STOCK PURCHASE AGREEMENT Among HITACHI, LTD. And HITACHI ASIA LTD. And CHARTERED SEMICONDUCTOR MANUFACTURING LTD. Dated as of February 15, 2008
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Exhibit 4.20
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Among
HITACHI, LTD.
And
HITACHI ASIA LTD.
And
Dated as of February 15, 2008
STRICTLY CONFIDENTIAL
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STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of February 15, 2008, among
HITACHI, LTD., a corporation organized under the laws of Japan (“Hitachi”), HITACHI ASIA
LTD., a company incorporated under the laws of Singapore (“HAS”) (each a “Seller”
and together the “Sellers”), and CHARTERED SEMICONDUCTOR MANUFACTURING LTD., a company
incorporated under the laws of Singapore (the “Purchaser”).
WHEREAS, HITACHI SEMICONDUCTOR SINGAPORE PTE. LTD., a company incorporated under the laws of
Singapore (the “Company”) is engaged in the business of semiconductor wafer fabrication in
Singapore (the “Business”);
WHEREAS, as of the date hereof, Hitachi owns 396,000,000 Class A Shares of the Company (all of
the issued and outstanding Class A Shares being referred to herein as “Class A Shares”) and
1,356,000,000 Class C Shares of the Company (all of the issued and outstanding Class C Shares being
referred to herein as “Class C Shares”), and HAS owns 44,000,000 Class A Shares. After the
date hereof but prior to Closing (as defined below), the Sellers shall effect the Recapitalization
(as defined below). Pursuant to the Recapitalization, as of the Closing Date, the Company will
issue additional shares in the issued share capital of the Company to Hitachi (the “Hitachi
Recapitalization Shares”) and HAS (the “HAS Recapitalization Shares”, and together with
the Hitachi Recapitalization Shares, the “Recapitalization Shares”). The Class A Shares,
the Class C Shares and the Recapitalization Shares owned by Hitachi and HAS at Closing will
collectively represent 100% of the issued and outstanding share capital of the Company at Closing
and shall collectively be referred to herein as the “Shares”;
WHEREAS, each Seller wishes to sell the Shares owned by it to the Purchaser, and the Purchaser
wishes to purchase from the Sellers, the Shares, all upon the terms and subject to the conditions
set forth herein; and
WHEREAS, concurrently with the execution of this Agreement, Renesas Technology Corp., a
corporation organized under the laws of Japan (“Renesas”), and the Company entered into a
foundry agreement, in the form previously agreed by the Purchaser, dated as of the date hereof (the
“Foundry Agreement”) and which is intended to be effective at the Closing pursuant to which
the Company will continue to manufacture and supply certain semiconductor wafer products to Renesas
after the Closing.
NOW, THEREFORE, in consideration of the promises and the mutual agreements and covenants
hereinafter set forth, and intending to be legally bound, each Seller and the Purchaser hereby
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. For purposes of this Agreement:
“Action” means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
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“Affiliate” means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under
common control with, such specified Person.
“Aggregate Purchase Price Allocation Schedule” means the schedule substantially in the
form attached hereto as Exhibit A setting forth the portion of the Aggregate Purchase Price to be
delivered, by wire transfer in immediately available funds, to each of the Purchase Price Bank
Accounts.
“Assets” means the assets and properties of the Company.
“Balance Sheet Date” means March 31, 2007.
“Business Day” means any day that is not a Saturday, a Sunday or other day on which
banks are required or authorized by Law to be closed in Singapore or Tokyo.
“CCS” means the Competition Commission of Singapore.
“Closing Financial Statements” means the audited balance sheet of the Company at March
31, 2008 and the profit and loss account, statement of changes in equity and statement of cash
flows for the period beginning April 1, 2007 and ending as of March 31, 2008.
“Closing Working Capital Statement” means the working capital statement (including the
related notes and schedules thereto) of the Company to be prepared pursuant to Section 2.06(b) and
to be dated as of the date of the Closing. Such Closing Working Capital Statement must also be
derived from the Closing Financial Statements (with such adjustments as are necessary if the
Closing occurs after March 31, 2008) which shall be delivered together with the Closing Working
Capital Statement.
“Competition Act” means the Competition Act, Chapter 50B of Singapore and the rules
and regulations promulgated thereunder and the guidelines published thereunder.
“control” (including the terms “controlled by” and “under common control
with”), with respect to the relationship between or among two or more Persons, means the
possession, directly or indirectly or as trustee, personal representative or executor, of the power
to direct or cause the direction of the affairs or management of a Person, whether through the
ownership of voting securities, as trustee, personal representative or executor, by contract,
credit arrangement or otherwise.
“Conveyance Taxes” means sales, use, value added (including goods and services),
transfer, stamp duty, stock transfer, real property transfer or gains and similar Taxes.
“Designated Amount” means S$400,000.
“Disclosure Schedule” means the Disclosure Schedule, dated as of the date hereof,
delivered by the Sellers to the Purchaser on the date hereof in connection with this Agreement.
Notwithstanding anything to the contrary contained in the Disclosure Schedule or in this Agreement,
the information and disclosures contained in any section of the Disclosure Schedule shall be deemed
to be disclosed and incorporated by reference in any other section of the Disclosure Schedule as
though fully set forth in such other section for which the
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applicability of such information and
disclosure is reasonably and readily apparent on the face of such information or disclosure. For
example, if a material contract disclosed on Section 3.16 of the Disclosure Schedule contains a
provision or reference relating to a required consent or other approval but such consent or other
approval is not disclosed on Section 3.05 of the Disclosure Schedule, then the provision or
reference in such material contract shall not be deemed to be disclosed and incorporated by
reference in Section 3.05 of the Disclosure Schedule since the parties agree that such a provision
or reference in the material contract is not reasonably and readily apparent for purposes of the
preceding sentence.
“Encumbrance” means any security interest, pledge, hypothecation, mortgage, lien or
encumbrance.
“Environmental Law” means any national or local statute, law, ordinance, regulation,
rule, code, order, consent decree or judgment, in each case in effect as of the date hereof,
relating to pollution or protection of the environment.
“Environmental Permits” means any permit, approval, identification number, license and
other authorization required under or issued pursuant to any applicable Environmental Law.
“Estimated Working Capital Statement” means the estimated working capital statement
(including the related notes and schedules thereto) of the Company attached hereto as Schedule
2.06(a), as of the Closing, prepared in accordance with the methods, principles, practices and
polices set forth therein.
“Excluded Liabilities” means Liabilities for the replacement or repair of products
manufactured, sold, licensed, leased or delivered by the Company on or before the Closing Date, or
other damages in connection therewith, to the extent not already reserved for in the Financial
Statements.
“Excluded Taxes” means (i) Taxes imposed on or payable by the Company for or with
respect to any taxable period that ends on or before the date of the Closing and (ii) with respect
to Straddle Periods, Taxes imposed on the Company which are allocable, to the portion of such
period ending on the date of the Closing; provided, however, that Excluded Taxes
shall not include Taxes resulting from any act, transaction or omission of the Purchaser or the
Company occurring after the Closing that is not in the ordinary course of business and shall not
include any taxes reflected on the Closing Working Capital Statement. In the case of Taxes that
are payable with respect to a
Straddle Period, the portion of any such Tax that is allocable to the portion of the taxable
period ending on the date of the Closing shall be: (i) in the case of Taxes that are either (x)
based upon or related to income or receipts or (y) imposed in connection with any sale or other
transfer or assignment of property (real or personal, tangible or intangible), deemed equal to the
amount which would be payable (after giving effect to amounts which may be deducted from or offset
against such Taxes) if the taxable period ended on the date of the Closing; (ii) and in the case of
Taxes imposed on a periodic basis with respect to the Assets of the Company or otherwise measured
by the level of any item, deemed to be the amount of such Taxes for the entire Straddle Period (or,
in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the
immediately preceding period) (after giving effect to amounts which may be deducted from or offset
against such Taxes), multiplied by a fraction the numerator of which is the number of days in the
period ending on the date of the Closing and the denominator of which is the
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number of days in the
entire Straddle Period. Any credit or refund resulting from an overpayment of Taxes for a Straddle
Period shall be prorated based upon the method employed above taking into account the type of Tax
to which the refund relates. In the case of any Tax based upon or measured by capital (including
net worth or long-term debt) or intangibles, any amount thereof required to be allocated shall be
computed by reference to the level of such items on the date of the Closing. All determinations
necessary to effect the foregoing allocations shall be made in a manner consistent with prior
practice of the Company.
“Governmental Authority” means any national, supranational, local or other government,
governmental, regulatory or administrative authority, agency or commission or any court, tribunal,
or judicial or arbitral body.
“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental Authority.
“HIT” means Hitachi International Treasury Ltd., a company incorporated under the laws
of Singapore.
“HIT Intercompany Liabilities” means the aggregate principal amount of Liabilities of
the Company payable by the Company to HIT.
“Indemnified Party” means a Purchaser Indemnified Party or a Seller Indemnified Party,
as the case may be.
“Indemnifying Party” means each Seller pursuant to Section 8.02 and the Purchaser
pursuant to Section 8.03, as the case may be.
“Law” means any national, supranational, local or similar statute, law, ordinance,
regulation, rule, code, order, requirement or rule of law (including common law).
“Leased Real Property” means the real property leased by the Company, in each case, as
tenant, together with, to the extent leased by the Company, all buildings
and other structures, facilities or improvements currently or hereafter located thereon, all
fixtures, systems, equipment and items of personal property of the Company attached or appurtenant
thereto and all easements, licenses, rights and appurtenances relating to the foregoing including,
for the avoidance of doubt, the buildings and other structures and facilities constructed by the
Company on real property leased by the Company.
“Liabilities” means any and all debts, liabilities and obligations, whether accrued
or fixed, absolute or contingent, matured or unmatured or determined or determinable, including
those arising under any Law, Action or Governmental Order and those arising under any contract,
agreement, arrangement, commitment or undertaking.
“Material Adverse Effect” means any circumstance, change in or effect on the Company,
individually or in the aggregate, that is materially adverse to the results of operations, the
condition (financial or other), the assets, liabilities, properties, business, or operations of the
Company.
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“Organizational Documents” means the memorandum and articles of association and the
certificate of incorporation of the Company (or other similar organizational document) as currently
in effect, including any amendments thereto.
“Permitted Encumbrances” means statutory Encumbrances for current Taxes not yet due or
delinquent (or which may be paid without interest or penalties) or the validity or amount of which
is being contested in good faith by appropriate proceedings.
“Person” means any individual, partnership, firm, corporation, limited liability
company, association, trust, unincorporated organization or other entity.
“Proprietary Rights” means (i) all inventions and discoveries (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto, and all patents,
patent applications, patent disclosures, invention disclosures and other rights of inventions,
worldwide, together with all provisionals, reissuances, continuations, continuations-in-part,
divisions, revisions, extensions and reexaminations or other applications or patents claiming the
benefit of the filing date of any such application or patent, thereof; (ii) all trademarks, service
marks, trade dress, logos, product names, slogans, brand names, trade names, domain names and
corporate names, together with all translations, adaptations, derivations and combinations thereof
and including all common law rights and all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith; (iii) all copyrightable works, all rights in
copyrights, including moral rights, copyrights, any and all website content, and other rights of
authorship and exploitation, and all applications, registrations and renewals in connection
therewith; (iv) all trade secrets and confidential business and technical information; (v) all
source code and object versions of computer software (including data and related documentation);
(vi) all software and web sites (including all related computer code and content); (vii) all
tangible embodiments, whether in electronic, written or other media, of technology, including
designs, design and manufacturing documentation (such as ▇▇▇▇ of materials, instructions and test
reports), schematics, algorithms, routines, formulae, software, databases, notebooks,
specification, development and equipment, processes, prototypes, know-how and devices; (viii) all
rights to exclude others from appropriating any of such rights, including the rights to ▇▇▇ for and
remedies against past, present and future infringements or misappropriations of any or all of the
foregoing and rights of priority and protection of interests therein; (ix) international
equivalents of any of the rights set forth in subsections (i) through (vii) above; (x) all other
proprietary, intellectual property, including registered intellectual property, and other rights
relating to any or all of the foregoing anywhere in the world; and (xi) all copies and tangible
embodiments of the items set forth in Clauses (i) through (vii) hereof (in whatever form or
medium), and any claims or causes of actions (pending or filed) arising out of or related to any
infringement or misappropriation of any of the foregoing.
“Purchase Price Bank Accounts” means the bank accounts of each Seller and HIT to be
designated by Hitachi in the Aggregate Purchase Price Allocation Schedule.
“Purchaser’s Accountants” means KPMG, independent accountants of the Purchaser.
“Sellers’ Accountants” means Ernst & Young, independent accountants of the Sellers.
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“Sellers’ Knowledge”, “Knowledge of the Sellers” or similar terms used in this
Agreement mean the knowledge of the Persons listed in Schedule 1.01, in each case after due
inquiry.
“SFRS” means Singapore Financial Reporting Standards in effect from time to time
applied consistently throughout the periods involved.
“Singapore” means the Republic of Singapore.
“S$” or “Singapore dollars” means the lawful currency of Singapore.
“Stamp Duty Documents” means (a) a working sheet computing the net asset value per
Share in the form prescribed by the Stamp Duty Branch of the Inland Revenue Authority of Singapore
and signed by a director or the secretary of the Company, and (b) such other documents as may be
prescribed from time to time by the Stamp Duty Branch of the Inland Revenue Authority of Singapore
for the purposes of assessing the stamp duty payable on a transfer of Shares.
“Straddle Period” means any taxable period beginning on or before the date of the
Closing and ending after the date of the Closing.
“Subsidiary” means any Person of which a majority of the outstanding voting securities
or other voting equity interests are owned, directly or indirectly, by the Company.
“Tax” or “Taxes” means any and all taxes, fees, levies, duties, tariffs, and
other charges of any kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto), including withholding taxes, imposed by any
government or taxing authority.
“Tax Returns” means any returns, declaration, report, election, claim for refund or
information return or other statement or form relating to, filed or required to be filed with any
Tax authority, including any schedule or attachment thereto or any amendment thereof.
“Working Capital” means the amount by which current assets exceed current liabilities,
each as shown on the Estimated Working Capital Statement or the Closing Working Capital Statement,
as the case may be.
