Exhibit 4.15
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
among
ST ASSEMBLY TEST SERVICES LTD,
CAMELOT MERGER, INC.
and
CHIPPAC, INC.
Dated as of February 10, 2004
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TABLE OF CONTENTS
PAGE
ARTICLE I
THE MERGER
SECTION 1.01. The Merger......................................................... 2
SECTION 1.02. Effective Time; Closing............................................ 2
SECTION 1.03. Effect of the Merger............................................... 3
SECTION 1.04. Certificate of Incorporation; By-laws.............................. 3
SECTION 1.05. Directors and Officers............................................. 3
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities........................................... 3
SECTION 2.02. Exchange of Certificates........................................... 4
SECTION 2.03. Stock Transfer Books............................................... 7
SECTION 2.04. Company Stock Options.............................................. 7
SECTION 2.05. Employee Stock Purchase Plan....................................... 9
SECTION 2.06. No Appraisal Rights................................................ 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Corporate Organization............................................. 9
SECTION 3.02. Certificate of Incorporation and By-laws........................... 10
SECTION 3.03. Capitalization..................................................... 10
SECTION 3.04. Authority Relative to This Agreement............................... 12
SECTION 3.05. No Conflict; Required Filings and Consents......................... 12
SECTION 3.06. Permits; Compliance................................................ 13
SECTION 3.07. SEC Filings; Financial Statements.................................. 14
SECTION 3.08. Absence of Certain Changes or Events............................... 16
SECTION 3.09. Absence of Litigation.............................................. 16
SECTION 3.10. Employee Benefit Plans............................................. 16
SECTION 3.11. Labor and Employment Matters....................................... 19
SECTION 3.12. Real Property; Title to Assets..................................... 20
SECTION 3.13. Intellectual Property.............................................. 21
SECTION 3.14. Taxes.............................................................. 23
SECTION 3.15. Environmental Matters.............................................. 24
SECTION 3.16. Material Contracts................................................. 25
SECTION 3.17. Insurance.......................................................... 27
SECTION 3.18. Customers and Suppliers............................................ 27
SECTION 3.19. Board Approval; Vote Required...................................... 27
SECTION 3.20. Certain Business Practices......................................... 28
SECTION 3.21. Interested Party Transactions...................................... 28
SECTION 3.22. Ownership of Parent Ordinary Shares................................ 28
SECTION 3.23. Opinion of Financial Advisor....................................... 28
SECTION 3.24. Brokers............................................................ 28
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PAGE
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 4.01. Corporate Organization............................................. 29
SECTION 4.02. Certificate of Incorporation and By-Laws........................... 29
SECTION 4.03. Capitalization..................................................... 30
SECTION 4.04. Authority Relative to This Agreement............................... 31
SECTION 4.05. No Conflict; Required Filings and Consents......................... 32
SECTION 4.06. Permits; Compliance................................................ 33
SECTION 4.07. SEC Filings; Financial Statements.................................. 33
SECTION 4.08. Absence of Certain Changes or Events............................... 35
SECTION 4.09. Absence of Litigation.............................................. 36
SECTION 4.10. Employee Benefit Plans............................................. 36
SECTION 4.11. Labor and Employment Matters....................................... 39
SECTION 4.12. Real Property; Title to Assets..................................... 40
SECTION 4.13. Intellectual Property.............................................. 41
SECTION 4.14. Taxes.............................................................. 43
SECTION 4.15. Environmental Matters.............................................. 43
SECTION 4.16. Material Contracts................................................. 44
SECTION 4.17. Insurance.......................................................... 46
SECTION 4.18. Customers and Suppliers............................................ 46
SECTION 4.19. Board Approval; Vote Required...................................... 46
SECTION 4.20. Certain Business Practices......................................... 47
SECTION 4.21. Interested Party Transactions...................................... 47
SECTION 4.22. Operations of Merger Sub........................................... 48
SECTION 4.23. Ownership of Company Capital Stock................................. 48
SECTION 4.24. Opinion of Financial Advisor....................................... 48
SECTION 4.25. Brokers............................................................ 48
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Merger.............. 48
SECTION 5.02. Conduct of Business by Parent Pending the Merger................... 51
SECTION 5.03. Control of Other Party's Business.................................. 54
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Disclosure Documents............................................... 54
SECTION 6.02. Stockholders' Meetings............................................. 57
SECTION 6.03. Access to Information; Confidentiality............................. 58
SECTION 6.04. No Solicitation of Transactions.................................... 58
SECTION 6.05. Employee Benefits Matters.......................................... 61
SECTION 6.06. Directors' and Officers' Indemnification and Insurance............. 62
SECTION 6.07. Notification of Certain Matters.................................... 63
SECTION 6.08. Company Affiliates................................................. 63
SECTION 6.09. Further Action; Reasonable Best Efforts............................ 63
SECTION 6.10. Plan of Reorganization............................................. 64
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PAGE
SECTION 6.11. Obligations of Merger Sub.......................................... 65
SECTION 6.12. Stock Exchange Listing/Quotation................................... 65
SECTION 6.13. Public Announcements............................................... 66
SECTION 6.14. Board of Directors; Corporate Headquarters; Corporate Name......... 66
SECTION 6.15. Accounting Matters................................................. 66
SECTION 6.16. Stock Transfer Taxes............................................... 67
SECTION 6.17. Supplemental Indentures............................................ 67
SECTION 6.18. SGX-ST Waiver...................................................... 67
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party........................ 67
SECTION 7.02. Conditions to the Obligations of Parent and Merger Sub............. 68
SECTION 7.03. Conditions to the Obligations of the Company....................... 70
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination........................................................ 71
SECTION 8.02. Effect of Termination.............................................. 73
SECTION 8.03. Fees and Expenses.................................................. 73
SECTION 8.04. Amendment.......................................................... 75
SECTION 8.05. Waiver............................................................. 76
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and Agreements......... 76
SECTION 9.02. Notices............................................................ 76
SECTION 9.03. Certain Definitions................................................ 77
SECTION 9.04. Severability....................................................... 84
SECTION 9.05. Entire Agreement; Assignment....................................... 84
SECTION 9.06. Parties in Interest; Third Parties................................. 85
SECTION 9.07. Specific Performance............................................... 85
SECTION 9.08. Governing Law...................................................... 85
SECTION 9.09. Headings........................................................... 85
SECTION 9.10. Counterparts....................................................... 85
SECTION 9.11. Waiver of Jury Trial............................................... 85
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of February 10,
2004 (this "Agreement"), among ST ASSEMBLY TEST SERVICES LTD, a Singapore public
company limited by shares ("Parent"), CAMELOT MERGER, INC., a Delaware
corporation and a wholly owned subsidiary of Parent ("Merger Sub"), and CHIPPAC,
INC., a Delaware corporation (the "Company").
WHEREAS, upon the terms and subject to the conditions of this Agreement and
in accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), Parent and the Company will enter into a business combination
transaction pursuant to which Merger Sub will merge with and into the Company
(the "Merger");
WHEREAS, the Board of Directors of the Company (the "Company Board") (i)
has determined that the Merger is consistent with and in furtherance of the
long-term business strategy of the Company and fair to, and in the best
interests of, the Company and its stockholders and has approved and adopted this
Agreement and declared its advisability and approved the Merger and the other
transactions contemplated by this Agreement and (ii) has resolved to recommend
the approval and adoption of this Agreement by the stockholders of the Company;
WHEREAS, the Board of Directors of Parent (the "Parent Board") (i) has
determined that the Merger is consistent with and in furtherance of the
long-term business strategy of Parent and fair to, and in the best interests of,
Parent and its shareholders and has approved and adopted this Agreement, the
Merger and the other transactions contemplated by this Agreement and (ii) has
resolved to recommend that the shareholders of Parent vote to approve (A) the
issuance of ordinary shares, par value S$0.25 per share, of Parent ("Parent
Ordinary Shares") underlying the Parent ADSs (as defined in Section 9.03(a))
that will be issued to the stockholders of the Company pursuant to the terms of
the Merger, (B) the issuance of the Substitute Options (as defined in Section
2.04) as set forth in Section 2.04 and the issuance of Parent Ordinary Shares
underlying the Parent ADSs to be issued upon exercise of the Substitute Options,
(C) the assumption of certain obligations under the Company Convertible
Subordinated Notes (as defined below), the entry into any agreements in
connection with such assumption and the issuance of Parent Ordinary Shares
underlying the Parent ADSs to be issued upon conversion of the Company
Convertible Subordinated Notes (the matters in clauses (A), (B) and (C) being
referred together as the "Share Issuance"), (D) the change of the corporate name
of Parent as provided in Section 6.14(c) (the "Parent Name Change"), (E) the
adoption of the New Stock Option Plans (as defined in Section 2.04 (a)) (the
"New Stock Option Plans Adoption"), and (F) the appointment of the Company
Designated Directors (as defined in Section 6.14) as set forth in Section
6.14(a)(iii) (the "Parent Board Appointments");
WHEREAS, as a condition and inducement to Parent entering into this
Agreement, concurrently with the execution and delivery of this Agreement,
Parent, the members of the Xxxx Group (as defined in Section 9.03(a)), the
members of the CVC Group (as defined in Section 9.03(a)) and certain other
stockholders of the Company have entered into Voting Agreements, dated as of the
date hereof (the "Company Stockholder Voting Agreements"), providing that, among
other things, such stockholders will vote their shares of capital stock of the
Company, in favor of this Agreement, the Merger and the other transactions
contemplated by this Agreement;
WHEREAS, as a condition and inducement to the Company entering into this
Agreement, concurrently with the execution and delivery of this Agreement, the
Company, Singapore Technologies Semiconductors Pte Ltd and certain other
shareholders of Parent have entered into Voting Agreements, dated as of the date
hereof (the "Parent Shareholder Voting Agreements", and together with the
Company Stockholder Voting Agreements, the "Voting Agreements"), providing that,
among other things, such shareholders will vote their Parent Ordinary Shares in
favor of the Share Issuance, the Parent Name Change, the New Stock Option Plans
Adoption and the Parent Board Appointments;
WHEREAS, as a condition and inducement to Parent entering into this
Agreement, concurrently with the execution and delivery of this Agreement,
Parent is entering into employment agreements with certain executives of the
Company (the "Employment Agreements"); and
WHEREAS, for United States federal income tax purposes, the Merger is
intended to qualify as a reorganization under the provisions of Section 368(a)
of the United States Internal Revenue Code of 1986, as amended (the "Code"), and
it is intended that Eligible Company Stockholders (as defined in Section
9.03(a)) will not recognize gain with respect to the Merger under the provisions
of Section 367(a) of the Code (except with respect to any cash received in lieu
of fractional interests).
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, at the Effective Time
(as defined in Section 1.02), Merger Sub shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of Merger
Sub shall cease and the Company shall continue as the surviving corporation of
the Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time; Closing. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, the parties hereto shall cause the Merger to be consummated by filing this
Agreement or a certificate of merger or certificate of ownership and merger (in
any case, the "Certificate of Merger") with the Secretary of State of the State
of Delaware, in such form as is required by, and executed in accordance with,
the relevant provisions of the DGCL (the date and time of such filing of the
Certificate of Merger (or such later time as may be agreed by each of the
parties hereto and specified in the Certificate of Merger) being the "Effective
Time"). Immediately prior to such filing of the Certificate of Merger, a closing
(the "Closing") shall be held at the offices of Shearman & Sterling LLP, 0
Xxxxxxx Xxxx, #00-00, Xxxxxxxxx 04 9909, with a meeting to be held
simultaneously at the offices of Shearman & Sterling LLP, 000 Xxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, or such other place as the parties
shall agree, for the purpose of
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confirming the satisfaction or waiver, as the case may be, of the conditions set
forth in Article VII.
SECTION 1.03. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement and the applicable provisions
of the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers and
franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities, obligations, restrictions, disabilities
and duties of each of the Company and Merger Sub shall become the debts,
liabilities, obligations, restrictions, disabilities and duties of the Surviving
Corporation.
SECTION 1.04. Certificate of Incorporation; By-laws. (a) At the Effective
Time, the Certificate of Incorporation of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided by law and such
Certificate of Incorporation; provided, however, that, at the Effective Time,
Article I of the Certificate of Incorporation of the Surviving Corporation shall
be amended to read as follows: "The name of the corporation is STATS ChipPAC,
Inc."
(b) At the Effective Time, the By-laws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the By-laws of the Surviving
Corporation until thereafter amended as provided by law, the Certificate of
Incorporation of the Surviving Corporation and such By-laws.
SECTION 1.05. Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of
Merger Sub immediately prior to the Effective Time shall be the initial officers
of the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified or until the earlier of their death,
resignation or removal.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of any party:
(a) each share of class A common stock, par value $0.01 per share, of
the Company ("Company Class A Common Stock") (all shares of Company Class A
Common Stock issued and outstanding immediately prior to the Effective Time
being hereinafter collectively referred to as the "Company Shares") issued
and outstanding immediately prior to the Effective Time (other than any
Company Shares to be canceled pursuant to Section 2.01(b)) shall be
canceled and shall be converted automatically, subject to Section 2.02,
into the right to receive 0.87 (the "Exchange Ratio") Parent ADSs. The
Parent ADSs may be evidenced by one or more Parent ADRs (as defined in
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Section 9.03(a)) issued in accordance with the Parent Deposit Agreement (as
defined in Section 9.03(a)). The Parent ADSs to be issued upon conversion
of Company Shares pursuant to this Section 2.01(a) and any cash to be paid
in lieu of fractional Parent ADSs as contemplated in Section 2.02(e) are
referred to collectively as "Merger Consideration". Such Parent ADSs and
the underlying Parent Ordinary Shares shall be in the same class and of the
same ranking as currently outstanding Parent ADSs and Parent Ordinary
Shares;
(b) each Company Share held in the treasury of the Company and each
Company Share owned by Merger Sub, Parent or any direct or indirect wholly
owned subsidiary of Parent or of the Company immediately prior to the
Effective Time (collectively, the "Excluded Company Shares") shall be
canceled without any conversion thereof and no payment or distribution
shall be made with respect thereto; and
(c) each share of common stock, par value $0.01 per share, of Merger
Sub issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation ("Surviving Corporation Common Stock").
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. (i) Prior to
the Effective Time, Parent shall appoint a bank or trust company reasonably
acceptable to the Company as exchange agent (the "Exchange Agent") for the
purpose of accepting Certificates (as defined below) to be surrendered by
holders of Company Shares in exchange for the Merger Consideration. Promptly
after the Effective Time, the Surviving Corporation will mail, or shall cause
the Exchange Agent to mail, to each person who was, at the Effective Time, a
holder of record of Company Shares entitled to receive the Merger Consideration
pursuant to Section 2.01(a): (A) a letter of transmittal, which shall be in
customary form and shall specify that delivery shall be effected, and risk of
loss and title to the certificates evidencing such Company Shares (the
"Certificates") shall pass, only upon proper delivery of the Certificates to the
Exchange Agent and (B) instructions for use in effecting the surrender of the
Certificates pursuant to such letter of transmittal.
(ii) At the Effective Time, Parent shall issue to and deposit with the
Depositary, for the benefit of the holders of Company Shares converted into the
right to receive Parent ADSs in accordance with Section 2.01(a), Parent Ordinary
Shares in an amount sufficient to permit the Depositary to issue Parent ADRs
representing the number of Parent ADSs issuable pursuant to Section 2.01(a).
Parent shall cause the Depositary to issue, upon the instructions of the
Exchange Agent, for the benefit of the holders of Company Shares converted into
the right to receive Parent ADSs in accordance with Section 2.01(a), through the
Exchange Agent, Parent ADRs representing the number of Parent ADSs issuable
pursuant to Section 2.01(a).
(b) Exchange Procedures. Upon surrender to the Exchange Agent of a
Certificate for cancellation, together with a letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto and
covering the Company Shares represented by such Certificate, and such other
documents as may be required pursuant to the
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instructions to the letter of transmittal, the holder of such Certificate shall
be entitled to receive in exchange therefor (i) the number of whole Parent ADSs
(excluding any fractional interest in Parent ADSs) to which such holder is
entitled in respect of such Company Shares pursuant to Section 2.01(a), and (ii)
a check in the amount (after giving effect to any required Tax withholdings)
equal to (A) any cash in lieu of fractional interests in Parent ADSs to which
such holder is entitled pursuant to Section 2.02(e) and (B) any dividends or
other distributions to which such holder is entitled pursuant to Section
2.02(c), and the Certificate so surrendered shall forthwith be cancelled. In the
event of a transfer of ownership of Company Shares that is not registered in the
transfer records of the Company, certificates representing, in the aggregate,
the proper number of Parent ADSs and a check in the amount equal to any cash in
lieu of any fractional interest in Parent ADSs to which such holder is entitled
pursuant to Section 2.02(e) and any dividends or other distributions to which
such holder is entitled pursuant to Section 2.02(c) may be issued to a
transferee if the Certificate representing such Company Shares is presented to
the Exchange Agent, properly endorsed and otherwise in proper form for transfer,
accompanied by all documents required to evidence and effect such transfer and
by evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 2.02, each Certificate shall be
deemed at all times after the Effective Time to represent only the right to
receive upon such surrender the Parent ADSs, cash in lieu of any fractional
interest in Parent ADSs to which such holder is entitled pursuant to Section
2.02(e) and any dividends or other distributions to which such holder is
entitled pursuant to Section 2.02(c).
(c) Distributions with Respect to Unexchanged Shares. No dividends or other
distributions declared or made after the Effective Time with respect to the
Parent Ordinary Shares with a record date after the Effective Time shall be paid
to the holder of any unsurrendered Certificate with respect to the Parent ADSs
represented thereby, and no cash payment in lieu of any fractional interest in
Parent ADSs shall be paid to any such holder pursuant to Section 2.02(e), until
the holder of such Certificate shall surrender such Certificate. Subject to the
effect of escheat, tax or other applicable Laws (as defined in Section 3.05(a)),
following surrender of any such Certificate, there shall be paid to the holder
of whole Parent ADSs issued in exchange therefor, without interest, (i)
promptly, the amount of any cash payable with respect to a fractional interest
in Parent ADSs to which such holder is entitled pursuant to Section 2.02(e) and
the amount of dividends or other distributions with a record date after the
Effective Time and theretofore paid with respect to such whole Parent ADSs, and
(ii) at the appropriate payment date, the amount of dividends or other
distributions, with a record date after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect to
such whole Parent ADSs.
(d) No Further Rights in Company Shares. All Parent ADSs issued upon
conversion of the Company Shares in accordance with the terms hereof (including
any cash paid pursuant to Section 2.02(c) or (e)) shall be deemed to have been
issued in full satisfaction of all rights pertaining to such Company Shares.
(e) No Fractional ADSs. (i) No certificates or scrip representing
fractional interests in Parent ADSs shall be issued upon the surrender for
exchange of Certificates, and such fractional interests will not entitle the
owner thereof to vote or to any other rights of a shareholder of Parent or a
holder of Parent ADRs or Parent ADSs.
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(ii) As promptly as practicable following the Effective Time, the Exchange
Agent shall determine the excess of (A) the number of whole Parent Ordinary
Shares delivered to the Depositary by Parent pursuant to Section 2.02(a)(ii)
over (B) the aggregate number of whole Parent Ordinary Shares represented by the
Parent ADSs to be distributed to holders of Company Shares pursuant to Section
2.02(b) (such excess, as issued as Parent ADSs by the Depositary to the Exchange
Agent, the "Excess ADSs"). As soon after the Effective Time as practicable, the
Exchange Agent, as agent for the holders of Company Shares, who, but for the
provisions of the Section 2.03(e), would be entitled to fractional interests in
Parent ADSs, shall sell the Excess ADSs on the Nasdaq National Market
("Nasdaq"), all in the manner provided in clause (iii) of this Section 2.02(e).
(iii) The sale of the Excess ADSs by the Exchange Agent shall be executed
on Nasdaq through one or more member firms of the National Association of
Securities Dealers, Inc. (the "NASD"). Until the gross proceeds of such sale or
sales have been distributed to the holders of Company Shares who are entitled to
receive such proceeds, the Exchange Agent will hold such proceeds in trust for
the holders of Company Shares (the "Company Shares Trust"). Parent shall pay all
commissions, transfer taxes and other out-of-pocket transaction costs, including
the expenses and compensation of the Exchange Agent incurred in connection with
such sale of the Excess ADSs. The Exchange Agent shall determine the portion of
the Company Shares Trust to which each holder of Company Shares shall be
entitled, if any, by multiplying the amount of the aggregate gross proceeds
comprising the Company Shares Trust by a fraction, the numerator of which is the
amount of the fractional share interest to which such holder of Company Shares
is entitled and the denominator of which is the aggregate amount of fractional
share interests to which all holders of Company Shares are entitled.
(iv) As soon as practicable after the determination of the amount of cash,
if any, to be paid to the holders of Company Shares in lieu of any fractional
interest in Parent ADSs and subject to Section 2.02(i), the Exchange Agent shall
make available such amounts to such holders of Company Shares.
(f) Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted to
reflect appropriately the effect of any stock split, reverse stock split, stock
dividend (including any dividend or distribution of securities convertible into
Parent Ordinary Shares, Parent ADSs or Company Class A Common Stock),
extraordinary cash dividends, reorganization, recapitalization,
reclassification, combination, exchange of shares or other like change with
respect to Parent ADSs, Parent Ordinary Shares or Company Class A Common Stock
occurring on or after the date hereof and prior to the Effective Time.
(g) Termination of Exchanges. Any Parent ADSs issuable or deliverable in
respect of Certificates pursuant to this Article II and any cash in lieu of
fractional interests in Parent ADSs payable pursuant to Section 2.02(e), plus
any cash dividends or other distributions that such holder has the right to
receive pursuant to Section 2.02(c), that remains unclaimed by any holders of
Certificates six months after the Effective Time shall be held by or on behalf
of the Depositary, subject to the instruction of Parent, in an account or
accounts in Singapore designated for such purpose and on behalf of such holders
of Certificates. Any cash remaining unclaimed by holders of Certificates or
Company Shares three years after the Effective Time (or such earlier date
immediately prior to such time as such cash would otherwise escheat to or
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become property of any Governmental Authority or as is otherwise provided by
applicable Law) shall, to the extent permitted by applicable Law, become the
property of the Surviving Corporation or Parent, as Parent may determine, free
and clear of any claims or interest of any person previously entitled thereto.
(h) No Liability. None of the Exchange Agent, Parent or the Surviving
Corporation shall be liable to any holder of Company Shares for any such Company
Shares (or dividends or distributions with respect thereto), or cash delivered
to a public official pursuant to any abandoned property, escheat or similar Law.
(i) Withholding Rights. Each of the Surviving Corporation and Parent shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Company Shares such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the Code, or any provision of state, local or foreign tax Law. To the extent
that amounts are so deducted or withheld by the Surviving Corporation or Parent,
as the case may be, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the Company Shares in
respect of which such deduction and withholding was made by the Surviving
Corporation or Parent, as the case may be.
(j) Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond, in such reasonable
amount as the Surviving Corporation may direct, as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the Parent
ADSs, any cash in lieu of fractional interests in Parent ADSs to which the
holders thereof are entitled pursuant to Section 2.02(e) and any dividends or
other distributions to which the holders thereof are entitled pursuant to
Section 2.02(c).
SECTION 2.03. Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of Company Shares thereafter on the records of the
Company. From and after the Effective Time, the holders of Certificates
representing Company Shares outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such Company Shares, except as
otherwise provided in this Agreement or by Law. On or after the Effective Time,
any Certificates presented to the Exchange Agent or Parent for any reason shall
be converted into Parent Ordinary Shares or Parent ADSs, any cash in lieu of
fractional interests in Parent Ordinary Shares or Parent ADSs to which the
holders thereof are entitled pursuant to Section 2.02(e) and any dividends or
other distributions to which the holders thereof are entitled pursuant to
Section 2.02(c).
SECTION 2.04. Company Stock Options. (a) At the Effective Time, Parent
shall issue Substitute Options (as defined below) in accordance with this
Section 2.04 to all holders of options to purchase shares of Company Class A
Common Stock (the "Company Stock Options") outstanding, whether or not
exercisable and whether or not vested, immediately prior to the Effective Time
under the Company 1999 Stock Purchase and Option Plan and the
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Company 2000 Equity Incentive Plan (collectively, the "Company Stock Option
Plans"). Parent shall issue the Substitute Options under the terms of the new
stock option plans to be adopted by Parent at the Parent Shareholders' Meeting
(the "New Stock Option Plans") to replace each of the Company Stock Option
Plans. The terms and conditions of the New Stock Option Plans shall be
substantially similar in all material respects with the terms and conditions of
each of the Company Stock Option Plans, provided that the New Stock Option Plans
shall differ from the terms and conditions of the Company Stock Option Plans to
the extent necessary to comply with Singapore Law. The Company shall use
reasonable efforts to take all necessary action, including obtaining the consent
of any holder of Company Stock Options, to implement the substitution of the
Company Stock Options with Substitute Options pursuant to the terms of the New
Stock Option Plans and in accordance with this Section 2.04; provided, however,
that any Company Stock Option that is not substituted with a Substitute Option
because the Company Stock Option holder rejects the Substitute Option shall
terminate as of the Effective Time. At the Effective Time, (a) each Company
Stock Option shall be substituted by Parent with Substitute Options in such
manner that Parent (A) is a corporation "issuing a stock option in a transaction
to which Section 424(a) applies" within the meaning of Section 424 of the Code
and the regulations thereunder or (B), to the extent that Section 424 of the
Code does not apply to any such Company Stock Option, would be such a
corporation were Section 424 of the Code to apply to such Company Stock Option,
and (b) each Substitute Option shall entitle its holder to acquire, on
substantially the same terms and conditions as were applicable to the Company
Stock Option for which the Substitute Option was substituted, (A) a number of
Parent Ordinary Shares equal to the product (rounded down to the nearest whole
Parent Ordinary Share) of (1) the number of shares of Company Class A Common
Stock that were issuable upon exercise of the related Company Stock Option
immediately prior to the Effective Time multiplied by (2) the Option Exchange
Ratio (which shall be the number equal to the product of the Exchange Ratio
multiplied by 10), and (B) the per share exercise price of each Substitute
Option shall be equal to the quotient (rounded up to the nearest cent) arrived
at by dividing (1) the per share exercise price of each related Company Stock
Option by (2) the Option Exchange Ratio (each, a "Substitute Option"); provided,
however, that, upon exercise of a Substitute Option, the holder thereof shall
have the right to elect to receive Parent ADSs rather than Parent Ordinary
Shares and, upon such election, the holder shall receive a number of Parent ADSs
equal to the number of Parent Ordinary Shares subject to the Substitute Option
divided by ten (rounded down to the nearest whole Parent ADS).
(b) Subject to the approval of the shareholders of Parent, Parent shall
take all corporate action necessary to make available for issuance a sufficient
number of Parent Ordinary Shares to be issued upon exercise of the Substitute
Options granted in accordance with this Section 2.04.
