EXHIBIT 1.1
EXECUTION VERSION
U.S.$150 million
9.25% Senior Notes Due 2011
Purchase Agreement
January 16, 2004
Citigroup Global Markets Limited
As Representative of the Initial Purchasers
Citigroup Centre, Canada Square
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Ladies and Gentlemen:
New ASAT (Finance) Limited, an exempt company with limited liability
under the Companies Law (2003 Revision) of the Cayman Islands (the "Issuer")
proposes to issue and sell to the several parties named in Schedule I hereto
(the "Initial Purchasers"), for whom you (the "Representatives") are acting as
representatives, U.S.$150 million principal amount of 9.25% Senior Notes Due
2011 (the "Offered Notes") of the Issuer, to be issued under an indenture (the
"Indenture"), to be dated as of the Closing Date, among the Issuer, ASAT
Holdings Limited, an exempt company with limited liability under the Companies
Law (2003 Revision) of the Cayman Islands ("Holdings"), each of Holdings'
current and future direct or indirect subsidiaries (subject to certain
exceptions to be set forth in the Indenture) (Holdings and each such direct or
indirect subsidiary issuing a guarantee, the "Guarantors," which as of the
Closing Date shall be those entities set forth in Schedule II hereto) and The
Bank of New York, as trustee (the "Trustee"). The Offered Notes will be
guaranteed (collectively, the "Guarantees") by the Guarantors. The Offered Notes
and the Guarantees are collectively referred to herein as the "Notes." The
Issuer and the Guarantors are referred to herein collectively as the "Obligors"
and the Notes and the Exchange Notes (as defined below) are referred to herein
collectively as the "Securities." To the extent there are no additional parties
listed on Schedule I other than you, the term Representatives as used herein
shall mean you as the Initial Purchasers, and the terms Representatives and
Initial Purchasers shall mean either the singular or plural as the context
requires. The use of the neuter in this Agreement shall include the feminine and
masculine wherever appropriate. Certain terms used herein are defined in Section
21 hereof.
The sale of the Notes to the Initial Purchasers and the subsequent
resale by the Initial Purchasers will be made without registration of the Notes
under the Act in reliance upon exemptions from the registration requirements of
the Act. The Notes will have the benefit of a registration rights agreement (the
"Registration Rights Agreement"), to be dated as of the Closing Date, among the
Obligors and the Initial Purchasers, in substantially the form of Exhibit
1
A hereto. Pursuant to the Registration Rights Agreement and as more fully set
forth therein, the Obligors will agree (A) to file with the Commission under the
circumstances set forth therein (i) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to notes in a like aggregate
principal amount as the Notes originally issued under the Indenture, identical
in all material respects to the Notes (except that they will not contain terms
with respect to transfer restrictions or the payment of Liquidated Damages),
guaranteed by the Guarantors and registered under the Act (such notes, together
with such guarantees, the "Exchange Notes"), to be offered in exchange for the
Notes (such offer to exchange hereinafter referred to as the "Exchange Offer"),
and (ii) if applicable, a shelf registration statement pursuant to Rule 415
under the Act (together with the Exchange Offer Registration Statement, the
"Registration Statements") relating to the resale by certain holders of the
Notes and (B) to use their reasonable efforts to cause the applicable
Registration Statement(s) to be declared and remain effective and usable upon
the terms and for the periods specified in the Registration Rights Agreement and
to consummate the Exchange Offer.
This Agreement, the Indenture, the Securities and the Registration
Rights Agreement are collectively referred to herein as the "Transaction
Documents."
In connection with the sale of the Notes, the Obligors have prepared a
preliminary offering memorandum, dated January 7, 2004 (as amended or
supplemented at the date thereof, including any and all exhibits thereto, and
any information incorporated by reference therein, the "Preliminary
Memorandum"), and a final offering memorandum, dated January 16, 2004, 2004 (as
amended or supplemented to the Execution Time, including any and all exhibits
thereto and any information incorporated by reference therein, the "Final
Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum sets
forth certain information concerning the Obligors and the Transaction Documents.
Each of the Obligors hereby confirms that it has authorized the use of the
Preliminary Memorandum and the Final Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Notes by the Initial
Purchasers. Unless stated to the contrary, any references herein to the terms
"amend", "amendment" or "supplement" with respect to the Final Memorandum shall
be deemed to refer to and include any information filed under the Exchange Act
subsequent to the Execution Time that is incorporated by reference therein.
1. Representations and Warranties. Each of the Obligors, jointly and
severally, represents and warrants to each Initial Purchaser as set forth below
in this Section 1 as of the date of this Agreement (or, if made as of a
specified date, as of such date):
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. At the Execution Time and on the
Closing Date the Final Memorandum did not and will not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that such Obligor makes no
representation or warranty as to the information contained in or omitted from
the Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to any Obligor by or on behalf of the Initial Purchasers
through the Representatives specifically for inclusion therein; provided further
that pricing information omitted from the Preliminary Memorandum shall not be
and shall not be deemed a breach of this Section 1(a).
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(b) None of the Obligors, their respective Affiliates, or any person
acting on their behalf has, directly or indirectly, made offers or sales of any
security, or solicited offers to buy, any security under circumstances that
would require the registration of the Notes under the Act, it being understood
that the Obligors make no representations or warranties regarding any activities
by the Initial Purchasers.
(c) None of the Obligors, their respective Affiliates, or any
person acting on their behalf has: (i) engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Notes or (ii) engaged in any directed
selling efforts (within the meaning of Regulation S) with respect to the Notes;
and each of the Obligors, their respective Affiliates and each person acting on
their behalf has complied with the offering restrictions requirement of
Regulation S; No securities of the same class as any of the Notes have been
issued and sold by any of the Obligors within the six-month period immediately
prior to the date hereof, it being understood that the Obligors make no
representations or warranties regarding any activities by the Initial
Purchasers.
(d) The Notes satisfy the eligibility requirements of Rule 144A(d)
(3) under the Act; no securities of the same class (within the meaning of Rule
144A(d)(3) under the Act) as the Notes are listed on any national securities
exchange registered under Section 6 of the Exchange Act or quoted in a U.S.
automated inter-dealer quotation system.
(e) Each of the Obligors (except for ASAT Inc. and ASAT (Finance)
LLC) is a "foreign issuer" (as defined in Regulation S) and each Obligor
reasonably believes that there is no substantial U.S. market interest (as
defined in Regulation S) in its debt securities.
(f) The Issuer has been advised by the NASD's PORTAL Market that the
Notes have been designated PORTAL-eligible securities in accordance with the
rules and regulations of the NASD.
(g) Assuming the accuracy of the Initial Purchasers' representations
and warranties set forth in Section 4(b) and that the Initial Purchasers have
not breached the covenants set forth in Section 4(a) of this Agreement, no
registration under the Act of the Notes is required for the offer and sale of
the Notes to the Initial Purchasers and the offer, resale and delivery of the
Notes by the Initial Purchasers, in each case, in the manner contemplated herein
and in the Final Memorandum.
(h) None of the Obligors is, and after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof as described
in the Final Memorandum will be, an "investment company" as defined in the
Investment Company Act, or excluded from the definition as an "investment
company" solely by reason of Section 3(c)(1) or Section 3(c)(7) of the
Investment Company Act.
(i) Holdings is subject to and in full compliance with the
applicable reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.
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(j) None of the Obligors has paid or agreed to pay to any person any
compensation for soliciting another to purchase any Securities of any Obligor
(except as contemplated in this Agreement).
(k) No Obligor has taken, directly or indirectly, any action
designed to or that has constituted or that might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of any Obligor to facilitate the sale
or resale of the Securities.
(l) Each of the Obligors has been duly incorporated or organized and
is validly existing as an entity in good standing under the laws of the
jurisdiction in which it is chartered or organized with full corporate power and
authority to own or lease, as the case may be, and to operate its properties and
conduct its business as described in the Final Memorandum, and is duly qualified
to do business as a foreign organization and is in good standing under the laws
of each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a Material
Adverse Effect (as defined below).
(m) All the outstanding shares of capital stock or other equity
interests, as applicable, of each Obligor have been duly authorized and validly
issued and are fully paid and nonassessable, and, except as otherwise set forth
in the Final Memorandum and except for directors' qualifying shares and other
similar shares, all outstanding shares of capital stock or other equity
interests, as applicable, of each Obligor (other than Holdings) are owned by
Holdings either directly or through wholly owned subsidiaries free and clear of
any security interest, claim, lien or encumbrance.
(n) The statements set forth in the Final Memorandum under the
heading "Description of Notes" are accurate and fair in all material respects
insofar as they purport to constitute a summary of the terms of the Notes.
(o) The statements set forth in the Final Memorandum under the
heading "Certain Tax Considerations" constitutes, in all material respects, a
fair and accurate summary of Hong Kong, Cayman Islands and the United States
federal income tax consequences of the purchase, ownership and disposition of
the Notes, based upon current Hong Kong, Cayman Islands and United States
federal income tax law, subject to the limitations set forth therein.
(p) This Agreement has been duly authorized, executed and delivered
by each Obligor.
(q) The Indenture has been duly authorized by each of the Obligors
and, assuming due authorization, execution and delivery thereof by the Trustee,
when executed and delivered by each of the Obligors, will constitute a valid and
binding instrument enforceable against each of the Obligors in accordance with
its terms (except that the enforceability thereof may be affected by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity). On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act and the rules
and regulations of the Commission applicable to an indenture which is qualified
thereunder.
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(r) The Notes have been duly authorized by each of the Obligors and,
when executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchasers as provided
herein, will have been duly executed and delivered by the Obligors and will
constitute the valid and binding obligation of each of the Obligors entitled to
the benefits of the Indenture (except that the enforceability thereof may be
affected by applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in effect and
to general principles of equity).
(s) The Registration Rights Agreement has been duly authorized by
each of the Obligors and, when executed and delivered by each of the Obligors
and the Initial Purchasers, will constitute a valid and binding instrument
enforceable against each of the Obligors in accordance with its terms (except
that the enforceability thereof may be affected by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity),
provided that no representation is made with respect to Section 6 thereof.
(t) On the Closing Date, the Exchange Notes will have been duly
authorized by each of the Obligors and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered in accordance with
the provisions of the Exchange Offer, will constitute the valid and binding
obligations of each of the Obligors entitled to the benefits of the Indenture
(except that the enforceability thereof may be affected by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity).
(u) On the Closing Date, the Transaction Documents will conform in
all material respects to the description thereof in the Final Memorandum.
(v) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, or the other Transaction Documents except (i)
such as may be required under the blue sky or similar laws of any jurisdiction
in which the Securities are offered and sold and, (ii) as otherwise set forth or
contemplated in the Transaction Documents.
(w) None of the execution and delivery of any of the Transaction
Documents, the issuance and sale of the Securities, or the consummation of any
other of the transactions herein or therein contemplated will conflict with,
result in a breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of any of the Obligors or any of its subsidiaries
pursuant to, (i) the charter or by-laws or comparable constituting documents of
such Obligor or any of its subsidiaries; (ii) any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which such Obligor or its
subsidiaries is a party or bound or to which its property is subject; or (iii)
any applicable statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having
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jurisdiction over such Obligor or any of its properties except in the case of
(ii) for such conflicts, breaches, violations or impositions that, individually
or in the aggregate, would not result in any Material Adverse Effect.