SECTION 1.02. Definitions. The following terms have the meanings set forth in the Sections set forth below:
| Definition | Location | |
“Agreement” |
Preamble | |
“Aggregate Purchase Price” |
2.02 | |
“Business” |
Recitals | |
“Class A Shares” |
Recitals | |
“Class C Shares” |
Recitals | |
“Closing” |
2.03 | |
“Closing Date” |
2.03 | |
“Confidential Memorandum” |
4.07 |
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| Definition | Location | |
“Company” |
Recitals | |
“Employee Benefit Plans” |
3.14(a) | |
“Foundry Agreement” |
Recitals | |
“Financial Statements” |
3.06(a) | |
“Governmental Approval” |
5.04(a) | |
“HAS” |
Preamble | |
“HAS Recapitalization Shares” |
Recitals | |
“Hitachi” |
Preamble | |
“Hitachi Recapitalization Shares” |
Recitals | |
“Independent Accounting Firm” |
2.06(c)(ii) | |
“Loss” |
8.02(a) | |
“Material Contracts” |
3.16(a) | |
“Nondisclosure Agreement” |
5.03(a) | |
“Permits” |
3.23 | |
“Personal Property Lease” |
3.16(a)(vii) | |
“Purchaser” |
Preamble | |
“Purchaser Indemnified Party” |
8.02(a) | |
“Recapitalization” |
3.03(b) | |
“Recapitalization Shares” |
Recitals | |
“Renesas” |
Recitals | |
“Renesas Employee Benefit Plans” |
3.14(a) | |
“Renesas Irrevocable Purchase Order” |
5.11(c) | |
“Renesas MOU” |
3.16(c) | |
“Retained Names and Marks” |
5.05(a) | |
“Secondee Loans” |
3.14(g) | |
“Seller” |
Preamble | |
“Seller Indemnified Party” |
8.03 | |
“Sellers” |
Preamble | |
“Shares” |
Recitals | |
“Third Party Claim” |
8.05(b) |
SECTION 1.03. Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise provided or that the context otherwise
requires:
(a) when a reference is made in this Agreement to an Article, Section, Exhibit or
Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated;
(b) the table of contents and headings for this Agreement are for reference purposes
only and do not affect in any way the meaning or interpretation of this Agreement;
(c) whenever the words “include,” “includes” or “including” are used in this
Agreement, they are deemed to be followed by the words “without limitation”;
(d) the words “hereof,” “herein” and “hereunder” and words of similar import, when
used in this Agreement, refer to this Agreement as a whole and not to any particular
provision of this Agreement;
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(e) all terms defined in this Agreement have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto, unless otherwise defined
therein;
(f) the definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms;
(g) references to a Person are also to its successors and permitted assigns; and
(h) the use of “or” is not intended to be exclusive unless expressly indicated
otherwise.
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale of the Shares. Upon the terms and subject to the conditions of this Agreement, at the Closing, each Seller
shall sell its respective Shares to the Purchaser, and the Purchaser shall purchase the Shares free
and clear of all Encumbrances.
SECTION 2.02. Aggregate Purchase Price. Subject to the adjustments set forth in Section 2.06, the aggregate purchase price for the
Shares shall be S$330,800,000 (the “Aggregate Purchase Price”). The Aggregate Purchase
Price shall be paid to the Sellers in the respective amounts set forth in the Aggregate Purchase
Price Allocation Schedule.
SECTION 2.03. Closing. Subject to the terms and conditions of this Agreement, the sale and purchase of the Shares
contemplated by this Agreement shall take place at a closing (the “Closing”) to be held at
the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
commencing at 12:00 noon Singapore time on March 31, 2008 or at such other place or at such other
time or on such other date as the Sellers and the Purchaser may mutually agree upon in writing
provided that all the conditions to the obligations of the parties hereto set forth in Section
7.01, Section 7.02 and Section 7.03 have been satisfied or waived (the “Closing Date”). The
Closing shall be deemed to be effective at the close of business on the Closing Date.
SECTION 2.04. Closing Deliveries by the Sellers. At the Closing, and against compliance by the Purchaser with the provisions of Section
2.05, including payment of the Aggregate Purchase Price:
(a) each Seller shall deliver or cause to be delivered to the Purchaser a proper
instrument for transfer of the Shares being sold by it free and clear of all Encumbrances,
duly executed by it in favor of the Purchaser, accompanied by the share certificates in
respect of such Shares;
(b) each Seller shall deliver or cause to be delivered to the Purchaser a receipt for
the portion of the Aggregate Purchase Price attributable to the Shares being sold by it as
set forth on the Aggregate Purchase Price Allocation Schedule;
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(c) Hitachi shall deliver or cause to be delivered to the Purchaser a receipt of
HIT, addressed to the Purchaser and the Company, confirming full satisfaction of the HIT
Intercompany Liabilities, including interest accrued thereon as of Closing, and confirming
the full discharge and release of all obligations and liabilities of the Company in respect
of the HIT Intercompany Liabilities, including interest accrued thereon as of Closing;
(d) Hitachi shall deliver or cause to be delivered to the Purchaser documents
reasonably satisfactory to the Purchaser to evidence the closing of the Recapitalization;
and
(e) each Seller shall deliver or cause to be delivered to the Purchaser each of the
items listed at Schedule 2.04.
SECTION 2.05. Closing Deliveries by the Purchaser. At the Closing, the Purchaser
shall deliver to:
(a)
each Seller, the portion of the Aggregate Purchase Price attributable to the shares being sold by it as set forth on the Aggregate Purchase Price Allocation Schedule by
wire transfer in immediately available funds to the Purchase Price Bank Accounts as set
forth on the Aggregate Purchase Price Allocation Schedule;
(b) the Sellers, a certified extract of the resolutions duly and validly adopted by
the board of directors of the Purchaser evidencing its authorization of the execution and
delivery of this Agreement and the consummation of the transactions contemplated hereby;
and
(c) the Sellers, a certificate of a duly authorized officer of the Purchaser
certifying as to the matters set forth in Section 7.01(a).
SECTION 2.06. Post-Closing Adjustment of Aggregate Purchase Price. The Aggregate
Purchase Price shall be subject to adjustment after the Closing as specified in this Section 2.06:
(a) Estimated Working Capital Statement. Schedule 2.06(a) sets forth the
Sellers’ good faith estimate of Working Capital as of the Closing and has been prepared in
accordance with the methods, principles, practices and policies set forth therein.
(b) Closing Working Capital Statement; Closing Financial Statements. As
promptly as practicable, but in any event within 60 Business Days following the Closing,
Hitachi shall deliver to the Purchaser the Closing Working Capital Statement and the
Closing Financial Statements. The Closing Working Capital Statement will be prepared on a
basis consistent with the methods, principles, practices and policies employed in the
preparation of the Estimated Working Capital Statement and must also be derived from the
Closing Financial Statements (with such adjustments as are necessary if the Closing occurs after March 31, 2008).
(c) Disputes. (i) Subject to Clause (ii) of this Section 2.06(c), the
Closing Working Capital Statement delivered by Hitachi to the Purchaser shall be final,
binding and conclusive on the parties hereto.
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(ii) The Purchaser may dispute any amounts reflected on the Closing Working
Capital Statement to the extent the net effect of such disputed amounts in the
aggregate would affect the Working Capital reflected on the Closing Working Capital
Statement by more than the Designated Amount, such dispute may be for any reason
provided that the Purchaser has a good faith belief in such reason after
consultation with the Purchaser’s Accountants, provided, however,
that the Purchaser shall have notified Hitachi and the Sellers’ Accountants in
writing of each disputed item, specifying the estimated amount thereof in dispute
and setting forth, in reasonable detail, the basis for such dispute, within 20
Business Days of Hitachi’s delivery of the Closing Working Capital Statement to the
Purchaser. In the event of such a dispute, the Sellers’ Accountants and the
Purchaser’s Accountants shall attempt to reconcile their differences, and any
resolution by them as to any disputed amounts shall be final, binding and
conclusive on the parties hereto. If the Sellers’ Accountants and the Purchaser’s
Accountants are unable to reach a resolution with such effect within 20 Business
Days after the receipt by Hitachi and the Sellers’ Accountants of the Purchaser’s
written notice of dispute, the Sellers’ Accountants and the Purchaser’s Accountants
shall submit the items remaining in dispute for resolution to
PricewaterhouseCoopers (or, if such firm shall decline or is unable to act or is
not, at the time of such submission, independent of the Sellers and the Purchaser
and their respective Affiliates, to another independent accounting firm of
international reputation mutually acceptable to the Sellers and the Purchaser)
(either PricewaterhouseCoopers or such other accounting firm being referred to
herein as the “Independent Accounting Firm”), which shall, within 30
Business Days after such submission, determine and report to each Seller and the
Purchaser upon such remaining disputed items, and such report shall be final,
binding and conclusive on each Seller and the Purchaser. The fees and
disbursements of the Independent Accounting Firm shall be allocated between the
Sellers on one hand and the Purchaser on the other hand in the same proportion that
the aggregate amount of such remaining disputed items so submitted to the
Independent Accounting Firm that is unsuccessfully disputed by the Sellers on the
one hand and the Purchaser on the other hand (as finally determined by the
Independent Accounting Firm) bears to the total amount of such remaining disputed
items so submitted.
(iii) In acting under this Agreement, the Sellers’ Accountants, the
Purchaser’s Accountants and the Independent Accounting Firm shall be entitled to
the privileges and immunities of arbitrators.
(d) Aggregate Purchase Price Adjustment. The Closing Working Capital
Statement shall be deemed final for the purposes of this Section 2.06 upon the earliest of
(x) the failure of the Purchaser to notify Hitachi of a dispute within 20 Business Days of
Hitachi’s delivery of the Closing Working Capital Statement to the Purchaser, (y) the
resolution of all disputes, pursuant to Section 2.06(c)(ii), by the Sellers’ Accountants
and the Purchaser’s Accountants and (z) the resolution of all disputes, pursuant to Section
2.06(c)(ii), by the Independent Accounting Firm. Within three Business Days of the Closing
Working Capital Statement being deemed final, an adjustment of the Aggregate Purchase Price
shall be made as follows:
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(i) In the event that the Working Capital reflected on the Estimated Working
Capital Statement exceeds the Working Capital reflected on the Closing Working
Capital Statement by at least the Designated Amount, then the Aggregate Purchase
Price shall be adjusted downward in an amount equal to the amount the Working
Capital reflected on the Estimated Working Capital Statement exceeds the Working
Capital reflected on the Closing Working Capital Statement plus interest on the
adjustment amount calculated in accordance with Section 2.06(e) and Hitachi, on
behalf of the Sellers, shall pay such adjustment amount plus interest to the
Purchaser within 20 Business Days, by wire transfer in immediately available funds
to a bank account designated by the Purchaser.
(ii) In the event that the Working Capital reflected on the Closing Working
Capital Statement exceeds the Working Capital reflected on the Estimated Working
Capital Statement by at least the Designated Amount, then the Aggregate Purchase
Price shall be adjusted upward in an amount equal to the amount the Working Capital
reflected on the Closing Working Capital Statement exceeds the Working Capital
reflected on the Estimated Working Capital Statement plus interest on the
adjustment amount calculated in accordance with Section 2.06(e) and the Purchaser
shall pay such adjustment amount plus interest to the Sellers within 20 Business
Days, by wire transfer in immediately available funds to the Purchase Price Bank
Accounts in the proportion derived from the Aggregate Purchase Price Allocation
Schedule.
(e) Interest on Payments. Any payments required to be made by Hitachi, on
behalf of the Sellers, or the Purchaser pursuant to Section 2.06(d) shall bear interest
from the date of the Closing through the date of payment at the Singapore Interbank Offered
Rate at the date of the Closing.
(f) Withholding. The Purchaser shall be entitled to deduct and withhold from
the consideration otherwise payable pursuant to this Agreement to any Seller (or HIT, if so
directed by any Seller in the Aggregate Purchase Price Allocation Schedule) such amounts as
the Purchaser is required to deduct and withhold under any applicable Law with respect to
the making of such payment. To the extent that amounts are so withheld by the Purchaser,
such withheld amounts shall be treated for all purposes of this Agreement as having been
paid to the Seller in respect of whom such deduction and withholding was made by the
Purchaser. The parties believe that applicable Law as of the date hereof would not require
withholding for payments made for purchases of shares but it would be required to the
extent such payments related to interest on amounts due.
ARTICLE
III
REPRESENTATIONS AND WARRANTIES OF HITACHI
Hitachi hereby represents and warrants to the Purchaser, as of the date hereof and the Closing
Date or, if a representation or warranty is made as of a specified date, as of such date, as
follows:
SECTION 3.01. Organization, Authority and Qualification of the Sellers. Each Seller
is a corporation duly organized and validly existing under the laws of the
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jurisdiction of its
incorporation and has all necessary corporate power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the transactions contemplated hereby. Each
Seller is duly licensed or qualified to do business in each jurisdiction which the properties owned
or leased by it or the operation of its business makes such licensing or qualification necessary,
except to the extent that the failure to be so licensed or qualified would not (a) adversely affect
the ability of each Seller to carry out its obligations under, and to consummate the transactions
contemplated by, this Agreement, or (b) otherwise have a Material Adverse Effect. The execution
and delivery of this Agreement by each Seller, the performance by each Seller of its obligations
hereunder and the consummation by each Seller of the transactions contemplated hereby have been
duly authorized by all requisite action on the part of each Seller and its respective stockholders.
This Agreement has been duly executed and delivered by each Seller, and (assuming due
authorization, execution and delivery by the Purchaser) this Agreement constitutes a legal, valid
and binding obligation of each Seller, enforceable against each Seller in accordance with its
respective terms.
