EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
between
ORIENT SEMICONDUCTOR ELECTRONICS, LIMITED
and
INTEGRATED PACKAGING ASSEMBLY CORPORATION
Dated December 26, 2000
Table Of Contents
PAGE
ARTICLE 1 Definitions............................................................................ 1
1.1 "Applicable Contract".......................................................... 1
1.2 "Breach"....................................................................... 1
1.3 "Buyer"........................................................................ 1
1.4 "Closing"...................................................................... 2
1.5 "Closing Date"................................................................. 2
1.6 "Company"...................................................................... 2
1.7 "Consent"...................................................................... 2
1.8 "Contemplated Transactions".................................................... 2
1.9 "Contract"..................................................................... 2
1.10 "Damages"...................................................................... 2
1.11 "Encumbrance".................................................................. 2
1.12 "Exchange Act"................................................................. 2
1.13 "GAAP"......................................................................... 2
1.14 "Governmental Authorization"................................................... 2
1.15 "Governmental Body"............................................................ 2
1.16 "Legal Requirement"............................................................ 2
1.17 "Order"........................................................................ 3
1.18 "Ordinary Course of Business".................................................. 3
1.19 "Person"....................................................................... 3
1.20 "Proceeding"................................................................... 3
1.21 "Related Person"............................................................... 3
1.22 "Representative"............................................................... 3
1.23 "Securities Act"............................................................... 3
1.25 "Series B Preferred Shares".................................................... 3
1.26 "Subsidiary"................................................................... 3
1.27 "Tax".......................................................................... 4
1.28 "Tax Return"................................................................... 4
ARTICLE 2 Sale And Transfer Of Series B Preferred Shares; Closing................................ 4
2.1 Series B Preferred Shares...................................................... 4
i.
Table Of Contents
(continued)
PAGE
2.2 Purchase Price................................................................. 4
2.3 Closing........................................................................ 4
2.4 Pre-Closing Obligations........................................................ 4
2.5 Closing Obligations............................................................ 4
ARTICLE 3 Representations And Warranties Of The Company.......................................... 5
3.1 Organization and Good Standing................................................. 5
3.2 Authority; No Conflict......................................................... 5
3.3 Capitalization................................................................. 6
3.4 SEC Filings; Financial Statements.............................................. 7
3.5 Books and Records.............................................................. 8
3.6 No Undisclosed Liabilities..................................................... 8
3.7 Taxes.......................................................................... 8
3.8 No Material Adverse Change..................................................... 9
3.9 Compliance With Legal Requirements; Governmental Authorizations................ 9
3.10 Legal Proceedings; Orders...................................................... 9
3.11 Intellectual Property.......................................................... 10
3.12 Disclosure..................................................................... 10
3.13 Brokers or Finders............................................................. 10
ARTICLE 4 Representations And Warranties Of Buyer................................................ 10
4.1 Investment Purpose............................................................. 10
4.2 Reliance on Exemptions......................................................... 10
4.3 Information.................................................................... 11
4.4 Transfer or Resale............................................................. 11
4.5 Legend......................................................................... 11
4.6 Authorization; Enforcement..................................................... 11
4.7 Brokers or Finders............................................................. 12
4.8 Accredited Investor............................................................ 12
ARTICLE 5 Indemnification; Remedies.............................................................. 12
5.1 Survival; Right to Indemnification Not Affected By Knowledge................... 12
5.2 Indemnification and Payment of Damages by The Company.......................... 12
ii.
Table Of Contents
(continued)
PAGE
5.3 [Reserved.].................................................................... 13
5.4 Limitations on Amount; Time Limitations........................................ 13
5.5 Procedure for Indemnification -- Third Party Claims............................ 13
5.6 Procedure For Indemnification -- Other Claims.................................. 14
5.7 Indemnification of Officers and Directors...................................... 14
ARTICLE 6 General Provisions..................................................................... 15
6.1 Expenses....................................................................... 15
6.2 Notices........................................................................ 15
6.3 Further Assurances............................................................. 16
6.4 Waiver......................................................................... 16
6.5 Entire Agreement and Modification.............................................. 17
6.6 Company Disclosure Schedule.................................................... 17
6.7 Assignments, Successors, and No Third-Party Rights............................. 17
6.8 Severability................................................................... 18
6.9 Section Headings, Construction................................................. 18
6.10 Survival....................................................................... 18
6.11 Time of Essence................................................................ 18
6.12 Governing Law.................................................................. 18
6.13 Counterparts................................................................... 18
iii.
