Exhibit (b)(i) AU Optronics Corp.
Exhibit
(b)(i)
AU
Optronics Corp.
0
Xx-Xxxx Xxxx 2
Hsinchu
Science Park
Hsinchu
Taiwan,
Republic of China
As of
October 13, 2010
Citibank,
N.A. - ADR Department
000
Xxxxxxxxx Xxxxxx - 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Zero Coupon Convertible
Bonds Due 2015
Ladies
and Gentlemen:
Reference
is made to the Deposit Agreement, dated as of May 29, 2002, as amended by
Amendment No. 1 to the Deposit Agreement, dated as of February 15, 2006, by and
among AU Optronics Corp., a company incorporated under the laws of the Republic
of China (the "Company"), Citibank,
N.A., as depositary (the "Depositary"), and the
Holders and Beneficial Owners of American Depositary Shares (the "ADSs"), each ADS
representing the right to receive 10 shares of common stock, par value NT$10.00
per share, of the Company (the "Shares”) (the Deposit
Agreement, dated as of May 29, 2002, as so amended and supplemented, the "Deposit
Agreement"). All capitalized terms used, but not otherwise
defined in this letter agreement (the "Letter Agreement"),
shall have the meaning assigned thereto in the Deposit Agreement.
The
Company has sold, in reliance on
Regulation S ("Reg
S") under the Securities Act of 1933, as amended (the "Securities Act"),
Zero Coupon Convertible Bonds due 2015 in the aggregate principal amount of
US$800,000,000 (the bonds so issued pursuant to Reg S, the "Bonds"). Each
Bond is convertible at the option of the holder (each such holder, a "Converting
Bondholder") into (a) the Company's Shares, or (b) the Company's ADSs, in
each case on or after November 23, 2010, and up to and including October 3,
2015, and upon the terms and conditions set forth in the Indenture, dated as of
October 13, 2010 (the "Indenture"), by and
between the Company and Citicorp International Limited, as indenture trustee
(the "Trustee").
The
Company anticipates that some Converting Bondholders may elect to hold their
Shares upon conversion of Bonds in the form of ADSs and is willing to
accommodate a request from a Converting Bondholder to hold the Shares in the
form of ADSs upon conversion of their Bonds provided that (a) the terms of
deposit of the Shares by the Converting Bondholder neither (i) prejudice
any substantial rights of existing Holders and Beneficial Owners of ADSs under
the Deposit Agreement nor (ii) violate or conflict with any law, rule or
regulations applicable to the ADSs, and (b) the Depositary agrees to
supplement the terms of the Deposit Agreement to accommodate a deposit of Shares
by Converting Bondholders immediately upon the conversion of Bonds without
prejudicing any substantial existing rights of Holders or Beneficial Owners of
ADSs.
1
The
purpose and intent of this Letter Agreement is to supplement the Deposit
Agreement for the sole purpose of accommodating the issuance of ADSs upon
deposit by the Company in connection with 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 filed with the Commission in respect of the ADSs and shall be filed
by the Company with governmental authorities in the ROC 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 Issue ADSs. In connection
with the offering and sale of the Bonds, the Company requests that the
Depositary, and the Depositary agrees upon the terms and subject to the
conditions set forth in this Letter Agreement to, establish procedures to enable
the deposit of Conversion Shares with the Custodian by the Company on behalf of
Converting Bondholders upon conversion of the Bonds in order to enable the
issuance and delivery by the Depositary to the Converting Bondholders of
ownership interests in Conversion Shares in the form of ADSs, upon the terms set
forth in the Deposit Agreement as supplemented by the terms of this Letter
Agreement.
2. Authority
to Accept Deposit of Conversion Shares and Issue ADSs. The
Company hereby confirms that all prior requisite governmental authorities in the
Republic of China, including but not limited to, the Republic of China Financial
Supervisory Commission ("ROC FSC"), have
approved the issuance of the Bonds, the deposit of Conversion Shares into the
Company's ADR facility and the issuance of ADSs in respect thereof, by or on
behalf of Converting Bondholders upon conversion of the Bonds. The
Company hereby instructs the Depositary, and the Depositary agrees, upon the
terms and subject to the conditions set forth in the Deposit Agreement and this
Letter Agreement, to issue to Converting Bondholders, upon conversion of the
Bonds, ADSs only upon receipt (i) from the Company (or any of its
designated agents) of a deposit of the applicable number of Conversion Shares
properly designated as Conversion Shares issued pursuant to a conversion of
Bonds, (ii) from the Custodian of a SWIFT message setting forth, inter alia, its receipt of
the deposit of the applicable number of Conversion Shares set forth in (i) above
by the Company, and (iii) payment of the fees (including, without limitation,
fees payable under Section 3 of this Letter Agreement for the issuance and
delivery of ADSs upon conversion of the Bonds), taxes and expenses otherwise
payable under the terms of the Deposit Agreement upon the deposit of Conversion
Shares and the issuance of ADSs. The Company agrees, in addition to
its undertakings in the Deposit Agreement, that neither it, nor any of its
Affiliates, will at any time request the conversion of the Bonds beneficially
owned by any of them into ADSs.