SECTION 3.02. Organization, Authority and Qualification of the Company. (a) The
Company is a company duly incorporated and validly existing under the laws of Singapore and has all
necessary corporate power and authority to own, operate or lease the properties and assets now
owned, operated or leased by it and to carry on its business as it has been and is currently
conducted. The Company is duly licensed or qualified to do business, except to the extent that the
failure to be so licensed or qualified would not (a) adversely affect the ability of the Sellers to
carry out their respective obligations under, and to consummate the transactions contemplated by,
this Agreement or (b) otherwise have a Material Adverse Effect. True and correct copies of
the Organizational Documents and the minute books of the Company have been delivered by
Hitachi to the Purchaser. The minute books of the Company contain complete records of all meetings
of and all actions taken by the shareholders and board of directors (including any committees
thereof) of the Company and no actions which are designated or required under applicable Law to
require the authorization of the meeting of the board of directors and/or the shareholders have
been taken by the Company which are not reflected in its respective minutes. The corporate records
of the Company, including the stock certificate books, stock registers and stock transfer ledgers
of the Company are true, correct and complete. Any applicable stock transfer Taxes and fees of any
Governmental Authority levied or payable with respect to transfers of the Shares prior to the
Closing Date have been paid and any applicable transfer tax stamps affixed.
(b) The Company does not have any Subsidiaries.
SECTION 3.03. Capitalization; Ownership of Shares. (a) As of the date hereof, the
total issued and outstanding share capital of the Company consists of 1,796,000,000 Shares, of
which 440,000,000 Class A Shares and 1,356,000,000 Class C Shares are issued and outstanding and
396,000,000 Class A Shares and 1,356,000,000 Class C Shares are owned of record and beneficially by
Hitachi and 44,000,000 Class A Shares are owned of record and beneficially by HAS, all of which are
validly issued, fully paid and non-assessable and were not issued in violation of any preemptive
rights.
(b) Between the date hereof and Closing, the Sellers will subscribe for and the Company will
issue to the Sellers the Recapitalization Shares for an aggregate subscription price of
S$330,000,000 (the “Recapitalization”). The Sellers shall cause the Company to use the
Recapitalization proceeds to satisfy in full the HIT Intercompany Liabilities (including all
interest accrued thereon), any cancellation fees incurred by the
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Company in respect of the HIT
Intercompany Liabilities and for working capital purposes. The Recapitalization will not adversely
affect the Purchaser or the Company, including with respect to any tax or accounting matters. As of
the Closing Date, the total issued and outstanding share capital of the Company will consist of
440,000,000 Class A Shares, 1,356,000,000 Class C Shares and the Recapitalization Shares, of which
396,000,000 Class A Shares, 1,356,000,000 Class C Shares and the Hitachi Recapitalization Shares
will be owned of record and beneficially by Hitachi and 44,000,000 Class A Shares and the HAS
Recapitalization Shares will be owned of record and beneficially by HAS, all of which will be
validly issued, fully paid and non-assessable and not issued in violation of any preemptive rights,
(c) There are no outstanding subscriptions, options, warrants, convertible securities or other
rights, agreements, arrangements, obligations or commitments relating to or entitling any Person to
purchase or otherwise acquire any stock of the Company or obligating either the Sellers or the
Company to issue or sell any stock, or any other interest in, the Company.
(d) There are no preemptive or similar rights to subscribe for or to purchase any stock of the
Company.
(e) The Shares constitute all the issued and outstanding shares of the Company and are and
will be as of the Closing Date collectively owned of record and beneficially by the Sellers free
and clear of all Encumbrances. The Sellers have the power and authority to sell, transfer, assign
and deliver the Shares as provided in this Agreement, and upon delivery of the Shares on Closing as
herein provided, the Purchaser will acquire good and transferable title to the Shares, free and
clear of any and all Encumbrances.
SECTION
3.04. No Conflict. The execution, delivery and performance of this Agreement
by each Seller do not and will not (a) violate, conflict with or result in the breach of the
certificate of incorporation or bylaws (or similar organizational documents) of each Seller or the
Company, (b) conflict with or violate any Law or Governmental Order applicable to the Seller or the
Company or any of their respective properties or (c) except as described at Section 3.04(c) of the
Disclosure Schedule, violate, conflict with, result in any breach or termination of, or constitute
a default (or event which with the giving of notice or lapse of time, or both, would become a
default) under, require any consent under, or give to others any rights of termination,
acceleration or cancellation of, or result in the creation of any Encumbrances upon any property of
the Sellers or the Company under, any note, bond, mortgage or indenture, agreement, lease,
sublease, license, permit or other instrument or arrangement to which each Seller or the Company is
a party, except, in the case of Clauses (b) and (c), as would not (i) materially and adversely
affect the ability of each Seller to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement or (ii) otherwise have a Material Adverse Effect.
SECTION
3.05. Governmental and Third Party Consents and Approvals. The execution,
delivery and performance of this Agreement by each Seller and the consummation by each Seller of
the transactions contemplated hereby do not and will not require any consent, approval,
authorization or other order of, action by, declaration or filing with or notification to, any
Person, including, any Governmental Authority, by the Company or any Seller, except as described in
Section 3.05 of the Disclosure Schedule.
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SECTION 3.06. Financial Information. (a) True copies of the audited balance
sheet of the Company for the fiscal years ending March 31, 2005, 2006 and 2007 and the related
profit and loss account, statement of changes in equity and statement of cash flows for those
fiscal years (collectively, the “Financial Statements”) have been delivered by Hitachi to
the Purchaser.
(b) The Estimated Working Capital Statement was prepared in accordance with the methods,
principles, practices and policies set forth in Schedule 2.06(a).
(c) The Closing Working Capital Statement will be prepared on a basis consistent with the
methods, principles, practices and policies employed in the preparation of the Estimated Working
Capital Statement and will be derived from the Closing Financial Statements (with such adjustments
as are necessary if the Closing occurs after March 31, 2008).
(d) The Financial Statements and the Closing Financial Statements, as the case may be, (i)
were and will be prepared in accordance with the books of account and other financial records of
the Company (except as may be indicated in the notes thereto), (ii) present and will present fairly
in all material respects the financial condition and results of operations, changes in
stockholders’ equity and cash flow of the Company as of the dates thereof or for the periods
covered thereby, and (iii) were and will be prepared in accordance with SFRS applied on a basis
consistent with the past practices of the Company.
(e) As of the Closing, the property, plant and equipment of the Company will not decrease by
more than S$400,000 from the property, plant and equipment of the Company of S$224,496,000 as
reflected in the forecast provided by Hitachi to the Purchaser, dated as of February 1, 2008.
(f) Since the Balance Sheet Date, the Company has incurred capital expenditures of
approximately S$25.8 million (of which approximately S$18.6 million has been or will have been paid
to equipment suppliers prior to Closing and approximately S$7.2 million has been used as described
in Section 3.18(c)) and will be fully reflected in the Closing Working Capital Statement. Such
capital expenditures shall also be included as fixed assets in the Closing Financial Statements.
(g) Neither the Estimated Working Capital Statement nor the Closing Working Capital Statement
shall include any amounts relating to the sale of the eight shut down tools as described at Section
5.11(c).
SECTION 3.07. Absence of Undisclosed Material Liabilities. (a) There are no
Liabilities of the Company other than (i) Liabilities reflected or reserved against on the
Financial Statements or the notes thereto, (ii) Liabilities set forth in the Section 3.07(a) of the
Disclosure Schedule, or (iii) current Liabilities incurred since the Balance Sheet Date in the
ordinary course of business of the Company consistent with past practices.
(b) There are no Liabilities owing by the Company to Hitachi or its Affiliates other than the
(i) HIT Intercompany Liabilities (including interest accrued thereon as of the Closing) and (ii)
Liabilities relating to the Business incurred in the ordinary course consistent with past practices
and, with respect to such Liabilities incurred prior to the date hereof, reflected in the Estimated
Working Capital Statement. As of the Closing Date, the HIT Intercompany Liabilities, including
interest accrued thereon as of the Closing, shall be
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fully satisfied and the Company shall be fully
discharged and released from all obligations and liabilities thereunder.
(c) As of the date hereof, since the Balance Sheet Date, no event has occurred which,
individually or in the aggregate, has had, or is reasonably likely to result in, a Material Adverse
Effect.
SECTION 3.08. Conduct in the Ordinary Course. Except as described in Section 3.08 of
the Disclosure Schedule, since the Balance Sheet Date, the Business has been conducted in the
ordinary course consistent with past practices and the Company has complied with and has not
violated or breached in any respect any of the terms of clauses (a) through (k) of Section 5.01
assuming such section was applicable from and after the Balance Sheet Date through and including
the date hereof.
SECTION 3.09. Litigation. There is no Action or Governmental Order (i) pending or, to
the Sellers’ Knowledge as of the date hereof, threatened against, involving or otherwise affecting
(x) the Business or (y) the Company or (z) any of the directors or officers of the Company with
respect to their business activities on behalf of the Company; or (ii) that may have the effect of
preventing, making illegal, or otherwise interfering with any of the transactions contemplated by
this Agreement. The Company is not in default with respect to any Governmental Order, and there
are no unsatisfied judgments against the Company.
SECTION 3.10. Compliance with Laws. Except as would not (a) adversely affect the
ability of each Seller to carry out its obligations under, and to consummate the transactions
contemplated by, this Agreement or (b) otherwise have a Material Adverse Effect, the Company has
conducted and continues to conduct the Business in accordance with all Laws and Governmental Orders
applicable to the Company and the Company is not in violation of any such Law or Governmental
Order.
SECTION 3.11. Environmental Matters. (a) Except as would not have a Material
Adverse Effect, (i) the Company is in compliance with all applicable Environmental Laws and have
obtained and are in compliance with all Environmental Permits, (ii) the Company has obtained all
Environmental Permits required under all applicable Environmental Laws necessary to operate the
Business and the execution and implementation of this Agreement will not affect the validity or
require the transfer of any Environmental Permits held by the Company and will not require any
notification, disclosure, registration, reporting, filing, investigation or remediation under any
Environmental Law; (iii) the Company is not the subject of any outstanding or, to the Sellers’
Knowledge, threatened Action relating to any Environmental Laws; (iv) there are no written claims
pursuant to any Environmental Law pending or, to the Sellers’ Knowledge, threatened against the
Company, and the Company has not received any written
communication alleging that the Company is or may be in violation of any Environmental Permit or
may have any Liability or responsibility under any Environmental Law and there are no facts or
circumstances which could form the basis of such a communication; and (v) there are no
investigations of the Business, operations, or currently or previously owned, operated or leased
property of the Company pending against the Company or, to the Sellers’ Knowledge, threatened which
could lead to the imposition of any Liability or responsibility of the Company pursuant to
Environmental Law. Hitachi has provided the Purchaser with copies of any and all environmental
assessment or audit reports or other similar studies or analyses generated by or for the Company or
the Sellers during the seven year period ending on the date hereof, that relate to the Assets.
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(b) The Purchaser acknowledges that (i) the representations and warranties contained in this
Section 3.11 are the only representations and warranties being made with respect to compliance with
or Liability under Environmental Laws related in any way to the Business, including the Assets, or
to this Agreement or its subject matter, and (ii) no other representation contained in this
Agreement shall apply to any such matters and no other representation or warranty, express or
implied, is being made with respect thereto.
SECTION 3.12. Proprietary Rights. (a) The Company does not own any Proprietary
Rights.
(b) Except as described in Section 3.12(b) of the Disclosure Schedule, Renesas is the owner or
licensee of all Proprietary Rights currently used or licensed by the Company, and the Company has a
valid right to use all Proprietary Rights used or necessary for the conduct of the Business as now
conducted. The Purchaser acknowledges and agrees that, except as expressly set forth in the
Foundry Agreement, the Company shall have no rights whatsoever in respect of the Proprietary Rights
of Renesas.
(c) Except as described in Section 3.12(c) of the Disclosure Schedule, the Company is not
under any obligation to pay any license fees, royalties or other payments or similar payments in
connection with the Proprietary Rights used by the Company, and the Company is not in default, or
with the giving of notice or lapse of time or both, would be in default, under any license with
respect to any Proprietary Right.
(d) As of the date hereof, (i) none of the Proprietary Rights has been held or stipulated to
be invalid in any litigation which has been concluded, (ii) the validity of none of the Proprietary
Rights has been challenged by any third party or questioned in any pending, or to the Sellers’
Knowledge, threatened Action, and (iii) Renesas has not received any written notice from any third
party challenging or questioning the validity of any of the Proprietary Rights.
(e) No approval or consent of any Person is needed for the Company to continue using, subject
to the terms and conditions of the Foundry Agreement, the Proprietary Rights used in the conduct of
the Business prior to the Closing following the
consummation of the transactions contemplated hereby and the effectiveness of the Foundry
Agreement.
SECTION 3.13. Real Property. (a) The Company does not own any real property.
(b) Section 3.13(b) of the Disclosure Schedule lists the address of each parcel of Leased
Real Property and the identity of the lessor, lessee and current occupant (if different from
lessee) of each such parcel of Leased Real Property. Except as described in Section 3.13(b) of
the Disclosure Schedule, (i) Hitachi has delivered to the Purchaser, true and complete copies of
(A) all leases, together with any and all amendments, modifications or supplements thereto, in
effect at the date hereof relating to the Leased Real Property and (B) all material deeds, title
insurance policies, legal opinions, title reports, appraisals, surveys, building plans and such
other similar materials and instruments applicable to the Leased Real Property within the
possession or control of the Sellers or the Company; and (ii) there has not been any sublease or
assignment entered into by the Company in respect of the leases relating to the Leased Real
Property.
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(c) The Company has all material certificates of occupancy and permits necessary for the
current use and operation of the Leased Real Property, and the Company has fully complied in all
material respects with all conditions of such certificates of occupancy and permits applicable to
it. No default or violation, or event that with the lapse of time or giving of notice or both
would become a default or violation, has occurred in the due observance of any such certificate of
occupancy and permit.
(d) As of the date hereof, there does not exist any actual or, to the Sellers’ Knowledge,
threatened or contemplated condemnation or eminent domain proceedings that affect the Leased Real
Property in whole or in part, and none of the Sellers or the Company has received any notice of
the intention of any Governmental Authority or other Person to take or use all or any part of the
Leased Real Property.
(e) As of the date hereof, none of the Sellers or the Company has received any notice from
any insurance company that has issued a policy with respect to the Leased Real Property requiring
performance of any structural or other repairs or alterations to such Leased Real Property.
(f) The Company does not own or hold, nor is it obligated under or a party to, any option,
right of first refusal or other contractual right to purchase, acquire, sell, assign or dispose of
any real estate or any portion thereof or interest therein.