Exhibit 99.1
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement (the "Agreement"), dated as of December 26, 2000
by and between Integrated Packaging Assembly Corporation, a Delaware
corporation, with headquarters located at 0000 Xxx Xxxxxxx Xxxx, Xxx Xxxx,
Xxxxxxxxxx 00000 (the "Company"), and Orient Semiconductor Electronics, Limited,
with headquarters located 00 Xxxx 0 XX. X.X.X.X. Xxxxxxxxx 00000, Xxxxxx, ROC
(the "Buyer").
Whereas:
A. The Board of Directors of the Company has authorized the following new
series of its Preferred Stock, $0.001 par value (the "Preferred Stock"): the
Company's Series B Convertible Preferred Stock (the "Series B Preferred
Shares"), which shall be convertible into shares of the Company's Common Stock,
$0.001 par value (the "Common Stock") (as converted, the "Conversion Shares"),
in accordance with the terms of the Company's Certificate of Designation of
Series B Convertible Preferred Stock, substantially in the form attached hereto
as Exhibit A (the "Certificate of Designation").
B. The Buyer wishes to purchase, upon the terms and conditions stated in
this Agreement, Three Million Twenty Three Thousand Two Hundred Twenty Five
(3,023,225) shares of Series B Preferred Shares.
Now Therefore, the Company and the Buyer hereby agree as follows:
ARTICLE 1
Definitions.
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
1.1 "Applicable Contract" -- any Contract (a) under which the Company has
or may acquire any rights, (b) under which the Company has or may become subject
to any obligation or liability, or (c) by which the Company or any of the assets
owned or used by it is or may become bound.
1.2 "Breach" -- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
or (b) any claim (by any Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
1.3 "Buyer" -- as defined in the first paragraph of this Agreement.
1.
1.4 "Closing" -- as defined in Section 2.3.
1.5 "Closing Date" -- the date and time as of which the Closing actually
takes place.
1.6 "Company" -- as defined in the first paragraph of this Agreement.
1.7 "Consent" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
1.8 "Contemplated Transactions" -- all of the transactions contemplated by
this Agreement.
1.9 "Contract" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
1.10 "Damages" -- as defined in Section 5.2.
1.11 "Encumbrance" -- any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
1.12 "Exchange Act" -- Securities and Exchange Act of 1934 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law.
1.13 "GAAP" -- generally accepted United States accounting principles,
applied on a basis consistent with the basis on which the Balance Sheet and the
other financial statements referred to in Section 3.4(b) were prepared.
1.14 "Governmental Authorization" -- any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
1.15 "Governmental Body" -- any:
(a) federal, state, local, municipal, foreign, or other government;
(b) governmental or quasi-governmental authority (including any
governmental agency, branch, department, official, or entity and any court or
other tribunal);
(c) multi-national organization or body; or
(d) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power.
1.16 "Legal Requirement" -- any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
2.
1.17 "Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
1.18 "Ordinary Course of Business" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if such
action is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person.
1.19 "Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
1.20 "Proceeding" -- any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
1.21 "Related Person" With respect to a specified Person:
(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person;
(b) any Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director or officer of such specified
Person; and
(d) any immediate family member of any individual described in clause
(a), (b) or (c).
"Material Interest" means beneficial ownership (as defined in Rule 13d-3
under the Securities Exchange Act of 1934) of voting securities or other voting
interests representing at least 5% of the outstanding voting power of a Person
or equity securities or other equity interests representing at least 5% of the
outstanding equity securities or equity interests in a Person.
1.22 "Representative" -- with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
1.23 "Securities Act" -- the Securities Act of 1933 or any successor law,
and regulations and rules issued pursuant to that Act or any successor law.
1.24 "SEC" -- Securities and Exchange Commission.
1.25 "Series B Preferred Shares" -- as defined in the Recitals of this
Agreement.
1.26 "Subsidiary" -- with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that
3.
corporation's or other Person's board of directors or similar governing body, or
otherwise having the power to direct the business and policies of that
corporation or other Person (other than securities or other interests having
such power only upon the happening of a contingency that has not occurred) are
held by the Owner or one or more of its Subsidiaries; when used without
reference to a particular Person, "Subsidiary" means a Subsidiary of the
Company.
1.27 "Tax" -- any tax (including any income tax, capital gains tax,
value-added tax, sales tax, property tax, gift tax, or estate tax), levy,
assessment, tariff, duty (including any customs duty), deficiency, or other fee,
and any related charge or amount (including any fine, penalty, interest, or
addition to tax), imposed, assessed, or collected by or under the authority of
any Governmental Body or payable pursuant to any tax-sharing agreement or any
other Contract relating to the sharing or payment of any such tax, levy,
assessment, tariff, duty, deficiency, or fee.
