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EXHIBIT 2.1
[EXECUTION COPY]
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
AMKOR TECHNOLOGY, INC.
as Purchaser
AND
ANAM SEMICONDUCTOR, INC.
as Seller
Dated as of December 30, 1998
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ASSET PURCHASE AGREEMENT
This is an ASSET PURCHASE AGREEMENT (the "Agreement"), dated December
30, 1998 by and between Amkor Technology, Inc., a corporation organized under
the laws of the State of Delaware of the United States, ("Amkor" or "Purchaser")
and Anam Semiconductor, Inc., a corporation organized under the laws of the
Republic of Korea ("Seller"). Purchaser and Seller shall sometimes each be
referred to as a Party and collectively as the Parties.
RECITALS:
WHEREAS, Seller is the owner and operator of four (4) semiconductor
packaging and test facilities located in the Republic of Korea; and
WHEREAS, Purchaser provides semiconductor packaging and test services
and is desirous of expanding its manufacturing capability; and
WHEREAS, Seller desires to sell, Purchaser desires to purchase,
semiconductor packaging and test operations generally known as K4 located at
Advanced Science & Xxxxxxxxxx Xxxxxxx, 0 xxxxx, Xxxxxxx-xxxx, Xxx-xx, Xxxx of
Kwangju 500-470 the Republic of Korea ("Business") upon terms and conditions set
forth herein.
NOW THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained herein, and in reliance thereon,
Purchaser and Seller hereby agree as follows:
DEFINITIONS:
"Affiliate" or "Affiliates" means any Person(s) directly or indirectly
controlling, controlled by or under common control with such Person. As used in
this definition, "controlling" (including, with its correlative meanings,
"controlled by" and "under common control with") means possession, directly or
indirectly, of power to direct or cause the direction of management or policies,
whether through ownership of securities, partnership or other ownership
interests, by contract or otherwise.
"Ancillary Agreements" has the meaning as described in Section 1.8(a).
"Asset List" has the meaning as described in Section 1.1.
"Assigned Contracts" has the meaning as described in Section 1.1(f).
"Assumed Liabilities" has the meaning as described in Section 1.7(a).
"Authority" means any national or local or foreign governmental or
regulatory entity, or any department, agency, authority or political subdivision
thereof.
"Award" has the meaning as described in Section 5.11(b).
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"Balance Sheet" has the meaning as described in Section 2.4.
"Base Rate" has the meaning as described in Section 1.3(a).
"Business" has the meaning as described in Recitals Section.
"Closing" and "Closing Date" have the meanings as described in Section
1.11.
"Closing Statement" has the meaning as described in Section 1.6 (a)(i).
"Confidential Information" has the meaning as described in Section
1.13(g).
"Damages" has the meaning as described in Section 4.3(a)(iii).
"Employees" has the meaning as described in Section 2.20.
"Employee Releases" has the meaning as described in Section 4.2.
"Environmental Law" has the meaning as described in Section 2.12(a)(i).
"Environmental Liabilities" means any liabilities (including costs of
re-mediation) known or unknown, foreseen or unforeseen, whether contingent or
otherwise, fixed or absolute, present or future, asserted against or incurred by
Purchaser or the Business arising out of or relating to (1) environmental
conditions first occurring or existing prior to the Closing (whether disclosed
or undisclosed) including, without limitation, the presence, Release, threat of
Release, Management or exposure of or to Hazardous Substances (each as defined
herein) at, on, in or under any property now or previously owned, operated or
leased by Seller, the Business or any of its Affiliates or predecessors (whether
into the air, soil, ground or surface waters on-site or off-site); (2) the
off-site transportation, storage, treatment, recycling or disposal of Hazardous
Materials Managed, Released or generated prior to the Closing by Seller or the
Business or any of its Affiliates or predecessors or generated in connection
with any of their operations; or (3) any violation of any Environmental Law
first occurring or existing prior to the Closing (including, without limitation,
costs and expenses for pollution control equipment required to bring the
Business into compliance with Environmental Laws and fines, penalties and
defense costs incurred for such reasonable time after the Closing as it takes
Purchaser to come into compliance).
"Environmental Permit" has the meaning as described in Section
2.12(a)(ii).
"Escrow Account", "Escrow Agent" and "Escrow Agreement" have the
meanings as described in Section 1.3(d).
"Exceptions That Will Not Exist at Closing"has the meaning as described
in Section 2.15(b)(i).
"Excluded Assets" has the meaning as described in Section 1.2.
"Excluded Liabilities" has the meaning as described in Section 1.7(b).
"Financial Statements" has the meaning as described in Section 2.4.
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"Hazardous Substances" means any hazardous, toxic or polluting
materials, substances, wastes, pollutants or contaminants (including, without
limitation, petroleum and petroleum products, PCBs, radioactive materials,
asbestos or asbestos-containing materials).
"ICC Rules" has the meaning as described in Section 5.11(a).
"Indemnified Party" and "Indemnifying Party" have the meanings as
described in Section 4.3(b)(iv).
"Intellectual Property" means any or all of the following and all rights
relating to or otherwise necessary to the operation of the Business, whether
owned by, licensed to or otherwise used by Seller, in, arising out of, or
associated therewith: (i) all United States, Korean and foreign patents and
utility models and applications therefor and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part thereof, and
equivalent or similar rights anywhere in the world in inventions and
discoveries; (ii) all inventions (whether patentable or not), invention
disclosures, improvements, trade secrets, proprietary information, know how,
technology, technical data and customer lists, and all documentation embodying
or evidencing any of the foregoing; (iii) all copyrights, copyrights
registrations and applications therefor and all other rights corresponding
thereto throughout the world; (iv) all mask works, mask work registrations and
applications therefor, and any equivalent or similar rights in semiconductor
masks, layouts, architectures or topology; (v) all industrial designs and any
registrations and applications therefor throughout the world; (vi) all trade
names, logos, common law trademarks and service marks, trademark and service
xxxx registrations and applications therefor and all goodwill associated
therewith throughout the world; (vii) all databases and data collections and all
rights therein throughout the world; and (viii) all computer software including
all source code, object code, firmware, development tools, files, records and
data, all media on which any of the foregoing is recorded; (ix) all World Wide
Web addresses, sites and domain names; and (x) any similar, corresponding or
equivalent rights to any of the foregoing anywhere in the world.
"IP Licensing Agreements" have the meaning as described in Section 1.1
(h).
"Key Employees" has the meaning as described in Section 4.2.
"Knowledge" and words of similar import mean, with respect to any Party,
actual knowledge of a particular fact or other matter being possessed by any
officer or other individual now or formerly having principal responsibility for
a business or administrative function of such Party, including individuals
servicing in such a capacity in or for the Business, and the knowledge that
reasonably could be expected to be obtained in the course of conducting a
reasonably comprehensive investigation concerning the subject matter.
"Law" means all laws, statutes, ordinances, regulations, and other
pronouncements having the effect of law of the Republic of Korea or any other
country or territory, commonwealth, city, county, municipality, protectorate,
possession, court, tribunal, agency, government, department, commission,
arbitrator, board, bureau, or instrumentality thereof.
"Liability" means all debt, liabilities, losses, claims, damages, costs,
expenses and obligations of every kind, whether fixed or contingent, mature or
unmatured, or liquidated or
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unliquidated, including, without limitation, those arising under any law and
those arising under any contract, commitment or undertaking.
"Licensed Intellectual Property" have the meanings as described in
Section 2.16.
"Lien" or "Liens" means any lien, charge, claim, pledge, security
interest, conditional sale agreement or other title retention agreement, lease,
tenancy, ground rent, license, mortgage, security agreement, covenant,
condition, restriction, right-of-way, easement, encroachment, option, judgment
or of other encumbrance of matter of title.
"Loss" or "Losses" means any and all deficiencies, judgments,
settlements, demands, claims, actions, assessments, liabilities, losses, damages
(other than consequential damages), interest, fines, penalties, costs and
expenses, including without limitation, reasonable legal, accounting and other
costs and expenses incurred in connection with investigating, defending,
settling or satisfying any and all demands, claims, actions, causes of action,
suit, proceedings, assessment, judgments or appeals.
"Management" has the meaning as described in Section 2.12(a)(iv).
"Managed" has a similar meaning appropriate for the context.
"Material Adverse Effect" has the meaning as described in Section 1.10
(e).
"Newco" has the meaning as described in Section 1.1.
"Net Asset Value" has the meaning as described in Section 1.6(b).
"Owned Real Properties" has the meaning as described in Section 2.15(b).
"Permitted Real Property Encumbrances" has the meaning as described in
Section 2.15(b).
"Person" means any individual, a corporation, a partnership, an
association, a trust or other entity or organization, including an Authority.
"Personal Property Permitted Encumbrances" has the meaning as described
in Section 2.14.
"Property Taxes" has the meaning as described in Section 4.8.
"Purchased Assets" has the meaning as described in Section 1.1.
"Purchase Price" has the meaning as described in Section 1.3(a).
"Real Properties" has the meaning as described in Section 2.15(a).
"Released" means released, spilled, leaked, pumped, poured, emitted,
emptied, discharged, injected, escaped, leached, disposed, or dumped and other
similar terms. "Release" when used as a verb has the same meaning, but in the
present tense, and when used as a noun has a similar meaning appropriate for the
context.
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"Schedules to be Prepared" has the meaning of such schedules to this
Agreement which have not yet been attached hereto as of the date of this
Agreement, but shall be prepared to Purchaser's satisfaction and delivered by
Seller within a reasonable time after the date hereof.
"Taxes" and "Tax" have the meanings as described in Section 2.7.
"Tax Exemption" has the meaning as described in Section 1.10(i).
"Third Party Claim" has the meaning as described in Section 4.3(c)(i).
"Transferred Employees" has the meaning as described in Section 4.2.
"Transition Service Agreement" and "Transition Period" have the meaning
as described in Section 4.7.
"U.S. GAAP" has the meaning as described in Section 1.6(a)(i).
"Workout" has the meaning as defined in the Accord Among Financial
Institutions for Promotion of Restructuring of Business Enterprises dated as of
June 29, 1998.
ARTICLE I
THE TRANSACTION
I.1. Sale and Purchase of Assets. Prior to the Closing, Purchaser shall
establish or cause its Affiliates to establish a 100% owned subsidiary ("Newco")
in the Republic of Korea, and shall assign all of its rights and obligations
under this Agreement to Newco without further consent of Seller. Following such
assignment, all references to the Purchaser in this Agreement shall be
considered references to Newco as if Newco had originally executed this
Agreement and Purchaser shall be relieved of any and all liability under this
Agreement except that Amkor's obligation to pay the Purchase Price and to assume
the Assumed Liabilities shall be discharged when Newco pays the Purchase Price
and assumes the Assumed Liabilities. The Parties also understand that certain
covenants of Seller shall extend to the original Purchaser under this Agreement
(i.e., Amkor Technology, Inc., "Amkor"). In such case, Newco and Amkor are
collectively referred to as "Purchasing Parties".
Subject to the terms and conditions hereof, at the Closing referred to
in Section 1.8 below, Seller will sell, transfer, convey and assign to
Purchaser, free and clear of all Liens of every kind, nature and description,
except for the Excluded Assets (as defined in Section 1.2) or as otherwise
disclosed and agreed in this Agreement, and Purchaser will purchase from Seller,
all of the assets as shall be listed on Schedule 1.1 (the "Asset List") and any
other assets that are being used for or are substantially related to the
Business including, without limitation, Seller's properties and business as a
going concern and good will and assets existing on the date of Closing, wherever
such assets are located and whether real, personal or mixed, tangible or
intangible, and whether or not any of such assets have any value for accounting
purposes or are carried or reflected on or specifically referred to in its books
or Financial Statement (collectively, the "Purchased Assets"). The Purchased
Assets shall include, without limitation, all of Seller's right, title and
interest in and to the following, as the same may exist on the Closing Date:
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(a) the Owned Real Properties together with the buildings,
fixtures, structures and other improvements erected thereon, and together with
all easements, rights and privileges appurtenant thereto, as more particularly
described on the Asset List;
(b) all of Seller's machinery, equipment, tooling, dies, jigs,
vehicles, spare parts and supplies being used for or substantially related to
the Business, including without limitation, the items listed on the Asset List;
(c) all of Seller's raw materials, work in process, parts,
subassemblies, finished goods and other inventories being used for or
substantially related to the Business, wherever located and whether carried on
Seller's books of account;
(d) all of Seller's other tangible assets being used for or
substantially related to the Business, including office furniture, office
equipment and supplies, computer hardware and software and vehicles;
(e) all of Seller's books, records, manuals, documents, books of
account, correspondence, sales and credit reports, customer lists, literature,
brochures, advertising material and the likes that are used for or are
substantially related to the Business;
(f) all of Seller's rights under leases for property, whether
real or personal, used for or substantially related to the Business, and all of
the Seller's rights under all other contracts, agreements and purchase and sale
orders related to the Business (the "Assigned Contracts"), which Assigned
Contracts will be assigned to Purchaser at or prior to the Closing and which
shall be listed on Schedule 1.10;
(g) All of Seller's interest in governmental permits, licenses,
registrations, orders and approval substantially relating to the Business to the
extent such permits, licenses, registrations, orders and approvals are
separately transferable to Purchaser; and
(h) All right, title and interest of Seller in and to the
goodwill incident to the Business other than those exclusively related to the
businesses of Seller which are not to be transferred hereunder.
