EXECUTION COPY
ADVANCED SEMICONDUCTOR ENGINEERING, INC.
00 XXXX XXXXX XXXX, XXXXXX EXPORT PROCESSING ZONE
XXXXXX KAOHSIUNG
TAIWAN, REPUBLIC OF CHINA
As of September 25, 2003
Citibank, N.A. - ADR Department
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Zero Coupon Bonds (ISIN No.: XS0176208782)
Ladies and Gentlemen:
Reference is made to the Amended and Restated Deposit Agreement, dated as
of September 29, 2000 as amended from time to time (the "Deposit Agreement"), by
and among Advanced Semiconductor Engineering, Inc., a company incorporated under
the laws of the Republic of China (the "Company"), Citibank, N.A., as Depositary
(the "Depositary"), and all Holders and Beneficial Owners of American Depositary
Shares (the "ADSs") evidenced by American Depositary Receipts (the "ADRs")
issued thereunder. All capitalized terms used, but not otherwise defined herein,
shall have the meaning assigned thereto in the Deposit Agreement as in effect on
the date hereof.
The Company has agreed to sell Zero Coupon Convertible Bonds due 2008
(ISIN No.: XS0176208782) (the "Bonds") issued pursuant to the terms of the
Indenture, dated September 25, 2003 (the "Indenture"), between the Company and
Citibank, N.A., as Trustee (the "Trustee"), each Bond convertible on or after
October 26, 2003 at the option of the holder (such holder, a "Converting
Bondholder") into (a) the Company's common shares, par value NT$10 per share
(the "Shares"), or (b) the Company's ADSs, each ADS representing five (5)
Shares, in each case upon the terms and conditions set forth in the Indenture.
The purpose and intent of this Letter Agreement is to supplement the
Deposit Agreement, including without limitation Section 5.7 thereof, for the
sole purpose of accommodating the issuance of ADSs upon the deposit of Shares by
the Company following the conversion of Bonds in accordance with the terms and
conditions of the Indenture (such Shares, the "Conversion Shares"). The Company
and the Depositary agree that this Letter Agreement shall be filed as an exhibit
to the next Registration Statement on Form F-6 of the Company filed with the
Commission in respect of the ADSs and shall be filed by the Company with
governmental authorities in the ROC if required in accordance with applicable
ROC laws and regulations.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Depositary hereby agree,
notwithstanding the terms of the Deposit Agreement, as follows:
1. Authority to Accept Deposit of Shares and Issue ADSs. (a) The
Company hereby confirms that the SFC has approved the issuance of the Bonds, the
issuance of the Conversion Shares upon conversion of the Bonds and the deposit
of the Conversion Shares into the ADR facility under the terms of the Deposit
Agreement thereby enabling the deposit from time to time of Conversion Shares by
the Company in connection with the conversion of the Bonds and, based on the
foregoing confirmation, authorizes and directs the Depositary (i) to accept the
deposit of Conversion Shares by the Company upon the conversion of the Bonds on
behalf of Converting Bondholders only upon receipt by the Depositary from each
of the Converting Bondholders of a copy of the completed and signed Bond
Conversion Notice substantially in the form attached hereto as Exhibit A (the
"Bond Conversion Notice"), and (ii) to issue in respect thereof ADSs that are
fully fungible with the ADSs outstanding under the Deposit Agreement. Nothing
contained herein shall obligate the Depositary to treat the ADSs issued upon
conversion of the Bonds differently from ADSs issued under the Deposit Agreement
except as specifically set forth herein.
(b) The Depositary agrees, upon the terms and subject to the conditions set
forth in this Letter Agreement, (i) to establish procedures to enable the
deposit of Conversion Shares with the Custodian by the Company upon the
conversion of Bonds on behalf of the Converting Bondholders in order to enable
the issuance by the Depositary to the Converting Bondholders of ownership
interests in the Conversion Shares in the form of ADSs issued pursuant to the
terms of the Deposit Agreement and this Letter Agreement, and (ii) to issue and
deliver ADSs to the applicable Converting Bondholders, in each case upon the
terms set forth herein, but only upon payment to the Depositary by the Company
of the charges of the Depositary for accepting a deposit of Eligible Securities
in the form of Conversion Shares and issuing ADSs (as set forth in Section 5.9
and Exhibit B of the Deposit Agreement).
(c) The Company agrees to pay the deposit fee provided for in Section 5.9 and
Exhibit B of the Deposit Agreement.
2. Company Assistance. (a) The Company agrees to provide
commercially reasonable assistance to the Depositary upon the request of the
Depositary (in each case, within the terms and conditions hereof) in connection
with the establishment of procedures to enable the acceptance of the deposit by
the Company on behalf of Converting Bondholders of the Conversion Shares with
the Custodian, the issuance of ADSs to the Converting Bondholders, the delivery
of ADRs to Converting Bondholders, and the transfer of such ADRs (and the ADSs
represented thereby) by Converting Bondholders. The Company shall, immediately
upon being notified by the trustee, as provided for under the Indenture, that it
has received a Bond Conversion Notice requesting the issuance of ADSs, request
the trustee to forward a copy of such Bond Conversion Notice (including the
certifications by the Converting Bondholder(s) contained therein) to the
Depositary.
