EXHIBIT 2.2
EXECUTION COPY
STOCK PURCHASE AGREEMENT
BY AND AMONG
AMKOR TECHNOLOGY, INC.
AND
UNITIVE SEMICONDUCTOR TAIWAN CORPORATION
AND
CERTAIN SHAREHOLDERS OF
UNITIVE SEMICONDUCTOR TAIWAN CORPORATION
JUNE 3, 2004
TABLE OF CONTENTS
ARTICLE I SALE AND TRANSFER OF SHARES; CLOSING 1
Section 1.1 Definitions 1
Section 1.2 Basic Transaction 1
Section 1.3 Purchase Price 2
Section 1.4 Closing 2
Section 1.5 Closing Obligations 2
Section 1.6 Option to Purchase Remaining Shares 3
ARTICLE II REPRESENTATION AND WARRANTIES 5
Section 2.1 Representations and Warranties Regarding the Company 5
Section 2.2 Representations and Warranties Regarding the Shares 5
Section 2.3 Representations and Warranties Regarding the Purchaser 5
ARTICLE III CONDITIONS PRECEDENT TO THE CLOSING 5
Section 3.1 Conditions Precedent to the Purchaser's Obligation to Close 5
Section 3.2 Conditions Precedent to the Company's and Seller' Obligation to Close 5
ARTICLE IV POST-CLOSING AGREEMENTS OF THE SELLERS AND THE COMPANY 6
Section 4.1 Election of New Directors and Supervisors 6
Section 4.2 Transition Matters 6
ARTICLE V TERMINATION 6
Section 5.1 Termination Events 6
Section 5.2 Effect of Termination 7
ARTICLE VI INDEMNIFICATION; REMEDIES 7
Section 6.1 Survival; Right to Indemnification Not Affected by Knowledge 7
Section 6.2 Indemnification and Payment of Damages by Sellers 7
Section 6.3 Indemnification and Payment of Damages by the Purchaser 8
Section 6.4 Time Limitations 8
Section 6.5 Limitation on Amount; Escrow of Portion of Remaining Shares 9
Section 6.6 Procedure for Indemnification-Third Party Claims 10
Section 6.7 Procedure for Indemnification-Other Claims 12
ARTICLE VII GENERAL PROVISIONS 12
Section 7.1 General Provisions 12
SCHEDULES AND EXHIBITS
SCHEDULES
A. List of Sellers
B. Definitions
C. Representations and Warranties Regarding The Company
D. Representations and Warranties Regarding The Shares
E. Representations and Warranties of The Purchaser
F. Conditions Precedent to The Purchaser's Obligation to Close
G. Conditions Precedent to The Company's and The Sellers' Obligation to Close
H. General Provisions
I. Pre-Closing Covenants of the Company
J. Company Disclosure Schedule
X. Xxxxxxx' Disclosure Schedule
L. Purchaser Disclosure Schedule
EXHIBITS
Exhibit A Amended Joint Venture Agreement
Exhibit F.4(a) Main Points of Opinion of Counsel to Company
Exhibit G.4(a) Main Points of Opinion of Counsel to the Purchaser
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is entered into as of
this 3rd day of June, 2004, by and among UNITIVE SEMICONDUCTOR TAIWAN
CORPORATION, a company limited by shares organized pursuant to the laws of the
Republic of China (the "Company"), certain of the shareholders of the Company as
listed in Schedule A (the "Sellers"), represented by XXX X. XXXXX and XXXXXX
XXXX, jointly or singly, each as a duly appointed Attorney-in-fact of the
Sellers (each a "Sellers' Representative"), and AMKOR TECHNOLOGY INC., a
Delaware, U.S.A. corporation (the "Purchaser"). The Company, the Sellers and the
Purchaser are sometimes singularly referred to herein as a "Party," and
collectively as the "Parties."
RECITALS
WHEREAS, the Company is a world-class wafer-level packaging foundry
service house located in Taiwan;
WHEREAS, the Sellers desire to sell to the Purchaser, and the
Purchaser desires to purchase from the Sellers, (a) Fifty-four Million One
Hundred Twenty-eight Thousand (54,128,000) shares of common stock, par value
NT$10 per share of the Company (the "Shares") (representing 51% of all of the
Shares of the Company held by the Sellers collectively and equivalent to 41.64%
of the issued and outstanding Shares of the Company) if Unitive International
Limited ("UIL") sells all of its Shares to the Purchaser or (b) Sixty-six
Million Three Hundred Thousand (66,300,000) Shares (representing 62.47% of all
of the Shares of the Company held by the Sellers collectively and equivalent to
51% of the issued and outstanding Shares of the Company), if UIL does not sell
all of its Shares to the Purchaser, for the consideration and on the terms set
forth in this Agreement;
WHEREAS, the Company, the Sellers and the Purchaser desire to
promote their mutual interests by entering into this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, covenants, representations and warranties made herein, the
Parties agree as follows:
ARTICLE I
SALE AND TRANSFER OF SHARES; CLOSING
SECTION 1.1 DEFINITIONS. The terms defined in Schedule B hereto are
incorporated by reference herein and constitute part of this
Agreement.
SECTION 1.2 BASIC TRANSACTION. On and subject to the terms and conditions of
this Agreement, at the Closing, (a) the Purchaser agrees to purchase
from each Seller and each Seller agrees to sell to the Purchaser the
number of Shares specified by each Seller's name in Schedule A free
and clear of all Encumbrances (the "Basic Transaction") and (b) each
Seller further grants to the Purchaser an option to purchase its
remaining Shares on the terms specified in Section 1.6 of this
Agreement (the "Option"). The exact number of Shares to be purchased
shall be determined immediately prior to the Closing. If UIL sells
all of its Shares to the Purchaser, then the Purchaser shall
purchase a total of Fifty-four Million One Hundred Twenty-eight
Thousand (54,128,000) Shares (representing 51% of all of the Shares
of the Company held by the Sellers collectively and equivalent to
41.64% of the issued and outstanding Shares of the Company) from the
Sellers at the Closing; otherwise, if UIL does not sell all of its
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Shares to the Purchaser, the Purchaser shall purchase a total of
Sixty-six Million Three Hundred Thousand (66,300,000) Shares
(representing 62.47% of all of the Shares of the Company held by the
Sellers collectively and equivalent to 51% of the issued and
outstanding Shares of the Company) from the Sellers at the Closing.
SECTION 1.3 PURCHASE PRICE. The purchase price will be Eleven and one-half
New Taiwan Dollars (NT$ 11.50) per Share (the "Purchase Price"), to
be paid in cash and to be delivered by the Purchaser to the Sellers
pursuant to Section 1.5(b)(ii) at the Closing.
SECTION 1.4 CLOSING. The closing of the Basic Transaction (the "Closing")
shall take place at the offices of the Company on June 18, 2004 or
at such other time and place as the Parties may agree, but in no
event later than July 2, 2004 (U.S. west coast time); provided,
however, that if a Force Majeur prevents the Parties from holding
the Closing by such date, this date shall be automatically extended
by ten (10) days. Subject to the provisions of Article V, failure to
consummate the purchase and sale provided for in this Agreement on
the date and time and at the place determined pursuant to this
Section 1.4 will not result in the termination of this Agreement and
will not relieve any Party of any obligation under this Agreement.
SECTION 1.5 CLOSING OBLIGATIONS. At the Closing,
(a) The Sellers' Representative will deliver to the Purchaser:
(i) subject to Section F.5, all of the Share Certificates
owned by each Seller, duly and properly chopped and
endorsed for transfer to the Purchaser (depending on
whether UIL sells all of its Shares to the Purchaser,
41.64% or 62.47% of which shall be transferred to the
Purchaser at the Closing, a portion to be held in escrow
in accordance with Section 6.5 and the remainder to be
held in escrow pending the Purchaser's exercise of
Option); and
(ii) the various opinions, certificates, instruments and
other documents referred to in Schedule F to this
Agreement; and
(b) The Purchaser will deliver to the Sellers:
(i) cash in the amount of the Purchase Price (the "Cash
Payment") in immediately available funds by wire
transfer to the following escrow account to be
administered by the Escrow Agent:
Bank Name: The Farmers Bank of China Foreign
Department
Account Number: 08009131312
Account Name: Pamir Law Firm
Bank Address: 00 Xxxxxxx Xxxx Xxxx, Xxxxxxx 0,
Xxxxxx 000, Xxxxxx
Telephone No.: x000-0-0000-0000
Swift Code: XXXXXXXX
Through: JPMorgan Chase Bank, New York
(XXXXXX00)
Farmers Bank Account No.
0011863263
and
(ii) the various certificates, instruments and other
documents referred to in Schedule G to this Agreement.
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(c) The Escrow Agent shall pay all applicable securities
transaction taxes out of the Cash Payment not later than one
(1) business day after the Closing Date and provide the
appropriate tax payment receipts to the applicable parties as
soon as practicable thereafter. The Escrow Agent shall also
pay all Sellers' Transaction Fees out of the Cash Payment.
After such payments are made, the Escrow Agent shall pay to
each Seller his/her/its portion of the Cash Payment (minus
applicable securities transaction taxes and his/her/its pro
rata portion of the Sellers' Transaction Fees) to the bank
accounts designated by each Seller in his/her/its Seller POA.
(d) If on the Closing Date, less than all of the shareholders of
the Company have become parties to this Agreement (for failure
to return a properly executed Seller POAs), the Purchaser
shall deposit into an escrow account an amount of cash in the
amount necessary to pay the Purchase Price to these
shareholders. As soon as practicable after properly executed
Seller POAs are received, upon the instruction of the
Purchaser after the Purchaser has obtained requisite foreign
investment approval, the Purchaser, the Company and the Escrow
Agent shall distribute the Purchase Price to such shareholders
in accordance with Section 1.5(c).
SECTION 1.6 OPTION TO PURCHASE REMAINING SHARES. Each Seller hereby grants to
the Purchaser an option to purchase all, but not less than all, of
its remaining Shares it holds in the Company immediately prior to
the Closing (collectively hereinafter referred to as the "Remaining
Shares") pursuant to the terms and conditions set forth herein. At
the Closing, each Seller shall have delivered Share Certificates
representing the Remaining Shares, duly and properly chopped and
endorsed for transfer to the Purchaser, which Share Certificates
shall be deposited into escrow in accordance with Section 6.5 and
the remainder to be held in escrow pending the Purchaser's exercise
of Option.
(a) The Purchaser may exercise the Option any time before the date
eighteen (18) calendar months after the Closing Date (the
"Exercise Period") at its sole discretion, provided, however,
that the Purchaser shall provide to the Sellers'
Representative written notice of its intention to exercise the
Option five (5) business days prior to the Exercise Date, and
the Sellers' Representative shall so inform each Seller; and
the Purchaser must exercise the Option within the Exercise
Period upon the earliest of:
(i) The date not later than sixty (60) days after the
Purchaser's receipt of an audited quarterly financial
report prepared by the Company Accountants showing that
the Company has positive or break-even operating income
for two (2) consecutive quarters in accordance with
R.O.C. GAAP; or
(ii) When both of the following events have occurred: (A) the
Company has successfully been qualified by IBM for
production and (B) for two (2) consecutive calendar
months, 2.25x + y >= 8,000 wafers per month, where x
represents the number of twelve-inch wafers serviced by
the Company during one calendar month and y represents
the number of eight-inch wafers serviced by the Company
during one calendar month.
(b) The price per Share at which the Purchaser shall exercise the
Option (the "Exercise Price") shall be comprised of a price
per Share and an earn-out payment, both calculated as follows:
(i) The price per Share component of the Exercise Price (the
"Exercise Price Per Share") shall be according to the
following chart:
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Option Indebtedness of the
Company at Time of Exercise
(in Millions NTD)
---------------------------- Exercise Price Per Share
Minimum Maximum (NTD)
--------------------------------------------------------------------------------
0 1,250 11.75
--------------------------------------------------------------------------------
Over 1,250 Reduction of NTD 0.37
from NTD 11.75
for every NTD 34 million
of Option Indebtedness above NTD 1,250,000,000
--------------------------------------------------------------------------------
and
(ii) The earn-out component of the Exercise Price (the
"Exercise Earn-out") shall equal 14% of the Company's
EBTDA one (1) calendar year after the first day of the
next calendar month after the date the Purchaser
exercises the Option (the "Exercise Date").
(c) The Purchaser shall exercise the Option by providing notice in
writing to the Sellers' Representative of its intention to
exercise the Option not later than five (5) business days
prior to the Exercise Date and after the Purchaser has
obtained requisite foreign investment approval, and the
Sellers' Representative shall so inform each Seller.
Thereafter, the Sellers' Representative shall promptly use
Reasonable Efforts to take all necessary actions to allow the
Purchaser to complete its exercise of the Option.
(d) On the Exercise Date, after the Purchaser has taken possession
of the Share Certificates representing the Remaining Shares,
in accordance with the escrow arrangements mutually agreed
upon with the Escrow Agent, and has completed all necessary
share transfer procedures, the Purchaser shall authorize the
Escrow Agent to distribute the Exercise Price Per Share to the
Sellers, subject to withholdings and deductions specified
below.
(e) The Company Accountants shall calculate the Option
Indebtedness and resulting Exercise Price Per Share based on
the closing balance sheet of the month prior to the Exercise
Date (which balance sheet shall have been certified by the
Company Accountants). The Exercise Price Per Share shall be
payable to the Sellers on the Exercise Date, minus (A) any
Sellers' Transaction Fees associated with the Purchaser's
exercise of the Option, (B) the applicable securities
transaction tax payable in connection with the transfer of the
Remaining Shares, calculated on the Exercise Price Per Share
and the Purchaser's good faith estimate of the Exercise
Earn-out, and (C) tax liabilities incurred by the Company as a
result of any of the items listed in Section C.12(e), if any
(provided that with respect to any deductions for such tax
liabilities, the Parties have agreed that such deductions
shall be considered Damages subject to the Indemnification
Limit, but the Purchaser may make such deductions directly
without following the procedures specified in Article 6).
