AMENDED AND RESTATED EXCHANGE AGREEMENT
AMENDED AND RESTATED
EXCHANGE AGREEMENT
This
AMENDED AND RESTATED EXCHANGE AGREEMENT (this “Agreement”), dated as
of August 15, 2008, is among PSi Technologies Holdings, Inc., a corporation
organized and existing under the laws of the Philippines (“Holdings”), PSi
Technologies, Inc., a corporation organized and existing under the laws of the
Philippines and the principal operating subsidiary of Holdings (the “Company”), and
Xxxxxxx Xxxxx Global Emerging Markets Partners, LLC (“Purchaser”).
WHEREAS,
the parties entered into an initial exchange agreement, dated as of July 3,
2003, relating to the Notes owned by the Purchaser, which the parties now desire
to hereby amend and restate in its entirety.
(a) Unless
otherwise defined herein, the terms below shall have the following meanings
(such meanings being equally applicable to singular and plural forms of the
terms defined):
“ADSs” means the
American Depositary Shares of Holdings, each ADS representing one share of
Common Stock.
“Affiliate” shall
mean, with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
under common Control with, such specified Person.
“Aggregate Converted
Principal” means, at a specified date, the sum of all the Conversion
Principal Amounts in respect of which Holdings issued shares of Common Stock to
Purchaser from the date hereof to such specified date.
“Board” means the
board of directors of Holdings.
“BSP” means the Bangko Sentral ng Pilipinas
or the central monetary authority of the Philippines or any Governmental
Authority of the Philippines that assumes the functions thereof.
“BSRD” means the
Bangko Sentral Registration Document issued by the BSP, which allows the holder
to source foreign exchange from the Philippine banking system.
“Business Day” means
any day other than a Saturday, Sunday or any other day that is a legal holiday
under the laws of the State of New York or Taguig, Philippines or a day on which
national banking associations in New York or Taguig, Philippines are authorized
or required by law or other governmental action to close.
“Common Stock” means
the common stock, par value PHP 1 2/3 per share of Holdings.
“Controls” means
(including the terms “Controlled by” and
“under common Control
with”) means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, as trustee or executor, by
contract or otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.
“Conversion Principal
Amount” means, at a specified date, (a) an amount set forth in an
Exchange Notice that represents the portion of the Current Invested Principal
Amount of the Notes that Purchaser is requesting to be converted into Common
Stock pursuant to such Exchange Notice or (b) an amount set forth in a
Mandatory Issuance Notice that represents the portion of the Current Invested
Principal Amount of the Notes that the Purchaser is requesting to be used to
calculate the number of shares of Common Stock to be issued in the Mandatory
Issuance relating to such Mandatory Issuance Notice.
“Current Invested Principal
Amount” means, at a specified date, an amount equal to the Invested
Principal Amount less the Aggregate
Converted Principal, in each case, from the date hereof to such specified
date.
“Current Market Price”
means in respect of any share of Common Stock on any date herein specified the
average of the daily market prices of the Common Stock or ADSs for five
consecutive trading days commencing ten trading days before the public
announcement of any sale or other issuance of Common Stock or Common Stock
Equivalents. The daily market price for each such trading day shall
be the last reported sale price on such day on the Nasdaq National Market (the
“Nasdaq”) or,
if the Common Stock or ADSs are not so listed or admitted, the last reported
sale price on such day on the Nasdaq or any other trading facility on which such
Common Stock or ADSs are then listed; provided, however, that if no
sale takes place on such day on any such exchange, market or trading facility,
the average of the last reported closing bid and ask prices on such day as
officially quoted on such exchange, market or trading facility shall be
the
2
daily
market price for such trading day. If the Common Stock or ADSs are
not listed on Nasdaq or any other trading facility at the time of such
calculation, the “Current Market Price”
of one share of Common Stock shall be determined by the Board in good
faith.
“Encumbrance” means
any lien, mortgage, pledge, collateral assignment, security interest,
hypothecation or other encumbrance, other than as established by, under or in
connection with, the terms of this Agreement, the Notes or the Purchase
Agreement, and the Subscription Agreement and the Note Assignment, if
applicable, or the transactions contemplated thereby.
“Governmental Agency”
means any supranational, multinational, municipal, provincial, federal, state,
local, foreign or other governmental agency, instrumentality, commission,
authority, board or body.
“Holder” shall mean
Purchaser and any transferee of Purchaser.
“Invested Principal
Amount” means USD$5,656,714, plus any accreted interest added to the
Invested Principal Amount pursuant to Section 2.01 of the
Notes.
“Law” means all laws,
statutes and ordinances of the United States, any state of the United States,
any foreign country, any foreign state and any political subdivision thereof,
including all decisions, orders, judgments or decrees of courts having the
effect of law in each such jurisdiction.