The Parties understand that, while certain Intellectual
Properties (including Licensed Intellectual Property) may be assigned to
Purchaser, most of the Intellectual Properties may not be assigned to Purchaser,
since they are also related to the other business of Seller which are not
transferred to Purchaser hereunder. With respect to such Intellectual Properties
which may be assigned to Purchaser, Seller shall sell, transfer, convey and
assign to Purchaser, free and clear of all Liens of every kind, nature and
description, all right, title and interest of Seller in and to such Intellectual
Properties. With respect to the Intellectual Properties which may not be
assigned to Purchaser, to the extent legally and/or contractually permissible,
Seller hereby shall grant to Purchaser and its Affiliates, effective at the
Closing Date, an irrevocable, worldwide, non-exclusive, perpetual, paid-up,
royalty-free and transferable (and sub-licensable) license (or sub-license) to
utilize such Intellectual Properties (including the Licensed Intellectual
Property) which Seller has rights to use as of the Closing Date, after obtaining
any and all consents necessary therefor for Purchaser to be able to operate the
Business substantially in the manner as such Business was operated by Seller.
For this
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purpose, Purchaser shall enter into one or more licensing agreements (the "IP
Licensing Agreements") with the holders of relevant Intellectual Properties,
including Seller itself, prior to the Closing. All costs, if any, shall be
payable by Seller to any third parties in connection with the transfer, licenses
or sub-licenses for the benefit of Purchaser pursuant to this Agreement. In
addition, the Parties agree that such IP Licensing Agreements will contain
rights of Purchaser or Amkor to acquire the Intellectual Properties developed by
Seller after the Closing Date on mutually agreed and commercially reasonable
terms.
To the extent that there are any tangible or intangible assets
used by Seller in connection with or otherwise necessary to the operation of the
Business that are not included in this Section 1.1 and are not specifically
designated as Excluded Assets by Section 1.2, the Purchased Assets shall include
an irrevocable, nonexclusive, perpetual, paid-up, royalty-free, transferable
license, contract or lease to utilize such assets in connection with the
operation of the Business after the Closing Date. To the extent that any such
assets may not be licensed, contracted or leased, Seller shall take all steps
required to assure that Purchaser obtains the benefit of such assets.
I.2. Excluded Assets. Notwithstanding any other provision of this
Agreement, Seller shall retain all property of any nature, kind and description
other than the Purchased Assets and for the avoidance of doubt the Purchased
Assets shall not include the following assets of the Business (collectively, the
"Excluded Assets"):
(a) all of the Seller's cash, cash in banks, certificates of
deposit, cash equivalents, bank and mutual fund accounts, deposits, securities
and bonds and other similar investments, deferred charges, and other cash
equivalents on hand or on deposit in any financial institution on the Closing
Date;
(b) all consideration received by and the rights of the Seller
under or pursuant to this Agreement or any agreement, instrument or document
ancillary hereto;
(c) all notes and accounts receivables owing to Seller on the
Closing Date; and
(d) any claims and rights against third parties (including,
without limitation, insurance carriers) arising from any event or actions first
occurring after the Closing Date.
I.3. Purchase Price. The total aggregate purchase price for the
Purchased Assets exclusive of VAT shall be Korean Won equivalent to US$
600,000,000 (the "Purchase Price") plus the Assumed Liabilities. The Korean Won
equivalent of Purchase Price shall be calculated by using the exchange rate to
convert U.S. dollars to Won, which shall be actually available to Seller as of
the Closing Date ("Base Rate"). Seller shall exercise its best efforts to obtain
the most favorable Base Rate. In no event, shall Purchaser have any obligation
to deliver a specific amount of Korean Won. The Purchase Price shall be subject
to adjustment as provided in Section 1.3(b) below and in Section 1.6.
(b) If Seller wishes to receive the Purchaser Price in U.S.
dollars in the amount of US$600,000,000 rather than the Korean Won equivalent
thereof, Seller shall obtain any and all governmental approvals necessary
therefor. If Sellers obtains such approval and provides Purchaser
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with the evidence of such approval satisfactory to Purchaser, Purchaser shall
pay the Purchase Price in U.S. dollars.
(c) Within 30 days from the date hereof, Seller shall apply for a
ruling to a relevant Korean tax authority with respect to the issue whether VAT
is payable on the transactions contemplated herein, and Seller shall obtain such
ruling prior to the Closing.
(d) On or prior to the Closing Date, Seller, Purchaser and an
escrow agent to be appointed by mutual consent of Seller and Purchaser ("Escrow
Agent") shall enter into one or more escrow agreements ("Escrow Agreements") in
such form and substance to be mutually agreed by the Parties. Such portions of
the Purchase Price as provided in Sections 1.4 (b) and (c) shall be deposited
with one or more escrow accounts ("Escrow Accounts") to assure the repayment of
certain liabilities by Seller, the downward adjustment of the Purchase Price,
and Seller's performance of its indemnifications obligation hereunder,, and
released to Seller in accordance with the terms of the Escrow Agreements. Any
funds in the Escrow Accounts remaining after the first anniversary of the
Closing Date shall be released to Purchaser: provided, however, that Seller's
indemnification obligation shall not be deemed relieved nor mitigated by such
releases.
I.4. Payment of Purchase Price. The Purchase Price shall be paid by
Purchaser to Seller as follows:
(a) Purchaser's payment at the Closing in Korean Won (or in case
of U.S. dollar payment pursuant to Section 1.3(b)) of the amount which shall be
set forth in Schedule 1.4(a), by wire transfer or delivery of a certified bank
check immediately available and in accordance with the instructions of Seller;
(b) Purchaser's deposit at the Closing in Korean Won (or in case
of U.S. dollar deposit pursuant to Section 1.3(b)) into an Escrow Account of the
amount which shall be set forth in Schedule 1.4(b) at the Closing;
(c) Purchaser's deposit at the Closing in Korean Won (or in case
of U.S. dollar deposit pursuant to Section 1.3(b)) into an additional Escrow
Account to cover the downward adjustment of the Purchase Price of the amount
which shall be set forth in Schedule 1.4(c) at the Closing; and
(d) Purchaser's assumption of Seller's liabilities as set forth
on Section 1.7.
I.5. Allocation of Purchase Price. Purchaser and Seller agree that the
Purchase Price shall be allocated among the Purchased Assets in accordance with
the principles of allocation which shall be set forth in Schedule 1.5. Purchaser
and Seller agree that each will report all Tax consequences of the purchase and
sale contemplated hereby in a manner consistent with such allocation.
I.6. Adjustments to Purchase Price.
(a) Post-Closing Balance Sheet Adjustment.
(i) Within 60 days of the Closing Date, Seller shall
prepare a statement of assets acquired and liabilities assumed relating to the
Business and shall, at its expense, prepare and deliver to Purchaser a statement
of the Net Asset Value of the Business, as of the Closing Date and as of the
Balance Sheet Date (the "Closing Statement"), as audited by independent
certified public
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accountants chosen by Seller and acceptable to Purchaser (i.e., Samil). The
Closing Statement shall be prepared in U.S. dollars according to the Generally
Accepted Accounting Principles in the United States ("U.S. GAAP"). "Net Asset
Value" shall mean the value of the assets of the Business less the liabilities
assumed by Purchaser where such assets and liabilities are calculated in
accordance with U.S. GAAP.
(ii) Purchaser shall fully cooperate with Seller in
Seller's preparation of the list of assets and liabilities as mentioned in
Section 1.6(a)(i) above, and each Party shall fully cooperate with the other
Party in the other Party's preparation of its Tax returns for the relevant Tax
year or years.
(iii) In the event that Purchaser disagrees with the
Closing Statement, Purchaser shall hire an independent certified public
accountant at its own expense, which shall prepare Seller's proposed adjustments
to the Closing Statement within 60 days of Seller's receipt of the Closing
Statement using U.S. GAAP. Any dispute (and only those items in dispute)
concerning the Closing Statement which cannot be resolved by the parties and
their respective independent certified public accountants within 60 days of
Purchaser's receipt of Seller's proposed adjustments to the Closing Statement
will be submitted no later than 60 days after such receipt to an independent
accounting firm mutually selected by Purchaser and Seller, and the determination
of such firm shall be final and binding on the Parties. The fees and expenses of
such third independent accounting firm shall be borne equally by the Parties.
(b) Adjustment Formula.
If the Net Asset Value at the Closing Date is less than the Net
Asset Value as of the Balance Sheet Date, then , the Purchase Price shall be
reduced by the amount of such deficiency and the Escrow balance shall be reduced
accordingly. If the Escrow balance is insufficient, Seller shall pay Purchaser
such amount by certified or bank check within ten days after acceptance of the
Closing Balance Sheet or upon resolution of any disputes described in 1.6(a).
Alternatively, at the Purchaser's option, such amount may be withheld from any
amount owing to Seller by Purchaser or its Affiliates to the extent permissible
under Korean law.
I.7. Assumption of Liabilities.
(a) Assumed Obligations. At the Closing, Purchaser shall
assume and agree to perform, pay or discharge, when due, and Seller shall be
released from all obligations related to all of the following:
(i) Seller's obligations and liabilities under
the Assigned Contracts solely with respect to conditions or events occurring
after the Closing Date;
(ii) Seller's obligations and liabilities solely
with respect to make severance payments to the Transferred Employees as listed
on Schedule 1.7(a). In no event, the amount of Seller's obligations and
liabilities to be assumed by Purchaser for the severance payments to the
Transferred Employees shall be greater than US$7,000,000 (or Korean Won
equivalent thereof); and
(iii) The obligations and liabilities to be assumed
by Purchaser pursuant to this Section 1.7 are hereinafter sometimes referred to
as the "Assumed Liabilities." Except with
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respect to the Assumed Liabilities, Purchaser does not hereby and shall not
assume or in any way undertake to pay, perform, satisfy or discharge any
liabilities or obligations of Seller, and Seller agrees to pay and satisfy when
due any such liabilities and obligations not assumed by Purchaser.
(b) Excluded Liabilities. Except as expressly provided in Section
1.7(a), Seller shall retain and neither Purchasing Parties shall assume nor be
liable for any liabilities and obligations of Seller and any other obligations
relating to the Business (such liabilities retained by Seller are referred to as
the "Excluded Liabilities"), including without limitation the following:
(i) any liabilities or obligations of Seller, contingent
or otherwise, for any indebtedness of Seller;
(ii) the liabilities or obligations of Seller to its
stockholders respecting dividends, distributions to its stockholders in
liquidation, redemptions of stock, or otherwise;
(iii) liabilities or obligations of Seller arising out of
any transactions occurring, or obligations incurred, after the Closing;
(iv) any obligations of Seller for expenses, public dues
or fees levied to Seller or deemed to be borne by Seller under relevant laws and
regulations incident to or arising out of the negotiation, preparation, approval
or authorization of this Agreement or the consummation of the transactions
contemplated hereby, including, without limitation, all stamp duties, attorneys
and accountants fees and all brokers or finders fees or commissions payable by
Seller;
(v) any obligation of Seller under or arising out of this
Agreement or any of the Ancillary Agreements;
(vi) any liabilities relating to claims by the insurer (or
the indemnitor) that the insured (or the indemnitees) had breached it
obligations under the policy of insurance (or the contract of indemnity) or had
committed fraud in the insurance application;
(vii) any liability or obligation of Seller to any
Affiliate unless otherwise provided for in this Agreement;
(viii) subject to the terms and conditions provided in
this Agreement, any liabilities or obligations, the existence of which
constitute a breach of the representations, warranties or covenants of Seller
contained in this Agreement;
(ix) subject to the terms and conditions provided in this
Agreement, any obligations or liabilities of Seller to indemnify its officers,
directors, employees or agents;
(x) any liability or obligation in respect of the Excluded
Assets;
(xi) all Taxes imposed on Seller, including (i) any Tax of
any other corporation which Tax is assessed against Seller by virtue of its
status, prior to the Closing Date, as a member of any consolidated group of
which such other corporation was also a member and (ii) any Taxes, including all
value-added, gross receipts, excise, registration, stamp duty, transfer or other
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similar taxes or governmental fees, imposed in connection with or attributable
to this Agreement, or as a result of the consummation of the transaction under
this Agreement;
(xii) subject to the terms and conditions provided in this
Agreement, any Environmental Liabilities;
(xiii) except for the Assumed Liabilities, any obligation
or liability arising under any contract, instrument or agreement (1) that is not
transferred to Purchaser as part of the Purchased Assets, or (2) that is not
transferred to Purchaser because of Seller's failure or inability to obtain any
third party consent required for the transfer or assignment of such contract or
agreement to Purchaser, or (3) that relates to any breach or default (or an
event which might, with the passing of time or the giving of notice, or both,
constitute a default) under any contract, instrument or agreement or to any
services to be provided by Seller under any such contract, instrument or
agreement arising out of or relating to periods on or prior to the Closing Date,
or (4) for which Seller received payment prior to the Closing;
(xiv) any existing or future liabilities to financial
institutions, such as banks, installment financing companies and leasing
companies;
(xv) any liability relating to the infringement or
asserted infringement of any intellectual property by Seller; and
(xvi) any other liability or obligation of Seller or
including any liability or obligation directly or indirectly arising out of or
relating to the operation of the Business or ownership of the Purchased Assets
on or prior to the Closing Date, whether contingent or otherwise, fixed or
absolute, known or unknown, matured or unmatured, present, future or otherwise,
irrespective of whether such liability or obligation is asserted before or after
the Closing, except for the Assumed Liabilities.
I.8. Conditions to Each Party's Obligations. The obligations of both
Purchaser and Seller to consummate the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions on or before the
Closing Date.