(x) The consolidated historical financial statements, notes and
schedules included or incorporated by reference in the Final Memorandum present
fairly the financial condition, results of operations and cash flows of Holdings
and its consolidated subsidiaries as of the dates and for the periods indicated,
comply as to form with the applicable accounting requirements of Regulation S-X
and have been prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis throughout the
periods involved (except as otherwise noted therein); the selected financial
data set forth under the caption "Selected Financial Information" and "Quarterly
Summary Financial Data" in the Final Memorandum fairly present, on the basis
stated in the Final Memorandum, the information included therein.
(y) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator to which Holdings or
any of its subsidiaries is a party or their property is subject, is pending or,
to the best knowledge of any of Holdings or any of its subsidiaries, threatened
that (i) could reasonably be expected to have a material adverse effect on the
performance of the Transaction Documents or the consummation of any of the
transactions contemplated hereby or thereby or (ii) could reasonably be expected
to have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of Holdings and any of its
subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business (a "Material Adverse Effect"), except as set forth
in or contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto after the Execution Time).
(z) Holdings and each of its subsidiaries owns, leases or licenses
all such properties as are necessary to the conduct of its operations as
presently conducted except as otherwise would not have a Material Adverse
Effect; any real property and buildings held under lease by Holdings and each of
its subsidiaries (including but not limited to (i) each lease agreement relating
to property in the Zhenan Technology and ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ (the "China Lease") and (ii) each lease agreement relating to the
office and assembly space in the ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇) are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not materially interfere with the use made
and proposed to be made of such property and buildings by Holdings and its
subsidiaries.
(aa) None of Holdings or any of its subsidiaries is in violation or
default of (i) any provision of its charter or bylaws or comparable constituting
documents; (ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its property
is subject; or (iii) any applicable statute, law, rule, regulation, judgment,
order or decree applicable to Holdings or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over Holdings or any of its subsidiaries or any of
their properties, as applicable except in the case of (ii) or (iii) for such
violations that, individually or in the aggregate, would not result in any
Material Adverse Effect.
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(bb) PricewaterhouseCoopers, who have audited certain financial
statements of Holdings and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements and
schedules as of April 30, 2003 and for the year ended April 30, 2003 included or
incorporated by reference in the Final Memorandum, are independent public
accountants with respect to Holdings within the meaning of the Act.
(cc) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co, who have certified certain financial
statements of Holdings and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements and
schedules as of April 30, 2001 and 2002 and for the years ended April 30, 2001
and 2002 included in the Final Memorandum, were independent public accountants
with respect to Holdings within the meaning of the Act during the time of their
audit.
(dd) Assuming the execution of the Transaction Documents and the
delivery of the Notes occurs outside of the Cayman Islands, there are no stamp
or other issuance or transfer taxes or duties or other similar fees or charges
required to be paid in connection with the execution and delivery of this
Agreement or the issuance or sale by the Obligors of the Notes, under the laws
of Hong Kong, Cayman Islands or the United States.
(ee) Holdings and each of its subsidiaries has filed all non-U.S.,
U.S. federal, state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect and except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto after the Execution Time)) and has paid all taxes required to be paid by
it and any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such assessment,
fine or penalty that is currently being contested in good faith or as would not
have a Material Adverse Effect and except as set forth in or contemplated in the
Final Memorandum (exclusive of any amendment or supplement thereto after the
Execution Time).
(ff) No labor problem or dispute with the employees of Holdings or
its subsidiaries exists or is threatened or imminent, and none of Holdings or
its subsidiaries is aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, contractors or customers, except as
would not have a Material Adverse Effect, and except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto after the Execution Time).
(gg) Holdings and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; all policies of insurance and fidelity or surety bonds insuring
Holdings or any of its subsidiaries or any of their respective businesses,
assets, employees, officers and directors are in full force and effect; Holdings
and each of its subsidiaries are in compliance with the terms of such policies
and instruments except as would not have a Material Adverse Effect; there are no
claims by any of Holdings or its subsidiaries
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under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; none of Holdings or
any of its subsidiaries has been refused any insurance coverage sought or
applied for; and none of Holdings or any of its subsidiaries has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(hh) No subsidiary of Holdings is currently prohibited, directly or
indirectly, from paying any dividends to its shareholders, from making any other
distribution on such subsidiary's capital stock, from repaying to any of
Holdings or any of its subsidiaries any loans or advances or from transferring
any of property or assets to any of Holdings or any of its subsidiaries, except
(i) as described in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto after the Execution Time), (ii) as set forth in
the Old Notes Indenture, (iii) the Indenture or (iv) as prohibited by applicable
law.
(ii) Holdings and each of its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate U.S.
federal, state or non-U.S. regulatory authorities necessary to conduct their
respective businesses except where the failure to possess such licenses,
certificates, permits and other authorizations would not have Material Adverse
Effect, and neither Holdings nor any of its subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto after the Execution Time).
(jj) Holdings and each of its 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 generally accepted
accounting principles in the United States 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.
(kk) Holdings and each of its subsidiaries are (i) in compliance with
any and all applicable non-U.S., U.S. federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"); (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (iii) have not
received notice of any actual or potential liability under any Environmental
Law, except, in each case, (A) where such non-compliance with Environmental
Laws, failure to receive required permits, licenses or other approvals, or
liability would not, individually or in the aggregate, have a Material Adverse
Effect and (B) as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto after the Execution Time).
Except as set forth in the Final Memorandum, Holdings and each of its
subsidiaries has not been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended.
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(ll) In the ordinary course of its business, each of Holdings and its
subsidiaries periodically reviews the effect of Environmental Laws on its
respective businesses, operations and properties, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties); on the basis of such review, Holdings and each of
its subsidiaries has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a Material Adverse
Effect, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto after the Execution Time).
(mm) There are no subsidiaries of Holdings other than those listed on
Annex A. No Obligor (except for Holdings and ASAT Limited) has any subsidiary
except that Newhaven Holdings Limited is a wholly-owned subsidiary of ASAT
Holdings, RBR Trading Holding (Curacao) N.V. is a wholly-owned subsidiary of
Newhaven Holdings Limited, RBR Trading Holding B.V. is a wholly-owned subsidiary
of RBR Trading Holding (Curacao) N.V. and ASAT S.A. is a wholly-owned subsidiary
(other than directors' qualifying and similar shares required by law to be held
by third parties) of RBR Trading Holding B.V.
(nn) None of Holdings and its subsidiaries or, to the knowledge of
any of Holdings or its subsidiaries, any director, officer, agent, employee or
Affiliate of any of Holdings or its subsidiaries, is aware of or has taken any
action, directly or indirectly, that would result in a violation by such Persons
of Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the "FCPA"), including, without limitation, making use
of the mails or any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization of the payment
of any money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any "foreign official" (as such term is defined
in the FCPA) or any foreign political party or official thereof or any candidate
for foreign political office, in contravention of the FCPA; Holdings and each of
its subsidiaries and, to the knowledge of Holdings and each of its subsidiaries,
each of their respective Affiliates has conducted its businesses in compliance
with the FCPA and has instituted and maintain policies and procedures designed
to ensure, and which are reasonably expected to continue to ensure, continued
compliance therewith.
(oo) The operations of Holdings and each of its subsidiaries are and
have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the "Money Laundering Laws") and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving Holdings or its subsidiaries with
respect to the Money Laundering Laws is pending or, to the best knowledge of
such entity, threatened.
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(pp) There is and has been no failure on the part of any of Holdings
or its subsidiaries and any of their respective directors or officers, in their
capacities as such, to comply with any applicable requirements of the Sarbanes
Oxley Act of 2002 and the rules and regulations promulgated in connection
therewith (the "Sarbanes Oxley Act"), including Section 402 related to loans and
Sections 302 and 906 related to certifications.
(qq) None of Holdings or its subsidiaries or, to their knowledge, any
director, officer, agent, employee or Affiliate of any of Holdings or its
subsidiaries, is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Department of the Treasury
("OFAC"); and neither Holdings nor any of its subsidiaries will directly or
indirectly use the proceeds of the offering of the Securities hereunder, or
lend, contribute or otherwise make available such proceeds, to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person known to such parties to be currently subject to
any U.S. sanctions administered by OFAC.
(rr) Except as disclosed in the Final Memorandum, no relationship,
direct or indirect, exists between or among any of the Obligors on the one hand
and the directors, officers, stockholders, customers or suppliers of any of the
Obligors, on the other hand, that would be required by the Act to be described
in the Final Memorandum if the Final Memorandum were a prospectus included in a
registration statement on Form F-1 filed with the Commission.
(ss) The industry, statistical and market-related data to be included
in the Final Memorandum, as of its date, will be true and accurate in all
material respects and will be based on or derived from sources that the Obligors
reasonably believe to be reliable and accurate.
(tt) The choice of law provisions set forth in Section 15 hereof and
the other Transaction Documents, are legal, valid and binding under the laws of
Hong Kong and the Cayman Islands and the Obligors know of no reason why the
courts of Hong Kong or the Cayman Islands will not give effect to the choice of
New York law as the proper law of the Transaction Documents; the Obligors have
the legal capacity to ▇▇▇ and be sued in their own name under the laws of Hong
Kong and the Cayman Islands; the Obligors have the power to submit, and each has
irrevocably submitted, to the non-exclusive jurisdiction of the New York courts
and has validly and irrevocably appointed CT Corporation System as its
authorized agent for the purpose described in Section 14 hereof and in the other
Transaction Documents; the irrevocable submission of the Obligors to the
non-exclusive jurisdiction of the New York courts and the waivers by the
Obligors of any immunity and any objection to the venue of the proceeding in a
New York court herein and in the Transaction Documents are legal, valid and
binding obligations of the Obligors and the Obligors no of know reason why the
courts of Hong Kong or the Cayman Islands would not give effect to such
submission and waivers; service of process in the manner set forth in Section 14
hereof and in the other Transaction Documents will be effective to confer valid
personal jurisdiction over the Obligors; and the courts in Hong Kong and the
Cayman Islands will recognize as valid and final, and will enforce, any final
and conclusive judgment against the Obligors obtained in a New York court
arising out of or in relation to the obligations of the Obligors under the
Transaction Documents.
10
(uu) Other than as described in the Final Memorandum, under the
existing laws and regulations of Hong Kong and the Cayman Islands, all payments
of principal, premium (if any) and interest on the Securities may be paid by the
Obligors to the registered holder thereof in U.S. dollars (that may be obtained
through conversion of Hong Kong Dollars or Cayman Islands Dollars), may be
freely transferred out of Hong Kong and the Cayman Islands, and all such
payments made to holders of the Securities who are non-residents of Hong Kong or
the Cayman Islands will not be subject to Hong Kong or Cayman Island income,
withholding or other taxes under the laws and regulations of Hong Kong and the
Cayman Islands and are otherwise free and clear of any other tax, duty
withholding or deduction in Hong Kong and the Cayman Islands and without the
necessity of obtaining any governmental authorization in Hong Kong or the Cayman
Islands.
(vv) Holdings and each of its subsidiaries own, possess, license or
have or could obtain without undue effort other rights to use on not unduly
burdensome terms, all patents, trade and service marks, trade names, copyrights,
domain names (in each case including all registrations and applications to
register same), inventions, trade secrets, technology, know-how, and other
intellectual property, (collectively, the "Intellectual Property") necessary for
the conduct of the their businesses as now conducted or as proposed in the Final
Memorandum to be conducted except as would not have a Material Adverse Effect.