“Person” shall mean
any individual, corporation, partnership, joint venture, firm, trust,
unincorporated organization, government or any agency or political subdivision
thereof or other entity.
“Philippine SEC” means
the Securities and Exchange Commission of the Philippines.
“PHP” shall mean the
lawful currency of the Philippines.
“Regulation” means any
rule or regulation of any Governmental Agency having the effect of Law or any
rule or regulation of any self-regulatory organization.
“Securities Act” means
the Securities Act of 1933 of the United States, as amended.
(b) The
following terms have the meanings set forth in the section set forth opposite
such term:
|
“2005
Note”
|
6(a)(iii)
|
|
“Agreement”
|
Preamble
|
|
“Closing”
|
3(e)
|
|
“Closing
Date”
|
2(e)
|
|
“Common Stock
Equivalents”
|
5(b)
|
|
“Company”
|
Preamble
|
3
|
“Contributed
Amount”
|
6(a)(iii)
|
|
“Exchange
Closing”
|
2(e)
|
|
“Exchange
Notice”
|
2(c)
|
|
“Exchange
Right”
|
2(a)
|
|
“Exchange
Shares”
|
2(i)
|
|
“Exchange Shares
Subscription Agreement”
|
2(c)
|
|
“Exchange Subsequent
Closing”
|
2(c)
|
|
“Extraordinary Common
Stock Event”
|
5(e)
|
|
“Holdings”
|
Preamble
|
|
“Issuance Purchase
Price”
|
3(a)
|
|
“Mandatory
Issuance”
|
3(a)
|
|
“Mandatory Issuance
Closing”
|
3(e)
|
|
“Mandatory Issuance
Closing Date”
|
3(e)
|
|
“Mandatory Issuance
Notice”
|
3(b)
|
|
“Mandatory Issuance
Rights”
|
3(a)
|
|
“Mandatory Issuance
Shares”
|
3(f)(i)
|
|
“Mandatory Issuance
Shares Subscription Agreement”
|
3(c)(ii)
|
|
“Mandatory Issuance
Subsequent Closing”
|
3(d)
|
|
“Net Consideration Per
Share”
|
5(c)
|
|
“Note
Assignment”
|
2(c)
|
|
“Note Exercise
Price”
|
2(a)
|
|
“Notes”
|
Recitals
|
|
“Notes
BSRD”
|
6(e)(i)
|
|
“Purchase
Agreement”
|
Recitals
|
|
“Purchaser”
|
Preamble
|
|
“Redemption
Payment”
|
3(c)
|
|
“Shares
BSRD”
|
6(e)(ii)
|
|
“Subsequent
Closing”
|
3(d)
|
The Note
Exercise Price is subject to adjustment as set forth in
Section 5.
4
after
the date of delivery of such notice with respect to shares of Common Stock
issuable from the unissued authorized capital stock of Holdings and within three
days after the approval by the Philippine SEC of the necessary increase in
authorized capital stock of Holdings with respect to shares of Common Stock
issuable from an increase in the authorized capital stock of Holdings; provided, however, if Holdings
has not received the Notes BSRD described in Section 6(e) by such third day
after the delivery of the Exchange Notice, the Closing shall occur as soon as
practicable following the receipt of such Notes BSRD by Holdings, and
(ii) the amount of Notes to be exchanged expressed as a Conversion
Principal Amount and such Conversion Principal Amount shall be in multiples of
$25,000 or, in the case of the exchange of all outstanding Notes, such remainder
of the Conversion Principal Amount. Concurrent with the delivery of
the Exchange Notice with respect to shares of Common stock issuable from the
unissued authorized capital stock and within three (3) Business Days after
stockholders representing at least two-thirds of the outstanding capital stock
of Holdings approve the necessary increase in authorized capital stock with
respect to shares of Common Stock issuable from an increase in authorized
capital stock of Holdings, Purchaser shall deliver to Holdings (A) an executed
signature page of the Exchange Shares Subscription Agreement attached hereto as
Exhibit A (“Exchange
Shares Subscription Agreement”), (B) an executed
signature page of the Note Assignment, a form of which is attached hereto as
Exhibit B (“Note
Assignment”), (C) such number
of Notes owned by Purchaser with an aggregate principal amount equal to the
Conversion Principal Amount as set forth in the Exchange Notice to which the
Exchange Notice relates together with the Note Assignment duly executed by
Purchaser. Upon such delivery and subject to Section 6(a)(iii),
Holdings shall receive the relevant Notes and all the rights pertaining to a
holder thereof other than the Exchange Rights.