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3. Fees of
the Depositary. The Company and the Depositary agree that the
Depositary shall, as contemplated in the Deposit Agreement, be authorized to
charge to the person receiving ADSs issued in connection with conversion of the
Bonds a depositary fee of up to U.S.$0.05 per ADS issued upon the deposit of the
Conversion Shares.
4. Company
Assistance. The Company agrees to (i) provide
commercially reasonable assistance to the Depositary upon the request of the
Depositary in the establishment of such procedures to enable the
acceptance of the deposit by the Company on behalf of Converting Bondholder(s)
of the Conversion Shares, and the issuance of ADSs to the Converting
Bondholder(s), and (ii) take all commercially reasonable steps requested by
the Depositary to ensure that the acceptance of the deposit of the Conversion
Shares and the issuance of ADSs to the Converting Bondholders, in each case upon
the terms and conditions set forth herein, do not prejudice any substantial
existing rights of Holders and Beneficial Owners of ADSs and do not violate the
provisions of the Securities Act or any other applicable laws. In
furtherance of the foregoing, the Company shall deliver or cause to be delivered
to the Depositary (x) a copy of all approvals received from ROC FSC approving
the issuance of the Bonds, the issuance and deposit of the relevant Conversion
Shares and the issuance of the ADSs, and (y) opinions of U.S. and ROC counsel
regarding, where applicable, the due execution and delivery and enforceability
of the Letter Agreement, the legality of the conversion of Bonds, the deposit of
the Conversion Shares with the Custodian and the issuance of ADSs.
5. Representations
and Warranties. The Company hereby represents and warrants, in
lieu of the representations contained in Section 3.3(a) of the Deposit Agreement
that (a) the Conversion Shares being deposited by the Company on behalf of
Converting Bondholders for the purpose of the issuance of the ADSs will, at the
time of deposit, be validly issued, fully paid and non-assessable, and free of
any preemptive rights of the holders of outstanding Shares, (b) the
Conversion Shares being deposited by the Company on behalf of the Converting
Bondholders for the issuance of the ADSs will, at the time of the deposit, rank
pari passu in all
respects (including as to trading and settlement in the Republic of China) with
respect to the other Shares on deposit under the Deposit Agreement that are not
Conversion Shares (except for any rights, dividends, allotments or other
distributions, the relevant record date for which precedes the date on which the
relevant Conversion Shares are issued), (c) the Company is, at the time of the
deposit, duly authorized to make deposits of any Conversion Shares, on behalf of
the Converting Bondholders, (d) the Conversion Shares presented for deposit will
be free and clear of any lien, encumbrance, security interest, mortgage or
adverse claim, and (e) the Conversion Shares presented for deposit will not have
been, at the time of the deposit, stripped of any rights or
entitlements. Such representations and warranties shall survive the
deposit of Conversion Shares and the issuance of ADSs in respect
thereof.
6. Indemnity. The
Company acknowledges and agrees that the indemnification by the Company in favor
of the Depositary, the Custodian and their respective officers, directors,
employees, agents and affiliates, and the Depositary acknowledges that the
indemnification by the Depositary in favor of the Company and its directors,
officers, employees, agents and affiliates, under Section 5.8 of the Deposit
Agreement shall apply to the acceptance of Conversion Shares for deposit and the
issuance of ADSs in respect thereof, in each case upon the terms set forth
herein, as well as to any other acts performed or omitted by the Depositary and
the Company, as contemplated by this Letter Agreement.
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12. 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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The
Company and the Depositary have caused this Letter Agreement to be executed and
delivered on their behalf by their respective officers thereunto duly authorized
as of the date set forth above.
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AU
OPTRONICS CORP.
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By:
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/s/ Xxxx
Xxxx
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| Name: |
Xxxx
Xxxx
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| Title: |
Chief
Financial Officer
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Agreed to
as of the date set forth above:
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CITIBANK,
N.A.,
as
Depositary
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By:
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/s/ Xxxxxxx
Xxxxxxx
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| Name: |
Xxxxxxx
Xxxxxxx
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| Title: |
Vice
President
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