1.28 "Tax Return" -- any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.
ARTICLE 2
Sale And Transfer Of Series B Preferred Shares; Closing.
2.1 Series B Preferred Shares. Subject to the terms and conditions of this
Agreement, at the Closing, the Company will sell and transfer the Series B
Preferred Shares to Buyer, and Buyer will purchase the Series B Preferred Shares
from the Company.
2.2 Purchase Price. The aggregate purchase price (the "Purchase Price")
for the Series B Preferred Shares will be U.S.$6,000,000.00
2.3 Closing. The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices of Xxxxxx Godward LLP at 0000 Xxxxxxx
Xxxxxx, Xxxx, Xxxx Xxxx, XX 00000, at 4:30 p.m. (local time) on December 26,
2000.
2.4 Pre-Closing Obligations: Prior to the Closing, the Company will have
filed the Certificate of Designation with the Secretary of State of the State of
Delaware.
2.5 Closing Obligations. At the Closing:
(a) The Company will deliver to Buyer:
(i) a duly executed certificate representing the Series B
Preferred Shares; and
(ii) a certificate executed by the Secretary of the Company
attaching thereto copies of the Certificate of Designation and the Company's
Certificate of Incorporation,
4.
as amended to date, each certified by the Secretary of State of the State of
Delaware, the Company's Bylaws and resolutions of the Company's Board of
Directors approving the Contemplated Transactions.
(b) Buyer will deliver to the Company the Purchase Price by bank
cashier's or certified check payable to the order of the Company or by wire
transfer to an account specified by the Company.
(c) Buyer will have received an opinion of Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, a professional corporation, counsel of the Company, dated as of the
Closing Date, substantially to the effect of Exhibit B.
ARTICLE 3
Representations And Warranties Of The Company.
Except as set forth in the disclosure schedule delivered to Buyer on the
date of this Agreement and signed by the President of the Company (the "Company
Disclosure Schedule"), the Company represents and warrants to Buyer as follows:
3.1 Organization and Good Standing.
(a) The Company is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware, with full corporate
power and authority to conduct its business as it is now being conducted, to own
or use the properties and assets that it purports to own or use, and to perform
all its obligations under Applicable Contracts. As of the date of this
Agreement, Part 3.1 of the Company Disclosure Schedule sets forth a list of all
of the Company's Subsidiaries. The Company and each of the Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each state or other jurisdiction in which either the ownership or
use of the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification. As of the date of this Agreement,
other than the Subsidiaries, neither the Company nor any of the Subsidiaries
owns or holds, directly or indirectly, any debt or equity securities of, or has
any other interest in, any corporation, partnership, joint venture or other
entity, and neither the Company nor any of the Subsidiaries has entered into any
agreement to acquire any such interest.
(b) The Company has delivered to Buyer copies of its Certificate of
Incorporation and Bylaws, as currently in effect.
3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of the Company, enforceable against the Company in accordance with
its terms subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies. The Company has the absolute and
unrestricted right, power, authority, and capacity to execute and deliver this
Agreement and to perform the obligations under this Agreement.
5.
(b) Except as set forth in Part 3.2 of the Company Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A)
any provision of the Organizational Documents of the Company, or (B) any
resolution adopted by the board of directors or the stockholders of the Company;
(ii) contravene, conflict with, or result in a violation of, or
give any Governmental Body or other Person the right to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any relief under,
any Legal Requirement or any Order to which the Company, or any of the assets
owned or used by the Company, may be subject;
(iii) contravene, conflict with, or result in a violation of any
of the terms or requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental
Authorization that is held by the Company or that otherwise relates to the
business of, or any of the assets owned or used by, the Company;
(iv) cause the Company to become subject to, or to become liable
for the payment of, any Tax;
(v) cause any of the assets owned by the Company to be
reassessed or revalued by any taxing authority or other Governmental Body;
(vi) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Applicable Contract; or
(vii) result in the imposition or creation of any Encumbrance
upon or with respect to any of the assets owned or used by the Company.
Except as set forth in Part 3.2 of the Company Disclosure Schedule, the
Company is not or will not be required to give any notice to or obtain any
Consent from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated
Transactions.