(c) As soon as practicable after the Effective Time, Parent shall deliver,
or cause to be delivered, to each holder of a Substitute Option an appropriate
notice setting forth such holder's rights pursuant thereto. Parent shall ensure,
to the extent required by, and subject to the provisions of, the Company Stock
Option Plans, that Company Stock Options that qualified as incentive stock
options under Section 422 of the Code prior to the Effective Time shall be
substituted by Substitute Options that qualify as incentive stock options under
Section 422 of the Code after the Effective Time. As soon as practicable after
the Effective Time, the Parent Ordinary Shares subject to Substitute Options
shall be covered by an effective registration
8
statement on Form S-8 and Form F-6 (or any successor form) or another
appropriate form, and Parent shall use its reasonable best efforts to maintain
the effectiveness of such registration statement or registration statements for
so long as Substitute Options remain outstanding. In addition, Parent shall use
reasonable best efforts to cause the Parent Ordinary Shares subject to the
Substitute Options or underlying any Parent ADSs to be issued upon exercise of
the Substitute Options to be listed on the Singapore Exchange Securities Trading
Limited (the "SGX-ST"), and to cause any Parent ADSs to be issued upon exercise
of the Substitute Options to be quoted on Nasdaq.
(d) On or after the date of this Agreement and prior to the Effective Time,
each of Parent and the Company shall take all necessary action such that, with
respect to each member of the Company Board and each employee of the Company
that is subject to Section 16 of the Exchange Act, the acquisition by such
person of Parent Ordinary Shares, Parent ADSs or Substitute Options in the
Merger and the disposition by any such person of Parent Ordinary Shares, Parent
ADSs or Company Stock Options pursuant to the transactions contemplated by this
Agreement shall be exempt from the short-swing profit liability rules of Section
16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated thereunder.
SECTION 2.05. Employee Stock Purchase Plan. With respect to the Company's
Employee Stock Purchase Plan (the "Purchase Plan"), the purchase period
currently in progress shall be shortened by setting a new purchase date in
accordance with paragraph 2 of Section 18 of the Purchase Plan (the "New
Purchase Date"). The Purchase Plan shall terminate immediately following the
purchase of shares of Company Class A Common Stock on the New Purchase Date.
SECTION 2.06. No Appraisal Rights. In accordance with Section 262 of the
DGCL, no appraisal rights shall be available to holders of Company Class A
Common Stock in connection with the Merger.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Schedule that has been
prepared by the Company and delivered by the Company to Parent in connection
with the execution and delivery of this Agreement (the "Company Disclosure
Schedule") (which Company Disclosure Schedule shall be arranged in sections
corresponding to the sections of this Article III, and any information disclosed
in any such section of the Company Disclosure Schedule shall be deemed to be
disclosed only for purposes of the corresponding section of this Article III,
unless it is reasonably apparent that the disclosure contained in such section
of the Company Disclosure Schedule applies to other representations and
warranties contained in this Article III), the Company hereby represents and
warrants to Parent that:
SECTION 3.01. Corporate Organization. (a) Each of the Company and each
subsidiary of the Company (each a "Company Subsidiary") is a corporation or
other organization duly organized, validly existing and, where applicable, in
good standing under the laws of the jurisdiction of its incorporation or
organization and has the requisite corporate power and
9
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals could not reasonably be
expected, individually or in the aggregate, to prevent or materially delay
consummation of the Merger or any of the transactions contemplated by this
Agreement or the Voting Agreements (collectively, the "Transactions") or
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and could not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect (as
defined in Section 9.03(a)). The Company and each Company Subsidiary is duly
qualified or licensed to do business, and, where applicable, is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except where the failure to be so qualified or licensed
and in good standing could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect.
(b) A true and complete list of all the Company Subsidiaries, together with
the jurisdiction of incorporation or organization of each Company Subsidiary and
the percentage of the outstanding capital stock of each Company Subsidiary owned
by the Company and each other Company Subsidiary, is set forth in Section
3.01(b) of the Company Disclosure Schedule. Except as set forth in Section
3.01(b) of the Company Disclosure Schedule, the Company does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity.
SECTION 3.02. Certificate of Incorporation and By-laws. The Company has
made available to Parent or its counsel a complete and correct copy of the
Certificate of Incorporation and the By-laws or equivalent organizational
documents, each as amended to date, of the Company and each Company Subsidiary.
Such Certificates of Incorporation, By-laws or equivalent organizational
documents are in full force and effect. Neither the Company nor any Company
Subsidiary is in violation of any of the provisions of its Certificate of
Incorporation, By-laws or equivalent organizational documents, except where such
violations could not reasonably be expected, individually or in the aggregate,
to prevent or materially delay consummation of any of the Transactions or
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and could not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect.
SECTION 3.03. Capitalization. (a) The authorized capital stock of the
Company consists of (i) 250,000,000 shares of Company Class A Common Stock,
(ii) 250,000,000 shares of class B common stock, par value $0.01 per share, of
the Company ("Company Class B Common Stock", and together with the Company Class
A Common Stock, the "Company Common Stock"), and (iii) 10,000,000 shares of
preferred stock, par value $0.01 per share ("Company Preferred Stock"), of which
10,000 shares have been designated Class A Convertible Preferred Stock, 105,000
shares have been designated Class B Preferred Stock, 8,750 shares have been
designated Class C-1 Preferred Stock and 8,750 shares have been designated Class
10
C-2 Preferred Stock. As of January 30, 2004, (i) 97,303,421 shares of Company
Class A Common Stock were issued and outstanding, all of which were validly
issued, fully paid and nonassessable, (ii) no shares of Company Class A Common
Stock were held in the treasury of the Company, (iii) no shares of Company Class
A Common Stock were held by subsidiaries of the Company, (iv) 14,978,196 shares
of Company Class A Common Stock were reserved for future issuance pursuant to
outstanding Company Stock Options and other purchase rights (the "Company Stock
Awards") granted pursuant to the Company Stock Option Plans and the Purchase
Plan, (v) 5,020,080 shares of Company Class A Common Stock were reserved for
future issuance upon conversion of the 8% Convertible Subordinated Notes due
June 15, 2011 of the Company (the "8% Convertible Notes") and (vi) 18,605,805
shares of Company Class A Common Stock were reserved for future issuance upon
conversion of the 2.50% Convertible Subordinated Notes due June 1, 2008 of the
Company (the "2.50% Convertible Notes", and together with the 8% Convertible
Notes, the "Company Convertible Subordinated Notes"). As of the date of this
Agreement, no shares of Company Class B Common Stock or Company Preferred Stock
are issued and outstanding. Except as set forth in this Section 3.03 or the
Company Voting Agreements, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of the Company or any Company Subsidiary or obligating
the Company or any Company Subsidiary to issue or sell any shares of capital
stock of, or other equity interests in, the Company or any Company Subsidiary.
The Company has not adopted, approved or entered into, or proposed to adopt,
approve or enter into, any stockholder "rights plan", "poison pill" plan or
comparable plan or arrangement. Except for the Company Convertible Subordinated
Notes, there are no bonds, debentures, notes or other indebtedness of the
Company having the right (or convertible into, or exchangeable for, securities
having the right) to vote on any matter on which holders of shares of Company
Common Stock may vote. Section 3.03(a) of the Company Disclosure Schedule sets
forth the following information with respect to each Company Stock Award
outstanding as of the date of this Agreement: (i) the name of the Company Stock
Award recipient; (ii) the particular plan pursuant to which such Company Stock
Award was granted; (iii) the number of shares of Company Class A Common Stock
subject to such Company Stock Award; (iv) the exercise or purchase price of such
Company Stock Award; (v) the date on which such Company Stock Award was granted;
(vi) the applicable vesting schedule; (vii) the date on which such Company Stock
Award expires; and (viii) whether the exercisability of or right to repurchase
of such Company Stock Award will be accelerated in any way by the Transactions,
and indicates the extent of acceleration. The Company has made available to
Parent or its counsel accurate and complete copies of all Company Plans pursuant
to which the Company has granted the Company Stock Awards that are currently
outstanding and the form of all stock award agreements evidencing such Company
Stock Awards. All shares of Company Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. There are no outstanding
contractual obligations of the Company or any Company Subsidiary to repurchase,
redeem or otherwise acquire any shares of Company Common Stock or any capital
stock of any Company Subsidiary or to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in, any Company
Subsidiary or any other person. There are no shares of Company Class A Common
Stock outstanding that are unvested or are subject to a repurchase option, risk
of forfeiture or other condition under any applicable restricted stock purchase
agreement or other agreement with the
11
Company. There are no commitments or agreements of any character to which the
Company is bound obligating the Company to accelerate the vesting of any Company
Stock Award as a result of the Merger. All outstanding shares of Company Class A
Common Stock, all outstanding Company Stock Awards, and all outstanding shares
of capital stock of each Company Subsidiary have been issued and granted in
compliance with (i) all applicable securities laws and other applicable Laws,
rules and regulations and (ii) all requirements set forth in applicable
contracts.
(b) Each outstanding share of capital stock of each Company Subsidiary is
duly authorized, validly issued, fully paid and nonassessable, and, except for
directors' qualifying shares required under applicable Law, each such share is
owned by the Company or another Company Subsidiary free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or any Company Subsidiary's voting
rights, charges and other encumbrances of any nature whatsoever.
SECTION 3.04. Authority Relative to This Agreement. Subject to the approval
and adoption of this Agreement by the Company's stockholders, the Company has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by the Company and
the consummation by the Company of the Transactions have been duly and validly
authorized by all necessary corporate action on the part of the Company, and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the Transactions (other than, with
respect to the Merger, the approval and adoption of this Agreement by the
holders of a majority of the then-outstanding shares of Company Class A Common
Stock, if and to the extent required by applicable law, and the filing and
recordation of appropriate merger documents as required by the DGCL). This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by the other parties
hereto, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting creditors' rights generally and subject to the effect of
general principles of equity (regardless of whether considered in a proceeding
at law or in equity). The Company Board has approved this Agreement, the Voting
Agreements and the Transactions and such approvals are sufficient so that the
restrictions on business combinations set forth in Section 203(a) of the DGCL
shall not apply to the Merger or any of the Transactions. To the knowledge of
the Company, no other state takeover statute is applicable to the Merger or the
other Transactions.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The execution
and delivery of this Agreement by the Company do not, and the performance of
this Agreement by the Company will not, (i) conflict with or violate the
Certificate of Incorporation or By-laws or any equivalent organizational
documents of the Company or any Company Subsidiary, (ii) assuming that all
consents, approvals, authorizations and other actions described in Sections 3.04
and 3.05(b) have been obtained and all filings and obligations described in
Section 3.05(b) have been made, conflict with or violate any United States or
non-United States statute, law, ordinance, regulation, rule, code, executive
order, injunction, judgment, decree or other order ("Law") applicable to the
Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected, or (iii) result in any
12
breach of, or constitute a default (or an event which, with notice or lapse of
time or both, would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
or any Company Subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any Company Subsidiary is a party or by which
the Company or any Company Subsidiary or any of their assets or properties is
bound or affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults or other occurrences which could not
reasonably be expected, individually or in the aggregate, to prevent or
materially delay consummation of any of the Transactions or otherwise prevent or
materially delay the Company from performing its obligations under this
Agreement and could not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do not, and
the performance of this Agreement by the Company will not, require the Company
to obtain any consent, approval, authorization or permit of, or to file with or
to notify, any United States federal, state, county or local or non-United
States government, governmental, regulatory or administrative authority, agency,
instrumentality or commission or any court, tribunal, or judicial or arbitral
body (a "Governmental Authority"), except (i) applicable requirements, if any,
of the Securities Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and state securities or
"blue sky" laws ("Blue Sky Laws"), (ii) the pre-merger notification requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (iii) the filing and recordation of appropriate merger documents as
required by the DGCL and the relevant authorities of other jurisdictions in
which the Company is qualified to do business, (iv) the filing of appropriate
documents with the IRS in connection with the Private Letter Ruling (as defined
below) contemplated by Section 6.10(d), and (v) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect.
SECTION 3.06. Permits; Compliance. Each of the Company and the Company
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Authority necessary for each of the
Company or the Company Subsidiaries to own, lease and operate its properties or
to carry on its business as it is now being conducted (the "Company Permits"),
except where the failure to have, or the suspension or cancellation of, any of
the Company Permits could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or
13
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and could not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect. No
suspension or cancellation of any of the Company Permits is pending or, to the
knowledge of the Company, threatened, except where the failure to have, or the
suspension or cancellation of, any of the Company Permits could not reasonably
be expected, individually or in the aggregate, to prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and could not
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect. Neither the Company nor any Company Subsidiary is in
conflict with, or in default, breach or violation of, (a) any Law applicable to
the Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected, or (b) any note, bond,
mortgage, indenture, contract, agreement, lease, license, Company Permit,
franchise or other instrument or obligation to which the Company or any Company
Subsidiary is a party or by which the Company or any Company Subsidiary or any
property or asset of the Company or any Company Subsidiary is bound, except for
any such conflicts, defaults, breaches or violations that could not reasonably
be expected, individually or in the aggregate, to prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and could not
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect.
SECTION 3.07. SEC Filings; Financial Statements. (a) The Company has filed
all forms, reports and documents required to be filed by it with the Securities
and Exchange Commission (the "SEC") since August 8, 2000 (as such documents have
been amended prior to the date hereof, collectively, the "Company SEC Reports").
As of their respective dates, the Company SEC Reports (i) complied in all
material respects in accordance with either the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and regulations
promulgated thereunder, and (ii) did not, at the time they were filed, or, if
amended, as of the date of such amendment, 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 made therein, in the light of the
circumstances under which they were made, not misleading. No Company Subsidiary
is required to file any form, report or other document with the SEC.
(b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the Company SEC Reports was prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by the SEC on Form 10-Q, Form 8-K or any similar or successor form)
and each fairly presents, in all material respects, the consolidated financial
position, results of operations and cash flows of the Company and its
consolidated subsidiaries as at the respective dates thereof and for the
respective periods indicated therein, except that the unaudited interim
financial statements may not contain footnotes and as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring year-end
adjustments).
(c) Except as and to the extent set forth on the consolidated balance sheet
of the Company and the consolidated Company Subsidiaries as at September 30,
2003, including the notes thereto, neither the Company nor any Company
Subsidiary has any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on a
balance sheet prepared in accordance with GAAP, except for liabilities and
obligations incurred in the ordinary course of business and in a manner
consistent with past practice since September 30, 2003 which, individually or in
the aggregate, could not reasonably be expected to have a Company Material
Adverse Effect.
14
(d) The Company has made available to Parent or its counsel all comment
letters received by the Company from the SEC or the staff thereof since January
1, 2000 and all responses to such comment letters filed by or on behalf of the
Company.
(e) The Company has timely filed all certifications and statements required
by (x) Rule 13a-14 or Rule 15d-14 under the Exchange Act or (y) 18 U.S.C.
Section 1350 (Section 906 of the Xxxxxxxx-Xxxxx Act of 2002) with respect to any
Company SEC Report. The Company maintains disclosure controls and procedures
required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such controls and
procedures are designed to ensure that material information concerning the
Company and the Company Subsidiaries is made known on a timely basis to the
individuals responsible for the preparation of the Company's SEC filings and
other public disclosure documents.
(f) The Company maintains a standard system of accounting established and
administered in accordance with GAAP. The Company and the Company Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management's general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(g) Since January 1, 2000, neither the Company nor any Company Subsidiary
nor, to the Company's knowledge, any director, officer, employee, auditor,
accountant or representative of the Company or any Company Subsidiary, has
received or otherwise had or obtained knowledge of any written or formal
complaint, allegation or claim regarding the accounting or auditing practices,
procedures, methodologies or methods of the Company or any Company Subsidiary or
their respective internal accounting controls, including any complaint,
allegation, assertion or claim that the Company or any Company Subsidiary has
engaged in questionable accounting or auditing practices. No attorney
representing the Company or any Company Subsidiary, whether or not employed by
the Company or any Company Subsidiary, has reported evidence of a material
violation of securities laws, breach of fiduciary duty or similar violation by
the Company or any of its officers, directors, employees or agents to the
Company Board or any committee thereof or to any director or officer of the
Company. Since January 1, 2000, there have been no formal internal
investigations regarding financial reporting or accounting policies and
practices discussed with, reviewed by or initiated at the direction of the chief
executive officer, chief financial officer, general counsel, the Company Board
or any committee thereof, other than ordinary course audits or reviews of
accounting policies and practices or internal controls required by the
Xxxxxxxx-Xxxxx Act of 2002.
(h) To the knowledge of the Company, no employee of the Company or any
Company Subsidiary has provided or is providing information to any law
enforcement agency regarding the commission or possible commission of any crime
or the violation or possible violation of any applicable Law. Neither the
Company nor any Company Subsidiary nor any officer, employee, contractor,
subcontractor or agent of the Company or any such Company Subsidiary has
discharged, demoted, suspended, threatened, harassed or in any other manner
15
discriminated against an employee of the Company or any Company Subsidiary in
the terms and conditions of employment because of any act of such employee
described in 18 U.S.C. Section 1514A(a).
SECTION 3.08. Absence of Certain Changes or Events. Since September 30,
2003, except as contemplated by this Agreement, (a) the Company and the Company
Subsidiaries have conducted their businesses only in the ordinary course of
business and in a manner consistent with past practice, (b) there has not been
any event, circumstance, change or effect that, individually or in the
aggregate, has had, constitutes or could reasonably be expected to have, a
Company Material Adverse Effect, and (c) none of the Company or any Company
Subsidiary has taken any action that, if taken after the date of this Agreement,
would constitute a material breach of any of the covenants set forth in Section
5.01.
SECTION 3.09. Absence of Litigation. There is no litigation, suit, claim,
action, proceeding or investigation (an "Action") pending or, to the knowledge
of the Company, threatened in writing against the Company or any Company
Subsidiary, or any property or asset of the Company or any Company Subsidiary,
before any Governmental Authority that (a) individually or in the aggregate, has
had, or could reasonably be expected to have, a Company Material Adverse Effect
or (b) seeks to materially delay or prevent the consummation of any of the
Transactions. Neither the Company nor any Company Subsidiary nor any material
property or asset of the Company or any Company Subsidiary is subject to any
continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the knowledge of the Company, continuing
investigation by, any Governmental Authority, or any order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority, that
could reasonably be expected, individually or in the aggregate, to prevent or
materially delay consummation of any of the Transactions or otherwise prevent or
materially delay the Company from performing its obligations under this
Agreement or could reasonably be expected, individually or in the aggregate, to
have a Company Material Adverse Effect.
SECTION 3.10. Employee Benefit Plans. (a) Section 3.10(a) of the Company
Disclosure Schedule lists (i) all employee benefit plans (as defined in Section
3(3) of the United States Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and whether or not subject to the requirements of ERISA) and
all bonus, stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement,
severance and other material benefit plans, programs or arrangements, and all
employment, termination, severance and other material similar contracts or
agreements (including, without limitation, any such contracts or agreements
relating to a sale of the Company or any Company Subsidiary or the consummation
of any Transaction) to which the Company or any Company Subsidiary is a party,
with respect to which the Company or any Company Subsidiary has any material
obligation or liability or that are maintained, contributed to or sponsored by
the Company or any Company Subsidiary for the benefit of any current or former
employee, officer or director of the Company or any Company Subsidiary, (ii)
each employee benefit plan for which the Company or any Company Subsidiary could
incur liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated and (iii) any employee benefit plan in respect of which
the Company or any Company Subsidiary could incur liability under Section
4212(c) of ERISA (collectively, the "Company Plans").
16
(b) With respect to each Company Plan that is subject to United States Law
(a "U.S. Company Plan"), the Company has made available to Parent or its counsel
a true and complete copy of (i) each U.S. Company Plan document, (ii) the most
recently filed Internal Revenue Service ("IRS") Form 5500, if any, relating to
such U.S. Company Plan, (iii) the most recent summary plan description for each
U.S. Company Plan for which a summary plan description is required by applicable
Law, (iv) the most recently received determination letter, if any, issued by the
IRS with respect to any U.S. Company Plan that is intended to qualify under
Section 401(a) of the Code, and (v) the most recently prepared actuarial report
or financial statement, if any, relating to a U.S. Company Plan. With respect to
each Company Plan that is not subject to United States Law (a "Non-U.S. Company
Plan"), the Company has made available to Parent or its counsel a true and
complete copy of each Non-U.S. Company Plan document and each material document,
if any, prepared in connection with each Non-U.S. Company Plan.
(c) None of the Company, any Company Subsidiary or any Company ERISA
Affiliate maintains, contributes to or has any liability with respect to a
multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA)
(a "Multiemployer Plan") or a single employer pension plan (within the meaning
of Section 4001(a)(15) of ERISA) for which liability under Section 4063 or 4064
of ERISA could be incurred (a "Multiple Employer Plan"). Except as set forth in
Section 3.10(c) of the Company Disclosure Schedule, none of the U.S. Company
Plans (i) provides for the payment of separation, severance, termination or
similar-type benefits to any person, (ii) obligates the Company or any Company
Subsidiary to pay separation, severance, termination or similar-type benefits
solely or partially as a result of any Transaction or (iii) obligates the
Company or any Company Subsidiary to make any payment or provide any benefit as
a result of a "change in control", within the meaning of such term under Section
280G of the Code. None of the U.S. Company Plans provides for or promises
retiree medical, disability or life insurance benefits to any current or former
employee, officer or director of the Company or any Company Subsidiary, except
as required by applicable Law. The Company, each Company Subsidiary and each
Company ERISA Affiliate have complied in all material respects with the
requirements of Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the
Code and any similar state Law ("COBRA").
(d) Each U.S. Company Plan has been maintained, funded and administered in
accordance with its terms and the requirements of all applicable Laws,
including, without limitation, ERISA and the Code, except where such
non-compliance could not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect. The Company and the
Company Subsidiaries have performed all material obligations required to be
performed by them under, are not in any material respect in default under or in
violation of, and have no knowledge of any material default or violation by any
party to, any U.S. Company Plan. No Action is pending or, to the knowledge of
the Company, threatened with respect to any U.S. Company Plan (other than claims
for benefits in the ordinary course) that could reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect and,
to the knowledge of the Company, no fact or event exists that could reasonably
be expected to give rise to any such Action.
(e) Each U.S. Company Plan that is intended to be qualified under Section
401(a) of the Code has timely applied for or received a favorable determination
letter from the
17
IRS covering all of the provisions applicable to the U.S. Company Plan for which
determination letters are currently available that the U.S. Company Plan is so
qualified or may rely on an opinion or advisory letter issued to a master or
prototype or volume submitter provider with respect to the tax-qualified status
of such U.S. Company Plan.
(f) Except for matters that, individually or in the aggregate, have not had
and could not reasonably be expected to have a Company Material Adverse Effect,
there has not been any prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) with respect to any U.S. Company Plan.
None of the Company, any Company Subsidiary or any Company ERISA Affiliate has
incurred any liability under, arising out of or by operation of Title IV of
ERISA (other than liability for premiums to the Pension Benefit Guaranty
Corporation arising in the ordinary course), including, without limitation, any
liability in connection with (i) the termination or reorganization of any
employee benefit plan subject to Title IV of ERISA, or (ii) the withdrawal from
any Multiemployer Plan or Multiple Employer Plan, and no fact or event exists
that would give rise to any such liability.
(g) With respect to each Non-U.S. Company Plan:
(i) each Non-U.S. Company Plan has been maintained and administered in
compliance with all applicable Laws, except where such non-compliance could
not reasonably be expected, individually or in the aggregate, to have a
Company Material Adverse Effect;
(ii) all employer and employee contributions to each Non-U.S. Company
Plan required by Law or by the terms of such Non-U.S. Company Plan have
been made, or, if applicable, accrued in accordance with the standard
accounting practices applicable in the local jurisdiction, and a pro rata
contribution for the period prior to and including the date of this
Agreement has been made or accrued;
(iii) the fair market value of the assets of each funded Non-U.S.
Company Plan, the liability of each insurer for any Non-U.S. Company Plan
funded through insurance or the book reserve established for any Non-U.S.
Company Plan, together with any accrued contributions, is sufficient to
procure or provide for the benefits determined on an ongoing basis (actual
or contingent) accrued to the date of this Agreement with respect to all
current and former participants under such Non-U.S. Company Plan according
to the actuarial assumptions and valuations most recently used to determine
employer contributions to such Non-U.S. Company Plan, and no Transaction
shall cause such assets or insurance obligations to be less than such
benefit obligations; provided that a Non-U.S. Company Plan that is
maintained solely pursuant to applicable foreign Law and sponsored by a
Governmental Authority shall not be subject to this paragraph;
(iv) each Non-U.S. Company Plan required to be registered has been
registered and has been maintained in good standing with applicable
regulatory authorities and, except as could not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse
Effect, each Non-U.S. Company Plan is now and always has been operated in
compliance with all applicable non-United States Laws;
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(v) none of the grants, subsidies, concessions and/or allowances that
have been received by the Company or any Company Subsidiary from any
Governmental Authority are liable to be repaid or revoked in whole or in
part as a result of the entry into or the completion of this Agreement or
the Transactions;
(vi) all deductions and payments required to be made by the Company or
any Company Subsidiary in respect of Central Provident Fund or Central
Provident Scheme contributions (including employer's contributions) in
relation to the remuneration of its employees to any relevant competent
authority have been so made; and
(vii) except as set forth in Section 3.10(g)(vii) of the Company
Disclosure Schedule, none of the Non-U.S. Company Plans (A) provides for
the payment of material separation, severance, termination or similar-type
benefits to any person, (B) obligates the Company or any Company Subsidiary
to pay material separation, severance, termination or similar-type benefits
solely or partially as a result of any Transaction, or (C) obligates the
Company or any Company Subsidiary to make any material payment or provide
any material benefit as a result of a change in control under applicable
Law. None of the Non-U.S. Company Plans provides for or promises material
retiree medical, disability or life insurance benefits to any current or
former employee, officer or director of the Company or any Company
Subsidiary, except as required by applicable Law.
SECTION 3.11. Labor and Employment Matters. (a) Except as set forth in
Section 3.11 of the Company Disclosure Schedule or as could not reasonably be
expected, individually or in the aggregate, to prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and could not
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect:
(i) there are no controversies pending or, to the knowledge of the
Company, threatened between the Company or any Company Subsidiary and any
of their respective employees;
(ii) neither the Company nor any Company Subsidiary is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by the Company or any Company Subsidiary, nor, to the
knowledge of the Company, are there any activities or proceedings of any
labor union to organize any such employees;
(iii) there are no unfair labor practice complaints pending against
the Company or any Company Subsidiary before the National Labor Relations
Board or any current union representation questions involving employees of
the Company or any Company Subsidiary; and
(iv) there is no strike, slowdown, work stoppage or lockout, or, to
the knowledge of the Company, threat thereof, by or with respect to any
employees of the Company or any Company Subsidiary.
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The consent of the labor unions that are a party to the collective bargaining
agreements listed in Section 3.11 of the Company Disclosure Schedule is not
required to consummate the Transactions.
(b) Except as could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect:
(i) the Company and the Company Subsidiaries are in compliance with
all applicable laws relating to the employment of labor, including those
related to wages, hours, collective bargaining and the payment and
withholding of taxes and other sums as required by the appropriate
Governmental Authority and have withheld and paid to the appropriate
Governmental Authority or are holding for payment not yet due to such
Governmental Authority all amounts required to be withheld from employees
of the Company or any Company Subsidiary and are not liable for any arrears
of wages, taxes, penalties or other sums for failure to comply with any of
the foregoing;
(ii) the Company and the Company Subsidiaries have paid in full to all
employees or adequately accrued for in accordance with GAAP consistently
applied all wages, salaries, commissions, bonuses, benefits and other
compensation due to or on behalf of such employees and there is no claim
with respect to payment of wages, salary or overtime pay that has been
asserted or is now pending or threatened before any Governmental Authority
with respect to any persons currently or formerly employed by the Company
or any Company Subsidiary;
(iii) neither the Company nor any Company Subsidiary is a party to, or
otherwise bound by, any consent decree with, or citation by, any
Governmental Authority relating to employees or employment practices;
(iv) there is no charge or proceeding with respect to a violation of
any occupational safety or health standards that has been asserted or is
now pending or threatened with respect to the Company; and
(v) there is no charge of discrimination in employment or employment
practices, for any reason, including, without limitation, age, gender,
race, religion or other legally protected category, which has been asserted
or is now pending or threatened before the United States Equal Employment
Opportunity Commission, or any other Governmental Authority in any
jurisdiction in which the Company or any Company Subsidiary has employed or
employ any person.