(a) The Escrow Agreement, the IP Licensing Agreements, the
Transition Service Agreement, the assignment agreement provided in Section
1.10(b) hereof, and any other agreements, if any, necessary to vest in Purchaser
good, valid and marketable title to the Purchased Assets (collectively, the
"Ancillary Agreements") have been duly executed and delivered after having been
duly authorized by all necessary corporate actions by the relevant parties
thereto.
(b) No provisions of any applicable law, and no judgment,
injunction, order or decree shall (i) prohibit the consummation of the Closing
or (ii) restrain, prohibit or otherwise interfere with the effective operation
or enjoyment by Purchaser of all or any material portion of the Purchased Assets
or the Business.
(c) The Purchasing Parties and Seller shall have each received
all material consents, authorizations or approvals from their boards of
directors, governmental agencies and third parties that are a pre-requisite to
the Closing as a matter of law, in form and substance satisfactory to the other
Party, and no such consent, authorization or approval shall have been revoked.
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Purchaser and Seller agree that in the event that the conditions set
forth in Sections 1.8(b) and (c) herein are not satisfied on or before the
Closing Date, the conditions may be satisfied on or before April 1, 1999, or a
later date mutually agreed in writing between the Parties, in which case the
Parties must comply with their respective obligations to consummate the
transactions as provided in this Agreement.
I.9. Conditions to Seller's Obligations. The obligations of Seller to
consummate the transaction contemplated hereby are subject to fulfillment of all
of the following conditions on or prior to the Closing Date.
(a) Each and every material representation and warranty made by
Purchaser contained in this Agreement shall have been true in all material
respects as of the date when made and shall be true in all material respects at
and as of the Closing Date as if originally made on and as of the Closing Date.
(b) All obligations of Purchaser to be performed on or before the
Closing Date shall have been performed in all material respects.
(c) No action shall be threatened or pending before any court or
governmental agency the probable outcome of which would result in the restraint
or prohibition of the consummation of the transactions contemplated hereby.
I.10. Conditions to Purchaser's Obligations. The obligations of
Purchaser to consummate the transactions contemplated hereby are subject to the
fulfillment of all of the following conditions on or prior to the Closing Date.
(a) Each and every representation and warranty made by Seller
contained in this Agreement and in any certificate or other writing delivered by
Seller pursuant hereto shall be true in all material respects as of the date
when made and shall be true in all material respects at and as of the Closing
Date as if originally made on and as of the Closing Date.
(b) Seller shall effectively assign the Assigned Contracts
(including obtaining all necessary consents). For each contract assigned under
this provision, Seller shall deliver to Purchaser at the Closing an assignment
agreement in such form and substance as shall be mutually agreed by the parties.
(c) All obligations of Seller to be performed hereunder on or
before the Closing Date shall have been performed in all material respects.
(d) No action shall be threatened or pending before any court or
governmental agency the probable outcome of which would result in (i) the
restraint or prohibition of the consummation of the transactions contemplated
hereby or (ii) the restraint or prohibition of, or interference with, the
effective operation of enjoyment by Purchaser of all or any material portion of
the Assets or the Business.
(e) On the Closing Date, there shall be no injunction, writ,
preliminary restraining order or any order of any nature in effect issued by a
court of competent jurisdiction directing that the transactions provided for
herein, or any of them, not be consummated as herein provided and no
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suit, action, investigation, inquiry or other legal or administrative proceeding
by any governmental body or other Person shall have been instituted or
threatened which questions of validity or legality of the transactions
contemplated hereby or which if successfully asserted might otherwise have a
Material Adverse Effect. "Material Adverse Effect" means an effect that is
materially adverse (i) to the properties, business, operations, earnings,
assets, liabilities or financial condition, or prospects of the Business taken
as a whole, (ii) the ability of Seller to perform its obligations under this
Agreement, or (iii) the enforceability of this Agreement.
(f) Between the date hereof and the Closing Date, there shall
have been no change which could have a Material Adverse Effect on the Business
or the Purchased Assets.
(g) Any and all notices to Employees, as required under
applicable employment laws, shall have been provided by Seller. Substantially
all of the Transferred Employees shall have accepted employment with Purchaser
and Purchaser shall have entered into arrangements with key Employees of Seller
satisfactory to Purchaser in its sole discretion.
(h) After (i) Purchaser and Amkor shall have been satisfied with
the results of their due diligence, (ii) Amkor shall have entered into an
arrangement satisfactory to Amkor in its sole discretion, to finance the
Purchase Price in full, (iii) Amkor shall have received a fairness opinion with
respect to the terms of the transactions contemplated by this Agreement, (iv)
the Workout of Seller shall have been approved by the relevant authorities to
Amkor's satisfaction, and Amkor shall be satisfied with the financial conditions
of Seller following the Workout, and (v) Amkor shall have received a tax
exemption under the Foreign Capital Promotion Law in regard to its purchase of
the Business ("Tax Exemption"), the Board of Directors of Amkor shall have
determined that the transactions contemplated herein are in the best interest of
Amkor and Purchaser in light of all circumstances associated with Seller and the
transactions contemplated hereby.
(i) Seller shall have obtained a ruling from a relevant Korean
Tax authority that VAT is not payable on the transactions contemplated herein.
(j) Seller shall have obtained the approval for the transactions
contemplated hereunder from a shareholders' meeting.
(k) Purchaser shall have received to its satisfaction the
favorable legal opinion of the counsel for Seller in the form and substance
satisfactory to Purchaser.
(l) Seller shall have delivered all of the Schedules to be
Prepared, which schedules will be satisfactory to Purchaser in form and
contents, and shall have obtained the consents thereto from Purchaser.
(m) Seller shall have received duly executed copies of all
agreements, instruments, certificates, consents or other documents necessary or
appropriate from the creditors of Seller to release any and all material
encumbrances against the Purchased Assets.
I.11. Closing. The closing under this Agreement will take place at 10:00
A.M., Seoul time, on February 26, 1999 (the "Closing"), at the main office of
Seller, Seoul, Korea, or at such other time, date or place as the Parties shall
mutually agree. The date on which Closing occurs is sometimes referred to herein
as the "Closing Date."
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I.12. Deliveries and Proceedings. At the Closing:
(a) Deliveries by Seller. Seller will deliver or cause to be
delivered to Purchaser:
(i) assignments of all transferable or assignable
licenses, permits and warranties relating to the Purchased Assets or the
Business, duly executed and in recordable form;
(ii) title certificates to the Owned Real Properties,
motor vehicles, or any other applicable assets together with title or license
certificates to Intellectual Properties (including the Licensed Intellectual
Property), included in the Purchased Assets right to which are transferred by
registration with any Authority, duly executed by the Seller (together with any
other transfer forms or other documents necessary to effectively transfer such
Purchased Assets to Purchaser);
(iii) all the books of account, ledgers, payroll records,
inventory and asset records and other books and documents which are used for or
are substantially related to the Business (other than minute books relating to
directors' and shareholders' meetings and statutory books) in whatever form and
upon whatever media they may be recorded;
(iv) copies of the Employee Releases and the employment
contracts with respect to the Key Employees;
(v) consent letters necessary for the valid assignment of
the Assigned Contracts duly executed by the parties thereto;
(vi) certified copies of resolutions of the Seller's board
of directors and shareholders meeting, both approving the sale of the Purchased
Assets and the Business on the terms of this Agreement and authorizing any one
its officers to execute this Agreement for and on behalf of the Seller;
(vii) such other instruments of conveyance as shall be
necessary to vest in Purchaser good, valid and marketable title to the Purchased
Assets;
(viii) receipt for the portion of the Purchase Price
provided in Section 1.4(a);
(ix) a certificate dated the Closing Date, from the
Representative Director of Seller to the effect that Seller has fulfilled the
conditions set forth in Section 1.10(c);
(x) a certificate dated the Closing Date, from the
Representative Director of Seller to the effect that Seller has cleared all
Liens or other types of encumbrances on the Business or the Purchased Assets;
and
(xi) executed copies of the Ancillary Agreements.
(b) Deliveries by Purchaser. At the Closing, Purchaser will
deliver to Seller:
(i) payment in Korean Won to be calculated at the Base
Rate of the U.S. dollars as set forth in Schedule 1.4(a) (or in case of U.S.
dollar payment, the amount stated in Schedule 1.4(a));
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(ii) a certificate evidencing the deposit of Korean Won
amount equivalent to U.S. dollars to be calculated at the Base Rate as set forth
in Schedules 1.4 (b) and (c) (or in case of U.S. dollar deposit, the amount
stated in Schedules 1.4(b) and (c)) with the Escrow Accounts;
(iii) a certificate evidencing the assumption of, and
consents by the creditors of, the liabilities listed on Schedule 1.7(a);
(iv) a certified copy of a resolution of Purchaser's board
of directors approving the purchase of the Purchased Assets and Business on the
terms of this Agreement and authorizing any one of its directors or officers to
execute this Agreement for and on behalf of the Seller;
(v) a certificate dated the Closing Date, from an
authorized officer of Purchaser to the effect that Purchaser has fulfilled the
conditions set forth in Section 1.9(b); and
(vi) executed copies of the Ancillary Agreements.
(c) Other Deliveries. Any other documents required to be
delivered pursuant to this Agreement will be exchanged.
I.13. Covenants of Seller. From and after the date hereof and until the
Closing Date, Seller hereby covenant and agree that:
(a) Business in Ordinary Course. Seller will carry on the
Business in the ordinary and normal course in substantially the same manner as
heretofore, except as otherwise expressly provided herein, and shall notify
Purchaser immediately in writing of any changes or deviations from the ordinary
and normal course of business.
(b) Maintain Properties. Seller will maintain and keep the plant
and equipment of or related to the Business in as good repair, working order and
condition as at present, except for depreciation due to ordinary wear and tear
and damage due to casualty.
(c) Insurance. Seller will keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to what is now
covering the Business and all assets related thereto.
(d) Perform Contracts. Seller will perform in all material
respects the obligations to be performed under all the contracts and documents
of or relating to the Business.
(e) Maintain Organization. Seller will maintain and preserve the
relationships of or related to the Business with suppliers and customers and
maintain the goodwill of the Business.
(f) Approvals and Consents. As soon as practicable after the
execution of this Agreement, Seller shall take all reasonable action required to
obtain all waivers, consents, approvals, including an approval from the
shareholders meeting; and promptly to give all notices, effect all registrations
pursuant to and make all other filings with or submissions to, any third
parties, including governmental authorities, necessary or advisable to
authorize, approve or permit the transactions contemplated hereby.
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(g) Confidentiality. Seller hereby covenants and agrees that,
except as may be required by law, rule or regulation or court order, unless this
Agreement is terminated, it will not at any time reveal, divulge or make known
to any Person (other than the Purchasing Parties, their Affiliates or their
agents) any information that relates to this Agreement, the transactions
contemplated hereby or the Business (whether now possessed by Seller or
furnished by Purchaser after the Closing Date), including, but not limited to,
customer lists or other customer information, trade secrets or formulae,
marketing plans or proposals, financial information or any data, written
material, records or documents used by or relating to the Business that are of a
confidential nature (collectively, the "Confidential Information").
(h) Advice of Changes. Seller hereby covenants and agrees that it
will advise the Purchasing Parties promptly in writing of any fact that, if
previously known, would have been required to be set forth or disclosed in or
pursuant to this Agreement, or which would result in breach in any material
respect by Seller of any of its representations and warranties, covenants or
agreements hereunder or which would have a Material Adverse Effect on the
Business, the Purchased Assets or the transactions contemplated hereby.
(i) All Necessary Filings. Seller hereby covenants that it will
make all necessary filings with the relevant government agencies which are
required for the completion of the transaction contemplated in this Agreement.
(j) Access to Information; Cooperation. Seller hereby covenants
and agrees that it shall give the Purchasing Parties and their representatives,
counsel, accountants and consultants reasonable access, during normal business
hours, to such of the properties, books, accounts, contracts and records of
Seller as the Purchasing Parties deem relevant to the Purchased Assets and the
Business, and furnish or otherwise make available to the Purchasing Parties all
such information concerning the Purchased Assets and the Business as the
Purchasing Parties may request. Seller further agrees and covenants that it
shall cooperate with the Purchasing Parties and their representatives, counsel,
accountants and consultants to make sure that the Closing Statement is prepared
as provided in Section 1.6(a)(i).
(k) Preparation. Seller will diligently prepare and deliver to
Purchaser all of the Schedules to be Prepared as soon as practicable after the
date hereof, which schedules will be satisfactory to Purchaser in form and
contents, and shall obtain the consents thereto from Purchaser.
(l) No Intentional Misrepresentation. Without express written
consent of Purchaser, Seller shall not take or omit any action with the
intention to cause any of its representations and warranties under this
Agreement to be inaccurate in material respect at, or any time prior to, the
Closing.
I.14. Obligations After the Closing Date.
(a) Assistance by Seller. Seller shall cooperate with the
Purchasing Parties' advisors and representatives, including its legal counsel,
in connection with the preparation of any report or filing required in
connection with the transactions contemplated hereby, such cooperation to be
provided by Seller at no cost to the Purchasing Parties.
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(b) Further Assurances of Seller. From and after the Closing
Date, Seller shall, at the request of any of the Purchasing Parties, execute,
acknowledge and deliver to Purchaser, without further consideration, all such
further assignments, conveyances, endorsements, deeds, special powers of
attorney, consents and other documents, and take such other action, as the
relevant Purchasing Party may reasonably request (i) to transfer to and vest in
Purchaser, and protect its rights, title and interest in, all the Purchased
Assets and (ii) otherwise to consummate the transactions contemplated by this
Agreement.