Except as set forth in the Final Memorandum, (i) Holdings and each of its
subsidiaries own, or have rights to use under license, all such Intellectual
Property free and clear in all respects of all adverse claims, liens or other
encumbrances; (ii) to the knowledge of Holdings and its subsidiaries, there is
no material infringement by third parties of any such Intellectual Property;
(iii) there is no pending or, to the knowledge of Holdings and its subsidiaries,
threatened action, suit, proceeding or claim by any third party challenging any
rights in or to any such Intellectual Property, and Holdings and each of its
subsidiaries are unaware of any facts which would form a reasonable basis for
any such claim; (iv) there is no pending or, to the knowledge of Holdings and
its subsidiaries, threatened action, suit, proceeding or claim by any third
party challenging the validity, scope or enforceability of any such Intellectual
Property, and Holdings and each of its subsidiaries are unaware of any facts
that would form a reasonable basis for any such claim; (v) there is no pending
or, to the knowledge of Holdings and its subsidiaries, threatened action, suit,
proceeding or claim by any third party that any of Holdings or its subsidiaries
infringes or otherwise violates any patent, trademark, copyright, trade secret
or other proprietary rights of any third party, and each of Holding and its
subsidiaries are unaware of any other fact which would form a reasonable basis
for any such claim; and (vi) to the knowledge of Holdings and its subsidiaries,
there is no valid and subsisting patent or published patent application that
would preclude such entities, from practicing any such Intellectual Property, in
each case other than would not reasonably be expected to have a Material Adverse
Effect.
(ww) An election has been filed by or on behalf of Issuer with the
U.S. Internal Revenue Service for the Issuer to be classified as a "disregarded
entity" for U.S. federal income tax purposes.
(xx) None of the Obligors, other than ASAT, Inc. and ASAT (Finance)
LLC, (i) has, at any time, had any office or place of business, or conducted any
material business, in the United States either directly or through an agent and
(ii) presently has any office or place of business, or conducts any material
business, in the United States either directly or through an agent.
11
(yy) No subsequent or other events have occurred since the date of
the audit reports on the consolidated historical financial statements and
schedules included in the Preliminary Memorandum and Final Memorandum for the
years ended April 30, 2001 and 2002 that would affect the contents or
presentation of such financial statements and schedules or would have given rise
to a qualification or non-issuance of such audit report.
(zz) The financial data for the quarters ended April 30, 2002 and
April 30, 2003 included in the Preliminary Memorandum and Final Memorandum
fairly present, on the basis stated therein, the information included therein.
(aaa) Each Obligor has not and undertakes that it will not, and each
of its subsidiaries has not and will not, directly or indirectly (excluding any
actions taken by the Initial Purchasers), offer or sell any Notes or distribute
or publish any offering memorandum, advertisement or other document in any
jurisdiction that would, to the best of its knowledge and belief, result in the
failure to comply with any material laws and regulations.
Any certificate signed by any officer of Holdings and delivered to the
Representatives or counsel for the Initial Purchasers in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Obligors, as to matters covered thereby, to each Initial Purchaser.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Obligors
agree to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Obligors, at a purchase price of
97.50% of the principal amount thereof, plus accrued interest, if any, from
January 26, 2004 to the Closing Date, the principal amount of Notes set forth
opposite such Initial Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Notes shall
be made at 10:00 A.M., New York City time, on January 26, 2004, or at such time
on such later date not more than three Business Days after the foregoing date as
the Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and Holdings or as provided in Section 9
hereof (such date and time of delivery and payment for the Notes being herein
called the "Closing Date"). Delivery of the Notes shall be made to the
Representatives for the respective accounts of the several Initial Purchasers
against payment by the several Initial Purchasers through the Representatives of
the purchase price thereof to or upon the order of the Issuer by wire transfer
payable in same-day funds to the account specified by the Issuer. Delivery of
the Notes shall be made through the facilities of The Depository Trust Company
("DTC") or its designated custodian, for the respective accounts of the DTC
participants for Euroclear Bank S.A./N.V., as operator of the Euroclear System
and Clearstream Banking, societe anonyme unless the Representatives shall
otherwise instruct. The Notes to be purchased by each Initial Purchaser
hereunder and sold to Qualified Institutional Buyers (as defined below) shall be
represented by one or more global notes (the "144A Global Notes") in book-entry
form. The Notes to be purchased by each Initial Purchaser hereunder and sold by
the Initial Purchasers in reliance on Regulation S of the Act shall be
represented by one of more global notes in book-entry form.
12
4. Offering by Initial Purchasers. (a) Each Initial Purchaser
acknowledges and has advised the Obligors that the Notes have not been and will
not be registered under the Act and may not be offered or sold within the United
States except pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Act.
(b) Each Initial Purchaser, severally and not jointly, represents
and warrants to and agrees with the Obligors that:
(i) it has not solicited, offered or sold, and will not
solicit, offer or sell, any Notes as part of their distribution at any
time or otherwise until 40 days after the later of the commencement of
the offering and the date of closing of the offering except:
(A) within the United States, to those it reasonably
believes to be "qualified institutional buyers" (as
defined in Rule 144A under the Act) or
(B) outside the United States, in accordance with Rule
903 of Regulation S;
(ii) neither it nor any person acting on its behalf has made
or will make offers or sales of the Notes in the United States by
means of any form of general solicitation or general advertising
(within the meaning of Regulation D) in the United States;
(iii) in connection with each sale pursuant to Section
4(b)(i)(A), it has taken or will take reasonable steps to ensure that
the purchaser of such Notes is aware that such sale is being made in
reliance on Rule 144A;
(iv) At or prior to the confirmation of sale of any Notes sold
in reliance on Regulation S, it will have sent to each distributor,
dealer or other person receiving a selling concession, fee or other
remuneration that purchases the Notes from it during the restricted
period a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering of the Securities and the date of original issuance of the
Securities, except in either case in accordance with Regulation S or
Rule 144A or any other available exemption from registration under the
Securities Act. Terms used above have the meanings given to them by
Regulation S."
(v) neither it, nor any of its Affiliates nor any person
acting on its or their behalf has engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) with
respect to the Notes;
13
(vi) it has not entered and will not enter into any
contractual arrangement with any distributor (within the meaning of
Regulation S) with respect to the distribution of the Notes, except
with its affiliates or with the prior written consent of Holdings;
(vii) it has not offered or sold and, prior to the date six
months after the date of issuance of the Notes, will not offer or sell
any Notes to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or as agent) for the purposes
of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities
Regulations 1995;
(viii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation
to the Notes in, from or otherwise involving the United Kingdom; and
(ix) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) received by it in connection with the issue or
sale of any Notes, in circumstances in which section 21(1) of the FSMA
does not apply to the Issuer.
(x) no action has been taken or will be taken to obtain an
authorisation from CONSOB for the public offering of the Notes in the
Republic of Italy; it has not offered sold or delivered and will not
offer, sell or deliver and has not distributed and will not distribute
and has not made and will not, directly or indirectly, make available
in the Republic of Italy any Notes, the Final Memorandum nor any other
offering material relating to the Notes except to "qualified
investors" (operatori qualificati), as defined in Article 31.2 of
CONSOB Regulation No. 11522 of July 1998 as amended ("Regulation No.
11522"), pursuant to Article 30.2 and 100.1, lett. a) of Legislative
Decree No. 58 of 24 February 1998 ("Decree No. 58"), or in any other
circumstance where an express exemption from compliance with the
solicitation restrictions provided by Decree No. 58 or CONSOB
Regulation No. 11971 of 14 May 1999 as amended applies, provided
however, that any such offer, sale or delivery of the Notes or
distribution of copies of the Final Memorandum or any other offering
material relating to the Notes in the Republic of Italy must be:
(A) made by investment firms, banks or financial
intermediaries permitted to conduct such activities
in the Republic of Italy in accordance with
legislative Decree No. 385 of 1 September 1993 as
amended ("Decree No. 385"), Decree ▇▇. ▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ and any other applicable laws
and regulations;
14
(B) in compliance with Article 129 of Decree No. 385 and
the implementing instructions of the Bank of Italy,
pursuant to which the issue, trading or placement of
securities in Italy is subject to prior notification
to the Bank of Italy, unless an exemption,
depending, inter alia, on the amount of the issue
and the characteristics of the securities, applies;
and
(C) in compliance with any other applicable notification
requirement or limitation which may be imposed by
CONSOB or the Bank of Italy.
(xi) the Notes have not been offered, sold, transferred or
delivered in or from the Netherlands as part of their initial
distribution or at any time thereafter, directly or indirectly other
than to individuals or legal entities, who or which trade or invest in
securities in the conduct of a business or a profession, which
includes, but is not limited to, banks, brokers, dealers,
institutional investors and undertakings with a treasury department;
(xii) the issuance or sale of the Notes is not subject to the
filing or registration of a prospectus with or by the French
Commission des operations de bourse; the Notes are not being and may
not be offered, issued or sold in France and the Final Memorandum or
any offering material relating to the Notes are not being and may not
be distributed or caused to be distributed in France to any person
except to (i) qualified investors (investisseurs qualifies) acting for
their own account or (ii) a limited circle of investors (cercle
restreint d'investisseurs) acting for their own account, all as
defined in article L 411-2 of the French Monetary and Financial Code,
and Decree No. 98-880 of October 1, 1998;
(xiii) (1) it has not offered or sold and will not offer or sell
the Notes in the Hong Kong SAR by means of the Final Memorandum or any
other document, other than to persons whose ordinary business involves
buying or selling shares or debentures, whether as principal or agent
or in circumstances which do not constitute an offer to the public
within the meaning of the Companies Ordinance (Cap. 32 of the Laws of
Hong Kong SAR), and (2) it has not issued and will not issue any
advertisement, invitation or document relating to the Notes, whether
in Hong Kong or elsewhere, which is directed at, or the contents of
which are likely to be accessed or read by, the public in Hong Kong
(except if permitted to do so under the securities laws of Hong Kong)
other than with respect to Notes which are or are intended to be
disposed of only to persons outside of Hong Kong or only to
"professional investors" within the meaning of the Securities and
Futures Ordinance (Cap. 571) of Hong Kong and any rules made
thereunder;
(xiv) the Final Memorandum has not been registered as a
prospectus with the Monetary Authority of Singapore; and it has not
circulated or distributed the Final Memorandum or any other document
or material in connection with the offer or sale, or invitation for
subscription or purchase, of the Notes, nor has it offered or sold the
Notes or made the Notes the subject of an invitation for subscription
or purchase, whether directly or indirectly, to the public or any
member of the public in Singapore other than (1) to an institutional
investor or other person specified in Section 274 of the Securities
and Futures Act, Chapter 289 of Singapore (the "SFA"), (2) to a
sophisticated investor, and in accordance with the conditions,
specified in Section 275 of the SFA or (3) otherwise pursuant to, and
in accordance with the conditions of, any other applicable provision
of the SFA; and
(xv) Each Initial Purchaser has not and undertakes that it
will not, directly or indirectly (excluding any actions taken by
Holdings and its subsidiaries), offer or sell any Notes or distribute
or publish any offering memorandum advertisement or other
documentation in any jurisdiction that would, to the best of its
knowledge and belief, result in the failure to comply with any
material laws and regulations.
15
(c) The Initial Purchasers agree that the sale and purchase of the
Notes shall be effected in a manner that will not violate the terms of the Old
Notes Indenture.
(d) The Initial Purchasers agree that they will not sell 20% or more
of the aggregate principal amount of the Notes to investors who are not
sophisticated investors or institutional investors, as both of these terms are
defined in the SFA.
5. Agreements. Each of the Obligors agrees, jointly and severally,
with each Initial Purchaser that:
(a) The Obligors will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period referred
to in paragraph (c) below, as many copies of the Final Memorandum and any
amendments and supplements thereto as they may reasonably request.