(ii) Any
accrued and unpaid interest (other than accrued and unpaid interest added to the
Invested Principal Amount pursuant to Section 2.01 of the Notes) in respect
of any Notes to be exchanged into shares of Common Stock pursuant to an Exchange
Notice shall be paid in cash at the time such Notes are exchanged.
(iii) No
fractional shares of Common Stock or scrip representing fractional shares of
Common Stock shall be issued upon the exchange of the Note. In lieu
of any fractional share of Common Stock to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Note Exercise Price
multiplied by such fraction.
5
BSRD
described in Section 6(d) by such third day after the delivery of the Exchange
Notice, the Closing shall occur as soon as practicable following the receipt of
such Notes BSRD by Holdings and the Company. In the event
that all of Purchaser’s Notes are not exchanged pursuant to this Agreement at
the relevant Closing, Purchaser may engage in successive closings (each, an
“Exchange Subsequent
Closing”) with respect to the completion of the exchange of its Notes for
Common Stock.
(i) At
the Exchange Closing or any Exchange Subsequent Closing, as the case may be,
Holdings shall deliver to Purchaser (A) certificates evidencing such number
of shares of Common Stock (as calculated in accordance with Section 2(d)
above) (the “Exchange
Shares”), pursuant to the Exchange Notice to which the Exchange Closing
or such Exchange Subsequent Closing relates, in definitive form and registered
in the name of Purchaser and/or such assigns permitted pursuant to the Note and
in such denominations as Purchaser shall reasonably request, (B) proof of
the payment prior to such Closing Date of applicable documentary stamp taxes and
any other fees or costs imposed on the issuance of the Exchange Shares by any
Governmental Agency having jurisdiction over such issuance, (C) one or more of
the Notes BSRDs, covering such amounts as necessary to cause the registration of
the Exchange Shares with the BSP and any other document, certificate or report
that may be required by the BSP in respect of such registration and (D) the fee
contemplated by Section 6(a)(iii)(a).
(ii) At
the Exchange Closing or any Exchange Subsequent Closing, as the case may be, the
Company shall deliver to Purchaser (A) an amount in cash equal to any accrued
and unpaid interest (other than accrued and unpaid interest added to the
Invested Principal Amount pursuant to Section 2.01 of the Notes) in respect
of the Notes exchanged into Common Stock pursuant to the Exchange Notice
delivered to Holdings under Section 2(d) above and (B) a new Note
representing the Current Invested Principal Amount, if any.
6
within
three days after the approval by the Philippine SEC of the necessary increase in
authorized capital stock of Holdings with respect to shares of Common Stock
issuable from an increase in the authorized capital stock of Holdings, and
(ii) the number of shares of Common Stock to be issued to Purchaser in
connection with the delivery of the Mandatory Issuance Notice, which shall be
determined by dividing
(A) the Conversion Principal Amount specified in the Mandatory Issuance Notice
by (B) the Note
Exercise Price then in effect; provided, however, that if the
Holder would receive any fractional share of Common Stock pursuant to this
calculation, Holdings shall make a cash payment to Purchaser equal to the Note
Exercise Price then in effect multiplied by such
fraction. Concurrently with the delivery of a Mandatory Issuance
Notice, Purchaser shall deliver to Holdings (A) an executed signature page of
the Subscription Agreement, (B) an executed signature page of the Note
Assignment, (C) such number of Notes owned by Purchaser with an aggregate
principal amount equal to the Conversion Principal Amount as set forth in the
Mandatory Issuance Notice to which the Mandatory Issuance relates, together with
an instrument of transfer reasonably satisfactory to Holdings duly executed by
Purchaser, and (D) the Issuance Purchase Price for the Mandatory Issuance
Shares. Upon such delivery, and subject to Section 3(c) below,
Holdings shall receive the relevant Notes and all the rights pertaining to a
holder thereof other than the Mandatory Issuance Rights.
(ii) Within
fourteen (14) days from the delivery of the Mandatory Issuance Notice with
respect to shares of Common Stock issuable from unissued authorized capital
stock of Holdings, and within fourteen (14) days after stockholders representing
at least two-thirds of the outstanding capital stock of Holdings approve the
necessary increase in authorized capital stock with respect to shares of Common
Stock issuable from an increase in authorized capital stock of Holdings, (A)
each of Holdings and the Company shall deliver to the Purchaser and the
Purchaser shall deliver to Holdings, an executed signature page of the Mandatory
Issuance Shares Subscription Agreement, a form of which is attached hereto as
Exhibit C (the “Mandatory Issuance Shares
Subscription
Agreement”), (B) Holdings shall deliver to the Purchaser and the
Purchaser to Holdings, an executed signature page of the Note Assignment, (C)
the Company shall deliver to the Purchaser the Redemption Payment,
and (D) the Purchaser shall deliver to Holdings the Issuance Purchase
Price and such number of Notes owned by Purchaser with an aggregate principal
amount equal to the Conversion Principal Amount as set forth in the Mandatory
Issuance Notice to which the Mandatory Issuance relates, together with the
relevant
7
Note
Assignment, it being understood that the actions contemplated by the foregoing
clauses (A) through (C) shall occur concurrently. Thereafter,
Holdings shall receive the relevant Notes and all the rights pertaining to a
holder thereof other than the Mandatory Share Issuance Rights.