(c) Further Assurances of Purchaser. From and after the Closing
Date, Purchaser shall afford to Seller and its attorneys, accountants and other
representatives access, during normal business hours, to such books and records
relating to the Business as reasonably may be required in connection with the
preparation of financial information for periods concluding on or prior to the
Closing Date. Purchaser shall cooperate in all reasonable respects with Seller
with respect to its former interest in the Business and in connection with
financial account closing and reporting and claims and litigation asserted by or
against third parties, including, but not limited to, making employees available
at reasonable times to assist with, or provide information in connection with
financial account closing and reporting and claims and litigation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents, warrants and covenants to and with the
Purchasing Parties as follows (as far as any of the following representations,
warranties and covenants are conditioned upon the preparation of the Schedules
to be Prepared, such representations, warranties and covenants shall be deemed
to have been made as of the date when the relevant Schedules to be Prepared are
delivered to the Purchasing Parties, and obtained their written consents
thereto):
II.1. Organization. Seller is a corporation duly incorporated and
validly existing under the laws of the Republic of Korea. Seller has all
requisite corporate power and authority to own or lease its properties and
assets as now owned or leased, to carry on its businesses as and where now being
conducted and to enter into this Agreement, and perform its obligations
hereunder. The copies of Seller's articles of incorporation and bylaws, as
amended to date, which have been delivered to Purchaser, are correct and
complete and are in full force and effect.
II.2. Authorization and Enforceability. The execution, delivery and
performance of this Agreement has been, and the Ancillary Agreements shall have
been duly authorized by all necessary corporate action on the part of Seller,
including the approvals by the board of directors (other than the shareholders
approval which Seller shall obtain before the Closing). This Agreement has been,
and at the Closing all the Ancillary Agreements shall have been duly executed
and delivered by Seller, and this Agreement constitutes, and at Closing the
Ancillary Agreements will constitute, the legal, valid and binding obligations
of Seller, enforceable in accordance with their respective terms.
II.3. No Violation of Laws or Agreements. The execution and delivery of
this Agreement do not, and the consummation of the transactions contemplated by
this Agreement and the compliance with the terms, conditions and provisions of
this Agreement by Seller, will not (a) contravene any provision of Seller's
articles of incorporation or bylaws; (b) conflict with or result in a breach of
or constitute a default (or an event which might, with the passage of time or
the giving
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of notice or both, constitute a default) under any of the terms, conditions or
provisions of any indenture, mortgage, loan or credit agreement or any other
agreement or instrument to which Seller is a party or by which it or any of its
assets may be bound or affected except as set forth on Schedule 2.10, or any
judgment or order of any court or governmental department, commission, board,
agency or instrumentality, domestic or foreign, or any applicable law, rule or
regulation, (c) result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon Seller's assets or give to others any
interests or rights therein, (d) result in the maturation or acceleration of any
liability or obligation of Seller that will not be paid in full by Seller at
Closing (or give others the right to cause such a maturation or acceleration),
or (e) result in the termination of or loss of any right (or give others the
right to cause such a termination or loss) under any of the Assigned Contracts
except as set forth on Schedule 2.10.
II.4. Financial Statements. The books of account and related records of
Seller fairly reflect in reasonable detail the assets, liabilities and
transactions related to the Business and are in adequate condition for the
preparation of the Financial Statement (as defined below and which shall be
limited only to a balance sheet and a statement of profits and losses) of the
Business in accordance with U.S. GAAP applied on a consistent basis. Seller has
delivered to Purchaser the audited financial statements of the Business as of
June 30, 1997, June 30, 1998, September 30, 1998, December 31, 1996, December
31, 1997, respectively and, shall deliver the unaudited financial statement as
of December 31, 1998 (together with prior dated financial statements, the
"Financial Statements"). The Financial Statements of the Business: (i) fairly
presents the financial condition, assets and liabilities of the Business as of
the dates thereof; and (ii) has been prepared in accordance with U.S. GAAP
consistently applied. All references in this Agreement to the "Balance Sheet"
shall mean the balance sheet of the Business as of September 30, 1998 included
in the Financial Statement and all references to the "Balance Sheet Date" shall
mean September 30, 1998.
II.5. Undisclosed Liabilities. The Business has no liability or
obligation of any nature, whether due or to become due, absolute, contingent or
otherwise, including liabilities for or in respect of national, local or foreign
Taxes, customs duties and any interest or penalties related hereto, except for
liabilities that are (a) fully reflected on the Balance Sheet or (b) incurred in
the ordinary course of business since the Balance Sheet Date and fully reflected
as liabilities on the Business's books of account, none of which individually or
in the aggregate, has been materially adverse.
II.6. No Changes. Except as disclosed on Schedule 2.6, since the Balance
Sheet Date and until the Closing, the Seller has conducted the Business only in
the ordinary course. Without limiting the generality of the foregoing sentence,
except as specifically communicated to Purchaser in writing. Except as otherwise
disclosed on Schedule 2.6, there has not been:
(a) any change in the financial condition, assets, liabilities,
net worth of the Business, except changes in the ordinary course of business,
none of which, individually or in the aggregate has been or could have an
Material Adverse Effect;
(b) any damage, destruction or loss, whether or not covered by
insurance, which could have a Material Adverse Effect;
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(c) any mortgage, pledge or subjection to lien, charge or
encumbrance of any kind of the assets, tangible or intangible of the Business;
(d) any strike, walkout, labor trouble or any other new or
continued event, development or condition of any character which has or could
have a Material Adverse Effect;
(e) any increase in the salaries or other compensation (excluding
increases in the ordinary course of business and consistent with past practice)
payable or to become payable to, or any advance (excluding advances for ordinary
business expenses) or loan to, any officer, director or employee of the
Business, or any increase in, or any addition to, other benefits (including
without limitation any bonus, profit-sharing, pension or other plan) to which
any of its officers, directors or employees may be entitled, or any payments to
any pension, retirement, profit-sharing, bonus or similar plan except payments
in the ordinary course of business and consistent with past practice made
pursuant to any employee benefit plan, or any other payment of any kind to (or
on behalf of) any such officer, director or employee other than payment of base
compensation and reimbursement for reasonable business expenses in the ordinary
course of business;
(f) any making or authorization of any capital expenditures which
are not in the ordinary course of business or in excess of 6 billion Won;
(g) any cancellation or waiver of any right material to the
operation of the Business or any cancellation or waiver of any debts or claims
of substantial value or any cancellation or waiver of any debts or claims
against any Affiliate;
(h) any sale, transfer or other disposition of any assets of the
Business, except sales of assets in the ordinary course of business;
(i) any payment, discharge or satisfaction of any liability or
obligation (whether accrued, absolute, contingent or otherwise) by Seller
related to or affecting the Business, other than the payment, discharge or
satisfaction, in the ordinary course of business, of liabilities or obligations
shown or reflected on the Balance Sheet or incurred in the ordinary course of
business since the Balance Sheet Date;
(j) any adverse change or any threat of any adverse change in
Seller's relations with, or any loss or threat of loss of, Seller's suppliers,
clients or customers, which change or loss could have a Material Adverse Effect;
(k) any write-offs as uncollectible of any notes receivable of
the Business or write-downs of the value of any assets or inventory by Seller
related to the Business other than in immaterial amounts or in the ordinary
course of business consistent with past practice and at a rate no greater than
during the twelve months ended on the Balance Sheet Date;
(l) any change by Seller in any method of accounting or keeping
its books of account or accounting practices related to or affecting the
Business;
(m) any creation, incurrence, assumption or guarantee by the
Business of any obligations or liabilities (whether absolute, accrued,
contingent or otherwise and whether due or to
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become due), except in the ordinary course of business, or any creation,
incurrence, assumption or guarantee by the Business of any indebtedness for
money borrowed;
(n) any payment, loan or advance of any amount to or in respect
of, or the sale, transfer or lease of any properties or assets (whether real,
personal or mixed, tangible or intangible) to, or entering into of any
agreement, arrangement or transaction with, any Affiliate, except for (i)
compensation to the officers and employees of the Business at rates not
exceeding the rates of compensation disclosed on Schedule 2.19 hereto and (ii)
reimbursements of or advances for expenses incurred for business-related
purposes not exceeding 1.2 billion Won outstanding in the aggregate at any given
time.
(o) any disposition of or failure to keep in effect any rights
in, to or for the use of Intellectual Property included in the Purchased Assets,
or, to Seller's Knowledge, any disclosure to any person not an employee or other
disposal of any trade secret, process or know-how relating to the Business; or
(p) any transaction, agreement or event to which Seller is a
party or a participant relating to the Business outside the ordinary course of
the Business or inconsistent with past practice.
(q) to Seller's Knowledge, neither the Business nor Seller has
become subject to any newly enacted or adopted law which may reasonably be
expected to have a Material Adverse Effect.
(r) any written up the value of any inventory or any other
assets, except for write-ups in the ordinary course of business and consistent
with past practices.
II.7. Taxes. Seller has (a) timely filed all national or local, payroll,
withholding, VAT, excise, sales, use, customs duties, personal property, use and
occupancy, business and occupation, mercantile, real estate, capital stock and
franchise or other tax returns of any kind whatsoever relating to the Business
(all the foregoing taxes, including interest and penalties thereon and including
estimated taxes, being hereinafter collectively called "Taxes" and individually
a "Tax"), (b) has paid all Taxes which are due pursuant to such returns and (c)
paid all other Taxes for which a notice of assessment or demand for payment has
been received. All such returns have been prepared in accordance with all
applicable laws and requirements and accurately reflect the taxable income (or
other measure of Tax) of the Party filing the same. The accruals for Taxes
contained in the Balance Sheet are adequate to cover all liabilities for Taxes
relating to the Business for all periods ending on or before the Balance Sheet
Date and nothing has occurred subsequent to that date to make any of such
accruals inadequate as of the Balance Sheet Date. All Taxes for periods
beginning after the Balance Sheet Date have been paid or are adequately reserved
against on the books of Seller. Seller has timely filed all information returns
or reports which are required to be filed and has accurately reported all
information required to be included on such returns or reports. To Seller's
Knowledge, there are no proposed assessments of Tax against Seller or proposed
adjustments to any Tax returns filed, pending against Seller. Except as
disclosed on Schedule 2.7, Seller has not received notice that any Tax return is
under examination by any taxing authority. Except as disclosed on Schedule 2.7
hereto, Seller has not executed a waiver or consent extending any statute of
limitation for any Tax liability which remains outstanding. Except as disclosed
on Schedule 2.7 hereto, since January 1,
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1998, Seller has not (a) joined in or been required to join in filing a
consolidated income Tax return, or (b) entered into a closing agreement with any
taxing authority.
II.8. Inventory. All of the inventories of the Business, including that
reflected in the Balance Sheet, are valued at cost being determined on a
weighted average basis except as disclosed in the Financial Statements. All of
the inventories of the Business reflected in the Balance Sheet and all such
inventories acquired since the Balance Sheet Date consist of items of a quality
and quantity usable and saleable in the ordinary course of business and at
normal profit margins (other than normal trade discounts regularly offered by
the Business for prompt payment or quantity purchase), and all of the raw
materials and work in process inventory of the Business reflected in the Balance
Sheet and all such inventories acquired since the Balance Sheet Date can
reasonably be expected to be consumed in the ordinary course of business within
a reasonable period of time. A physical inventory shall be taken during the week
prior to the Closing Date. Attached hereto is Schedule 2.8 which sets forth the
value of the Business's inventory of finished goods, work in process and raw
materials as of September 30, 1998 together with the period of time within which
such inventories are usable and salable.
II.9. No Pending Litigation or Proceedings. Except as set forth on
Schedule 2.9 hereto, there are no actions, suits, investigations, proceedings or
claims pending or affecting, or to Seller's Knowledge, threatened against or the
Business of Seller or Seller's agents or their assets of or related to the
Business, by or before any court or governmental department, agency or
instrumentality, and to Seller's Knowledge, there is no basis for any such
action, suit, investigation, proceeding or claim. There are presently no
outstanding judgments, decrees or orders of any court or any governmental or
administrative agency, against or, to Seller's Knowledge, affecting the
Business.
II.10. Contracts; Compliance. Except as listed on Schedule 2.10 hereto,
Seller is not a party to nor bound by any contract or commitment, oral or
written, formal or informal related to or affecting the Business, of the
following types:
(a) mortgages, indentures, security agreements or other
agreements and instruments relating to the borrowing of money, the extension of
credit or the granting of liens or encumbrances;
(b) employment and consulting agreements;
(c) union or other collective bargaining agreements;
(d) powers of attorney;
(e) sales agency, manufacturers representative and
distributorship agreements or other distribution or commission arrangements;
(f) licenses of patent, trade secrets, know-how, trademark,
copyrights and other Intellectual Property;
(g) agreements, orders or commitments for the purchase of
services, raw materials, supplies or finished products from any one supplier for
an amount in excess of 100 million Won.