SECTION 3.14. Employee Benefit Matters. (a) Section 3.14(a) of the Disclosure
Schedule lists (i) all employee benefit plans and all bonus, stock option, incentive, severance or
other benefit plans, programs or arrangements, and all employment, termination, severance or other
agreements, to which the Company is a party, with respect to which the Company has any obligation or which are maintained,
contributed to or sponsored by the Company for the benefit of any current or former employee,
officer or director of the Company, and (ii) any contracts, arrangements or understandings between
the Company and any employee of the Company (collectively, the “Employee Benefit Plans”).
For the avoidance of doubt, “Employee Benefit Plans” shall not include any employee benefit plans,
bonus, stock option, incentive, severance or other benefit plans, programs or arrangements or
employment, termination, severance or other agreement maintained, contributed to or sponsored by
Renesas or its Affiliates for employees of Renesas or such Affiliates who have been seconded to the
Company (the “Renesas Employee Benefit Plans”). True, correct and complete copies of all
Employee Benefit Plans and related documents have been delivered or made available to the
Purchaser, including all amendments thereto. Benefits under all Employee Benefit Plans are as
represented and have not been increased subsequent to the date as of which documents have been
provided.
(b) The Company has duly made all contributions and premiums required by Law within the
prescribed time periods or by the terms of any Employee Benefit Plan and shall continue to do so
through the Closing Date. If intended or required to be funded and/or book-reserved, each such
Employee Benefit Plan is fully funded and/or book reserved, as appropriate, based upon reasonable
actuarial assumptions.
(c) Except as contemplated under any of the documents to be executed in connection with the
Closing as contemplated in this Agreement, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (i) result in any payment
(including any bonus, golden parachute or severance payment) becoming due to any employee of
Company (whether or not under any Employee Benefit
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Plan); (ii) increase any benefits otherwise
payable under any Employee Benefit Plan; or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.
(d) None of the Sellers or the Company has any contract or agreement to create any additional
Employee Benefit Plan or to modify any such existing plan.
(e) Other than pursuant to any Employee Benefit Plan and except for Liabilities that are
reflected on the Closing Working Capital Statement, there does not now exist, and there are no
existing circumstances that could reasonably be expected to result in, any Liability to the Company
following the Closing with respect to any employee benefit plan, or bonus, stock option, incentive,
severance or other benefit plan, program or arrangement, or employment, termination, severance or
other agreement, to which any Seller or any of its Affiliates is a party, with respect to which any
Seller or any of its Affiliates has any obligation or which is maintained, contributed to or
sponsored by any Seller or any of its Affiliates for the benefit of any current or former
employee, officer or director of any Seller or any of its Affiliates.
(f) Pursuant to a secondment agreement dated as of March 31, 2005, entered into between the
Company and Renesas, the Company is obligated to reimburse Renesas for the bi-annual bonuses
paid to its employees or the employees of its Affiliates who
have been seconded to the Company. To the extent determinable, these reimbursement obligations will
be reflected on the Closing Working Capital Statement. Except as set forth above, there are no
Liabilities owing by the Company with respect to any of the Renesas Employee Benefit Plans.
(g) The aggregate amount of all loans and advances made by the Company to the employees of
Renesas or its Affiliates who have been seconded to the Company (the “Secondee Loans”) does
not exceed S$30,000.
SECTION 3.15. Taxes. (a) (i) All Tax Returns required to have been filed by or with
respect to the Company have been filed within the prescribed time period (taking into account any
extension of time to file granted or obtained); (ii) all Taxes required to be paid by the Company
have been paid without penalty or interest or, in respect of Taxes currently payable, will be paid
within the prescribed time period; (iii) no deficiency for any amount of Tax has been asserted or
assessed by a Governmental Authority against the Company that has not been satisfied by payment,
settled or withdrawn; (iv) there are no Tax Encumbrances on any Assets of the Company (other than
Permitted Encumbrances); (v) none of the Tax Returns are under audit; (vi) no waivers of any
applicable statutory (or otherwise) period of limitations or extensions of time with respect to any
Tax Returns have been granted to the Company; and (vii) the Company does not have any nexus with
any jurisdiction where the Company does not file a Tax Return which nexus could subject it to Tax
in such jurisdiction.
(b) The Company has delivered or made available to the Purchaser complete and accurate copies
of all Tax Returns of the Company (and its predecessors) for all taxable years remaining open
under the applicable statutory (or otherwise) period of limitations, including for the most recent
taxable year, complete and accurate copies of all examination reports assessed against or agreed
to by the Company (and its predecessors) and all notices of additional assessments since March 31,
2003.
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(c) The Company is not bound by any Tax sharing or allocation agreements or similar
arrangements (including indemnity or reimbursement arrangements) and has no Liability for Taxes of
any other Person.
(d) The Company will not be required to include any item of income in, or exclude any item of
deduction from, taxable income for any period (or any portion thereof) ending after the Closing
Date whether or not as a result of any (i) installment sale or other transaction on or prior to
the Closing Date, (ii) accounting method change or agreement with any Governmental Authority, or
(iii) prepaid amount received on or prior to the Closing Date.
SECTION 3.16. Material Contracts. (a) Section 3.16(a) of the Disclosure Schedule
lists each of the following contracts and agreements of the Company in effect as of the date hereof
(such contracts and agreements being “Material Contracts”):
(i) all management contracts and contracts with independent contractors or
consultants (or similar arrangements) that are not cancelable without penalty or
further payment and without more than 30 days’ notice;
(ii) all contracts and agreements relating to indebtedness for borrowed money,
indemnification or guarantees in each case involving an amount in excess of
S$1,000,000, individually or in the aggregate;
(iii) all contracts and agreements that limit or purport to limit the ability
of the Company to compete in any line of business or with any Person or in any
geographic area or during any period of time;
(iv) all contracts and agreements, or series of any such contracts with a
customer of the Company if the Company is obligated thereunder to deliver more than
S$1,000,000 in invoice value of finished goods and services or will take one year
or more from the date hereof to perform or complete;
(v) all purchase commitments or similar contracts or series of any such
contracts with a vendor or supplier if such commitment exceeds S$1,000,000;
(vi) (1) joint venture, partnership or similar contracts or agreements, (2)
contracts or agreements relating to the acquisition or disposition by the Company
of any operating business or the capital stock of any other Person, (3) contracts
or agreements for the purchase, sale, assignment, transfer, conveyance, lease or
other disposal of any of the assets of the Company or for the grant to any Person
of any preferential rights to purchase any of its assets involving an amount in
excess of S$1,000,000, individually or in the aggregate, (4) any contracts or
agreements relating to the making of loans, advances or capital contributions to,
or investments in, any Person (other than the Secondee Loans), or the discharge or
satisfaction of any debt or claim or the amendment, termination, waiver or release
of any contract right by the Company
involving an amount in excess of S$1,000,000, individually or in the aggregate; or
(5) all material contracts, agreements, or product warranties not made in the
ordinary course of business;
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(vii) all leases of personal property (individually, a “Personal Property
Lease” and, collectively, the “Personal Property Leases”) for any such
lease involving annual payments in excess of S$1,000,000 relating to personal
property used in the Business or to which the Company is a party or by which the
properties or assets of the Company are bound; and
(viii) all maintenance or service contracts requiring payment at an average
rate of S$5,000 per month or more.
(b) (i) Each Material Contract is valid and binding on the Company and, to the Sellers’
Knowledge, the counterparties thereto, is enforceable against the Company and, to the Sellers’
Knowledge, the counterparties thereto in accordance with its terms, and is in full force and
effect; (ii) no Material Contract has been modified or amended; (iii) as of the date hereof, none
of the Sellers or the Company has received any written notice or communication from any party to a
Material Contract stating such party’s intent to modify, terminate or fail to renew the
arrangements and relationships set forth therein with the Company; (iv) the Company is not in
breach of, or default in any material respect under, any Material Contract to which it is a party
nor, to the Sellers’ Knowledge, is any other party to any Material Contract in default in any
material respect thereunder; and (v) upon consummation of the transactions contemplated by this
Agreement, except to the extent that any consents set forth in Section 3.04(c) of the Disclosure
Schedule are not obtained and except as set forth in Section 3.16(c) below, the Material Contracts
shall continue in full force and effect without penalty or other adverse consequences.
(c) Set forth at Section 3.16(c) of the Disclosure Schedule is a complete list of all the
contracts that would be terminated as of Closing (including the memorandum of understanding (the
“Renesas MOU”), dated as of December 21, 2004, between Hitachi and Renesas) and contracts
between the Company on the one hand and Hitachi and its Affiliates or Renesas and its Affiliates on
the other hand) and neither the Company nor the Purchaser shall have any liabilities or obligations
thereunder except for any payables of the Company to such parties that are reflected on the Closing
Working Capital Statement.
SECTION 3.17. Brokers. Except for Deutsche Securities Inc., no broker, finder or
investment banker is entitled to any brokerage, finder’s or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements made by or on behalf
of the Sellers. Hitachi is responsible for the fees and expenses of Deutsche Securities Inc.
SECTION 3.18. Tangible Personal Property; Sufficiency of Assets; Capacity of Wafer
Fabrication Facility. (a) The Company has good and marketable title to each item of tangible
personal property reflected in the Financial Statements and the
Estimated Working Capital Statement (except as sold or disposed of subsequent to the date thereof
in the ordinary course of business), free and clear of any and all Encumbrances (other than
Encumbrances that do not materially and adversely affect the operation and use of such tangible
personal property). Except as would not have a Material Adverse Effect, all such items of tangible
personal property which, individually or in the aggregate, are material to the operation of the
Business, are in good condition and a state of good maintenance and repair (ordinary wear and tear
excepted), and have been maintained in accordance with the manufacturers’ and customers’
specifications (if any) and good industry practice.
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(b) The Personal Property Leases and each item of tangible personal property reflected in the
Financial Statements and the Estimated Working Capital Statement and which will be reflected in the
Closing Working Capital Statement, together with the Leased Real Properties described in Section
3.13 and the Proprietary Rights described in Section 3.12, are all of the assets used or necessary
for the conduct of the Business as now conducted, are sufficient for the continued conduct of the
Business after the Closing in substantially the same manner as conducted prior to the Closing,
generally suitable for the purposes used and in material compliance with all applicable Laws.
(c) As of the Closing Date, the wafer input capacity of the Company’s wafer fabrication
facility shall be at least 24,100 wafers per month, consisting substantially of 0.18 um wafers.
Upon completion of the S$8.268 million capital expenditure as described at Section 3.18(c) of the
Disclosure Schedule and based on the product mix and production plan of the Company as set forth in
the Confidential Memorandum (as defined in Section 4.07), the wafer input capacity of the Company’s
wafer fabrication facility shall include 6,000 0.15 um wafers per month. No additional capital
expenditures shall be required to achieve such levels of capacity.
SECTION 3.19. Insurance. Section 3.19 of the Disclosure Schedule sets forth a
complete and accurate list (showing as to each policy or binder the carrier, policy number,
coverage limits, expiration dates, annual premiums and a general description of the type of
coverage provided) of all policies or binders of insurance of any kind or nature covering the
Company or any of its employees, properties or assets, including, policies of life, disability,
fire, theft, workers compensation, employee fidelity and other casualty and liability insurance.
All policies or binders of insurance covering the Company or any of its employees, properties or
assets are in full force and effect and are sufficient for compliance with all applicable Laws and
of all contracts to which the Company is a party. The Company is not in default under any of such
policies or binders, and the Company has not failed to give any notice or to present any claim
under any such policy or binder in a due fashion and within the time periods prescribed thereby. To
the Sellers’ Knowledge, there are no facts upon which an insurer might be justified in reducing
coverage or increasing premiums on existing policies or binders. There are no outstanding unpaid
claims under any such policies or binders. Such policies and binders are in full force and effect
as of the date hereof and shall be kept in full force and effect by the Company through the Closing
Date.
SECTION 3.20. Related Party Transactions. (a) Except as set forth on Section 3.20(a)
of the Disclosure Schedule, (i) none of the Sellers, the beneficiaries of the Sellers, or any of
the Affiliates of the foregoing (other than the Company) has borrowed any moneys from or has
outstanding any other indebtedness or other similar obligations to the Company; (ii) none of the
Sellers, the beneficiaries of the Sellers, or any Affiliate of the foregoing (other than the
Company), or any director, officer or employee of the Company (whether acting as such on or after
the date which is one year before the date hereof) is a party to any contract, agreement or
understanding with the Company; and (iii) none of the Sellers has any contract, agreement or
understanding with any officer or director of the Company with respect to the subject matter of
this Agreement or the consideration payable hereunder.
(b) All balances between the Company and HIT pursuant to the pooling services agreement, dated
as of October 1, 2003, shall have been settled on or prior to Closing.
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SECTION 3.21. Suppliers. Section 3.21 of the Disclosure Schedule sets forth a
complete and accurate list of all suppliers of the Company where the annual purchases therefrom
amount to S$2,000,000 or more during each of the Company’s last three fiscal years. Since the
Balance Sheet Date, the Company has not received any notice of any material adverse change in the
business relationship or prospects of the Company with respect to any supplier listed at Section
3.21 of the Disclosure Schedule.
SECTION 3.22. Labor Matters. (a) The Company is not and has not been engaged in any
unfair labor practice which would have a Material Adverse Effect; (b) there is no unfair labor
practice complaint pending or, to the Sellers’ Knowledge, threatened against the Company; (c) there
is no strike, labor dispute, slowdown or stoppage pending or, to the Sellers’ Knowledge, threatened
against the Company; (d) to the Sellers’ Knowledge, no event has occurred or circumstance exists
that could reasonably be expected to provide the basis for any work stoppage or other labor
dispute, and (e) the Company has not entered into any contracts or arrangements with any labor
union or association representing any employee of the Company and to the Sellers’ Knowledge, there
are no union organizing activities taking place at the Company.
SECTION 3.23. Permits. The Company has obtained all approvals, consents, licenses,
permits, waivers or other governmental or regulatory authorizations reasonably necessary to the
ownership or operation of its properties or the conduct of its Business (the “Permits”).