(i) At
the Mandatory Issuance Closing or any Mandatory Issuance Subsequent Closing, as
the case may be, Holdings shall deliver to Purchaser (A) certificates
evidencing such number of shares of Common Stock (as calculated in accordance
with Section 3(b)(ii) above) (the “Mandatory Issuance
Shares”), pursuant to the Mandatory Issuance Notice to which the
Mandatory Issuance Closing or such Mandatory Issuance Subsequent Closing
relates, in definitive form and registered in the name of Purchaser and/or such
assigns permitted pursuant to the Note and in such denominations as Purchaser
shall reasonably request and (B) proof of the payment prior to such
Mandatory Issuance Closing Date of applicable documentary stamp taxes and any
other fees or costs imposed on the issuance of the Mandatory Issuance Shares by
any Governmental Agency having jurisdiction over such issuance.
(ii) At
the Mandatory Issuance Closing or any Mandatory Issuance Subsequent Closing, as
the case may be, the Company shall deliver to Purchaser (A) an amount in cash
equal to the sum of (x) any accrued and unpaid interest (other than accrued and
unpaid interest added to the Invested Principal Amount pursuant
Section 2.01 of the Notes) in respect of the Notes assigned pursuant to the
Mandatory Issuance Notice delivered to Holdings under Section 3(b)(ii)
above, (y) any cash payment in lieu of any fractional share of Common Stock
pursuant to Section 3(b)(ii) above, and (z) the Redemption Payment, and (B) a
new Note representing the Current Invested Principal Amount, if
any.
8
(a) As
of the date hereof and as of the date of the Closing and each Subsequent
Closing, Holdings hereby represents and warrants to Purchaser as
follows:
(i) Existence. Holdings
is a corporation duly organized, validly existing and in good standing under the
laws of the Philippines and has full corporate power and authority to conduct
its business and own and operate its properties as now conducted, owned and
operated.
(ii) Authorization and
Enforceability. Holdings has the full power and authority and
has taken all required corporate and other action necessary to authorize and
permit Holdings to execute and deliver this Agreement and to carry out the terms
hereof and to issue and deliver the Common Stock (except to the extent Holdings
is required to issue and deliver Common Stock in excess of its authorized
capital stock), and none of such actions will violate any provision of Holdings’
Articles of Incorporation or any applicable Law, or rule of any stock exchange
where the ADSs are listed, or result in the breach of, or constitute a default
(or event which, with notice or lapse of time or both, would constitute a
default) under, any agreement, instrument or understanding to which Holdings is
a party or by which it is bound. This Agreement constitutes a legal,
valid and binding obligation of Holdings, enforceable against Holdings in
accordance with its terms, except to the extent limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
similar laws of general application related to the enforcement of creditor’s
rights generally and (ii) general principles of equity. The Purchaser
acknowledges that the following shall not constitute a breach of the
representations and warranties contained in this Section 4.1(a)(ii): (1)
Holdings’ non-payment as of the date hereof of documentary stamp
taxes that will be due on the issuance of shares of Common Stock issuable under
this Agreement or any applicable taxes, fees or costs contemplated by Section
2(f)(i)(B) or 3(f)(ii)(B) of this Agreement, (2) Holdings’ not having
secured as of the date hereof an amended Notes BSRD and (3) Holdings’ not having
secured as of the date hereof and as of the Closing the Shares
BSRD.
(iii) Issuance of Common
Stock. The shares of Common Stock that may be issued pursuant
to this Agreement, when issued and delivered in accordance with this Agreement,
will be validly issued and outstanding and will be fully paid, nonassessable and
registrable with the BSP.
(b) As
of the date hereof and as of the date of the Closing and each Subsequent
Closing, Purchaser hereby represents and warrants to Holdings and the Company as
follows:
(i) Existence. Purchaser
is a limited liability company, duly organized and validly existing and in good
standing under the laws of the State of Delaware.