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(h) agreements, orders or commitments for the sale of products or
services for more than 100 million Won to any single purchaser;
(i) contracts or options relating to the sale by Seller of any
asset of the Business, other than sales of inventory in the ordinary course of
business;
(j) bonus, profit-sharing, compensation, stock option, pension,
retirement, deferred compensation, accrued vacation pay, group insurance,
welfare agreements or other plans, agreements, trusts or arrangements for the
benefit of employees;
(k) agreements or commitments for capital expenditures which are
not in the ordinary course of business or in excess of 6 billion Won for any
single project;
(l) joint venture agreements;
(m) agreements requiring the consent of any party thereto to the
consummation of the transactions contemplated hereby;
(n) agreements with any Affiliate;
(o) lease agreements under which it is either lessor or lessee;
(p) agreements, contracts or commitments for any charitable or
political contribution;
(q) non-competition agreements;
(r) any foreign currency exchange or forward purchase agreements
directly related to the Business;
(s) any agreements providing for indemnification or guaranty
obligations of Seller with respect to the Business other than in the ordinary
course of business having a potential cost in excess of 100 million Won;
(t) requirements agreements relating to obligations to purchase
all or substantially all of any products as well as to supply all or
substantially all of the products;
(u) any non-disclosure agreement; or
(v) other agreements, contracts and commitments which are
material to the Business, or which involve payments or receipts of more than 1.2
billion Won in any single year, or which were entered into other than in the
ordinary and usual course of business.
All such contracts and other commitments are in full force and effect;
all parties to such contracts and other commitments have complied with the
provisions thereof; no such party is in default under any of the terms thereof;
and no event has occurred that with the passage of time or the giving of notice
or both would constitute a default by any party under any provision thereof.
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II.11. Compliance with Laws. Schedule 2.11 hereto sets forth a list of
all material permits, certificates, licenses, orders, registrations, franchises,
authorizations and other approvals from all national, local and foreign
governmental and regulatory bodies held by Seller that relate to or effect the
Business or the Purchased Assets. The Seller holds and is in compliance with all
material permits, certificates, licenses, orders, approvals, registrations,
franchises and authorizations required under all laws in connection with the
Business and the Purchased Assets, and, to Seller's Knowledge, all of such
permits, certificates, licenses, orders, approvals, registrations, franchises
and authorizations are in full force and effect. The Seller has complied with
all applicable statutes, rules, regulations and orders, national and local,
which, if not complied with, would have a Material Adverse Effect on the
Business or the Purchased Assets. No notice, citation, summons or order has been
issued, no complaint has been filed, no penalty has been assessed and, to
Seller's Knowledge, no investigation or review is pending or threatened by any
governmental or other entity (a) with respect to any alleged violation by Seller
of any law of any governmental entity relating to or affecting the Business or
the Purchased Assets (b) with respect to any alleged failure by Seller to have
any permit, certificate, license, approval, registration or authorization
required in connection with the Business or the Purchased Assets.
II.12. Environmental Matters.
(a) Except as disclosed on Schedule 2.12 hereto or in the site
assessments of the Owned Real Properties performed by or on behalf of Purchaser
(true and complete copies of which Purchaser has delivered to Seller):
(i) The Business is in compliance with and are not in
violation of any national or local statutory or regulation, rule, order,
ordinance, guideline, direction, or notice, relating to the environment, public
health and safety, and employee health and safety, including those relating to
Hazardous Substances ("Environmental Laws").
(ii) Seller holds and is in compliance with all necessary
or required environmental permits, certificates, consent or other settlement
agreements, licenses, approvals, registrations and authorizations required under
all Environmental Laws that relate to or affect the Business ("Environmental
Permits") as being used as of the date of this Agreement, and all of such
Environmental Permits are valid and in full force and effect. All such
Environmental Permits held by Seller are listed on Schedule 2.12 hereto and any
that are not transferable are so designated. Seller has made or will make before
the Closing timely application for renewals of all such Environmental Permits
for which Environmental Laws require that applications must be filed on or
before the Closing to maintain the Environmental Permits in full force and
effect after the Closing Date. Purchaser shall bear any fees, cost or other
expenses incurred in making such filings or applications to the extent to which
Purchaser receives a benefit from the Environmental Permit obtained as a result
of such filing or application.
(iii) No consent, approval or authorization of, or
registration or filing with any Person, including any environmental governmental
Authority or regulatory agency, is required in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby. Seller (with Purchaser's reasonable assistance) has or will prepare and
file all applications for the transfer of all Environmental Permits, at
Purchaser's expense, that
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must be transferred as a result of the consummation of the transactions
contemplated by this Agreement.
(iv) No notice, citation, summons or order has been issued
or served upon, no complaint has been filed, no penalty has been assessed and,
to Seller's Knowledge, no investigation or review is pending or threatened by
any Authority or Person: (a) with respect to any alleged violation by Seller of
any Environmental Law relating to or affecting the Business; or (b) with respect
to any alleged failure by Seller to have any Environmental Permit relating to or
affecting the Business; or (c) with respect to any use, possession, generation,
treatment, storage, recycling, transportation or disposal (collectively
"Management") of any Hazardous Substances by or on behalf of Seller or, to
Seller's knowledge, its predecessors relating to or affecting the Business.
(v) Seller has not received any request for information,
notice of claim, demand, order or notification for which it or any of its
predecessors are or may be potentially responsible with respect to any
investigation or clean-up of any threatened or actual Release of any Hazardous
Substance relating to or affecting the Business.
(vi) Except for Hazardous Substances stored or used in the
ordinary course of their manufacturing processes, in quantities and in a manner
(1) not in violation of any applicable law, or (2) which has not or is not
reasonably likely to create a condition which requires investigation,
re-mediation or other responsive action or responsibility or liability under
Environmental Laws, to Seller's Knowledge neither the Seller nor any Affiliate
of Seller has used, generated, treated, stored for more than 90 days, recycled
or disposed of any Hazardous Substances on any property now owned, operated or
leased by Seller or any Affiliate of Seller or on any formerly owned, operated
or leased property that is related in any way to the Business, nor has anyone
else during the period that such property has been owned, operated or leased by
Seller or, to Seller's Knowledge, during any other period, treated, stored for
more than 90 days, recycled or disposed of any Hazardous Substances on any
property now owned, operated or leased by Seller or Affiliate of Seller or on
any formerly owned, operated or leased property.
(vii) No Hazardous Substance generated by Seller or any
Affiliate of Seller that is any way related to the Business has been recycled,
treated, stored, disposed of or transported by any entity in violation of any
Environmental Law or in a manner which has created or is reasonably likely to
create any liability or responsibility under any Environmental Law.
(viii) No Hazardous Substance has been Released at, on,
about or under by Seller or, to Seller's Knowledge is present in the Purchased
Assets or in any property now owned, operated or leased by Seller or any
Affiliate of Seller that is in any way related to the Business which requires
investigation, re-mediation or other response action.
(ix) There are no environmental Liens on the Purchased
Assets or on any properties owned or leased by Seller or any Affiliate of Seller
which would materially impair Purchaser's ability to lawfully operate the
Business as such Business was operated prior to the Closing Date and, to
Seller's Knowledge, no government actions have been taken or are in process or
pending which could subject any of such properties to such Liens.
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(x) No deed or other instrument of conveyance of real
property to Seller or any Affiliate of Seller with respect to the Real
Properties contains a restriction relating to the actual or suspected presence
of Hazardous Substances, which restriction would materially impair Purchaser's
ability to lawfully operate the Business as such Business was operated prior to
the Closing Date.
(xi) To Seller's Knowledge, there are no facts or
circumstances related to environmental matters concerning the Purchased Assets
that could reasonably be expected to lead to any future environmental claims
against Seller, or Purchaser under current law.
(xii) There have been no environmental inspections,
investigations, studies, audits, tests, reviews or other analyses conducted by
or at the direction of Seller or, in the possession of Seller indicating the
presence of any Hazardous Substance in or on any property or business now or
previously owned, operated, or leased by Seller or any Affiliate of Seller in
any way related to the Business in material violation of any Environmental Law
or which has created a condition which requires investigation, re-mediation or
other response action under Environmental Law which have not been provided to
Purchaser prior to the date hereof.
II.13. Consents. Except as set forth on Schedule 2.10, no consent,
approval or authorization of, or registration or filing with, any Person, is
required in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
II.14. Personal Property. The Seller owns all of its tangible personal
property and assets substantially relating to or affecting the Business,
including the properties and assets reflected in the Balance Sheet (except those
disposed of in the ordinary course of business since the Balance Sheet Date);
and at the Closing none of such properties or assets will be subject to any
mortgage, pledge, lien, restriction, encumbrance, claim, security interest,
charge or any other matter affecting title, except, (a) minor imperfections of
title, none of which, individually or in the aggregate, materially detracts from
the value of or impairs the use of the affected properties or impairs any
operations of the Seller, (b) liens for current Taxes not yet due and payable,
or (c) as disclosed on Schedule 2.14 hereto (the "Personal Property Permitted
Encumbrances"). All tangible personal property, assets, equipment or other
personal property consigned or leased to Seller, whether used exclusively in the
operation of the Business are listed on Schedule 2.14.
II.15. Real Estate.
(a) Schedule 2.15 hereto contains a true, correct and complete
list of all real properties owned, leased, subleased, licensed or otherwise
occupied by Seller substantially relating to or affecting the Business including
the real property that the Purchaser purchases under this Agreement
(collectively, the "Real Properties") separately indicating the nature of
Seller's interest therein. Except as set forth on Schedule 2.15 hereto, no other
Person has any oral or written right, agreement or option to acquire, lease,
sublease or otherwise occupy all or any portion of such Real Properties. Seller
has not received any written or oral notice for assessment for public
improvements against any of the Real Properties which remains unpaid and, to
Seller's Knowledge, no such assessment has been proposed. There is no pending
condemnation, expropriation, eminent domain or similar proceeding affecting all
or any portion of any of the Real Properties and, to Seller's Knowledge, no such
proceeding is contemplated.
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(b) Except as disclosed on Schedule 2.15 hereto,
(i) Seller has (1) good and marketable title to the Real
Properties owned by Seller (the "Owned Real Properties"). The Owned Real
Property is free and clear of any and all Liens, exceptions, items,
encumbrances, easements, restrictions and other matters either of record or not
of record which either individually or in the aggregate, could prohibit or
adversely interfere with Purchaser's use of such property except (a) matters set
forth on Schedule 2.15 and referred to as the "Exceptions that will not exist at
Closing" (the "Exceptions That Will Not Exist at Closing"), (b) matters set
forth on Schedule 2.15, none of which is material in amount and none of which,
individually or in the aggregate, impairs, or grants or evidences rights which
if exercised would impair, the use of the affected property in the manner such
property is currently being used, or impairs the current operations of the
Business, (c) defects of title, conditions, easements, encroachments, covenants
or restrictions, if any, none of which is material in amount and none of which,
individually or in the aggregate, materially impairs, or grants or evidences
rights which if exercised would materially impair, the use of the affected
property in the manner such property is currently being used, or impairs the
current operations of the Business, and (d) zoning or land use ordinances, none
of which, individually or in the aggregate, impairs the use of the affected
property in the manner such property is currently being used or impairs the
current operations of the Business (collectively, the "Permitted Real Property
Encumbrances"). No material default or breach exists under any of the covenants,
conditions, restrictions, rights-of-way or easements, if any, affecting all or
any portion of the Owned Real Properties.
(ii) The current zoning of each of the Real Properties
permits the operator of such property to use such property for the Purchaser's
intended use thereof, provided that such use is similar to Seller's use thereof
or otherwise disclosed to Seller. Seller has not made any application for a
rezoning of any of the Owned Real Properties. To Seller's Knowledge, there are
no proposed or pending changes to any zoning affecting any of the Owned Real
Properties.
(iii) All utilities, including without limitation, potable
water, sewer, gas, electric, telephone, and other public utilities and all storm
water drainage required by law or necessary for the operation of the Real
Properties, (1) either enter the Real Properties through open public streets
adjoining the Real Properties, or, if they pass through adjoining private land,
do so in accordance with valid public or private easements or rights of way
which will inure to the benefit of Purchaser, (2) are installed, connected,
operating and adequate for the operation of the Business as it has been
previously conducted by Seller, with all installation and connection charges
paid in full, including, without limitation, connection and the right to
discharge sanitary waste into the collector system of the appropriate sewer
utility, and (3) are adequate (in both quality and quantity) to service the Real
Properties for their respective use in the business as presently conducted
thereon.
(iv) Each of the Real Properties is located along one or
more dedicated public streets or has access thereto. All curb-cut and
street-opening permits or licenses required for vehicular access to and from the
Real Properties to any adjoining public street or to any parking spaces utilized
in connection with the Real Property have been obtained and paid for, are in
full force and effect and shall inure to the benefit of Purchaser.
(v) The improvements located on the Real Properties,
including the roof, structure, soil, elevators, walls, heating, ventilation, air
conditioning, plumbing, electrical, drainage,
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fire alarm, communications, security and exhaust systems and their component
parts, or other improvements on or forming a part of the Real Properties, are
adequate for the operation of the Business as it has been previously conducted
by Seller. Seller has not received any notification of and there are no
outstanding or incomplete work orders in respect of any of the buildings,
improvements or other structures constructed on the Real Properties or of any
current non-compliance with applicable statutes and regulations or building and
zoning by-laws and regulations.
(c) Except as set forth on Schedule 2.15 hereto, there are no
deeds of trust or mortgages which are a Lien upon the Real Properties.
II.16. Intellectual Properties
(a) Attached hereto as Schedule 2.16 is a correct list of all
Intellectual Property.
(b) Except as set forth on Schedule 2.16, to Seller's Knowledge,
neither the manufacture, sale, use of any products now or heretofore
manufactured or sold by Seller nor the operation of the Business did and does
infringe (nor has any claim been made that any such action infringes) the
patents or other Intellectual Property rights of others.
(c) With respect to the portion of the Intellectual Property that
is not owned by Seller ("Licensed Intellectual Property"), the Seller owns or
possesses adequate licenses or other rights at reasonable market costs to use
the same as necessary to conduct the Business as now conducted. Except as set
forth on Schedule 2.16, there is no agreement to which Seller is a party or to
which Seller is legally bound and no restriction or Liens, materially and
adversely affecting the use by Seller and, after the Closing, the use by
Purchaser, of any of the Licensed Intellectual Properties.