The Permits held by the Company or used in the conduct of its Business or operations or use of its
properties and assets, as described in Section 3.23 of the Disclosure Schedule, collectively
constitute all of the Permits reasonably necessary for the Company to lawfully conduct and operate
the Business in the manner they currently conduct and operate the Business and to permit the
Company to own and use their assets in the manner in which they currently own and use such assets.
All applications for or renewals of all Permits have been duly filed and made within the prescribed
time periods and no Permit will expire or be terminated as a result of the consummation of the
transactions contemplated by this Agreement.
SECTION 3.24. Disclaimer of Sellers. EXCEPT AS SET FORTH IN OR MADE PURSUANT TO THIS
AGREEMENT, NONE OF THE SELLERS, THEIR RESPECTIVE AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES OR REPRESENTATIVES MAKE OR HAVE MADE ANY OTHER REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF THE COMPANY, THE SHARES OR ANY OF THE
ASSETS, INCLUDING WITH RESPECT TO (I) MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, (II)
THE OPERATION OF THE BUSINESS BY THE PURCHASER AFTER THE CLOSING IN ANY MANNER OTHER THAN AS USED
AND OPERATED BY RENESAS AND THE COMPANY OR (III) THE PROBABLE SUCCESS OR PROFITABILITY OF THE
BUSINESS AFTER THE CLOSING.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
OF THE PURCHASER
The Purchaser hereby represents and warrants to each Seller as follows:
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SECTION 4.01. Organization and Authority of the Purchaser. The Purchaser is a
company duly incorporated and validly existing under the laws of the jurisdiction of its
incorporation and has all necessary corporate power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the transactions contemplated hereby. The
Purchaser is duly licensed or qualified to do business in each jurisdiction which the properties
owned or leased by it or the operation of its business makes such licensing or qualification
necessary, except to the extent that the failure to be so licensed or qualified would not adversely
affect the ability of Purchaser to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement. The execution and delivery by the Purchaser of this
Agreement, the performance by the Purchaser of its obligations hereunder and the consummation by
the Purchaser of the transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of the Purchaser. This Agreement has been duly executed and delivered
by the Purchaser, and (assuming due authorization, execution and delivery of this Agreement by each
Seller) this Agreement constitutes legal, valid and binding obligations of the Purchaser,
enforceable against the Purchaser in accordance with its respective terms.
SECTION 4.02. No Conflict. Assuming the making and obtaining of all filings,
notifications, consents, approvals, authorizations and other actions referred to in Section 4.03,
the execution, delivery and performance by the Purchaser of this Agreement do not and will not (a)
violate, conflict with or result in the breach of any provision of the certificate of incorporation
or bylaws (or similar organizational documents) of the Purchaser, (b) conflict with or violate any
Law or Governmental Order applicable to the Purchaser or its respective assets, properties or
businesses or (c) conflict with, result in any breach of, constitute a default (or event which with
the giving of notice or lapse of time, or both, would become a default) under, require any consent
under, or give to others any rights of termination, amendment, acceleration, suspension, revocation
or cancellation of, any note, bond, mortgage or indenture, agreement, lease, sublease, license,
permit, or other instrument or arrangement to which the Purchaser is a party, except, in the case
of Clause (c), where any required consents are obtained prior to the date hereof, and further
except, in the case of Clauses (b) and (c), as would not materially and adversely affect the
ability of the Purchaser to carry out its obligations under, and to consummate the transactions
contemplated by, this Agreement.
SECTION 4.03. Governmental and Third Party Consents and Approvals. The execution,
delivery and performance by the Purchaser of this Agreement and the consummation by the Purchaser
of the transactions contemplated hereby do not and will not require any consent, approval,
authorization or other order of, action by, declaration or filing with, or notification to, any
Person, including, any Governmental Authority, by the Purchaser, except the premerger notification
and waiting period requirements pursuant to the competition law requirements of Singapore.
SECTION 4.04. Financing. The Purchaser has sufficient immediately available funds to
pay, in cash, the Aggregate Purchase Price and all other amounts payable pursuant to this Agreement
or otherwise necessary to consummate all the transactions contemplated hereby.
SECTION 4.05. Litigation. As of the date hereof, no Action by or against the
Purchaser is pending or, to the best knowledge of the Purchaser, threatened, which could affect the
legality, validity or enforceability of this Agreement or the consummation of the transactions
contemplated hereby.
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SECTION 4.06. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Purchaser.
SECTION 4.07. Independent Investigation; Sellers’ Representations. The Purchaser has
conducted its own independent investigation, review and analysis of the Business, operations,
Assets, liabilities, results of operations, financial condition, and prospects of the Business,
which investigation, review and analysis was done by the Purchaser and its Affiliates and
representatives. The Purchaser hereby acknowledges and agrees that (a) other than the
representations and warranties set forth in or made pursuant to this Agreement and the Foundry
Agreement, none of the Sellers, their respective Affiliates, or any of their respective officers,
directors, employees or representatives make or have made any representation or warranty with
respect to the Company, the Shares or the Assets and (b) other than the indemnification obligations
of each Seller set forth in Article VIII, and other than any Liability which arises from fraud or
intentional misrepresentation of any of the Sellers or their respective Affiliates, none of the
Sellers, their Affiliates, or any of their respective officers, directors, employees or
representatives will have or be subject to any Liability or indemnification obligation to the
Purchaser or to any other Person resulting from the distribution to the Purchaser, its Affiliates
or representatives of, or the Purchaser’s use of, any information relating to the Business,
including the Confidential Memorandum, dated as of September 2007 (the “Confidential
Memorandum”), and any information, documents or material made available to the Purchaser,
whether orally or in writing, in certain “data rooms,” management presentations, responses to
questions submitted on behalf of the Purchaser, during site visits or in any other form in
expectation of the transactions contemplated by this Agreement, except that if any of the
provisions of this Agreement are not performed in accordance with their terms or are otherwise
breached, the parties shall be entitled to seek specific performance of the terms thereof in
accordance with applicable Law. For the avoidance of doubt, the Purchaser shall be able to pursue
and enforce any and all remedies available under applicable Law or otherwise in respect of any
Liability which arises from fraud or intentional misrepresentation of any of the Sellers or their
respective Affiliates. In entering into this Agreement, the Purchaser acknowledges that it has
relied solely upon the aforementioned investigation, review and analysis and not on any factual
representations or opinions of the Sellers or their respective representatives (except the specific
representations and warranties of each Seller set forth in or made pursuant to this Agreement and
the representations and warranties of Renesas set forth in or made pursuant to the Foundry
Agreement).
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business Prior to the Closing. Each Seller covenants and
agrees that, except as described in Section 5.01 of the Disclosure Schedule, between the date
hereof and the Closing, it shall cause the Company to, (i) conduct its Business in all material
respects in the ordinary course consistent with past practices and (ii) use its reasonable best
efforts to preserve intact in all material respects the current business organization of the
Business and the Assets. Without limiting the foregoing and except as described in Section 5.01 of
the Disclosure Schedule, each Seller covenants and agrees that, between the date hereof and the
Closing, it shall not allow the Company to (without the prior
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written consent of the Purchaser,
which consent may be provided or withheld in the Purchaser’s sole discretion, but in any case
without unreasonable delay):
(a) (i) except for the issue of the Recapitalization Shares, issue or sell any shares,
notes, bonds or other securities of the Company (or any option, warrant or other right to
acquire the same), (ii) redeem, repurchase or acquire any shares of the Company, or (iii)
declare or pay any dividends or distributions to the holders of shares of the Company,
other than dividends, distributions and redemptions declared, made or paid by the Company
solely to the Sellers and as described in Section 5.01 of the Disclosure Schedule and
provided that any such dividends, distributions or redemptions are reflected in the Closing
Working Capital Statement;
(b) enter into, amend or modify any Material Contracts or amend or modify the Foundry
Agreement;
(c) except for any amendment or restatement necessary to effect the Recapitalization,
amend or restate any of the Organizational Documents;
(d) other than as required by Law, grant or announce any increase in the salaries,
bonuses or other benefits payable by the Company to any of the employees of the Company
pursuant to any Employee Benefit Plans, programs or agreements existing on the date hereof.
To the Sellers’ Knowledge, there is no requirement by Law for the Company to do any of the
above;
(e) change any method of accounting or accounting practice or policy used by the
Company, other than such changes required by SFRS;
(f) fail to exercise any rights of renewal with respect to any material Leased Real
Property that by its terms would otherwise expire;
(g) enter into any employment or similar contract (or amend any such contract) with
any person holding the designation of section manager or equivalent and above;
(h) revalue any of the Assets, including, by writing off inventory, notes or accounts
receivable except in the ordinary course of business consistent with past practice or as
required by SFRS;
(i) institute or settle any Action involving an amount in excess of S$100,000,
individually or in the aggregate, by the Company;
(j) make any Tax election or agreement or change any Tax election of any kind by the
Company, settle or compromise any claim, notice, audit report, assessment or additional
assessment in respect of Taxes, or enter into any Tax allocation or sharing agreement; and
(k) agree to do anything set forth in subsections (a) through (j) of this Section
5.01.
Notwithstanding anything to the contrary contained herein, subject to Section 5.07, nothing
shall prohibit the Sellers from causing the Company to pay, or to receive payment for, any amounts
outstanding under the payables or receivables between the
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Company, on the one hand, and the Sellers
and any of their respective Affiliates, on the other hand, under the agreements and contracts
listed in Section 3.20 of the Disclosure Schedule provided that any such payments (x) are
consistent with past practice and made in accordance with the terms of the agreements or contracts
establishing such payables or receivables and (y) are reflected in the Closing Working Capital
Statement.
SECTION 5.02. Access to Properties and Information. (a) From the date hereof until
the Closing, upon reasonable notice, Hitachi shall cause the Company and its officers, directors,
employees, accountants and counsel to (i) afford the Purchaser and its authorized representatives
access to the Company’s wafer fabrication facility, equipment and operating data for the purposes
of conducting qualification activities in connection with the manufacture of wafers, including
engineering activity wafers and unit module development, (ii) afford the Purchaser and its
authorized representatives reasonable access to the offices, properties and books and records of
the Company, and (iii) furnish to the officers, employees, and authorized agents and
representatives of the Purchaser such additional financial and operating data and other information
regarding the Business (or copies thereof) as the Purchaser may from time to time reasonably
request; provided, however, that any such access or furnishing of information shall
be conducted at the Purchaser’s expense, during normal business hours in Singapore, under the
supervision of Hitachi’s or Renesas’ personnel and in such a manner as not to interfere with the
normal operations of the Business. Notwithstanding anything to the contrary in this Agreement,
Hitachi shall not be required to disclose any information to the Purchaser if Hitachi believes in
good faith would (i) jeopardize any attorney-client or other legal privilege, or (ii) contravene
any applicable Laws; provided in each case that Hitachi discloses to the Purchaser as much
information as it is legally permitted about the matter to which the privilege or applicable Law
applies, and provided further that Hitachi shall use its reasonable best efforts to cooperate and
explore in good faith whether a method could be used to permit disclosure by Hitachi without
waiving such privilege.
(b) In order to facilitate the resolution of any claims made against or incurred by the
Sellers relating to the Business, for a period up to and including March 31, 2013, the Purchaser
shall (i) retain the books and records relating to the Company relating to periods prior to the
Closing, and (ii) upon reasonable notice, afford the officers, employees, agents and
representatives of each Seller reasonable access (including the right to make, at the each Seller’s
expense, photocopies), during normal business hours in Singapore, to such books and records;
provided, however, that (A) any such access or furnishing of information shall be
conducted at the Sellers’ expense, under the supervision of the Purchaser’s personnel and in such a
manner as not to interfere with the normal operations of the Business and (B) the Purchaser shall
notify Hitachi at least 30 days in advance of destroying any such books and records prior to and
including March 31, 2013 in order to provide Hitachi the opportunity to access such books and
records in accordance with this Section 5.02(b).
(c) In order to facilitate the resolution of any claims made against or incurred by the
Purchaser or the Company, for a period up to and including March 31, 2013, each Seller covenants
and agrees that Hitachi shall (i) retain the books and records relating to the Business and the
Company relating to periods prior to the Closing which shall not otherwise have been delivered to
the Purchaser or the Company, and (ii) upon reasonable notice, afford the officers, employees,
agents and representatives of the Purchaser reasonable access (including the right to make, at the
Purchaser’s expense, photocopies), during normal business hours in Japan, to such books and
records; provided, however, that (A) any such
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access or furnishing of information
shall be conducted at the Purchaser’s expense, under the supervision of the Sellers’ personnel and
in such a manner as not to interfere with the normal operations of the Sellers’ business and (B)
Hitachi shall notify the Purchaser at least 30 days in advance of destroying any such books and
records prior to and including March 31, 2013 in order to provide the Purchaser the opportunity to
access such books and records in accordance with this Section 5.02(c).
SECTION 5.03. Confidentiality. (a) The terms of the letter agreement, dated as of
July 6, 2007 (the “Nondisclosure Agreement”), between Hitachi and the Purchaser are hereby
incorporated herein by reference and shall continue in full force and effect until the Closing, at
which time such Nondisclosure Agreement and the obligations of the Purchaser under this Section
5.03 shall terminate; provided, however, that the Nondisclosure Agreement shall
terminate only in respect of that portion of the Confidential Information (as defined in the
Nondisclosure Agreement) exclusively relating to the transactions contemplated by this Agreement.
If this Agreement is, for any reason, terminated prior to the Closing, the Nondisclosure Agreement
shall nonetheless continue in full force and effect.
(b) Nothing provided to the Purchaser pursuant to Section 5.02(a) shall in any way amend or
diminish the Purchaser’s obligations under the Nondisclosure Agreement. The Purchaser acknowledges
and agrees that any confidential information provided to the Purchaser pursuant to Section 5.02(a)
or otherwise by the Sellers, the Company, or any officer, director, employee, agent,
representative, accountant or counsel thereof shall be subject to the terms and conditions of the
Nondisclosure Agreement.