(b) The Obligors will not amend or supplement the Final Memorandum,
other than by filing documents under the Exchange Act that are incorporated by
reference therein, without the prior written consent of the Representatives;
provided, however, that, prior to the earlier of (i) the completion of the
distribution of the Notes by the Initial Purchasers (as reasonably determined by
the Initial Purchasers) and (ii) nine months from the Closing Date: (A) the
Obligors will not file any document under the Exchange Act that is incorporated
by reference in the Final Memorandum unless, prior to such proposed filing, the
Obligors have furnished the Representatives with a copy of such document for
their review and the Representatives have not reasonably objected to the filing
of such document and (B) the Obligors will promptly advise the Representatives
when any document filed under the Exchange Act that is incorporated by reference
in the Final Memorandum shall have been filed with the Commission.
(c) If at any time prior to the earlier of (i) the completion of the
sale of the Notes by the Initial Purchasers (as reasonably determined by the
Representatives) and (ii) nine months from the Closing Date, any event occurs as
a result of which the Final Memorandum, as then amended or supplemented, would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstancesunder which they were made, not misleading, or if it should be
necessary to amend or supplement the Final Memorandum to comply with applicable
law, the Obligors will promptly (A) notify the Representatives of any such
event; (B) subject to the requirements of paragraph (b) of this Section 5,
prepare an amendment or supplement that will correct such statement or omission
or effect such compliance; and (C) supply any supplemented or amended Final
Memorandum to the several Initial Purchasers and counsel for the Initial
Purchasers without charge in such quantities as they may reasonably request.
(d) The Obligors will use reasonable efforts to arrange, if
necessary, for the qualification of the Securities for sale by the Initial
Purchasers under the laws of such jurisdictions as the Representatives may
designate (including Hong Kong, Singapore, Italy, France, the Netherlands,
certain provinces of Canada and such other jurisdictions as agreed to by
Holdings) and will maintain such qualifications in effect so long as reasonably
required for the sale of the Securities; provided that in no event shall the
Obligors be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale of the
Securities, in any jurisdiction where it is not now so subject. The Obligors
will promptly advise the Representatives of the receipt by any Obligor of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
(e) Until the second anniversary of the Closing Date, the Obligors
(i) will not permit any of their affiliates (as defined in Rule 144 of the Act)
that are directly or indirectly controlled by Holdings to and (ii) use their
respective reasonable efforts to not permit any other affiliate (as defined in
Rule 144 of the Act) to, resell any Notes that constitute "restricted
securities" under Rule 144 of the Act that have been acquired by any of them.
(f) None of the Obligors nor any Affiliates of any Obligor nor any
person acting on any of their behalf will, directly or indirectly, make offers
or sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Notes under the Act
(other than such registration as required by Registration Rights Agreement).
(g) None of the Obligors nor any Affiliates of any Obligor nor any
person acting on any of their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Notes in the United States.
(h) So long as any of the Notes are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act, the Obligors will, during any
period in which Holdings is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act or it is not exempt from such reporting requirements
pursuant to and in compliance with Rule 12g3-2(b) under the Exchange Act,
provide to each holder of such restricted securities and to each prospective
purchaser (as designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information required to be
provided by Rule 144A(d)(4) under the Act. This covenant is intended to be for
the benefit of the holders, and the prospective purchasers designated by such
holders, from time to time of such restricted securities.
16
(i) None of the Obligors nor any Affiliates of any Obligor nor any
person acting on any of their behalf will engage in any directed selling efforts
with respect to the Notes; and each of them will comply with the offering
restrictions requirement of Regulation S. Terms used in this paragraph have the
meanings given to them by Regulation S.
(j) Each of the Obligors will cooperate with the Representatives and
use their respective reasonable efforts to permit the Securities to be eligible
for clearance and settlement through The Depository Trust Company.
(k) Each Obligor will use their respective reasonable efforts to
effect the inclusion of the Notes in PORTAL and the listing of the Securities on
the Singapore Exchange Securities Trading Limited ("SGX-ST") and to maintain the
listing of the Notes on PORTAL and the Securities on the SGX-ST so long as the
Notes and Securities, as the case may be, are outstanding.
(l) The Obligors will not for a period of 30 days following the
Execution Time, without the prior written consent of Citigroup, offer, sell or
contract to sell, or otherwise dispose of or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by any Obligor or any Affiliate of an Obligor or any
person in privity with an Obligor or any Affiliate of an Obligor, directly or
indirectly, or announce the offering of, (i) any debt securities issued or
guaranteed by an Obligor (other than the Securities) or (ii) any debt or
commercial paper facilities with banks or other institutional lenders in favor
of or guaranteed by an Obligor.
(m) The Obligors will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of an Obligor to facilitate the sale
or resale of the Securities.
(n) The Obligors agree to pay the costs and expenses relating to the
following matters: (i) the preparation of the Indenture, the Registration Rights
Agreement, the issuance of the Securities and the fees of the Trustee; (ii) the
printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the Preliminary
Memorandum and the Final Memorandum, and all amendments or supplements to either
of them, as may, in each case, be reasonably requested for use in connection
with the offering and sale of the Notes; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities; (iv)
any stamp or transfer taxes in connection with the original issuance and sale of
the Securities; (v) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Securities;
(vi) the Trustee and the Trustee's counsel in connection with the Indenture and
the Securities; (vii) any paying agent, transfer agent, registrar, depositary
and/or any other agents required by the Transaction Documents; (viii) any
registration or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states, the Netherlands, the
provinces of ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and any other
jurisdictions specified pursuant to Section 5(d) (including filing fees and the
reasonable fees and expenses of counsel for the Initial Purchasers
17
relating to such registration and qualification); (ix) admitting the Notes for
trading in the PORTAL Market; (x) applying for and/or listing the Notes on the
Luxembourg Stock Exchange and the SGX-ST; (xi) the transportation, accommodation
and other expenses incurred by or on behalf of Obligors' representatives in
connection with presentations to prospective purchasers of the Notes; (xii) the
fees and expenses of the Obligors' accountants and the fees and expenses of
counsel (including local and special counsel) for the Obligors and the Initial
Purchasers; (xiii) the Exchange Offer and any Registration Statement as set
forth in the Registration Rights Agreement; (xiv) obtaining a rating of the
Notes or the Exchange Notes by investment rating agencies, if applicable; and
(xv) all other costs and expenses incident to the performance by the Obligors of
their obligations hereunder. The Initial Purchasers shall pay US$375,000 to the
Obligors as reimbursement for certain of the above expenses.
(o) Holdings will, for a period of nine months following the
Execution Time, furnish to the Representatives (i) all reports or other
communications (financial or other) generally made available to stockholders,
and deliver such reports and communications to the Representatives as soon as
they are available, unless such documents are furnished to or filed with the
Commission or any securities exchange on which any class of securities of
Holdings is listed and generally made available to the public and (ii) such
additional information concerning the business and financial condition of the
Obligors as the Representatives may from time to time reasonably request (such
statements to be on a consolidated basis to the extent the accounts of Holdings
and its subsidiaries are consolidated in reports furnished to stockholders);
provided, that Holdings shall not be required to furnish the Representatives
such information set forth above if in the reasonable opinion of legal counsel
to Holdings the delivery of such information would violate Regulation FD under
the Act.
(p) The Obligors will comply with all applicable securities and
other laws, rules and regulations, including, without limitation, the Sarbanes
Oxley, and use their respective best efforts to cause the directors and officers
of the Obligors, in their capacities as such, to comply with such laws, rules
and regulations, including, without limitation, the provisions of the Sarbanes
Oxley Act.
(q) On the Closing Date, the Obligors shall effect a Covenant
Defeasance (as defined in the Old Notes Indenture) of the Old Notes in
accordance with the terms of the Old Notes Indenture.
(r) On the Closing Date, the Obligors shall issue or cause to be
issued a notice of redemption pursuant to Section 3.4 of the Old Notes Indenture
to redeem all of the Old Notes then outstanding on the date no later than 30
days following the Closing Date (the "Redemption Date") and on the Redemption
Date, which shall not be more than 45 days following the Closing Date, the
Obligors shall cause ASAT Finance LLC to redeem the Old Notes in full, all in
accordance with the Old Notes Indenture.
(s) The Obligors agree that the sale and purchase of the Notes shall
be effected in a manner that will not violate the terms of the Old Notes
Indenture.
18
(t) Unless otherwise required by applicable law, all payments
required to be paid by the Obligors to the Initial Purchasers and the
Representatives (other than as a holder of the Notes) hereunder shall be made
without withholding or deduction of any tax, assessment, or other governmental
charges whatsoever (collectively, "Governmental Taxes"). If (i) the Obligors are
required to deduct or withhold any Governmental Taxes, or (ii) if any
Governmental Taxes are required to be paid by the Representatives or the Initial
Purchasers in connection with the sale of the Notes to or by the Representatives
or the Initial Purchasers (other than, in the case of any particular
Representative or Initial Purchaser, any tax (whether described in clause (i) or
(ii)) imposed (A) on a net income basis by a jurisdiction within which such
Representative or Initial Purchaser is organized or in which it conducts
business or (B) on a gross income basis by a jurisdiction solely as a result of
the Representative or Initial Purchaser being organized in or conducting
business in such jurisdiction) (such taxes referred to in the immediately
preceding clause (i) and (ii) are hereinafter referred to as "Covered
Governmental Taxes"), then the Obligors shall pay to the Representatives and the
Initial Purchasers such additional amounts as are necessary so that the net
amount received by the Representatives and the Initial Purchasers after such
deduction, withholding, or payment (taking into account any deductions,
withholdings, or payments of Covered Governmental Taxes that may be applicable
to such additional amounts) will equal the amount otherwise to be received by
the Representatives and the Initial Purchasers had no such Covered Governmental
Taxes been imposed. The Obligors shall pay promptly the full amount of Covered
Governmental Taxes withheld or deducted to the relevant tax authority in
accordance with applicable law. The Obligors shall be liable for, and shall
indemnify, defend, and hold harmless the Representatives and the Initial
Purchasers from and against any and all Covered Governmental Taxes imposed on,
incurred by, asserted against, or collected from the Representatives or the
Initial Purchasers. Amounts payable by the Obligors pursuant to this paragraph
shall be made within 5 days from the date the Representatives or the Initial
Purchasers make a written demand therefor.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Notes shall be subject to
the accuracy of the representations and warranties of the Obligors contained
herein at the Execution Time and on the Closing Date, to the accuracy of the
statements of the Obligors made in any certificates pursuant to the provisions
hereof, to the performance by the Obligors of their obligations hereunder and to
the following additional conditions; provided, however, that the parties hereto
agree that the events set forth in Section 6(p) shall occur and shall be deemed
to occur contemporaneously with the delivery of and payment for the Notes:
(a) The Obligors shall have requested and caused ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, United States, New York and
California special counsel for the Obligors, to furnish to the Representatives
its opinion, dated the Closing Date and addressed to the Representatives,
substantially to the effect that:
(i) ASAT, Inc. is validly existing as a corporation in good
standing under the laws of the State of California, with corporate
power and authority to own its properties and conduct its business as
described in the Final Memorandum and to execute and deliver the
Transaction Documents and issue the Exchange Notes as contemplated
thereby and to perform its other obligations thereunder, all as
subject to the terms and conditions expressed therein. ASAT, Inc. is
in good standing as a foreign corporation in Texas.
19
(ii) ASAT (Finance) LLC is a limited liability company in good
standing under the laws of the State of Delaware, with the requisite
power and authority to own its properties and conduct its business as
described in the Final Memorandum.
(iii) All of the issued and outstanding shares of capital stock
or other ownership interests of each of ASAT, Inc. and ASAT (Finance)
LLC (collectively, the "US Subsidiaries") have been duly and validly
authorized and issued, are fully paid and nonassessable, and are owned
as of record directly by ASAT Limited, a company organized under the
laws of Hong Kong.