There is no pending litigation or other legal action with
respect to any of the Intellectual Properties, and no order, holding, decision
or judgment has been rendered by any Authority, and no agreement, consent or
stipulation exists to which, in any such event, Seller is a party or of which
Seller has knowledge, which would prevent Seller, or after the Closing,
Purchaser, from using any of the Intellectual Properties.
(d) The operation of the Business by Purchaser will not result in
Purchaser being required either (i) to pay any royalties, other payments or
consideration, or (ii) to grant any right, to any third parties, either directly
or indirectly or through Seller, with respect to the Intellectual Property
rights of such third parties.
(e) Schedule 2.16 (e) sets forth a true and correct description
of Seller's Year 2000 plan together with a description of the current status of
the execution of the plan. Seller has, as of the date hereof, taken all
reasonable steps, and made every reasonable effort, to substantially comply
with, implement, carry out and effectuate all of the requirements, steps,
measures and procedures, and meet all the guidelines and deadline, as set forth
in such plan. Seller has no knowledge of any event, occurrence, condition or
reason that would prevent, or interfere with, the implementation of the plan
substantially in accordance with the guidelines and deadlines set forth in such
plan.
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(f) Schedule 2.16 lists all actions that must be taken by
Purchaser within sixty (60) days of the Closing Date, including the payment of
any registration, maintenance or renewal fees or the filing of any documents,
applications or certificates for the purposes of maintaining, perfecting or
preserving or renewing any of the Intellectual Property.
II.17. Transactions with Related Parties. Except as disclosed on
Schedule 2.17, no Affiliate has:
(a) borrowed money or loaned money to the Seller in connection
with the Business or the Purchased Assets which remains outstanding;
(b) any contractual or other claims, express or implied, of any
kind whatsoever against Seller in connection with the Business or the Purchased
Assets;
(c) any interest in any property or assets used by Seller in
connection with the Business or the Purchased Assets; or
(d) is engaged in any other transaction with Seller relating to
or affecting the Business or the Purchased Assets (other than employment
relationships at the salaries disclosed in Schedule 2.19 hereto).
II.18. Condition of Assets. The buildings, machinery, equipment, tools,
furniture, improvements and other fixed assets of the Seller used in or related
to or affecting the Business, including those reflected in the Balance Sheet,
are adequate for the operation of the Business as it has been previously
conducted by the Seller.
II.19. Compensation Arrangements; Officers and Directors. Schedule 2.19
hereto sets forth the following information:
(a) The names and current annual salary, including any bonus, if
applicable, of all present directors, officers and employees of Seller at the
rank of "Kwa Jang" or higher who work in connection with the Business together
with a statement of the full amount of all remuneration paid by Seller to each
such person during the 12 month period preceding the date hereof.
(b) the names and titles of each trustee, fiduciary or plan
administrator of each employee benefit plan of the Seller.
II.20. Labor Relations.
(a) Schedule 2.20 hereto contains a true and complete list of all
current employees of Seller that Seller asserts are necessary to the operation
of the Business ("Employees"), together with their respective job titles and
current annual compensation and bonuses or bonus eligibility (if any), as of the
date hereof. Schedule 2.20 shall have been updated as of the Closing, if
necessary. Except for those individuals identified on Schedule 2.20, there are
no employees hired by and currently working for Seller necessary to the
operation of the Business.
(b) Schedule 2.20 contains a list of all written employment
policies, practices, manuals, handbooks, procedures, and terms and conditions of
employment of Seller, including
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wages, pension benefit plan, an employee welfare benefit plan or any bonus,
incentive compensation, profit sharing, retirement, pension, group insurance,
death benefit, health, cafeteria, flexible benefit, medical expense
reimbursement, dependent care, stock option, stock purchase, stock appreciation
rights, savings, deferred compensation, consulting, severance pay or termination
pay, vacation pay, life insurance, welfare or other employee benefit or fringe
benefit plan, program or arrangement, or any other similar things that are
applicable to Employees. Except as listed on Schedule 2.20, there are no
employment policies, practices, manuals, handbooks, procedures or terms or
conditions of employment that are applicable to Employees.
(c) Schedule 2.20 contains a list of all current, or if expired
and not renewed, the most recent, employment, labor or collective bargaining
agreements with any of the Employees. Except as listed on Schedule 2.20, there
are no employment, labor or collective bargaining agreement, or governmental or
administrative charges, affecting or concerning the Employees, pending or to
Seller's knowledge threatened against Seller.
(d) Except as set forth on Schedule 2.20, there are no
consulting, contracting or independent contracting agreements with any person
retained or employed in connection with the Assets or the Business.
(e) The overall relations of Seller with its employees are good.
There are no unfair labor practice complaints against Seller pending or, to
Seller's Knowledge, threatened. There is no labor strike, dispute, slow down or
stoppage actually pending or, to Seller's Knowledge, threatened against or
involving Seller. No employee grievance which might to Seller's Knowledge have
an adverse effect on Seller or the conduct of the Business is pending. No
private agreement restricts Seller from relocating, closing or terminating any
of its operations or facilities. Except as disclosed in Schedule 2.20, Seller
has not in the past twelve (12) months experienced any work stoppage or slow
down or, to the best of Seller's Knowledge committed any unfair labor practice.
II.21. Products Liability. Except for lawsuits, claims, damages and
expenses adequately covered by the Seller's insurance, there are no (a)
liabilities of Seller, fixed or contingent, asserted or, to Seller's Knowledge,
unasserted, with respect to any product liability or any similar claim that
relates to any product manufactured and sold by Seller to others in connection
with the Business, or (b) liabilities of Seller, fixed or contingent, asserted
or, to Seller's Knowledge, unasserted, with respect to any claim for the breach
of any express or implied product warranty or any other similar claim with
respect to any product manufactured and sold by Seller to others other than
standard warranty obligations (to replace, repair or refund) made by the Seller
in the ordinary course of business to purchasers of its products in connection
with the Business.
II.22. Insurance. Attached hereto as Schedule 2.22 is a complete and
correct list of all policies of insurance relating to the Business or the
Purchased Assets of which Seller is the owner, insured or beneficiary, or
covering any of the property of the Business, true, correct and complete copies
of which have been delivered to Purchaser, indicating for each policy the
carrier, the insured, type of coverage, the amounts of coverage, deductible,
premium rate, cash value if any, expiration date and any pending claims
thereunder. All such policies are in full force and effect. The coverage
provided by such policies are reasonable, in both scope and amount, in light of
the risks attendant to the Business and the Purchased Assets. Seller has
paid-in-full all premiums due on such policies as of the Closing Date. There is
no default with respect to any provision contained in any such policy,
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nor has there been any failure to give any notice or present any claim under any
such policy in a timely fashion or in the manner or detail required by the
policy. Except as set forth on Schedule 2.22, there are no outstanding unpaid
premiums or claims under such policies. No notice of cancellation or non-renewal
with respect to, or disallowance of any claim under, any such policy has been
received by Seller. Except as set forth on Schedule 2.22, Seller has not been
refused any insurance, nor has its coverage been limited by any insurance
carrier to which it has applied for insurance or with which it has carried
insurance during the last five years. Except as set forth on Schedule 2.22, all
products liability and general liability policies maintained by or for the
benefit of the Seller during the last five (5) years have been "occurrence"
policies and not "claims made" policies. All product liability and general
liability policies relating to the manufacture and sale of the products and
components manufactured and sold by Seller prior to the Closing Date shall
remain in place for at least five (5) years from the Closing Date.
II.23. Brokerage. Seller has not made any agreement or taken any other
action which might cause anyone to become entitled to a broker's fee or
commission as a result of the transaction contemplated hereunder.
II.24. Disclosure. No representation or warranty by Seller in this
Agreement, and no exhibit, certificate or schedule furnished or to be furnished
to Purchaser pursuant hereto, or in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements or facts contained herein or therein not misleading or necessary to
provide Purchaser with proper information as to the Seller and the Purchased
Assets. Seller shall disclose to Purchaser at Closing any information then in
the possession of Seller that indicates that Purchaser is in breach of this
Agreement or which may provide the basis for a claim by Seller that Purchaser
has breached this Agreement.
II.25. Mitigation. The Parties acknowledge that the representations and
warranties set forth above shall, in any case not be interpreted as limiting or
restricting Purchaser's general obligation at law, if any, to prevent and/or
mitigate any loss or damages which it may incur after the Closing in connection
with or involving the Business or the Purchased Assets to be transferred under
this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
III.1. Organization and Good Standing. Purchaser is a corporation duly
incorporated, validly existing and in good standing under the applicable laws of
its home jurisdiction, in the case of Amkor Technology, Inc., the laws of State
of Delaware, U.S.A. and in the case of Newco, the laws of the Republic of Korea.
III.2. Corporate Power and Authority. Purchaser has all requisite
corporate power and authority to make, execute, deliver and perform this
Agreement and all other agreements, documents and instruments to which it is a
party or is otherwise obligated which are executed, delivered or performed
pursuant to this Agreement.
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III.3. Due Authorization. Other than the approval for the Closing
hereunder from Purchaser's board of directors, which is made as one of the
conditions to Purchaser's obligations under Section 1.10(h), the execution,
delivery and performance of this Agreement and all other agreements, documents
and instruments to which Purchaser is a party or is otherwise obligated which
are to be executed, delivered or performed pursuant to this Agreement have been
duly authorized by all necessary corporate action on the part of Purchaser, and
this Agreement constitutes and any other instruments to be delivered by
Purchaser at Closing, when executed and delivered at Closing, will constitute,
the legal, valid and binding obligations of Purchaser, enforceable against it in
accordance with their respective terms.
III.4. Brokerage. Purchaser has not made any agreement or taken any
other action which might cause anyone to become entitled to a broker's fee or
commission as a result of the transactions contemplated hereunder.
III.5. No Breaches; Etc. The execution, delivery and performance of this
Agreement and the other agreements contemplated by this Agreement and the
consummation of the transactions contemplated by this Agreement do not and will
not result in any breach or acceleration of any of the terms or conditions of
its articles of incorporation or bylaws, or of any mortgage, bond, indenture,
contract, agreement, license or other instrument or obligation to which
Purchaser is a party. The execution, delivery and performance of this Agreement
or the other agreements contemplated by this Agreement will not result in the
material violation of any statute, regulation, judgment, writ, injunction or
decree of any court, threatened or entered in a proceeding or action in which
Purchaser is, was or may be bound.
III.6. Disclosure. No representation or warranty by Purchaser in this
Agreement, and no exhibit, certificate or schedule furnished or to be furnished
to Seller pursuant hereto, or in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements or
facts contained herein or therein not misleading or necessary to provide Seller
with proper information as to the Purchaser and the Purchase Assets. Purchaser
shall disclose to Seller at Closing any information then in the possession of
Purchaser that indicates that Seller is in breach of this Agreement or which may
provide the basis for a claim by Purchaser that Seller has breached this
Agreement.
III.7. Litigation. There is no action, suit, proceeding or investigation
pending, or, to Purchaser's knowledge, threatened, against or related to
Purchaser or its respective properties or business which would be reasonably
likely to adversely affect or restrict Purchaser's ability to consummate the
transactions contemplated by this Agreement, and there is no reasonable basis
known to Purchaser for any such action that may result in such effect and is
probable of assertion.
III.8. Mitigation. The Parties acknowledge that the representations and
warranties set forth above shall, in any case not be interpreted as limiting or
restricting Seller's general obligation at law, if any, to prevent and/or
mitigate any loss or damages which it may incur after the Closing in connection
with the transfer of the Business or the Purchased Assets to Purchaser under
this Agreement.
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ARTICLE IV
CERTAIN ADDITIONAL COVENANTS
IV.1. Costs, Expenses and Taxes. Unless otherwise provided for herein,
Purchaser and Seller will each pay all their own expenses incurred in connection
with this Agreement and the transactions contemplated hereby, including (a) all
costs, expenses and Taxes to the extent levied to each Party, and (b) all
accounting, legal and appraisal fees and settlement charges.
IV.2. Employees of the Business. Not later than one week prior to the
Closing, the Parties shall finalize a list of employees to be transferred from
Seller to Purchaser (the "Transferred Employees"). Further, the Transferred
Employees shall include certain employees as shall be identified in Schedule 4.2
("Key Employees"). The transfer from Seller to Purchaser of the Transferred
Employees shall be subject to the following basic principles:
(a) All of the Transferred Employees shall have the right to
elect to be (i) formally terminated as employees of Seller and commence new
employment relation with Purchaser or (ii) transferred to Purchaser as a
continuation of their current employment.
(b) With respect to the Transferred Employees who elect to
terminate their employment with Seller and commence new employment relation with
Purchaser, Seller shall pay, in a timely manner in accordance with the
requirements of the Labor Standards Act and current company practices, all
salary, bonuses, allowances, severance, unused leave (including the pro rata
portion of accrued but unused leave attributable to the portion of the 1998
calendar year prior to closing) and any other monetary obligations or claims
relating to the Transferred Employees' employment with Seller or its Affiliates
that may have accrued to those personnel prior to their separation. Seller
represents and warrants that the amount paid by it to such personnel will be
adequate to fully satisfy all of their claims relating to each of their terms of
employment at Seller or any Affiliate of Seller. For the portion of the 1999
calendar year after the Closing Date, each of the Transferred Employees who have
elected to terminate shall receive the pro rata portion of paid leave days that
are attributable to this portion of the 1999 Calendar Year. For subsequent
years, each of the Transferred Employees who have elected to terminate shall
receive the same number of paid leave days that they would have received had
they continued to be employees of Purchaser, provided that Purchaser's agreement
to this provision shall in no way be interpreted as obligating Purchaser to pay
any severance to the Transferred Employees relating to their years of service at
any company other than Purchaser.