SECTION 5.04. Regulatory and Other Authorizations; Notices and Consents. (a) The
Purchaser and each of the Sellers shall use their respective commercially reasonable efforts to
promptly obtain all authorizations, consents, orders and approvals of all Governmental Authorities
that may be or become necessary for its execution and delivery of, and the performance of its
obligations pursuant to this Agreement (the “Governmental Approvals”) and will cooperate
fully with each other in promptly seeking to obtain all such Governmental Approvals. For the
purposes of the definition of “Governmental Approvals”, any authorizations, consents and
approvals from the Jurong Town Corporation shall not be considered a Governmental Approval but
shall be an authorization, consent or approval of a third party. As soon as practicable after the
entry into this Agreement, the parties hereto shall cooperate in the preparation of a notification
to the CCS of the sale and purchase of the Shares hereunder, and the application to it for a
decision, in accordance with Section 57(1) of the Competition Act and (if applicable) within the
specified time frame (or extensions thereof) as may be stipulated by the CCS. Each party hereto
undertakes not to provide any incomplete, false or misleading information to the CCS in connection
with the aforesaid notification and application to the CCS for a decision. The Sellers shall not be
required to pay any fees or other payments to any Governmental Authorities in order to obtain any
such authorization, consent, order or approval (other than normal filing fees that are imposed by
Law on the Sellers).
(b) Subject to applicable Law, each party to this Agreement shall promptly notify the other
parties of any communication it or any of its controlled Affiliates receives from any Governmental
Authority relating to the matters that are the subject of this Agreement and permit the other
parties to review in advance any proposed communication by such party to any Governmental
Authority. No party to this Agreement shall agree to participate in any meeting with any
Governmental Authority in respect of any filings, investigation or other inquiry relating to the
matters that are the subject of this Agreement
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unless it consults with the other parties in advance
and, to the extent permitted by such Governmental Authority, gives the other parties the
opportunity to attend and participate at such meeting. Subject to the Nondisclosure Agreement and
applicable Law, the parties to this Agreement will coordinate and cooperate fully with each other
in exchanging such information and providing such assistance as each other party may reasonably
request in connection with the foregoing. Subject to the Nondisclosure Agreement and applicable
Law, the parties to this Agreement will provide the other parties with copies of all
correspondence, filings or communications among the parties or any of their representatives, on the
one hand, and any Governmental Authority or members of its staff, on the other hand, with respect
to this Agreement and the transactions contemplated by this Agreement.
(c) Each of the Sellers shall use their respective commercially reasonable efforts to promptly
obtain all consents and approvals described in Sections 3.04(c)(2)(a) and 3.05(1) of the Disclosure
Schedule.
SECTION 5.05. Retained Names and Marks. (a) Purchaser hereby acknowledges that all
right, title and interest in and to the names “Hitachi” and “HNS,” together with all variations
thereof and all trademarks, service marks, domain names, trade names, trade dress, corporate names,
logos and other identifiers of source containing,
incorporating or associated with any of the foregoing (the “Retained Names and Marks”) are
owned exclusively by either or both of the Sellers, and that, except as expressly provided below,
any and all right of the Company to use the Retained Names and Marks shall terminate as of the
Closing and shall immediately revert to the appropriate Seller. Purchaser further acknowledges
that it has no rights, and is not acquiring any rights, to use the Retained Names and Marks, except
as provided herein.
(b) The Purchaser shall, as soon as practicable after the Closing, but in no event later than
20 Business Days thereafter, cause the Company to effect a change in its corporate name to a
corporate name that does not contain any Retained Names and Marks.
(c) Within 90 days after the Closing, the Purchaser shall use its reasonable best efforts to
cause the Company to remove or obliterate all Retained Names and Marks from all existing stocks of
signs, letterheads, advertisements and promotional materials, Internet web sites and Internet
domain names, and other documents and materials containing the Retained Names and Marks or limit
the use of such existing stocks for internal use only, and transfer to the Sellers any rights with
respect to Internet domain names incorporating any Retained Names or Marks. Except as contemplated
by this Section 5.05, no right to use the Retained Names and Marks is granted by either of the
Sellers to the Purchaser or the Company, whether by implication or otherwise, and nothing hereunder
permits the Purchaser or the Company to use the Retained Names and Marks on any non-public
documents, materials, products or services or unless required to comply with applicable Law.
SECTION 5.06. Notifications. Until the Closing, each party hereto shall promptly
notify the other party in writing of any fact, change, condition, circumstance or occurrence or
nonoccurrence of any event of which it is aware that will or is reasonably likely to result in any
of the conditions set forth in Article VII of this Agreement becoming incapable of being satisfied;
provided, however, that the delivery of any notice pursuant to this Section 5.06
shall not limit or otherwise affect the remedies available hereunder to the party receiving such
notice.
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SECTION 5.07. Cash at Closing. The Sellers shall cause the Company to have, at the Closing, cash or cash equivalents in an
aggregate amount of at least S$300,000.
SECTION 5.08. Further Action. The parties hereto shall use all reasonable efforts to take, or cause to be taken, all
appropriate action, to do or cause to be done all things necessary, proper or advisable under
applicable Law, and to execute and deliver such documents and other papers, as may be required to
carry out the provisions of this Agreement and consummate and make effective the transactions
contemplated by this Agreement.
SECTION 5.09. Tax Matters. (a) Any Tax refund, credit or similar benefit (including any interest paid or credited with
respect thereto) relating to any taxable period (or any portion of a taxable period) ending on or
before the date of the Closing, based on Tax Returns prepared by Hitachi, shall be the property of
the Sellers, and if received by the Purchaser or the Company, shall be paid over to the Sellers
within 45 days after such receipt. The Purchaser may permit each Seller to participate in (at each
Seller’s expense) the prosecution of any such refund claim. Notwithstanding the foregoing, the
Purchaser shall be entitled to any Tax refund, credit or similar benefit relating to any
pre-Closing period if such refund, credit or similar benefit results from any change in the tax
status of the Company after Closing resulting from any post-Closing reorganization or
restructuring.
(b) Notwithstanding anything to the contrary in this Agreement, the Sellers shall, on a joint
and several basis, be responsible for, and fully indemnify the Purchaser and the Company with
respect to, any and all Excluded Taxes. The Purchaser and the Company shall promptly notify Hitachi
if there is any written notice of deficiency or other claim relating to the Excluded Taxes. Any
payment pursuant to this Section 5.09(b) shall be made within the earlier of (i) 45 days after the
written demand therefor and (ii) the time within which the Company is required to pay such amount
as required by applicable Law.
(c) Hitachi shall prepare and file (or cause the Company to prepare and file) all Tax Returns
relating to the Company for all taxable periods ending on or before the date of the Closing. The
Purchaser shall prepare and file (or cause the Company to prepare and file) all Tax Returns that
relate to the Company for taxable periods ending after the date of the Closing (including Straddle
Periods); it being understood that all Taxes shown as due and payable on such Tax Returns shall be
the responsibility of the Purchaser, except for Excluded Taxes which are the responsibility of the
Sellers. Such Tax Returns shall be prepared on a basis consistent with those prepared for prior
taxable periods unless a different treatment of any item is required by applicable law. With
respect to any Tax Return required to be filed with respect to the Company after the date of the
Closing and as to which Taxes are allocable to the Sellers under the definition of Excluded Taxes, the Purchaser shall provide Hitachi and its authorized
representative with a copy of such completed Tax Return and a statement (with which the Purchaser
will make available supporting schedules and information) certifying the amount of Tax shown on
such Tax Return that is allocable to the Sellers pursuant to the definition of Excluded Taxes at
least 30 days prior to the due date (including any extension thereof) for filing of such Tax
Return, and Hitachi and its authorized representative shall have the right to review and comment on
such Tax Return and statement prior to the filing of such Tax Return. Hitachi and the Purchaser
agree to consult and to attempt in good faith to resolve any issues arising as a result of the
review of such Tax Return and statement by Hitachi or its authorized representative.
(d) Hitachi and the Purchaser shall provide each other with such cooperation and information
as either of them reasonably may request of the other (and the
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Purchaser shall cause the Company to
provide such cooperation and information) in filing any Tax Return, amended Tax Return or claim for
refund, determining a Liability for Taxes or a right to a refund of Taxes or participating in or
conducting any audit or other proceeding in respect of Taxes. Notwithstanding anything to the
contrary in Section 5.02, each Seller and the Purchaser shall retain all Tax Returns, work papers
and all material records or other documents in its possession (or in the possession of its
Affiliates) relating to Tax matters of the Company for any taxable period that includes the date of
the Closing and for all prior taxable periods until the later of (i) the expiration of the
applicable statutory limitation periods to which such Tax Returns and other documents relate,
without regard to extensions or (ii) six years following the applicable year of assessment for such
Tax Returns.
SECTION 5.10. Aggregate Purchase Price Allocation Schedule. No later than five Business Days prior to the Closing, Hitachi shall deliver or cause to be
delivered the completed Aggregate Purchase Price Allocation Schedule to the Purchaser.
SECTION 5.11. Ancillary Agreements. (a) Hitachi agrees to cause HAS to waive any termination rights arising from the execution,
delivery and performance of this Agreement as described at Section 3.04(c) of the Disclosure
Schedule and to keep performing the services under the shared energy performance savings contract,
dated as of March 14, 2007, between the Company and HAS through the term of such contract (unless
earlier terminated by the Purchaser) in accordance with, and on the same terms and conditions of,
such contract.
(b) Hitachi agrees to use its reasonable best efforts to cause its Affiliates (i) to keep
performing the services under the agreements listed at Schedule 5.11(b), in each case, through the
term of each respective agreement (unless earlier terminated by the Purchaser in accordance with
the terms thereof) in accordance with, and on the same terms and conditions of, each respective
agreement and (ii) on or prior to the expiry of each respective agreement, to enter into good faith
negotiations for the renewal of such agreements on terms and conditions to be mutually agreed,
provided that if the parties fail to renew the consignment agreement identified in item 1 of Schedule
5.11(b) by the expiry of such agreement on March 31, 2008, Hitachi agrees to use its reasonable
best efforts to cause its Affiliate, Hitachi Plant Engineering and Construction Co., Ltd. to extend
the term of the current agreement for a further period of six months from March 31, 2008 on the
same terms and conditions. For the avoidance of doubt, the Purchaser acknowledges that the
consignment agreement identified in item 1 of Schedule 5.11(b) be subject to Clause (ii) above.
(c) Hitachi also agrees to cause Renesas to issue and deliver an irrevocable purchase order
(the “Renesas Irrevocable Purchase Order”) to the Company for the purchase of the eight
shut down tools listed at Schedule 5.11(c) at an aggregate price of S$2,260,000, delivery of which
tools shall occur as soon as reasonably practicable after the Closing Date and payment for which
will be made against delivery.
ARTICLE VI
EMPLOYEE MATTERS
SECTION 6.01. Continued Employment. For a period of one year following the Closing, the Purchaser shall cause the Company to
continue to employ all the employees of the Company as of the date of the Closing on terms and
conditions no less favorable than those in effect prior to the Closing under the Employee Benefit
Plans and as set out in the
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salary schedule, dated as of January 4, 2008, previously provided by the Sellers to the
Purchaser; provided, however, that the Purchaser may terminate the employment of
any such employee, for cause as defined in the Company’s employment rules or in the relevant
employment letter or agreement; provided, further, that the Purchaser shall not be
in breach of this Section 6.01 if any such employee voluntarily leaves the Company. Without
limiting the foregoing, the Purchaser shall cause the Company to ensure that such employees receive
credit under any current or future Employee Benefit Plans in which they are entitled to participate
for their service at the Company prior to the Closing to the extent the benefits under such
Employee Benefit Plans are based on length of service.
SECTION 6.02. Expatriate Personnel. The Sellers shall cause the Company to terminate the secondment of all Japanese expatriate
personnel seconded to the Company as of the date of the Closing. The Purchaser and the Company
shall have no responsibility for any severance obligations arising in connection with such
terminations. Effective as of Closing, the Purchaser shall cause the Company to accept the
secondment of the Japanese expatriate personnel listed in the secondment agreement to be entered
into between Renesas and the Company on the terms of and subject to the conditions set forth
therein.
ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.01. Conditions to Obligations of the Sellers. The obligations of the Sellers to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or written waiver by the Sellers, at or prior to the
Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. (i) Each of the
representations and warranties of the Purchaser contained in this Agreement (A) qualified
as to materiality shall be true and correct in all respects and (B) not qualified as to
materiality or Material Adverse Effect shall be true and correct in all material respects,
in each case as of the date hereof and as of the date of Closing, except to the extent such
representations and warranties are made as of another date, in which case such
representations and warranties shall be true and correct as of such other date, and (ii)
the covenants and agreements contained in this Agreement to be complied with by the
Purchaser on or before the Closing shall have been complied with in all material respects;
and
(b) Governmental Approvals. If required by the CCS, the Sellers shall have
obtained a favorable decision from the CCS to the effect that the purchase and sale of the
Shares contemplated by this Agreement does not constitute a violation of the relevant
merger provisions.
SECTION 7.02. Conditions to Obligations of the Purchaser. The obligations of the Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or written waiver by the Purchaser, at or prior to
the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. (i) Each of the
representations and warranties of each Seller contained in this Agreement (A) qualified as
to materiality shall be true and correct in all respects and (B) not qualified
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as to
materiality or Material Adverse Effect shall be true and correct in all material respects,
in each case as of the date hereof and as of the date of Closing, except to the extent such
representations and warranties are as of another date, in which case, such representations
and warranties shall be true and correct as of such other date; provided that the failure
of the representations and warranties set forth in Sections 3.06(e) and (f) to be true and
correct shall be disregarded for the purposes of this Section 7.02(a)(i), (ii) each of the
representations and warranties of each Seller contained in Sections 3.09(i), 3.12(d),
3.13(d), 3.13(e) and 3.16(b)(iii) of this Agreement shall be true and correct in all
material respects as of the date of Closing, provided that for purposes of determining
whether the condition in this Clause is satisfied the phrase “as of the date hereof” in
each such Section shall be deemed to have been deleted and no longer applicable to such
Sections, and (iii) the covenants and agreements contained in this Agreement to be complied
with by each Seller on or before the Closing shall have been complied with in all material
respects;
(b) No Material Adverse Effect. Since the date hereof, no event has occurred
which, individually or in the aggregate, has had, or is reasonably likely to result in, a
Material Adverse Effect.