(iv) This Agreement has been duly authorized, executed and
delivered by ASAT, Inc. and duly executed and delivered by the
Obligors.
(v) Each of the Indenture and the Registration Rights
Agreement has been duly authorized, executed and delivered by ASAT,
Inc., duly executed and delivered by the Obligors and constitutes a
valid and binding agreement, enforceable against each of the Obligors
in accordance with its terms.
(vi) The Notes have been duly authorized and executed by ASAT,
Inc. and duly executed by the other Obligors and, assuming that the
Notes have been duly authenticated by the Trustee, have been duly
issued and delivered by the Obligors. Assuming due payment by the
Initial Purchasers in accordance with the terms of this Agreement, the
Notes constitute valid and binding obligations of each of the Obligors
enforceable against each of the Obligors in accordance with their
terms and will be entitled to the benefits provided by the Indenture.
(vii) The Exchange Notes have been duly authorized by ASAT,
Inc.
(viii) The statements set forth in the Final Memorandum under
the caption, "Description of Notes," insofar as they purport to
constitute a summary of the terms of the Notes and the Exchange Notes,
fairly summarize in all material respects the matters referred to
therein.
(ix) Although the discussion set forth in the Final Memorandum
under the heading "Certain Tax Considerations--United States" with
respect to the issuance of the Notes pursuant to this Agreement does
not purport to discuss all possible United States Federal income tax
consequences of the purchase, ownership and disposition of the Notes,
such discussion, subject to the qualifications and limitations stated
therein, constitutes, in all material respects, a fair summary of the
United States Federal income tax consequences to United States holders
of the purchase, ownership and disposition of the Notes, based upon
United Stated Federal income tax laws in existence on the date of the
Final Memorandum.
(x) To their knowledge and other than as set forth in the
Final Memorandum, there are no legal or governmental proceedings
pending or threatened to which the Obligors are a party or to which
any property of the Obligors is subject that would be reasonably
expected to have a material adverse effect.
20
(xi) No consent, approval, authorization, filing with or order
of any United States Federal or California court or governmental
agency or body or with the State of Delaware under the Delaware
General Corporation Law or the Delaware Limited Liability Company Act
is required for the issue and sale of the Notes or the Exchange Notes,
or the consummation by the Obligors of the transactions contemplated
by this Agreement, the Indenture, the Registration Rights Agreement
and the Notes or the Exchange Notes except (i) such as may be required
under the Blue Sky or securities laws of any jurisdiction in which the
Notes or the Exchange Notes, respectively, are offered or sold (as to
which we express no opinion), and (ii) as otherwise set forth or
contemplated in the Final Memorandum, this Agreement, the Indenture,
the Registration Rights Agreement and the Notes.
(xii) Neither the execution and delivery by the Obligors of the
Indenture, this Agreement, the Registration Rights Agreement, the
issuance and sale of the Notes or the Exchange Notes by the Obligors,
nor the consummation of any other of the transactions therein
contemplated by the Obligors (i) will violate the charter or by-laws
of ASAT, Inc.; (ii) will conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any Reviewed Document (as defined in the opinion); or
(iii) will violate any Applicable Law (as defined in the opinion) or
to their knowledge, any order, in any such case of any United States
Federal or California court or governmental agency or body having
jurisdiction over an Obligor or any of its properties, except for
violations in (ii) and (iii) that would not reasonably be expected to
have a material adverse effect.
(xiii) No registration of the Notes under the Act, and no
qualification of an indenture under the United States Trust Indenture
Act of 1939, as amended, with respect thereto, are required for the
sale and delivery of the Notes by the Obligors to the Initial
Purchaser or the initial resale by the Initial Purchaser of the Notes
in the manner contemplated in this Agreement and in the Final
Memorandum (it being understood that no opinion is expressed as to any
subsequent resale of any of the Notes).
(xiv) None of the Obligors is required, and upon application of
the proceeds as discussed under the caption "Use of Proceeds" in the
Final Memorandum will not be required, to register as an "investment
company" as such term is defined in the Investment Company Act of
1940.
In rendering such opinion, such counsel may (A) rely as to matters
involving the application of laws of any jurisdiction other than New York and
California, to the extent they deem proper and specified in such opinion, upon
the opinion of other counsel of good standing whom they believe to be reliable
and who are satisfactory to counsel for the Initial Purchasers; (B) as to
matters of fact, to the extent they deem proper, rely on certificates of
responsible officers of the Obligors and public officials and (C) make such
assumptions, qualifications and reservations as are customary for New York and
California legal opinions rendered in connection with transactions similar to
that contemplated herein.
21
References to the Final Memorandum in this Section 6(a) include any
amendment or supplement thereto at the Closing Date.
(b) The Obligors shall have requested and caused ▇▇▇▇▇▇ ▇▇▇▇▇▇ White
& ▇▇▇▇▇▇▇▇▇, Hong Kong counsel for the Obligors to furnish to the
Representatives its opinion, dated the Closing Date and addressed to the
Representatives, substantially to the effect that:
(i) each of the Obligors incorporated or organized under the
laws of Hong Kong as applicable (the "HK Obligors") has been duly
incorporated and is validly existing under the laws of Hong Kong, as
applicable, with the necessary corporate power and authority under
Hong Kong law and its memorandum and articles of association to enter
and perform its obligations under the Transaction Documents, to own or
lease its real property and to conduct business as a provider of
semiconductor assembly and testing services;
(ii) all the outstanding shares in the capital stock of ASAT
Limited and ▇▇▇▇▇▇▇▇ Limited have been duly authorized and validly
issued and, based also on the Annual Returns filed by ASAT Limited and
▇▇▇▇▇▇▇▇ Limited with the Registrar of Companies in Hong Kong on March
25, 2003 and June 29, 2003, respectively, are fully paid and, except
for one share in each of the issued share capital of ASAT Limited and
▇▇▇▇▇▇▇▇ Limited, are owned as of record by Holdings and ASAT Limited,
respectively, in each case, to such law firm's knowledge, based solely
on inquiries made of officers of Holdings and certain searches, free
and clear of any perfected security interest and any other security
interest, claim, lien or encumbrance. For the avoidance of doubt,
"knowledge" in the previous sentence refers to the actual
contemporaneous knowledge of the attorneys at such law firm who are
currently involved in the legal representation of the HK Obligors in
connection with the offer and sale of the Offered Notes;
(iii) each of this Agreement, the Indenture, the Registration
Rights Agreement and the Securities have been duly authorized,
executed (except for the Exchange Notes) and delivered (except for the
Exchange Notes) by the HK Obligors;
(iv) each of this Agreement, the Indenture, the Registration
Rights Agreement and the Notes constitutes, and when executed and
delivered in accordance with the Registration Rights Agreement and the
Indenture, the Exchange Notes will constitute, the valid and binding
obligations of the applicable HK Obligors enforceable against the
applicable HK Obligors in accordance with its terms (subject, as to
the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity);
22
(v) the statements set forth under the heading "Certain Tax
Considerations--Hong Kong" and "Enforceability of Civil Liabilities"
in the Final Memorandum, insofar as such statements purport to
summarize certain applicable Hong Kong law, constitute fair and
correct summaries of such applicable law;
(vi) the statements set forth under the headings "Risk
Factors--Environmental, health and safety laws could impose material
liability on us and our financial condition may be negatively affected
if we are required to incur significant costs of compliance," "Risk
Factors--Difficulties in enforcing judgments in foreign
jurisdictions," "Description of Notes--Certain Bankruptcy
Limitations," and "Business--Environmental Matters" in the Final
Memorandum to the extent such statements relate to matters of Hong
Kong law or regulation (as applicable) constitute fair and correct
summaries of Hong Kong law or regulation and nothing has been omitted
from such statements which would make the same misleading in any
material respect;
(vii) no consent, approval, authorization, filing with or order
of any court or governmental agency or body is required under Hong
Kong law in connection with the transactions contemplated by this
Agreement, the Indenture, the Registration Rights Agreement or the
Securities;
(viii) neither the execution and delivery of the Indenture, this
Agreement, the Registration Rights Agreement, the issuance and sale of
the Securities, nor the consummation of any other of the transactions
herein or therein expressly contemplated, nor the fulfillment of the
terms hereof or thereof will conflict with, result in a breach or
violation of any lien, charge or encumbrance (the particulars of which
are registered against any HK Obligors at the Registrar of Companies
in Hong Kong) upon any property or asset in Hong Kong of the HK
Obligors pursuant to, (A) the memorandum and articles of association
of such HK Obligor; or (B) any existing Hong Kong law, rule,
regulation of any Hong Kong regulatory body, governmental body or
other governmental authority having jurisdiction over such HK Obligor
or any of its properties in Hong Kong;
(ix) the choice of law provisions set forth in Section 15
hereof, the Indenture, the Registration Rights Agreement and in the
Notes are legal, valid and binding under the laws of Hong Kong and
such counsel currently knows of no reason why the courts of Hong Kong
would not give effect to the choice of New York law as the proper law
of this Agreement, the Indenture, the Registration Rights Agreement
and the Notes except where the choice of law involves (i) laws which
the Hong Kong courts consider procedural in nature; (ii) laws which
are revenue or penal laws, (iii) laws the application of which would
be inconsistent with public policy, as such term is interpreted under
the laws of Hong Kong or (iv) a choice that was not exercised in good
faith by the parties to the agreements thereto; the HK Obligors have
the legal capacity to ▇▇▇ and be sued in their own name under the laws
of Hong Kong; the HK Obligors have the power to submit to the
non-exclusive jurisdiction of the New York courts in the Indenture,
the Registration Rights Agreement and the Notes under the laws of Hong
Kong; the submission of the HK Obligors under New York law to the
non-exclusive jurisdiction of the New York courts and the waivers by
the HK Obligors of any immunity and any objection to the venue of the
proceeding in a New York court in this Agreement, in the Indenture, in
the Registration Rights Agreement and in the Notes are valid and
binding under the laws of Hong Kong and such counsel knows of no
reason why the courts of Hong Kong would not give effect to such
submission and waivers;
23
(x) other than as described in the Final Memorandum no stamp
or other issuance or transfer taxes or duties and no capital gains,
income, withholding or other taxes are payable by or on behalf of the
Initial Purchasers to Hong Kong or to any political subdivision or
taxing authority thereof or therein in connection with the sale and
delivery by the HK Obligors of the Notes to the Initial Purchasers or
the sale and delivery by the Initial Purchasers of the Notes as
contemplated herein;
(xi) other than as described in the Final Memorandum, under
the existing laws and regulations of Hong Kong, all payments of
principal, premium (if any) and interest on the Securities may be paid
by the HK Obligor to the registered holder thereof in U.S. dollars
(that may be obtained through conversion of Hong Kong dollars) that
may be freely transferred out of Hong Kong, and all such payments made
to holders of the Securities who are non-residents of Hong Kong will
not be subject to Hong Kong income, withholding or other taxes under
the laws and regulations of Hong Kong and are otherwise free and clear
of any other tax, duty withholding or deduction in Hong Kong and
without the necessity of obtaining any governmental authorization in
Hong Kong; and
(xii) as there is no treaty or other arrangement providing for
the reciprocal enforcement of judgments between Hong Kong and the
United States including the State of New York, a judgment of any New
York Court rendered in an action brought in such court to enforce the
obligations of any HK Obligor under any Transaction Document may be
enforced in Hong Kong by commencing an action in the Hong Kong courts
on that judgment. The judgment of a New York Court in respect of any
Transaction Document may form the basis of a cause of action and may,
at the discretion of the Hong Kong courts, be enforceable in Hong Kong
at common law if:
(A) it is for a definite sum of money (and not relating
to taxes or penalties);
(B) it is final and conclusive between the parties;
(C) bringing proceedings in the New York Court was not
contrary to any agreement between the parties to the
dispute;
24
(D) the New York Court is considered by the courts of
Hong Kong as being of competent jurisdiction to
grant the judgment;
(E) the New York Court judgment was not obtained by
fraud or in breach of the rules of natural justice;
(F) enforcement of the New York Court judgment would not
be contrary to in public policy in Hong Kong;
(G) the New York Court judgment was not obtained by
proceedings which were contrary to natural justice;
and
(H) the judgment is not consistent with a prior Hong
Kong judgment or foreign judgment which is entitled
to recognition in Hong Kong.