(f) The Company Accountants shall have thirty (30) days to
calculate and certify the Exercise Earn-out after the date one
year after the Exercise Date. The Exercise Earn-out shall be
paid to the Sellers not later than fifteen (15) calendar days
after the Company Accountants certify the calculation of the
Exercise Earn-out, at which time
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each Seller shall be paid its pro rata portion (based on the
number of Remaining Shares it sold to the Purchaser on the
Exercise Date) of the Exercise Earn-out (less (A) any Sellers'
Transaction Fees then applicable, (B) any withholdings in
accordance with applicable Legal Requirements and (C) tax
liabilities incurred by the Company as a result of any of the
items listed in Section C.12(e), if any (provided that with
respect to any deductions for such tax liabilities, the
Parties have agreed that such deductions shall be considered
Damages subject to the Indemnification Limit, but the
Purchaser may make such deductions directly without following
the procedures specified in Article 6)).
(g) In the event that the Purchaser does not exercise the Option
within the Option Period, the Purchaser shall cause the Escrow
Agent to release from escrow all the Share Certificates
representing the Remaining Shares back to the Sellers, who may
then cancel their endorsements for transfer on the back of
each Share Certificate; provided, however, that any Share
Certificates representing Remaining Shares held in escrow
pursuant to Section 6.5 shall remain in escrow subject to the
provisions of Section 6.5 until the date two (2) years from
the Closing Date.
ARTICLE II
REPRESENTATION AND WARRANTIES
SECTION 2.1 REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY. The Company
and the Sellers' make the representations and warranties regarding
the Company set forth in Schedule C hereto, all of which are
incorporated by reference herein and constitute part of this
Agreement.
SECTION 2.2 REPRESENTATIONS AND WARRANTIES REGARDING THE SHARES. Each of the
Sellers makes the representations and warranties regarding the
Shares set forth in Schedule D hereto, all of which are incorporated
herein by reference and constitute part of this Agreement.
SECTION 2.3 REPRESENTATIONS AND WARRANTIES REGARDING THE PURCHASER. The
Purchaser makes the representations and warranties set forth in
Schedule E hereto, all of which are incorporated herein by reference
and constitute part of this Agreement.
ARTICLE III
CONDITIONS PRECEDENT TO THE CLOSING
SECTION 3.1 CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATION TO CLOSE. The
obligations of the Purchaser to purchase the Shares and consummate
the Basic Transaction are set forth in Schedule F hereto, all of
which are incorporated herein by reference and constitute part of
this Agreement, and the Company and the Sellers shall have complied
with the pre-closing covenants set forth in Schedule I hereto, all
of which are incorporated herein by reference and constitute part of
this Agreement.
SECTION 3.2 CONDITIONS PRECEDENT TO THE COMPANY'S AND SELLER' OBLIGATION TO
CLOSE. The obligations of the Company and the Sellers to sell the
Shares and consummate the Basic Transaction are set forth in
Schedule G hereto, all of which are incorporated herein by reference
and constitute part of this Agreement.
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ARTICLE IV
POST-CLOSING AGREEMENTS OF THE SELLERS AND THE COMPANY
The Company and the Sellers covenant and agree with the Purchaser
that, following the Closing of the Basic Transaction, the Company will comply
with all the covenants and agreements of this Article IV, except to the extent
(i) the Purchaser may otherwise consent in writing or (ii) otherwise required by
applicable Legal Requirements.
SECTION 4.1 ELECTION OF NEW DIRECTORS AND SUPERVISORS. Not later than the first
(1st) business day after the Closing Date, the Chairman of the
Company shall send a notice to each director of the Company to
convene a Board of Directors meeting for the purpose of convening a
meeting as of shareholders of the Company to re-elect the directors
and supervisors of the Company in accordance with the Amended Joint
Venture Agreement. Such notice shall have been prepared and approved
by the Purchaser before the Closing Date.
SECTION 4.2 TRANSITION MATTERS. The Company and the Sellers who comprise of
management of the Company shall, as soon as practicable after the
Closing, cooperate with the Purchaser to complete all necessary
amendments to the Company's registration and records with
Governmental Bodies, changes to the signatures and chops used on the
Company's bank accounts and any other transition matters deemed
necessary by the Purchaser arising as a result of the Basic
Transaction and the obligations set forth in the Amended Joint
Venture Agreement, including authorizing the use of all necessary
chops used by the Company immediately prior to the Closing.
ARTICLE V
TERMINATION
Section 5.1 TERMINATION EVENTS. This Agreement may be terminated at any time
prior to Closing:
(a) by the Purchaser, the Sellers' Representative and the Company
by mutual written consent at any time prior to the Closing;
(b) by the Purchaser, the Sellers' Representative or the Company
if the Closing shall not have been consummated on or before
July 2, 2004 (U.S. west coast time); provided, however, that
if a Force Majeur prevents the Parties from holding the
Closing by such date, this date shall be automatically
extended by ten (10) days;
(c) by the Company, the Sellers' Representative or the Purchaser
if there shall be any law or regulation that makes
consummation of the Basic Transaction or the exercise of the
Option illegal or otherwise prohibited or if consummation of
the Basic Transaction or the exercise of the Option would
violate any nonappealable final order, decree or judgment of
any court or governmental body having competent jurisdiction;
(d) by the Purchaser by giving written notice to the Company at
any time prior to the Closing (i) in the event the Company has
breached any representation, warranty, or covenant contained
in this Agreement in any material respect, the Purchaser has
notified the Company of the breach, and the breach has
continued without cure for a period of thirty (30) days after
the notice of breach or (ii) if events occur which render
impossible compliance with one or more conditions set forth in
Schedule F and such conditions are not waived by the
Purchaser; provided that such events did not result from any
action or omission by the Purchaser which was within its
control and which
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the Purchaser was not expressly permitted to take or omit by
the terms of this Agreement; and
(e) by the Company by giving written notice to the Purchaser at
any time prior to the Closing (i) in the event the Purchaser
has breached any representation, warranty, or covenant
contained in this Agreement in any material respect, the
Company has notified the Purchaser of the breach, and the
breach has continued without cure for a period of (thirty) 30
days after the notice of breach or (ii) if events occur which
render impossible compliance with one or more conditions set
forth in Schedule G, and such conditions are not waived by the
Company; provided that such events did not result from any
action or omission by the Company which was within the control
of the Company and which the Company was not expressly
permitted to take or omit by the terms of this Agreement.
Section 5.2 EFFECT OF TERMINATION. Each Party's right of termination under
Section 5.1 is in addition to any other rights it may have under
this Agreement or otherwise, and the exercise of a right of
termination will not be an election of remedies. If this Agreement
is terminated pursuant to Section 5.1, all further obligations of
the Parties under this Agreement will terminate, except that the
obligations in Section H.3 will survive; provided, however, that if
this Agreement is terminated by a party because of the Breach of
this Agreement by the other party or because one or more of the
conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's failure
to comply with its obligations under this Agreement, the terminating
party's right to pursue all legal remedies will survive such
termination unimpaired.
ARTICLE VI
INDEMNIFICATION; REMEDIES
Section 6.1 SURVIVAL; RIGHT TO INDEMNIFICATION. The representations, warranties,
covenants, and obligations of the Company and the Sellers in this
Agreement, the Company Disclosure Schedule, the Sellers' Disclosure
Schedule, the supplements to the Company Disclosure Schedule and the
Sellers' Disclosure Schedule and any other certificate or document
delivered by the Company and the Sellers pursuant to this Agreement
will survive the Closing. The Purchaser's right to indemnification,
payment of Damages or other remedy based on such representations,
warranties, covenants, and obligations shall be limited to the
extent that the Purchaser had any Actual Knowledge prior to the
execution and delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of or compliance with, any
such representation, warranty, covenant, or obligation. The written
waiver by the Purchaser of any condition based on the accuracy of
any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will be deemed to limit
the Purchaser's right to indemnification, payment of Damages, or
other remedy based on the specific representations, warranties,
covenants, and obligations so waived.
Section 6.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY THE SELLERS. The Sellers
will, jointly and severally, indemnify and hold harmless the
Purchaser and its Representatives, stockholders, controlling
persons, and affiliates (collectively, the "Indemnified Persons")
for, and will pay to the Indemnified Persons the amount of, any
loss, liability, claim, damage (including incidental and
consequential damages), expense (including costs of investigation
and defense and reasonable attorneys' fees) or diminution of value,
whether or not involving a
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third-party claim (collectively, "Damages") (to the extent that the
Company's existing insurance policies do not cover such Damages),
arising, directly or indirectly, from or in connection with:
(a) any Breach of any representation or warranty or covenant or
obligation made by the Company or the Sellers in this
Agreement, the Company Disclosure Schedule, or any other
certificate or document delivered by the Company pursuant to
this Agreement, except as specifically covered in subsections
(b), (c) and (d) below;
(b) any Tax in excess of amounts accrued on the Balance Sheet or
disclosed in Section C.12(a) of the Company Disclosure
Schedule (without giving effect to any supplement to the
Company Disclosure Schedule), any and all liabilities,
interest and penalties resulting from Tax matters arising
before the Closing Date and any breach of the representation
and warranty set forth in Section C.12;
(c) any claim brought against the Company or the Purchaser arising
in connection with the operations of the Company prior to the
Closing Date, including but not limited to the matters covered
by Sections X.0, X.00, X.00, X.00, X.00, X.00, X.00, X.00,
X.00 and C.25;
(d) any claim by any Person for brokerage or finder's fees or
commissions or similar payments other than as provided in
Section C.23 of the Company Disclosure Schedule based upon any
agreement or understanding alleged to have been made by any
such Person with the Company (or any Person acting on their
behalf) in connection with the Basic Transaction.
The remedies provided in this Section 6.2 will not be exclusive of
or limit any other remedies that may be available to the Purchaser
or the other Indemnified Persons.
Section 6.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY THE PURCHASER. The
Purchaser will indemnify and hold harmless the Sellers, and will pay
to the Sellers the amount of any Damages arising, directly or
indirectly, from or in connection with (a) any Breach of any
representation or warranty made by the Purchaser in this Agreement
or in any certificate delivered by the Purchaser pursuant to this
Agreement, (b) any Breach by the Purchaser of any covenant or
obligation of the Purchaser in this Agreement, or (c) any claim by
any Person for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to have
been made by such Person with the Purchaser (or any Person acting on
its behalf) in connection with the Basic Transaction.
The remedies provided in this Section 6.3 will not be exclusive of
or limit any other remedies that may be available to the Sellers.
SECTION 6.4 TIME LIMITATIONS.
(a) If the Closing occurs, in order for the Sellers to have any
liability (for indemnification or otherwise) with respect to
any representation or warranty, or covenant or obligation to
be performed and complied with prior to the Closing Date
(excepting those in Sections X.0, X.0, X.0 xxx X.00), xxx
Xxxxxxxxx must notify the Company of a claim specifying the
factual basis of that claim in reasonable detail to the extent
then known by the Purchaser on or before the following
limitations periods (each, a "Time Limitation Period"):
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(i) With respect to claims under Section 6.2(a), not later
than one (1) year after the Closing Date;
(ii) With respect to claims under Section 6.2(b), not later
than last day of that a Governmental Body may pursue the
Company for such matters under applicable Legal
Requirements;
(iii) With respect to claims under Section 6.2(c), not later
than two (2) years after the Closing Date; and
(iv) With respect to claims under Section 6.2(d), not later
than six (6) months after the Closing Date.
(b) There shall be no such notification requirement as to any
claim with respect to Sections X.0, X.0, X.0 xxx X.00, or as
to any claim for indemnification or reimbursement based on a
covenant or agreement to be performed by the Company after the
Closing Date.
(c) If the Closing occurs, in order for the Purchaser to have any
liability (for indemnification or otherwise) with respect to
any representation or warranty, or covenant or obligation to
be performed and complied with prior to the Closing Date, the
Sellers must notify the Purchaser of a claim specifying the
factual basis of the claim in reasonable detail to the extent
then known by the Sellers on or before the first (1st)
anniversary following the Closing Date, with respect to claims
under Sections 6.3(a) and 6.3(b), and on or before the date
six (6) months from the Closing Date, with respect to claims
under Section 6.3(c).
SECTION 6.5 LIMITATION ON AMOUNT; ESCROW OF PORTION OF REMAINING SHARES.
(a) The indemnifying party will have no liability (for
indemnification or otherwise) with respect to the matters
described in this Article VI until the total of all Damages
with respect to such matters exceeds NT$15,000,000 (the
"Indemnification Basket"), and then only for the amount by
which such Damages exceed the Indemnification Basket. However,
the Indemnification Basket will not apply to (i) any Breach of
the indemnifying persons' representations and warranties of
which either the indemnifying person had Actual Knowledge at
any time prior to the date on which such representation or
warranty is made, (ii) any intentional Breach by the
indemnifying party of any covenant or obligation, or (iii) a
breach of the representations and warranties contained in
Section C.12(e), and in such cases, the party seeking
indemnification may seek indemnification without satisfying
the Indemnification Basket.
(b) In no event shall the indemnifying party's aggregate total
liability (for indemnification or otherwise) under this
Section 6 exceed US$7 million (the "Indemnification Limit").
Each Seller agrees to allow the Purchaser to deposit a number
of Share Certificates representing his/her/its Remaining
Shares equal to such Seller's pro rata portion of the total
number of Shares equal to the Indemnification Limit
(calculated using the Purchase Price as defined in Section 1.3
hereof as the value of such Remaining Shares) into an escrow
account designated by the Purchaser and agreed by the Sellers
pursuant to Section F6 to be used to pay any Damages to which
the Indemnified Persons may be entitled under this Article 6.
Such Share Certificates shall remain in the escrow account
until the date two (2) years from the Closing Date. In the
event that the Purchaser exercises the Option prior to such
date, the Sellers agree that the Purchaser
-9-
may withhold from the Exercise Price an amount equal to the
Indemnification Limit to be deposited into an escrow account
until the date two (2) years from the Closing Date. In the
event that any Damages are to be deducted from the Remaining
Shares or the withheld Exercise Price, they shall be deducted
from each Seller pro rata (and in the case of Share
Certificates, as close to pro rata as reasonably possible).
(c) In the event that the Purchaser does not exercise the Option
within the Option Period, the Purchaser shall cause the Escrow
Agent to release from escrow all the Share Certificates
representing the Remaining Shares back to the Sellers, who may
then cancel their endorsements for transfer on the back of
each Share Certificate; provided, however, that any Share
Certificates representing Remaining Shares held in escrow for
purpose of securing the Indemnification Limit pursuant to
Section 6.5(b) shall remain in escrow subject to the
provisions of Section 6.5(b) until the date two (2) years from
the Closing Date.