The Parties agree that the liabilities set forth in
Schedule 1.7(a) as part of the Assumed Liabilities shall represent the
liabilities of Seller to pay severance payments to the Transferred Employees who
elect to terminate their employment with Seller. Therefore, if and to the extent
that Seller pays the severance payments to the Transferred Employees who elect
to terminate their employment with Seller, the Parties agree that the Assumed
Liabilities shall be correspondingly reduced. In such event, within ten (10)
days from the Closing Date, Purchaser shall pay in cash to Seller the amount by
which the Assumed Liabilities were so reduced.
(c) With respect to the Transferred Employees who elect to carry
over their employment into Purchaser, Purchaser shall be responsible for the
severance payments to the extent that such liabilities are included in the
Assumed Liabilities as set forth in Schedule 1.7(a). With
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respect to any other liabilities of Seller relating to those employees, as part
of the Purchase Price adjustment under Section 1.6, the Purchase Price shall be
adjusted to reflect the increased liability for any and all unpaid wages, unused
leave and other rights, if any, that have accrued to such personnel prior to
commencement of their employment with Purchaser, whether or not under any
existing employment, labor or collective bargaining agreement or under any such
agreements entered into after the Closing Date but with retroactive application
extending to before the Closing Date. Purchaser shall be responsible for the
full amount of severance and other benefits of such employees from the
commencement of their employment with Purchaser. Seller represents and warrants
that the amount so adjusted under this Section 4.2(c) will be adequate to fully
satisfy all claims of these employees relating to each of their terms of
employment at Seller or any Affiliates of Seller.
(d) Prior to the Closing, Seller shall deliver to Purchaser a
list indicating the election of each Transferred Employee as described in
Section 4.2(a) above. Further, prior to the Closing, Seller shall obtain
releases from the Transferred Employees who elect to terminate their employment
with Seller and commence new employment relation with Purchaser, to the effect
that they will waive any right, if any, against Purchaser regarding any
severance, unused leave and other obligations or claims arising from their
employment relation with Seller before the Closing ("Employee Releases").
IV.3. Indemnification.
(a) General Indemnification Obligations.
(i) Indemnification by Seller. Seller hereby agrees to
indemnify and hold harmless Purchaser from and against:
(1) any and all Damages arising out of or resulting
from any misrepresentation, breach of warranty or nonfulfillment of any
agreement on the part of Seller contained in this Agreement or in any
certificate, instrument, agreement or other document furnished or to be
furnished to Purchaser pursuant hereto or in connection with the transactions
contemplated hereby;
(2) any and all Damages arising out of or resulting
from any liabilities of Seller of any nature, whether due or to become due,
whether accrued, absolute, contingent or otherwise existing on the Closing Date
or arising out of any transactions entered into, or any state of facts existing,
prior to such date, except the Assumed Liabilities;
(3) any Damages arising out of or resulting from
any claim asserted against Purchaser with respect to Excluded Liabilities;
(4) any and all Damages arising from claims brought
by Transferred Employees who have elected to terminate their employment with
Seller in relation to these employees' terms of employment with Seller or any
Affiliate of Seller, including but not limited to claims resulting from the
increase in any employee's wage during his or her period of employment with
Seller; and
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(5) any secondary Tax liability of the Purchaser
under the National Tax Basic Law and the Local Tax Law for the Taxes of Seller
that have accrued prior to the Closing Date.
(ii) Indemnification by Purchaser. Purchaser hereby agrees
to indemnify and hold harmless Seller from and against:
(1) any Damages arising out of or resulting from
any misrepresentation, breach of warranty or nonfulfillment of any agreement on
the part of Purchaser contained in this Agreement or in any certificate,
instrument, agreement or other document furnished or to be furnished to Seller
in connection with the transactions contemplated hereby;
(2) any Damages resulting from or arising out of
the failure by Purchaser to pay or discharge, or cause to be paid or discharged,
any of the Assumed Liabilities; and
(3) any Damages arising out of or resulting from
any claim asserted against Seller with respect to Assumed Liabilities.
(iii) For purposes of this Agreement, "Damages" means the
aggregate amount of all damages, claims, losses, obligations, liabilities
(including any governmental penalty, fines or punitive damages), deficiencies,
interest, costs and expenses arising out of or relating to a matter and any
actions, judgments, costs and expenses (including reasonable attorneys' fees and
all other expenses incurred in investigating, preparing or defending any
litigation or proceeding, commenced or threatened) incident to such matter or to
the enforcement of this Agreement, including, but not limited to, reasonable
legal fees incurred by the Party entitled to indemnification under this
Agreement.
(b) Indemnification Cap. The maximum aggregate liability of
Seller or Purchaser in respect of all claims shall not exceed the Purchase
Price.
(c) General Indemnification Procedures.
(i) Purchaser and Seller shall cooperate in the defense or
prosecution of any claim, action, suit or proceeding asserted against either of
them by a party other than a Party hereto or an Affiliate of any Party hereto in
respect of which indemnity may be sought hereunder (a "Third Party Claim") and
shall furnish such records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials and appeals, as may be
reasonably requested in connection therewith.
(ii) Except as otherwise provided in this Agreement, no
action or claim for Damages resulting from breaches of the representations and
warranties of Seller or Purchaser shall be brought or made after 24 months
following the Closing, except that such time limitation shall not apply to (i)
claims for misrepresentations or breaches of warranty relating to Section 2.7
(relating to Taxes) which may be asserted until 180 days after the running of
the applicable statute of limitations with respect to the taxable period to
which the particular claims relates, (ii) claims relating to Environmental
Liabilities that have been brought against Purchaser by third parties within
five years following the Closing Date and (iii) any claims which have been the
subject of a written notice from
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Purchaser to Seller prior to the expiration of the applicable period under this
Section 4.3(c)(vi), which notice specifies in reasonable detail the nature of
the claim.
(iii) Notwithstanding anything to the contrary in this
Section 4.3, no limitation or condition of liability provided in this Section
shall apply to the breach of any of the representations and warranties contained
herein if such representation or warranty was made with actual knowledge that it
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements or facts contained therein not misleading.
(iv) If there shall be a judicial determination that any
Party (the "Indemnified Party") seeking indemnification from another Party (the
"Indemnifying Party") under this Agreement is not entitled to such
indemnification in the amount originally claimed by a third party, then the
Indemnifying Party shall be entitled to reimbursement from the Indemnified Party
for its costs and expenses, including reasonable attorneys' fees, incurred in
the defense of the claim for such indemnity pro rata, to the extent that the
amount awarded is less than the amount originally claimed.
(v) Following the receipt by either Party of a complaint
initiating a lawsuit in respect of a Third Party Claim in respect of which
indemnity may be sought from either Party hereunder, within a reasonable time
after such receipt, the receiving Party shall give the other Party notice of
such Third Party Claim.
(vi) Purchaser shall notify Seller and Seller shall notify
Purchaser of any claim for Damages. Such notice shall describe, to the extent
reasonably available, the nature of the claim, the proposed remedy and the cost
to remedy or to satisfy the claim. Purchaser and Seller shall, in good faith,
consult with the other Party and give the other Party a reasonable opportunity
to propose an alternative method to remedy or satisfy the claim. Provided,
however, that if the nature of the claim is such that, in Purchaser and Seller's
judgment, the above notice and opportunity provisions could reasonably be
expected to cause further Damages or would otherwise not be appropriate under
the circumstances, then the prior notice and opportunity shall not be required.
Neither Purchaser nor Seller shall be required in any event to adopt the method
proposed by the other Party. Purchaser and Seller's failure to give the other
Party the prior notice and opportunity or to adopt the method proposed, shall
not bar in any event either Party from asserting an indemnification claim
against the other under and subject to the terms and conditions described in
this Section 4.3, but, in any such claim, the failure of either Party to give
prior notice and opportunity, or to adopt the method proposed shall be
admissible evidence if either Party shall contest the reasonableness of the
amount of the Damages that it may recover from the other Party.
(vii) Any amounts due to Purchaser or its Affiliates as a
result of Seller's indemnification obligations under this Agreement, arising
from the transactions contemplated hereby, arising from any breach of any
representation or warranty of Seller or otherwise may be set off by Purchaser or
any of its affiliates from any amounts owed at any time to Seller or its
affiliates to the extent permissible under Korean law.
IV.4. Confidentiality. From and after the Closing, Seller shall, and
shall cause its Affiliates and representatives to, keep confidential and not
disclose to any other Person or use for his or its own benefit or the benefit of
any other Person any trade secrets or other confidential proprietary
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information in its possession or control regarding Seller or their respective
businesses and operations. The obligations of the Seller under this Section 4.4
shall not apply to information which (i) is or becomes generally available to
the public without breach of the commitment provided for in this Section; or
(ii) is required to be disclosed by law, order or regulation of a court or
tribunal or governmental authority; provided, however, that, in any such case,
Seller shall notify Purchaser as early as reasonably practicable prior to
disclosure to allow Purchaser to take appropriate measures to preserve the
confidentiality of such information.
IV.5. Access to Information. Seller and Purchaser shall reasonably
cooperate with each other after the Closing so that (subject to any limitations
that are reasonably required to preserve any applicable attorney-client
privilege) each Party has access without causing excessive hardship to normal
operations to the business records, contracts and other information existing at
the Closing Date and relating to Seller (whether in the possession of Seller or
Purchaser) (including copies thereof) as is reasonably necessary for the (a)
preparation for or the prosecution or defense of any suit, action, litigation or
administrative, arbitration or other proceeding or investigation (other than one
by or on behalf of a Party to this Agreement) by or against Purchaser or Seller
(b) preparation and filing of any Tax return or election relating to Seller and
any audit by any taxing authority of any returns of Purchaser or Seller relating
thereto, (c) preparation and filing of any other documents required by
governmental or regulatory bodies, (d) transfer of data to Purchaser relating to
the Seller and (e) the preparation of any reports necessary for their financial
reporting purposes including that required in connection with any registration
statement or report filed by the Purchasing Parties with any governmental
agency. The Party requesting such information and assistance shall reimburse the
other Party for all out-of-pocket costs and expenses incurred by such Party in
providing such information and in rendering such assistance. The access to
files, books and records contemplated by this Section 4.5 shall be during normal
business hours and upon not less than two (2) business days prior written
request, and shall identify the scope of the information to be reviewed and
shall be subject to such further reasonable limitations as the Party having
custody or control thereof may impose to preserve the confidentiality of
information contained therein, and shall not extend to material subject to a
claim of privilege unless expressly waived by the Party entitled to claim the
same. The Parties mutually agree to use their commercially reasonable efforts to
cause their independent public accountants to provide each other with any
necessary or required consents in connection with audit of the Business.
IV.6. Cooperation.
(a) With respect to the Excluded Liabilities, Purchaser agrees to
reasonably cooperate with Seller, at no cost to Purchaser, in connection with
Seller's defense of any claims or lawsuit relating thereto, including, without
limitation, making available to Seller for inspection and copying business
records of the Purchaser pertaining to such claims or lawsuits and making
employees of the Purchaser available as needed from time to time for interviews,
trial testimony and similar appearances.
(b) Seller agrees to cooperate with Purchaser in Purchaser's
efforts to obtain the Tax Exemptions, provided that Seller shall not be
obligated to bear any costs in relation to such cooperation.
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IV.7. Transition Services.
(a) During a period of not less than sixty-days from the Closing
Date but less than one-year therefrom (the "Transition Period") to be separately
agreed by the Parties, Seller shall ensure that the Business is continued to be
provided with all of the services and parts and components currently provided to
the Business by Seller or any Person affiliated with Seller including, among
other things, the research and development, accounting, data processing,
materials procurement, electronic data processing, administrative services and
all other such support services as are reasonably required in connection with
the operation of the Business, on the terms and conditions not less favorable
than the terms and conditions pursuant to which such services and parts and
components are now being provided to the Business. Purchaser shall not bear any
costs for the services to be provided by Seller during the Transition Period.
Prior to the Closing, Seller and Purchaser shall enter into a service agreement
("Transition Service Agreement") to ensure such continued services during the
Transition Period and the period thereafter until the Parties shall separately
agree, in such form and substance as attached hereto as Schedule 4.7.
(b) During the Transition Period, Seller shall ensure that all
services currently made available to the employees of the Business including,
without limitation, cafeteria, clinic and human welfare services continue to be
provided to the Transferred Employees on the same terms and conditions as such
services are now being provided to them.
IV.8. Property Taxes. Any and all Taxes, charges, public imposts, fees,
and the like (collectively "Property Taxes") which are assessed on or are
required to be paid by Purchaser for the first time after the Closing but prior
to the end of the calendar year in which the Closing occurs, in relation to, or
as a result of, ownership of the real properties (including land and buildings)
acquired from Seller or the operation of business at the place(s) acquired from
Seller shall be shared by Seller and Purchaser on the basis of the number of
days of their respective holding of the real properties or operation of business
during the calendar year in which Property Taxes are assessed. Property Taxes
shall include, but not be limited to, property tax on buildings, global land tax
on land, business place tax, and any and all surtaxes on these taxes.
IV.9. Repayment of Debt. Seller agrees to use that portion of the
Purchase Price set forth in Section 1.4(b) hereto, together with any of its
funds, necessary to repay in full those obligations of Seller set forth on
Schedule 1.4(b).