The term "enforceable" as used above in relation to proceedings in a court
in Hong Kong to enforce a judgment rendered by a New York Court does not mean
that the judgment will necessarily be enforced in all circumstances in
accordance with its terms.
In rendering such opinion, such counsel may (A) rely as to matters
involving the application of laws of any jurisdiction other than Hong Kong, to
the extent they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Initial Purchasers; (B) rely as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Obligors and public officials and (C) make such assumptions, qualifications
and reservations as are customary for Hong Kong legal opinions rendered in
connection with transactions similar to that contemplated herein.
References to the Final Memorandum in this Section 6(b) include any
amendment or supplement thereto at the Closing Date.
(c) The Obligors shall have requested and caused King and Wood,
China counsel for the Obligors, to furnish to the Representatives its opinion,
dated the Closing Date and addressed to the Representatives, to the effect that:
(i) the statements "Business--Operations" in the Final
Memorandum, insofar as such statements purport to summarize certain
provisions of the China Lease, constitute fair summaries of such
provisions or such applicable law;
(ii) the China Lease is valid, subsisting and enforceable
lease under PRC law; and
25
(iii) the statements set forth under the headings "Enforcement
of Civil Liabilities" "Risk Factors--Environmental, health and safety
laws could impose material liability on us and our financial condition
may be negatively affected if we are required to incur significant
costs of compliance" and "Business--Environmental Matters" in the
Final Memorandum to the extent such statements relate to matters of
PRC law or regulation (as applicable) or to the provisions of
documents therein described, are true and accurate in all material
respects and nothing has been omitted from such statements which would
make the same misleading in any material respect.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the PRC, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Initial Purchasers; and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Obligors and public officials.
References to the Final Memorandum in this Section 6(c) include any
amendment or supplement thereto at the Closing Date.
(d) The Obligors shall have requested and caused ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
Cayman Islands counsel for the Obligors to furnish to the Representatives its
opinion, dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) Each of the Obligors incorporated or organized under the
laws of the Cayman Islands as applicable (the "Cayman Obligors") has
been duly incorporated as an exempted company with limited liability
and is validly existing and in good standing under the laws of the
Cayman Islands.
(ii) Each of the Cayman Obligors has full power and authority
under its Memorandum and Articles of Association to enter into,
execute and perform its obligations under the Transaction Documents
and the Notes including (i) the issue and offer of the Notes pursuant
to the Transaction Documents and (ii) the exchange of the Notes for
the Exchange Notes.
(iii) The execution and delivery of the Transaction Documents,
the issue and offer of the Notes and the exchange of the Notes for the
Exchange Notes by the Cayman Obligors and the performance of their
obligations thereunder do not conflict with or result in a breach of
any of the terms or provisions of the Memorandum and Articles of
Association of the Cayman Obligors or any law, public rule or
regulation applicable to the Cayman Obligors in the Cayman Islands
currently in force and do not conflict with or result in a breach of
or constitute a default under any existing rule, regulation, order or
decree of any governmental authority or agency or any official body of
the Cayman Islands.
(iv) The execution, delivery and performance of the
Transaction Documents has been authorised by and on behalf of the
Cayman Obligors and, assuming the Transaction Documents have been
executed and delivered by any director of such Cayman Obligor, the
Transaction Documents have been duly executed and delivered on behalf
of the Cayman Obligors and constitute the legal, valid and binding
obligations of the Cayman Obligors enforceable in accordance with
their terms.
26
(v) The Notes and the Exchange Notes have been duly
authorised by the Cayman Obligors. When the Notes are signed in
facsimile or manually by a director on behalf of the Cayman Obligors
and, if appropriate, authenticated in the manner set forth in the
Indenture and delivered against due payment therefor will be duly
executed, issued and delivered and will constitute the legal, valid
and binding obligations of the Cayman Obligors enforceable in
accordance with their respective terms. When the Exchange Notes are
signed in facsimile or manually by a director on behalf of the Cayman
Obligors and, if appropriate, authenticated in the manner set forth in
the Indenture will be duly executed, issued and delivered and will
constitute the legal, valid and binding obligations of the Cayman
Obligors enforceable in accordance with their respective terms.
(vi) No authorisations, consents, approvals, licences,
validations or exemptions are required by law from any governmental
authorities or agencies or other official bodies in the Cayman Islands
in connection with:
(A) the issue of the Preliminary Memorandum or the Final
Memorandum;
(B) the execution, creation or delivery of the
Transaction Documents by the Cayman Obligors of
their obligations thereunder;
(C) subject to the payment of stamp duty, the
enforcement of the Transaction Documents against the
Company;
(D) the offering, execution, authentication, allotment,
issue, delivery or exchange of the Notes or the
Exchange Notes;
(E) the performance by the Company of its obligations
under the Notes or the Exchange Notes and the
Transaction Documents;
(F) the listing of the Notes and the Exchange Notes on
the SGX-ST;
(G) the filing of a registration statement with the
United States Securities Exchange Commission in
relation to the Exchange Notes and the exchange of
the Notes for the Exchange Notes; or
(H) the payment of the principal and interest and any
other amounts under the Notes and the Exchange
Notes.
27
(vii) No taxes, fees or charges (other than stamp duty) are
payable (either by direct assessment or withholding) to the government
or other taxing authority in the Cayman Islands under the laws of the
Cayman Islands in respect of:
(A) the execution or delivery of the Transaction
Documents or the Notes or the Exchange Notes;
(B) the enforcement of the Transaction Documents, the
Notes or the Exchange Notes;
(C) the exchange of the Notes for the Exchange Notes by
the Cayman Obligors;
(D) payments made under, or pursuant to, the Transaction
Documents; or
(E) the issue, transfer or redemption of the Notes.
(viii) The Cayman Islands currently have no form of income,
corporate or capital gains tax and no estate duty, inheritance tax or
gift tax.
(ix) The courts of the Cayman Islands will observe and give
effect to the choice of New York law as the governing law of the
Transaction Documents, the Notes and the Exchange Notes. The
submission to the non-exclusive jurisdiction of any United States
Federal or New York State court sitting in the Borough of Manhattan in
New York City and the waiver by the Cayman Obligors of any objection
to venue of proceedings in the relevant Transaction Documents, and the
appointment of an agent to accept service of process in such
jurisdiction, is legal, valid and binding on the Cayman Obligors.
(x) On a winding up of the Cayman Obligors claims in respect
of the Notes and the Exchange Notes, as the case may be, and the
associated receipts and coupons will rank at least pari passu with all
other present and future unsecured and unsubordinated obligations of
the Cayman Obligors, except for those obligations of the Cayman
Obligors which are mandatorily preferred by law.
(xi) Based solely on their inspection of the Register of Writs
and Other Originating process in the Grand Court of the Cayman Islands
from 7 November 2003 there were no actions or petitions pending
against the Cayman Obligors in the courts of the Cayman Islands as at
close of business in the Cayman Islands on January 23, 2004.
(xii) Although there is no statutory enforcement in the Cayman
Islands of judgments obtained in New York, the courts of the Cayman
Islands will recognise a foreign judgment as the basis for a claim at
common law in the Cayman Islands provided such judgment:
28
(A) is given by a competent foreign court;
(B) imposes on the judgment debtor a liability to pay a
liquidated sum for which the judgment has been
given;
(C) is final;
(D) is not in respect of taxes, a fine or a penalty; and
(E) was not obtained in a manner and is not of a kind
the enforcement of which is contrary to the public
policy of the Cayman Islands.
(xiii) It is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of the Transaction
Documents or the Notes or the Exchange Notes that any document be
filed, recorded or enrolled with any governmental authority or agency
or any official body in the Cayman Islands.
(xiv) Subject to the terms of the Indenture, the Notes and the
Exchange Notes, each registered holder of the Notes and the Exchange
Notes (when issued) shall be entitled to seek enforcement of its
rights as registered holder of the Notes or the Exchange Notes, as the
case may be, in a direct action or proceeding against the Company,
assuming this to be the case under New York law.
(xv) The statements made in the Final Memorandum under the
heading "Certain Tax Considerations Cayman Islands", "Enforcement of
Civil Liabilities" and "Description of ASAT Holdings Organizational
Documents" are correct in so far as such statements are summaries of
or relate to Cayman Islands law.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the Cayman
Islands, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Initial Purchasers; and (B) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Obligors and public officials.
References to the Final Memorandum in this Section 6(d) include any
amendment or supplement thereto at the Closing Date.
(e) The Representatives shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇ Slate
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, United States counsel to the Initial Purchasers, such
opinion or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the Notes, the
Indenture, the Registration Rights Agreement, the Final Memorandum (as amended
or supplemented at the Closing Date) and other related matters as the
Representatives may reasonably require, and the Obligors shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
29
(f) The Obligors shall have furnished to the Representatives a
certificate of Holdings, signed by (x) the Chairman of the Board, the President
or the Chief Executive Officer and (y) the principal financial or accounting
officer of Holdings, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Final Memorandum, any amendment or
supplement to the Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Obligors in
this Agreement are true and correct on and as of the Closing Date with
the same effect as if made on the Closing Date, and the Obligors have
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied hereunder at or prior to the
Closing Date; and
(ii) since the date of the most recent financial statements
included or incorporated by reference in the Final Memorandum
(exclusive of any amendment or supplement thereto after the Execution
Time), there has been no material adverse change in the condition
(financial or otherwise), prospects, earnings, business or properties
of the Obligors, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Final Memorandum (exclusive of any amendment
or supplement thereto).
(g) At the Execution Time, the Obligors shall have requested and
caused PricewaterhouseCoopers ("PWC") to furnish to the Representatives a
letter, dated as of the Execution Time, in form and substance satisfactory to
the Representatives substantially to the effect that:
(i) They are independent certified public accountants with
respect to Holdings within the meaning of the Act and the applicable
rules and regulations adopted by the Commission pursuant thereto (the
"Rules").
(ii) The Holdings' officials have advised PWC that the
financial statements included in the Final Memorandum are prepared in
accordance with Regulation S-X of the Rules. In their opinion, the
consolidated financial statements audited by them and included in the
Final Memorandum comply as to form in all material respect with the
applicable section of Regulation S-X.
(iii) They have not audited any financial statements of
Holdings as of any date or for any period subsequent to April 30,
2003; although they have conducted an audit for the year ended April
30, 2003, the purpose (and therefore the scope) of the audit was to
enable PWC to express an opinion on the consolidated financial
statements as of April 30, 2003 and for the year then ended, but not
on the financial statements for any interim period within that year.
Therefore, they are unable to and do not express any opinion on the
unaudited condensed consolidated balance sheet as of October 31, 2003
and the unaudited condensed consolidated statements of income and of
cash flows for the three- and six-month periods ended October 31, 2003
and 2002 included in the Final Memorandum, or on the financial
position, results of operations, or cash flows as of any date or for
any period subsequent to April 30, 2003.