(d) After the date two (2) years from the Closing Date, if there
are any Share Certificates remaining in said escrow account
(or any portion of the withheld Exercise Price remaining in
said escrow account), they will be returned to the Sellers;
provided, however, that if the date two (2) years from the
Closing Date has past and there is still an amount of Damages
that is the subject of an indemnification claim that has not
yet been conclusively resolved, none of the Share Certificates
(or no portion of the withheld Exercise Price) shall be
returned until the Purchaser is satisfied that all
indemnification claims have been paid and any disputes with
respect thereto have been conclusively resolved.
SECTION 6.6 PROCEDURE FOR INDEMNIFICATION-THIRD PARTY CLAIMS. Subject to the
provisions of Sections 6.4 and 6.5 hereof:
(a) Promptly after receipt by an indemnified party under Section
6.2 or 6.3 of notice of the commencement of any Proceeding
against it by a third party, such indemnified party will, if a
claim is to be made against an indemnifying party under such
Section, give notice to the indemnifying party of the
commencement of such claim, but the failure to notify the
indemnifying party will not relieve the indemnifying party of
any liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the
indemnifying party's failure to give such notice; provided,
however, that if the indemnified party intentionally failed to
give such notice, the indemnifying party will be deemed to
have been prejudiced by the amount of attorneys' fees incurred
with respect thereto through the date notice is received by
the indemnifying party and the indemnifying party will not be
required to indemnify the indemnified party for such
attorneys' fees.
(b) If any Proceeding referred to in Section 6.6(a) is brought
against an indemnified party and it gives notice to the
indemnifying party of the commencement of such Proceeding, the
indemnifying party will be entitled to participate in such
Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint
representation would be inappropriate, or (ii) the
indemnifying party fails to provide reasonable assurance to
the indemnified party of its financial capacity to defend such
Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with
counsel reasonably satisfactory to the indemnified party and,
after notice from the indemnifying party to the indemnified
party of its election to assume
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the defense of such Proceeding, the indemnifying party will
not, as long as it diligently conducts such defense, be liable
to the indemnified party under this Article VI for any fees of
other counsel or any other expenses with respect to the
defense of such Proceeding, in each case subsequently incurred
by the indemnified party in connection with the defense of
such Proceeding, other than reasonable costs of investigation
and monitoring of defense of such Proceeding. If the
indemnifying party assumes the defense of a Proceeding, (i) it
will be conclusively established for purposes of this
Agreement that the claims made in that Proceeding are within
the scope of and subject to indemnification; (ii) no
compromise or settlement of such claims may be effected by the
indemnifying party without the indemnified party's consent
unless (A) there is no finding or admission of any violation
of Legal Requirements or any violation of the rights of any
Person and no effect on any other claims that may be made
against the indemnified party, and (B) the sole relief
provided is monetary damages that are paid in full by the
indemnifying party; and (iii) the indemnified party will have
no liability with respect to any compromise or settlement of
such claims effected without its consent. If notice is given
to an indemnifying party of the commencement of any Proceeding
and the indemnifying party does not, within ten (10) days
after the indemnified party's notice is given, give notice to
the indemnified party of its election to assume the defense of
such Proceeding, the indemnifying party will be bound by any
determination made in such Proceeding or any compromise or
settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable
probability that a Proceeding may adversely affect it or its
Affiliates other than as a result of monetary damages for
which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the
indemnifying party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the indemnifying
party will not be bound by any determination of a Proceeding
so defended or any compromise or settlement effected without
its consent (which may not be unreasonably withheld).
(d) The Sellers hereby consent to the non-exclusive jurisdiction
of any court in which a Proceeding is brought against any
Indemnified Person for purposes of any claim that an
Indemnified Person may have under this Agreement with respect
to such Proceeding or the matters alleged therein, and agrees
that process may be served on it with respect to such a claim
anywhere in the world.
(e) After such a Proceeding brought by a third party has concluded
and one Party seeks to claim indemnification from the other
Party, the Party seeking indemnification shall notify the
other Party of the claim in writing. After the notice is
given, the Parties shall discuss in good faith or otherwise
resolve the claim. If after thirty (30) days, the Parties are
not able to resolve the claim, either Party may submit the
claim for final and binding arbitration pursuant to Section
H.5. Where the Purchaser is the Party seeking indemnification,
if the Parties reach a resolution or the Purchaser prevails in
arbitration, the Purchaser shall be entitled to satisfy its
claim for Damages from the Share Certificates representing
Remaining Shares (calculated using the Purchase Price as the
value of such Remaining Shares), or the withheld Exercise
Price, in accordance with Section 6.5 by taking possession of
the appropriate number of Share Certificates representing
Remaining Shares or cash from the withheld Exercise Price, as
the case may be. If the Sellers are the Party seeking
indemnification, if the Parties reach a resolution or the
Sellers prevail in arbitration, the Sellers shall be entitled
to satisfy
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their claim for Damages as agreed by the Parties or as decided
by the Tribunal, as the case may be.
Section 6.7 PROCEDURE FOR INDEMNIFICATION-OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim may
be asserted by notice to the Party from whom indemnification is
sought. The notice must specify the factual basis of the claim in
reasonable detail to the extent known by the Party seeking
indemnification. After the notice is given, the Parties shall
discuss in good faith or otherwise resolve the claim. If after
thirty (30) days, the Parties are not able to resolve the claim,
either Party may submit the claim for final and binding arbitration
pursuant to Section H.5. Where the Purchaser is the Party seeking
indemnification, if the Parties reach a resolution or the Purchaser
prevails in arbitration, the Purchaser shall be entitled to satisfy
its claim for Damages from the Share Certificates representing
Remaining Shares (calculated using the Purchase Price as the value
of such Remaining Shares), or the withheld Exercise Price, in
accordance with Section 6.5 by taking possession of the appropriate
number of Share Certificates representing Remaining Shares or cash
from the withheld Exercise Price, as the case may be. If the Sellers
are the Party seeking indemnification, if the Parties reach a
resolution or the Sellers prevail in arbitration, the Sellers shall
be entitled to satisfy their claim for Damages as agreed by the
Parties or as decided by the Tribunal, as the case may be.
ARTICLE VII
GENERAL PROVISIONS
SECTION 7.1 GENERAL PROVISIONS. The general provisions set forth in Schedule G
hereto are incorporated herein by reference and constitute part of
this Agreement
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Parties have executed and delivered this Stock
Purchase Agreement as of the date first written above.
COMPANY:
UNITIVE SEMICONDUCTOR TAIWAN CORPORATION
By: /s/ Xxx X. Xxxxx 6/3 2004
-----------------------------------
Name: Xxx X. Xxxxx
Its: Chairman
PURCHASER:
AMKOR TECHNOLOGY, INC.
By: /s/ X. Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Its: Executive Vice President
SELLERS' REPRESENTATIVES
ON BEHALF OF EACH SELLER:
By: /s/ Xxx X. Xxxxx
------------------------------------
Name: Ray. X. Xxxxx
Their: Attorney-in-fact
By: /s/ Xxxxxx Xxxx 6/3/04
------------------------------------
Name: Xxxxxx Xxxx
Their: Attorney-in-fact
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SCHEDULE B
DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Schedule B:
"Affiliate" shall mean a Person that directly, or indirectly, through one
or more intermediaries, controls or is controlled by, or is under common control
with any Person or Persons.
"Actual Knowledge" shall mean with respect to a particular fact or matter,
(a) in the case of an individual, that such individual is actually aware of such
fact or matter; or, (b) in the case of a Person that is not an individual, that
an individual who is serving, or who has at any time served, as a director,
officer or partner of such Person (or in any similar capacity), or as an
employee having responsibility for such facts or matters, has, or at any time
had, actual knowledge of such fact or matter.
"Amended Joint Venture Agreement" shall mean the Amended Joint Venture
Agreement in a form attached hereto as Exhibit A to be executed and delivered by
the Company, the Sellers, other Company shareholders (as required) and the
Purchaser pursuant to the terms of this Agreement, which amends the Original
Joint Venture Agreement entered into in April 2002 by and among the Company and
certain Stockholders.
"Applicable Contract" shall mean any material Contract (a) by which the
Company or any Company Subsidiary has or may acquire any rights, (b) by which
the Company or any Company Subsidiary has or may become subject to any
obligation or liability, or (c) by which the Company or any Company Subsidiary
or any of the properties or assets owned or used by them is or may become bound.
"Balance Sheet" shall mean the audited balance sheet of the Company for
the year ended December 31, 2003 included in the Financial Statements.
"Basic Transaction" shall have the meaning set forth in Section 1.2.
"Breach" shall mean a breach of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any written instrument
delivered pursuant to this Agreement, which breach will be deemed to have
occurred if there is or has been (a) any inaccuracy in or breach of, or any
failure to perform or comply with, such representation, warranty, covenant,
obligation, or other written provision, or (b) any claim (by any Person) or
other occurrence or circumstance that is or was inconsistent with such
representation, warranty, covenant, obligation, or other written provision.
"Cash Payment" has the meaning set forth in Section 1.5(b)(i).
"Closing" has the meaning set forth in Section 1.4.
"Closing Date" shall mean the date and time as of which the Closing
actually takes place.
"Company" has the meaning set forth in the first paragraph of this
Agreement.
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"Company Closing Documents" has the meaning set forth in Section C.2(a).
"Company Disclosure Schedule" shall mean the disclosure schedule delivered
by the Company to the Purchaser concurrently with the execution and delivery of
this Agreement.
"Company Securities" has the meaning set forth in Section C.3(b).
"Company Subsidiary" shall mean all Subsidiaries of the Company in
existence as of the date of this Agreement or subsequently organized.
"Company's Accountants" shall mean PricewaterhouseCoopers or such other
firm of independent public accountants appointed by the Purchaser.
"Consent" shall mean any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contract" shall mean any agreement, contract, lease, license, instrument,
obligation, promise, undertaking or other arrangement (whether written or oral
and whether express or implied) that is legally binding and any amendment,
supplement and modification (whether written or oral) thereto.
"Damages" shall have the meaning set forth in Section 6.2.
"Earn-out" shall have the meaning set forth in Section 1.6(f).
"EBTDA" shall mean the Company's earnings (after interest) before income
taxes with depreciation added for assets of the Company. Any assets financed,
consigned or otherwise provided to the Company by the Purchaser after the
Closing Date shall be treated as expense in accordance with ROC GAAP, and such
expense shall be equal or equivalent to the depreciation incurred by any of such
assets purchased or financed by the Purchaser or its Affiliate after the Closing
Date. Such expense, unless classified as depreciation expense, will be a
reduction of EBTDA. For the avoidance of doubt, depreciation for assets
purchased or financed by the Purchaser shall not be included in the depreciation
added back to the Company's earnings (after interest) before income taxes to
arrive at EBTDA.
"Encumbrance" shall mean any charge, claim, condition, equitable interest,
lien, option, pledge, security interest, right of first refusal, or restriction
of any kind, including any restriction on use, transfer, receipt of income, or
exercise of any other attribute of ownership.
"Environmental, Health and Safety Requirements" shall mean all applicable
Legal Requirements and all contractual obligations concerning public health and
safety, worker health and safety, and pollution or protection of the
environment, including without limitation all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials, substances
or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation, each as amended and as now or
hereafter in effect.
"Escrow Agent" shall mean the escrow agent engaged by the Purchaser to
facilitate the escrow arrangements with respect to the Purchase Price set aside
for shareholders of the Company who have not become Sellers as of the Closing
Date, the Share Certificates
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representing the Remaining Shares, the Share Certificates (or cash) held in
accordance with Section 6.5, and the distribution to the Sellers of the proceeds
of the Basic Transaction and the Purchaser's exercise of the Option.
"Escrow Fees and Expenses" shall have the meaning set forth in Section
F.6.
"Exercise Date" shall have the meaning set forth in Section 1.6(b).
"Exercise Earn-out" shall have the meaning set forth in Section 1.6(b).
"Exercise Price" shall have the meaning set forth in Section 1.6(b).
"Exercise Price Per Share" shall have the meaning set forth in Section
1.6(b).
"Financial Information" shall mean collectively the Financial Statements,
Selected Financial Information, and Most Recent Financial Information.
"Financial Statements" shall mean the audited non-consolidated financial
statements of the Company as at and for the years ended December 31, 2002 and
2003, together with reports on such year-end statements by the Company's
Accountants, including in each case a balance sheet, statements of income and
cash flows and changes in stockholders' equity and accompanying notes.
"Force Majeur" shall mean a cause beyond the reasonable control of either
Party, including, without limitation, acts of God, war, civil disturbance,
earthquake, epidemic and failure of public utilities or common carriers.
"Governmental Authorization" shall mean any Consent, license, permit or
other authorization issued, granted, given, or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Legal
Requirement.
"Governmental Body" shall mean any:
(a) nation, county, state, city, district, or other jurisdiction of any
nature;
(b) national, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, board,
commission official, or other entity and any court or other
tribunal);
(d) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"Inception Date" shall mean June 30, 1999, the date the company license
was issued to the Company.
"Indebtedness" shall mean as applied to any Person: (i) all obligations of
that Person to repay or pay money borrowed from another Person or the deferred
portion of the purchase price of services or assets; (ii) all obligations of
that Person under bankers acceptances or letters of credit; (iii) obligations of
others which that Person has directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the Ordinary Course of Business),
discounted or sold with recourse or agreed (contingently or otherwise) to
purchase or repurchase or otherwise acquire, or in respect of which that Person
has agreed to supply or advance funds (whether by
-16-
way of loan, stock purchase, capital contribution or otherwise) or otherwise to
become directly or indirectly liable; (iv) all obligations evidenced or secured
by any mortgage, pledge, lien or conditional sale or other title retention
agreement to which any property or asset owned or held by that Person is
subject, whether or not the obligation evidenced or secured thereby shall have
been assumed; and (v) all other items (except items of capital stock, capital
surplus, general contingency reserves, deferred income taxes, retained earnings
and amounts attributable to minority interest, if any) which in accordance with
ROC GAAP would be included in determining total liabilities as shown on the
liability side of a balance sheet of that Person as of the date Indebtedness is
to be determined, including obligations of that Person properly treated as
capital lease obligations or their equivalent under ROC GAAP.
"Indemnification Basket" has the meaning set forth in Section 6.5.