(ii) Authorization and
Enforceability. Purchaser has the full power and authority and
has taken all action necessary to authorize and permit it to execute
and
9
deliver
this Agreement and to carry out the terms hereof and none of such actions will
violate any provision of Purchaser’s organizational documents or any applicable
Law, or result in the breach of, or constitute a default (or event which, with
notice or lapse of time or both, would constitute a default) under, any
agreement, instrument or understanding to which Purchaser is a party or by which
it is bound. This Agreement constitutes a legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, except to the extent limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws of general application
related to the enforcement of creditor’s rights generally and (ii) general
principles of equity.
(iii) Securities
Laws. The Purchaser understands that the amendment of the
Notes and the issuance of Common Stock pursuant to the Notes and this Agreement
is intended to be exempt from registration under the Securities
Act. The Purchaser is an “accredited investor” as such term is
defined in Rule 501(a) of Regulation D under the Securities Act. The
Purchaser has acquired the Notes (and will acquire the Common Stock pursuant
hereto) for its own account, for investment and not with a view to the public
resale or distribution thereof, in violation of any United States or Philippine
securities law.
(a) If
Holdings shall, while Purchaser’s Exchange Rights or Mandatory Issuance Rights
under this Agreement are outstanding, issue or sell shares of Common Stock or
Common Stock Equivalents (as defined below) without consideration or at a price
per share or Net Consideration Per Share (as defined below) less than the
Current Market Price in effect immediately prior to such issuance or sale then
in such case the Note Exercise Price, except as hereinafter provided, shall be
lowered so as to be equal to an amount determined by multiplying such Note
Exercise Price by the following fraction:
N0 + X0
X0 + N2
Where:
N0 = the
number of shares of Common Stock outstanding immediately prior to the issuance
of such additional shares of Common Stock or Common Stock Equivalents
(calculated on a fully diluted basis assuming the exercise or conversion of all
then exercisable or convertible options, warrants, purchase rights and
convertible securities).
N1 = the
number of shares of Common Stock which the aggregate consideration (without
giving effect to any underwriter’s discounts or commissions) if any (including
the Net Consideration Per Share with respect to the issuance of Common Stock
Equivalents), received or receivable by Holdings for the total number of such
additional shares of Common Stock so issued or deemed to be issued would
purchase at the Current Market Price in effect immediately prior to such
issuance.
10
N2 = the
number of such additional shares of Common Stock so issued or deemed to be
issued.
(b) For
purposes of this Section 5, if a part or all of the consideration received by
Holdings in connection with the issuance of any securities described in this
Section 5 consists of property other than cash, such consideration shall be
deemed to have a fair market value as is reasonably determined in good faith by
the Board or a committee thereof. For the purposes of this Section 5,
the issuance of any warrants, options or subscription or purchase rights with
respect to shares of Common Stock and the issuance of any securities convertible
into or exchangeable for shares of Common Stock, including the ADSs, and the
issuance of any warrants, options or subscription or purchase rights with
respect to such convertible or exchangeable securities (collectively, “Common Stock
Equivalents”) shall be deemed an issuance of Common Stock. For
the avoidance of doubt, if a Common Stock Equivalent is issued or sold as part
of a unit with any other security of Holdings or its Affiliates that is not
independent of a Common Stock Equivalent, such other security shall not
constitute a Common Stock Equivalent. Any obligation, agreement or
undertaking to issue Common Stock Equivalents at any time in the future shall be
deemed to be an issuance at the time such obligation, agreement or undertaking
is made or arises and no additional adjustment of the Note Exercise Price shall
be made upon issuance of the Common Stock pertaining thereto.
(c) For
purposes of this Section 5, the “Net Consideration Per
Share” which shall be receivable by Holdings for any Common Stock issued
upon the exercise or conversion of any Common Stock Equivalents shall be
determined as follows:
(i) The
amount equal to the total amount of consideration, if any, received by Holdings
for the issuance of such Common Stock Equivalents (without giving effect to any
underwriting discounts or commissions), plus the minimum
amount of consideration, if any, payable to Holdings upon exercise, or
conversion or exchange thereof, divided by the
aggregate number of shares of Common Stock that would be issued if all such
Common Stock Equivalents were exercised, exchanged or converted.
(ii) In
each instance such determination shall be made as of the date of issuance of
Common Stock Equivalents without giving effect to any possible future upward
price adjustments or rate adjustments which may be applicable with respect to
such Common Stock Equivalents.
(d) Section 5(a)
shall not apply under any of the circumstances that would constitute an
Extraordinary Common Stock Event (as described below). Further,
Section 5(a) shall not apply with respect to the issuance or sale of shares
of Common Stock, or the grant of options or other Common Stock Equivalents
exercisable therefor, to current or former directors, officers, employees and
consultants of Holdings or any subsidiary pursuant to any qualified or
non-qualified stock option plan or agreement, stock purchase plan or agreement,
stock restriction agreement, employee stock ownership plan, consulting
agreement, or such other options, issuances, arrangements, agreements or plans
intended principally as a means of providing compensation for employment or
services, provided that in each
such case such plan, agreement, or other arrangement or issuance is approved by
the vote or consent of the Board.