IV.10. Assignment of Contracts
(a) Notwithstanding anything to the contrary in this Agreement or
any Ancillary Agreements, this Agreement shall not constitute an agreement to
assign any contract which is to be an Purchased Asset or any benefit arising
thereunder or resulting therefrom, if an attempted assignment thereof, without
the consent of a party thereto other than the Seller, would constitute a breach
or other contravention thereof or in any way adversely affect the rights of
Purchaser, or its designees, thereunder (a "Non-Assignable Contract"). Seller
shall use prior to the Closing all commercially reasonable efforts to obtain the
consent of the other Persons for the assignment thereof to Purchaser or its
designees. If such consent is not obtained prior to the Closing, or if an
attempted assignment thereof would be ineffective or would adversely affect the
rights thereunder so that Purchaser would not receive substantially all such
rights, (x) Seller shall continue to use all
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commercially reasonable efforts to obtain the consent of the other Persons for
the assignment thereof to Purchaser or its designees, and (y) Seller and
Purchaser shall cooperate in a mutually agreeable arrangement under which
Purchaser would obtain the benefits and assume the obligations thereunder in
accordance with Agreement, including subcontracting, sub-licensing or
sub-leasing to Purchaser, or under which Seller would enforce for the benefit of
Purchaser, with Purchaser assuming Seller's obligations, any and all rights of
Seller against a third party thereto. Seller shall promptly pay to Purchaser
when received all monies received by Seller in respect of such Non-Assignable
Contracts or any benefit arising thereunder, except to the extent the same
represents and Excluded Asset. To the extent the benefits therefrom and
obligations thereunder have been provided by alternative arrangements as
provided above, any such Non-Assignable Contract shall be deemed a Purchased
Asset, provided that Purchaser shall not be responsible for any liabilities (i)
arising out of a claim of breach of such Non-Assignable Contract due to the
establishment of the alternative arrangements, or (ii) arising out of such
Non-Assignable Contract as a result of Seller's action without Purchaser's
approval in a manner inconsistent with the alternative arrangements.
(b) In furtherance, and not in limitation of the foregoing
subsection (a), in the event that Seller is unable to obtain any required
consent to the transfer at Closing to the Purchaser of any Non-Assignable
Contract and Seller and Purchaser have failed to agree on alternate arrangements
to an assignment reasonably satisfactory to Purchaser, then (i) Seller shall
remain a party to and shall continue to be bound by such Non-Assignable
Contract, (ii) Purchaser shall pay, perform and discharge fully all of the
obligations of Seller thereunder from and after the Closing Date, upon the terms
and subject to the conditions of such Non-Assignable Contract, (iii) Seller
shall, without further consideration received in respect of such Non-Assignable
Contract on and after the Closing Date, and (vi) Seller shall, without further
consideration therefor, exercise and exploit its rights and options under such
Non-Assignable Contract in the manner and only to the extent directed by
Purchaser. If and when any consent shall be obtained following the Closing Date
with respect to the transfer by Seller to Purchaser of any such Non-Assignable
Contract or such Non-Assignable Contract shall otherwise become assignable
following the Closing Date, Seller shall promptly assign all of its rights and
obligations thereunder to Purchaser, without further consideration therefor, and
Purchaser shall, without further consideration therefor, assume such rights and
obligations, to the fullest extent permitted. The existence of the provisions of
this Section 4.10 shall not reduce or otherwise adversely affect any Party's
ability to enforce any of its rights under this Agreement.
IV.11. Notices of Certain Events. Seller shall promptly notify Purchaser
of (i) any notice or other communication from any person alleging that the
consent of such person is or may be required in connection with the transactions
contemplated by this Agreement, (ii) any notice or other communication from any
governmental agency in connection with the transactions contemplated by this
Agreement, and (iii) any claims commenced or, to Seller's Knowledge, threatened
against, relating to or involving or otherwise affecting the Business or the
Purchased Assets that, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to this Agreement or that relate to the
consummation of the transactions contemplated by this Agreement.
IV.12. Purchaser agrees that it will use its reasonable commercial
efforts to ensure that the Business will continue to be subject to the capacity
allocation procedures set forth in the Packaging and Test Services Agreement
dated January 1, 1998 (the "Packaging Agreement") and shall use reasonable
commercial efforts to ensure that capacity is allocated equitably, consistent
with customer requirements and the terms of the Packaging Agreement, between the
Business, any other
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semiconductor packaging and test facilities held by Purchaser or its Affiliates
and any semiconductor packaging and test facilities owned by Seller, including,
but not limited to, Seller's "K2" plant located in Buchon, Korea.
ARTICLE V
MISCELLANEOUS
V.1. Further Assurances; Cooperation. At and after the Closing, Seller
will execute and deliver such further instruments of conveyance and transfer as
Purchaser may reasonably request to convey and transfer effectively to Purchaser
the Purchased Assets or to put Purchaser in actual possession and control of the
business of the Seller.
V.2. Nature and Survival of Representations. The representations,
warranties, covenants and agreements of Purchaser and Seller contained in this
Agreement, and all statements contained in this Agreement or any Exhibit or
Schedule hereto or any certificate delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby, shall be deemed to
constitute representations, warranties, covenants and agreements of the
respective Party delivering the same. All such representations, warranties,
covenants and agreements shall survive the Closing hereunder subject to Section
4.3 hereof. Except for the representation and warranties expressly contained in
this Agreement, the Parties make no other representations or warranties and no
additional representations and warranties may be implied.
V.3. Notices. All notices, requests, demands elections and other
communications which either Party to this Agreement may desire or be required to
give hereunder shall be in writing and shall be deemed to have been duly given
if delivered personally, by a reputable courier service which requires a
signature upon delivery, by mailing the same by registered or certified first
class mail, postage prepaid, return receipt requested, or by telecopying with
receipt confirmation (followed by a first class mailing of the same) to the
Party to whom the same is so given or made. Such notice, request, demand,
waiver, election or other communication will be deemed to have been given as of
the date so delivered or electronically transmitted or seven days after mailing
thereof.
If to Seller, to: Anam Semiconductor, Inc.
280-8, 0-xx Xxxxxx-xxxx
Xxxxxxxx-xx, Xxxxx 000-000 Xxxxx
Attn: Kyu-Xxxx Xxx
If to Purchaser, to: Amkor Technology, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
or to such other address as such Party shall have specified by notice to the
other Party hereto.
V.4. Successors and Assigns. This Agreement, and all rights and powers
granted hereby, will bind and inure to the benefit of the Parties hereto and
their respective successors and assigns.
V.5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Republic of Korea, without regard to its
conflict of law provisions.
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V.6. Headings. The headings preceding the text of the sections and
subsections hereof are inserted solely for convenience of reference, and shall
not constitute a part of this Agreement, nor shall they affect its meaning,
construction or effect.
V.7. Amendment and Waiver. The Parties may by mutual agreement amend
this Agreement in any respect, and any Party, as to such Party, may (a) extend
the time for the performance of any of the obligations of any other Party, (b)
waive any inaccuracies in representations by any other Party, (c) waive
compliance by any other Party with any of the agreements contained herein and
performance of any obligations by such other Party, and (d) waive the
fulfillment of any condition that is precedent to the performance by such Party
of any of its obligations under this Agreement. To be effective, any such
amendment or waiver must be in writing and be signed by the Party against whom
enforcement of the same is sought.
V.8. Entire Agreement. This Agreement and the Schedules hereto, each of
which is hereby incorporated herein, set forth all of the promises, covenants,
agreements, conditions and undertakings between the Parties hereto with respect
to the subject matter hereof, and supersede all prior and contemporaneous
agreements and understandings, inducements or conditions, express or implied,
oral or written.
V.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
V.10. Governing Language. The English language text of the Agreement
shall prevail over any translation thereof.
V.11. Arbitration.
(a) Any dispute arising under this Agreement which is not settled
after good faith attempts by the Parties to amicably resolve such dispute shall
be resolved by final and binding arbitration. The arbitration shall be held in
Seoul, Korea if the arbitration is brought by Purchaser and Amkor if the
arbitration is brought by Seller in accordance with the Rules of Conciliation
and Arbitration of the International Chamber of Commerce ("ICC Rules") as then
existing and shall be heard and determined by an arbitral tribunal composed of
three (3) arbitrators. Each of the Parties shall appoint one arbitrator each,
and both of such arbitrators shall appoint a third arbitrator who shall serve as
the Chairman of such arbitral tribunal, provided that such third arbitrator is
not a citizen of the U.S.A. or Korea. If either Party fails or decides against
appointing an arbitrator within a period of thirty (30) days of the appointment
of the first arbitrator, or if the arbitrators designated by the Parties fail or
otherwise are unable to appoint the third arbitrator within (30) days of the
appointment of the second arbitrator, then the remaining arbitrator(s) shall be
selected by the President of the International Chamber of Commerce, U.S.A.,
which shall act as the appointing authority.
(b) All arbitration proceedings shall be conducted in the English
language and the arbitral award (the "Award") shall be rendered no later than
six (6) months from the commencement of the arbitration or as otherwise provided
by the ICC Rules, unless otherwise extended by the arbitral tribunal for no more
than an additional six (6) months for reasons that are just and equitable.
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(c) The Parties expressly understand and agree that the Award
shall be the sole, exclusive, final and binding remedy between them regarding
any and all Disputes presented to the arbitral tribunal. Each Party hereby
expressly waives any and all rights that such Party may have with respect to a
judicial review of the Award in the courts of any country. Application shall be
made to any court having jurisdiction over the Party (or its assets) against
whom the Award is rendered for a judicial acceptance of the Award and an order
of enforcement.
(d) Notwithstanding any other provision of this Agreement, either
Party shall be entitled to seek preliminary injunctive relief from any court of
competent jurisdiction pending the final decision or award of the arbitrators.
V.12. Termination. This Agreement may be terminated upon the occurrence
of any of the following events:
(a) the mutual agreement of all the Parties to
terminate the Agreement;
(b) if the Closing does not take place prior to June 1,
1999, provided that the right of any Party to terminate
this Agreement under this Clause (b) shall not be
available to any Party whose failure to fulfil any
obligation under this Agreement has been the cause of,
or resulted in, the failure of the Closing Date to
occur on or before such date;
(c) By any Party upon notice to the other if any of the
conditions set forth in Sections 1.8, 1.9 and 1.10
hereof become impossible to satisfy (other than by
reason of the failure of each Party to fulfill its
obligations under this Agreement); or
(d) by any Party if any court of competent jurisdiction
shall have issued an order, decree or ruling or taken
any other action enjoining or otherwise prohibiting the
transactions contemplated under this Agreement and such
order, decree or ruling or other action has become
final and nonappealable.
V.13. Consequences of Termination. If this Agreement is terminated by
Seller or Purchaser as permitted under Section 5.12 and not as a result of a
breach of a representation or warranty or the failure of any Party to perform
its obligations hereunder, such termination shall be without liability of any
Party. If a Party terminates this Agreement as a result of a breach of a
representation or warranty by the other Party or the failure of the other Party
to perform its obligations hereunder, the non-breaching Party, in addition to
any other legal remedies that may be available, shall be entitled to
reimbursement from the breaching Party for all expenses incurred by the
non-breaching Party in connection with this Agreement and the transactions
contemplated hereby.
V.14. Enforcement and Damages. Purchaser and Seller agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that each of Purchaser and Seller
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement, this being in
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addition to any other remedy, including without limitation damages, to which it
is entitled at law or in equity.
V.15. Severability. If at any time subsequent to the date hereof, any
term or provision of this Agreement shall be determined by any court of
competent jurisdiction to be partially or wholly illegal, void or unenforceable,
such provision shall be of no force and effect to the extent so determined, but
the illegality or unenforceability of such term or provision shall have no
effect upon and shall not impair the legality or enforceability of any other
term or provision of this Agreement.
V.16. Construction. The Parties acknowledge that each Party and its
counsel have reviewed and revised this Agreement and that any rule of
construction to the effect that any ambiguities are to be resolved against the
drafting Party shall not be employed in the interpretation of this Agreement or
any amendments, schedules or exhibits hereto.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed
in their respective names by an officer thereof duly authorized as of the date
first above written.
Amkor Technology, Inc.
By:_____________________________________
Name:
Title:
Anam Semiconductor, Inc.
By:_____________________________________
Name:
Title:
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LIST OF SCHEDULES
Schedule 1.1 Asset List
Schedule 1.4(a) Purchase Price
Schedule 1.4(b) Liabilities of Seller to be Repaid
Schedule 1.4(c) Downward Adjustment
Schedule 1.5 Allocation of Purchase Price
Schedule 1.6 Restrictions on Adjustment
Schedule 1.7(a) List of Assumed Liabilities
Schedule 1.10 Contracts to be Assigned
Schedule 2.6 Changes Since Balance Sheet Date
Schedule 2.7 Taxes
Schedule 2.8 Inventory
Schedule 2.9 Pending Litigations
Schedule 2.10 Contracts
Schedule 2.11 Permits
Schedule 2.12 Environmental Matters
Schedule 2.14 Personal Property Permitted Encumbrances
Schedule 2.15 Real Estate
Schedule 2.16 Intellectual Properties
Schedule 2.16(e) Year 2000 Plan
Schedule 2.17 Transactions With Related Parties
Schedule 2.19 Compensation Arrangements; Officers and Directors
Schedule 2.20 Employees
Schedule 2.22 Insurance
Schedule 4.2 Key Employees
Schedule 4.7 Transition Service Agreement