(c) Governmental Approvals. The Purchaser shall have obtained all
Governmental Approvals, including a favorable decision from the CCS to the effect that the
purchase and sale of the Shares contemplated by this Agreement does not constitute a
violation of the relevant merger provisions;
(d) Foundry Agreement. The Foundry Agreement shall have been duly executed and
delivered by the parties thereto and shall be valid and binding on such parties and enforceable
against them in accordance with its terms;
(e) Renesas Irrevocable Purchase Order. The Purchaser shall have received the Renesas
Irrevocable Purchase Order, duly executed and delivered by Renesas, which shall be valid and
binding on Renesas, enforceable against Renesas in accordance with its terms; and
(f) Additional Events. The following events shall have occurred or be satisfied at
Closing:
(i) the Recapitalization shall have been
completed; and
(ii) the Company shall have been fully discharged and released of all
obligations and liabilities in respect of the HIT Intercompany Liabilities.
SECTION 7.03. Mutual Conditions. The obligations of the Purchaser and the Sellers to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment or written waiver, at or prior to the
Closing, of the condition that no Governmental Authority shall have enacted, issued, promulgated,
enforced or entered any Law or Governmental Order (whether temporary, preliminary or permanent)
that has the effect of making the transactions contemplated by this illegal or otherwise
restraining or prohibiting the consummation of such transactions.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Survival of Representations and Warranties. The representations and
warranties of the parties hereto contained in this Agreement shall survive the Closing for a period
of 24 months after the Closing; provided, however, that the representations and
warranties dealing with environmental matters and Taxes provided in Sections 3.11 and 3.15,
respectively, shall survive for a period of seven years after the Closing; provided
further that any claim made with reasonable specificity by the party seeking to be
indemnified within the time periods set forth in this Section 8.01 shall survive until such claim
is finally and fully resolved. All covenants and agreements contained herein shall remain in full
force and effect for a period of 24 months following the Closing, except for those covenants and
agreements that by their terms are to be performed in whole or in part after the Closing, which
shall remain in full force and effect for a period of 24 months following the date by which such
covenant or agreement is required to be performed; provided, however, that any
claim made with reasonable specificity by the party seeking to be indemnified within the time
periods set forth in this Section 8.01 shall survive until such claim is finally and fully
resolved.
SECTION 8.02. Indemnification by the Sellers. (a) The Purchaser and its Affiliates,
officers, directors, employees, agents, successors and assigns (each, a “Purchaser Indemnified
Party”) shall be indemnified and held harmless by the Sellers, on a joint and several basis,
for and against all losses, damages, claims, costs and expenses, interest, awards, judgments and
penalties (including reasonable attorneys’ and consultants’ fees and expenses) actually suffered or
incurred by it (hereinafter, a “Loss”), arising out of or resulting from: (i) the breach of
any representation or warranty made by the Sellers contained in this Agreement or in any
certificates delivered hereunder, (ii) the breach of any covenant or agreement by the Sellers
contained in this Agreement or (iii) any Excluded Taxes or Excluded Liabilities.
(b) Notwithstanding anything to the contrary in this Agreement (including the first clause of
Section 3.07(c)), if (i) to the extent an event has occurred after the date hereof but on or prior
to the Closing Date, (ii) such event, individually or in the aggregate, has had, or is reasonably
likely to result in, a Material Adverse Effect after the date hereof, (iii) the Purchaser has no
actual knowledge of such event or does not reasonably believe on the Closing Date that such event
will result in a Material Adverse Effect, and (iv) the Closing occurs, then the Purchaser shall be
entitled (subject to the limits on indemnification set forth in this Article VIII) to be
indemnified against any Loss arising from such event under Section 3.07(c), but for the purposes of
this Section 8.02(b) the phrase “as of the date hereof” in Section 3.07(c) shall be deemed to have
been deleted and not applicable to such Section. For the avoidance of doubt, this Section 8.02(b)
shall not affect or otherwise limit the Purchaser’s ability to seek indemnification for any Losses
it may incur under any other representation or warranty contained in the Agreement or in the
certificates delivered thereunder.
(c) Notwithstanding anything to the contrary in this Agreement, to avoid the double counting
of Losses, the Purchaser shall not be deemed to have incurred any Loss to the extent such Loss was
reflected in the Closing Working Capital Statement.
(d) Notwithstanding anything to the contrary in this Agreement, the representations and
warranties made by the Sellers in Section 3.06(e) shall not be subject to the limits on
indemnification set forth in this Article VIII. In respect of such representations
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and warranties,
if the actual amount of property, plant and equipment as of Closing is less than the amount which
the Sellers have represented to in Section 3.06(e), the Purchaser’s Loss shall be the amount of
such deficiency.
(e) To avoid the double counting of Losses, the Purchaser agrees that it shall not be entitled
to any indemnification for any Losses resulting from any breach of Section 3.06(f) to the extent
that such breach also results in a dollar for dollar reduction of the Company’s property, plant and
equipment below S$224,496,000.
SECTION 8.03. Indemnification by the Purchaser. Each Seller and its Affiliates,
officers, directors, employees, agents, successors and assigns (each, a “Seller Indemnified
Party”) shall be indemnified and held harmless by the Purchaser for and against any and all
Losses, arising out of or resulting from: (i) the breach of any representation or warranty made by
the Purchaser contained in this Agreement or in any certificates delivered hereunder; (ii) the
breach of any covenant or agreement by the Purchaser contained in this Agreement; or (iii) any
claim or cause of action by any Person arising before or after the Closing against any Seller
Indemnified Party with respect to the operations of the Company, except for claims or causes of
action with respect to which the Seller(s) is(are) obligated to indemnify the Purchaser Indemnified
Parties pursuant to Section 8.02.
SECTION 8.04. Limits on Indemnification. (a) No claim may be asserted nor may any
Action be commenced against another party for breach of any representation, warranty, covenant or
agreement contained herein, unless written notice of such claim or action is received by such party
describing in reasonable detail the facts and circumstances with respect to the subject matter of
such claim or Action on or prior to the date on which the representation, warranty, covenant or
agreement on which such claim or Action is based ceases to survive as set forth in Section 8.01,
irrespective of whether the subject matter of such claim or action shall have occurred before or
after such date.
(b) In respect of a claim arising out of or resulting from a breach of any representation or
warranty made by the Purchaser or the Sellers contained in this Agreement or in respect of any
Excluded Liabilities: (i) an Indemnifying Party shall not be liable for any claim for
indemnification under the indemnification provisions set forth in or made pursuant to this
Agreement, unless and until the aggregate amount of indemnifiable Losses which may be recovered
from the Indemnifying Party equals or exceeds S$2,000,000; (ii) no Losses may be claimed under the
indemnification provisions set forth in or made pursuant to this Agreement by any Indemnified Party
or shall be reimbursable by or shall be included in calculating the aggregate Losses set forth
in Clause (i) above other than Losses in excess of S$400,000 resulting from any single claim
or aggregated claims arising out of the same facts, events or circumstances; (iii) the maximum
amount of indemnifiable Losses which may be recovered from an Indemnifying Party arising out of or
resulting from the causes set forth in the indemnification provisions in or made pursuant to this
Agreement shall be an amount equal to S$248,100,000; and (iv) no party hereto shall have any
Liability under any provision of this Agreement for any punitive, incidental, consequential,
special or indirect damages, including loss of future revenue or income, or loss of business
reputation or opportunity relating to the breach or alleged breach of this Agreement. For the
avoidance of doubt, the limitations on indemnification set out in this Section 8.04 shall not apply
to any claims for indemnification relating to any Excluded Taxes or relating to the breach of any
covenant or agreement.
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SECTION 8.05. Notice of Loss; Third Party Claims. (a) An Indemnified Party shall
give the Indemnifying Party notice of any matter which an Indemnified Party has determined has
given or could give rise to a right of indemnification under this Agreement, within 60 days of such
determination, stating the amount of the Loss, if known, and method of computation thereof, and
containing a reference to the provisions of this Agreement in respect of which such right of
indemnification is claimed or arises.
(b) If an Indemnified Party shall receive notice of any Action, audit, claim, demand or
assessment (each, a “Third Party Claim”) against it which may give rise to a claim for Loss
under this Article VIII, within 30 days of the receipt of such notice, the Indemnified Party shall
give the Indemnifying Party notice of such Third Party Claim; provided, however,
that the failure to provide such notice shall not release the Indemnifying Party from any of its
obligations under this Article VIII except to the extent that such failure results in a material
detriment to the Indemnifying Party and shall not relieve the Indemnifying Party from any other
Liability that it may have to any Indemnified Party other than under this Article VIII. The
Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim at
its expense and through counsel of its choice if it gives notice of its intention to do so to the
Indemnified Party within 15 days of the receipt of such notice from the Indemnified Party. If the
Indemnifying Party elects to undertake any such defense against a Third Party Claim, the
Indemnified Party may participate in such defense at its own expense. The Indemnified Party shall
cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party,
at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in
the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is
reasonably required by the Indemnifying Party. If the Indemnifying Party elects to direct the
defense of any such claim or proceeding, the Indemnified Party shall not pay, or permit to be paid,
any part of such Third Party Claim unless the Indemnifying Party consents in writing to such
payment or unless the Indemnifying Party withdraws from the defense of such Third Party Claim
Liability or unless a final judgment from which no appeal may be taken by or on behalf of the
Indemnifying Party is entered against the Indemnified Party for such Third Party Claim. If the
Indemnified Party assumes the defense of any such claims or proceeding pursuant to this Section
8.05 and proposes to settle such claims or proceeding prior to a final judgment thereon or to forgo
any appeal with respect thereto, then the Indemnified
Party shall give the Indemnifying Party prompt written notice thereof and the Indemnifying
Party shall have the right to participate in the settlement or assume or reassume the defense of
such claims or proceeding.
SECTION 8.06. Remedies. The Purchaser and each Seller acknowledge and agree that
notwithstanding anything herein to the contrary, no breach of any representation, warranty,
covenant or agreement contained herein shall give rise to any right on the part of the Purchaser or
the Sellers, after the consummation of the purchase and sale of the Shares contemplated by this
Agreement, to rescind this Agreement or any of the transactions contemplated hereby. Each party
hereto shall take all reasonable steps to mitigate its Losses after it has actual knowledge of such
Losses.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. Termination. This Agreement may be terminated at any time prior to the
Closing:
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(a) by Hitachi or by the Purchaser if the Closing shall not have occurred by March 31,
2008; provided, however, that (i) the right to terminate this Agreement
under this Section 9.01(a) shall not be available to any party whose failure to fulfill any
obligation under this Agreement shall have been the cause of, or shall have resulted in,
the failure of the Closing to occur on or prior to such date and (ii) in the event all of
the conditions set forth in Article VII (other than conditions which, by their nature, can
only be satisfied at Closing) shall have been satisfied or waived by the parties hereto on
or before March 31, 2008 other than the conditions set forth in Section 7.01(b) and Section
7.02(c) on obtaining a favorable decision from the CCS to the effect that the purchase and
sale of the Shares contemplated by this Agreement does not constitute a violation of the
relevant merger provisions, then the termination right set forth in this Section 9.01(a)
shall not be available to either party until April 30, 2008;
(b) by Hitachi if the Purchaser shall have breached any of its representations,
warranties, covenants or agreements contained in this Agreement which would give rise to
the failure of a condition set forth in Article VII, which breach cannot be or has not been
cured within 30 days after the giving of written notice by Hitachi to the Purchaser
specifying such breach;
(c) by the Purchaser if either Seller shall have breached any of its representations,
warranties, covenants or agreements contained in this Agreement which would give rise to
the failure of a condition set forth in Article VII, which breach cannot be or has not been
cured within 30 days after the giving of written notice by the Purchaser to the Seller in
breach specifying such breach; or
(d) by the mutual written consent of Hitachi and the Purchaser.
SECTION 9.02. Effect of Termination. In the event of termination of this Agreement
as provided in Section 9.01, this Agreement shall forthwith become void and there shall be no
Liability on the part of either party hereto except (a) as set forth in Section 5.03 and Article X
and (b) that nothing herein shall relieve either party from Liability for any breach of this
Agreement occurring prior to such termination.
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Expenses. Except as otherwise specified in this Agreement or the
Schedules, (a) all costs and expenses, including, fees and disbursements of counsel, financial
advisors and accountants, incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be borne by the party incurring such costs and expenses,
whether or not the Closing shall have occurred, except that all such fees, costs and expenses of
the Company up to a maximum of S$100,000 shall be borne by the Company and the balance shall be
borne by, and be the sole responsibility of, the Sellers. For the avoidance of doubt, such fees,
costs and expenses to be borne by the Company shall not include post-merger integration costs and
expenses requested by the Purchaser, including trial production and similar costs, which shall be
borne by the Purchaser; and (b) all Conveyance Taxes that may be imposed upon, or payable or
collectible or incurred in connection with this Agreement and the transactions contemplated hereby
shall be paid by the Purchaser within seven days after the written demand therefor, and the
Purchaser and the Sellers agree to cooperate in the execution and delivery of all instruments and
certificates necessary to enable the Purchaser to comply with any pre-Closing filing requirements.
SECTION 10.02. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and shall be deemed to
have been duly given or made upon receipt) by delivery in person, by an internationally recognized
overnight courier service, by facsimile or registered or certified mail (postage prepaid, return
receipt requested) to the respective parties hereto at the following addresses (or at such other
address for a party as shall be specified in a notice given in accordance with this Section 10.02):
| (a) | if to the Sellers: | ||||
| Hitachi, Ltd. | |||||
| Nihon Seimei Marunouchi Building | |||||
| 6-6 ▇▇▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇ | |||||
| ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇ | |||||
| ▇▇▇▇▇ | |||||
| Facsimile: | ▇▇▇-▇-▇▇▇▇-▇▇▇▇ | ||||
| Attention: | Shoji Okuyoshi | ||||
| Senior Manager | |||||
| Group Company Office | |||||
| Hitachi Group Headquarters | |||||
| (b) | if to the Purchaser: | ||||
| Chartered Semiconductor Manufacturing Ltd. |
|||||
| ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇ | |||||
| ▇▇▇▇▇▇ ▇ | |||||
| ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||||
| Facsimile: | ▇▇▇-▇▇▇▇-▇▇▇▇ | ||||
| Attention: | General Counsel | ||||
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SECTION 10.03. Public Announcements. No party to this Agreement shall make, or cause
to be made, any press release or public announcement in respect of this Agreement or the
transactions contemplated by this Agreement or otherwise communicate with any news media without
the prior written consent of the other parties unless otherwise required by Law or applicable stock
exchange regulation, and the parties to this Agreement shall cooperate as to the timing and
contents of any such press release, public announcement or communication.