3.3 Capitalization.
(a) As of the date of this Agreement, the authorized capital stock of
the Company consists of: 200,000,000 shares of Company Common Stock of which, as
of November 30, 2000, 56,369,400 shares are issued and outstanding; and
10,000,000 shares of preferred stock, $0.001 par value, of which, as of the date
hereof, 3,000,000 shares are designated as Series A Convertible Preferred Stock
("Series A Preferred Shares"), 3,000,000 of which are issued and outstanding,
and 3,023,225 shares are designated as Series B Convertible Preferred Stock,
none of which are issued and outstanding. The issued and outstanding Series A
6.
Preferred Shares are, in the aggregate, convertible into 41,246,312 shares of
Common Stock. All the issued and outstanding shares of Company Common Stock and
Preferred Stock are validly issued, fully paid and nonassessable and free of
preemptive rights and were issued in compliance with state and federal
securities laws. Immediately prior to the Closing, the Company has outstanding
options to purchase a total of 11,110,166 shares of Company Common Stock (the
"Company Options") pursuant to the Company's stock option plans and agreements,
and outstanding warrants to purchase a total of 2,331,400 shares of Company
Common Stock (the "Company Warrants"). The Company Disclosure Schedule sets
forth, immediately prior to the Closing, with respect to the Company Warrants,
the number of shares of Common Stock issuable upon exercise, the exercise price
per share and the expiration date of each Company Warrant. Except as set forth
above, immediately prior to the Closing, (i) there are no shares of capital
stock of the Company authorized, issued or outstanding, (ii) there are no
outstanding subscriptions, options, warrants, stock appreciation right plans,
calls, rights, convertible securities, stockholder rights plans (or similar
plans commonly referred to as "poison pills") or other agreements or commitments
of any character relating to issued or unissued capital stock or other
securities of the Company or any of its subsidiaries, or obligating the Company
or any other party to issue, transfer or sell any shares of the capital stock or
other securities of the Company or any of its subsidiaries, and (iii) there are
no other outstanding securities convertible into, exchangeable for or evidencing
the right to subscribe for any shares of the capital stock or other securities
of the Company or any of its subsidiaries or any successor corporation or
controlling person of such successor corporation.
(b) The Series B Preferred Shares are duly authorized and, upon
issuance in accordance with the terms hereof, shall be (i) validly issued, fully
paid and non-assessable, (ii) free from all taxes, liens and charges with
respect to the issue thereof and (iii) entitled to the rights and preferences
set forth in the Certificate of Designation. The Conversion Shares issuable upon
conversion of the Series B Preferred Shares will have been duly authorized and
reserved for issuance and upon conversion or exercise in accordance with the
Certificate of Designations will be validly issued, fully paid and nonassessable
and free from all taxes, liens and charges with respect to the issue thereof,
with the holders being entitled to all rights accorded to a holder of Common
Stock.
(c) All of the outstanding shares of capital stock of each Subsidiary
are validly issued, fully paid and nonassessable and are free and clear of any
liens, claims or encumbrances.
3.4 SEC Filings; Financial Statements.
(a) The Company has delivered to Buyer (or Buyer has otherwise
obtained) a complete and accurate copy of each report, schedule, registration
statement and definitive proxy statement filed by the Company with the SEC on or
after April 29, 1999 (the "Company SEC Reports"), which are all the forms,
reports and documents required to be filed by the Company with the SEC on or
after April 29, 1999. The Company SEC Reports (i) complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, at and as of the times they were filed (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) and (ii) did not at and as of the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date
7.
of such filing) contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(b) Each of the sets of financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports
(collectively, the "Past Financial Statements") was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes thereto) and fairly presents the consolidated
financial position of the Company and the Subsidiaries as at the respective
dates thereof and the consolidated results of its operations and cash flows for
the periods indicated, except that the quarterly unaudited interim financial
statements included in the Past Financial Statements were or are subject to
normal year-end audit adjustments which were not or are not expected to be
material in amount.
(c) The Company has previously furnished to Buyer a complete and
accurate copy of any amendments or modifications that have not yet been filed
with the SEC to agreements, documents or other instruments that have been filed
by the Company with the SEC pursuant to the Securities Act or the Exchange Act.
3.5 Books and Records. The books of account, minute books, and other
records of the Company, all of which have been made available to Buyer, are
complete and correct and have been maintained in accordance with sound business
practices and the requirements of Section 13(b)(2) of the Exchange Act, as
amended, including the maintenance of an adequate system of internal controls.
The minute books of the Company contain accurate and complete records of all
meetings held of, and corporate action taken by, the stockholders, the Boards of
Directors, and committees of the Boards of Directors of the Company, and no
meeting of any such stockholders, Board of Directors, or committee has been held
for which minutes have not been prepared and are not contained in such minute
books. At the Closing, all of such books and records will be in the possession
of the Company.