30
(iv) For purposes of the comfort letter they have read the
fiscal year 2004 minutes of the meetings of the stockholders of
Holdings and the Board of Directors of Holdings as set forth in the
minute books through January 11, 2004, officials of Holdings having
advised PWC that the minutes of all such meetings through that date
were set forth therein (except for the minutes of the Board of
Directors on December 16, 2003 which were not approved in final form,
for which draft minutes were provided to PWC; officials of Holdings
have represented that such draft include all substantive actions taken
at such meeting); they have carried out other procedures to January
12, 2004 (PWC's work did not extend to the period from January 12,
2004 to January 16, 2004, inclusive), as follows:
(A) With respect to the three- and six-month periods
ended October 31, 2003, they have performed the
procedures (completed on December 15, 2003)
specified by SAS No. 100, "Interim Financial
Information" ("SAS 100"), on the unaudited condensed
consolidated balance sheet as of October 31, 2003
and the unaudited condensed consolidated statements
of income and cash flows for the three- and
six-month periods ended October 31, 2003 included in
the Final Memorandum. With respect to the three- and
six-month periods ended October 31, 2002, they have
performed the procedures (completed on December 16,
2002) specified by SAS No. 71, "Interim Financial
Information" ("SAS 71"), on the unaudited condensed
consolidated statements of income and cash flows for
the three- and six-month periods ended October 31,
2003 included in the Final Memorandum.
(B) With respect to the period from November 1, 2003 to
November 30, 2003, PWC has:
(I) read the unaudited consolidated financial data
of Holdings from November 1, 2003 to November
30, of both 2003 and 2002, furnished to PWC by
Holdings, officials of Holdings having advised
them that no such financial data as of any
date or for any period subsequent to November
30, 2003 were available; and
(II) inquired of certain officials of Holdings who
have responsibility for financial and
accounting matters whether the unaudited
financial data referred to in (g)(iv)(B)(I)
are stated on a basis substantially consistent
with that of the audited financial statements
included in the Final Memorandum.
31
The procedures as mentioned above did not constitute
an audit conducted in accordance with generally
accepted auditing standards. Also, those procedures
would not necessarily reveal matters of significance
with respect to the comments in (g)(v) below.
Accordingly, PWC made no representations regarding
the sufficiency of those procedures for the purposes
of the Representatives.
(v) Nothing came to PWC's attention as a result of the
foregoing procedures, however, that caused them to believe that:
(A) any material modifications should be made to the
unaudited condensed consolidated financial
information described in (g)(iv)(A) for them to be
in conformity with generally accepted accounting
principles; or
(B) (i) at November 30, 2003, there were any changes in
capital stock, increases in long-term debt or any
decrease in consolidated current assets or
stockholders' equity of Holdings and its
consolidated subsidiaries as compared with amounts
shown on the October 31, 2003 unaudited condensed
consolidated balance sheet prepared in accordance
with accounting principles generally accepted in the
United States, included in the Final Memorandum, or
(ii) for the period from November 1, 2003 to
November 30, 2003, there were any decreases, as
compared to the corresponding period in the
preceding year, in net sales, income from operations
or net income, except in all instances for increases
or decreases that the Final Memorandum discloses as
having occurred or may occur and except that 687,555
stock options with a weighted average exercise price
of US$1.44 per ADS were exercised by certain
employees of Holdings from November 1, 2003 to
November 30, 2003, resulting in an increase in
common stock to Holdings by approximately US$34,000
and additional paid in capital by US$933,000.
(vi) As mentioned (g)(iv)(B), Holdings' officials have advised
them that no consolidated balance sheet and income statement data as
of any date or for any period subsequent to November 30, 2003 are
available; accordingly, the procedures carried out by PWC with respect
to changes in financial statement items after November 30, 2003 have,
of necessity, been even more limited than those with respect to the
periods referred to in (g)(iv). They have inquired of certain
officials of Holdings who have responsibility for financial and
accounting matters whether (i) at January 11, 2004 there was any
change in the capital stock, increases in long-term debt or decrease
in stockholders' equity of Holdings as compared with amounts shown on
the October 31, 2003 unaudited condensed consolidated balance sheet
included in the Final Memorandum or (ii) for the period from November
1, 2003 to January 11, 2004, there were any decreases, as compared
with the corresponding period in the preceding year, in net sales. On
the basis of these inquiries and their reading of the minutes as
described in (g)(iv), nothing came to their attention that caused them
to believe that there was any such increase or decrease, except in all
instances that the Final Memorandum discloses as having occurred or
may occur and except that in addition to that disclosed in (g)(v)(B),
510,958 stock options with a weighted average exercise price of
US$1.19 per ADS were exercised by certain employees of Holdings from
December 1, 2003 to January 11, 2004, resulting in an increase in
common stock to Holdings by approximately US$26,000 and additional
paid-in capital by US$567,000.
32
(vii) They have compared certain specified dollar amounts or
percentages derived from such dollar amounts and other financial
information contained in the Final Memorandum as specifically
identified by the Representatives (in each case to the extent such
dollar amounts, percentages and other financial information are
derived from the general accounting records of Holdings and its
subsidiaries subject to the internal controls of Holdings accounting
system or are derived directly from such records by analysis or
computation) with the results obtained from such inquiries, a reading
of such general accounting records and other proceedings specified in
such letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
(h) The Representatives shall have received a letter, dated the
Closing Date of PWC which meets the requirements of Section 6(g), except that
the specified date referred to in such section will be a date not more than 5
days prior to the Closing Date for the purposes of this Section 6(h).
(i) At the Execution Time, the Obligors shall have requested and
caused Deloitte Touche Tohmatsu to furnish to the Representatives a letter,
dated as of the Execution Time, in form and substance satisfactory to the
Representatives to the effect that:
(i) They were independent certified public accountants with
respect to Holdings for the years ended April 30, 2000 and 1999 under
Rule 101 of the AICPA's Code of Professional Conduct, and its
interpretations and rulings.
(ii) They have not audited any financial statements of
Holdings as of any date or for any period subsequent to April 30,
2000; although they have conducted an audit for the year ended April
30, 2000, the purpose (and therefore the scope) of the audit was to
enable them to express their opinion on the consolidated financial
statements as of April 30, 2000, and for the year then ended, but not
on the financial statements for any interim period within that year.
Therefore, they are unable to express and do not express any opinion
on the financial position, results of operations, or cash flows as of
any date or for any period subsequent to April 30, 2000, for the
Holdings.
33
(iii) They have compared specified dollar amounts for
percentages derived from such dollar amounts and other financial
information contained in the Final Memorandum (in each case to the
extent such dollar amounts, percentages and other financial
information are derived from the general accounting records of
Holdings and its subsidiaries subject to the internal controls of
Holdings accounting system or are derived directly from such records
by analysis or computation) with the results obtained from such
inquiries, a reading of such general accounting records and other
proceedings specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter.
(j) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum (exclusive of any amendment
or supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (g) of this Section
6; or (ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), prospects, earnings, business
or properties of Holdings and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto after the Execution Date), the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto after the Execution Date).
(k) The Notes shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the NASD and the
Notes shall be eligible for clearance and settlement through The Depository
Trust Company.
(l) The Obligors shall have applied to list the Notes on the SGX-ST.
(m) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Obligors' debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.
(n) The Obligors and the Trustee shall have executed the Indenture
and the Initial Purchasers shall have received an executed original thereof on
the Closing Date.
(o) The Obligors shall have executed the Registration Rights
Agreement and the Initial Purchasers shall have received an executed original
thereof on the Closing Date,
(p) The Obligors shall have (i) irrevocably deposited or caused to
be deposited with the trustee of the Old Notes, in trust, for the benefit of the
holders of the Old Notes cash, U.S. Government Obligations (as defined in the
Old Notes Indenture) or a combination of both in an amount specified in the Old
Notes Indenture and in accordance with Sections 8.4(1)(a) and 8.5 of the Old
Notes Indenture, (ii) received an opinion of counsel and delivered it to the
Trustee under the Old Notes Indenture as required by Sections 8.4(1)(c) and
8.4(1)(g) of the Old Notes Indenture; (iii) received an opinion or other
confirmation from a nationally-recognized firm of independent accountants as
required by Section 8.4(1)(a) of the Old Notes Indenture, (iv) delivered to the
Trustee under the Old Notes Indenture an officers' certificate as required by
Section 8.4(1)(g) of the Old Notes Indenture; (v) satisfied all of the other
relevant conditions applicable to a Covenant Defeasance (as defined in the Old
Notes Indenture) of the Old Notes as set forth in Sections 8.3, 8.4 and 8.5 of
the Old Notes Indenture and (vi) irrevocably issued and given or caused to be
given a notice of redemption to redeem all of the Old Notes then outstanding on
the date 30 days following the Closing Date, all to the satisfaction of the
Representatives.
34
(q) The Representatives shall have received a copy of the election
properly filed by or on behalf of the Issuer with the U.S. Internal Revenue
Service for the Issuer to be classified as a "disregarded entity" for U.S.
federal income tax purposes.
(r) Prior to the Closing Date, the Obligors shall have furnished to
the Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Initial Purchasers, this Agreement and all obligations of the Initial
Purchasers hereunder may be cancelled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Obligors in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of counsel for the Initial Purchasers, at the offices of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP in Hong Kong and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, Palo Alto, California on the
Closing Date.
7. Reimbursement of Expenses. If the sale of the Notes provided for
herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Obligors to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of
the Initial Purchasers, the Obligors will reimburse the Initial Purchasers
severally through Citigroup on demand for all out of pocket expenses (including
reasonable fees and disbursements of counsel and excluding any fees of Citigroup
for advisory services rendered in the offer and sale of the Notes) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Notes.
35
8. Indemnification and Contribution. (a) Each of the Obligors agrees,
jointly and severally, to indemnify and hold harmless each Initial Purchaser,
the directors, officers, employees, Affiliates and agents of each Initial
Purchaser and each person who controls any Initial Purchaser within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other U.S. federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Memorandum, the Final Memorandum or in any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Obligors will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made in the Preliminary Memorandum, the Final Memorandum, or in any amendment
thereof or supplement thereto, in reliance upon and in conformity with written
information furnished to the Obligors by or on behalf of any Initial Purchaser
through the Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability that the Obligors may otherwise
have.
(b) Each Initial Purchaser severally, and not jointly, agrees to
indemnify and hold harmless the Obligors, each of their respective directors,
officers, and each person who controls any Obligor within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Obligors to each Initial Purchaser, but only in reliance and in conformity
with written information relating to such Initial Purchaser furnished to the
Obligors by or on behalf of such Initial Purchaser through the Representatives
specifically for inclusion in the Preliminary Memorandum, the Final Memorandum
or in any amendment or supplement thereto. This indemnity agreement will be in
addition to any liability that any Initial Purchaser may otherwise have. Each
Obligor acknowledges that (i) the statements set forth in the last paragraph of
the cover page regarding delivery of the Notes, (ii) paragraph 15 following the
table of contents and (iii), under the heading "Plan of Distribution,"
paragraphs 11 and 14; the first sentence of the paragraph 1, the first sentence
in paragraph 3, and the eighth sentence of paragraph 10 in the Preliminary
Memorandum and the Final Memorandum constitute the only information furnished in
writing by or on behalf of the Initial Purchasers for inclusion in the
Preliminary Memorandum, the Final Memorandum or in any amendment or supplement
thereto.