SECTION 3.12. Real Property; Title to Assets. (a) Section 3.12(a) of the
Company Disclosure Schedule lists each parcel of real property currently owned
by the Company or any Company Subsidiary or owned by the Company and any Company
Subsidiary after January 1, 1999. Each parcel of real property owned by the
Company or any Company Subsidiary (i) is owned free and clear of all mortgages,
pledges, liens, security interests,
20
conditional and installment sale agreements, encumbrances, charges or other
claims of third parties of any kind, including, without limitation, any
easement, right of way or other encumbrance to title, or any option, right of
first refusal, or right of first offer (collectively, "Liens"), other than
Permitted Liens (as defined in Section 9.03(a)), and (ii) is neither subject to
any governmental decree or order to be sold nor is being condemned, expropriated
or otherwise taken by any public authority with or without payment of
compensation therefor, nor, to the knowledge of the Company, has any such
condemnation, expropriation or taking been proposed.
(b) Section 3.12(b) of the Company Disclosure Schedule lists each parcel of
real property currently leased or subleased by the Company or any Company
Subsidiary, with the name of the lessor and the date of the lease, sublease,
assignment of the lease, any guaranty given or leasing commissions payable by
the Company or any Company Subsidiary in connection therewith and each amendment
to any of the foregoing (collectively, the "Company Lease Documents"). True,
correct and complete copies of all Company Lease Documents have been made
available to Parent or its counsel. All such current leases and subleases are in
full force and effect, are valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
material default or event of default (or event which, with notice or lapse of
time, or both, would constitute a default) by the Company or any Company
Subsidiary or, to the Company's knowledge, by the other party to such lease or
sublease.
(c) Except as could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect: (i) there are no contractual or legal restrictions that preclude or
restrict the ability to use any real property owned or leased by the Company or
any Company Subsidiary for the purposes for which it is currently being used;
and (ii) there are no material latent defects or material adverse physical
conditions affecting the real property, and improvements thereon, owned or
leased by the Company or any Company Subsidiary.
(d) Each of the Company and the Company Subsidiaries has good and valid
title to, or, in the case of leased properties and assets, valid leasehold or
subleasehold interests in, all of its properties and assets, tangible and
intangible, real, personal and mixed, used or held for use in its business, free
and clear of any Liens, except for Permitted Liens.
SECTION 3.13. Intellectual Property. (a) Except as could not reasonably be
expected, individually or in the aggregate, to prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and could not
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect:
(i) to the knowledge of the Company, the Company and the Company
Subsidiaries own or are licensed to use all Intellectual Property used in
or necessary for the conduct of their respective businesses as currently
conducted;
21
(ii) to the knowledge of the Company, the conduct of the business of
the Company and the Company Subsidiaries as currently conducted does not
infringe upon or misappropriate the Intellectual Property rights of any
third party;
(iii) there are no claims or suits pending or, to the knowledge of the
Company and except as set forth in Section 3.13(a)(iii) of the Company
Disclosure Schedule, threatened against the Company or any Company
Subsidiary (A) alleging that the conduct of the business of the Company or
any Company Subsidiary as currently conducted infringes upon or
misappropriates the Intellectual Property rights of any third party or (B)
challenging the ownership, use, validity or enforceability of any item of
Intellectual Property owned by the Company or a Company Subsidiary
("Company Owned Intellectual Property");
(iv) with respect to the Company Owned Intellectual Property, the
Company or a Company Subsidiary is the owner of the entire right, title and
interest in and to such Company Owned Intellectual Property, free and clear
of all liens, encumbrances and other restrictions, and is entitled to use
such Company Owned Intellectual Property in the continued operation of its
respective business;
(v) there are no settlements, forbearances to xxx, consents,
judgments, orders or similar obligations which (A) restrict the business of
the Company or any Company Subsidiary in or under any Intellectual Property
rights of any third party; or (B) permit any third party to use any Company
Owned Intellectual Property;
(vi) Section 3.13(a)(vi) of the Company Disclosure Schedule sets forth
each item of material Intellectual Property licensed to the Company or a
Company Subsidiary ("Company Licensed Intellectual Property"), and the
Company or a Company Subsidiary has the right to use such Company Licensed
Intellectual Property in the continued operation of its respective business
in accordance with the terms of the license agreement governing such
Company Licensed Intellectual Property and the Company and the Company
Subsidiaries have used such Company Licensed Intellectual Property in
accordance with the terms of such license agreement;
(vii) to the knowledge of the Company, the Company Owned Intellectual
Property is valid and enforceable, and has not been adjudged invalid or
unenforceable in whole or in part;
(viii) to the knowledge of the Company, no person is engaging in any
activity that infringes upon or misappropriates the Company Owned
Intellectual Property;
(ix) to the knowledge of the Company, each license of the Company
Licensed Intellectual Property is valid and enforceable, is binding on all
parties to such license, and is in full force and effect;
(x) to the knowledge of the Company, no party to any license of the
Company Licensed Intellectual Property is in breach thereof or default
thereunder; and
22
(xi) neither the execution of this Agreement nor the consummation of
any Transaction will adversely affect any of the Company's or Company
Subsidiaries' rights with respect to the Company Owned Intellectual
Property or the Company Licensed Intellectual Property.
(b) Except as could not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect, the Company and Company
Subsidiaries have taken commercially reasonable actions to protect each item of
Company Owned Intellectual Property. The Company and Company Subsidiaries have
policies of (i) obtaining assignments from all technical employees and
consultants, who are involved in any way in the research, development or
invention of technology, of all of their rights in the technology created by
them within the scope of their employment during such employment and (ii)
requiring all directors who are involved in an executive capacity with the
Company or a Company Subsidiary, officers, management employees, and technical
and professional employees of the Company and Company Subsidiaries to enter into
written agreements with the Company or Company Subsidiaries to maintain in
confidence all confidential or proprietary information acquired by them in the
course of their employment. The Company and Company Subsidiaries enforce the
foregoing policies in a manner consistent with industry standard practices and
neither the Company nor the Company Subsidiaries are aware of any violations of
the foregoing policies.
(c) The Company or any Company Subsidiary has not agreed to indemnify any
third party for or against any infringement or misappropriation with respect to
any third party Intellectual Property other than in the ordinary course of
business.
(d) The consummation of the Transactions will not result in the Company or
any Company Subsidiary being bound by any non-compete or other restriction on
the operation of any business of the Company or any Company Subsidiary, or in
the grant by the Company or any Company Subsidiary of any rights or licenses to
any Company Owned Intellectual Property.
(e) The Company or any Company Subsidiary has not licensed any Company
Owned Intellectual Property to any third party other than in the ordinary course
of business.
SECTION 3.14. Taxes. The Company and the Company Subsidiaries have filed
all material Tax Returns (as defined in Section 9.03(a)) required to be filed by
them and have paid and discharged all material Taxes required to be paid or
discharged, other than such payments as are being contested in good faith by
appropriate proceedings. All Tax Returns are true, accurate and complete in all
material respects. Neither the IRS nor any other United States or non-United
States taxing authority or agency is now asserting or, to the knowledge of the
Company, threatening to assert, against the Company or any Company Subsidiary
any material deficiency or claim for any Taxes or interest thereon or penalties
in connection therewith. Neither the Company nor any Company Subsidiary has
granted any waiver of any statute of limitations with respect to, or any
extension of a period for the assessment of, any Tax. The accruals and reserves
for Taxes reflected in the consolidated balance sheet of the Company and the
consolidated Company Subsidiaries as at September 30, 2003 are adequate to cover
all Taxes accruable through such date (including interest and penalties, if any,
thereon) in accordance with GAAP. There are no Tax liens upon any property or
assets of the Company or any of the Company Subsidiaries except liens for
current Taxes not yet due. Neither the Company nor any
23
Company Subsidiary has been a "distributing corporation" or a "controlled
corporation" in a distribution intended to qualify under Section 355(e) of the
Code within the past five years. To the knowledge of the Company, neither the
Company nor any of its affiliates has taken or agreed to take any action that
would prevent the Merger from qualifying as a reorganization within the meaning
of Section 368(a) of the Code (determined without the application of Section 367
of the Code) or the exchange by Eligible Company Stockholders of Company Shares
for Parent ADSs pursuant to the Merger from satisfying the requirements of
Section 1.367(a)-3(c) of the Income Tax Regulations (the "Regulations") other
than subsection (3)(C) thereof. The Company is not aware of any agreement, plan
or other circumstance that would prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code (determined
without the application of Section 367 of the Code) or the by Eligible Company
Stockholders of Company Shares for Parent ADSs pursuant to the Merger from
satisfying the requirements of Section 1.367(a)-3(c) of the Regulations other
than subsection (3)(C) thereof.
SECTION 3.15. Environmental Matters. Except as could not reasonably be
expected, individually or in the aggregate, to prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and could not
reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect:
(a) neither the Company nor any Company Subsidiary has violated or is
in violation of any Environmental Law (as defined in Section 9.03(a)) and
neither the Company nor any Company Subsidiary has received any written
communication from a Governmental Agency or person alleging any actual or
potential liability of, or any actual or potential violation by, the
Company or any Company Subsidiary arising under any Environmental Law;
(b) none of the properties currently owned, leased or operated by the
Company or any Company Subsidiary or formerly owned, leased or operated by
the Company or any Company Subsidiary (including, without limitation, soils
and surface and groundwaters) is or has been contaminated with any
Hazardous Substance (as defined in Section 9.03(a)), which contamination
requires investigation or remediation under any Environmental Law, or has
given rise to or would reasonably be expected to give rise to liability or
obligations (including any investigatory, reporting or remedial obligation)
under any Environmental Law;
(c) neither the Company nor any Company Subsidiary has stored,
handled, treated, disposed of, arranged for the disposal of, transported or
released any Hazardous Substance at any property or facility, including,
without limitation, any offsite location, and neither the Company nor any
Company Subsidiary has or has allegedly exposed any person to any Hazardous
Substance, so as to give rise to a requirement for investigation or
remediation under any Environmental Law or so as to give rise to any
current or reasonably expected future liability or obligation (including
any investigatory, reporting or remedial obligation) under any
Environmental Law;
(d) the Company and the Company Subsidiaries have all permits,
licenses and other authorizations required under any Environmental Law and
the
24
Company and the Company Subsidiaries are in compliance with, and have no
current or pending liability or obligation associated with any past
non-compliance with, such permits, licenses and authorizations;
(e) neither the execution of this Agreement nor the consummation of
the Transactions will require any investigation, remediation or other
action with respect to Hazardous Substances, or any notice to or consent of
Governmental Authorities or third parties, pursuant to any applicable
Environmental Law;
(f) neither the Company nor any Company Subsidiary has designed,
manufactured, installed, marketed, sold, handled or distributed asbestos or
any asbestos-containing product or asbestos-containing material, and no
basis in fact or Law, or under contract or lease agreement, exists upon
which any claim of liability could be asserted against the Company or any
Company Subsidiary relating to asbestos, asbestos-containing products or
asbestos-containing materials located at any property or facility; and
(g) the Company has made available to Parent or its counsel all
environmental reports and other material environmental documents relating
to its business or to the Company or the Company Subsidiaries, or to their
respective affiliates' or predecessors' properties, facilities or
operations.
SECTION 3.16. Material Contracts. (a) Subsections (i) through (xi) of
Section 3.16(a) of the Company Disclosure Schedule list the following types of
contracts and agreements to which the Company or any Company Subsidiary is a
party (such contracts and agreements as are required to be set forth in Section
3.16(a) of the Company Disclosure Schedule being the "Material Company
Contracts"):
(i) each "material contract" (as such term is defined in Item
610(b)(10) of Regulation S-K of the SEC) with respect to the Company and
its Company Subsidiaries;
(ii) each contract and agreement that is likely to involve
consideration of more than $500,000, in the aggregate, over the remaining
term of such contract or agreement, than purchase orders entered into in
the ordinary course of business and in a manner consistent with past
practice;
(iii) each contract and agreement evidencing outstanding indebtedness
in a principal amount of $500,000 or more;
(iv) all leases of real property leased for the use or benefit of the
Company or any Company Subsidiary;
(v) all material contracts and agreements with any Governmental
Authority to which the Company or any Company Subsidiary is a party;
(vi) all contracts and agreements that limit, or purport to limit, the
ability of the Company or any Company Subsidiary to compete in any line of
business or with any person or entity or in any geographic area or during
any period of time;
25
(vii) all contracts and agreements providing for benefits under any
Company Plan;
(viii) all contracts for employment required to be listed in Section
3.10 of the Company Disclosure Schedule;
(ix) each joint venture, partnership, strategic alliance and similar
agreement to which the Company or any Company Subsidiary is a party, which
is material to the Company or any Company Subsidiary or which provides for
the ownership of any equity interest in any person or entity;
(x) all material broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing consulting and advertising contracts, and agreements to which the
Company or any Company Subsidiary is a party;
(xi) all management contracts (excluding contracts for employment) and
contracts with other consultants, including any contracts involving the
payment of royalties or other amounts calculated based upon the revenues or
income of the Company or any Company Subsidiary or income or revenues
related to any product or service of the Company or any Company Subsidiary
to which the Company or any Company Subsidiary is a party;
(xii) all licenses or sublicenses of Intellectual Property to which
the Company or any Company Subsidiary is a party and that are material to
the business of the Company or any Company Subsidiary; and
(xiii) all other contracts and agreements that are material to the
Company and the Company Subsidiaries, taken as a whole, or the absence of
which could reasonably be expected, individually or in the aggregate, to
have a Company Material Adverse Effect.
(b) Except as could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect:
(i) each Material Company Contract is a legal, valid and binding
agreement;
(ii) neither the Company nor any Company Subsidiary has received any
claim of default under any Material Company Contract and neither the
Company nor any Company Subsidiary is in breach or violation of, or default
under, any Material Company Contract;
(iii) to the Company's knowledge, no other party is in breach or
violation of, or default under, any Material Company Contract; and
26
(iv) neither the execution of this Agreement nor the consummation of
any Transaction shall constitute a default under, give rise to cancellation
rights under or otherwise adversely affect any of the material rights of
the Company or any Company Subsidiary under any Material Company Contract.
The Company has made available to Parent or its counsel true and complete copies
of all Material Company Contracts, including any amendments thereto.
SECTION 3.17. Insurance. The Company and the Company Subsidiaries maintain
insurance coverage with reputable insurers in such amounts and covering such
risks as are in accordance with normal industry practice for companies engaged
in businesses similar to that of the Company and the Company Subsidiaries
(taking into account the cost and availability of such insurance).
SECTION 3.18. Customers and Suppliers. Section 3.18 of the Company
Disclosure Schedule sets forth a true and complete list of the Company's top 20
customers for 2003 (based on the revenue from such customers during the 12-month
period ended December 31, 2003) and top 20 suppliers for 2003 (based on payments
to such suppliers during the 12-month period ended December 31, 2003). Except as
set forth in Section 3.18 of the Company Disclosure Schedule, no customer that
accounted for more than two percent of the Company's consolidated revenues
during the 12-month period ended December 31, 2003 and no material supplier of
the Company and the Company Subsidiaries during that period (a) has cancelled or
otherwise terminated any agreement with the Company or any Company Subsidiary
prior to the expiration of the agreement term, (b) has returned, or threatened
to return, a substantial amount of any of the products, equipment, goods and
services purchased from the Company or any Company Subsidiary, or (c) to the
Company's knowledge, has threatened, or indicated its intention, to cancel or
otherwise terminate its relationship with the Company or the Company
Subsidiaries or to reduce substantially its purchases from or sales to the
Company or any Company Subsidiary of any products, equipment, goods or services.
Neither the Company nor any Company Subsidiary has (y) breached any material
agreement with or (z) engaged in any fraudulent conduct with respect to, any
such customer or supplier of the Company or any Company Subsidiary.
SECTION 3.19. Board Approval; Vote Required. (a) The Company Board, by
resolutions duly adopted by unanimous vote of those members of the Company Board
voting at a meeting duly called and held and not subsequently rescinded or
modified in any way, has duly (i) determined that this Agreement, the Voting
Agreements and the Merger are fair to and in the best interests of the Company
and its stockholders, (ii) approved this Agreement, the Voting Agreements and
the Merger and declared their advisability, (iii) recommended that the
stockholders of the Company approve and adopt this Agreement and approve the
Merger and directed that this Agreement and the Merger be submitted for
consideration by the holders of Company Class A Common Stock at the Company
Stockholders' Meeting (as defined below), and (iv) confirmed that the Company
Stock Options will not accelerate as a result of the Merger. Pursuant to Article
Twelve of the Company's Certificate of Incorporation, the limitations on
business combinations contained in Section 203 of the DGCL do not apply to the
Company.
27
(b) The only vote of the holders of any class or series of capital stock or
other securities of the Company necessary to approve this Agreement, the Voting
Agreements, the Merger and the other Transactions is the affirmative vote of the
holders of a majority of the outstanding shares of Company Class A Common Stock
in favor of the approval and adoption of this Agreement.
SECTION 3.20. Certain Business Practices. None of the Company, any Company
Subsidiary or, to the Company's knowledge, any directors or officers, agents or
employees of the Company or any Company Subsidiary, has (a) used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to political activity; (b) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended; or (c) made any payment in the nature of criminal bribery.
SECTION 3.21. Interested Party Transactions. Except for any agreement or
arrangement that is likely to involve consideration of less than $50,000 during
any calendar year, no director, officer or other affiliate of the Company or any
Company Subsidiary (a) purchases from or sells or furnishes to, the Company or
any Company Subsidiary, any goods or services, (b) is a party to any contract or
agreement disclosed in Section 3.16 of the Company Disclosure Schedule, or (c)
has any contractual or other arrangement with the Company or any Company
Subsidiary. The Company and the Company Subsidiaries have not, since January 1,
2002, (i) extended or maintained credit, arranged for the extension of credit or
renewed an extension of credit in the form of a personal loan to or for any
director or executive officer (or equivalent thereof) of the Company, or (ii)
materially modified any term of any such extension or maintenance of credit.
SECTION 3.22. Ownership of Parent Ordinary Shares. As of the date of this
Agreement, neither the Company nor any Company Subsidiary is the beneficial
owner of any shares of capital stock of Parent.
SECTION 3.23. Opinion of Financial Advisor. The Company Board has received
the opinion of Credit Suisse First Boston LLC, dated the date of this Agreement,
to the effect that, as of the date of this Agreement, the Exchange Ratio is
fair, from a financial point of view, to the holders of Company Class A Common
Stock, a written copy of which opinion will be delivered to Parent, solely for
informational purposes, promptly after receipt thereof by the Company Board.
SECTION 3.24. Brokers. No broker, finder or investment banker (other than
Credit Suisse First Boston LLC) is entitled to any brokerage, finder's or other
fee or commission in connection with the Transactions based upon arrangements
made by or on behalf of the Company. The Company has made available to Parent or
its counsel a complete and correct copy of all agreements between the Company
and Credit Suisse First Boston LLC pursuant to which such firm would be entitled
to any payment relating to the Transactions.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Except as set forth in the Parent Disclosure Schedule that has been
prepared by Parent and delivered by Parent to the Company in connection with the
execution and delivery of this Agreement (the "Parent Disclosure Schedule")
(which Parent Disclosure Schedule shall be arranged in sections corresponding to
the sections of this Article IV, and any information disclosed in any such
section of the Parent Disclosure Schedule shall be deemed to be disclosed only
for purposes of the corresponding section of this Article IV, unless it is
reasonably apparent that the disclosure contained in such section of the Parent
Disclosure Schedule applies to other representations and warranties contained in
this Article IV), Parent hereby represents and warrants to the Company that:
SECTION 4.01. Corporate Organization. (a) Each of Parent and each
subsidiary of Parent (each a "Parent Subsidiary") is a corporation or other
organization duly organized, validly existing and, where applicable, in good
standing under the laws of the jurisdiction of its incorporation or organization
and has the requisite corporate power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority and
governmental approvals could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay Parent or Merger Sub from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Parent Material Adverse
Effect (as defined in Section 9.03(a)). Parent and each Parent Subsidiary is
duly qualified or licensed to do business, and, where applicable, is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except where the failure to be so qualified or licensed
and in good standing could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay Parent or Merger Sub from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Parent Material Adverse
Effect.
(b) A true and complete list of all the Parent Subsidiaries, together with
the jurisdiction of incorporation or organization of each Parent Subsidiary and
the percentage of the outstanding capital stock of each Parent Subsidiary owned
by Parent and each other Parent Subsidiary, is set forth in Section 4.01(b) of
the Parent Disclosure Schedule. Except as set forth in Section 4.01(b) of the
Parent Disclosure Schedule, Parent does not directly or indirectly own any
equity or similar interest in, or any interest convertible into or exchangeable
or exercisable for any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity.
SECTION 4.02. Certificate of Incorporation and By-Laws. Parent has made
available to the Company or its counsel a complete and correct copy of the
Memorandum and Articles of Association or equivalent organizational documents,
each as amended to date, of
29
Parent and each Parent Subsidiary. Such Memorandum and Articles of Association
or equivalent organizational documents are in full force and effect. Neither
Parent nor any Parent Subsidiary is in violation of any of the provisions of its
Memorandum and Articles of Association or equivalent organizational documents,
except where such violations could not reasonably be expected, individually or
in the aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay Parent or Merger Sub from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Parent Material Adverse
Effect.
SECTION 4.03. Capitalization. (a) The authorized capital stock of Parent
consists of 3,200,000,000 Parent Ordinary Shares. As of January 30, 2004, (i)
1,076,675,760 Parent Ordinary Shares were issued and outstanding, all of which
were validly issued, fully paid and non-assessable, (ii) no Parent Ordinary
Shares were held by subsidiaries of Parent, (iii) 60,965,705 Parent Ordinary
Shares were reserved for future issuance pursuant to outstanding employee stock
options ("Parent Stock Options") and other purchase rights (together with Parent
Stock Options, the "Parent Stock Awards") granted pursuant to the Parent Share
Option Plan 1999 (the "Parent Stock Option Plan") and (iv) 172,512,573 Parent
Ordinary Shares were reserved for future issuance upon conversion of the 1.75%
Convertible Notes due 2007 of Parent and the 4.25% Convertible Notes due 2008 of
Parent (collectively, the "Parent Convertible Notes"). Except as set forth in
this Section 4.03 or the Parent Shareholder Voting Agreements, there are no
options, warrants or other rights, agreements, arrangements or commitments of
any character relating to the issued or unissued capital stock of Parent or any
Parent Subsidiary or obligating Parent or any Parent Subsidiary to issue or sell
any shares of capital stock of, or other equity interests in, Parent or any
Parent Subsidiary. Parent has not adopted, approved or entered into, or proposed
to adopt, approve or enter into, any stockholder "rights plan", "poison pill"
plan or comparable plan or arrangement. Except for the Parent Convertible Notes,
there are no bonds, debentures, notes or other indebtedness of Parent having the
right (or convertible into, or exchangeable for, securities having the right) to
vote on any matter on which holders of Parent Ordinary Shares may vote. Section
4.03(a) of the Parent Disclosure Schedule sets forth the following information
with respect to each Parent Stock Award outstanding as of the date of this
Agreement: (i) the name of the Parent Stock Award recipient; (ii) the particular
plan pursuant to which such Parent Stock Award was granted; (iii) the number of
Parent Ordinary Shares subject to such Parent Stock Award; (iv) the exercise or
purchase price of such Parent Stock Award; (v) the date on which such Parent
Stock Award was granted; (vi) the applicable vesting schedule; (vii) the date on
which such Parent Stock Award expires; and (viii) whether the exercisability of
or right of repurchase of such Parent Stock Award will be accelerated in any way
by the Transactions, and indicates the extent of acceleration. Parent has made
available to the Company or its counsel accurate and complete copies of all
Parent Plans pursuant to which Parent has granted the Parent Stock Awards that
are currently outstanding and the form of all stock award agreements evidencing
such Parent Stock Awards. All Parent Ordinary Shares subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and non-assessable. There are no outstanding
contractual obligations of Parent or any Parent Subsidiary to repurchase, redeem
or otherwise acquire any Parent Ordinary Shares or any capital stock of Parent
Subsidiary or to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any Parent Subsidiary or any other
person. There are no Parent Ordinary Shares or Parent ADSs outstanding that are
unvested or are subject to a repurchase
30
option, risk of forfeiture or other condition under the Parent Stock Plan or any
applicable restricted stock purchase agreement or other agreement with Parent.
There are no commitments or agreements of any character to which Parent is bound
obligating Parent to accelerate the vesting of any Parent Stock Option as a
result of the Merger. All outstanding Parent Ordinary Shares, all outstanding
Parent Stock Options, and all outstanding shares of capital stock of each Parent
Subsidiary have been issued and granted in compliance with (i) all applicable
securities laws and other applicable Laws, rules and regulations (including,
without limitation, any applicable Singapore Laws, rules and regulations) and
(ii) all requirements set forth in applicable contracts.
(b) Each outstanding share of capital stock of each Parent Subsidiary is
duly authorized, validly issued, fully paid and nonassessable, and, except for
directors' qualifying shares required under applicable Law, each such share is
owned by Parent or another Parent Subsidiary free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
limitations on Parent's or any Parent Subsidiary's voting rights, charges and
other encumbrances of any nature whatsoever.
(c) The Parent Ordinary Shares underlying the Parent ADSs to be issued
pursuant to the Merger in accordance with Section 2.01 (i) will be duly
authorized, validly issued, fully paid and non-assessable and not subject to
preemptive rights created by statute, the Parent's Memorandum and Articles of
Association or any agreement to which the Parent is a party or is bound and (ii)
will, when issued, be registered under the Securities Act and the Exchange Act
and registered or exempt from registration under applicable Blue Sky Laws.