3.6 No Undisclosed Liabilities. Except as set forth in Part 3.6 of the
Company Disclosure Schedule, the Company has no liabilities or obligations of
any nature (whether known or unknown and whether absolute, accrued, contingent,
or otherwise) except for liabilities or obligations reflected or reserved
against in the Past Financial Statements and current liabilities incurred in the
Ordinary Course of Business since the date of the most recent of the Past
Financial Statements (the "Past Financial Statement Date") which are not, either
individually or in the aggregate, material in amount.
3.7 Taxes. The Company has filed or caused to be filed (on a timely basis
since April 29, 1999) all Tax Returns that are or were required to be filed by
or with respect to any of them, either separately or as a member of a group of
corporations, pursuant to applicable Legal Requirements. The Company has paid,
or made provision for the payment of, all Taxes that have or may have become due
pursuant to those Tax Returns or otherwise, or pursuant to any assessment
received by the Company, except such Taxes, if any, as are listed in Part 3.7 of
the Company Disclosure Schedule and are being contested in good faith and as to
which adequate reserves (determined in accordance with GAAP) have been provided
in the Past Financial Statements.
8.
3.8 No Material Adverse Change. Since the Past Financial Statement Date,
there has not been any material adverse change in the business, operations,
properties, prospects, assets, or condition of the Company, and no event has
occurred or circumstance exists that may result in such a material adverse
change.
3.9 Compliance With Legal Requirements; Governmental Authorizations.
Except as set forth in Part 3.9 of the Company Disclosure Schedule:
(a) the Company is in compliance with each Legal Requirement that is
applicable to it or to the conduct or operation of its business or the ownership
or use of any of its assets where noncompliance, either individually or in the
aggregate, has had or would have a material adverse effect on the Company, its
assets or business;
(b) the Company has not received, at any time since April 29, 1999,
any notice or other communication (whether written or, to the knowledge of the
Company's current officers, oral) from any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or potential violation of, or
failure to comply with, any Legal Requirement, or (B) any actual, alleged,
possible, or potential obligation on the part of the Company to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature; and
(c) the Company is in compliance with all of the terms and
requirements of each Governmental Authorization of the Company where
noncompliance, either individually or in the aggregate, has had or would have a
material adverse effect on the Company, its assets or business.
3.10 Legal Proceedings; Orders.
(a) Except as set forth in Part 3.10 of the Company Disclosure
Schedule, there is no pending Proceeding:
(i) that has been commenced by or against the Company; or
(ii) that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the Contemplated
Transactions.
To the knowledge of the Company, (1) no such Proceeding has been
threatened, and (2) no event has occurred or circumstance exists that could
reasonably be expected to give rise to or serve as a basis for the commencement
of any such Proceeding. The Company has delivered or made available to Buyer
copies of all pleadings, correspondence, and other documents relating to each
Proceeding listed in Part 3.10 of the Company Disclosure Schedule.
(b) Except as set forth in Part 3.10 of the Company Disclosure
Schedule, there is no Order to which the Companies, or any of the assets owned
or used by the Company, is subject.
9.
3.11 Intellectual Property.
(a) The Company owns or possesses sufficient legal rights to all
patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes necessary for
its business as now conducted and as presently proposed to be conducted, without
any known infringement of the rights of others.
(b) The Company has not received any communications alleging that the
Company has violated or, by conducting its business as presently proposed, would
violate any of the patents, trademarks, service marks, trade names, copyrights
or trade secrets or other proprietary rights of any other person or entity, nor
is the Company aware of any reasonable basis therefor.
(c) The Company is not aware that any of its officers or key employees
is obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with their duties to
the Company or that would conflict with the Company's business as presently
proposed to be conducted.
3.12 Disclosure. No representation or warranty of the Company in this
Agreement and no statement in the Company Disclosure Schedule, taken as a whole,
omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not misleading.
3.13 Brokers or Finders. The Company and its officers or agents have
incurred no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement and will indemnify and hold Buyer harmless from any such payment
alleged to be due by or through the Company as a result of the action of the
Company or its officers or agents.
ARTICLE 4
Representations And Warranties Of Buyer.
Buyer represents and warrants to the Company as follows:
4.1 Investment Purpose. Buyer (i) is acquiring the Series B Preferred
Shares and (ii) upon conversion of the Series B Preferred Shares, will acquire
the Conversion Shares then issuable, for its own account for investment only,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof.