"Indemnification Limit" has the meaning set forth in Section 6.5.
"Indemnified Persons" has the meaning set forth in Section 6.2.
"Intellectual Property" shall mean all trademarks, patents, tradenames,
material trade secrets, material copyrights, domain names, service marks,
licenses, all registrations and applications for any of the foregoing, and other
intellectual property and proprietary rights and know-how (whether or not
subject to statutory registration or protection) owned or used by the Company or
in which the Company has an interest (whether licensed to or by the Company).
"Legal Requirement" shall mean all applicable provisions of all (i)
constitutions, treaties, statutes, laws, codes, rules, regulations, ordinances
or orders of any Governmental Body and (ii) orders, decisions, injunctions,
judgments, awards and decrees of or agreements with any Governmental Body.
"Minute Books" shall mean the record of actions taken by the Company's
shareholders and board of directors.
"Most Recent Financial Information" shall mean the financial information
of the Company for the three-month period ended March 31, 2004 prepared and
reviewed by the Company's Accountants, including, selected profit and loss
information items (through earnings before interest, depreciation, taxes and
amortization) and selected balance sheet items.
"Most Recent Month End" shall mean the month ended in the Most Recent
Financial Information.
"NTD" or "NT$" shall mean New Taiwan Dollars, the official currency of the
ROC.
"Option" shall have the meaning set forth in Section 1.6.
"Option Indebtedness" shall mean Indebtedness incurred by the Company
during the Exercise Period (based on the closing balance sheet of the month
prior to the Exercise Date (certified by the Company Accountants), expressly
including (a) the Company's existing Indebtedness as of the date of Closing, (b)
payments for twelve-inch (12") wafer equipment installed at the Company's
premises which have not yet been paid as of the date of Closing (approximately
NT$420 million), and (c) loans from the Purchaser or an Affiliate of the
Purchaser used by the Company for working capital requirements, but excluding
(x) future capital expansion investments made by the Purchaser or an Affiliate
of the Purchaser, the depreciation of which is charged to the Purchaser or an
Affiliate of the Purchaser and (y) loans
-17-
incurred by the Company at the Purchaser's request to finance equipment, and
deducting (z) the current assets of the Company reflected on such closing
balance sheet (but excluding from current assets any cash on hand in connection
with loans excluded pursuant to (x) and (y) or a capital contribution by the
Purchaser).
"Order" shall mean any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" shall mean an action taken by a Person that
is:
(a) consistent with the past practices of such Person and is taken in
the ordinary course of the normal day-to-day operations of such
Person;
(b) not required to be authorized by the shareholders or board of
directors of such Person (or by any Person or group of Persons
exercising similar authority) and is not required to be specifically
authorized by the parent company (if any) of such Person; and
(c) similar in nature and magnitude to actions customarily taken,
without any authorization by the board of directors (or by any
Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons
that are in the same line of business as such Person.
"Organizational Documents" shall mean as to a Person (a) its certificate,
memorandum or articles of association or incorporation, by-laws or other
analogous documents adopted or filed in connection with the creation, formation
or organization of a Person, and (b) any amendment thereto.
"Original Joint Venture Agreement" shall mean the Joint Venture Agreement
dated as of June 15, 1999 by and among the Company and certain shareholders of
the Company.
"Party" and "Parties" has the meaning set forth in the first paragraph of
this Agreement.
"Person" shall mean any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or Governmental Body.
"Proceeding" shall mean any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"Purchaser" has the meaning set forth in the first paragraph of this
Agreement.
"Purchaser Closing Documents" has the meaning set forth in Section E.2(a).
"Purchaser Disclosure Schedule" shall mean the disclosure schedule
delivered by Purchaser to the Company concurrently with the execution and
delivery of this Agreement.
"Reasonable Efforts" shall mean the efforts that a reasonable Person
desirous of achieving a result would use in similar circumstances to ensure that
such result is achieved as expeditiously as reasonably possible.
-18-
"Reasonable Knowledge" shall mean with respect to a particular fact or
matter, (a) in the case of an individual, that a reasonable individual should
have or should have had Actual Knowledge of such fact or matter or could be
expected to discover or otherwise become aware of such fact or other matter in
the course of conducting a reasonable inquiry concerning the existence of such
fact or other matter, or (b) in the case of a Person that is not an individual,
that a reasonable individual who is serving, or who has at any time served, as a
director, officer or partner of such Person (or in any similar capacity), or as
an employee having responsibility for such facts or matters should have or
should have had Actual Knowledge of such fact or matter or could be expected to
discover or otherwise become aware of such fact or other matter in the course of
conducting a reasonable inquiry concerning the existence of such fact or other
matter
"Related Person" shall mean a director, Supervisor, Officers, employee or
shareholder, or an Affiliate of the foregoing.
"Remaining Shares" shall have the meaning set forth in Section 1.6.
"Representative" shall mean with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.
"ROC" shall mean the Republic of China or Taiwan.
"ROC Company Law" shall mean the Company Law of the Republic of China.
"ROC GAAP" shall mean generally accepted ROC accounting principles,
applied on a consistent basis.
"Seller POA" shall mean the duly and properly executed or chopped power of
attorney authorizing the Sellers' Representative to act on behalf of each Seller
in all aspects with respect to the Basic Transaction, the sale of his/her/its
Remaining Shares to the Purchaser in connection with the Purchaser's exercise of
the Option and otherwise with respect to the transactions contemplated by this
Agreement in the form approved by the Purchaser's counsel.
"Sellers" has the meaning set forth in the first paragraph of this
Agreement.
"Sellers Closing Documents" has the meaning set forth in Section D.2.
"Sellers Disclosure Schedule" shall mean the disclosure schedule delivered
by the Sellers to the Purchaser concurrently with the execution and delivery of
this Agreement.
"Sellers' Representative" has the meaning set forth in the first paragraph
of this Agreement.
"Sellers' Transaction Fees" shall mean all advisory, legal and consulting
fees incurred by the Company and the Sellers in connection with the negotiation
of this Agreement, the consummation of the Basic Transaction and the Purchaser's
exercise of the Option which were not paid before the Closing or the closing of
the exercise of the Option, all of which have been notified to the Purchaser in
writing not later than three (3) days prior to the Closing Date or prior to the
Closing of the Purchaser's exercise of the Option, and the fees of the Escrow
Agent and expenses associated with the escrow arrangements that exceed
US$25,000.
-19-
"Selected Financial Information" shall mean the following selected
financial information prepared and reviewed by the Company's Accountants (i) the
unaudited pro forma consolidated profit and loss statement of the Company for
the year ended December 31, 2003 and (ii) the unaudited combined balance sheet
for the Company at December 31, 2003 and delivered to Purchaser by the Company.
"Share Certificates" shall mean official certificates issued by the
Company representing the Shares.
"Shares" has the meaning set forth in the Recitals of this Agreement.
"Subsidiary" shall mean with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person are held by the Owner
or one or more of its Subsidiaries or Affiliates.
"Tax" shall mean any tax (including, but not limited to, any income tax,
capital gains tax, value-added tax, sales or use tax, employment tax, excise
tax, gross receipts tax, property tax, gift tax, or estate tax), levy,
assessment, tariff, duty (including any customs duty), deficiency, or other fee,
and any related charge or amount (including any fine, penalty, interest, or
addition to tax), imposed, assessed, or collected by or under the authority of
any Governmental Body or payable pursuant to any tax-sharing agreement or any
other Contract relating to the sharing or payment of any such tax, levy,
assessment, tariff, duty, deficiency, or fee.
"Tax Return" shall mean any return (including any information return),
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection,
or payment of any Tax or in connection with the administration, implementation,
or enforcement of or compliance with any Legal Requirement relating to any Tax.
"Time Limitation Period" has the meaning set forth in Section 6.4.
"Trade Secrets" shall mean all know-how trade secrets, confidential
information, customer lists, software, technical information, data, process
technology, plans, drawings and other proprietary rights owned, used or held for
use, or licensed by the Company.
"Tribunal" shall have the meaning set forth in Section H.5(d).
"UIL" has the meaning set forth in the Recitals of this Agreement.
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SCHEDULE C
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
The Company and each Seller represent and warrant to the Purchaser
that the statements contained in this Schedule C are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Schedule C). Such representations and
warranties are made and given subject to the disclosures in the Company
Disclosure Schedule accompanying this Agreement executed, delivered and
certified by the Company.
Section C.1 ORGANIZATION AND GOOD STANDING.
(a) The Company is a company limited by shares duly organized and
validly existing pursuant to the laws of the Republic of
China, with full corporate power and authority to conduct its
business as it is now being conducted, to own or use the
properties and assets that it purports to own or use, and to
perform all its obligations under Applicable Contracts.
(b) The Company has delivered to the Purchaser copies of the
Organizational Documents of the Company, as currently in full
force and effect. The Company is not in violation of any of
the provisions of its Organizational Documents.
SECTION C.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of the Company enforceable against it in accordance
with its terms. Upon the execution and delivery by the Company
of this Agreement and any other document or agreement required
to be executed and delivered by the Company pursuant to the
terms of this Agreement (collectively, the "Company Closing
Documents"), the Agreement and the Company Closing Documents
will constitute the legal, valid, and binding obligations of
the Company, enforceable against it in accordance with their
respective terms. The Company has the absolute and
unrestricted right, power, authority, and capacity to execute
and deliver this Agreement and the Company Closing Documents
and to perform its obligations under this Agreement and the
Company Closing Documents.
(b) Except as set forth in Section C.2(b) of the Company
Disclosure Schedule, neither the execution and delivery of
this Agreement and the Company Closing Documents nor the
consummation or performance of the Basic Transaction or the
Purchaser's exercise of the Option will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of
(A) any provision of the Organizational Documents of the
Company, (B) any resolution adopted by the board of
directors or the stockholders of the Company; or (C) any
Legal Requirement or Order applicable to the Company;
(ii) contravene, conflict with, or result in a violation of,
or give any Governmental Body or other Person the right
to challenge the Basic Transaction or the Purchaser's
exercise of the Option or to exercise any remedy or
obtain any relief
-21-
under, any Legal Requirement or any Order to which the
Company, or any of the assets owned or used by the
Company, may be subject;
(iii) contravene, conflict with, or result in a violation of
any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw,
suspend, cancel, terminate, or modify, any Governmental
Authorization that is held by the Company or that
otherwise relates to the business of, or any of the
assets owned or used by the Company;
(iv) alter or violate or impair any license, franchise,
permit or other similar authorization held by the
Company;
(v) require any consent or other action by any Person under,
conflict with, result in a breach of, constitute a
default under, or give rise (A) to any right of
termination, cancellation or acceleration of any right
or obligation of the Company under any Applicable
Contract, or (B) to a loss of any benefit to which the
Company is entitled under any Applicable Contract; or
(vi) result in the imposition or creation of any Encumbrance
upon or with respect to any of the assets owned or used
by the Company.
(c) Except as set forth in Section C.2(c) of the Company
Disclosure Schedule, the Company is not, and will not be,
required to give any notice to or obtain any Consent from any
Person in connection with the execution and delivery of this
Agreement or the consummation or performance of the Basic
Transaction or the Purchaser's exercise of the Option.
(d) For the purposes of consummating the Basic Transaction and the
Purchaser's exercise of the Option, the Company has waived any
and all transfer restrictions, if any, on the Shares sought to
be transferred by the Sellers to the Purchaser and has
obtained the waivers from each party to the Stockholders
Agreement dated as of April 2002 by and among the Company and
certain shareholders of the Company regarding any rights of
first refusal that any shareholder of the Company may have
with respect to the transfer of the Shares to the Purchaser.
The Company has provided all such waivers to the Purchaser for
review.
SECTION C.3 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
140,000,000 shares of common stock, par value NT$10 per share,
of which 130,000,000 shares are issued and outstanding as of
the date hereof. All issued and outstanding Company Shares
have been or will be upon issuance duly authorized and validly
issued, fully paid and non-assessable. Section C.3(a) of the
Company Disclosure Schedule sets forth the names of the
holders of the Company Shares and the number and percentage of
the Company Shares held by each such holder.
(b) Except as set forth in Section C.3(b) of the Company
Disclosure Schedule, there are no outstanding (i) shares of
capital stock or voting securities of the Company other than
the Company Shares, (ii) securities of the Company convertible
into or exchangeable for shares of capital stock or voting
securities or ownership interests in the Company or (iii)
options or other rights to securities or ownership interests
in or securities convertible into or exchangeable for capital
stock or voting securities or ownership interests in the
Company (the items in clauses (i), (ii), and (iii) being
referred to
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collectively as "Company Securities"). The Company has no
outstanding bonds, debentures, notes or other obligations the
holders of which have the right to vote (or are convertible
into or exercisable for securities having the right to vote)
with the stockholders of the Company on any matter.
(c) None of the outstanding Company Shares or other securities of
the Company were issued in violation of any Legal Requirement.
(d) Except as set forth in Section C.3(d) of the Company
Disclosure Schedule, no holder of Company Securities possesses
any right relative to the ownership of such Company Securities
other than as set forth in the Company's Organizational
Documents.
SECTION C.4 TITLE TO SHARES. The delivery of the Share Certificates to the
Purchaser provided in Section 1.5(a)(i) above will result in the
Purchaser's immediate acquisition of record and beneficial ownership
of the Shares free and clear of all Encumbrances.
SECTION C.5 SUBSIDIARIES. There are no Subsidiaries or branches of the
Company located anywhere.
SECTION C.6 FINANCIAL INFORMATION. The Company has delivered to the
Purchaser complete and correct copies of the Financial Statements,
the Selected Financial Information and the Most Recent Financial
Information. The Financial Statements are complete and correct in
all material respects, have been derived from the respective
accounting books and records of the Company, and have been prepared
in accordance with R.O.C. GAAP applied on a consistent basis
throughout the periods presented in the Financial Statements. The
balance sheets included in the Financial Statements present fairly
the respective financial position of the Company as at the
respective dates thereof, and the statements of income and
statements of cash flows included in the Financial Statements
present fairly the respective results of operations, cash flows and
changes in stockholders' equity of the Company for the respective
periods indicated all in accordance with R.O.C. GAAP. The Selected
Financial Information is correct in all material respects and has
been derived from the Financial Statements. The selected financial
and operating data included in the Selected Financial Information
present fairly the financial condition and results of operations of
the Company for the period, and as of the date indicated. The Most
Recent Financial Information is correct in all material respects and
has been derived from the unaudited management accounts of the
Company. The selected financial and operating data included in the
Most Recent Financial Information present fairly the financial
condition and results of operations of the Company for the period
ended, and as of, the Most Recent Month End.
