Exhibit 10.12.1
ChipPAC, Inc. Hyundai Electronics America ChipPAC Limited
3151 Coronado Drive 3101 North First Street Craigmuir Chambers
Santa Clara, CA 95054 San Jose, CA, 95054 Road Town, Tortola
British Virgin Islands
July 15, 1999
Tessera, Inc.
3099 Orchard Drive
San Jose, California 95134
Attention: Chief Executive Officer
Re: TCC License Agreement dated December 22, 1998, as amended
between Tessera, Inc. and the Tessera Affiliates and
ChipPAC, Inc. and the Licensee Affiliates (the "Agreement")
Ladies and Gentlemen:
Hyundai Electronics Industries Co., Ltd. and Hyundai Electronics America
(collectively, "Hyundai") have entered into an agreement pursuant to which
ChipPAC, Inc. shall be recapitalized (the "Recapitalization"). As a result of
the Recapitalization, (i) an equity investor group led by Bain Capital and
Citicorp Venture Capital, together with ChipPAC management, will own the
majority of ChipPAC's equity and (ii) all of ChipPAC's sales, marketing and
licensing activities will be conducted by ChipPAC Limited, ChipPAC's newly
established British Virgin Islands subsidiary (which will also own the stock of
ChipPAC's Korean and Chinese operating subsidiaries).
Following the consummation of the Recapitalization, ChipPAC will be the
second largest independent provider of semiconductor packaging and test services
to the semiconductor industry. ChipPAC provides packaging and test services to
some of the world's largest and most prominent semiconductor manufacturers. A
number of ChipPAC's customers and suppliers have already been notified of the
proposed transaction and have been encouraging and supportive.
We anticipate consummating the Recapitalization on or about July 29, 1999.
In order to facilitate the orderly progression of the Recapitalization, it is
desirable that ChipPAC, Inc. transfer its rights and obligations under the
Agreement to Hyundai Electronics America and that Hyundai Electronics America
immediately transfer its rights and obligations under the Agreement to ChipPAC
Limited.
We would appreciate it if you would execute and return the enclosed copy of
this letter by July 22, 1999 as evidence that, effective upon the consummation
of the Recapitalization pursuant to that certain Agreement and Plan of
Recapitalization and Merger dated as of March 13, 1999, as amended, by and among
Hyundai, ChipPAC, Inc. and ChipPAC Merger Corp., you consent to (i) the transfer
of all of ChipPAC, Inc.'s rights and obligations under the Agreement to Hyundai
Electronics America and to the transfer immediately thereafter by Hyundai
Electronics America of all such rights and obligations under the Agreement to
ChipPAC Limited and (ii) the collateral security assignment by ChipPAC Limited
of its rights under the Agreement to any of its financing
Tessera, Inc. July 15, 1999
Consent - Page 2
sources, notwithstanding in either case, any provision to the contrary in the
Agreement which may otherwise prohibit or restrict such transfers. From and
after the effectiveness of the transfer of such rights and obligations under the
Agreement to ChipPAC Limited, ChipPAC Limited shall assume each of ChipPAC,
Inc.'s obligations pursuant to the Agreement and shall be bound by all of the
terms and conditions of the Agreement that by their terms apply to ChipPAC,
Inc., and Hyundai Electronics America shall have no rights, obligations or
liabilities thereunder. In no event shall Hyundai be liable to Tessera, Inc. or
the Tessera Affiliates for any breach or damages caused by ChipPAC Limited in
connection with or arising out of the Agreement.
We anticipate providing you notice of the consummation of the
Recapitalization shortly after the closing thereof. Please contact Dennis
McKenna of ChipPAC at (408) 486-5901, Baxon S. Kim of Hyundai Electronics
America at (408) 232-8203 and Rod J. Howard of Brobeck, Phleger & Harrison LLP,
counsel to Hyundai Electronics, at (650) 812-2596, with any questions concerning
this letter.
Very truly yours,
ChipPAC, Inc.
By: /s/ Dennis McKenna
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Its: PRESIDENT/CEO
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Hyundai Electronics America
By: /s/ Dr. C.S. Park
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Its: President & CEO
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ChipPAC Limited
By: /s/ Richard Parsons
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RICHARD PARSONS, for WESTLAND LIMITED
Its: DIRECTOR
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Agreed to as of this 29 day of July, 1999.
Tessera, Inc.
By: /s/ Bruce McWilliams
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Its: President & CEO
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July 29, 1999