(b) The Company shall concurrently with the execution of this Letter Agreement
and the first closing of the offering of the Bonds also deliver to the
Depositary (i) a copy of the approval letter (translated into English) from the
SFC approving the issuance of the Bonds, (ii) an opinion of U.S. counsel, as
provided for in Section 5.7 of the Deposit Agreement, and (iii) an opinion from
ROC counsel, as provided for in Section 5.7 of the Deposit Agreement.
3. Representations and Warranties. The Company hereby represents and
warrants that (i) the Conversion Shares, and the certificates therefor, to be
deposited by the Company on behalf of the Converting Bondholders for the purpose
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of the issuance of ADSs will, at the time of deposit, be duly authorized,
validly issued, fully paid and non-assessable, (ii) all preemptive (and similar)
rights, if any, with respect to such Conversion Shares have been validly waived
or exercised and the Conversion Shares rank pari passu with respect to the other
Eligible Securities on deposit under the Deposit Agreement, (iii) the Company is
duly authorized to make such deposit of Conversion Shares, (iv) the Conversion
Shares presented for deposit are free and clear of any lien, encumbrance,
security interest, charge, mortgage or adverse claim, and are not, and the ADSs
issuable upon such deposit will not be, Restricted Securities and (v) the
Conversion Shares presented for deposit have not been stripped of any rights or
entitlements. Such representations and warranties shall survive the deposit and
withdrawal of the Conversion Shares, the issuance and cancellation of ADSs in
respect thereof and the transfer of such ADSs.
4. Indemnity. (a) The Depositary agrees to indemnify the Company
against, and hold each of them harmless from, any direct loss, liability, tax,
charge or expense of any kind whatsoever (including, but not limited to, the
reasonable fees and expenses of counsel) which may arise out of acts performed
or omitted by the Depositary under the terms hereof due to the negligence or bad
faith of the Depositary.
(b) The Company agrees to indemnify the Depositary and the Custodian against,
and hold each of them harmless from, any direct loss, damage, liability, tax,
charge or expense of any kind whatsoever (including, but not limited to, the
reasonable fees and expenses of counsel) incurred by them that may arise (i) out
of, or in connection with, the issuance of ADSs upon the terms hereof, or (ii)
out of acts performed or omitted in connection with this Letter Agreement, as
the same may be amended, modified or supplemented from time to time, in any such
case (x) by the Depositary, or the Custodian, except to the extent such loss,
liability, tax, charge or expense is due to the negligence or bad faith of any
of them, or (y) by the Company. The obligations set forth in this Section 4
shall survive the termination of this Letter Agreement and the resignation or
removal of the Depositary.
5. Governing Law. This Letter Agreement shall be interpreted under,
and all the rights and obligations hereunder shall be governed by, the laws of
the State of New York.
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Each of the Company and the Depositary has caused this Letter Agreement to
be executed and delivered on its behalf by its respective officers thereunto
duly authorized as of the date set forth above.
ADVANCED SEMICONDUCTOR
ENGINEERING, INC.
By: /s/
-----------------------------
Agreed to as of the date set forth above:
CITIBANK, N.A.,
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Xxxxx X. Xxxxxxx
Vice President
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EXHIBIT A
FORM OF BOND CONVERSION NOTICE
To: Advanced Semiconductor Engineering, Inc. (the "Company")
Attention: Xxxxxxx Xxx
Cc: (If requesting issuance of ADSs upon conversion of Bonds) Citibank,
N.A., as Depositary (the "Depositary")
20th Floor, 000 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000
XXX
The undersigned owner of this Bond and as specified below hereby
irrevocably exercises the option to Convert this Bond, or the portion thereof
designated below, in accordance with the terms of the Indenture referred to in
this Bond and as specified below.
Please check A or B below.
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A. |_| Check here if you wish to receive Common Shares upon
conversion of the Bonds.
The undersigned owner of this Bond (i) agrees to receive, pursuant to the
terms of the Indenture, upon conversion Common Shares, par value NT$10 per
share, of Advanced Semiconductor Engineering, Inc. ("Common Shares") (as
adjusted pursuant to the terms of the Indenture) and (ii) directs that such
Common Shares, deliverable upon the conversion, and any Securit(y)(ies)
representing any unconverted principal amount hereof, be issued and delivered to
the registered holder hereof (in the case of Bonds) or through the local agent
appointed by the undersigned owner (in the case of Common Shares) unless a
different name has been indicated below. If Common Shares are to be delivered
registered in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto.
The undersigned owner represents, warrants and acknowledges that:
1. (a) This Bond does not constitute a "restricted security" for purposes
of the Securities Act of 1933, as amended (the "Securities Act");
(b) Such owner is not an "affiliate" of the Company for purposes of
the Securities Act; and
(c) If such owner is exercising the option to convert this Bond on
or prior to the 40th day after the commencement of the offering of the
Bonds, such owner shall not transfer the Common Shares except in
compliance with Regulation S of the Securities Act.