SECTION C.7 BOOKS AND RECORDS. The books of account, stock record books,
and other records of the Company (specifically excluding the Minute
Books), all of which have been made available to the Purchaser, are
complete and correct and have been maintained in accordance with
sound business practices, including the maintenance of an adequate
system of internal controls, and accurately reflect all material
transactions. The Minute Books of the Company are materially
complete and correct and have been prepared and maintained in
accordance with ROC Company Law. The Company will not be adversely
affected by the manner in which the Minute Books have been
maintained or by the actions taken by the stockholders, the board of
directors, and the committees of the board of directors of the
Company which are not fully reflected in the Minute Books.
-23-
SECTION C.8 TITLE TO PROPERTIES; ENCUMBRANCES.
(a) Except as set forth in Section C.8 (a) of the Company
Disclosure Schedule, the Company owns (with good and
marketable title in the case of real property, subject only
to the matters permitted by the following sentence) all the
material properties and assets (whether real, personal, or
mixed and whether tangible or intangible) that they purport
to own located in the facilities owned or operated by the
Company or reflected as owned in the books and records of the
Company, including all of the properties and assets reflected
in the Financial Statements, and all of the material
properties and assets purchased or otherwise acquired by the
Company since the Most Recent Month End, which subsequently
purchased or acquired material properties and assets are
listed in Section C.8(a) of the Company Disclosure Schedule.
(b) Except as provided in Section C.8(b) of the Company
Disclosure Schedule, all material properties and assets
reflected in the Most Recent Financial Information are free
and clear of all Encumbrances and are not, in the case of
real property, subject to any rights of way, building use
restrictions, exceptions, variances, reservations, or
limitations of any nature.
SECTION C.9 CONDITION AND SUFFICIENCY OF ASSETS. To the Reasonable
Knowledge of the Company, the buildings, plants, structures,
equipment and other material assets of the Company are structurally
sound. The buildings, plants, structures, equipment and other
material assets of the Company are in good operating condition and
repair (subject to normal wear and tear), and are adequate for the
uses to which they are being put, and none of such buildings,
plants, structures, equipment or other material assets is in need
of maintenance or repairs except for ordinary, routine maintenance
and repairs that are not material in nature or cost. The building,
plants, structures, equipment and other material assets of the
Company are sufficient for the continued conduct of their
respective business after the Closing in substantially the same
manner as conducted prior to the Closing.
SECTION C.10 ACCOUNTS RECEIVABLE. All accounts receivable of the Company
that are reflected in the Most Recent Financial Information or on
the accounting records of the Company as of the Closing Date
represent or will represent valid obligations arising from sales
actually made or services actually performed in the Ordinary Course
of Business.
SECTION C.11 NO UNDISCLOSED LIABILITIES.
(a) The Company has no material liabilities or obligations of any
nature, whether absolute, accrued, contingent or otherwise
and whether due or to become due, except (i) as set forth in
Section C.11 of the Company Disclosure Schedule, (ii) as and
to the extent disclosed or reserved against in the Balance
Sheet or specifically disclosed in the notes thereto and
(iii) for liabilities and obligations that (A) are incurred
after the date of the Balance Sheet in the Ordinary Course of
Business and are not prohibited by this Agreement and (B)
individually and in the aggregate, have or result in no
material adverse effect.
(b) Since the date of the Most Recent Month End, there has not
occurred or come to exist any material adverse effect or any
event, occurrence, fact, condition, change, development or
effect that, individually or in the aggregate, could result
in a material adverse effect.
-24-
SECTION C.12 TAXES.
(a) The Company has prepared and filed or caused to be filed on a
timely basis all appropriate ROC governmental agency Tax
Returns and reports that are or were required to be filed by
it pursuant to applicable Legal Requirements. The Company has
delivered or made available to the Purchaser copies of, and
Section C.12(a) of the Company Disclosure Schedule contains a
complete and accurate list of, all Tax Returns filed by the
Company on or since the Inception Date.
(b) The Company has paid, or made provision for the payment of,
all Taxes that have or may have become due pursuant to any
Tax Return filed by, or on their behalf, pursuant to any
assessment deficiency or similar notice received by the
Company or otherwise.
(c) The relevant taxation bureau in the ROC has not audited any
tax returns of the Company for any year and (i) no
deficiencies have been proposed; (ii) no waivers of the
statute of limitations granted to the Company or any Company
Subsidiary are now outstanding; and (iii) there are no
agreements providing for the extension of time with respect
to the assessment of any tax deficiency.
(d) All Taxes that the Company is or was required by any Legal
Requirement to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the
proper Governmental Body or other Person. There is no action,
suit, proceeding, investigation, audit, or claim now pending
or threatened by any taxing authority related to the Company
or any Company Subsidiary. No claim has ever been made by any
taxing authority in a jurisdiction where the Company does not
file Tax Returns that the Company is subject to taxation in
such jurisdiction.
(e) The Company has paid, or has withheld, all Taxes required by
any applicable Legal Requirement to be paid or withheld,
including but not limited to the following situations in
connection with which the Sellers agree to indemnify the
Purchaser for Damages pursuant to Section 6.2(b):
(i) All taxes on service fee and license payments;
(ii) Customs duties, value-added taxes and any other Taxes
on the SECAP loan equipment; and
(iii) any research and development Tax credits claimed on
filed Tax Returns for years 1999-2003 which are
subsequently denied by the relevant taxation bureau
under audit.
Section C.13 NO MATERIAL ADVERSE CHANGE. Since December 31, 2003, there has
not been any material adverse change in the business, operations,
properties, prospects, assets, or condition of the Company and no
event has occurred or circumstance exists that may result in such a
material adverse change.
SECTION C.14 COMPLIANCE WITH LEGAL REQUIREMENTS. Except as set forth in
Section C.14 of the Company Disclosure Schedule,
(a) the Company and at all times since the Inception Date has
been, in full compliance, except where such non compliance
would not have a material adverse effect on the Company, with
each Legal Requirement that is or was applicable to (i) it,
(ii) the
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conduct or operation of its businesses, or (iii) the
ownership or use of any of their respective assets or the
issuance;
(b) the Company is and at all times since the Inception Date has
been, in full compliance with each Legal Requirement that is
or was applicable to the issuance, sale and trading of the
Company.
(c) no event has occurred or circumstance exists that (with or
without notice or lapse of time) (i) may constitute or result
in a violation by the Company of, or a failure on the part of
the Company to comply with, any Legal Requirement, which
violation or failure to comply would have a material adverse
effect on the Company, or (ii) may give rise to any
obligation on the part of the Company to undertake, or to
bear all or any portion of the cost of, any remedial action
of any nature, which obligation could have a material adverse
effect on the Company; and
(d) the Company has not received, at any time, any notice or
other communication (whether oral or written) from any
Governmental Body or any other Person regarding (i) any
actual, alleged, possible, or potential violation of, or
failure to comply with, any Legal Requirement, which
violation or failure to comply would have a material adverse
effect on the Company, or (ii) any actual, alleged, possible,
or potential obligation on the part of the Company to
undertake, or to bear all or any portion of the cost of, any
remedial action of any nature, which obligation could have a
material adverse effect on the Company.
SECTION C.15 GOVERNMENT AUTHORIZATIONS.
(a) The Company holds all Governmental Authorizations necessary
to permit the Company to lawfully conduct and operate its
businesses in the manner it currently conducts and operates
such businesses and to permit the Company to own and use its
respective assets in the manner in which it currently owns
and uses such assets. All such Governmental Authorizations
are valid and in full force and effect.
(b) Except as set forth in Section C.15(b) of the Company
Disclosure Schedule:
(i) the Company is, and at all times since the Inception
Date has been, in full compliance with all of the terms
and requirements of each Governmental Authorization
held by the Company;
(ii) no event has occurred or circumstance exists that may
(with or without notice or lapse of time) (A)
constitute or result directly or indirectly in a
violation of or a failure to comply with any term or
requirement of any Governmental Authorization held by
the Company, or (B) result directly or indirectly in
the revocation, withdrawal, suspension, cancellation,
or termination of, or any modification to, any
Governmental Authorization held by the Company;
(iii) the Company has not received any notice or other
communication (whether oral or written) from any
Governmental Body or any other Person regarding (A) any
actual, alleged, possible, or potential violation of or
failure to comply with any term or requirement of any
Governmental Authorization, or (B) any actual,
proposed, possible, or potential revocation,
withdrawal, suspension, cancellation, termination of,
or modification to any Governmental Authorization; and
-26-
(iv) all applications required to have been filed for the
renewal of the Governmental Authorizations held by the
Company have been duly filed on a timely basis with the
appropriate Governmental Bodies, and all other filings
required to have been made with respect to such
Governmental Authorizations have been duly made on a
timely basis with the appropriate Governmental Bodies.
Section C.16 LEGAL PROCEEDINGS; ORDERS.
(a) Section C.16(a) of the Company Disclosure Schedule contains a
complete and correct list of each Proceeding by or against
the Company that is currently pending, has been pending at
any time since the Inception Date, or to the Reasonable
Knowledge of the Company is threatened, and that:
(i) may affect the business of, or any of the assets owned
or used by the Company; or
(ii) may have the effect of preventing, delaying, making
illegal, or otherwise interfering with, the Basic
Transaction or the Purchaser's exercise of the Option.
In addition, (1) no event has occurred or, to the
Reasonable Knowledge of the Company, no circumstance
exists that may give rise to or serve as a basis for
the commencement of any Proceeding by or against the
Company and (2) no Proceeding has been settled since
the Inception Date, for an amount greater than
NT$1,000,000. The Company has delivered to the
Purchaser copies of all pleadings, correspondence, and
other documents relating to each Proceeding (if any)
listed in Section C.16(a) of the Company Disclosure
Schedule. The Proceedings listed in Section C.16(a) of
the Company Disclosure Schedule will not have a
material adverse effect on the business, operations,
assets, conditions, or prospects of the Company.
(b) Except as set forth in Section C.16(b) of the Company
Disclosure Schedule,
(i) the Company is not subject to any Order that relates to
the business of, or any of the assets owned or used by,
the Company;
(ii) no officer or director of the Company is subject to any
Order that prohibits such officer or director from
engaging in or continuing any conduct, activity, or
practice relating to the business of the Company; and
(iii) to the Reasonable Knowledge of the Company, no agent or
employee of the Company is subject to any Order that
prohibits such agent or employee from engaging in or
continuing any conduct, activity, or practice relating
to the business of the Company;
(c) Except as set forth in Section C.16(c) of the Company
Disclosure Schedule,
(i) the Company is, and at all times since the Inception
Date has been, in full compliance with all of the terms
and requirements of each Order to which it, or any of
the assets owned or used by it, is or has been subject;
(ii) no event has occurred or circumstance exists that may
constitute or result in (with or without notice or
lapse of time) a violation of or failure to comply with
any term or requirement of any Order to which the
Company, or any of the assets owned or used by the
Company is subject; and
(iii) the Company has not received, at any time, any notice
or other communication (whether oral or written) from
any Governmental Body or any other Person
-27-
regarding any actual, alleged, possible, or potential
violation of, or failure to comply with, any term or
requirement of any Order to which the Company, or any
of the assets owned or used by the Company, is or has
been subject.
Section C.17 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth in
Section C.17 of the Company Disclosure Schedule, since December 31,
2003, the Company has conducted its business only in the Ordinary
Course of Business and there has not been any:
(a) event, occurrence, development or state of circumstances or
facts which has had or is reasonably expected to have a
material adverse effect, other than those resulting from
changes in general conditions (including laws and
regulations) applicable to the industry, or general economic
conditions;
(b) payment or increase by the Company of any bonuses, salaries,
or other compensation or benefits to any stockholder,
director, or except in the Ordinary Course of Business
officer or employee;
(c) entry into any employment, severance, or similar Contract
with any director, officer, or employee (other than in the
case of an employee in the Ordinary Course of Business), or
debt issued or advances made to any stockholder, director,
officer, or employee (other than in the case of an employee
in the Ordinary Course of Business);
(d) damage to or destruction or loss of any asset or property of
the Company, whether or not covered by insurance, which
damage, destruction or loss has materially and adversely
affected the properties, assets, business, financial
condition, or prospects of the Company, taken as a whole;
(e) sale, lease, transfer or other disposition (other than in the
Ordinary Course of Business) of any asset or property of the
Company in excess of NT$10,000,000;
(f) repayment of any debt other than debt disclosed in the
Financial Statements or incurred in the Ordinary Course of
Business;
(g) material change in the accounting methods used by the
Company;
(h) any occurrence, assumption or guarantee by the Company of any
Indebtedness (other than in the Ordinary Course of Business)
in excess of NT$20,000,000 or increase in the aggregate
Indebtedness (other than in the Ordinary Course of Business
including capital expenditures) of the Company in excess of
NT$20,000,000;
(i) failure on the part of the Company to make accruals in
amounts sufficient to cover the Company's obligations under
its pension plan and performance pay or other incentive
plans; or
(j) any other agreement to do any of the foregoing, whether oral
or written, or event or condition of any nature that might
materially and adversely affect the assets properties,
financial condition, operating results or business of the
Company.
-28-
Section C.18 CONTRACTS; NO DEFAULTS.
(a) Section C.18(a) of the Company Disclosure Schedule contains a
complete and accurate list, if any, and the Company has
delivered to the Purchaser true and complete copies, of each
Applicable Contract involving an amount or value in excess of
NT$3,000,000.
(b) Except as set forth in Section C.18(b) of the Company
Disclosure Schedule, no officer, director, agent, employee,
consultant, or contractor of the Company is bound by any
Contract that purports to limit the ability of such officer,
director, agent, employee, consultant, or contractor to (A)
engage in or continue any conduct, activity, or practice
relating to the business of the Company, or (B) assign to the
Company or to any other Person any rights to any invention,
improvement, or discovery.
(c) Except as set forth in Section C.18(c) of the Company
Disclosure Schedule, each Applicable Contract identified or
required to be identified in Section C.18(a) of the Company
Disclosure Schedule is in full force and effect and is valid
and enforceable in accordance with its terms.