11
(e) Upon
the happening of an Extraordinary Common Stock Event (as described below),
simultaneously with the happening of such Extraordinary Common Stock Event, the
Note Exercise Price shall be adjusted by multiplying the Note Exercise Price by
a fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such Extraordinary Common Stock Event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such Extraordinary Common Stock Event, and the product so
obtained shall thereafter be the Note Exercise Price.
An “Extraordinary Common Stock
Event” shall mean (i) the issue of additional shares of Common Stock
as a dividend or other distribution on outstanding shares of Common Stock,
(ii) a subdivision of outstanding shares of Common Stock into a greater
number of shares of Common Stock, or (iii) a combination or reverse stock
split of outstanding shares of Common Stock into a smaller number of shares of
the Common Stock.
(f) If
the Common Stock shall be changed into the same or a different number of shares
of any other class or classes of capital stock, whether by capital
reorganization, recapitalization, reclassification or consolidation or merger of
Holdings with another corporation, or the sale of all or substantially all of
its assets to another corporation or otherwise (other than an Extraordinary
Common Stock Event), then in each such event Purchaser shall have the right
thereafter to receive upon exercise hereof, in lieu of the number of shares of
Common Stock which Purchaser would otherwise have been entitled to receive, the
kind and amount of shares of capital stock and other securities and property
which it would have received upon such reorganization, recapitalization,
reclassification or consolidation or merger of Holdings with another
corporation, or the sale of all or substantially all of its assets or other
change had Purchaser exercised the Exchange Right immediately prior to such
reorganization, recapitalization, reclassification or consolidation or merger of
Holdings with another corporation, or the sale of all or substantially all of
its assets or change, all subject to further adjustment as provided
herein. The provision for such adjustments shall be a condition
precedent to the consummation by Holdings of any such transaction.
(g) Whenever
on or after the date of this Agreement the number of shares of Common Stock for
which this Exchange Right is exercisable or the Note Exercise Price is adjusted,
as herein provided, Holdings shall promptly give notice thereof to Purchaser, in
accordance with Section 9(b), by delivering a certificate which sets forth
the Note Exercise Price after such adjustment and a brief statement of the facts
requiring such adjustment. Such certificate shall also set forth the
kind and amount of stock or other securities or property for which this Exchange
Right shall be exercisable following the occurrence of any of the events
specified above. The foregoing anti-dilution adjustments shall not
apply to any securities outstanding prior to the date hereof.
12
Agreement,
or pursuant to the Exchange Agreement, dated as of June 2, 2005, among Holdings,
the Company and Purchaser (the “2005 Exchange
Agreement”), the lesser of (A) such number of shares of Common Stock as
are issuable upon the exchange of all then outstanding Notes and pursuant to a
Mandatory Issuance, in each case pursuant to this Agreement, and
pursuant to the 2005 Exchange Agreement and (B) all of its then authorized but
unissued shares of Common Stock. All shares of Common Stock that are
to be issuable upon exercise of the Exchange Right shall, when issued, be duly
authorized, duly and validly issued, fully paid and non-assessable and free from
all taxes, charges and Encumbrances. Holdings shall take all such
actions as may be necessary to assure that all such shares of Common Stock may
be so issued without violation of any applicable Law or Regulation or of any
requirements of any domestic securities exchange upon which shares of Common
Stock may be listed (except for official notice of issuance, which shall be
immediately transmitted by Holdings upon issuance).
(ii) At
any time and from time to time, Purchaser may request that Holdings use its
reasonable best efforts to increase the number of its authorized but unissued
shares of Common Stock to a number of shares of Common Stock that is not greater
than the number of shares of Common Stock that would be issuable (A) upon the
exchange of all then outstanding Notes or pursuant to a Mandatory Issuance, in
each case pursuant to this Agreement, and (B) pursuant to the 2005 Exchange
Agreement. Following receipt of such a request, Holdings shall use
its reasonable best efforts to take all action necessary to increase its
authorized but unissued shares of Common Stock accordingly as promptly as
practicable thereafter and shall keep Purchaser reasonably informed with respect
thereto.