SECTION 4.04. Authority Relative to This Agreement. Subject to the approval
of the Share Issuance, the Parent Name Change, the New Stock Option Plans
Adoption and the Parent Board Appointments by Parent's shareholders, each of
Parent and Merger Sub has all necessary corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the Transactions. The execution and delivery of this Agreement by
Parent and Merger Sub and the consummation by Parent and Merger Sub of the
Transactions have been duly and validly authorized by all necessary corporate
action on the part of Parent and Merger Sub, and no other corporate proceedings
on the part of Parent or Merger Sub are necessary to authorize this Agreement or
to consummate the Transactions (other than, with respect to the Share Issuance,
the New Stock Option Plans Adoption and the Parent Board Appointments, the
approval of the Share Issuance, the New Stock Option Plans Adoption and the
Parent Board Changes by a majority of the votes cast with respect to the Share
Issuance, the New Stock Option Plans Adoption and the Parent Board Appointments
at the Parent Shareholders' Meeting (as defined below), with respect to the
Parent Name Change, the approval of the Parent Name Change by 75% of the votes
cast with respect to the Parent Name Change at the Parent Shareholders' Meeting,
and with respect to the Merger, the filing and recordation of appropriate merger
documents as required by the DGCL). This Agreement has been duly and validly
executed and delivered by Parent and Merger Sub and, assuming due authorization,
execution and delivery by the other parties hereto, constitutes a legal, valid
and binding obligation of each of Parent and Merger Sub, enforceable against
each of Parent and Merger Sub in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting creditors' rights generally and subject to the effect of
general principles of equity
31
(regardless of whether considered in a proceeding at law or in equity). To the
knowledge of Parent, as of the date hereof, no Singapore takeover statute, rule
or regulation is applicable to the Merger or the other Transactions. To the
knowledge of Parent, no Singapore takeover statute, rule or regulation will be
applicable to the Merger or the other Transactions as of the Effective Time,
assuming that (i) no person acquires Parent Ordinary Shares or Parent ADSs
(taken together with Parent Ordinary Shares and/or Parent ADSs acquired by
persons acting in concert with him) that carry 30% or more of the voting rights
of Parent; and (ii) no person who, together with parties acting in concert with
him, holds not less than 30% but not more than 50% of the voting rights of
Parent, and such person or any person acting in concert with him, acquires in
any period of six months additional Parent Ordinary Shares and/or Parent ADSs
carrying more than 1% of the voting rights of Parent, in each case as a result
of or pursuant to the Merger or the other Transactions.
SECTION 4.05. No Conflict; Required Filings and Consents. (a) The execution
and delivery of this Agreement by Parent and Merger Sub do not, and the
performance of this Agreement by Parent and Merger Sub will not, (i) conflict
with or violate the Memorandum and Articles of Association or other
organizational documents of Parent or any Parent Subsidiary, (ii) assuming that
all consents, approvals, authorizations and other actions described in Sections
4.04 and 4.05(b) have been obtained and all filings and obligations described in
Section 4.05(b) have been made, conflict with or violate any Law applicable to
Parent or any Parent Subsidiary or by which any property or asset of Parent or
any Parent Subsidiary is bound or affected, or (iii) result in any breach of, or
constitute a default (or an event which, with notice or lapse of time or both,
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of Parent or any Parent Subsidiary
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Parent or
any Parent Subsidiary is a party or by which Parent or any Parent Subsidiary or
any of their properties or assets is bound or affected, except, with respect to
clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults
or other occurrences which could not reasonably be expected, individually or in
the aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay Parent or Merger Sub from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Parent Material Adverse
Effect.
(b) The execution and delivery of this Agreement by Parent and Merger Sub
do not, and the performance of this Agreement by Parent and Merger Sub will not,
require Parent or Merger Sub to obtain any consent, approval, authorization or
permit of, or to file with or to notify any Governmental Authority, except (i)
applicable requirements, if any, of the Securities Act, Exchange Act and Blue
Sky Laws, (ii) the pre-merger notification requirements of the HSR Act, (iii)
the filing and recordation of appropriate merger documents as required by the
DGCL and the relevant authorities of other jurisdictions in which Parent is
qualified to do business, (iv) appropriate applications, filings and notices to,
and approval of, Nasdaq and the SGX-ST as may be required in connection with the
listing of the Parent ADSs to be issued in connection with the Merger or
pursuant to the Substitute Options, (v) the filing of appropriate documents with
the IRS in connection with the Private Letter Ruling (as defined below)
contemplated by Section 6.10(d), and (vi) where the failure to obtain such
consents, approvals, authorizations or
32
permits, or to make such filings or notifications, could not reasonably be
expected, individually or in the aggregate, to prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
Parent or Merger Sub from performing its obligations under this Agreement and
could not reasonably be expected, individually or in the aggregate, to have a
Parent Material Adverse Effect.
SECTION 4.06. Permits; Compliance. Each of Parent and the Parent
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Authority necessary for each of Parent
or the Parent Subsidiaries to own, lease and operate its properties or to carry
on its business as it is now being conducted (the "Parent Permits"), except
where the failure to have, or the suspension or cancellation of, any of the
Parent Permits could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay Parent or Merger Sub from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Parent Material Adverse
Effect. No suspension or cancellation of any of the Parent Permits is pending
or, to the knowledge of Parent, threatened, except where the failure to have, or
the suspension or cancellation of, any of the Parent Permits could not
reasonably be expected, individually or in the aggregate, to prevent or
materially delay consummation of any of the Transactions or otherwise prevent or
materially delay Parent or Merger Sub from performing its obligations under this
Agreement and could not reasonably be expected, individually or in the
aggregate, to have a Parent Material Adverse Effect. Neither Parent nor any
Parent Subsidiary is in conflict with, or in default, breach or violation of,
(a) any Law applicable to Parent or any Parent Subsidiary or by which any
property or asset of Parent or any Parent Subsidiary is bound or affected, or
(b) any note, bond, mortgage, indenture, contract, agreement, lease, license,
Parent Permit, franchise or other instrument or obligation to which Parent or
any Parent Subsidiary is a party or by which Parent or any Parent Subsidiary or
any property or asset of Parent or any Parent Subsidiary is bound, except for
any such conflicts, defaults, breaches or violations that could not reasonably
be expected, individually or in the aggregate, to prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
Parent or Merger Sub from performing its obligations under this Agreement and
could not reasonably be expected, individually or in the aggregate, to have a
Parent Material Adverse Effect.
SECTION 4.07. SEC Filings; Financial Statements. (a) Parent has filed all
forms, reports and documents required to be filed by it with the SEC since
January 28, 2000 (as such documents have been amended prior to the date hereof,
collectively, the "Parent SEC Reports"). As of their respective dates, the
Parent SEC Reports (i) complied in all material respects in accordance with
either the requirements of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations promulgated thereunder, and (ii) did not,
at the time they were filed, or, if amended, as of the date of such amendment,
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 made
therein, in the light of the circumstances under which they were made, not
misleading. No Parent Subsidiary is required to file any form, report or other
document with the SEC.
33
(b) Parent has filed all forms, reports and documents required to be filed
by it with the Registry of Companies and Businesses of Singapore since January
1, 2000 (collectively, the "Parent Singapore Filings"). The Parent Singapore
Filings complied in all material respects in accordance with the requirements of
the Companies Act (Chapter 50) of Singapore, as amended from time to time (the
"Singapore Companies Act") and, if applicable, the Securities and Futures Act
(Chapter 289) of Singapore, as amended from time to time (the "Singapore
Securities Act"). Since January 28, 2000, Parent has filed all forms, reports
and documents required to be filed by it with the SGX-ST. Parent has made
available to the Company or its counsel the letter from the SGX-ST, dated as of
September 30, 1999, (the "SGX-ST Letter"), and since January 28, 2000, Parent
has complied with the conditions to the waiver set forth in paragraph 4(ii)
thereof and there have not been any amendments or modifications as to the waiver
contained in paragraph 4(ii) thereof, and the waiver set forth in paragraph
4(ii) thereof has not been revoked by SGX-ST. As of the date hereof, Parent has
not received any notice (written or otherwise) from SGX-ST that SGX-ST has
imposed any additional conditions or has revoked any of the conditions in
relation to its waiver from the requirements of having to comply with the
continuing listing requirements of SGX-ST (the "SGX-ST Waiver"). Parent has
complied with and is not in breach of any other conditions, requirements or
other obligations imposed by the SGX-ST which are not the subject of the SGX-ST
Waiver.
(c) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the Parent SEC Reports was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto or, in the case of
unaudited statements, as permitted by the SEC on Form 10-Q, Form 8-K or any
similar or successor form) and each fairly presents, in all material respects,
the consolidated financial position, results of operations and cash flows of
Parent and its consolidated subsidiaries as at the respective dates thereof and
for the respective periods indicated therein, except that the unaudited interim
financial statements may not contain footnotes and as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring year-end
adjustments).
(d) Except as and to the extent set forth on the consolidated balance sheet
of Parent and the consolidated Parent Subsidiaries as at September 30, 2003,
including the notes thereto, neither Parent nor any Parent Subsidiary has any
liability or obligation of any nature (whether accrued, absolute, contingent or
otherwise) that would be required to be reflected on a balance sheet prepared in
accordance with GAAP, except for liabilities and obligations, incurred in the
ordinary course of business and in a manner consistent with past practice since
September 30, 2003, which, individually or in the aggregate, could not
reasonably be expected to have a Parent Material Adverse Effect.
(e) Parent has made available to the Company or its counsel all comment
letters received by Parent from the SEC or the staff thereof since January 1,
2000 and all responses to such comment letters filed by or on behalf of Parent.
(f) Parent has timely filed all certifications and statements required by
(x) Rule 13a-14 or Rule 15d-14 under the Exchange Act or (y) 18 U.S.C. Section
1350 (Section 906 of the Xxxxxxxx-Xxxxx Act of 2002) with respect to any Parent
SEC Report. Parent maintains disclosure controls and procedures required by Rule
13a-15 or Rule 15d-15 under the Exchange
34
Act; such controls and procedures are designed to ensure that material
information concerning Parent and the Parent Subsidiaries is made known on a
timely basis to the individuals responsible for the preparation of Parent's SEC
filings and other public disclosure documents.
(g) Parent maintains a standard system of accounting established and
administered in accordance with GAAP. Parent and the Parent Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management's general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(h) Since January 1, 2000, neither Parent nor any Parent Subsidiary nor, to
Parent's knowledge, any director, officer, employee, auditor, accountant or
representative of Parent or any Parent Subsidiary, has received or otherwise had
or obtained knowledge of any written or formal complaint, allegation or claim
regarding the accounting or auditing practices, procedures, methodologies or
methods of Parent or any Parent Subsidiary or their respective internal
accounting controls, including any complaint, allegation, assertion or claim
that Parent or any Parent Subsidiary has engaged in questionable accounting or
auditing practices. No attorney representing Parent or any Parent Subsidiary,
whether or not employed by Parent or any Parent Subsidiary, has reported
evidence of a material violation of securities laws, breach of fiduciary duty or
similar violation by Parent or any of its officers, directors, employees or
agents to the Parent Board or any committee thereof or to any director or
officer of Parent. Since January 1, 2000, there have been no formal internal
investigations regarding financial reporting or accounting policies and
practices discussed with, reviewed by or initiated at the direction of the chief
executive officer, chief financial officer, general counsel, the Parent Board or
any committee thereof, other than ordinary course audits or reviews of
accounting policies and practices or internal controls required by the
Xxxxxxxx-Xxxxx Act of 2002.
(i) To the knowledge of Parent, no employee of Parent or any Parent
Subsidiary has provided or is providing information to any law enforcement
agency regarding the commission or possible commission of any crime or the
violation or possible violation of any applicable Law. Neither Parent nor any
Parent Subsidiary nor any officer, employee, contractor, subcontractor or agent
of Parent or any such Parent Subsidiary has discharged, demoted, suspended,
threatened, harassed or in any other manner discriminated against an employee of
Parent or any Parent Subsidiary in the terms and conditions of employment
because of any act of such employee described in 18 U.S.C. Section 1514A(a).
SECTION 4.08. Absence of Certain Changes or Events. Since September 30,
2003, except as contemplated by this Agreement, (a) Parent and the Parent
Subsidiaries have conducted their businesses only in the ordinary course of
business and in a manner consistent with past practice, (b) there has not been
any event, circumstance, change or effect that, individually or in the
aggregate, has had, constitutes or could reasonably be expected to have, a
Parent Material Adverse Effect, and (c) none of Parent or any Parent Subsidiary
has taken any
35
action that, if taken after the date of this Agreement, would constitute a
material breach of any of the covenants set forth in Section 5.02.
SECTION 4.09. Absence of Litigation. There is no Action pending or, to the
knowledge of Parent, threatened in writing against Parent or any Parent
Subsidiary, or any property or asset of Parent or any Parent Subsidiary, before
any Governmental Authority that (a) individually or in the aggregate, has had,
or could reasonably be expected to have, a Parent Material Adverse Effect or (b)
seeks to materially delay or prevent the consummation of any of the
Transactions. Neither Parent nor any Parent Subsidiary nor any material property
or asset of Parent or any Parent Subsidiary is subject to any continuing order
of, consent decree, settlement agreement or other similar written agreement
with, or, to the knowledge of Parent, continuing investigation by, any
Governmental Authority, or any order, writ, judgment, injunction, decree,
determination or award of any Governmental Authority, that could reasonably be
expected, individually or in the aggregate, to prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
Parent from performing its obligations under this Agreement or could reasonably
be expected, individually or in the aggregate, to have a Parent Material Adverse
Effect.
SECTION 4.10. Employee Benefit Plans. (a) Section 4.10(a) of the Parent
Disclosure Schedule lists (i) all employee benefit plans (as defined in Section
3(3) of ERISA, and whether or not subject to the requirements of ERISA) and all
bonus, stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement,
severance and other material benefit plans, programs or arrangements, and all
employment, termination, severance and other material similar contracts or
agreements (including, without limitation, any such contracts or agreements
relating to a sale of Parent or any Parent Subsidiary or the consummation of any
Transaction) to which Parent or any Parent Subsidiary is a party, with respect
to which Parent or any Parent Subsidiary has any material obligation or
liability or that are maintained, contributed to or sponsored by Parent or any
Parent Subsidiary for the benefit of any current or former employee, officer or
director of Parent or any Parent Subsidiary, (ii) each employee benefit plan for
which Parent or any Parent Subsidiary could incur liability under Section 4069
of ERISA in the event such employee benefit plan has been or were to be
terminated and (iii) any employee benefit plan in respect of which Parent or any
Parent Subsidiary could incur liability under Section 4212(c) of ERISA
(collectively, the "Parent Plans").
(b) With respect to each Parent Plan that is subject to United States Law
(a "U.S. Parent Plan"), Parent has made available to the Company a true and
complete copy of (i) each U.S. Parent Plan document, (ii) the most recently
filed IRS Form 5500, if any, relating to such U.S. Parent Plan, (iii) the most
recent summary plan description for each U.S. Parent Plan for which a summary
plan description is required by applicable Law, (iv) the most recently received
determination letter, if any, issued by the IRS with respect to any U.S. Parent
Plan that is intended to qualify under Section 401(a) of the Code, and (v) the
most recently prepared actuarial report or financial statement, if any, relating
to a U.S. Parent Plan. With respect to each Parent Plan that is not subject to
United States Law (a "Non-U.S. Parent Plan"), Parent has made available to the
Company or its counsel a true and complete copy of each Non-U.S. Parent Plan
document and each material document, if any, prepared in connection with each
Non-U.S. Parent Plan.
36
(c) None of the Parent, any Parent Subsidiary or any Parent ERISA Affiliate
maintains, contributes or has any liability under or with respect to a
Multiemployer Plan or a Multiple Employer Plan. Except as set forth in Section
4.10(c) of the Parent Disclosure Schedule, none of the U.S. Parent Plans (i)
provides for the payment of separation, severance, termination or similar-type
benefits to any person, (ii) obligates Parent or any Parent Subsidiary to pay
separation, severance, termination or similar-type benefits solely or partially
as a result of any Transaction or (iii) obligates Parent or any Parent
Subsidiary to make any payment or provide any benefit as a result of a "change
in control", within the meaning of such term under Section 280G of the Code.
None of the U.S. Parent Plans provides for or promises retiree medical,
disability or life insurance benefits to any current or former employee, officer
or director of Parent or any Parent Subsidiary, except as required by applicable
Law. Parent, each Parent Subsidiary and each Parent ERISA Affiliate have
complied in all material respects with the requirements of COBRA.
(d) Each U.S. Parent Plan has been maintained, funded and administered in
accordance with its terms and the requirements of all applicable Laws,
including, without limitation, ERISA and the Code, except where such
non-compliance could not reasonably be expected, individually or in the
aggregate, to have a Parent Material Adverse Effect. Parent and the Parent
Subsidiaries have performed all material obligations required to be performed by
them under, are not in any material respect in default under or in violation of,
and have no knowledge of any material default or violation by any party to, any
U.S. Parent Plan. No Action is pending or, to the knowledge of Parent,
threatened with respect to any U.S. Parent Plan (other than claims for benefits
in the ordinary course) that could reasonably be expected, individually or in
the aggregate, to have a Parent Material Adverse Effect and, to the knowledge of
Parent, no fact or event exists that could reasonably be expected to give rise
to any such Action.
(e) Each U.S. Parent Plan that is intended to be qualified under Section
401(a) of the Code has timely applied for or received a favorable determination
letter from the IRS covering all of the provisions applicable to the U.S. Parent
Plan for which determination letters are currently available that the U.S.
Parent Plan is so qualified or may rely on an opinion or advisory letter issued
to a master or prototype or volume submitter provider with respect to the
tax-qualified status of such U.S. Parent Plan.
(f) Except for matters that, individually or in the aggregate, have not had
and could not reasonably be expected to have a Parent Material Adverse Effect,
there has not been any prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) with respect to any U.S. Parent Plan. None
of Parent, any Parent Subsidiary or any Parent ERISA Affiliate has incurred any
liability under, arising out of or by operation of Title IV of ERISA (other than
liability for premiums to the Pension Benefit Guaranty Corporation arising in
the ordinary course), including, without limitation, any liability in connection
with (i) the termination or reorganization of any employee benefit plan subject
to Title IV of ERISA, or (ii) the withdrawal from any Multiemployer Plan or
Multiple Employer Plan, and no fact or event exists that would give rise to any
such liability.
(g) With respect to each Non-U.S. Parent Plan:
37
(i) each Non-U.S. Parent Plan has been maintained, funded and
administered in compliance with all applicable Laws, except where such
non-compliance could not reasonably be expected, individually or in the
aggregate, to have a Parent Material Adverse Effect;
(ii) all employer and employee contributions to each Non-U.S. Parent
Plan required by Law or by the terms of such Non-U.S. Parent Plan have been
made, or, if applicable, accrued in accordance with the standard accounting
practices applicable in the local jurisdiction, and a pro rata contribution
for the period prior to and including the date of this Agreement has been
made or accrued;
(iii) the fair market value of the assets of each funded Non-U.S.
Parent Plan, the liability of each insurer for any Non-U.S. Parent Plan
funded through insurance or the book reserve established for any Non-U.S.
Parent Plan, together with any accrued contributions, is sufficient to
procure or provide for the benefits determined on an ongoing basis (actual
or contingent) accrued to the date of this Agreement with respect to all
current and former participants under such Non-U.S. Parent Plan according
to the actuarial assumptions and valuations most recently used to determine
employer contributions to such Non-U.S. Parent Plan, and no Transaction
shall cause such assets or insurance obligations to be less than such
benefit obligations; provided that a Non-U.S. Parent Plan that is
maintained solely pursuant to applicable foreign Law and sponsored by a
Governmental Authority shall not be subject to this paragraph;
(iv) none of the grants, subsidies, concessions and/or allowances that
have been received by Parent or any Parent Subsidiary from any Governmental
Authority are liable to be repaid or revoked in whole or in part as a
result of the entry into or the completion of this Agreement or the
Transactions;
(v) each Non-U.S. Parent Plan required to be registered has been
registered and has been maintained in good standing with applicable
regulatory authorities, and except as could not reasonably be expected,
individually or in the aggregate, to have a Parent Material Adverse Effect,
each Non-U.S. Parent Plan is now and always has been operated in compliance
with all applicable non-United States Laws;
(vi) all deductions and payments required to be made by Parent or any
Parent Subsidiary in respect of Central Provident Fund or Central Provident
Scheme contributions (including employer's contributions) in relation to
the remuneration of its employees to any relevant competent authority have
been so made; and
(vii) except as set forth in Section 4.10(g)(vii) of the Parent
Disclosure Schedule, none of the Non-U.S. Parent Plans (A) provides for the
payment of material separation, severance, termination or similar-type
benefits to any person, (B) obligates Parent or any Parent Subsidiary to
pay material separation, severance, termination or similar-type benefits
solely or partially as a result of any Transaction, or (C) obligates Parent
or any Parent Subsidiary to make any material payment or provide any
material benefit as a result of a change in control under applicable Law.
None of the Non-U.S. Parent Plans provides for or promises material retiree
medical, disability or life insurance
38
benefits to any current or former employee, officer or director of Parent
or any Parent Subsidiary, except as required by applicable Law.
SECTION 4.11. Labor and Employment Matters. (a) Except as set forth in
Section 4.11 of the Parent Disclosure Schedule or as could not reasonably be
expected, individually or in the aggregate, to prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
Parent or Merger Sub from performing its obligations under this Agreement and
could not reasonably be expected, individually or in the aggregate, to have a
Parent Material Adverse Effect:
(i) there are no controversies pending or, to the knowledge of Parent,
threatened between Parent or any Parent Subsidiary and any of their
respective employees;
(ii) neither Parent nor any Parent Subsidiary is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by Parent or any Parent Subsidiary, nor, to the knowledge
of Parent, are there any activities or proceedings of any labor union to
organize any such employees;
(iii) there are no unfair labor practice complaints pending against
Parent or any Parent Subsidiary before the National Labor Relations Board
or any current union representation questions involving employees of Parent
or any Parent Subsidiary; and
(iv) there is no strike, slowdown, work stoppage or lockout, or, to
the knowledge of Parent, threat thereof, by or with respect to any
employees of Parent or any Parent Subsidiary.
The consent of the labor unions that are a party to the collective bargaining
agreements listed in Section 4.11 of the Parent Disclosure Schedule is not
required to consummate the Transactions.
(b) Except as could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay Parent or Merger Sub from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Parent Material Adverse
Effect:
(i) Parent and the Parent Subsidiaries are in compliance with all
applicable laws relating to the employment of labor, including those
related to wages, hours, collective bargaining and the payment and
withholding of taxes and other sums as required by the appropriate
Governmental Authority and have withheld and paid to the appropriate
Governmental Authority or are holding for payment not yet due to such
Governmental Authority all amounts required to be withheld from employees
of Parent or any Parent Subsidiary and are not liable for any arrears of
wages, taxes, penalties or other sums for failure to comply with any of the
foregoing;
(ii) Parent and the Parent Subsidiaries have paid in full to all
employees or adequately accrued for in accordance with GAAP consistently
applied all wages, salaries, commissions, bonuses, benefits and other
compensation due to or on behalf of such
39
employees and there is no claim with respect to payment of wages, salary or
overtime pay that has been asserted or is now pending or threatened before
any Governmental Authority with respect to any persons currently or
formerly employed by Parent or any Parent Subsidiary;
(iii) neither Parent nor any Parent Subsidiary is a party to, or
otherwise bound by, any consent decree with, or citation by, any
Governmental Authority relating to employees or employment practices;
(iv) there is no charge or proceeding with respect to a violation of
any occupational safety or health standards that has been asserted or is
now pending or threatened with respect to Parent; and
(v) there is no charge of discrimination in employment or employment
practices, for any reason, including, without limitation, age, gender,
race, religion or other legally protected category, which has been asserted
or is now pending or threatened before the United States Equal Employment
Opportunity Commission, or any other Governmental Authority in any
jurisdiction in which Parent or any Parent Subsidiary has employed or
employs any person.
SECTION 4.12. Real Property; Title to Assets. (a) Section 4.12(a) of the
Parent Disclosure Schedule lists each parcel of real property currently owned by
Parent or any Parent Subsidiary or owned by Parent or any Parent Subsidiary
after January 1, 1999. Each parcel of real property owned by Parent or any
Parent Subsidiary (i) is owned free and clear of all Liens, other than Permitted
Liens, and (ii) is neither subject to any governmental decree or order to be
sold nor is being condemned, expropriated or otherwise taken by any public
authority with or without payment of compensation therefor, nor, to the
knowledge of Parent, has any such condemnation, expropriation or taking been
proposed.
(b) Section 4.12(b) of the Parent Disclosure Schedule lists each parcel of
real property currently leased or subleased by Parent or any Parent Subsidiary,
with the name of the lessor and the date of the lease, sublease, assignment of
the lease, any guaranty given or leasing commissions payable by Parent or any
Parent Subsidiary in connection therewith and each amendment to any of the
foregoing (collectively, the "Parent Lease Documents"). True, correct and
complete copies of all Parent Lease Documents have been made available to the
Company or its counsel. All such current leases and subleases are in full force
and effect, are valid and effective in accordance with their respective terms,
and there is not, under any of such leases, any existing material default or
event of default (or event which, with notice or lapse of time, or both, would
constitute a default) by Parent or any Parent Subsidiary or, to Parent's
knowledge, by the other party to such lease or sublease.
(c) Except as could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay Parent from performing its
obligations under this Agreement and could not reasonably be expected,
individually or in the aggregate, to have a Parent Material Adverse Effect: (i)
there are no contractual or legal restrictions that preclude or restrict the
ability to use any real property owned or leased by Parent or any Parent
Subsidiary for the
40
purposes for which it is currently being used; and (ii) there are no material
latent defects or material adverse physical conditions affecting the real
property, and improvements thereon, owned or leased by Parent or any Parent
Subsidiary.
(d) Each of Parent and the Parent Subsidiaries has good and valid title to,
or, in the case of leased properties and assets, valid leasehold or subleasehold
interests in, all of its properties and assets, tangible and intangible, real,
personal and mixed, used or held for use in its business, free and clear of any
Liens, except for Permitted Liens.
SECTION 4.13. Intellectual Property. (a) Except as could not reasonably be
expected, individually or in the aggregate, to prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
Parent from performing its obligations under this Agreement and could not
reasonably be expected, individually or in the aggregate, to have a Parent
Material Adverse Effect:
(i) to the knowledge of Parent, Parent and the Parent Subsidiaries own
or are licensed to use all Intellectual Property used in or necessary for
the conduct of their respective businesses as currently conducted;
(ii) to the knowledge of Parent, the conduct of the business of Parent
and the Parent Subsidiaries as currently conducted does not infringe upon
or misappropriate the Intellectual Property rights of any third party;
(iii) there are no claims or suits pending or, to the knowledge of the
Parent and except as set forth in Section 4.13(a)(iii) of the Parent
Disclosure Schedule, threatened against Parent or any Parent Subsidiary (A)
alleging that the conduct of the business of Parent or any Parent
Subsidiary as currently conducted infringes upon or misappropriates the
Intellectual Property rights of any third party or (B) challenging the
ownership, use, validity or enforceability of any item of Intellectual
Property owned by Parent or a Parent Subsidiary ("Parent Owned Intellectual
Property");
(iv) with respect to Parent Owned Intellectual Property, Parent or a
Parent Subsidiary is the owner of the entire right, title and interest in
and to such Parent Owned Intellectual Property, free and clear of all
liens, encumbrances and other restrictions, and is entitled to use such
Parent Owned Intellectual Property in the continued operation of its
respective business;
(v) there are no settlements, forbearances to xxx, consents,
judgments, orders or similar obligations which (A) restrict the business of
Parent or any Parent Subsidiary in or under any Intellectual Property
rights of any third party; or (B) permit any third party to use any Parent
Owned Intellectual Property;
(vi) Section 4.13(a)(vi) of the Parent Disclosure Schedule sets forth
each item of material Intellectual Property licensed to Parent or a Parent
Subsidiary ("Parent Licensed Intellectual Property"), and Parent or a
Parent Subsidiary has the right to use such Parent Licensed Intellectual
Property in the continued operation of its respective business in
accordance with the terms of the license agreement governing such Parent
Licensed Intellectual Property and Parent and the Parent Subsidiaries have
used such
41
Parent Licensed Intellectual Property in accordance with the terms of such
license agreement;
(vii) to the knowledge of Parent, the Parent Owned Intellectual
Property is valid and enforceable, and has not been adjudged invalid or
unenforceable in whole or in part;
(viii) to the knowledge of Parent, no person is engaging in any
activity that infringes upon or misappropriates the Parent Owned
Intellectual Property;
(ix) to the knowledge of Parent, each license of the Parent Licensed
Intellectual Property is valid and enforceable, is binding on all parties
to such license, and is in full force and effect;
(x) to the knowledge of Parent, no party to any license of the Parent
Licensed Intellectual Property is in breach thereof or default thereunder;
and
(xi) neither the execution of this Agreement nor the consummation of
any Transaction will adversely affect any of Parent's or Parent
Subsidiaries' rights with respect to the Parent Owned Intellectual Property
or the Parent Licensed Intellectual Property.