4.2 Reliance on Exemptions. Buyer understands that the Series B Preferred
Shares and the Conversion Shares are being offered and sold to it in reliance on
specific exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying upon the truth and
accuracy of, and Buyer's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of Buyer set forth herein in
order to determine the availability of such exemptions and the eligibility of
Buyer to acquire the Series B Preferred Shares and the Conversion Shares.
10.
4.3 Information. Buyer and its advisors have been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Series B Preferred Shares and
the Conversion Shares which have been requested by Buyer. Buyer and its advisors
have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by Buyer or its
advisors, if any, or its representatives shall modify, amend or affect Buyer's
right to rely on the Company's representations and warranties contained in
Article 3 above.
4.4 Transfer or Resale. Buyer understands that (i) the Series B Preferred
Shares and the Conversion Shares have not been and are not being registered
under the Securities Act or any state securities laws, and may not be sold,
assigned or transferred unless (A) subsequently registered thereunder, (B) Buyer
shall have delivered to the Company an opinion of counsel, in a generally
acceptable form, to the effect that such securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from
such registration, or (C) Buyer provides the Company with reasonable assurance
that such securities can be sold, assigned or transferred pursuant to Rule 144
promulgated under the Securities Act (or a successor rule thereto); (ii) any
sale of such securities made in reliance on Rule 144 promulgated under the
Securities Act (or a successor rule thereto) ("Rule 144") may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of such securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder.
4.5 Legend. Buyer understands that the certificates or other instruments
representing the Series B Preferred Shares and, until such time as the sale of
the Conversion Shares have been registered under the Securities Act, the stock
certificates representing the Conversion Shares, shall bear a restrictive legend
in substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL,
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO
RULE 144 UNDER SAID ACT.
4.6 Authorization; Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of Buyer and is a valid and binding
agreement of such Buyer enforceable in accordance with its terms, subject as to
enforceability to general
11.
principles of equity and to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors' rights and remedies.
4.7 Brokers or Finders. Buyer and its officers and agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement and will indemnify and hold the Company harmless from any such payment
alleged to be due by or through Buyer as a result of the action of Buyer or its
officers or agents.
4.8 Accredited Investor. Buyer is an "accredited investor" within the
meaning of Regulation D promulgated under the Securities Act.
ARTICLE 5
Indemnification; Remedies.
5.1 Survival; Right to Indemnification Not Affected By Knowledge. Subject
to Section 5.4 hereof, all representations, warranties, covenants, and
obligations in this Agreement, the Company Disclosure Schedule and any other
certificate or document delivered pursuant to this Agreement will survive the
Closing. The right to indemnification, payment of Damages or other remedy based
on such representations, warranties, covenants, and obligations will not be
affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.
5.2 Indemnification and Payment of Damages by The Company. The Company
will indemnify and hold harmless Buyer and its respective Representatives,
stockholders, and Related Persons (collectively, the "Indemnified Persons") for,
and will pay to the Indemnified Persons the amount of, any loss, liability,
claim, damage, expense (including costs of investigation and defense and
reasonable attorneys' fees) or diminution of value, whether or not involving a
third-party claim (collectively, "Damages"), arising, directly or indirectly,
from or in connection with:
(a) any Breach of any representation or warranty made by the Company
in this Agreement, the Company Disclosure Schedule, or any other certificate or
document delivered by the Company pursuant to this Agreement;
(b) any Breach by the Company of any covenant or obligation of the
Company in this Agreement;
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any
12.
such Person with the Company (or any Person acting on their behalf) in
connection with any of the Contemplated Transactions; or
(d) any claim by any Person or any Proceeding instituted against the
Company, its Representatives, stockholders or Related Persons or any Indemnified
Person in connection with the consummation of any of the Contemplated
Transactions.
The remedies provided in this Section 5.2 will not be exclusive of or limit
any other remedies that may be available to Buyer or the other Indemnified
Persons.
The Company acknowledges and agrees that, if the Company suffers, incurs or
otherwise becomes subject to any Damages as a result of or in connection with
any inaccuracy in or Breach of any representation, warranty, covenant or
obligation by the Company, then Buyer shall also be deemed, by virtue of its
ownership of the stock of the Company, to have incurred Damages as a result of
and in connection with such inaccuracy or Breach.
5.3 [Reserved.]
5.4 Limitations on Amount; Time Limitations.
(a) The Company will have no liability (for indemnification or
otherwise) with respect to the matters described in clause (a) or clause (b) of
Section 5.2 until the total of all Damages with respect to such matters exceeds
$102,000, and then the Company will be liable for the entire amount of such
Damages (starting from the first dollar of such Damages). However, this Section
5.4 will not apply to any fraud or intentional Breach by the Company of any
covenant or obligation, and the Company will be liable for all Damages with
respect to such Breaches.