36
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
or if the indemnifying party has been materially prejudiced by such failure and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
counsel (including local counsel) of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel,
other than local counsel if not appointed by the indemnifying party, retained by
the indemnified party or parties except as set forth below); provided, however,
that such counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel (including
local counsel) to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action; or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. The indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all indemnified parties. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Obligors and the Initial Purchasers
severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending any loss, claim, damage, liability or action
(collectively "Losses") to which the Obligors and one or more of the Initial
Purchasers may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Obligors on the one hand and by the Initial
Purchasers on the other from the offering of the Notes; provided, however, that
in no case shall any Initial Purchaser be responsible for any amount in excess
of the purchase discount or commission applicable to the Notes purchased by such
Initial Purchaser hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Obligors and the Initial
Purchasers severally shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Obligors on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions that resulted in such Losses, as well as any
other relevant equitable considerations. Benefits received
37
by the Obligors shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by them, and benefits received by
the Initial Purchasers shall be deemed to be equal to the total purchase
discounts and commissions. Relative fault shall be determined by reference to,
among other things, whether any untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information provided by the Obligors on the one hand or the Initial Purchasers
on the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Obligors and the Initial Purchasers agree that it would not be
just and equitable if contribution were determined by pro rata allocation or any
other method of allocation that does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Initial Purchaser within the meaning
of either the Act or the Exchange Act and each director, officer, employee,
Affiliate and agent of an Initial Purchaser shall have the same rights to
contribution as such Initial Purchaser, and each person who controls the
Obligors within the meaning of either the Act or the Exchange Act and each
officer and director of the Obligors shall have the same rights to contribution
as an Obligor, subject in each case to the applicable terms and conditions of
this paragraph (d). The Initial Purchasers' obligations to contribute as
provided in this Section 8(d) are several in proportion to their respective
underwriting obligations and not joint.
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Notes agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Notes set forth opposite their names in Schedule I hereto bears to the aggregate
principal amount of Notes set forth opposite the names of all the remaining
Initial Purchasers) the Notes which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Notes which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10%
of the aggregate principal amount of Notes set forth in Schedule I hereto, the
remaining Initial Purchasers shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Notes, and if such nondefaulting
Initial Purchasers do not purchase all the Notes, this Agreement will terminate
without liability to any nondefaulting Initial Purchaser or the Obligors. In the
event of a default by any Initial Purchaser as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Representatives shall reasonably determine in order that the
required changes in the Final Memorandum or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Initial Purchaser of its liability, if any, to the Obligors or
any nondefaulting Initial Purchaser for damages occasioned by its default
hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Issuers prior
to delivery of and payment for the Notes, if at any time prior to such time (i)
(a) trading in Holdings' American Depositary Shares shall have been suspended by
the Commission or (b) Holdings' American Depositary Shares traded on the Nasdaq
National Market (including the Nasdaq SmallCap Market) or trading in securities
generally on the New York Stock Exchange, the Nasdaq National Market (including
the Nasdaq SmallCap Market) shall have been suspended or limited or minimum
prices shall have been established on any of such exchange or the Nasdaq
National Market (including the Nasdaq SmallCap Market); (ii) a banking
moratorium shall have been declared either by U.S. federal or New York State or
Hong Kong or Cayman Islands authorities; or (iii) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Notes as contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto).
38
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Obligors or their respective officers and of the Initial Purchasers set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Initial Purchasers
or the Obligors or any of the indemnified persons referred to in Section 8
hereof, and will survive delivery of and payment for the Notes. The provisions
of Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup General Counsel (fax no.:
▇▇-▇▇▇-▇▇▇-▇▇▇▇) and confirmed to Citigroup at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel; or, if sent to the Obligors, will be
mailed, delivered or telefaxed to ▇▇-▇▇▇-▇▇▇▇-▇▇▇▇ and confirmed to it at ▇/▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇, ▇▇▇ Industrial Building, 138 Texaco Road,
Tsuen Wan, New Territories, Hong Kong, attention of the Legal Department.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
indemnified persons referred to in Section 8 hereof and their respective
successor, and, except as expressly set forth in Section 5(h) hereof, no other
person will have any right or obligation hereunder.
14. Jurisdiction. Each of the Obligors agree that any suit, action or
proceeding against an Obligor brought by any Initial Purchaser, the directors,
officers, employees and agents of any Initial Purchaser, or by any person who
controls any Initial Purchaser, arising out of or based upon this Agreement or
the transactions contemplated hereby may be instituted in any State or U.S.
federal court in The City of New York and County of New York, and waives any
objection which it may now or hereafter have to the laying of venue of any such
proceeding, and irrevocably submits to the non-exclusive jurisdiction of such
courts in any suit, action or proceeding. Each of Obligors hereby appoints CT
Corporation System as its authorized agent (the "Authorized Agent") upon whom
process may be served in any suit, action or proceeding arising out of or based
upon this Agreement or the transactions contemplated herein that may be
instituted in any State or U.S. federal court in The City of New York and County
of New York, by any Initial Purchaser, the directors, officers, employees,
Affiliates and agents of any Initial Purchaser, or by any person who controls
any Initial Purchaser, and expressly accepts the non-exclusive jurisdiction of
any such court in respect of any such suit, action or proceeding. Each of the
Obligors hereby represents and warrants, jointly and severally, that the
Authorized Agent has accepted such appointment and has agreed to act as said
agent for service of process, and each of Obligors agrees to take any and all
action, including the filing of any and all documents that may be necessary to
continue such appointment in full force and effect as aforesaid. Service of
process upon the Authorized Agent shall be deemed, in every respect, effective
service of process upon each of the Obligors. Notwithstanding the foregoing, any
action arising out of or based upon this Agreement may be instituted by any
Initial Purchaser, the directors, officers, employees, Affiliates and agents of
any Initial Purchaser, or by any person who controls any Initial Purchaser, in
any court of competent jurisdiction in Cayman Islands or Hong Kong. The parties
hereto each hereby waive any right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement.
39
15. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
16. Currency. Each reference in this Agreement to U.S. dollars (the
"relevant currency"), including by use of the symbol "$" is of the essence. To
the fullest extent permitted by law, the obligation of the Obligors or the
Initial Purchasers, as the case may be, in respect of any amount due under this
Agreement will, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the relevant currency that the party entitled to receive such payment
may, in accordance with its normal procedures, purchase with the sum paid in
such other currency (after any premium and costs of exchange) on the Business
Day immediately following the day on which such party receives such payment. If
the amount in the relevant currency that may be so purchased for any reason
falls short of the amount originally due, the Obligors or the Initial
Purchasers, as the case may be, will pay such additional amounts, in the
relevant currency, as may be necessary to compensate for the shortfall. If the
amount in the relevant currency that may be so purchased for any reason exceeds
the amount originally due, the Obligors or the Initial Purchasers, as the case
may be, will return such excess amount, in the relevant currency, to the party
that paid such amounts. Any obligation of the Obligors or the Initial
Purchasers, as the case may be, not discharged by such payment will, to the
fullest extent permitted by applicable law, be due as a separate and independent
obligation and, until discharged as provided herein, will continue in full force
and effect.
17. Waiver of Immunity. To the extent that an Obligor or an Initial
Purchaser has or hereafter may acquire any immunity (sovereign or otherwise)
from any legal action, suit or proceeding, from jurisdiction of any court or
from set-off or any legal process (whether service or notice, attachment in aid
or otherwise) with respect to itself or any of its property, each of the
Obligors or such Initial Purchaser, as the case may be, hereby irrevocably
waives and agrees not to plead or claim such immunity in respect of its
obligations under this Agreement.
18. Waiver of Tax Confidentiality. Notwithstanding anything herein to
the contrary, purchasers of the Notes and the Obligors (and their respective
employees, representatives or other agents) may disclose to any and all persons,
without limitation of any kind, the U.S. tax treatment and U.S. tax structure of
any transaction contemplated herein and all materials of any kind (including
opinions or other tax analyses) that are provided to the purchasers of the Notes
relating to such U.S. tax treatment and U.S tax structure, other than any
information for which nondisclosure is reasonably necessary in order to comply
with applicable securities laws.
40
19. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
20. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
21. Definitions. The terms that follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the U.S. Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
"Citigroup" shall mean Citigroup Global Markets Limited.
"Commission" shall mean the Securities and Exchange Commission of the
United States.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Investment Company Act" shall mean the U.S. Investment Company Act of
1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Old Notes" shall mean the 12 1/2% Senior Notes due 2006 issued by
ASAT (Finance) LLC and guaranteed by Holdings and certain of its subsidiaries
referred to in the Old Notes Indenture.
"Old Notes Indenture" shall mean the Indenture dated October 29, 1999
by and among U.S. Bank National Association (as successor JPMorgan Chase Bank),
as trustee, ASAT (Finance) LLC, as issuer and guaranteed by Holdings and certain
of its subsidiaries named therein relating to the issuance of 12 1/2% Senior
Notes due 2006.
"PORTAL" shall mean the Private Offerings, Resales and Trading through
Automated Linkages system of the NASD.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Trust Indenture Act" shall mean the U.S. Trust Indenture Act of 1939,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
22. Obligations of Holdings. Notwithstanding anything herein to the
contrary, Holdings shall have no obligations under this Agreement to the extent
(i) it is not permitted to have such obligations under Section 4.20 of the Old
Notes Indenture and (ii) such Section 4.20 of the Old Notes Indenture then
remains in effect.
41
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among each
of the Obligors and the several Initial Purchasers.
Very truly yours,
New ASAT (Finance) Limited
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
ASAT Holdings Limited
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
ASAT Limited
The COMMON SEAL of ASAT LIMITED )
was hereunto affixed in the )
presence of: )
) /s/ ▇▇▇▇▇▇ ▇▇▇▇
) ----------------------------------------
) Name: ▇▇▇▇▇▇ ▇▇▇▇
) Title: Director
▇▇▇▇▇▇▇▇ Limited
The COMMON SEAL of ▇▇▇▇▇▇▇▇ )
LIMITED was hereunto affixed in the )
presence of: )
) /s/ ▇▇▇▇▇▇ ▇▇▇▇
) ----------------------------------------
) Name: ▇▇▇▇▇▇ ▇▇▇▇
) Title: Director
)
)
)
) /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
) ----------------------------------------
) Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
) Title: Director
ASAT, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
Citigroup Global Markets Limited
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Director
For itself and the other several Initial
Purchasers named in Schedule I to the
foregoing Agreement.
SCHEDULE I
Principal Amount of
Notes
Initial Purchaser to be Purchased
--------------------------------------------------------- --------------------
Citigroup Global Markets Limited......................... U.S.$ 150,000,000.00
Total................................................. U.S.$ 150,000,000.00
====================
SCHEDULE II
Guarantors as of the Closing Date
ASAT, Inc.
ASAT Holdings Limited/(1)/
ASAT Limited
▇▇▇▇▇▇▇▇ Limited
----------
/(1)/ Notwithstanding anything herein to the contrary, Holdings shall have no
obligations under the Indenture or as a Guarantor to the extent (i) it is
not permitted to have such obligations under Section 4.20 of the Old
Notes Indenture and (ii) such Section 4.20 of such Old Notes Indenture
then remains in effect.
ANNEX A
Subsidiaries of ASAT Holdings Limited and ASAT Limited
ASAT, Inc.
ASAT, S.A.
ASAT (Cayman) Limited
ASAT (Finance) LLC
ASAT GmbH
ASAT Korea Limited
ASAT Limited
ASAT (Singapore) Pte. Ltd.
New ASAT (Finance) Limited
Newhaven Holdings Limited
RBR Trading Holding B.V.
RBR Trading Holding (Curacao) N.V.
▇▇▇▇▇▇▇▇ Limited
EXHIBIT A
Form of Registration Rights Agreement