(b) Except as could not reasonably be expected, individually or in the
aggregate, to have a Parent Material Adverse Effect, Parent and the Parent
Subsidiaries have taken commercially reasonable actions to protect each item of
Parent Owned Intellectual Property. Parent and the Parent Subsidiaries have
policies of (i) obtaining assignments from all technical employees and
consultants, who are involved in any way in the research, development or
invention of technology, of all of their rights in the technology created by
them within the scope of their employment during such employment and (ii)
requiring all directors who are involved in an executive capacity with Parent or
a Parent Subsidiary, officers, management employees, and technical and
professional employees of Parent and the Parent Subsidiaries to enter into
written agreements with Parent or the Parent Subsidiaries to maintain in
confidence all confidential or proprietary information acquired by them in the
course of their employment. Parent and the Parent Subsidiaries enforce the
foregoing policies in a manner consistent with industry standard practices and
neither Parent nor the Parent Subsidiaries are aware of any violations of the
foregoing policies.
(c) Parent or any Parent Subsidiary has not agreed to indemnify any third
party for or against any infringement or misappropriation with respect to any
third party Intellectual Property other than in the ordinary course of business.
(d) The consummation of the Transactions will not result in Parent or any
Parent Subsidiary being bound by any non-compete or other restriction on the
operation of any business of Parent or any Parent Subsidiary, or in the grant by
Parent or any Parent Subsidiary of any rights or licenses to any Parent Owned
Intellectual Property.
(e) Parent or any Parent Subsidiary has not licensed any Parent Owned
Intellectual Property to any third party other than in the ordinary course of
business.
42
SECTION 4.14. Taxes. Parent and the Parent Subsidiaries have filed all
material Tax Returns required to be filed by them and have paid and discharged
all material Taxes required to be paid or discharged, other than such payments
as are being contested in good faith by appropriate proceedings. All Tax Returns
are true, accurate and complete in all material respects. No taxing authority or
agency is now asserting or, to the knowledge of Parent, threatening to assert,
against Parent or any Parent Subsidiary any material deficiency or claim for any
Taxes or interest thereon or penalties in connection therewith. Neither Parent
nor any Parent Subsidiary has granted any waiver of any statute of limitations
with respect to, or any extension of a period for the assessment of, any Tax.
The accruals and reserves for Taxes reflected in the consolidated balance sheet
of Parent and the consolidated Parent Subsidiaries as at September 30, 2003 are
adequate to cover all Taxes accruable through such date (including interest and
penalties, if any, thereon) in accordance with GAAP. There are no Tax liens upon
any property or assets of Parent or any of the Parent Subsidiaries except liens
for current Taxes not yet due. To the knowledge of Parent, neither Parent nor
any of its affiliates has taken or agreed to take any action that would prevent
the Merger from qualifying as a reorganization within the meaning of Section
368(a) of the Code (determined without the application of Section 367 of the
Code) or the exchange by Eligible Company Stockholders of Company Shares for
Parent ADSs pursuant to the Merger from satisfying the requirements of Section
1.367(a)-3(c) of the Regulations other than subsection (3)(C) thereof. Parent is
not aware of any agreement, plan or other circumstance that would prevent the
Merger from qualifying as a reorganization within the meaning of Section 368(a)
of the Code (determined without the application of Section 367 of the Code) or
the exchange by Eligible Company Stockholders of Company Shares for Parent ADSs
pursuant to the Merger from satisfying the requirements of Section 1.367(a)-3(c)
of the Regulations other than subsection (3)(C) thereof.
SECTION 4.15. Environmental Matters. Except as could not reasonably be
expected, individually or in the aggregate, to prevent or materially delay
consummation of any of the Transactions or otherwise prevent or materially delay
Parent from performing its obligations under this Agreement and could not
reasonably be expected, individually or in the aggregate, to have a Parent
Material Adverse Effect:
(a) neither Parent nor any Parent Subsidiary has violated or is in
violation of any Environmental Law and neither Parent nor any Parent
Subsidiary has received any written communication from a Governmental
Agency or person alleging any actual or potential liability of, or any
actual or potential violation by, Parent or any Parent Subsidiary arising
under any Environmental Law;
(b) none of the properties currently owned, leased or operated by
Parent or any Parent Subsidiary or formerly owned, leased or operated by
Parent or any Parent Subsidiary (including, without limitation, soils and
surface and groundwaters) are or have been contaminated with any Hazardous
Substance, which contamination requires investigation or remediation under
any Environmental Law, or has given rise to or would reasonably be expected
to give rise to liability or obligations (including any investigatory,
reporting or remedial obligation) under any Environmental Law;
(c) neither Parent nor any Parent Subsidiary has stored, handled,
treated, disposed of, arranged for the disposal of, transported or released
any Hazardous
43
Substance at any property or facility, including, without limitation, any
offsite location, and neither Parent nor any Company Subsidiary has or has
allegedly exposed any person to any Hazardous Substance, so as to give rise
to a requirement for investigation or remediation under any Environmental
Law or so as to give rise to any current or reasonably expected future
liability or obligation (including any investigatory, reporting or remedial
obligation) under any Environmental Law;
(d) Parent and the Parent Subsidiaries have all permits, licenses and
other authorizations required under any Environmental Law and Parent and
the Parent Subsidiaries are in compliance with, and have no current or
pending liability or obligation associated with any past non-compliance
with, such permits, licenses and other authorizations;
(e) neither the execution of this Agreement nor the consummation of
the Transactions will require any investigation, remediation or other
action with respect to Hazardous Substances, or any notice to or consent of
Governmental Authorities or third parties, pursuant to any applicable
Environmental Law;
(f) neither Parent nor any Parent Subsidiary has designed,
manufactured, installed, marketed, sold, handled or distributed asbestos or
any asbestos-containing product or asbestos-containing material, and no
basis in fact or Law, or under contract or lease agreement, exists upon
which any claim of liability could be asserted against Parent or any Parent
Subsidiary relating to asbestos, asbestos-containing products or
asbestos-containing materials located at any property or facility; and
(g) Parent has made available to the Company or its counsel all
environmental reports and other material environmental documents relating
to its business or to Parent or the Parent Subsidiaries, or to their
respective affiliates' or predecessors' properties, facilities or
operations.
SECTION 4.16. Material Contracts. (a) Subsections (i) through (xi) of
Section 4.16(a) of the Parent Disclosure Schedule list the following types of
contracts and agreements to which Parent or any Parent Subsidiary is a party
(such contracts and agreements as are required to be set forth in Section
4.16(a) of the Parent Disclosure Schedule being the "Material Parent
Contracts"):
(i) each "material contract" (as such term is defined in Item
610(b)(10) of Regulation S-K of the SEC) with respect to Parent and its
Parent Subsidiaries;
(ii) each contract and agreement that is likely to involve
consideration of more than $500,000, in the aggregate, over the remaining
term of such contract or agreement, other than purchase orders entered into
in the ordinary course of business and in a manner consistent with past
practice;
(iii) each contract and agreement evidencing outstanding indebtedness
in a principal amount of $500,000 or more;
44
(iv) all leases of real property leased for the use or benefit of
Parent or any Parent Subsidiary;
(v) all material contracts and agreements with any Governmental
Authority to which Parent or any Parent Subsidiary is a party;
(vi) all contracts and agreements that limit, or purport to limit, the
ability of Parent or any Parent Subsidiary to compete in any line of
business or with any person or entity or in any geographic area or during
any period of time;
(vii) all contracts and agreements providing for benefits under any
Parent Plan;
(viii) all contracts for employment required to be listed in Section
4.10 of the Parent Disclosure Schedule;
(ix) each joint venture, partnership, strategic alliance and similar
agreement to which Parent or any Parent Subsidiary is a party, which is
material to Parent or any Parent Subsidiary or which provides for the
ownership of any equity interest in any person or entity;
(x) all material broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing consulting and advertising contracts and agreements to which
Parent or any Parent Subsidiary is a party;
(xi) all management contracts (excluding contracts for employment) and
contracts with other consultants, including any contracts involving the
payment of royalties or other amounts calculated based upon the revenues or
income of Parent or any Parent Subsidiary or income or revenues related to
any product or service of Parent or any Parent Subsidiary to which Parent
or any Parent Subsidiary is a party;
(xii) all licenses or sublicenses of Intellectual Property to which
Parent or any Parent Subsidiary is a party and that are material to the
business of Parent or any Parent Subsidiary; and
(xiii) all other contracts and agreements that are material to Parent
and the Parent Subsidiaries, taken as a whole, or the absence of which
could reasonably be expected, individually or in the aggregate, to have a
Parent Material Adverse Effect.
(b) Except as could not reasonably be expected, individually or in the
aggregate, to prevent or materially delay consummation of any of the
Transactions or otherwise prevent or materially delay Parent or Merger Sub from
performing its obligations under this Agreement and could not reasonably be
expected, individually or in the aggregate, to have a Parent Material Adverse
Effect:
(i) each Material Parent Contract is a legal, valid and binding
agreement;
45
(ii) neither Parent nor any Parent Subsidiary has received any claim
of default under any Material Parent Contract and neither Parent nor any
Parent Subsidiary is in breach or violation of, or default under, any
Material Parent Contract;
(iii) to Parent's knowledge, no other party is in breach or violation
of, or default under, any Material Parent Contract; and
(iv) neither the execution of this Agreement nor the consummation of
any Transaction shall constitute a default under, give rise to cancellation
rights under or otherwise adversely affect any of the material rights of
Parent or any Parent Subsidiary under any Material Parent Contract.
Parent has made available to the Company or its counsel true and complete copies
of all Material Parent Contracts, including any amendments thereto.
SECTION 4.17. Insurance. Parent and the Parent Subsidiaries maintain
insurance coverage with reputable insurers in such amounts and covering such
risks as are in accordance with normal industry practice for companies engaged
in businesses similar to that of Parent and the Parent Subsidiaries (taking into
account the cost and availability of such insurance).
SECTION 4.18. Customers and Suppliers. Section 4.18 of the Parent
Disclosure Schedule sets forth a true and complete list of Parent's top 20
customers for 2003 (based on the revenue from such customers during the 12-month
period ended December 31, 2003) and top 20 suppliers for 2003 (based on payments
to such suppliers during the 12-month period ended December 31, 2003). Except as
set forth in Section 4.18 of the Parent Disclosure Schedule, no customer that
accounted for more than two percent of Parent's consolidated revenues during the
12-month period ended December 31, 2003 and no material supplier of Parent and
the Parent Subsidiaries during that period (a) has cancelled or otherwise
terminated any agreement with Parent or any Parent Subsidiary prior to the
expiration of the agreement term, (b) has returned, or threatened to return, a
substantial amount of any of the products, equipment, goods and services
purchased from Parent or any Parent Subsidiary, or (c) to Parent's knowledge,
has threatened, or indicated its intention, to cancel or otherwise terminate its
relationship with Parent or the Parent Subsidiaries or to reduce substantially
its purchases from or sales to Parent or any Parent Subsidiary of any products,
equipment, goods or services. Neither Parent nor any Parent Subsidiary has (y)
breached any material agreement with or (z) engaged in any fraudulent conduct
with respect to, any such customer or supplier of Parent or any Parent
Subsidiary.
SECTION 4.19. Board Approval; Vote Required. (a) The Parent Board, by
resolutions duly adopted by unanimous vote of those members of the Parent Board
voting at a meeting duly called and held and not subsequently rescinded or
modified in any way, has duly (i) determined that this Agreement, the Voting
Agreements, the Merger, the Share Issuance, the Parent Name Change, the New
Stock Option Plans Adoption and the Parent Board Appointments are fair to and in
the best interests of Parent and its shareholders, (ii) approved this Agreement,
the Voting Agreements, the Merger, the Share Issuance, the Parent Name Change,
the New Stock Option Plans Adoption and the Parent Board Appointments and (iii)
recommended that the shareholders of Parent Ordinary Shares approve the Share
Issuance, the Parent Name Change, the New Stock Option Plans Adoption and the
Parent Board Appointments and directed that the Share Issuance, the Parent Name
Change,
46
the New Stock Option Plans Adoption and the Parent Board Appointments be
submitted for consideration by the holders of Parent Ordinary Shares at the
Parent Shareholders' Meeting.
(b) The only vote of the holders of any class or series of shares or other
securities of Parent necessary to approve this Agreement, the Voting Agreements,
the Merger, the Share Issuance, the Parent Name Change, the New Stock Option
Plans Adoption and the Parent Board Appointments and the other Transactions is
the affirmative vote of a majority of the votes cast with respect to the Share
Issuance, the New Stock Option Plans Adoption and the Parent Board Appointments
and the affirmative vote of 75% of the votes cast with respect to the Parent
Name Change, each at the Parent Shareholders' Meeting, in favor of the approval
of the Share Issuance, the Parent Name Change, the New Stock Option Plans
Adoption and the Parent Board Appointments, respectively.
SECTION 4.20. Certain Business Practices. (a) None of Parent, any Parent
Subsidiary or, to Parent's knowledge, any directors or officers, agents or
employees of Parent or any Parent Subsidiary has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
political activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended; or (iii) made any payment in the nature of criminal bribery.
(b) None of Parent, any Parent Subsidiary or, to Parent's knowledge, any
officers, agents or employees of Parent or any Parent Subsidiary has, for the
purpose of securing any contract for Parent or any Parent Subsidiary, given or
offered any bribe or any corrupt, unlawful or immoral payment.
(c) To Parent's knowledge, none of the directors, officers, agents,
employees or other persons acting on behalf of Parent or any Parent Subsidiary
has been party to: (i) the use of any assets of Parent or any Parent Subsidiary
for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity or to the making of any direct or indirect
unlawful payment to government officials or employees or to any candidate for
political office or any political party from such assets; (ii) the establishment
or maintenance of any unlawful or unrecorded fund of group moneys or other
assets; (iii) the making of any false or fictitious entries on the books or
records of Parent or any Parent Subsidiary; or (iv) the making of any unlawful
payment.
SECTION 4.21. Interested Party Transactions. Except for any agreement or
arrangement that is likely to involve consideration of less than $50,000 during
any calendar year, no director, officer or other affiliate of Parent or any
Parent Subsidiary (a) purchases from, or sells or furnishes to, Parent or any
Parent Subsidiary any goods or services, (b) is a party to any contract or
agreement disclosed in Section 4.16 of the Parent Disclosure Schedule, or (c)
has any contractual or other arrangement with Parent or any Parent Subsidiary.
Parent and the Parent Subsidiaries have not, since January 1, 2002, (i) extended
or maintained credit, arranged for the extension of credit or renewed an
extension of credit in the form of a personal loan to or for any
47
director or executive officer (or equivalent thereof) of Parent, or (ii)
materially modified any term of any such extension or maintenance of credit.
SECTION 4.22. Operations of Merger Sub. Merger Sub is a wholly owned
subsidiary of Parent, was formed solely for the purpose of engaging in the
Transactions, has engaged in no other business activities and has conducted its
operations only as contemplated by this Agreement.
SECTION 4.23. Ownership of Company Capital Stock. As of the date of this
Agreement, neither Parent nor any Parent Subsidiary is the beneficial owner of
any shares of capital stock of the Company.
SECTION 4.24. Opinion of Financial Advisor. The Parent Board has received
the opinion of Xxxxxx Xxxxxxx Xxxx Xxxxxx Asia (Singapore) Pte, dated the date
of this Agreement, to the effect that, as of the date of this Agreement, the
Exchange Ratio is fair, from a financial point of view, to Parent, a written
copy of which opinion will be delivered to the Company, solely for informational
purposes, promptly after receipt thereof by the Parent Board.
SECTION 4.25. Brokers. No broker, finder or investment banker (other than
Xxxxxx Xxxxxxx & Co. Incorporated) is entitled to any brokerage, finder's or
other fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of Parent or Merger Sub. Parent has made
available to the Company or its counsel a complete and correct copy of all
agreements between Parent and Xxxxxx Xxxxxxx & Co. Incorporated pursuant to
which such firm would be entitled to any payment relating to the Transactions.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Merger. (a)
The Company agrees that, between the date of this Agreement and the earlier of
the Effective Time and the termination of this Agreement pursuant to Article
VIII, except as set forth in Section 5.01 of the Company Disclosure Schedule or
as expressly contemplated by any other provision of this Agreement, unless
Parent shall otherwise consent in writing (which consent shall not be
unreasonably withheld or delayed):
(i) the Company shall, and shall cause each Company Subsidiary to, use
its reasonable best efforts to conduct the business of the Company and the
Company Subsidiaries, in all respects material to the Company and the
Company Subsidiaries, taken as a whole, in the ordinary course of business
and in a manner consistent with past practice; and
(ii) the Company shall, and shall cause each Company Subsidiary to,
use its reasonable best efforts to preserve substantially intact the
business organization of the Company and the Company Subsidiaries, to keep
available the services of the current officers, employees and consultants
of the Company and the Company Subsidiaries and to preserve the current
relationships of the Company and the Company Subsidiaries with
48
customers, suppliers and other persons with which the Company or any
Company Subsidiary has significant business relations.
(b) By way of amplification and not limitation of Section 5.01(a), except
as contemplated by any other provision of this Agreement or as set forth in
Section 5.01 of the Company Disclosure Schedule, neither the Company nor any
Company Subsidiary shall, between the date of this Agreement and the earlier of
the Effective Time and the termination of this Agreement pursuant to Article
VIII, directly or indirectly, do, or propose to do, any of the following without
the prior written consent of Parent (which consent shall not be unreasonably
withheld or delayed):
(i) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents;
(ii) issue, sell, pledge, dispose of, grant or encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of, (A) any
shares of any class of capital stock of the Company or any Company
Subsidiary, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any
other ownership interest (including, without limitation, any phantom
interest), of the Company or any Company Subsidiary (except for the
issuance of up to a maximum of 6,715,239 shares of Company Class A Common
Stock issuable pursuant to employee stock options or up to a maximum of
23,625,885 shares of Company Class A Common Stock issuable pursuant to the
terms of the Company Convertible Subordinated Notes outstanding on the date
hereof, in the ordinary course of business and in a manner consistent with
past practice in accordance with the terms of the Company Stock Option
Plans or such notes as in effect as of the date hereof) or (B) any assets
of the Company or any Company Subsidiary, except in the ordinary course of
business and in a manner consistent with past practice;
(iii) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock, except for dividends by any direct or indirect
wholly owned Company Subsidiary to the Company or any other Company
Subsidiary;
(iv) reclassify, combine, split, subdivide or redeem, or purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(v) (A) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets or any other business
combination) any corporation, partnership, other business organization or
any division thereof or any material amount of assets; (B) except for
borrowings under existing credit facilities in the ordinary course of
business and in a manner consistent with past practice, incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise become responsible for, the obligations
of any person, or make any loans or advances, or grant any security
interest in any of its assets; (C) enter into any contract or agreement
other than in the ordinary course of business and in a manner consistent
with past practice that, if in effect on the date hereof, would qualify as
a Company Material
49
Contract; (D) make, authorize or make any commitment with respect to any
capital expenditure, except for capital expenditures that, in the aggregate
for each quarter, do not exceed 125% of the budgeted amounts set forth in
the Company's capital expenditure budget attached as Section 5.01(b)(v) of
the Company Disclosure Schedule; or (E) enter into or amend any contract,
agreement, commitment or arrangement with respect to any matter set forth
in this Section 5.01(b)(v);
(vi) make any investment in any entity (other than a subsidiary) in
excess of $25 million;
(vii) increase the compensation payable or to become payable or the
benefits provided to its directors, officers or employees, except for
increases in the ordinary course of business and in a manner consistent
with past practice or as required by applicable Law in salaries or wages of
employees of the Company or any Company Subsidiary who are not directors or
officers of the Company, or grant any severance or termination pay to
(other than pursuant to existing contractual obligations disclosed in
Section 3.10(a) of the Company Disclosure Schedule or in the ordinary
course of business and in a manner consistent with past practice), or enter
into any employment or severance agreement with any director, officer or
other employee of the Company or of any Company Subsidiary, or, except as
required by Law, establish, adopt, enter into or amend any collective
bargaining, bonus, profit-sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee; provided
that the Company and Parent hereby agree that, notwithstanding the
foregoing, award grants may be made to employees of the Company and the
Company Subsidiaries pursuant to the ChipPAC, Inc. Employee Retention Plan
and the ChipPAC, Inc. Special Bonus Plan as contemplated in Section
6.05(c);
(viii) (A) exercise its discretion with respect to or otherwise
voluntarily accelerate the vesting of any Company Stock Award as a result
of the Merger, any other change of control of the Company (as defined in
the Company Stock Option Plans) or otherwise; or (B) exercise its
discretion with respect to or otherwise amend, modify or supplement the
Purchase Plan;
(ix) make any change in any material method of accounting, method of
accounting principles or practice, except for such change required by
reason of a concurrent change in GAAP or compliance with the applicable
requirements of the rules and regulations promulgated by the SEC;
(x) make any tax election inconsistent with past custom and practice
or settle or compromise any material United States federal, state, local or
non-United States income tax liability inconsistent with any accrual or
reserve therefor on the consolidated balance sheet of the Company and the
consolidated Company Subsidiaries as of September 30, 2003;
50
(xi) pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction, in the ordinary course of
business and in a manner consistent with past practice, of liabilities
reflected or reserved against in the consolidated balance sheet of the
Company and the consolidated Company Subsidiaries as at September 30, 2003
or subsequently incurred in the ordinary course of business and in a manner
consistent with past practice;
(xii) amend, modify or consent to the termination of any Material
Company Contract, or amend, waive, modify or consent to the termination of
the Company's or any Company Subsidiary's material rights thereunder;
(xiii) commence any Action (except in the ordinary course of business
against third parties) or settle any Action (except in the ordinary course
of business, it being understood that any settlement involving the payment
by the Company or any Company Subsidiary of more than $500,000 is not in
the ordinary course of business);
(xiv) permit any item of Company Owned Intellectual Property to lapse
or to be abandoned, dedicated or disclaimed, by failing to perform or make
any applicable filings, recordings or other similar actions or filings, or
by failing to pay all required fees and taxes required or advisable to
maintain and protect its interest in each and every item of Company Owned
Intellectual Property, except where the failure to make such filings and
payments results from the exercise of reasonable business judgment;
(xv) sell, assign or license any of the Company Owned Intellectual
Property, except for licensing of Company Owned Intellectual Property in
the ordinary course of business consistent with past practice;
(xvi) fail to make in a timely manner any filings with the SEC
required under the Securities Act or the Exchange Act or the rules and
regulations promulgated thereunder; or
(xvii) announce an intention, enter into any formal or informal
agreement or otherwise make a commitment to do any of the foregoing.
SECTION 5.02. Conduct of Business by Parent Pending the Merger. (a) Parent
agrees that, between the date of this Agreement and the earlier of the Effective
Time and the termination of this Agreement pursuant to Article III, except as
set forth in Section 5.02 of the Parent Disclosure Schedule or as expressly
contemplated by any other provision of this Agreement, unless the Company shall
otherwise consent in writing (which consent shall not be unreasonably withheld
or delayed):
(i) Parent shall, and shall cause each Parent Subsidiary to, use its
reasonable best efforts to conduct the business of Parent and the Parent
Subsidiaries, in all respects material to Parent and the Parent
Subsidiaries, taken as a whole, in the ordinary course of business and in a
manner consistent with past practice; and
51
(ii) Parent shall, and shall cause each Parent Subsidiary to, use its
reasonable best efforts to preserve substantially intact the business
organization of Parent and the Parent Subsidiaries, to keep available the
services of the current officers, employees and consultants of Parent and
the Parent Subsidiaries and to preserve the current relationships of Parent
and the Parent Subsidiaries with customers, suppliers and other persons
with which Parent or any Subsidiary has significant business relations.
(b) By way of amplification and not limitation of Section 5.01(a), except
as contemplated by any other provision of this Agreement or as set forth in
Section 5.02 of the Parent Disclosure Schedule, neither Parent nor any Parent
Subsidiary shall, between the date of this Agreement and the earlier of the
Effective Time and the termination of the Agreement pursuant to Article VIII,
directly or indirectly, do, or propose to do, any of the following without the
prior written consent of the Company (which consent shall not be unreasonably
withheld or delayed):
(i) amend or otherwise change its Memorandum and Articles of
Association or equivalent organizational documents;
(ii) issue, sell, pledge, dispose of, grant or encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of, (A) any
shares of any class of capital stock of Parent or any Parent Subsidiary, or
any options, warrants, convertible securities or other rights of any kind
to acquire any shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom interest), of Parent
or any Parent Subsidiary (except for the issuance of up to a maximum of
60,965,705 Parent Ordinary Shares (whether in the form of Parent Ordinary
Shares or Parent ADSs) issuable pursuant to employee stock options or up to
a maximum of 172,512,573 Parent Ordinary Shares (whether in the form of
Parent Ordinary Shares or Parent ADSs) issuable pursuant to the terms of
the Parent Convertible Notes outstanding on the date hereof, in the
ordinary course of business and in a manner consistent with past practice
in accordance with the terms of the Parent Stock Option Plans or such notes
as in effect as of the date hereof) or (B) any assets of Parent or any
Parent Subsidiary, except in the ordinary course of business and in a
manner consistent with past practice;
(iii) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock, except for dividends by any direct or indirect
wholly owned Parent Subsidiary to Parent or any other Parent Subsidiary;
(iv) reclassify, combine, split, subdivide or redeem, or purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(v) (A) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets or any other business
combination) any corporation, partnership, other business organization or
any division thereof or any material amount of assets; (B) except for
borrowings under existing credit facilities in the ordinary course of
business and in a manner consistent with past practice, incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or
52
otherwise become responsible for, the obligations of any person, or make
any loans or advances, or grant any security interest in any of its assets;
(C) enter into any contract or agreement other than in the ordinary course
of business and in a manner consistent with past practice that, if in
effect on the date hereof, would qualify as a Parent Material Contract; (D)
make, authorize or make any commitment with respect to any capital
expenditure, except for capital expenditures that, in the aggregate for
each quarter, do not exceed 125% of the budgeted amounts set forth in
Parent's capital expenditure budget attached as Section 5.02(b)(v) of the
Parent Disclosure Schedule; or (E) enter into or amend any contract,
agreement, commitment or arrangement with respect to any matter set forth
in this Section 5.02(b)(v);
(vi) make any investment in any entity (other than a subsidiary) in
excess of $25 million;
(vii) increase the compensation payable or to become payable or the
benefits provided to its directors, officers or employees, except for
increases in the ordinary course of business and in a manner consistent
with past practice in salaries or wages of employees of Parent or any
Parent Subsidiary who are not directors or officers of Parent, or grant any
severance or termination pay to (other than pursuant to existing
contractual obligations disclosed in Section 4.10(a) of the Parent
Disclosure Schedule or in the ordinary course of business and in a manner
consistent with past practice), or enter into any employment or severance
agreement with any director, officer or other employee of Parent or of any
Parent Subsidiary, or, except as required by Law, establish, adopt, enter
into or amend any collective bargaining, bonus, profit-sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any director, officer
or employee;
(viii) exercise its discretion with respect to or otherwise
voluntarily accelerate the vesting of any Parent Stock Award as a result of
the Merger, any other change of control of Parent (as defined in the Parent
Stock Option Plans) or otherwise;
(ix) make any change in any material method of accounting, method of
accounting principles or practice, except for such change required by
reason of a concurrent change in GAAP or compliance with the applicable
requirements of the Securities Act, the Exchange Act, the SGX-ST, the
SGX-ST Listing Manual, the Singapore Companies Act or the Singapore
Securities Act, as the case may be, or the rules and regulations
promulgated thereunder; (x) make any tax election inconsistent with past
custom and practice or settle or compromise any material United States
federal, state, local or non-United States income tax liability
inconsistent with any accrual or reserve therefor on the consolidated
balance sheet of Parent and the consolidated Parent Subsidiaries as of
September 30, 2003;
(xi) pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment,
53
discharge or satisfaction, in the ordinary course of business and in a
manner consistent with past practice, of liabilities reflected or reserved
against in the consolidated balance sheet of Parent and the consolidated
Parent Subsidiaries as at September 30, 2003 or subsequently incurred in
the ordinary course of business and in a manner consistent with past
practice;
(xii) amend, modify or consent to the termination of any Material
Parent Contract, or amend, waive, modify or consent to the termination of
Parent's or any Parent Subsidiary's material rights thereunder;
(xiii) commence any Action (except in the ordinary course of business
against third parties) or settle any Action (except in the ordinary course
of business, it being understood that any settlement involving the payment
by Parent or any Parent Subsidiary of more than $500,000 is not in the
ordinary course of business);
(xiv) permit any item of Parent Owned Intellectual Property to lapse
or to be abandoned, dedicated or disclaimed, by failing to perform or make
any applicable filings, recordings or other similar actions or filings, or
by failing to pay all required fees and taxes required or advisable to
maintain and protect its interest in each and every item of Parent Owned
Intellectual Property, except where the failure to make such filings and
payments results from the exercise of reasonable business judgment;
(xv) sell, assign or license any of the Parent Owned Intellectual
Property, except for licensing of Parent Owned Intellectual Property in the
ordinary course of business consistent with past practice;
(xvi) fail to make in a timely manner any filings with the SEC
required under the Securities Act or the Exchange Act or the rules and
regulations promulgated thereunder or filings required with any authorities
or regulatory bodies in Singapore in accordance with applicable Singapore
Laws, rules and regulations; or
(xvii) announce an intention, enter into any formal or informal
agreement or otherwise make a commitment, to do any of the foregoing.