(b) The Company will have no liability (for indemnification or
otherwise) with respect to any representation or warranty, or covenant or
obligation to be performed and complied with prior to the Closing Date, other
than those in Sections 3.3 and 3.7, unless on or before December 26, 2001 Buyer
notifies the Company of a claim specifying the factual basis of that claim in
reasonable detail to the extent then known to Buyer. A claim with respect to
Section 3.3 or 3.7 or a claim for indemnification or reimbursement not based
upon any representation or warranty or covenant or obligation to be performed
and complied with prior to the Closing Date, may be made at any time.
5.5 Procedure for Indemnification -- Third Party Claims.
(a) Promptly after receipt by an Indemnified Person under Section 5.2
of notice of the commencement of any Proceeding against it, such Indemnified
Person will, if a claim is to be made against the Company under such Section,
give notice to the Company of the commencement of such claim, but the failure to
notify the Company will not relieve the Company of any liability that it may
have to any Indemnified Person, except to the extent that the Company
demonstrates that the defense of such action is prejudiced by the Indemnifying
Person's failure to give such notice.
13.
(b) If any Proceeding referred to in Section 5.5(a) is brought
against an Indemnified Person and it gives notice to the Company of the
commencement of such Proceeding, the Company will be entitled to participate in
such Proceeding and, to the extent that it wishes (unless (i) the Company is
also a party to such Proceeding and the Indemnified Person determines in good
faith that joint representation would be inappropriate, or (ii) the Indemnified
Person fails to provide reasonable assurance to the Indemnified Person of its
financial capacity to defend such Proceeding and provide indemnification with
respect to such Proceeding), to assume the defense of such Proceeding with
counsel satisfactory to the Indemnified Person and, after notice from the
Company to the Indemnified Person of its election to assume the defense of such
Proceeding, the Company will not, as long as it diligently conducts such
defense, be liable to the Indemnified Person under this Article 5 for any fees
of other counsel or any other expenses with respect to the defense of such
Proceeding, in each case subsequently incurred by the Indemnified Person in
connection with the defense of such Proceeding, other than reasonable costs of
investigation. If the Company assumes the defense of a Proceeding, (i) it will
be conclusively established for purposes of this Agreement that the claims made
in that Proceeding are within the scope of and subject to indemnification; (ii)
no compromise or settlement of such claims may be effected by the Company
without the Indemnified Person's consent unless (A) there is no finding or
admission of any violation of Legal Requirements or any violation of the rights
of any Person and no effect on any other claims that may be made against the
Indemnified Person, and (B) the sole relief provided is monetary damages that
are paid in full by the Company; and (iii) the Indemnified Person will have no
liability with respect to any compromise or settlement of such claims effected
without its consent. If notice is given to the Company of the commencement of
any Proceeding and the Company does not, within ten days after the Indemnified
Person's notice is given, give notice to the Indemnified Person of its election
to assume the defense of such Proceeding, the Company will be bound by any
determination made in such Proceeding or any compromise or settlement effected
by the Indemnified Person. Any settlement or payment by the Company of any claim
for indemnification hereunder shall be approved by a majority of the Company's
directors who are not designated by the holder or holders of the Series A
Preferred Shares pursuant to Section C.2.c.i.A of the Series A Certificate of
Designation.
(c) Notwithstanding the foregoing, if an Indemnified Person
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the Indemnified Person may, by notice to the Company, assume the
exclusive right to defend, compromise, or settle such Proceeding, but the
indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).
5.6 Procedure For Indemnification -- Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
5.7 Indemnification of Officers and Directors.
(a) All rights to indemnification existing in favor of the directors
and officers of the Company for acts and omissions occurring prior to the
Closing, as provided in the
14.
Company's Certificate of Incorporation or Bylaws (as in effect as of the date of
this Agreement) and as provided in any indemnification agreements between the
Company and said officers and directors (as in effect at the Closing), shall
survive the Closing and shall be the obligation of and observed by the Company
for a period of not less than six (6) years from and after the Closing.