SECTION 10.04. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect for so long as the
economic or legal substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to either party hereto. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner in order that the transactions contemplated by this
Agreement are consummated as originally contemplated to the greatest extent possible.
SECTION 10.05. Entire Agreement. This Agreement and the Nondisclosure Agreement
constitute the entire agreement of the parties hereto with respect to the subject matter hereof and
thereof and supersede all prior agreements and undertakings, both written and oral, among the
Sellers and the Purchaser with respect to the subject matter hereof and thereof.
SECTION 10.06. Assignment. This Agreement may not be assigned by operation of law or
otherwise without the express written consent of Hitachi and HAS or of the Purchaser (which consent
may be granted or withheld in the sole discretion of Hitachi and HAS or of the Purchaser), as the
case may be, except that the Purchaser may assign this Agreement to any of its Affiliates without
the prior written consent of Hitachi and HAS; provided, however, that the Purchaser
will remain liable under this Agreement.
SECTION 10.07. Amendment. This Agreement may not be amended or modified except (a)
by an instrument in writing signed by, or on behalf of, each party or (b) by a waiver in accordance
with Section 10.08.
SECTION 10.08. Waiver. Hitachi and HAS, on the one hand, and the Purchaser, on the
other hand, may (a) extend the time for the performance of any of the obligations or other acts of
the other party, (b) waive any inaccuracies in the representations and warranties of the other
party contained herein or in any document delivered by the other party pursuant hereto or (c) waive
compliance with any of the agreements of the other party or conditions to such party’s obligations
contained herein. Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be
construed as a waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition of this Agreement. The failure of any party
hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights.
SECTION 10.09. No Third Party Beneficiaries. This Agreement shall be binding upon
and inure solely to the benefit of the parties hereto and their respective successors and permitted
assigns and nothing herein, express or implied (including the
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provisions of Article VIII relating to indemnified parties), is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever, including any rights of employment for
any specified period, under or by reason of this Agreement.
SECTION 10.10. Currency. Unless otherwise specified in this Agreement, all
references to currency, monetary values and dollars set forth herein shall mean Singapore dollars
and all payments hereunder shall be made in Singapore dollars.
SECTION 10.11. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
SECTION 10.12. Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement shall be referred to, and finally resolved by, arbitration in accordance
with the UNCITRAL Arbitration Rules in accordance with the HKIAC Procedures for the Administration
of International Arbitration in force at the date of this Agreement. The place of arbitration
shall be Hong Kong. The arbitral tribunal shall consist of three arbitrators. The language of the
arbitration shall be English.
SECTION 10.13. Counterparts. This Agreement may be executed and delivered (including
by electronic mail or facsimile transmission) in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, each Seller and the Purchaser have caused this Agreement to be executed as
of the date first written above by their respective officers thereunto duly authorized.
| HITACHI, LTD. |
||||
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇▇ | |||
| Name: ▇▇▇▇ ▇▇▇▇▇▇ | ||||
| Title: Vice President and Executive Officer | ||||
| HITACHI ASIA LTD. |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇ | |||
| Name: ▇▇▇▇▇▇ ▇▇▇▇ | ||||
| Title: Managing Director | ||||
| CHARTERED SEMICONDUCTOR MANUFACTURING LTD. |
||||
| By: | /s/ Chia Song Hwee | |||
| Name: Chia Song Hwee | ||||
| Title: President and Chief Executive Officer | ||||
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EXHIBIT A
FORM OF AGGREGATE PURCHASE PRICE ALLOCATION SCHEDULE
[ ], 2008
Dear Sirs:
This is the Aggregate Purchase Price Allocation Schedule referred to in Section 1.01 of the Stock
Purchase Agreement (the “Agreement”), dated as of February 15, 2008, among Hitachi, Ltd., a
corporation organized under the laws of Japan, Hitachi Asia Ltd., a company incorporated under the
laws of Singapore, and Chartered Semiconductor Manufacturing Ltd., a company incorporated under the
laws of Singapore (the “Purchaser”). Capitalized terms used but not defined herein are as
defined in the Agreement.
We hereby confirm that at the Closing, the Aggregate Purchase Price shall be payable by the
Purchaser to the following Purchase Price Bank Accounts in the amounts set forth below:
(1)
|
Amount | : | S$[ ] | |||||
| Payment to | : | The Bank of Tokyo Mitsubishi UFJ, Ltd. | ||||||
| Account Name | : | Hitachi, Ltd | ||||||
| Branch | : | Head Office | ||||||
| SWIFT Code | : | ▇▇▇▇▇▇▇▇ | ||||||
| Account No. | : | ▇▇▇▇▇▇▇ | ||||||
(2)
|
Amount | : | S$[ ] | |||||
| Payment to | : | The Bank of Tokyo Mitsubishi UFJ, Ltd. | ||||||
| Account Name | : | Hitachi International Treasury Ltd. | ||||||
| For the benefit of | : | Hitachi, Ltd | ||||||
| Branch | : | Singapore Branch | ||||||
| SWIFT Code | : | ▇▇▇▇▇▇▇▇ | ||||||
| Account No. | : | 100298 | ||||||
| Execution Copy | Exhibit A-1 |
Table of Contents
STRICTLY CONFIDENTIAL
(3)
|
Amount | : | S$[ ] | |||||
| Payment to | : | The Bank of Tokyo Mitsubishi UFJ, Ltd. | ||||||
| Account Name | : | Hitachi Asia Ltd. | ||||||
| Branch | : | Singapore Branch | ||||||
| SWIFT Code | : | ▇▇▇▇▇▇▇▇ | ||||||
| Account No. | : | 029658 | ||||||
(4)
|
Amount | : | S$[ ] | |||||
| Payment to | : | The Bank of Tokyo Mitsubishi UFJ, Ltd. | ||||||
| Account Name | : | Hitachi International Treasury Ltd. | ||||||
| For the benefit of | : | Hitachi Asia Ltd. | ||||||
| Branch | : | Singapore Branch | ||||||
| SWIFT Code | : | ▇▇▇▇▇▇▇▇ | ||||||
| Account No. | : | 100298 | ||||||
| Very truly yours, Hitachi, Ltd. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Execution Copy | Exhibit A-2 |
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STRICTLY CONFIDENTIAL
EXHIBIT B
MATTERS TO BE COVERED IN OPINIONS OF SELLERS’ COUNSEL
(Subject to Customary Qualifications)
| 1. | Each Seller is a corporation validly existing under the laws of [Japan] [Singapore]. (Japanese counsel and Singapore counsel) | |
| 2. | Each Seller (a) has the corporate power to execute, deliver and perform the Stock Purchase Agreement, (b) has taken all corporate action necessary to authorize the execution, delivery and performance of the Stock Purchase Agreement, and (c) has duly executed and delivered the Stock Purchase Agreement. (Japanese counsel and Singapore counsel) | |
| 3. | The execution and delivery by each Seller of the Stock Purchase Agreement does not, and the performance by it of its obligations thereunder and the consummation of the transactions contemplated thereby will not, (a) result in a violation of such relevant party’s articles of incorporation or by-laws (or similar charter documents), or (b) result in a violation of applicable Law. (Japanese counsel and Singapore counsel) | |
| 4. | The Stock Purchase Agreement is the legal, valid and binding obligation of each Seller that is a party thereto, enforceable against such Seller in accordance with its terms. (US counsel) | |
| 5. | The Company’s authorized capital stock consists of [ ], [ ] of which are issued and outstanding of record prior to the Closing. All of such issued and outstanding shares are duly authorized and validly issued and fully paid and nonassessable. (Singapore counsel) | |
| 6. | Assuming the Purchaser acquire the Shares in good faith and without notice of adverse claim and in compliance with any applicable laws, the delivery of the share certificates and other instruments of transfer in the manner provided in the Stock Purchase Agreement will transfer to the Purchaser good and valid title to the Shares, free and clear of all Encumbrances. (Singapore counsel) |
| Execution Copy | Exhibit B |
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STRICTLY CONFIDENTIAL
SCHEDULE 1.01
SELLERS’ KNOWLEDGE
| 1. | Yoshiatsu Hayashi | |
| 2. | ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |
| 3. | Shoji Okuyoshi | |
| 4. | ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |
| 5. | ▇▇▇▇▇▇ ▇▇▇▇▇ | |
| 6. | ▇▇▇▇▇▇▇▇ ▇▇▇▇ |
| Execution Copy | Schedule 1.01 |
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STRICTLY CONFIDENTIAL
SCHEDULE 2.04
CLOSING DELIVERIES BY SELLERS
Each Seller shall deliver or cause to be delivered to the Purchaser at Closing:
| (a) | a certificate of a duly authorized officer of that Seller, dated as of the Closing Date, certifying as to the matters set forth in Sections 7.01(b) and Sections 7.02(a), (b) and (f), in form and substance reasonably satisfactory to the Purchaser; | |
| (b) | the written resignations of each director of the Company with an acknowledgement from each director that he has no claims against the Company for compensation for loss of office, redundancy, unfair dismissal or otherwise; | |
| (c) | certified true copies of the resolutions, duly adopted by the board of directors of each Seller and in form and substance reasonably satisfactory to the Purchaser, authorizing that Sellers’ execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and thereby; | |
| (d) | an opinion of counsel to the Sellers, Shearman & Sterling LLP, on New York law, dated as of the Closing Date, covering the matters set forth in Exhibit B, in form and substance reasonably satisfactory to the Purchaser; | |
| (e) | an opinion of counsel to the ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, on Singapore law, dated as of the Closing Date, covering the matters set forth in Exhibit B, in form and substance reasonably satisfactory to the Purchaser; | |
| (f) | an opinion of counsel to the Sellers, Mori Hamada & Matsumoto, on Japanese law, dated as of the Closing Date and with a certified English translation, covering the matters set forth in Exhibit B, in form and substance reasonably satisfactory to the Purchaser; | |
| (g) | the Stamp Duty Documents; and | |
| (h) | such other documents as may be reasonably requested by the Purchaser to evidence the satisfaction by the Sellers of the other conditions set forth in Section 7.01, Section 7.02 or Section 7.03 or which may otherwise be necessary to effect the transactions contemplated hereby or thereby, |
provided that the Purchaser shall reimburse the Sellers for the reasonable costs of obtaining the
opinions listed at (d) through (f) above.
| Execution Copy | Schedule 2.04 |
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STRICTLY CONFIDENTIAL
SCHEDULE 2.06(a)
ESTIMATED WORKING CAPITAL STATEMENT
Estimated Working Capital Statement as of March 31, 2008:
Unit: Singapore Dollars
Current Assets |
||||
Inventories |
24,251,000 | |||
Trade Receivables |
19,392,000 | |||
Other receivables, deposits and prepayments |
1,995,000 | |||
Short term deposits |
— | |||
Cash and cash equivalents |
300,000 | |||
| 45,938,000 | ||||
Current Liabilities |
||||
Trade Payables |
25,644,000 | |||
Other payables and accruals |
12,155,000 | |||
Loan from a related company |
— | |||
Provision for income tax |
7,000 | |||
| 37,806,000 | ||||
Working Capital |
||||
Current Assets |
45,938,000 | |||
— Current Liabilities |
37,806,000 | |||
| 8,132,000 |
PREPARATION OF ESTIMATED WORKING CAPITAL STATEMENT
“Working Capital” shall mean the amount by which current assets exceed current liabilities of the
Company as calculated in accordance with Singapore Financial Reporting Standards (SFRS) and the
significant accounting policies of the Company which have been used to prepare the annual audited
financial statements of the Company for the year ended March 31, 2007.
This Estimated Working Capital Statement has been prepared on a historical cost basis and is
presented in Singapore Dollars (SGD or $), with all values rounded to the nearest thousand ($’000)
except where otherwise indicated.
Pursuant to Section 3.06(g), the Estimated Working Capital Statement does not include any amounts
relating to the sale of the eight shut down tools as described at Section 5.11(c).
| Execution Copy | Schedule 2.06(a) |
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STRICTLY CONFIDENTIAL
SCHEDULE 5.11(b)
ANCILLARY AGREEMENTS WITH HITACHI’S AFFILIATES
| 1. | Consignment Agreement for Utility Facilities Maintenance, dated as of March 31, 2006, between the Company and Hitachi Plant Engineering and Construction Co., Ltd. | |
| 2. | Maintenance Services Agreement, dated as of May 1, 2007, between the Company and Hitachi High — Technologies (Singapore) Pte Ltd relating to the provision of support and services for the FACIM sub-system. |
| Execution Copy | Schedule 5.11(b) |
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STRICTLY CONFIDENTIAL
SCHEDULE 5.11(c)
EIGHT SHUT DOWN TOOLS
| Serial Number |
Process Category | M/C Model | Maker | Equipment Number |
Installation site | |||||||
1. |
465 | Poly Si Depo | DJ-853V | Kokusai Electric | H-P03 | RT/Kofu | ||||||
2. |
474 | Poly Si Depo (L/L) | DJ-835V (L/L) | Kokusai Electric | H-N06 | RT/Kofu | ||||||
3. |
475 | Poly Si Depo (L/L) | DJ-835V (L/L) | Kokusai Electric | H-N07 | RT/Kofu | ||||||
4. |
506 | Lamp Anneal | HP8800 | METRON | N-G01 | RT/Kofu | ||||||
5. |
507 | Lamp Anneal | HP8800 | METRON | N-G02 | RT/Kofu | ||||||
6. |
509 | Lamp Anneal | HP8800 | METRON | N-G04 | RT/Naka | ||||||
7. |
510 | Lamp Anneal | HP8800 | METRON | N-G05 | RT/Kofu | ||||||
8. |
512 | Lamp Anneal | HP8800 | METRON | N-H03 | RT/Naka | ||||||
| Execution Copy | Schedule 5.11(c) |