SECTION 5.03. Control of Other Party's Business. Nothing contained in this
Agreement shall give the Company, directly or indirectly, the right to control
or direct Parent's operations prior to the Effective Time. Nothing contained in
this Agreement shall give Parent, directly or indirectly, the right to control
or direct the Company's operations prior to the Effective Time. Prior to the
Effective Time, each of Parent and the Company shall exercise, consistent with
the terms and conditions of this Agreement, control and supervision over their
respective operations.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Disclosure Documents. (a) U.S. Filings. As promptly as
practicable after the execution of this Agreement, (i) Parent and the Company
shall prepare and
54
file the proxy statement to be sent to the stockholders of the Company relating
to the meeting of the Company's stockholders (the "Company Stockholders'
Meeting") to be held to consider approval and adoption of this Agreement, or any
information statement to be sent to such stockholders, as appropriate (such
proxy statement or information statement, as amended or supplemented, being
referred to herein as the "Proxy Statement"), (ii) Parent shall prepare and file
with the SEC a registration statement on Form F-4 (together with all amendments
thereto, the "Registration Statement"), in which the Proxy Statement shall be
included as a prospectus, in connection with the registration under the
Securities Act of the Parent ADSs to be issued to the stockholders of the
Company pursuant to the Merger and the underlying Parent Ordinary Shares
thereof, and (iii) Parent shall use all reasonable best efforts to cause the
Depositary to file with the SEC a registration statement on Form F-6 (the "Form
F-6 Registration Statement") in connection with the registration under the
Securities Act of the Parent ADRs to be issued in connection with the Merger.
Each of Parent and the Company shall furnish to the other party all information
concerning it and its business as the other party may reasonably request in
connection with such actions and the preparation of the Registration Statement,
the Proxy Statement and the Form F-6 Registration Statement. Each of Parent and
the Company shall use its reasonable best efforts to respond as promptly as
practicable to any comments of the SEC with respect to such documents and to
cause the Registration Statement and the Form F-6 Registration Statement to be
declared effective by the SEC as promptly as practicable and to keep the
Registration Statement effective as long as necessary to consummate the
Transactions. As promptly as practicable after the Registration Statement shall
have been declared effective by the SEC, the Company shall mail the Proxy
Statement to its stockholders and, if necessary, after the Proxy Statement shall
have been so mailed, promptly circulate amended, supplemental or supplemented
proxy materials, and, if required in connection therewith, resolicit proxies.
(b) Singapore Filings. As promptly as practicable after the execution of
this Agreement, Parent shall prepare the shareholders circular to be sent to the
shareholders of Parent relating to the meeting of Parent's shareholders (the
"Parent Shareholders' Meeting" and, together with the Company Stockholders'
Meeting, the "Stockholders' Meetings") to be held to consider the approval of
the Share Issuance, the Parent Name Change, the New Stock Option Plans Adoption
and the Parent Board Appointments (the "Parent Shareholders Circular"). The
Company shall furnish to Parent all information concerning it and its business
as Parent may reasonably request in connection with such actions and the
preparation of the Parent Shareholders Circular. Each of Parent and the Company
shall use its reasonable best efforts to respond as promptly as practicable to
any comments of the SGX-ST with respect to the Parent Shareholders Circular and
to receive the approval of the SGX-ST as promptly as practicable. As promptly as
practicable after the Parent Shareholders Circular shall have been filed with
the SGX-ST (or, if approval of the SGX-ST is required, as promptly as
practicable after the Parent Shareholders Circular shall have been approved by
the SGX-ST), Parent shall mail the Parent Shareholders Circular to its
shareholders and, if necessary, after the Parent Shareholders Circular shall
have been so mailed, promptly circulate amended, supplemental or supplemented
circular materials.
(c) Except as provided in Section 6.04(c), the Company covenants that none
of the Company Board or any committee thereof shall withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent or Merger Sub, the
approval or recommendation by the Company Board or any committee thereof of this
Agreement, the Voting
55
Agreements, the Merger or any other Transaction (the "Company Board
Recommendation") and that the Proxy Statement shall include the recommendation
of the Company Board to the stockholders of the Company in favor of approval and
adoption of this Agreement and approval of the Merger.
(d) Except as provided in Section 6.04(d), Parent covenants that none of
the Parent Board or any committee thereof shall withdraw or modify, or propose
to withdraw or modify, in a manner adverse to the Company, the approval or
recommendation by the Parent Board or any committee thereof of this Agreement,
the Voting Agreements, the Merger, the Share Issuance, the Parent Name Change,
the New Stock Option Plans Adoption and the Parent Board Appointments or any
other Transaction (the "Parent Board Recommendation") and that the Parent
Shareholders Circular shall include the recommendation of the Parent Board to
the shareholders of Parent in favor of the Share Issuance, the Parent Name
Change, the New Stock Option Plans Adoption and the Parent Board Appointments.
(e) No amendment or supplement to the Proxy Statement, the Registration
Statement, the Form F-6 Registration Statement or the Parent Shareholders
Circular will be made by Parent or the Company without the approval of the other
party (such approval not to be unreasonably withheld or delayed) and after
having provided the other party with the opportunity to review and comment
thereon (such review not to be unreasonably delayed). Parent and the Company
each will advise the other, promptly after they receive notice thereof, of the
time when the Registration Statement or Form F-6 Registration Statement has been
declared effective or any supplement or amendment has been filed, of the
issuance of any stop order, of the suspension of the qualification of the Parent
ADSs or Parent Ordinary Shares issuable in connection with the Merger for
offering or sale in any jurisdiction, or of any request by the SEC or SGX-ST for
amendment of the Proxy Statement, the Registration Statement, the Form F-6
Registration Statement or the Parent Shareholders Circular or comments thereon
and responses thereto or requests by the SEC or SGX-ST for additional
information.
(f) Parent represents and warrants to the Company that the information
supplied by Parent for inclusion in the Registration Statement, the Form F-6
Registration Statement, the Proxy Statement or the Parent Shareholders Circular
shall not, at (i) the time the Parent Shareholders Circular is filed with the
SGX-ST, (ii) the time the Registration Statement or Form F-6 Registration
Statement is declared effective, (iii) the time the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to the stockholders of
the Company, (iv) the time the Parent Shareholders Circular (or any amendment
thereof or supplement thereto) is first mailed to the shareholders of Parent,
(v) the time of each of the Stockholders' Meetings (as defined below) and (vi)
the Effective Time, contain any untrue statement of a material fact or fail to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. If, at any time prior to the Effective Time, any event or
circumstance relating to Parent, any Parent Subsidiary or any of their
respective officers or directors should be discovered by Parent which should be
set forth in an amendment or a supplement to the Registration Statement, Form
F-6 Registration Statement, Proxy Statement or Parent Shareholders Circular,
Parent shall promptly inform the Company. Parent represents and warrants to the
Company that all documents that Parent is responsible for filing with the SEC or
the SGX-ST, as the case may be, in connection with the Merger or the other
Transactions will comply as to form and substance in all material
56
aspects with the applicable requirements of the Securities Act, the Exchange
Act, the SGX-ST, the SGX-ST Listing Manual, the Singapore Companies Act and the
Singapore Securities Act, as the case may be, and the rules and regulations
thereunder.
(g) The Company represents and warrants to Parent that the information
supplied by the Company for inclusion in the Registration Statement, the Form
F-6 Registration Statement, the Proxy Statement or the Parent Shareholders
Circular shall not, at (i) the time the Parent Shareholders Circular is filed
with the SGX-ST, (ii) the time the Registration Statement or Form F-6
Registration Statement is declared effective, (iii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
stockholders of the Company, (iv) the time the Parent Shareholders Circular (or
any amendment thereof or supplement thereto) is first mailed to the shareholders
of Parent, (v) the time of each of the Stockholders' Meetings and (vi) the
Effective Time, contain any untrue statement of a material fact or fail to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. If, at any time prior to the Effective Time, any event or
circumstance relating to the Company or any Company Subsidiary, or their
respective officers or directors, should be discovered by the Company which
should be set forth in an amendment or a supplement to the Registration
Statement, Form F-6 Registration Statement, Proxy Statement or Parent
Shareholders Circular, the Company shall promptly inform Parent. The Company
represents and warrants to Parent that all documents that the Company is
responsible for filing with the SEC in connection with the Merger or the other
Transactions will comply as to form and substance in all material respects with
the applicable requirements of the Securities Act and the rules and regulations
thereunder and the Exchange Act and the rules and regulations thereunder.
SECTION 6.02. Stockholders' Meetings. (a) The Company shall call and hold
the Company Stockholders' Meeting as promptly as practicable for the purpose of
voting upon the approval and adoption of this Agreement.
(b) Parent shall call and hold the Parent's Shareholders' Meeting as
promptly as practicable for the purpose of voting upon the approval of the Share
Issuance, the Parent Name Change, the New Stock Option Plans Adoption and the
Parent Board Appointments.
(c) Each of the Company and Parent shall use its reasonable best efforts to
hold the Stockholders' Meetings on the same day as soon as practicable after the
date on which the Registration Statement becomes effective. Each of the Company
and Parent shall use its reasonable best efforts to solicit from its
shareholders proxies in favor of the approval and adoption of this Agreement or
in favor of the approval of the Share Issuance, the Parent Name Change, the New
Stock Option Plans Adoption and the Parent Board Appointments, as the case may
be, and shall take all other action necessary or advisable to secure the
required vote or consent of its shareholders, except in the event and to the
extent that the Company Board or the Parent Board, as the case may be, in
accordance with Section 6.04(c) or Section 6.04(d), withdraws or modifies its
recommendation to its shareholders in favor of the approval and adoption of this
Agreement or in favor of the Share Issuance, the Parent Name Change, the New
Stock Option Plans Adoption and the Parent Board Appointments, as the case may
be.
57
SECTION 6.03. Access to Information; Confidentiality. (a) Except as
required pursuant to any confidentiality agreement or similar agreement or
arrangement to which the Company or Parent or any of their respective
subsidiaries is a party or pursuant to applicable Law, from the date of this
Agreement until the Effective Time, the Company and Parent shall (and shall
cause their respective subsidiaries to): (i) provide to the other party (and the
other party's officers, directors, employees, accountants, consultants, legal
counsel, agents and other representatives, collectively, "Representatives")
reasonable access during normal business hours upon prior notice to the
officers, employees, agents, properties, offices and other facilities of such
party and its subsidiaries and to the books and records thereof, including
access to enter any real property owned, leased, subleased or occupied by such
party or such party's Subsidiary in order to conduct an environmental assessment
of such property (provided that no subsurface investigation work of the sort
commonly referred to as "Phase II" investigatory work shall be conducted absent
the prior written consent of the other party, which consent shall not be
unreasonably withheld); and (ii) furnish promptly to the other party such
information concerning the business, properties, contracts, assets, liabilities,
personnel and other aspects of such party and its subsidiaries as the other
party or its Representatives may reasonably request; provided, however, that (A)
no pricing or other competitively sensitive information retrieved from the
Company will be made available to persons who are involved in any pricing or
sales activity at Parent or any Parent Subsidiary, (B) no pricing or other
competitively sensitive information retrieved from Parent will be made available
to persons who are involved in any pricing or sales activity at the Company or
any Company Subsidiary and (C) neither Parent nor the Company shall use any
information obtained from the other party for any purpose other than evaluation
of such other party in connection with this Agreement.
(b) All information obtained by the parties pursuant to this Section 6.03
shall be kept confidential in accordance with the confidentiality agreement,
dated January 6, 2004 (the "Confidentiality Agreement"), between Parent and the
Company.
(c) No investigation pursuant to this Section 6.03 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
SECTION 6.04. No Solicitation of Transactions. (a) Each party to this
Agreement agrees that, from and after the date hereof until the earlier of the
Effective Time and the termination of this Agreement pursuant to Article VIII,
it shall not, and shall not permit any of its Subsidiaries or any of its or its
Subsidiaries' directors, officers or employees to, and shall use its best
efforts to cause its investment bankers, attorneys, accountants and other
representatives retained by it or any of its Subsidiaries not to, directly or
indirectly: (i) solicit, initiate or knowingly encourage (including by way of
furnishing nonpublic information), or take any other action knowingly to
facilitate, any inquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to its stockholders) that constitutes
a Competing Transaction (as defined below); (ii) enter into or maintain or
continue discussions or negotiations with any person or entity in furtherance of
such inquiries or to obtain a Competing Transaction; (iii) agree to, approve,
endorse or recommend any Competing Transaction or enter into any letter of
intent or other contract, agreement or commitment contemplating or otherwise
relating to any Competing Transaction; or (iv) authorize or permit any of the
officers, directors or employees of such party or any of its Subsidiaries, or
any investment banker, financial
58
advisor, attorney, accountant or other representative retained by such party, to
take any such action. Each party to this Agreement shall notify the other party
as promptly as practicable (and in any event within one day after such party
attains knowledge thereof) if any proposal or offer, or any inquiry or contact
with any person with respect thereto, regarding a Competing Transaction is made,
specifying the material terms and conditions thereof and the identity of the
party making such proposal or offer or inquiry or contact (including material
amendments or proposed material amendments). Each party to this Agreement
immediately shall cease and cause to be terminated all existing discussions or
negotiations with any parties conducted heretofore with respect to a Competing
Transaction. Each party to this Agreement shall not release any third party
from, or waive any provision of, any confidentiality or standstill agreement to
which it is a party.
(b) Notwithstanding anything to the contrary in this Section 6.04, the
Board of Directors of Parent or the Company, as the case may be, may furnish,
prior to approval of this Agreement, the Merger, the Share Issuance, the Parent
Name Change, the New Stock Option Plans Adoption and the Parent Board
Appointments at the Company Stockholders' Meeting or the Parent Shareholders'
Meeting, as the case may be, information to, and enter into discussions with, a
person who has made an unsolicited, written, bona fide proposal or offer
regarding a Competing Transaction or otherwise facilitate any effort or attempt
to make or implement a proposal or offer for a Competing Transaction, if such
Board of Directors has (i) determined, in its good faith judgment (after having
consulted with a financial advisor of internationally recognized reputation)
that such proposal or offer is reasonably likely to lead to a Superior Proposal
(as defined below), (ii) determined, in its good faith judgment after
consultation with independent legal counsel (who may be such party's regularly
engaged independent legal counsel), that, in light of such proposal or offer
regarding a Competing Transaction, the furnishing of such information or
entering into discussions is required to comply with its fiduciary obligations
to Parent and its shareholders or the Company and its stockholders,
respectively, under applicable Law, (iii) provided written notice to the other
party of its intent to furnish information or enter into discussions with such
person at least 24 hours prior to taking any such action, and (iv) obtained from
such person an executed confidentiality agreement on terms no less favorable to
the other party than those contained in the Confidentiality Agreement (it being
understood that such confidentiality agreement and any related agreements shall
not include any provision calling for any exclusive right to negotiate with such
party or having the effect of prohibiting such party from satisfying its
obligations under this Agreement).
(c) Except as set forth in this Section 6.04(c), the Company Board shall
not make a change in the Company Board Recommendation (a "Change in the Company
Board Recommendation") in a manner adverse to Parent or Merger Sub or approve or
recommend, or cause or permit the Company to enter into any letter of intent,
agreement or obligation with respect to, any Competing Transaction.
Notwithstanding the foregoing, if, prior to the approval of this Agreement and
the Merger at the Company Stockholders' Meeting, the Company Board determines,
in its good faith judgment prior to the Effective Time and after consultation
with independent legal counsel (who may be the Company's regularly engaged
independent legal counsel), that it is required to make a Change in the Company
Board Recommendation to comply with its fiduciary obligations to the Company and
its stockholders under applicable Law, the Company Board may recommend a
Superior Proposal, but only (i) after providing written notice to Parent (a
"Notice of Company Superior Proposal") advising Parent that the Company
59
Board has received a Superior Proposal, specifying the material terms and
conditions of such Superior Proposal and identifying the person making such
Superior Proposal and indicating that the Company Board intends to effect a
Change in the Company Board Recommendation and the manner in which it intends
(or may intend) to do so, and (ii) if Parent does not, within 48 hours of
Parent's receipt of the Notice of Company Superior Proposal, deliver to the
Company a binding, written offer that the Company Board determines, in its good
faith judgment (after having consulted with independent legal counsel and a
financial advisor of internationally recognized reputation) to be at least as
favorable to the Company's stockholders as such Superior Proposal. Any
disclosure that the Company Board may be compelled to make with respect to the
receipt of a proposal or offer for a Competing Transaction under applicable Law
or Rule 14d-9 or 14e-2 or that the Company Board determines to comply with its
fiduciary duties to the Company and its stockholders will not constitute a
violation of this Agreement, provided that such disclosure states that no action
will be taken by the Company Board in violation of this Section 6.04(c). The
obligation of the Company to call, give notice of, convene and hold the Company
Stockholders' Meeting shall not be limited or otherwise affected by the
commencement, disclosure, announcement or submission to it of any Competing
Transaction, or by any Change in the Company Board Recommendation, except in the
event that this Agreement is terminated in accordance with Section 8.01(j). The
Company shall not submit to the vote of its stockholders any Competing
Transaction, or propose to do so, except in the event that this Agreement is
terminated in accordance with Section 8.01(j).
(d) Except as set forth in this Section 6.04(d), the Parent Board shall not
make a change in the Parent Board Recommendation (a "Change in the Parent Board
Recommendation") in a manner adverse to the Company or approve or recommend, or
cause or permit Parent to enter into any letter of intent, agreement or
obligation with respect to, any Competing Transaction. Notwithstanding the
foregoing, if, prior to the approval of the Share Issuance, the Parent Name
Change, the New Stock Option Plans Adoption and the Parent Board Appointments at
the Parent Shareholders' Meeting, the Parent Board determines, in its good faith
judgment prior to the Effective Time and after consultation with independent
legal counsel (who may be Parent's regularly engaged independent legal counsel),
that to make a Change in the Parent Board Recommendation is required to comply
with its fiduciary obligations to Parent and its shareholders under applicable
Law, the Parent Board may recommend a Superior Proposal, but only (i) after
providing written notice to the Company (a "Notice of Parent Superior Proposal")
advising the Company that the Parent Board has received a Superior Proposal,
specifying the material terms and conditions of such Superior Proposal and
identifying the person making such Superior Proposal and indicating that the
Parent Board intends to effect a Change in the Parent Board Recommendation and
the manner in which it intends (or may intend) to do so, and (ii) if the Company
does not, within 48 hours of the Company's receipt of the Notice of Parent
Superior Proposal, deliver to Parent a binding written offer that the Parent
Board determines, in its good faith judgment (after having consulted with
independent legal counsel and a financial advisor of internationally recognized
reputation) to be at least as favorable to Parent's shareholders as such
Superior Proposal. Any disclosure that the Parent Board may be compelled to make
with respect to the receipt of a proposal or offer for a Competing Transaction
under applicable Law (including, without limitation, the Singapore Code of
Take-overs and Mergers) or Rule 14d-9 or 14e-2 or the requirements of the
Securities Industry Counsel or that the Parent Board determines to comply with
its fiduciary duties to Parent and its shareholders will not constitute a
violation of this Agreement, provided that such disclosure
60
states that no action will be taken by the Parent Board in violation of this
Section 6.04(d). The obligation of Parent to call, give notice of, convene and
hold the Parent Shareholders' Meeting shall not be limited or otherwise affected
by the commencement, disclosure, announcement or submission to it of any
Competing Transaction, or by any Change in the Parent Board Recommendation,
except in the event that this Agreement is terminated in accordance with Section
8.01(k). Parent shall not submit to the vote of its shareholders any Competing
Transaction, or propose to do so, except in the event that this Agreement is
terminated in accordance with Section 8.01(k).
(e) A "Competing Transaction" means with respect to the Company or Parent,
as the case may be, any of the following (other than the Transactions): (i) a
transaction, whether a merger, purchase of assets, tender offer or otherwise,
which, if consummated, would result in a third party's acquiring (A) more than
20% of the equity securities of the Company or of Parent, as the case may be,
(B) all or substantially all of the assets of the Company and the Company
Subsidiaries, taken as a whole, or of Parent and the Parent Subsidiaries, taken
as a whole, or (C) is conditioned upon the non-consummation of the Transactions;
(ii) in the case of the Company, any solicitation in opposition to approval and
adoption of this Agreement by the Company's stockholders; and (iii) in the case
of Parent, any solicitation in opposition to approval of the Share Issuance,
Parent Name Change, the New Stock Option Plans Adoption or the Parent Board
Appointments by Parent's shareholders.
(f) A "Superior Proposal" means with respect to the Company or Parent, as
the case may be, an unsolicited bona fide offer made by a third party which (i)
is for a transaction, whether a merger, purchase of assets, tender offer or
otherwise, other than the Transactions, which, if consummated, would result in
(A) the stockholders of such party immediately preceding such transaction
holding less than 50% of the equity interest in the surviving or resulting
entity of such transaction or (B) a third party's acquiring all or substantially
all of the assets of the Company and the Company Subsidiaries, taken as a whole,
or Parent and the Parent Subsidiaries, taken as a whole, as the case may be, and
(ii) is on terms that the Board of Directors of such party determines, in its
good faith judgment (after having consulted with independent legal counsel and a
financial advisor of internationally recognized reputation), taking into
account, among other things, all legal, financial, regulatory and other aspects
of the proposal and the person making the proposal, (A) if consummated pursuant
to its terms, is reasonably likely to result in a transaction that is more
favorable to the stockholders of such party (in their capacities as
stockholders), from a financial point of view, than the Merger and (B) is
reasonably capable of being completed on the terms proposed.
SECTION 6.05. Employee Benefits Matters. (a) For one year following the
Effective Time, or such longer period as may be required by applicable Law or
contract, Parent shall or shall cause the Surviving Corporation to provide or
cause to be provided to employees of the Surviving Corporation or any other
affiliate of Parent who were employees of the Company or any Company Subsidiary
immediately prior to the Effective Time and, in each case, to the extent an
employee continues employment with the Surviving Corporation or any other
affiliate of Parent (the "Continuing Employees") compensation and employee
benefit plans, programs and policies and fringe benefits (other than equity
based compensation arrangements) that, in the aggregate, are substantially
similar to those that were provided to the Continuing Employees by the Company
or any Company Subsidiary immediately prior to the execution of this Agreement.
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(b) Following the Effective Time, Parent shall or shall cause the Surviving
Corporation to recognize (or cause to be recognized) the service of each
Continuing Employee with the Company or any Company Subsidiary determined as of
the Effective Time for purposes of eligibility and vesting under any employee
benefit plans, programs or arrangements maintained by Parent, the Surviving
Corporation, or any of their affiliates that employs any Continuing Employee;
provided, however, that such crediting of service shall not operate to duplicate
any benefit or the funding of any such benefit. Each such employee benefit plan,
program or arrangement that provides health benefits to Continuing Employees
shall waive pre-existing condition limitations with respect to the Continuing
Employees to the same extent waived under the applicable group health plan of
the Company or any Company Subsidiary maintained prior to the Effective Time,
and each Continuing Employee shall be given credit for amounts paid under the
corresponding group health plan of the Company or any Company Subsidiary during
the plan year in which the Effective Time occurs for purposes of applying
deductibles, co-payments and out-of-pocket maximums for such plan year.
(c) As of the Effective Time, Parent shall cause the Surviving Corporation
to honor for the one-year period following the Effective Time all employment and
severance agreements existing as of the date hereof and set forth in Schedule
3.10(a) of the Company Disclosure Schedule between the Company or any Company
Subsidiary and any current or former director, officer or employee of the
Company or any Company Subsidiary. In addition, Parent shall, after the
Effective Time, cause the Surviving Corporation to perform the Company's
obligations under the ChipPAC, Inc. Employee Retention Plan and the ChipPAC,
Inc. Special Bonus Plan, which will provide for payments at specified times of
severance, bonuses and retention payments to employees of the Company and the
Company Subsidiaries contingent upon the occurrence of the Effective Time in an
aggregate cash amount of US$5.0 million, and the individual award agreements to
be entered into thereunder with participating employees of the Company and the
Company Subsidiaries.
(d) Parent shall use its reasonable best efforts to procure consents from
non-U.S. Continuing Employees that are required by applicable Law or collective
bargaining agreement as a result of Parent's modifications of any material terms
and conditions of employment for such employees in such employees' respective
jurisdictions.
SECTION 6.06. Directors' and Officers' Indemnification and Insurance. (a)
The Certificate of Incorporation and By-laws of the Surviving Corporation shall
contain provisions no less favorable with respect to indemnification than are
set forth in Article Eight of the Certificate of Incorporation or Article V of
the By-laws of the Company, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would affect adversely the rights thereunder of individuals who, at
or prior to the Effective Time, were directors, officers, employees, fiduciaries
or agents of the Company, unless such modification shall be required by law.