(b) From the Closing until the third anniversary of the Closing Date,
the Company shall maintain in effect, for the benefit of the current directors
and officers of the Company with respect to acts or omissions occurring prior to
the Closing, the existing policy of directors' and officers' liability insurance
maintained by the Company as of the date of this Agreement (the "Existing
Policy"); provided, however, that (i) the Company may substitute for the
Existing Policy a policy or policies of comparable coverage, and (ii) the
Company shall not be required to pay an annual premium for the Existing Policy
(or for any substitute policies) in excess of 125% of the amount of the last
annual premium paid by the Company prior to the date of this Agreement for the
Existing Policy (the "Past Premium Amount"). In the event any future annual
premium for the Existing Policy (or any substitute policies) exceeds the Past
Premium Amount by more than 125%, the Company shall be entitled to reduce the
amount of coverage of the Existing Policy (or any substitute policies) to the
amount of coverage that can be obtained for a premium equal to 125% of the Past
Premium Amount.
(c) This Section 5.7 shall survive the Closing, is intended to be for
the benefit of, and enforceable by, each person entitled to indemnification as
contemplated hereby and each such person's or entity's heirs and
representatives, and shall be binding on all successors and assigns of the
Company.
ARTICLE 6
General Provisions.
6.1 Expenses. Each party to this Agreement will bear its respective
expenses incurred in connection with the preparation, execution, and performance
of this Agreement and the Contemplated Transactions, including all fees and
expenses of its Representatives.
6.2 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
15.
If to the Company:
Integrated Packaging Assembly Corporation
0000 Xxx Xxxxxxx Xxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: J. Xxxxxx Xxxxxxxxxx, Xx.
If to Buyer:
Orient Semiconductor Electronics, Limited
00 Xxxx 0 XX. X.X.X.X.
Xxxxxxxxx 00000
Xxxxxx, ROC
Telephone: 000-0-0000000
Facsimile: 000-0-0000000
Attention: Xxxxxx Duh
With a copy to:
Xxxxxx Godward LLP
3000 El Camino Real
Five Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Each party shall provide ten (10) days' prior written notice to the other
party of any change in address or facsimile number.
6.3 Further Assurances. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
6.4 Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power,
16.
or privilege under this Agreement or the documents referred to in this Agreement
will operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power, or privilege will preclude any other
or further exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement; provided, however, that, with respect
to the Company, no such waiver or renunciation shall be effective unless
approved by a majority of the Company's directors who are not designated by the
holder or holders of the Series A Preferred Shares pursuant to Section C.2.c.i.A
of the Series A Certificate of Designation.
6.5 Entire Agreement and Modification. This Agreement supersedes all prior
agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment;
provided, however, that, with respect to the Company, no such amendment shall be
effective unless approved by a majority of the Company's directors who are not
designated by the holder or holders of the Series A Preferred Shares pursuant to
Section C.2.c.i.A of the Series A Certificate of Designation.
6.6 Company Disclosure Schedule.
(a) The disclosures in the Company Disclosure Schedule, and those in
any supplement thereto, must relate only to the representations and warranties
in the Section of the Agreement to which they expressly relate and not to any
other representation or warranty in this Agreement.
(b) In the event of any inconsistency between the statements in the
body of this Agreement and those in the Company Disclosure Schedule (other than
an exception expressly set forth as such in the Company Disclosure Schedule with
respect to a specifically identified representation or warranty), the statements
in the body of this Agreement will control.
6.7 Assignments, Successors, and No Third-Party Rights. Neither party may
assign any of its rights under this Agreement without the prior consent of the
other party, which will not be unreasonably withheld, except that Buyer may
assign any of its rights under this Agreement to any Subsidiary of Buyer.
Subject to the preceding sentence, this Agreement will apply to, be binding in
all respects upon, and inure to the benefit of the successors and permitted
assigns of the parties. Except as contemplated by Section 5.7 hereof, nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are
17.
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
6.8 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
6.9 Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
6.10 Survival. Subject to Section 5.4 hereof, the representations and
warranties of the Company and Buyer contained in Articles 3 and 4 shall survive
the Closing.
6.11 Time of Essence. With regard to all dates and time periods set forth
or referred to in this Agreement, time is of the essence.
6.12 Governing Law. This Agreement will be governed by the laws of the
State of California without regard to conflicts of laws principles.
6.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
18.
In Witness Whereof, the parties have executed and delivered this Agreement
as of the date first written above.
Buyer: The Company:
Orient Semiconductor Integrated Packaging
Electronics, Limited Assembly Corporation
By: /s/ Xxxxxx Xxx By:/s/ Xxxxxx Xxxxx
------------------------------ -------------------------------
Name: Xxxxxx Xxx Name: Xxxxxx Xxxxx
--------------------------- ----------------------------
Its: President Its: President and CEO
----------------------------- -----------------------------
19.