Exh. A-1
2. The Common Shares have not been, and are not expected to be, registered
under the Securities Act or with any securities regulatory authority of any
state of the United States and are subject to significant restrictions on
transfer.
The undersigned hereby declares that all stamp, issue, registration or
similar taxes and duties payable on conversion, issue or delivery of Common
Shares or any other property or cash have been paid.
The name and address of the person in whose name the Common Shares are to
be registered upon conversion of the Bonds are as follows:
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Name:
--------------------------------------------------------------------------------
Taiwan Securities Central Depositary Co. Account Number:
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Address:
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The undersigned hereby requests that the certificate for the Common Shares
required to be delivered upon conversion be dispatched (at undersigned's own
risk and expense) to the person specified on the preceding paragraph whose name
and address is given below and in the manner specified below:
Name:_____________________________________________________________________
Nationality:______________________________________________________________
Address:__________________________________________________________________
Contact Person:___________________________________________________________
Telephone No.:____________________________________________________________
Fax No.:__________________________________________________________________
Manner of Dispatch:_______________________________________________________
Name of Local Agent:______________________________________________________
Address of Local Agent:___________________________________________________
B. |_| Check here if you wish to receive ADSs upon conversion of the
Bonds. The undersigned owner of this Bond (i) agrees to
receive, pursuant to the terms of the Indenture, upon
conversion Common Shares to be represented by ADSs and (ii)
directs that such Common Shares, deliverable upon conversion
and any Securit(y)(ies) representing any unconverted principal
amount hereof, be issued and delivered to the registered
holder hereof (in the case of Bonds) or to the Custodian (in
the case of Common Shares). Please deliver a copy of the
conversion notice to the Depositary for any exercise of the
option to convert this Bond, or the portion thereof, into ADSs
Exh. A-2
The undersigned hereby declares that all stamp, issue,
registration or similar taxes and duties payable on
conversion, issue or delivery of ADSs or any other property or
cash have been paid.
If the conversion of the Bond or any portion thereof falls
within the Distribution Compliance Period (as defined below):
The undersigned owner represents, warrants and acknowledges
that, prior to the expiration of the expiration of 40 days
after the later of the commencement of the offering of the
Bonds and last related closing date (the "Distribution
Compliance Period"), such ADSs will not be offered, sold,
pledged or otherwise transferred to any U.S. person (as
defined in Regulation S).
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Fill in for: registration of Common Shares (or ADSs, if applicable), if to
be delivered, and of Bonds if to be issued, in either case otherwise than to and
in the name of the registered holder (the "Registered Shareholder").
Social Security or Other Taxpayer Identifying Number_________________
(Name)_______________________________________________________________
(Street Address)_____________________________________________________
(City, State and Zip Code)___________________________________________
(Please print name and address)
Principal Amount to be Converted (if less than all):
Amount to be Converted into Common Shares US$______________
Amount to be Converted into ADSs: US$______________
Total Amount to be Converted: US$______________
Serial or identifying number/ISIN number of Bonds to be converted:
__________________________________________________________________________
The undersigned owner hereby certifies that:
(a) |_| such Registered Shareholder is a "Related Person" of the
Company
|_| such Registered Shareholder is not a "Related Person" of the
Company
(b) |_| such Registered Shareholder will own _____ Common Shares of
the Company from the conversion of this Bond surrendered
herewith (not including Common Shares mentioned below):
Exh. A-3
|_| such Registered Shareholder has converted from this Bond _____
Common Shares of the Company prior to the date hereof.
Note: Under the laws of the Republic of China, a person or entity is
deemed to be a "Related Person" of the Company if the person or
entity is:
(A) (i) a company of which the chairman of the board of directors or
the general manager serves as the chairman of the board of
directors or the general manager of the Company, or is the
spouse or a relative by blood or marriage to the chairman of
the board of directors or general manager of the Company
within the second degree as defined under the Civil Code of
the Republic of China;
(ii) a non-profit organization of which the funds donated from the
Company exceeds one-third of such non-profit organization's
total funds;
(iii) a director, supervisor or general manager, vice-general
manager, assistant vice-general manager, or department head of
the Company reporting to the general manager of the Company;
(iv) the spouse of a director, supervisor or general manager of the
Company; or
(v) a relative by blood or marriage to the Company's chairman of
the board of directors or general manager within the second
degree as defined under the Civil Code of the Republic of
China.
OR
(B) a person or entity in which the Company has invested, which
investment is accounted for by the equity method of accounting under
generally accepted accounting principles in the ROC (the "Equity
Method"); or a person or entity which uses the Equity Method to
account for an investment in the Company.
Dated: _______________________________________________________________
Signature: _______________________________________________________________
Name: _______________________________________________________________
(please print name)
Xxx. X-0