(b) The Surviving Corporation shall use its reasonable best efforts to
maintain in effect, for six years from the Effective Time, the current
directors' and officers' liability insurance policies maintained by the Company
(provided that the Surviving Corporation may substitute therefor policies of at
least the same coverage containing terms and conditions that are no less
advantageous) with respect to matters occurring prior to the Effective Time;
provided,
62
however, that in no event shall the Surviving Corporation be required to expend
pursuant to this Section 6.06(b) more than an amount per year equal to 200% of
current annual premiums paid by the Company for such insurance (which premiums
the Company represents and warrants to be $842,575 in the aggregate), it being
understood that, if the premium required to be paid by Parent for such policy
would exceed such 200% amount, then the coverage of such policy shall be reduced
to the maximum amount that may be obtained for a per annum premium in such 200%
amount.
(c) In the event the Company or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Company or the
Surviving Corporation, as the case may be, or at Parent's option, Parent, shall
assume the obligations set forth in this Section 6.06.
SECTION 6.07. Notification of Certain Matters. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(a) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which could reasonably be expected to cause any
representation or warranty of such party contained in this Agreement to be
untrue or inaccurate in any material respect and (b) any failure of the Company,
Parent or Merger Sub, as the case may be, to comply with or satisfy any covenant
or agreement to be complied with or satisfied by it hereunder, in the case of
(a) or (b), such that the conditions under Section 7.02(a) or Section 7.02(b),
in the case of the Company, or under Section 7.03(a) or Section 7.03(b), in the
case of Parent, would not be satisfied; provided, however, that the delivery of
any notice pursuant to this Section 6.07 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
SECTION 6.08. Company Affiliates. No later than 30 days after the date of
this Agreement, the Company shall deliver to Parent a list of names and
addresses of those persons who were, in the Company's reasonable judgment, on
such date, affiliates (within the meaning of Rule 145 of the rules and
regulations promulgated under the Securities Act (each such person being a
"Company Affiliate")) of the Company. The Company shall provide Parent with such
information and documents that the Company has in its possession as Parent shall
reasonably request for purposes of reviewing such list. The Company shall use
its reasonable best efforts to deliver or cause to be delivered to Parent, prior
to the Effective time, an affiliate letter substantially in the form attached
hereto as Exhibit 6.08, executed by each of the Company Affiliates identified in
the foregoing list and any person who shall, to the knowledge of the Company,
have become a Company Affiliate subsequent to the delivery of such list.
SECTION 6.09. Further Action; Reasonable Best Efforts. Upon the terms and
subject to the conditions of this Agreement, each of the parties hereto shall
(a) make promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act or other applicable foreign, federal or state
antitrust, competition or fair trade Laws with respect to the Transactions and
(b) use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable Laws or otherwise to consummate and make effective
the Transactions, including,
63
without limitation, using its reasonable best efforts to obtain all permits,
consents, approvals, authorizations, qualifications and orders of Governmental
Authorities and parties to contracts with the Company or Parent or their
subsidiaries as are necessary for the consummation of the Transactions and to
fulfill the conditions to the Merger; provided that nothing contained in this
Section 6.09 shall require Parent or the Company to divest any asset or assets
or license any technology which individually or in the aggregate have a fair
value in excess of $10,000,000 in any manner that would not be commercially
reasonable. In case, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall use their
reasonable best efforts to take all such action.
SECTION 6.10. Plan of Reorganization. (a) This Agreement is intended to
constitute a "plan of reorganization" within the meaning of Section 1.368-2(g)
of the income tax regulations promulgated under the Code. From and after the
date of this Agreement and until the Effective Time, each party hereto shall use
its reasonable best efforts to cause the Merger to qualify, and will not
knowingly take any action, cause any action to be taken, fail to take any action
or cause any action to fail to be taken which action or failure to act could
reasonably be expected to prevent the Merger from qualifying, as a
reorganization within the meaning of Section 368(a) of the Code (including the
receipt and continued effectiveness of the Private Letter Ruling) or the
exchange by Eligible Company Stockholders of Company Shares for Parent ADSs
pursuant to the Merger from satisfying the requirements of Section 1.367(a)-3(c)
of the Regulations other than subsection (3)(C) thereof. Following the Effective
Time, neither the Surviving Corporation, Parent nor any of their affiliates
shall knowingly take any action, cause any action to be taken, fail to take any
action or cause any action to fail to be taken, which action or failure to act
could reasonably be expected to cause the Merger to fail to qualify as a
reorganization within the meaning of Section 368(a) of the Code (including the
failure to receive and maintain the continued effectiveness of the Private
Letter Ruling) or the exchange by Eligible Company Stockholders of Company
Shares for Parent ADSs pursuant to the Merger from satisfying the requirements
of Section 1.367(a)-3(c) of the Regulations other than subsection (3)(C)
thereof.
(b) As of the date hereof, the Company, after consultation with counsel,
does not know of any reason (i) why it would not be able to deliver to counsel
to the Company and Parent, at the date of the legal opinions referred to below,
certificates, with customary exceptions and modifications thereto, to enable
such firms to deliver legal opinions that (assuming receipt of the Private
Letter Ruling) the Merger qualifies as a reorganization within the meaning of
Section 368(a) of the Code, and the Company hereby agrees to use its reasonable
best efforts to deliver such certificates effective as of the date of such
opinions or (ii) why counsel to the Company and Parent would not be able to
deliver legal opinions that (assuming receipt of the Private Letter Ruling) the
Merger qualifies as a reorganization within the meaning of Section 368(a) of the
Code.
(c) As of the date hereof, Parent, after consultation with counsel, does
not know of any reason (i) why it and Merger Sub would not be able to deliver to
counsel to the Company and Parent, at the date of the legal opinions referred to
below, certificates, with customary exceptions and modifications thereto, to
enable such firms to deliver legal opinions that (assuming receipt of the
Private Letter Ruling) the Merger qualifies as a reorganization
64
within the meaning of Section 368(a) of the Code, and Parent hereby agrees to
use its reasonable best efforts to deliver such certificates on behalf of both
Parent and Merger Sub effective as of the date of such opinions, or (ii) why
counsel to the Company and Parent would not be able to deliver legal opinions
that (assuming receipt of the Private Letter Ruling) the Merger qualifies as a
reorganization within the meaning of Section 368(a) of the Code.
(d) Parent and the Company shall cooperate and use their respective
reasonable best efforts to obtain a private letter ruling from the IRS with
respect to the transactions contemplated by this Agreement, as provided for
under Section 1.367(a)-3(c)(9) of the Regulations, to qualify for an exception
to the general rule under Section 367(a)(1) of the Code (the "Private Letter
Ruling"). Such reasonable best efforts shall include, without limitation, Parent
and Company's making (or causing their respective affiliates to make) such
representations or covenants as the IRS may reasonably request in connection
with the Private Letter Ruling. Any written or substantive oral communications
with the IRS to the extent possible shall be conducted jointly by the Company
and Parent or Xxxxxxxx & Xxxxx LLP and Shearman & Sterling LLP, respectively. If
the IRS does not issue the Private Letter Ruling, but there has been a change in
law, clear guidance from the IRS or a change in facts that would nevertheless
indicate that the opinion described below could be given, Parent and the Company
shall use their reasonable best efforts each to obtain an opinion of a
nationally recognized law firm that for federal income tax purposes the exchange
by Eligible Company Stockholders of Company Shares solely for Parent ADSs
pursuant to the Merger will not result in the recognition of gain under the
provisions of Section 367(a) of the Code (a "Section 367 Opinion"). Parent and
the Company agree to timely satisfy, or cause to be timely satisfied, all
applicable tax reporting and filing requirements contained in the Code and the
United States Income Tax Regulations with respect to the transactions
contemplated hereby, including, without limitation, the reporting requirements
contained in Section 1.367(a)-3(c)(6) of the Regulations.
SECTION 6.11. Obligations of Merger Sub. Parent shall take all action
necessary to cause Merger Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and subject to the conditions set
forth in this Agreement.
SECTION 6.12. Stock Exchange Listing/Quotation. (a) Parent shall promptly
prepare and submit to the SGX-ST a listing application covering the Parent
Ordinary Shares underlying the Parent ADSs to be issued in the Merger, pursuant
to the Substitute Options and upon conversion of the Company Convertible
Subordinated Notes, and shall use its reasonable best efforts to obtain, prior
to the Effective Time, approval for such listing on the SGX-ST, subject to
official notice of issuance to the SGX-ST and customary conditions, and the
Company shall cooperate with Parent with respect to such listing.
(b) Parent shall promptly prepare and submit to the Nasdaq a listing
application covering the Parent ADSs to be issued in the Merger, pursuant to
Substitute Options and upon conversion of the Company Convertible Subordinated
Notes, and shall use its reasonable best efforts to obtain, prior to the
Effective Time, approval for the quotation of such Parent ADSs, subject to
official notice of issuance to Nasdaq, and the Company shall cooperate with
Parent with respect to such quotation.
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SECTION 6.13. Public Announcements. The initial press release relating to
this Agreement shall be a joint press release the text of which has been agreed
to by each of Parent and the Company. Thereafter, unless otherwise required by
applicable Law or the requirements of the SGX-ST or Nasdaq, no statement or
other disclosure regarding the Transactions will be made by any party to this
Agreement without the prior approval of the Company and Parent, which approval
shall not be unreasonably withheld or delayed, provided, however, that nothing
in this Section 6.13 shall be deemed to limit the rights of the Company or
Parent under Section 6.04.
SECTION 6.14. Board of Directors; Corporate Headquarters; Corporate Name.
(a) Parent shall use its reasonable best efforts to, subject to the fiduciary
duties of the Parent Board, (i) not increase the number of directors who are
nominees of Singapore Technologies Semiconductors Pte Ltd prior to the Effective
Time and cause the number of directors comprising the Parent Board as of
immediately after the Effective Time to be 11, (ii) cause four of the current
members of the Parent Board to resign effective as of immediately after the
Effective Time, (iii) cause each of Mr. Xxxxxx Xxxx, Xx. Xxxxxxx Xxxxx, Xx.
Xxxxx Sup Park and Mr. Xxxxxx XxXxxxx (the "Company Designated Directors"),
assuming that each such person is willing to serve as a director, to be
nominated for election as a director of Parent, effective as of the Effective
Time, at the Parent Shareholders' Meeting, (iv) cause Mr. Xxxxxx XxXxxxx to be
appointed as Vice Chairman of the Parent Board as of the Effective Time, to
serve as Vice Chairman and director until December 31, 2004, (v) cause one of
Mr. Xxxxxx Xxxx, Xx. Xxxxxxx Xxxxx or Xx. Xxxxx Sup Park to be appointed to the
Audit Committee of the Parent Board as of the Effective Time, and (vi) cause the
Audit Committee Terms of Reference to be amended as of the Effective Time to
provide, in accordance with NASD Rule 4350(h), that Parent shall conduct an
appropriate review of all "related party transactions" (defined as transactions
required to be disclosed pursuant to Rule 404 of Regulation S-K under the
Securities Act or any successor provision thereto) for potential conflict of
interest situations and that all such transactions must be approved by the Audit
Committee of the Parent Board. If any Company Designated Director shall, prior
to the Effective Time, die or determine not to serve as a director of Parent,
the Company shall have the right to appoint another person who would qualify as
an "independent" director under the rules of Nasdaq to become a Company
Designated Director, subject to the approval of such person by the Parent Board
(which approval shall not be unreasonably withheld).
(b) The corporate headquarters of Parent following completion of the Merger
will remain in Singapore.
(c) Parent shall take all such action as may be necessary to cause the
corporate name of Parent to be renamed, effective as of the Effective Time,
"STATS ChipPAC Ltd", or such other name to be agreed upon between Parent and the
Company prior to the mailing of the Proxy Statement and the Parent Shareholders
Circular (which name shall include the names "STATS" and "ChipPAC"), subject to
receipt of the requisite approval of the shareholders of Parent.
SECTION 6.15. Accounting Matters. Each of Parent and the Company agree to
each use reasonable best efforts to cause to be delivered to each other consents
and comfort letters from their respective independent auditors, in form
reasonably satisfactory to the recipient
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and customary in scope and substance for consents and comfort letters delivered
by independent public accountants in connection with registration statements on
Form F-4 under the Securities Act.
SECTION 6.16. Stock Transfer Taxes. All stock transfer, real estate
transfer, documentary, stamp, recording and other similar Taxes (including
interest, penalties and additions to any such Taxes) incurred in connection with
this Agreement and the Transactions shall be paid by the Surviving Corporation,
and the Company shall cooperate with Parent and Merger Sub in preparing,
executing and filing any Tax Returns with respect to such Taxes.
SECTION 6.17. Supplemental Indentures. As of the Effective Time, the
Surviving Corporation and Parent shall (i) execute and deliver to Firstar Bank,
N.A., as trustee under the Indenture dated as of June 15, 2001 between the
Company and Firstar Bank, N.A. (the "8% Convertible Notes Indenture"), a
supplemental indenture in accordance with Section 4.11 of the 8% Convertible
Notes Indenture and (ii) execute and deliver to U.S. Bank National Association,
as trustee under the Indenture dated as of May 28, 2003 between the Company and
U.S. Bank National Association (the "2.50% Convertible Notes Indenture"), a
supplemental indenture in accordance with Section 5.11 of the 2.50% Convertible
Notes Indenture. Prior to the Effective Time, the Company shall, and after the
Effective Time, the Surviving Corporation shall, deliver such notices to
security holders, certificates, opinions, agreements and other instruments as
Parent or the trustees under the indentures specified above and under the
Indenture dated as of July 29, 1999, among ChipPAC International Limited,
ChipPAC Merger Corp. and Firstar Bank of Minnesota, N.A. as trustee (the "12.75%
Notes Indenture"), may reasonably request in connection with the Merger and such
indentures and supplemental indentures.
SECTION 6.18. SGX-ST Waiver. Parent shall give written notice to the
Company as soon as reasonably practicable after Parent receives notice (written
or otherwise) from the SGX-ST that the SGX-ST has imposed any additional
condition or revoked any of the conditions in relation to SGX-ST Waiver from the
requirements of having to comply with the continuing listing requirements of the
SGX-ST.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party. The obligations
of the Company, Parent and Merger Sub to consummate the Merger are subject to
the satisfaction or waiver (where permissible) of the following conditions:
(a) Registration Statements. The Registration Statement and Form F-6
Registration Statement shall have been declared effective by the SEC under
the Securities Act and no stop order suspending the effectiveness of the
Registration Statement or Form F-6 Registration Statement shall have been
issued by the SEC and no proceeding for that purpose shall have been
initiated by the SEC.
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(b) SGX-ST Filings. The Parent Shareholders Circular shall have been
filed with the SGX-ST and Parent shall have received all approvals and
confirmations from the SGX-ST necessary to mail the Parent Shareholders
Circular to the shareholders of Parent in connection with the Parent
Shareholders' Meeting.
(c) Company Stockholder Approval. This Agreement shall have been
approved and adopted by the requisite affirmative vote of the stockholders
of the Company in accordance with the DGCL and the Company's Certificate of
Incorporation, and such approval shall not have been rescinded, revoked or
otherwise withdrawn.
(d) Parent Shareholder Approval. The Share Issuance, the Parent Name
Change, the New Stock Option Plans Adoption and the Parent Board
Appointments shall have been approved by the requisite affirmative vote of
the shareholders of Parent in accordance with the rules and regulations of
the SGX-ST, Nasdaq, the Singapore Companies Act and Parent's Memorandum and
Articles of Association, and such approval shall not have been rescinded,
revoked or otherwise withdrawn.
(e) No Order. No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, judgment,
decree, executive order or award which is then in effect and has the effect
of making the Merger illegal or otherwise prohibiting consummation of the
Merger.
(f) U.S. Antitrust Approvals and Waiting Periods. Any waiting period
(and any extension thereof) applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(g) Stock Exchange Listing/Quotation. The Parent ADSs to be issued in
the Merger, pursuant to the Substitute Options or pursuant to the
conversion of the Company Convertible Subordinated Notes shall have been
authorized for quotation on Nasdaq and the Parent Ordinary Shares
underlying such Parent ADSs shall have been authorized for listing on the
SGX-ST, in each case, subject to official notice of issuance and other
customary conditions.
SECTION 7.02. Conditions to the Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to consummate the Merger are subject to the
satisfaction or waiver, where permissible, by Parent or Merger Sub, as the case
may be, of the following additional conditions:
(a) Representations and Warranties. (i) The representations and
warranties of the Company contained in Section 3.03(a) of this Agreement
shall have been true and correct in all material respects as of the date of
this Agreement and shall be true and correct in all material respects as of
the Effective Time, as though made on and as of the Effective Time (except
to the extent expressly made as of an earlier date, in which case as of
such earlier date), and (ii) the representations and warranties of the
Company otherwise contained in this Agreement shall have been true and
correct as of the date of this Agreement (without giving effect to any
qualification or limitation as to materiality or Company Material Adverse
Effect set forth therein) and shall be true and correct as of
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the Effective Time (without giving effect to any qualification or
limitation as to materiality or Company Material Adverse Effect set forth
therein), as though made on and as of the Effective Time (except to the
extent expressly made as of an earlier date, in which case of as such
earlier date), except in this clause (ii) where the failure of such other
representations of the Company to be so true and correct (without giving
effect to any qualification or limitation as to materiality or Company
Material Adverse Effect set forth therein) would not reasonably be
expected, individually or in the aggregate, to have a Company Material
Adverse Effect.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time.
(c) Officer Certificate. The Company shall have delivered to Parent a
certificate, dated the date of the Closing, signed by the President or any
Senior Vice President of the Company, certifying as to the satisfaction of
the conditions specified in Sections 7.02(a) and 7.02(b).
(d) Consents. The consents, approvals or authorizations listed on
Section 7.02(d) of the Company Disclosure Schedule shall have been
obtained.
(e) Material Adverse Effect. No Company Material Adverse Effect shall
have occurred since the date of this Agreement and be continuing.
(f) Tax Opinion; Private Letter Ruling. Parent shall (i) have received
the opinion of Shearman & Sterling LLP, counsel to Parent, based upon
representations of Parent, Merger Sub and the Company, and normal
assumptions, to the effect that, for federal income tax purposes (and
determined without the application of Section 367 of the Code), the Merger
will qualify as a reorganization within the meaning of Section 368(a) of
the Code, that each of Parent, Merger Sub and the Company will be a party
to the reorganization within the meaning of Section 368(b) of the Code and
(ii) have received the Private Letter Ruling or a Section 367 Opinion,
which opinions or Private Letter Ruling shall not have been withdrawn or
modified in any material respect. The issuance of the opinion in clause (i)
above shall be conditioned on receipt by Shearman & Sterling LLP of
representation letters from each of Parent, Merger Sub and the Company as
contemplated in Section 6.10 of this Agreement. Each such representation
letter shall be dated on or before the date of such opinion and shall not
have been withdrawn or modified in any material respect as of the Effective
Time.
(g) No Defaults. No Default or Event or Default (as defined in the
relevant indenture) shall have occurred and be continuing under the 8%
Convertible Notes Indenture, the 2.50% Convertible Notes Indenture or the
12.75% Notes Indenture and no Default or Event of Default (as defined in
the relevant indenture) shall occur and be continuing immediately after
giving effect to the Merger.
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SECTION 7.03. Conditions to the Obligations of the Company. The obligations
of the Company to consummate the Merger are subject to the satisfaction or
waiver, where permissible, by the Company of the following additional
conditions:
(a) Representations and Warranties. (i) The representations and
warranties of Parent contained in Section 4.03(a) of this Agreement shall
have been true and correct in all material respects as of the date of this
Agreement and shall be true and correct in all material respects as of the
Effective Time, as though made on and as of the Effective Time (except to
the extent expressly made as of an earlier date, in which case as of such
earlier date), and (ii) the representations and warranties of Parent
otherwise contained in this Agreement shall have been true and correct as
of the date of this Agreement (without giving effect to any qualification
or limitation as to materiality or Parent Material Adverse Effect set forth
therein) and shall be true and correct as of the Effective Time (without
giving effect to any qualification or limitation as to materiality or
Parent Material Adverse Effect set forth therein), as though made on and as
of the Effective Time (except to the extent expressly made as of an earlier
date, in which case of as such earlier date), except in this clause (ii)
where the failure of such other representations of Parent to be so true and
correct (without giving effect to any qualification or limitation as to
materiality or Parent Material Adverse Effect set forth therein) would not
reasonably be expected, individually or in the aggregate, to have a Parent
Material Adverse Effect.
(b) Agreements and Covenants. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by it
on or prior to the Effective Time.
(c) Officer Certificate. Parent shall have delivered to the Company a
certificate, dated the date of the Closing, signed by the President or any
Senior Vice President of Parent, certifying as to the satisfaction of the
conditions specified in Sections 7.03(a) and 7.03(b).
(d) Consents. The consents, approvals or authorizations listed on
Section 7.03(d) of the Parent Disclosure Schedule shall have been obtained.
(e) Material Adverse Effect. No Parent Material Adverse Effect shall
have occurred since the date of this Agreement and be continuing.
(f) Tax Opinion; Private Letter Ruling. The Company shall (i) have
received the opinion of Xxxxxxxx & Xxxxx LLP, counsel to the Company, based
upon representations of Parent, Merger Sub and the Company, and normal
assumptions, to the effect that, for federal income tax purposes (and
determined without the application of Section 367 of the Code), the Merger
will qualify as a reorganization within the meaning of Section 368(a) of
the Code and that each of Parent, Merger Sub and the Company will be a
party to the reorganization within the meaning of Section 368(b) of the
Code and (ii) have received the Private Letter Ruling or a Section 367
Opinion, which opinions or Private Letter Ruling shall not have been
withdrawn or modified in any material respect. The issuance of the opinion
in (i) above shall be conditioned on receipt by Xxxxxxxx & Xxxxx LLP of
representation letters from each of Parent, Merger Sub and the Company as
70
contemplated in Section 6.10 of this Agreement. Each such representation
letter shall be dated on or before the date of such opinion and shall not
have been withdrawn or modified in any material respect as of the Effective
Time.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and the Merger
and the other Transactions may be abandoned at any time prior to the Effective
Time, notwithstanding any requisite approval and adoption of this Agreement and
the Transactions by the stockholders of the Company, by action taken or
authorized by the respective party's Board of Directors, as follows:
(a) by mutual written consent of Parent and the Company; or
(b) by either Parent or the Company if the Effective Time shall not
have occurred on or before September 30, 2004 (which date shall be
extended, at the written request of either Parent or the Company, to a date
not later than the earliest of (i) 30 days after receipt of the Private
Letter Ruling (or such longer period after receipt of the Private Letter
Ruling as may be necessary to satisfy the conditions set forth in Section
7.01(e) and 7.01(f) after receipt of the Private Letter Ruling), (ii) the
date on which the IRS advises the parties that it will not issue the
Private Letter Ruling and (iii) December 31, 2004, to the extent necessary
to satisfy the conditions set forth in Sections 7.02(f) and 7.03(f) and so
long as all other conditions have been satisfied or shall be capable of
being satisfied) (the "End Date"); provided, however, that the right to
terminate this Agreement under this Section 8.01(b) or to extend the End
Date shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before such date; or
(c) by either Parent or the Company if any Governmental Authority in
the United States or Singapore shall have enacted, issued, promulgated,
enforced or entered any injunction, order, decree or ruling which has
become final and nonappealable and has the effect of making consummation of
the Merger illegal or otherwise preventing or prohibiting consummation of
the Merger; or
(d) by Parent (at any time prior to the adoption and approval of this
Agreement and the Merger by the required vote of the stockholders of the
Company) if a Triggering Event (as defined below) with respect to the
Company shall have occurred; or
(e) by the Company (at any time prior to the approval of the Share
Issuance, the New Stock Option Plans Adoption and the Parent Board
Appointments by the required vote of the shareholders of Parent) if a
Triggering Event with respect to Parent shall have occurred; or
(f) by either Parent or the Company if this Agreement shall fail to
receive the requisite vote for approval at the Company Stockholders'
Meeting; or
71
(g) by either Parent or the Company if the Share Issuance or Parent
Name Change shall fail to receive the requisite vote for approval at the
Parent Shareholders' Meeting; or
(h) by Parent upon a breach of any representation, warranty, covenant
or agreement on the part of the Company set forth in this Agreement, or if
any representation or warranty of the Company shall have become untrue, in
either case such that the conditions set forth in Section 7.02(a) and
Section 7.02(b) would not be satisfied ("Terminating Company Breach");
provided, however, that, if such Terminating Company Breach is curable by
the Company, Parent may not terminate this Agreement under this Section
8.01(h) for so long as the Company continues to exercise its reasonable
best efforts to cure such breach, unless such breach is not cured within 20
days after notice of such breach is provided by Parent to the Company;
provided further that Parent shall not itself be in breach such that the
conditions set forth in Section 7.03(a) or (b) would not be satisfied; or
(i) by the Company upon a breach of any representation, warranty,
covenant or agreement on the part of Parent and Merger Sub set forth in
this Agreement, or if any representation or warranty of Parent and Merger
Sub shall have become untrue, in either case such that the conditions set
forth in Section 7.03(a) and Section 7.03(b) would not be satisfied
("Terminating Parent Breach"); provided, however, that if such Terminating
Parent Breach is curable by Parent, the Company may not terminate this
Agreement under this Section 8.01(i) for so long as Parent continues to
exercise its reasonable best efforts to cure such breach, unless such
breach is not cured within 20 days after notice of such breach is provided
by the Company to Parent; provided further that the Company shall not
itself be in breach such that the conditions set forth in Section 7.02(a)
or (b) would not be satisfied; or
(j) by the Company (at any time prior to the Company Stockholders'
Meeting) in order to enter into a definitive agreement with respect to a
Superior Proposal if the Company Board shall have made a Change in the
Company Board Recommendation in compliance with Section 6.04(c); provided,
however, that any termination of this Agreement pursuant to this Section
8.01(j) shall not be effective until the Company has made full payment of
all amounts provided under Section 8.03; or
(k) by Parent (at any time prior to the Parent Shareholders' Meeting)
in order to enter into a definitive agreement with respect to a Superior
Proposal if the Parent Board shall have made a Change in the Parent Board
Recommendation in compliance with Section 6.04(d); provided, however, that
any termination of this Agreement pursuant to this Section 8.01(k) shall
not be effective until Parent has made full payment of all amounts provided
under Section 8.03; or
(l) by either the Company or Parent if (i) despite both parties'
reasonable best efforts, the IRS advises the parties that it will not issue
the Private Letter Ruling and the parties have exhausted all reasonable
opportunities to convince the IRS to reconsider its decision and to issue
the Private Letter Ruling and (ii) after consulting with at least two
nationally recognized law firms, no such law firm is able to deliver a
Section 367
72
Opinion; provided, however, that the right to terminate under this Section
8.01(l) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the IRS to issue the Private Letter Ruling; and, provided
further that Parent may not terminate under this Section 8.01(l) if until
20 days after a party notifies the other party of its determination that
the circumstances described in clauses (i) and (ii) above have occurred and
Parent may not terminate under this Section 8.01(l) if prior to the end of
such 20 day period (x) the Company waives the condition set forth in
Section 7.03(f) and (y) the parties to the Company Stockholder Voting
Agreements agree that such waiver of such condition shall not affect the
continued effect of the Company Stockholder Voting Agreement.