(d) Except as set forth in Section C.18(d) of the Company
Disclosure Schedule,
(i) the Company is, and at all times since the Inception
Date has been, in substantial compliance with all
applicable terms and requirements of each Applicable
Contract;
(ii) to the Reasonable Knowledge of the Company, each other
Person that has or had any obligation or liability
under any Applicable Contract under which the Company
has or had any rights is, and at all times has been, in
full compliance with all applicable terms and
requirements of such Contract;
(iii) no event has occurred or circumstance exists that (with
or without notice or lapse of time) may contravene,
conflict with, or result in a violation or breach of,
or give the Company or, to the Reasonable Knowledge of
the Company, any other Person the right to declare a
default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel,
terminate, or modify, the Applicable Contract; and
(iv) the Company has not given to or received from any other
Person, at any time any notice or other communication
(whether oral or written) regarding any actual,
alleged, possible, or potential violation or breach of,
or default under, any Applicable Contract.
(e) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid
or payable to the Company under current or completed
Applicable Contracts with any Person and, to the Reasonable
knowledge of the Company no such Person has made written
demand for such renegotiation.
(f) The Applicable Contracts listed in Section C.18(a) of the
Company Disclosure Schedule have not been entered into in
violation of any Legal Requirement.
Section C.19 INSURANCE.
(a) All policies to which the Company is or was a party or that
provide coverage to either the Company, or any director or
officer of the Company:
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(i) are or were valid, outstanding, and enforceable;
(ii) to the Reasonable Knowledge of the Company, are or were
issued by an insurer that is financially sound and
reputable;
(iii) to the Reasonable Knowledge of the Company, provide or
provided adequate insurance coverage for the assets and
the operations of the Company for all risks normally
insured against by a Person carrying on the same
business or businesses in the ROC as the Company;
(iv) to the Reasonable Knowledge of the Company, are or were
sufficient for compliance with all Legal Requirements
and Contracts to which the Company is a party or by
which any of them is bound; and
(v) will continue in full force and effect following the
consummation of the Basic Transaction and the
Purchaser's exercise of the Option.
(b) The Company has not received (i) any refusal of coverage or
any notice that a defense will be afforded with reservation
of rights, or (ii) any notice of cancellation or any other
indication that any insurance policy is no longer in full
force or effect or will not be renewed or that the issuer of
any policy is not willing or able to perform its obligations
thereunder.
(c) The Company has paid all premiums due, and has otherwise
performed all of its obligations, under each policy to which
the Company is a party or that provides coverage to the
Company or any director thereof.
(d) The Company has given notice to the insurer of all claims
that may be insured thereby.
SECTION C.20 EMPLOYMENT MATTERS.
(a) The Company has made all accruals necessary to fund its
obligations under its pension plan and performance pay or
other incentive plans. The Company is not liable for any
unpaid wages, vacation pay, bonuses, benefit payments,
pension fund contributions or commissions, or for any
material tax, penalty, assessment, or forfeiture for failure
to comply with any employer/employee matter.
(b) The Company is not in violation of any Legal Requirement
governing employment and labor matters where the failure to
be in compliance would have a material adverse effect on the
Company or its business.
(c) The employees of the Company are not represented by a labor
organization, no union claims to represent any such employees
and, to the Reasonable Knowledge of the Company, no union
organizing effort is or within the last two (2) years has
been underway involving employees of the Company. There are
no strikes, lockouts, work stoppages, slowdowns,
jurisdictional disputes, material grievances, material
arbitrations or organizing activities occurring or threatened
with respect to the Company.
SECTION C.21 INTELLECTUAL PROPERTY. To the Company's Reasonable Knowledge,
after due inquiry: (a) all of the Intellectual Property is valid
and is owned or legally used by the Company, free and clear of all
Encumbrances; (b) no further licenses or authorizations are
-30-
required to be obtained in order for the Company to legitimately
use the Intellectual Property to operate the Company's business in
the ordinary course; (c) none of the Company's rights in or use of
such Intellectual Property infringes on the rights of others or has
been, or is currently being, or threatened to be, challenged; (d)
all of the Intellectual Property registrations have been duly
issued and have not been canceled, abandoned, or otherwise
terminated; (e) all of the Intellectual Property applications have
been duly filed with the appropriate authorities; (f) no consents
or approvals of any Person owning Intellectual Property are
necessary for the Company to participate in the Basic Transaction
or the Purchaser's exercise of the Option or to enter into this
Agreement or any Company Closing Document; and (g) the execution of
this Agreement and the Company Closing Documents and consummation
of the Basic Transaction or the Purchaser's exercise of the Option
will not conflict with or impair such Intellectual Property. The
Company owns or has the right to use all of the Intellectual
Property necessary to conduct its operations and business. To the
Reasonable Knowledge of the Company, there are no claims, or any
basis for any claims, by third parties that it has infringed any
intellectual property of any other Person or that any other Person
has infringed any of the Intellectual Property of the Company.
Except as set forth in Section C.21 of the Company Disclosure
Schedule, no third party has been permitted or licensed to use any
of the Intellectual Property or been granted any option thereto,
and no royalties or other fees are payable to any third party with
respect to any of the Intellectual Property.
SECTION C.22 RELATIONSHIPS WITH RELATED PERSONS.
(a) Except as set forth in Section C.22(a) of the Company
Disclosure Schedule, neither the Company nor any Related
Person of the Company has since the Inception Date, has had,
any interest in any property (whether real, personal, or
mixed and whether tangible or intangible), used in or
pertaining to the business of the Company. Neither the
Company, nor any Related Person of the Company is, or since
the Inception Date, has owned (of record or as a beneficial
owner) an equity interest or any other financial or profit
interest in, a Person that has (i) had business dealings or a
material financial interest in any transaction with the
Company, or (ii) engaged in competition with the Company with
respect to any line of the products or services of the
Company in any market presently served by the Company.
(b) Except as set forth in Section C.22(b) of the Company
Disclosure Schedule or in the Financial Statements, neither
the Company nor any Related Person of the Company is, or
since the Inception Date, was, a party to any Contract with,
or has or had any claim or right against, the Company.
(c) Section C.22(c) of the Company Disclosure Schedule contains a
list of all Indebtedness between the Company and a Related
Person of the Company including the amount thereof and the
payment obligations thereunder.
SECTION C.23 BROKERS OR FINDERS. Except as set forth in Section C.23 of
the Company Disclosure Schedule, neither the Company, nor its
agents have incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or
other similar payment in connection with this Agreement.
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SECTION C.24 DISCLOSURE.
(a) No representation or warranty of the Company in this
Agreement and no statement in the Company Disclosure Schedule
omits to state a material fact necessary to make the
statements herein or therein, in light of the circumstances
in which they were made, not misleading.
(b) The Financial Information does not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under
which they are made, not misleading.
(c) There is no fact known to the Company that has specific
application to the Company (other than general economic or
industry conditions) and that materially adversely affects
or, as far as the Company can reasonably foresee, materially
threatens, the assets, businesses, prospects, financial
condition, or results of operations of the Company
(separately or on a consolidated basis) that has not been set
forth in this Agreement or the Company Disclosure Schedule.
SECTION C.25 ENVIRONMENTAL, HEALTH AND SAFETY MATTERS.
(a) The Company has complied and is in compliance with all
Environmental, Health, and Safety Requirements.
(b) Without limiting the generality of the foregoing, the Company
has obtained and complied with, and is in compliance with,
all permits, licenses and other authorizations that are
required pursuant to Environmental, Health, and Safety
Requirements for the occupation of its facilities and the
operation of its business.
(c) The Company has not received any written or verbal notice,
report or other information regarding any actual or alleged
violation of Environmental, Health, and Safety Requirements,
or any liabilities or potential liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise), including
any investigatory, remedial or corrective obligations,
relating to any of them or its facilities arising under
Environmental, Health, and Safety Requirements.
(d) None of the following exists at any property or facility
owned or operated by the Company: (i) underground storage
tanks, (ii) asbestos-containing material in any form or
condition, (iii) materials or equipment containing
polychlorinated biphenyls, or (iv) landfills, surface
impoundments, or disposal areas.
(e) The Company has not treated, stored, disposed of, arranged
for or permitted the disposal of, transported, handled, or
released any substance, including without limitation any
hazardous substance, or owned or operated any property or
facility (and no such property or facility is contaminated by
any such substance) in a manner that has given or would give
rise to liabilities, including any liability for response
costs, corrective action costs, personal injury, property
damage, natural resources damages or attorney fees, pursuant
to any Environmental, Health, and Safety Requirements.
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(f) Neither this Agreement nor the consummation of the Basic
Transaction or the Purchaser's exercise of the Option will
result in any obligations for site investigation or cleanup,
or notification to or consent of any Government Body or third
parties.
(g) The Company has not, either expressly or by operation of law,
assumed or undertaken any liability, including without
limitation any obligation for corrective or remedial action,
of any other Person relating to Environmental, Health, and
Safety Requirements.
(h) No facts, events or conditions relating to the past or
present facilities, properties or operations of the Company
will prevent, hinder or limit continued compliance with
Environmental, Health, and Safety Requirements, give rise to
any investigatory, remedial or corrective obligations
pursuant to Environmental, Health, and Safety Requirements,
or give rise to any other liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise) pursuant to
Environmental, Health, and Safety Requirements, including
without limitation any relating to onsite or offsite releases
or threatened releases of hazardous materials, substances or
wastes, personal injury, property damage or natural resources
damage.
SECTION C.26 WAIVER OF TRANSFER RESTRICTIONS. The Company hereby waives all
stock transfer restrictions contained in the various agreements
between the Company and each of the Sellers with respect to each of
the Seller's sale of Shares and Remaining Shares to the Purchaser
pursuant to this Agreement.
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SCHEDULE D
REPRESENTATIONS AND WARRANTIES REGARDING THE SHARES
Each of the Sellers, severally, represents and warrants to the
Purchaser that the statements contained in this Schedule D are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date and the Exercise Date (as though made then and as though the
Closing Date or the Exercise Date, as the case may be, were substituted for the
date of this Agreement throughout this Schedule D). Such representations and
warranties are made and given subject to the disclosures in the Sellers'
Disclosure Schedule accompanying this Agreement executed, delivered and
certified by the Sellers.
SECTION D.1 OWNERSHIP. The Shares set forth by each Seller's name in Schedule A
are duly authorized, validly issued, fully paid, and non-assessable.
Each Seller owns its Shares free and clear of all Encumbrances. Each
Seller has the right, power, and authority to sell, assign, transfer
and convey it Shares as provided herein, and upon such sale, the
Purchaser will receive good and valid title to all of its Shares,
free and clear of all Encumbrances. The Share Certificates for each
Seller's Shares will be, when delivered to the Purchaser, in proper
form for transfer.
SECTION D.2 AUTHORITY. This Agreement constitutes the legal, valid, and binding
obligation of each Seller enforceable against it in accordance with
its terms. Upon the execution and delivery by the Seller's Attorney
of this Agreement and any other document or agreement required to be
executed and delivered by each Seller pursuant to the terms of this
Agreement (including the Seller POA) (collectively, the "Sellers
Closing Documents"), the Agreement and the Sellers Closing Documents
will constitute the legal, valid, and binding obligations of each
Seller, enforceable against each Seller in accordance with their
respective terms. Each Seller has properly granted to the Seller's
Attorney the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement and the Sellers
Closing Documents on its behalf and each Seller has the absolute and
unrestricted right, power, authority, and capacity to perform its
obligations under this Agreement and the Sellers Closing Documents.
The execution, delivery, and performance of this Agreement and the
Sellers Closing Documents and the consummation of the Basic
Transaction and the Purchaser's exercise of the Option have been
duly authorized by all requisite action on the part of each of the
Sellers, and no other proceeding, authorization or approval on the
part of any of the Sellers is necessary to authorize the execution
and delivery of this Agreement or any of the Sellers Closing
Documents or the performance by any of the Sellers of the Basic
Transaction or the Purchaser's exercise of the Option.
SECTION D.3 NO VIOLATION. Neither the execution, delivery or performance of this
Agreement nor the consummation of the Basic Transaction or the
Purchaser's exercise of the Option (i) will violate or conflict with
the Organizational Documents of any Seller, (ii) will conflict with
or result in any breach of or default under any provision of any
contract or agreement of any kind to which a Seller is a party or by
which a Seller is bound, (iii) is prohibited by or requires a Seller
to obtain or make any consent, authorization, approval, registration
or filing under any Legal Requirement or Order of any Governmental
Body or of any other Person, (iv) will cause any acceleration of the
maturity of any note, instrument or other obligation to which a
Seller is a party or by which a Seller is bound or with respect to
which a Seller is an obligor or guarantor or (v) will result in the
creation or imposition of any Encumbrance upon or give to any
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other Person any interest or right (including any right of
termination or cancellation) in or with respect to any of the
properties, assets, business, agreements or contracts of a Seller.
SECTION D.4 BROKERS OR FINDERS. Except as set forth in Section D.4 of the
Sellers' Disclosure Schedule, none of the Sellers nor any of their
agents have incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or
other similar payment in connection with this Agreement.
SECTION D.5 RELEASE OF CLAIMS AGAINST PURCHASER AND PURCHASER'S REPRESENTATIVES.
Each Seller agrees that upon receipt of Purchase Price after the
consummation of the Basic Transaction, he/she/it shall be deemed to
thereupon release and forever discharge the Purchaser, its
Affiliates and its Representatives from any and all claims, causes
of action, obligations, damages and liabilities relating to the
Basic Transaction, the Purchaser Closing Documents and this
Agreement, except for the Purchaser's obligations with respect to
the Option and under Article 6. Each Seller further agrees that upon
receipt of the Exercise Price after the consummation of the
Purchaser's exercise of the Option, he/she/it shall be deemed to
thereupon release and forever discharge the Purchaser, its
Affiliates and its Representatives from any and all claims, causes
of action, obligations, damages and liabilities relating to the
Purchaser's exercise of the Option, this Agreement and otherwise
with respect to the transactions contemplated by this Agreement.