(iii) If
and to the extent that the Purchaser, in connection with its subscription for
any newly-authorized shares of Common Stock in connection with any exercise of a
Mandatory Issuance Right or an Exchange Right under this Agreement or the 2005
Exchange Agreement, contributes, transfers or assigns an amount (whether or not
such amount is in the form of cash or all or a portion of the Note or the 2005
Note) to Holdings as paid-in capital for all or a portion of such shares of
Common Stock (the “Contributed Amount”),
then, (a) at the Closing (if any), Holdings shall pay to Purchaser in cash a fee
in an amount equal to the interest that would have accrued on such Contributed
Amount under the Note or the 10.00% Exchangeable Senor Subordinated Note dated
as of June 2, 2005 (the “2005 Note”) in
respect of which such Mandatory Issuance Right or Exchange Right was exercised
since it was exercised or (b) if the Closing does not occur prior to the 60th
Business Day after the delivery of an Exchange Notice or Mandatory Issuance
Notice, as applicable, Holdings shall promptly return such Contributed Amount to
Purchaser (together with a fee in cash in an amount equal to the interest that
would have accrued on such Contributed Amount under the Note or the 2005 Note in
respect of which such Mandatory Issuance Right or Exchange Right was exercised
since it was exercised), in cash or by return of the applicable portion of the
Notes or the 2005 Notes contributed to Holdings. Notwithstanding any
other agreement entered into by and among the Purchaser, Holdings and the
Company, the period provided for in this Section 6(a)(iii) may be extended with
the prior consent of the Purchaser for good cause, which consent shall not be
unreasonably withheld.
13
(b) Filings;
Etc. Subject
to the terms and conditions herein provided, Purchaser, Holdings and the Company
shall:
(i) make
any required filings, and obtain the consents, approvals, permits or
authorizations, required to be made or obtained prior to the Closing or a
Subsequent Closing, as the case may be, with or from any Governmental
Agency;
(ii) to
the extent permitted by Law and Regulation, agree not to participate in any
meeting or discussion with any Governmental Agency in respect of any filings,
investigation or other inquiry concerning this Agreement or the transactions
contemplated hereby unless they consult with the other parties in advance and,
to the extent permitted by such Governmental Agency, gives the other parties the
opportunity to attend and participate in such meeting or
discussion;
(iii) to
the extent permitted by Law and Regulation, furnish the other parties with
copies of all correspondence, filings and communications (and memoranda setting
forth the substance thereof) between them and their subsidiaries and their
respective representatives on the one hand, and any Governmental Agency or
members of any such agency’s staff on the other hand, with respect to this
Agreement and the transactions contemplated hereby; and
(iv) furnish
the other parties with such necessary information and reasonable assistance as
such other parties and their Affiliates may reasonably request in connection
with their preparation of necessary filings, registrations or submissions of
information to any governmental or regulatory authorities.
(c) Without
limiting Section 6(b), Purchaser, Holdings and the Company
shall:
(i) each
use reasonable best efforts to avoid the entry of, or to have vacated,
terminated or modified, any decree, order or judgment that would restrain,
prevent or delay the consummation of the transactions contemplated by this
Agreement; and
(ii) each
use reasonable best efforts to take any and all steps necessary to obtain any
consents and approvals or make any required filings under Section 6(b) above or
eliminate any impediments to the consummation of the transactions contemplated
by this Agreement.
(d) [Intentionally
Omitted.]
14
pertaining
to the use of proceeds from the Purchase Price and all other documents that may
be required by the BSP to register the Notes and issue the Notes
BSRD.
(ii) Holdings
and the Company agree that, for the benefit of Purchaser or any transferee of
Purchaser, they shall have (A) within 5 days of the Closing or any Subsequent
Closing, taken all action necessary to register the shares of Common Stock
issuable upon exchange of the Notes or pursuant to Mandatory Issuance with the
BSP and (B) within 30 Business Days of the Closing or the Subsequent Closing
obtained the related BSRD (the “Shares BSRD”); provided, however, that in the
event that Purchaser exercises an Exchange Right prior to September 30, 2008,
all actions set forth in this Section 6(e)(ii) shall be completed within 60
Business Days of such Closing or Subsequent Closing instead of 30 Business
Days. The period provided for in this Section 6(e)(ii) may be
extended with the prior consent of the Purchaser for good cause, which consent
shall not be unreasonably withheld. Such action shall include filing
of the requisite Notes BSRD, if applicable, and all other documents that may be
required by the BSP to register the shares of Common Stock and issue the Shares
BSRD.