For purposes of this Agreement, a "Triggering Event" with respect to a party
hereto shall be deemed to have occurred if: (i) the Board of Directors of such
party or any committee thereof withdraws, modifies or changes its recommendation
of this Agreement, the Merger or the Transactions in a manner adverse to the
other party or shall have resolved to do so; (ii) the Board of Directors of such
party shall have recommended to the stockholders of such party a Competing
Transaction or shall have resolved to do so or shall have entered into any
letter of intent or similar document or any agreement, contract or commitment
accepting any Competing Transaction; (iii) such party shall have failed to
include in the Proxy Statement or the Parent Shareholders Circular, as the case
may be, the recommendation of the Board of Directors of such party in favor of
the approval and adoption of this Agreement and the approval of the Merger or
approval of the Share Issuance, the New Stock Option Plans Adoption or the
Parent Board Appointments as applicable; or (iv) a tender offer or exchange
offer for 20% or more of the outstanding shares of capital stock of such party
is commenced, and the Board of Directors of such party fails to recommend
against acceptance of such tender offer or exchange offer by its stockholders
(including by taking no position with respect to the acceptance of such tender
offer or exchange offer by its stockholders) within 20 days of the announcement
of such tender offer or exchange offer.
SECTION 8.02. Effect of Termination. Any termination of this Agreement
pursuant to Section 8.01 will be effective immediately upon the delivery of a
valid written notice of the terminating party to the non-terminating party. In
the event of the termination of this Agreement pursuant to Section 8.01, this
Agreement shall forthwith become void, and there shall be no liability under
this Agreement on the part of any party hereto, except (a) as set forth in
Section 8.03 and (b) nothing herein shall relieve any party from liability for
any breach of any of its representations, warranties, covenants or agreements
set forth in this Agreement prior to such termination; provided, however, that
the Confidentiality Agreement shall survive any termination of this Agreement.
SECTION 8.03. Fees and Expenses. (a) All fees and expenses incurred in
connection with this Agreement, the Merger and the other Transactions, including
fees and expenses of financial advisors, financial sponsors, legal counsel and
other advisors ("Advisors"), will be paid by the party incurring such expenses
whether or not the Merger is consummated; provided, however, that Parent and the
Company will share equally (i) the filing fee for the Notification and Report
Forms filed with the FTC and DOJ under the HSR Act and (ii) fees directly
associated with the printing, filing and mailing of the Registration Statement,
the Proxy
73
Statement and the Parent Shareholder Circular; provided further that neither of
(i) or (ii) shall be deemed to include fees or expenses payable to Advisors.
(b) The Company agrees that:
(i) if Parent shall terminate this Agreement pursuant to Section
8.01(d); or
(ii) if (A) Parent or the Company shall terminate this Agreement
pursuant to Section 8.01(f), (B) prior to the time of the Company
Stockholders' Meeting a Competing Transaction shall have been publicly
announced with respect to the Company, and (C) the Company completes a
Third Party Acquisition (as defined below) within 12 months after the date
of such termination or the Company enters into an agreement providing for a
Third Party Acquisition within 12 months after the date of such termination
and the Company subsequently completes such Third Party Acquisition; or
(iii) if (A) Parent or the Company shall terminate this Agreement
pursuant to Section 8.01(b), (B) prior to the time of such termination a
Competing Transaction shall have been publicly announced with respect to
the Company, and (C) the Company completes a Third Party Acquisition within
12 months after the date of such termination or the Company enters into an
agreement providing for a Third Party Acquisition within 12 months after
the date of such termination and the Company subsequently completes such
Third Party Acquisition; or
(iv) if the Company shall terminate this Agreement pursuant to Section
8.01(j);
then the Company shall pay to Parent, in immediately available funds, a fee of
$40 million (the "Fee"), (A) in the case of Section 8.03(b)(i), one business day
following the termination, (B) in the case of Section 8.03(b)(ii) or (iii), one
business day following the consummation of such Third Party Acquisition and (C)
in the case of Section 8.03(b)(iv), on the day of termination of this Agreement.
(c) Parent agrees that:
(i) if the Company shall terminate this Agreement pursuant to Section
8.01(e); or
(ii) if (A) Parent or the Company shall terminate this Agreement
pursuant to Section 8.01(g), (B) prior to the time of the Parent
Shareholders' Meeting a Competing Transaction shall have been publicly
announced with respect to Parent, and (C) Parent completes a Third Party
Acquisition within 12 months after the date of such termination or Parent
enters into an agreement providing for a Third Party Acquisition within 12
months after the date of such termination and Parent subsequently completes
such Third Party Acquisition; or
(iii) if (A) Parent or the Company shall terminate this Agreement
pursuant to Section 8.01(b), (B) prior to the time of such termination a
Competing Transaction shall have been publicly announced with respect to
Parent, and (C) Parent completes a Third Party Acquisition within 12 months
after the date of such termination or Parent enters
74
into an agreement providing for a Third Party Acquisition within 12 months
after the date of such termination and Parent subsequently completes such
Third Party Acquisition; or
(iv) if Parent terminates this Agreement pursuant to Section 8.01(k);
then Parent shall pay to the Company, in immediately available funds, the Fee,
(A) in the case of Section 8.03(c)(i), one business day following the
termination, (B) in the case of Section 8.03(c)(ii) or (iii), one business day
following the consummation of such Third Party Acquisition and (C) in the case
of Section 8.03(c)(iv), on the day of termination of this Agreement.
(d) Each of Parent and the Company acknowledges that the agreements
contained in this Section 8.03 are an integral part of the transactions
contemplated by this Agreement. In the event that Parent or the Company, as the
case may be, shall fail to pay the Fee when due, the term "Fee" shall be deemed
to include the costs and expenses actually incurred or accrued by the other
party (including, without limitation, fees and expenses of counsel) in
connection with the collection under and enforcement of this Section 8.03,
together with interest on such unpaid Fee, commencing on the date that the Fee
became due, at a rate equal to the rate of interest publicly announced by
Citibank, N.A., from time to time, in The City of New York, as such bank's Prime
Rate plus 2.00%. Payment of the fees and expenses described in this Section 8.03
shall not be in lieu of any damages incurred in the event of willful or
intentional breach of this Agreement.
(e) "Third Party Acquisition" means any of the following transactions
(other than the transactions contemplated by this Agreement): (i) a merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company or Parent, as the case may be,
pursuant to which the stockholders of such party immediately preceding such
transaction hold less than 50% of the aggregate equity interests in the
surviving or resulting entity of such transaction or of any direct or indirect
parent thereof; (ii) a sale or other disposition by the Company or Parent, as
the case may be, of assets representing in excess of 50% of the aggregate fair
market value of the business of such party, together with its Subsidiaries,
taken as a whole, immediately prior to such sale or other disposition; (iii) an
acquisition by any person or group (including by way of a tender offer or an
exchange offer or an issuance of capital stock by the Company or Parent, as the
case may be), directly or indirectly, of beneficial ownership of more than 50%
of the voting power of the then outstanding shares of capital stock of the
Company or Parent, as the case may be; or (iv) the repurchase by the Company or
Parent, as the case may be, or any of their subsidiaries, of more than 50% of
the outstanding shares of capital stock of such party.
SECTION 8.04. Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after the
approval and adoption of this Agreement and the Transactions by the stockholders
of the Company, no amendment may be made that would reduce the amount or change
the type of consideration into which each Share shall be converted upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
75
SECTION 8.05. Waiver. At any time prior to the Effective Time, any party
hereto may, by action taken or authorized by its Board of Directors, (a) extend
the time for the performance of any obligation or other act of any other party
hereto, (b) waive any inaccuracy in the representations and warranties of any
other party contained herein or in any document delivered pursuant hereto and
(c) waive compliance with any agreement of any other party or any condition to
its own obligations contained herein. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements in this Agreement and in any
certificate delivered pursuant hereto shall terminate at the Effective Time or
upon the termination of this Agreement pursuant to Section 8.01 as provided in
Section 8.02, as the case may be, except that the agreements set forth in
Articles I and II, Sections 6.06 and 6.10, Article VIII and this Article IX
shall survive the Effective Time.
SECTION 9.02. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or email or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 9.02):
(a) if to Parent or Merger Sub:
ST Assembly Test Services Ltd
00 Xxx Xx Xxx Xxxxxx 00
#00-00/00 Xxxxxxxxx, Xxxxxxxxx 000000
Attention: Xxxxx Nai
Facsimile No: (x00) 0000-0000
Email Address: xxxxxxxx@xxxxx.xx.xxx.xx
with copies to:
Xxxxx & Xxxxxxxx
00 Xxxxxxxx Xxxx
#00-00 Xxxx Xxxxx
Xxxxxxxxx 000000
Attention: Xxxxxx Xxxx
Facsimile No: (x00) 0000-0000
76
Shearman & Sterling LLP
0 Xxxxxxx Xxxx, #00-00
Xxxxxxxxx 000000
Attention: Xxxx X. Xxxx, Esq.
Facsimile No: (x00) 0000-0000
Email Address: xxxxx@xxxxxxxx.xxx
Shearman & Sterling LLP
0000 Xxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No: (000) 000-0000
Email Address: xxxxxxxx@xxxxxxxx.xxx
(b) if to the Company:
ChipPAC, Inc.
00000 Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. XxXxxx
Facsimile No: (000) 000-0000
Email Address: xxxxxxxx.x.xxxxxx@xxxxxxx.xxx
with copies to:
Xxxxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxx Xxxxx
Facsimile No: (000) 000-0000
Email Address: xxxxxx@xxxxxxxx.xxx
Rajah & Xxxx
0 Xxxxxxx Xxxx, #00-00
Xxxx xx Xxxxx Xxxxxxxx,
Xxxxxxxxx, 000000
Attention: Xxxx Xxxx Tan
Facsimile No: 00-0000-0000
Email Address: xxxx.xxxx.xxx@xxxxxxxxx.xxx
SECTION 9.03. Certain Definitions. (a) For purposes of this Agreement:
"affiliate" of a specified person means a person who is an affiliate
within the meaning of Rule 145 of the rules and regulations promulgated
under the Securities Act.
"beneficial owner", with respect to any securities, has the meaning
ascribed to such term under Rule 13d-3(a) of the Exchange Act.
77
"business day" means any day on which the principal offices of the SEC
in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized to close in Singapore or San Francisco, California.
"Xxxx Group" means (i) Xxxx Capital Fund VI, L.P., (ii) BCIP
Associates II, whose managing partner is Xxxx Capital Investors, LLC, (iii)
BCIP Associates II-B, (iv) BCIP Trust Associates II, L.P., (v) BCIP Trust
Associates II-B, (vi) BCIP Associates II-C, (vii) PEP Investments PTY,
Ltd., (viii) Sankaty High Yield Assets Partners, L.P. and (ix) Xxxx
Capital, L.L.C.
"Central Provident Fund" shall have the same meaning as is ascribed to
it by the Central Provident Fund Act, Chapter 36 of Singapore.
"Central Provident Scheme" means any recognized mandatory social
security scheme that is not subject to U.S. Law and under which benefits
may be payable only upon the retirement, unemployment, physical injury or
disability of the insured, which has or is capable of having effect in
relation to one or more descriptions or categories of employment so as to
provide benefits, in the form of pensions, allowances, gratuities or other
payments, payable on termination of service, death or retirement, to or in
respect of persons gainfully employed under a contract of service in any
employment.
"Company ERISA Affiliate" means each entity that is treated as a
single employer with the Company or any Company Subsidiary pursuant to
Section 414 of the Code.
"Company Material Adverse Effect" means any change, event, violation,
inaccuracy, circumstance or effect (any such item, an "Effect") that,
individually or when taken together with all other Effects that have
occurred during the applicable measurement period prior to the date of
determination of the occurrence of the Company Material Adverse Effect, is
or is reasonably likely to be materially adverse to the business, financial
condition or results of operations of the Company and the Company
Subsidiaries, taken as a whole; provided, however, in no event will any of
the following, alone or in combination, be deemed to constitute nor will
any of the following be taken into account in determining whether there has
been or will be, a Company Material Adverse Effect: (i) changes in general
economic conditions or changes in securities markets in general, which
Effects do not have a materially disproportionate effect on Company and the
Company Subsidiaries, taken as a whole; (ii) changes in the industries in
which the Company and the Company Subsidiaries operate, which Effects do
not have a materially disproportionate effect on the Company and the
Company Subsidiaries, taken as a whole; (iii) the public announcement or
pendency of the transactions contemplated hereby; (iv) compliance with the
terms and conditions of this Agreement, including actions or omissions of
the Company or any Company Subsidiary taken with the written consent of
Parent; (v) any attrition of U.S.-based employees of the Company or the
Company Subsidiaries; (vi) a change in Law or GAAP or the interpretations
thereof, which Effects do not have a materially disproportionate effect on
the Company and the Company Subsidiaries, taken as a whole; and (vii) any
declaration of war by or
78
against, or an escalation of hostilities involving, or an act of terrorism
against, China, Korea, Malaysia, Singapore, Taiwan or the United States,
which Effects do not have a materially disproportionate effect on the
Company and the Company Subsidiaries, taken as a whole.
"control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, or as trustee
or executor, 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 credit
arrangement or otherwise.
"CVC Group" means (i) Citicorp Venture Capital, Ltd., (ii) Citicorp
Mezzanine III, L.P. and (iii) CCT Partners VI, L.P.
"Eligible Company Stockholders" means holders or deemed holders of
Company Shares (including partners of a partnership that holds Company
Shares) who will not be "five-percent transferee shareholders" as defined
in Section 1.367(a)-3(c)(5)(ii) of the income tax regulations under the
Code or who enter into (or whose consolidated tax group parent has entered
into on their behalf) five-year gain recognition agreements in the form
prescribed by Section 1.367(a)-8(b) of the income tax regulations under the
Code.
"Environmental Laws" means any United States federal, state or local
or non-United States law (including the common law, statutes, regulations,
orders and contractual obligations) relating to: (i) releases or threatened
releases of Hazardous Substances or materials containing Hazardous
Substances; (ii) the manufacture, handling, transport, use, treatment,
storage or disposal of Hazardous Substances or materials containing
Hazardous Substances; or (iii) pollution or protection of the environment,
health, safety or natural resources.
"Hazardous Substances" means: (i) those substances defined in or
regulated under the following United States federal statutes and their
state counterparts, as each may be amended from time to time, and all
regulations thereunder: the Hazardous Materials Transportation Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act, the Clean Water Act, the Safe
Drinking Water Act, the Atomic Energy Act, the Federal Insecticide,
Fungicide, and Rodenticide Act and the Clean Air Act; (ii) petroleum and
petroleum products, including crude oil and any fractions thereof; (iii)
natural gas, synthetic gas, and any mixtures thereof; (iv) polychlorinated
biphenyls, asbestos and radon; and (v) any other contaminant regulated by,
or for which standards of conduct are imposed by, any Governmental
Authority pursuant to any Environmental Law.
"Intellectual Property" means: (i) patents and patent applications;
(ii) trademarks, service marks, trade dress, logos, trade names, corporate
names and other source identifiers, and registrations and applications for
registration thereof; (iii) copyrightable works, copyrights, and
registrations and applications for registration thereof; (iv) mask
79
works; and (v) confidential and proprietary information, including trade
secrets, know-how and inventions.
"Parent ADRs" means American Depositary Receipts, each of which
evidences one Parent ADSs.
"Parent ADSs" means the American Depositary Shares issued pursuant to
the Parent Deposit Agreement, each of which represents the right to receive
ten Parent Ordinary Shares.
"Parent Deposit Agreement" means the Deposit Agreement, dated as of
February 8, 2001, by and among Parent, Citibank, N.A., as Depositary, and
the holders from time to time of Parents ADSs evidenced by Parent ADRs
issued thereunder, as amended through the Effective Time.
"Parent ERISA Affiliate" means each entity that is treated as a single
employer with Parent or any Parent Subsidiary under Section 414 of the
Code.
"Parent Material Adverse Effect" means any Effect that, individually
or when taken together with all other Effects that have occurred during the
applicable measurement period prior to the date of determination of the
occurrence of the Parent Material Adverse Effect, is or is reasonably
likely to be materially adverse to the business, financial condition or
results of operations of Parent and the Parent Subsidiaries, taken as a
whole; provided, however, in no event will any of the following, alone or
in combination, be deemed to constitute nor will any of the following be
taken into account in determining whether there has been or will be, a
Parent Material Adverse Effect: (i) changes in general economic conditions
or changes in securities markets in general, which Effects do not have a
materially disproportionate effect on Parent and the Parent Subsidiaries,
taken as a whole; (ii) changes in the industries in which Parent and the
Parent Subsidiaries operate, which Effects do not have a materially
disproportionate effect on Parent and the Parent Subsidiaries, taken as a
whole; (iii) the public announcement or pendency of the transactions
contemplated hereby; (iv) compliance with the terms and conditions of this
Agreement, including actions or omissions of Parent or any Parent
Subsidiary taken with the written consent of the Company; (v) a change in
Law or GAAP or the interpretations thereof, which Effects do not have a
materially disproportionate effect on Parent and the Parent Subsidiaries,
taken as a whole; and (vi) any declaration of war by or against, or an
escalation of hostilities involving, or an act of terrorism against, China,
Korea, Malaysia, Singapore, Taiwan or the United States, which Effects do
not have a materially disproportionate effect on Parent and the Parent
Subsidiaries, taken as a whole.
"Permitted Liens" means: (i) Liens for current taxes and assessments
not yet past due as of the Effective Time or which are being legitimately
contested by appropriate proceedings; (ii) inchoate mechanics' and
materialmen's Liens for construction in progress; (iii) workmen's,
repairmen's, warehousemen's, landlord's and carriers' Liens arising in the
ordinary course of business consistent with past practice that are not
delinquent and which, individually or in the aggregate, could not
reasonably be expected
80
to be materially adverse to the use, value or ownership of the subject
property; and (iv) all matters of record, Liens and other imperfections of
title and encumbrances that, individually or in the aggregate, could not
reasonably be expected to be materially adverse to the use, value or
ownership of the subject property.
"person" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including,
without limitation, a "person" as defined in Section 13(d)(3) of the
Exchange Act), trust, association or entity or government, political
subdivision, agency or instrumentality of a government.
"subsidiary" or "subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means an affiliate controlled by
such person, directly or indirectly, through one or more intermediaries.
"Taxes" shall mean any and all taxes, fees, levies, duties, tariffs,
imposts and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect
thereto) imposed by any Governmental Authority or taxing authority,
including, without limitation: taxes or other charges on or with respect to
income, franchise, windfall or other profits, gross receipts, property,
sales, use, capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value-added or gains taxes; license, registration and documentation fees;
and customers' duties, tariffs and similar charges.
"Tax Return" means all Singapore or United States federal, state,
local, provincial and any other domestic or foreign Tax return or report.
(a) The following terms have the meaning set forth in the Sections set
forth below:
Defined Term Location of Definition
------------ ----------------------
2.50% Convertible Notes.......................... Section 3.03(a)
2.50% Convertible Notes Indenture................ Section 6.17
8% Convertible Notes............................. Section 3.03(a)
8% Convertible Notes Indenture................... Section 6.17
12.75% Notes Indenture........................... Section 6.17
Action........................................... Section 3.09
Agreement........................................ Preamble
Blue Sky Laws.................................... Section 3.05(b)
Certificate of Merger............................ Section 1.02
Certificates..................................... Section 2.02(a)
Change in the Company Board Recommendation....... Section 6.04(c)
Change in the Parent Board Recommendation........ Section 6.04(d)
Closing.......................................... Section 1.02
COBRA............................................ Section 3.10(c)
Code............................................. Recitals
81
Defined Term Location of Definition
------------ ----------------------
Company......................................... Preamble
Company Affiliate............................... Section 6.08
Company Board................................... Recitals
Company Board Recommendation.................... Section 6.01(c)
Company Class A Common Stock.................... Section 2.01(a)
Company Class B Common Stock.................... Section 3.03(a)
Company Common Stock............................ Section 3.03(a)
Company Convertible Subordinated Notes.......... Section 3.03(a)
Company Disclosure Schedule..................... Article III
Company Lease Documents......................... Section 3.12(b)
Company Licensed Intellectual Property.......... Section 3.13(c)
Company Owned Intellectual Property............. Section 3.13(b)
Company Permits................................. Section 3.06
Company Plans................................... Section 3.10(a)
Company Preferred Stock......................... Section 3.03(a)
Company SEC Reports............................. Section 3.07(a)
Company Shares.................................. Section 2.01(a)
Company Shares Trust............................ Section 2.02(e)
Company Stock Awards............................ Section 3.03(a)
Company Stock Option Plans...................... Section 2.04(a)
Company Stock Options........................... Section 2.04(a)
Company Stockholder Voting Agreements........... Recitals
Company Stockholders' Meeting................... Section 6.01(a)
Company Subsidiary.............................. Section 3.01(a)
Competing Transaction........................... Section 6.04(f)
Confidentiality Agreement....................... Section 6.03(b)
Continuing Employees............................ Section 6.05(a)
DGCL ........................................... Recitals
Effective....................................... Section 89.03(a)
Effective Time.................................. Section 1.02
End Date........................................ Section 8.01(b)
ERISA........................................... Section 3.10(a)
Excess ADSs..................................... Section 2.02(e)
Exchange Act.................................... Section 3.05(b)
Exchange Agent.................................. Section 2.02(a)
Exchange Fund................................... Section 2.02(a)
Exchange Ratio.................................. Section 2.01(a)
Excluded Company Shares......................... Section 2.01(b)
Expenses........................................ Section 8.03(a)
Fee............................................. Section 8.03(b)
Form F-6 Registration Statement................. Section 6.01(a)
GAAP............................................ Section 3.07(b)
Governmental Authority.......................... Section 3.05(b)
HSR Act......................................... Section 3.05(b)
IRS............................................. Section 3.10(a)
82
Defined Term Location of Definition
------------ ----------------------
Law.............................................. Section 3.05(a)
Liens............................................ Section 3.12(a)
Material Company Contracts....................... Section 3.16(a)
Material Parent Contracts........................ Section 4.16(a)
Merger........................................... Recitals
Merger Consideration............................. Section 2.01(a)
Merger Sub....................................... Preamble
Multiemployer Plan............................... Section 3.10(c)
Multiple Employer Plan........................... Section 3.10(c)
NASD............................................. 2.02(e)
Nasdaq........................................... Section 2.02(e)
New Purchase Date................................ Section 2.05
New Stock Option Plans Adoption.................. Recitals
Non-U.S. Company Plan............................ Section 3.10(b)
Non-U.S. Parent Plan............................. Section 4.10(b)
Notice of Company Superior Proposal.............. Section 6.04(c)
Notice of Parent Superior Proposal............... Section 6.04(d)
Parent........................................... Preamble
Parent Board..................................... Recitals
Parent Board Appointments........................ Recitals
Parent Board Recommendation...................... Section 6.01(d)
Parent Convertible Notes......................... Section 4.03
Parent Disclosure Schedule....................... Article IV
Parent Lease Documents........................... Section 4.12(b)
Parent Licensed Intellectual Property............ Section 4.13(c)
Parent Name Change............................... Recitals
Parent Ordinary Shares........................... Recitals
Parent Owned Intellectual Property............... Section 4.13(b)
Parent Permits................................... Section 4.06
Parent Plans..................................... Section 4.10(a)
Parent SEC Reports............................... Section 4.07(a)
Parent Shareholder Voting Agreements............. Recitals
Parent Shareholders Circular..................... Section 6.01(c)
Parent Shareholders' Meeting..................... Section 6.01(b)
Parent Singapore Filings......................... Section 4.07(b)
Parent Stock Awards.............................. Section 4.03(a)
Parent Stock Option Plan......................... Section 4.03(a)
Parent Stock Options............................. Section 4.03(a)
Parent Subsidiary................................ Section 4.01(a)
Proxy Statement.................................. Section 6.01(a)
Private Letter Ruling............................ Section 6.10(d)
Purchase Plan.................................... Section 2.05
Registration Statement........................... Section 6.01(a)
Regulations...................................... Section 3.14
Representatives.................................. Section 6.03(a)
83
Defined Term Location of Definition
------------ ----------------------
SEC.............................................. Section 3.07(a)
Section 367 Opinion.............................. Section 6.10(c)
Securities Act................................... Section 3.05(b)
SGX-ST........................................... Section 2.04(c)
SGX-ST Letter.................................... Section 4.07(b)
Share Issuance................................... Recitals
Singapore Companies Act.......................... Section 4.07(b)
Singapore Securities Act......................... Section 4.07(b)
Stockholders' Meetings........................... Section 6.01(b)
Substitute Option................................ Section 2.04(a)
Superior Proposal................................ Section 6.04(g)
Surviving Corporation............................ Section 1.01
Surviving Corporation Common Stock............... Section 2.01(c)
Terminating Company Breach....................... Section 8.01(h)
Terminating Parent Breach........................ Section 8.01(i)
Third Party Acquisition.......................... Section 8.03(e)
Transactions..................................... Section 3.01(a)
Triggering Event................................. Section 8.01
U.S. Company Plan................................ Section 3.10(b)
U.S. Parent Plan................................. Section 4.10(b)
Voting Agreements................................ Recitals
SECTION 9.04. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 9.05. Entire Agreement; Assignment. This Agreement, together with
the schedules and exhibits thereto, the Voting Agreements, the Employment
Agreements and the Confidentiality Agreement constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede,
except as set forth in Sections 6.03(b), all prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto, in
whole or in part (whether pursuant to a merger, by operation of law or
otherwise), without the prior written consent of the other parties hereto, and
any attempt to make any such assignment without such consent shall be null and
void, except that Merger Sub may assign, in its sole discretion, any or all of
its rights, interests and obligations under this Agreement to any direct or
indirect wholly owned subsidiary of Parent without the consent of the Company,
but no such assignment shall relieve Merger Sub of any of its obligations
hereunder.
84
SECTION 9.06. Parties in Interest; Third Parties. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and, subject
to Section 9.05, their respective successors and assigns, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement. Except to the extent set forth in Sections 9.05 and 9.06, no
person who is not a party to this Agreement has any rights under the Contracts
(Rights of Third Parties) Act, Chapter 53B of Singapore to enforce any provision
of this Agreement.
SECTION 9.07. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement were
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 9.08. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State (other than those
provisions set forth herein that are required to be governed by the laws of
Singapore). All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined exclusively in any Delaware Chancery
Court or any Delaware federal court. The parties hereto hereby (a) submit to the
exclusive jurisdiction of the Delaware Chancery Court or any Delaware federal
court for the purpose of any Action arising out of or relating to this Agreement
brought by any party hereto, and (b) irrevocably waive, and agree not to assert
by way of motion, defense, or otherwise, in any such Action, any claim that it
is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution, that the Action
is brought in an inconvenient forum, that the venue of the Action is improper,
or that this Agreement or the Transactions may not be enforced in or by any of
the above-named courts.
SECTION 9.09. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.10. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
SECTION 9.11. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS. EACH OF
THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER HERETO HAVE BEEN INDUCED TO
85
ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
86
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
ST ASSEMBLY TEST SERVICES LTD
By /s/ Tan Lay Koon
---------------------------------
Name: Tan Lay Koon
Title: President and Chief
Executive Officer
CAMELOT MERGER, INC.
By /s/ Tan Lay Koon
---------------------------------
Name: Tan Lay Koon
Title: Chairman of the Board and
President
CHIPPAC, INC.
By /s/ Xxxxxx XxXxxxx
---------------------------------
Name: Xxxxxx XxXxxxx
Title: Chairman, Chief Executive
Officer and President
87