SECTION D.6 APPROVAL OF PURCHASE OF ALL SHARES OF UIL BY THE PURCHASER. Each
Seller has been notified that, as a condition precedent to the Basic
Transaction and contemporaneous with the Closing, the Purchaser
shall purchase all the Shares held by UIL and hereby agrees to the
terms thereof. Each Seller hereby releases and forever discharges
the Purchaser and all of its directors, officers, employees,
shareholders, agents, representatives, affiliates, successors and
assigns, and each of them, separately and collectively, from any and
all claims, obligations, damages and liabilities, in connection with
the purchase by the Purchaser of all the Shares of UIL.
SECTION D.7 WAIVER OF RIGHT OF FIRST REFUSAL. Each Seller hereby waives its
right of first refusal pursuant to the Stockholders' Agreement dated
as of April 2002 by and among the Company and certain shareholders
of the Company with respect to the Basic Transaction and the
Purchaser's exercise of the Option.
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SCHEDULE E
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to Company and the Sellers
that the statements contained in this Schedule E are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Schedule E). Such representations and
warranties are made and given subject to the disclosures in the Purchaser's
schedules accompanying this Agreement executed, delivered and certified by the
Purchaser.
Section E.1 ORGANIZATION AND GOOD STANDING. The Purchaser is corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware, U.S.A.
Section E.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding
obligation of the Purchaser, enforceable against it in
accordance with its terms. Upon execution and delivery by the
Purchaser of this Agreement and any other document or
agreement required to be executed and delivered by the
Purchaser pursuant to the terms of this Agreement
(collectively, the "Purchaser Closing Documents"), the
Agreement and Purchaser Closing Documents will constitute the
legal, valid and binding obligations of the Purchaser,
enforceable against it in accordance with their respective
terms. The Purchaser has the absolute and unrestricted right,
power, and authority to execute and deliver this Agreement and
Purchaser Closing Documents and to perform its respective
obligations under this Agreement and Purchaser Closing
Documents.
(b) Except as set forth in Section E.2(b) of Purchaser Disclosure
Schedule, neither the execution and delivery of this Agreement
and Purchaser Closing Documents by the Purchaser nor the
consummation or performance of the Basic Transaction or the
exercise of the Option by the Purchaser will give any Person
the right to prevent, delay, or otherwise interfere with the
Basic Transaction or the Purchaser's exercise of the Option
pursuant to:
(i) any provision of the Purchaser's Organizational
Documents;
(ii) any resolution adopted by the board of directors of the
Purchaser;
(iii) any Legal Requirement or Order to which the Purchaser
may be subject; or
(iv) any Contract to which the Purchaser is a party or by
which the Purchaser may be bound.
(c) Except as set forth in Section E.2(c) of Purchaser Disclosure
Schedule, the Purchaser is not, or will not be, required to
obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation
or performance of the Basic Transaction or the Purchaser's
exercise of the Option.
Section E.3 CERTAIN PROCEEDINGS. No Proceeding has been commenced or, to the
Reasonable Knowledge of the Purchaser, threatened against the
Purchaser that challenges, or may
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have the effect of preventing, delaying, making illegal, or
otherwise interfering with, the Basic Transaction or the Purchaser's
exercise of the Option.
SECTION E.4 BROKERS OR FINDERS. Except as disclosed in Section E.4 of the
Purchaser Disclosure Schedule, the Purchaser and its respective
directors, officers and agents have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payments in connection with
this Agreement.
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SCHEDULE F
CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATION TO CLOSE
The obligation of the Purchaser to purchase the Shares and to take
the other actions required to be taken by the Purchaser at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by the Purchaser, in whole or
in part if it executes a writing so stating at or prior to Closing):
Section F.1 ACCURACY OF REPRESENTATIONS. All of the representations and
warranties of the Company and the Sellers in this Agreement
(considered collectively), and each of these representations and
warranties (considered individually), must have been accurate in all
material respects as of the date of this Agreement, and must be
accurate in all material respects at and as of the Closing Date, as
if made at and as of the Closing Date; provided however that the
representations and warranties set forth in Section C.3 and Section
C.4 must be accurate in all respects.
Section F.2 THE COMPANY'S PERFORMANCE.
(a) Except as set forth in Section F.2(b) below, all of the
covenants and obligations that the Company is required to
perform or to comply with pursuant to this Agreement at or
prior to the Closing, including those listed in Schedule I,
(considered collectively), and each of these covenants and
obligations (considered individually), must have been duly
performed and complied with in all material respects.
(b) Each document or other delivery required to be delivered
pursuant to Section 1.5(a) must have been delivered.
Section F.3 CONSENTS. All Consents required in Section C.2 of the Company
Disclosure Schedule must have been obtained and must be in full
force and effect. Complete and correct copies of all such Consents
shall have been delivered to the Purchaser.
Section F.4 ADDITIONAL DOCUMENTS. The Company must have caused the following
documents to be delivered to the Purchaser:
(a) properly chopped and endorsed Share Certificates and duly
completed and executed or chopped applications and other
documentation necessary for the transfer of the Shares to the
Purchaser in the Basic Transaction;
(b) properly chopped and endorsed Share Certificates and duly
completed and executed or chopped applications and other
documentation necessary for the transfer of the Remaining
Shares to the Purchaser when the Purchaser exercises the
Option, such Share Certificates to be held in escrow in
accordance with Section 6.5 and pending the Purchaser's
exercise of the Option.
(c) the Amended Joint Venture Agreement executed by the Company
and the Sellers' Representative on behalf of each Seller;
(d) the opinion of THY Taiwan International Law Offices, dated the
Closing Date, covering the points set forth in Exhibit F.4 (a)
in a form acceptable to the Purchaser;
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(e) such other documents as the Purchaser may reasonably request
for the purpose of enabling their counsel to provide the
opinion referred to in Section G.4(a) below;
(f) subject to Section F.5 hereof, a fully executed or chopped
original Seller POA from each Seller;
(g) the notices to all of the directors of the Company to convene
a meeting of the Company's Board of Directors in accordance
with Section 4.1, previously approved by the Purchaser and
ready to be sent on the first business day after the Closing
Date;
(h) Attachment C.12(a) to the Company Disclosure Schedule; and
(i) such other documents as the Purchaser may reasonably request
for the purpose of facilitating the consummation or
performance of the Basic Transaction.
SECTION F.5 MINIMUM PARTICIPATION OF SHAREHOLDERS. The shareholders of the
Company participating in the Basic Transaction as Sellers (i.e.,
those who have returned duly and properly executed or chopped Seller
POAs) must represent at least 90% of the outstanding Shares,
excluding the Shares held by UIL (i.e., 74% of the total outstanding
Shares of the Company).
SECTION F.6 ESCROW. Prior to the Closing Date, the Purchaser, the Sellers
(represented by the Sellers' Representative) and the Escrow Agent
shall enter into a mutually acceptable escrow agreement to govern
the escrow arrangements with respect to the Purchase Price set aside
for shareholders of the Company who have not become Sellers as of
the Closing Date, the Share Certificates representing the Remaining
Shares, the Share Certificates (or cash) held in accordance with
Section 6.5, and the distribution to the Sellers of the proceeds of
the Basic Transaction and the Purchaser's exercise of the Option,
provided, however, that the fees of the Escrow Agent and expenses
associated with the escrow arrangements (the "Escrow Fees and
Expenses") shall be borne by the Purchaser to the extent not
exceeding (including) US$25,000 and the Escrow Fees and Expenses
exceeding US$25,000 shall be equally borne by the Sellers and the
Purchaser (on a 50%/50% basis). Such escrow agreement shall set
forth clear instructions with respect to the release of the Share
Certificates or cash, provided, however, that the Purchaser shall
indemnify the Sellers for any damages resulting from breaches of the
escrow agreement not attributable to the Sellers, unless otherwise
provided by such escrow agreement.
SECTION F.7 NO PROCEEDINGS. Since the date of this Agreement, there must not
have been commenced or threatened against the Purchaser, or against
any Person affiliated with the Purchaser, any Proceeding (a)
involving any challenge to, or seeking damages or other relief in
connection with, any of the transactions contemplated hereby, or (b)
that may have the effect of preventing, delaying, making illegal, or
otherwise interfering with any of the transactions contemplated
hereby.
SECTION F.8 NO PROHIBITION. Neither the consummation nor the performance of any
of the transactions contemplated hereby will, directly or indirectly
(with or without notice or lapse of time), materially contravene, or
conflict with, or result in a material violation of, or cause the
Purchaser or any Person affiliated with the Purchaser to suffer any
material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has
been published, introduced, or otherwise proposed by or before any
Governmental Body.
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Section F.9 THE PURCHASER'S APPROVALS. To the extent noT previously
authorized by the Board of Directors of the Purchaser, the
Purchaser shall have obtained any other required corporate approval
or authorization, including foreign investment approval of the
Investment Commission of the Ministry of Economic Affairs of the
Republic of China. The Purchaser shall pursue satisfaction of this
condition in good faith.
Section F.10 PARTICIPATION OF UIL. The Purchaser shall have reached
agreement with and shall have signed a binding agreement with UIL
regarding (a) a modified Sublicense Agreement and modified
Collaborative Services Agreement or (b) a transaction that provides
the same effect for the Purchaser. For the avoidance of doubt, this
condition shall be deemed fully satisfied at such time that such a
binding agreement has been signed by the Purchaser and UIL,
irrespective of whether the closing for any transaction
contemplated by such agreement has occurred.
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SCHEDULE G
CONDITIONS PRECEDENT TO THE COMPANY'S AND THE SELLERS'
OBLIGATION TO CLOSE
The obligation of the Sellers to sell the Shares and the Sellers and
the Company to take the other actions required to be taken by them at the
Closing is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by the Company, in whole or
in part if executes a writing so stating at or prior to Closing):
Section G.1 ACCURACY OF REPRESENTATIONS. All of the Purchaser's representations
and warranties in this Agreement (considered collectively), and each
of these representations and warranties (considered individually),
must have been accurate in all material respects as of the date of
this Agreement and must be accurate in all material respects as of
the Closing Date as if made on the Closing Date, except for those
representations and warranties made of a specified date.
Section G.2 THE PURCHASER'S PERFORMANCE. The Purchaser must have delivered each
of the documents and other deliveries required to be delivered by
the Purchaser pursuant to Section 1.5(b) and must have made the Cash
Payment required to be made by the Purchaser the pursuant to Section
1.5(b)(i).
Section G.3 CONSENTS. All Consents required in Section E.2 of the Purchaser
Disclosure Schedule must have been obtained and must be in full
force and effect. Complete and correct copies of all such Consents
shall have been delivered to the Company.
SECTION G.4 ADDITIONAL DOCUMENTS. The Purchaser must have caused the following
documents to be delivered to Company and/or the
(a) an opinion of counsel to the Purchaser, dated the Closing
Date, covering the points set forth in Exhibit G.4(a) and in a
form acceptable to the Sellers; and
(b) such other documents as Company may reasonably request for the
purpose of enabling its counsel to provide the opinions
referred to in Section G.4(a) above;
(c) the Amended Joint Venture Agreement, executed by the
Purchaser; and
(d) such other documents as the Company may reasonably request for
the purposes of otherwise facilitating the consummation of the
Basic Transaction.
Section G.5 NO PROHIBITION. There must not be in effect any Legal Requirement or
Order that (i) prohibits the sale of the Shares of the Sellers to
the Purchaser or (ii) materially contravenes or conflicts with the
Company's or the Sellers' performance of the Basic Transaction.
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SCHEDULE H
GENERAL PROVISIONS
Section H.1 EXPENSES. Each party will be responsible for its own expenses in
connection with the preparation, execution, and performance of this
Agreement and the Basic Transaction and the Purchaser's exercise of
the Option, including, without limitation, all travel and
accommodation expenses of its Representatives and all third party
professional expenses. The Sellers understand and agree that any
Sellers' Transaction Fees incurred in connection with the
Purchaser's exercise of the Option shall be deducted pro rata from
the proceeds of the Exercise Price paid to each Seller.
Section H.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar publicity
to be issued by the Purchaser, the Company or any of the Sellers
with respect to this Agreement or the Basic Transaction or the
Purchaser's exercise of the Option will be issued, if at all, at
such time and in such manner as the Purchaser and the Company shall
mutually agree. Unless consented to by the Company or the Purchaser
in advance or required by Legal Requirements, each Party (including
each Seller) shall keep this Agreement strictly confidential and may
not make any disclosure of this Agreement to any Person; provided,
however, that if applicable Legal Requirements require the Company,
the Purchaser or a Seller to disclose this Agreement or the terms
hereof, such party shall provide the Company and the Purchaser with
five (5) business days' prior written notice of such disclosure and
a copy of such disclosure. The Parties will consult with each other
concerning the means by which the employees, customers, and
suppliers of the Company and others having dealings with the Company
will be informed of the Basic Transaction or the Purchaser's
exercise of the Option, and the Purchaser will have the right to be
present for any such communication.
Section H.3 CONFIDENTIALITY. The Nondisclosure Agreement, dated September 15,
2003, entered into by the Company and the Purchaser is incorporated
herein by this reference and shall remain in full force and effect
by its terms.
Section H.4 NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have
been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written
confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by
the addressee, if sent by an internationally recognized overnight
delivery service (receipt requested), in each case to the
appropriate addresses and telecopier numbers set forth below (or to
such other addresses and telecopier numbers as a Party may designate
by notice to the other Party):
Company: Unitive Semiconductor Taiwan Corporation
00 Xxxxx-Xx Xxxxx Xxxx
Xxxx Xxx Xxxxx, Xxxxxx, ROC
Attention: Xxxxxx Xxxx, President
Telephone: x000-0-0000000 Ext.7000
Facsimile: x000-0-0000000
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The Sellers: Unitive Semiconductor Taiwan Corporation
00 Xxxxx-Xx Xxxxx Xxxx
Xxxx Xxx Xxxxx, Xxxxxx, ROC
Attention: Xxx X. Xxxxx and/or Xxxxxx Xxxx
Attorneys-in-Fact for the Sellers
Telephone: x000-0-0000000 Ext.7000
Facsimile: x000-0-0000000
The Purchaser: Amkor Technology, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000, X.X.X.
Attention: General Counsel
Telephone: x0-000-000-0000
Facsimile: x0-000-000-0000
With a copy to: The Pamir Law Group
14/F, 116 Nanking East Road, Sec. 2
Taipei 104, Taiwan
Attention: Xxxxxxx X. Xxx
Telephone: (000-0) 0000-0000
Facsimile: (000-0) 0000-0000
Section H.5 RESOLUTION OF DISPUTES.