The
obligations of Holdings and Purchaser to complete the exchange of Notes for
Common Stock upon the exercise of an Exchange Right or to consummate a Mandatory
Issuance upon exercise of a Mandatory Issuance Right shall be subject to the
conditions that (a) the issuance of Common Stock will not require registration
of the Common Stock under the Securities Act or any other securities laws and
(b) none of the parties hereto shall be subject to any Law that prohibits the
consummation of the transactions contemplated hereby or decree, order or
injunction that prohibits the consummation of the transactions contemplated
hereby issued by a court of competent jurisdiction of (i) the United States
or any state or other jurisdiction in the United States or (ii) the
Republic of the Philippines; provided, however, that, prior
to invoking this condition, each party shall have complied with
Section 6(b), and with respect to other matters not covered by
Section 6(b), shall have used its reasonable best efforts to have any such
decree, order or injunction lifted or vacated; and no Law or Regulation shall
have been enacted by any Governmental Agency which prohibits or makes unlawful
the consummation of the transactions contemplated by this
Agreement.
No owner
of Notes shall, as such, be entitled to vote or be deemed the holder of Common
Stock that may at any time be issuable upon exercise of Exchange Rights or
Mandatory Issuance Rights for any purpose whatsoever, nor shall anything
contained herein be construed to confer upon the owner of the Notes, as such,
any of the rights of a shareholder of Holdings or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issue or reclassification of stock, change of par
value, consolidation, merger or conveyance or otherwise), or to receive notice
of meetings until such owner shall have exercised Exchange Rights or Mandatory
Issuance Rights in accordance with the provisions hereof.
15
(i) If
to Purchaser, at
Xxxxxxx
Xxxxx Global Emerging Markets Partners, LLC
World
Financial Center, North Tower
000 Xxxxx
Xxxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxxx
X. Xxxxxxxx
Facsimile: (000)
000-0000
and to
any Holder, at the address
provided
by such Holder
with a
copy to:
Shearman
& Sterling LLP
000
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxxxxx
Xxxxx
Facsimile: (000)
000-0000
(ii) If
to Holdings or the Company, at
PSi
Technologies, Inc.
Electronics
Avenue
FTI
Complex, Taguig
Metro
Manila
Philippines
Attention: Xxxxxx
X. Xxxxx, Xx.
Facsimile: (000)
000-0000
16
with a
copy to:
Akin Gump
Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxx
Xxxxxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000-0000
Attention: Xxxxxxx
X. Xxxxx
Facsimile: (000)
000-0000
and
to:
X.X. Xxx
Law Offices
No. 48,
SMC Court
Celery
Drive, Xxxxx Verde 5
Pasig
City, Metro Manila
Philippines
1600
Attention: Xxxxx
Go Xxx
Facsimile: (000)
000-0000
(e) Governing Law;
Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
(i) Any
claim, action, suit or proceeding seeking to enforce any provision of, or based
on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby may be heard and determined in any New York
State or federal court sitting in The City of New York, County of Manhattan, and
each of the parties hereto hereby consents to the exclusive jurisdiction of such
courts (and of the appropriate appellate courts therefrom in any such claim,
action, suit or proceeding) and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of venue of any such claim, action, suit or proceeding in any such court or that
any such claim, action, suit or proceeding that is brought in any such court has
been brought in an inconvenient forum.
(ii) Subject
to applicable law, process in any such claim, action, suit or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Nothing herein shall affect the right
of any party to serve legal process in any manner permitted by law or at
equity. WITH RESPECT TO ANY SUCH CLAIM, ACTION, SUIT OR PROCEEDING IN
ANY SUCH COURT,
17
EACH OF
THE PARTIES IRREVOCABLY WAIVES AND RELEASES TO THE OTHER ITS RIGHT TO A TRIAL BY
JURY, AND AGREES THAT IT WILL NOT SEEK A TRIAL BY JURY IN ANY SUCH
PROCEEDING.
18
consist
of a number of copies hereof each signed by less than all, but together signed
by all of the parties hereto.
19
|
PSI
TECHNOLOGIES HOLDINGS, INC.
|
||||
|
|
By: | /s/ | ||
| Name: | Xxxxxx X. Xxxxx, Xx. | |||
| Title: | Chairman of the Board and Chief | |||
| Executive Officer | ||||
|
PSI
TECHNOLOGIES, INC.
|
||||
|
|
By: | /s/ | ||
| Name: | Xxxxxx X. Xxxxx, Xx. | |||
| Title: | Chairman of the Board and Chief | |||
| Executive Officer | ||||
|
XXXXXXX
XXXXX GLOBAL EMERGING
MARKETS
PARTNERS, LLC
|
||||
|
By:
|
Xxxxxxx
Xxxxx Global Emerging Markets
Partners,
L.P.,
as
its Managing Member
|
|||
|
By:
|
Xxxxxxx
Xxxxx Global Capital, L.L.C.,
as
its General Partner
|
|||
|
By:
|
Xxxxxxx
Xxxxx Global Partners, Inc.,
as
its Managing Partner
|
|||
|
|
By: | /s/ | ||
| Name: | ||||
| Title: | ||||