows: ((((Third Year ASE Group Total
+ Fourth Year ASE Group Total + Fifth Year ASE Group
Total)/ $600,000,000) x $23,333,333) x 87.5%)--Third
Year Payment--Fourth Year Payment); or
iii. If the Third Year ASE Group Total plus the Fourth
Year ASE Group Total plus Fifth Year ASE Group Total
is more than $470,000,000 but less than or equal to
$520,000,000 then the amount shall be calculated as
follows: ((((Third Year ASE Group Total + Fourth Year
ASE Group Total + Fifth Year ASE Group Total)/
$600,000) x $23,333,333) x 80%)--Third Year
Payment--Fourth Year Payment).
(2) If any portion of the $23,333,333 was paid for the Third Year
Period but not the Fourth Year Period:
i. If the Third Year ASE Group Total plus the Fifth Year
ASE Group Total is more than $375,000,000 then the
amount shall he calculated as follows: (((Third Year
ASE Group Total + Fifth Year ASE Group Total)/
$400,000,000) x $15,333,333)--the portion of the
$23,333,333 paid for the Third Year Period (the
"Third Year Payment");
ii. If the Third Year ASE Group Total plus the Fifth Year
ASE Group Total is more than $345,000,000 but less
than or equal to $375,000,000 then the amount shall
be calculated as follows: ((((Third Year ASE Group
Total + Fifth Year ASE Group Total)/ $400,000,000) x
$15,333,333) x 87.5%)--the Third Year Payment; or
iii. If the Third Year ASE Group Total plus the Fifth Year
ASE Group Total is more than $315,000,000 but less
than or equal to $345,000,000 then the amount shall
be calculated as follows: ((((Third Year ASE Group
Total + Fifth Year ASE Group Total)/ $400,000,000) x
$15,333,333) x 80%)--the Third Year Payment.
iv. In no event shall the total amount paid in the Third
Year Period and the Fifth Year Period combined exceed
$15,333,333.
(3) If any portion of the $23,333,333 was paid for the Fourth
Year Period but not the Third Year Period:
i. If the Fourth Year ASE Group Total plus the Fifth
Year ASE Group Total is more than $380,000,000 then
the amount shall be calculated as follows: (((Fourth
Year ASE Group Total + Fifth Year ASE Group Total)/
$400,000,000) x $16,000,000)--the portion of the
$23,333,333 paid for the Fourth Year Period (the
"Fourth Year Payment");
ii. If the Fourth Year ASE Group Total plus the Fifth
Year ASE Group Total is more than $350,000,000 but
less than or equal to $380,000,000 then the amount
shall be calculated as follows: ((((Fourth Year ASE
Group Total + Fifth Year ASE Group Total)/
$400,000,000) x $16,000,000) x 87.5%)--the Fourth
Year Payment; or
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iii. If the Fourth Year ASE Group Total plus the Fifth
Year ASE Group Total is more than $310,000,000 but
less than or equal to $350,000,000 then the amount
shall be calculated as follows: ((((Fourth Year ASE
Group Total + Fifth Year ASE Group Total)/
$400,000,000) x $16,000,000) x 80%)--the Fourth Year
Payment.
iv. In no event shall the total amount paid in the Fourth
Year Period and the Fifth Year Period combined exceed
$16,000,000.
(4) If no portion of the $23,333,333 was paid for the Third Year
Period or the Fourth Year Period:
i. If the Fifth Year ASE Group Total is more than
$200,000,000 then the amount shall be $8,000,000;
ii If the Fifth Year ASE Group Total is more than
$190,000,000 but less than $200,000,000 then the
amount shall be calculated as follows: Fifth Year ASE
Group Total/ $200,000,000 x $8,000,000;
iii. If the Fifth Year ASE Group Total is more than
$175,000,000 but less than or equal to $190,000,000
then the amount shall be calculated as follows: Fifth
Year ASE Group Total/ $200,000,000 x $8,000,000 x
87.5%; or
iv. If the Fifth Year ASE Group Total is more than
$155,000,000 but less than or equal to $175,000,000
then the amount shall be calculated as follows: Fifth
Year ASE Group Total/ $200,000,000 x $8,000,000 x
80%.
For purposes of clauses (A), (B) and (C) above, the total purchase
price of all products and services shall be calculated using the purchase
prices in effect for such products and services as of March 12, 2002. For any
products or services not offered as of March 12, 2002 the purchase prices shall
be those negotiated and agreed to by the Parties.
The foregoing payments shall not be subject to interest from the
Interest Commencement Date as was the amount provided for in Section
2.09(b)(ii)(D); provided, however, that if Buyer fails to pay any amounts
required to be paid hereunder by the dates required herein, such unpaid amounts
shall bear interest at the applicable rate in Section 2.09(b)(iv) of the Asset
Purchase Agreement plus 3% per annum. Interest shall be calculated on the basis
of a 360-day year for the actual number of days elapsed.
In addition to the above, Motorola agrees to commence the
qualification of substrates manufactured by ASE Materials' facility located in
Xxxxx-Xx, Taiwan. ASE acknowledges that Motorola has no obligation to qualify
any such substrates unless Motorola's qualification standards are met.
This letter amendment shall not amend any other provisions of the
Asset Purchase Agreement.
Please indicate our acknowledgment and agreement of the foregoing by
signing below.
Very truly yours,
ASE (Xxxxx Xx), Inc. Advanced Semiconductor
Engineering, Inc.
By: /s/ Shih-Song Xxx By: /s/ Xxxxxx Xxxx
----------------------- -------------------------------
Name: Shih-Son Xxx Name: Xxxxxx Xxxx
Title: President, ASE (Xxxxx Xx) Title: Chief Financial Officer
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ACKNOWLEDGED AND AGREED:
Motorola, Inc. Motorola Electronics Taiwan, Inc.
By: /s/ Xxx Sun By: /s/ Xxx Sum
------------------------------- --------------------
Name: Xxx Sun Name: Xxx Sum
Title: Corporate Vice President Title: President
cc: Motorola, Inc.
0000 X Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
XXX
Attn: General Counsel
Fax: (000) 000 0000
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