(a) Amicable Settlement. All disputes in connection with the
interpretation or implementation of this Agreement, or the
breach, termination or invalidity hereof, so far as is
reasonably possible, shall be settled amicably through
friendly consultation by the Parties.
(b) Arbitration. In the event that the Parties are unable to
settle any such dispute within thirty (30) days of its
submission in writing by one of the Parties, any such disputes
shall be settled by final and binding arbitration in
accordance with the R.O.C. Arbitration Law. The first arbitral
proceeding shall take place within one hundred twenty (120)
days after the due constitution of the Tribunal.
(c) Place of Arbitration. The place of arbitration shall be in
Taipei, Taiwan.
(d) Dispute Resolution. The arbitration shall be heard and
determined by a tribunal consisting of three (3) arbitrators
(the "Tribunal"). Each Party shall appoint one arbitrator, and
the Party-appointed arbitrators shall jointly appoint a third
arbitrator who shall be the presiding arbitrator.
(e) Binding Effect. The decision made by the Tribunal shall be
final and binding on all Parties, and all Parties shall act
accordingly.
(f) Costs and Awards. The cost of arbitration shall be equally
borne by the Parties, unless otherwise decided by the
Tribunal, and each Party shall bear its own legal fees in
connection with the arbitration proceeding. The award shall be
made and shall be payable in U.S. dollars free of any tax or
any other deduction. The award shall include interest from the
date of any breach or other violation of this
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Agreement. The Tribunal shall also fix an appropriate rate of
interest from the date of the breach or other violation to the
date when the award is paid in full.
(g) Language. The English language shall be the prevailing
language in the arbitral proceeding, and if testimony,
evidence or other material presented at the arbitral
proceeding is in a language other than English, the
translation thereof into English shall prevail. All hearing
pleadings, statements of claim or defense, awards and the
reasons supporting them shall be written in English.
(h) Continuing Performance. During such consultation or
arbitration, the Parties shall, with the exception of matters
in dispute, continue to perform their respective obligations
pursuant to the provisions of this Agreement.
Section H.6 FURTHER ASSURANCES.
(a) The Parties agree (i) to furnish upon request to each other
such further information, (ii) to execute and deliver to each
other such other documents, and (iii) to do such other acts
and things, all as the other Party may reasonably request for
the purpose of carrying out the intent of this Agreement and
the documents referred to in this Agreement.
(b) In the event and for so long as any Party actively is
contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in
connection with (i) the Basic Transaction, (ii) the
Purchaser's exercise of the Option or (iii) any fact,
situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure
to act, or transaction on or prior to the Closing Date
involving the Company, each of the other parties will
cooperate with it and its counsel in the contest or defense,
make available their personnel, and provide such testimony and
access to their books and records as shall be necessary in
connection with the contest or defense, all at the sole cost
and expense of the contesting or defending party (unless the
contesting or defending party is entitled to indemnification
therefor under Article VI above).
Section H.7 WAIVER. The rights and remedies of the Parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by
any Party in exercising any right, power, or privilege under this
Agreement or the documents referred to in this Agreement will
operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power, or privilege
will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege.
To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement or the documents referred to in
this Agreement can be discharged by one Party, in whole or in part,
by a waiver or renunciation of the claim or right unless in writing
signed by the other Party; (b) no waiver that may be given by a
Party will be applicable except in the specific instance for which
it is given; and (c) no notice to or demand on one party will be
deemed to be a waiver of any obligation of such Party or of the
right of the Party giving such notice or demand to take further
action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
Section H.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements between the Parties with respect to its subject
matter and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms
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of the agreement between the Parties with respect to its subject
matter. This Agreement may not be amended or modified except by a
written agreement executed by the Party to be charged with the
amendment or modification.
Section H.9 DISCLOSURE SCHEDULES.
(a) The disclosures in the Disclosure Schedules, and those in any
supplement thereto, must relate only to the representations
and warranties in the Section of the Agreement to which they
expressly relate and not to any other representation or
warranty in this Agreement.
(b) In the event of any inconsistency between the statements in
the body of this Agreement and those in the Disclosure
Schedules (other than an exception expressly set forth as
such in the Disclosure Schedules with respect to a
specifically identified representation or warranty), the
statements in the body of this Agreement will control.
Section H.10 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. None of
the Parties may assign any of its rights under this Agreement
without the prior consent of the other Parties, which will not be
unreasonably withheld, except that the Purchaser may assign any of
its rights under this Agreement to any Related Person of the
Purchaser. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit
of the successors and permitted assigns of the Parties. Nothing
expressed or referred to in this Agreement will be construed to
give any Person other than the Parties to this Agreement any legal
or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive
benefit of the Parties and their successors and assigns.
Section H.11 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction,
the other provisions of this Agreement will remain in full force
and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and
effect to the extent not held invalid or unenforceable.
Section H.12 SECTION HEADINGS, CONSTRUCTION. The headings of sections in
this Agreement are provided for convenience only and will not
affect its construction or interpretation. All references to a
section ("Section ") or sections ("Section ") refer to the
corresponding section or sections of this Agreement. All words used
in this Agreement will be construed to be of such gender or number
as the circumstances require. Unless otherwise expressly provided,
the word "including" does not limit the preceding words or terms.
Section H.13 TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
Section H.14 GOVERNING LAW. This Agreement will be governed by the laws of
the Republic of China without regard to conflicts of laws
principles.
Section H.15 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy
of this Agreement and all of which, when taken together, will be
deemed to constitute one and the same agreement.
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SCHEDULE I
PRE-CLOSING COVENANTS OF THE COMPANY
The Company covenants and agrees with the Purchaser that, at all
times after the date of execution of this Agreement and before the earlier of
the Closing Date or the termination of this Agreement, the Company shall comply
with all covenants and provisions of this Schedule I applicable to it, except to
the extent that the Purchaser may otherwise consent in writing.
SECTION I.1 ACCESS AND INVESTIGATION.
(a) Between the date of execution of this Agreement and the
Closing Date, the Company and its Representatives will (i)
afford the Purchaser and its Representatives reasonable access
to the Company's Representatives, properties, contracts, books
and records, and other documents and data, (ii) furnish the
Purchaser and Purchaser's Representatives with copies of all
such contracts, books and records, and other documents and
data as the Purchaser may reasonably request, (iii) furnish
the Purchaser and the Purchaser's Representatives with such
additional financial, operating, and other data and
information as the Purchaser may reasonably request, (iv)
instruct the Representatives of the Company to cooperate, to
the extent reasonable, with the Purchaser and its
Representatives in its investigation of the Company, and (v)
otherwise cooperate with the investigation by the Purchaser
and the Purchaser Representatives, and shall authorize
independent certified public accountants of the Company to
permit the Purchaser and Purchaser's Representatives to
examine all accounting records and working papers pertaining
to the Financial Information. The Purchaser and the Company
will coordinate such activities in a manner so as to eliminate
or reduce the disruption to the Company's businesses resulting
therefrom.
(b) No investigation pursuant to this Section I.1 shall affect or
be deemed to modify any representation or warranty made by the
Company or the Sellers.
SECTION I.2 OPERATION OF THE BUSINESS OF THE COMPANY. Between the date of the
execution of this Agreement and the Closing Date, the Company will:
(a) conduct the business of the Company only in the Ordinary
Course of Business and otherwise refrain from any
extraordinary transactions;
(b) use its best efforts to preserve intact the current business
organizations of the Company, keep available the services of
the current officers, employees, and agents of the Company;
and maintain the relations and goodwill with suppliers,
customers, landlords, creditors, employees, agents, and others
having business relationships with the Company; and
(c) report periodically to the Purchaser concerning the status of
the business, operations, and finances of the Company.
SECTION I.3 NEGATIVE COVENANT. Except as otherwise expressly permitted by this
Agreement, between the date of the execution of this Agreement and
the Closing Date, the Company will not without the prior written
consent of the Purchaser, take any affirmative action, or fail to
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take any reasonable action as a result of which any of the changes
or events listed in Section C.17 will occur.
SECTION I.4 REQUIRED APPROVALS; COOPERATION.
(a) As promptly as practicable after the date of this Agreement,
the Company will (i) make all filings and obtain all
approvals, authorizations, consents and clearances required by
Legal Requirements to be made by each of them in order to
consummate the Basic Transaction and (ii) obtain all approvals
and consents required of any Person to consummate the Basic
Transaction.
(b) Between the date of the execution of this Agreement and the
Closing Date, the Company will (i) cooperate with the
Purchaser with respect to all filings that the Purchaser
elects to make or are required by Legal Requirements to make
in connection with the Basic Transaction, and (ii) cooperate
with the Purchaser in obtaining all consents identified in
Section E.2 of the Purchaser Disclosure Schedule.
Section I.5 NOTIFICATION. The Company will notify the Purchaser promptly in
writing of, and contemporaneously will provide the Purchaser with
true and complete copies of any and all information or documents
relating to, and will use best efforts to cure before the Closing
Date, any event, transaction, or circumstance occurring after the
date of the execution of this Agreement that causes or will cause
any covenant or agreement of the Company under this Agreement to be
breached, or that renders or will render untrue any representation
or warranty of the Company and/or the Sellers contained in this
Agreement as if the same were made on or as of the date of such
event, transaction, or circumstance. The Company also will use Best
Efforts to cure, before the Closing Date, any violation or breach of
any representation, warranty, covenant, or agreement made by the
Company and/or the Sellers in this Agreement, whether occurring or
arising before or after the date of the execution of this Agreement.
No disclosure by the Company and/or the Sellers pursuant to this
Section I.5, however, shall be deemed to amend or supplement the
Company Disclosure Schedule, or to prevent or cure any
misrepresentation or breach of warranty, unless consented to in
writing by the Purchaser.
SECTION I.6 FURTHER ASSURANCES. The Company will use its best efforts to take
all action and to do all things reasonably necessary, proper or
advisable in order to consummate the Basic Transaction (including
satisfaction, but not waiver, of the closing conditions set forth in
Schedules F and G).
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AMKOR TECHNOLOGY, INC.
0000 XXXXXXXXXX XXXXX
XXXX XXXXXXX, XX 00000, X.X.X.
July 9, 2004
Unitive Semiconductor Taiwan Corporation
00 Xxxxx-Xx Xxxxx Xxxx
Xxxx Xxx Xxxxx, Xxxxxx, ROC
Attn: Xxx X. Xxxxx, as Chairman and Sellers' Representative
RE: Amendment to Stock Purchase Agreement and Loan Agreement
Dear Ray:
This letter (this "Letter") is to confirm our understanding that Unitive
Semiconductor Taiwan Corporation ("UST") and the certain shareholders who have
authorized you to be the Seller's Representative (the "Sellers") have agreed to
the following matters with respect to the Loan Agreement dated as of June 3,
2004 by and between Amkor Technology, Inc. ("Amkor") and UST (the "Loan
Agreement") and the Stock Purchase Agreement dated as of June 3, 2004 by and
among Amkor, the Sellers and UST (the "SPA"). Terms not defined herein have the
meanings ascribed thereto in the SPA.
UST, the Sellers and Amkor hereby agree as follows:
1. Sections 1.4 and 5.1(b) of the SPA shall be amended to replace "July 2,
2004" with "August 20, 2004". Accordingly, Section 5 of the Loan Agreement shall
not come into effect, if at all, until August 20, 2004.
2. Section 4.1 of the SPA shall be deleted in its entirety and shall be
replaced with the following text:
"Not later than the Closing Date, the Company shall have called a
shareholders meeting and have elected the directors and supervisors in
accordance with the terms of the Amended Joint Venture Agreement. As soon
as practicable after the Closing, the newly elected directors shall
convene a meeting of the Board of Directors to elect one director
representative of the Purchaser as Chairman of the Company."
3. After the execution of this Letter and before the Closing, Amkor shall
in good faith work with UST and the banks with which UST has outstanding loan
obligations to investigate into and determine the most suitable form of
guarantee or substitute arrangement acceptable by Amkor and the banks to replace
Xxx Xxxxx'x and Xxxxxx Xxxx'x existing personal guarantees. Substitute
arrangements may include, and are not limited to, indemnification of Xxx Xxxxx
and Xxxxxx Xxxx and seeking alternative sources of financing to replace the
existing bank loans. As soon as practicable after the
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Closing, but no later than three (3) months after the Closing, Amkor shall put
such replacement guarantees or substitute arrangements into effect. During the
time between the Closing and the time that such replacement guarantees or
substitute arrangements are put into effect. Amkor shall indemnify Xxx Xxxxx and
Xxxxxx Xxxx for claims from the banks arising out of their personal guarantees.
These indemnity obligations shall be set forth in a form of indemnity letter
with terms satisfactory to Amkor, Xxx Xxxxx and Xxxxxx Xxxx which shall provide,
among other things, that no loan payments shall be made by UST, Xxx Xxxxx or
Xxxxxx Xxxx without Amkor's approval.
4. The Amended Joint Venture Agreement and Escrow Agreement shall be
executed on or before the Closing by UST, Amkor and the Sellers' Representatives
in substantially the form attached hereto.
In the event of any conflict or inconsistency between the Loan Agreement
and this Letter or between the SPA and this Letter, this Letter shall prevail
and control. Except as amended hereby, each of the SPA and Loan Agreement
remains in full force and effect. This Letter may be executed simultaneously in
two or more counterparts and by different parties hereto on separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Letter shall be
governed by and construed under the laws of the Republic of China, and in the
event of a dispute, Section H.5 of the SPA (Resolution of Disputes) shall apply
to the parties hereto.
Sincerely,
AMKOR TECHNOLOGY, INC.
By: /s/ Xxxx Xxxxxxx
--------------------------
Name: XXXX XXXXXXX
Its: EVP, Corp. Dev.
[Remainder of page intentionally left blank; Acknowledgement page follows.]
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AGREED AND ACCEPTED:
UNITIVE SEMICONDUCTOR SELLERS' REPRESENTATIVE
TAIWAN CORPORATION ON BEHALF OF EACH SELLER
BY: /s/ Xxx X. Xxxxx By: /s/ Xxx X. Xxxxx
--------------------- -------------------------
Name: Xxx X. Xxxxx Name: Xxx X. Xxxxx
Its: Chairman ' Their: Attorney-in-Fact
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