Exhibit 4.1
EXECUTION COPY
$150,000,000
CHIPPAC INTERNATIONAL LIMITED
12 3/4% Senior Subordinated Notes Due 2009
PURCHASE AGREEMENT
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July 22, 1999
Credit Suisse First Boston Corporation
Donaldson, Lufkin & Jenrette Securities Corporation
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, N.Y. 10010
Ladies and Gentlemen:
1. Introductory. ChipPAC International Limited, a British Virgin Islands
corporation (the "Issuer"), which is a wholly owned subsidiary of ChipPAC Merger
Corp. ("MergerCo"), a Delaware corporation which was formed and is wholly owned
by affiliates of Bain Capital, Inc. and SXI Group LLC, an affiliate of Citicorp
Venture Capital, proposes, subject to the terms and conditions stated herein, to
issue and sell to the several initial purchasers named in Schedule A hereto (the
"Initial Purchasers") the respective principal amounts set forth in Schedule A
hereto of U.S. $150,000,000 aggregate principal amount of its 12 3/4% Senior
Subordinated Notes Due 2009 (the "Offered Securities"). The Offered Securities
are to be issued pursuant to an indenture (the "Indenture") to be dated as of
July 29, 1999 (the "Closing Date"), between the Issuer, MergerCo and Firstar
Bank of Minnesota, N.A., as trustee (the "Trustee"). In connection with the
consummation of the Recapitalization, as defined in the Offering Circular (as
defined herein), (1) MergerCo will merge with and into ChipPAC, Inc., a
California corporation ("ChipPAC"), with ChipPAC, Inc. as the surviving
corporation in such merger, and (2) the Issuer will be merged with and into a
wholly owned subsidiary of ChipPAC, Inc., which surviving corporation will be
renamed ChipPAC International Company Limited (the "Surviving Issuer")(the
mergers described in clauses (1) and (2) are collectively referred to herein as
the "Merger"). MergerCo will guarantee the Offered Securities as of the issue
date on an unconditional senior subordinated basis pursuant to the terms of the
Indenture (the "Parent Guaranty"). As a result of the Merger and in connection
with the Recapitalization, (1) all of the Issuer's obligations under the Offered
Securities, the Indenture, the Registration Rights Agreement and the Escrow
Agreement (as each term is defined herein) will, by operation of law, become
obligations of ChipPAC International Company Limited, (2) all of MergerCo's
obligations under the Parent Guaranty, the Offered Securities, the Indenture,
the Registration Rights Agreement and the Escrow Agreement will, by operation of
law, become obligations of ChipPAC, Inc., (3) ChipPAC, Inc. and ChipPAC
International Company Limited will enter into a supplemental
indenture relating to the Indenture (the "Supplemental Indenture"), and, in the
case of ChipPAC, Inc., the Parent Guaranty, which Supplemental Indenture will
cause the obligations under the Indenture and the Parent Guaranty to be assumed
by ChipPAC, Inc. and ChipPAC International Company Limited (4) each direct and
indirect subsidiary of ChipPAC, Inc. (other than ChipPAC Assembly and Test
(Shanghai) Company, Ltd. and Hyundai Electronics (Shanghai) Company Ltd. (to be
renamed ChipPAC (Shanghai) Company Ltd. after the Recapitalization)) will enter
into a Subsidiary Guaranty Agreement pursuant to which each will guarantee the
Offered Securities on an unconditional basis (the "Subsidiary Guaranties" and,
together with the Parent Guaranty, the "Guaranties") and (5) the Issuer will
enter into a credit agreement (together with the related guaranties and security
documents, the "Credit Agreement") among itself, the guarantors named therein,
Credit Suisse First Boston, as administrative agent, and the lenders named
therein.
The Offered Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933 (the "Securities
Act"), in reliance upon an exemption therefrom. Pursuant to the terms of the
Offered Securities and the Indenture, the Initial Purchasers and investors that
acquire Offered Securities may only resell or otherwise transfer such Offered
Securities if such Offered Securities are hereafter registered under the
Securities Act or if an exemption from the registration requirements of the
Securities Act is available (including, without limitation, the exemption
afforded by Rule 144A, Rule 144 or Regulation S of the rules and regulations
under the Securities Act).
Holders of the Offered Securities (including the Initial Purchasers and
their direct and indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement dated the Closing Date, among the Issuer, MergerCo
and the Initial Purchasers (the "Registration Rights Agreement"), pursuant to
which the Issuer will agree to file with the Securities and Exchange Commission
(the "Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of senior
subordinated notes of the Issuer, which are substantially identical to the
Offered Securities (the "Exchange Securities") (except that the Exchange
Securities will not contain terms with respect to transfer restrictions and
interest rate increase) and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act.
This Agreement, the Indenture, the Offered Securities, the Exchange
Securities, the Registration Rights Agreement and the Escrow Agreement are
sometimes referred to in this Agreement collectively as the "Operative
Documents". All material agreements and instruments relating to the
Recapitalization (including, but not limited to, the Recapitalization Agreement
(as defined in the Offering Document) and the Credit Agreement), are sometimes
referred to in this Agreement collectively as the "Transaction Agreements". The
Operative Documents and the Transactions Agreements are sometimes referred to in
this Agreement collectively as the "Transaction Documents". The transactions
that comprise the Recapitalization (including the Merger, the issuance and sale
of the Offered Securities and the borrowings under the Credit Agreement) are
sometimes collectively referred to in this Agreement as the
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"Transactions." References in this Agreement to the subsidiaries of ChipPAC
shall include all direct and indirect subsidiaries of ChipPAC after consummation
of the Merger and related Recapitalization.
On the Closing Date, the Issuer will deposit with Firstar Bank of
Minnesota, N.A. (the "Escrow Agent") the gross proceeds of the offering of the
Offered Securities, together with certain other funds made available to the
Issuer (the "Escrowed Funds"). Upon the satisfaction of certain conditions as
set forth in an Escrow Agreement to be dated the Closing Date between the
Issuer, MergerCo and the Escrow Agent (the "Escrow Agreement"), the Escrowed
Funds will be released to ChipPAC International Company Limited, and such funds
will be used to fund, in part, the Recapitalization.
Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Offering Document (as defined below).
The Issuer and MergerCo hereby agree with the Initial Purchasers as
follows:
2. Representations and Warranties of the Issuer and MergerCo. The Issuer
and MergerCo, jointly and severally, represent and warrant to, and agree with,
the Initial Purchasers that:
(a) A preliminary offering circular dated June 30, 1999, a
supplemental preliminary offering circular dated July 19, 1999 and an
offering circular dated the date of this Agreement relating to the Offered
Securities to be offered by the Initial Purchasers have been prepared by
the Issuer. Such preliminary offering circular, together with such
supplemental preliminary offering circular (collectively, the "Preliminary
Offering Circular") and offering circular (the "Offering Circular") are
hereinafter collectively referred to as the "Offering Document". Any
references herein to the Offering Document shall be deemed to include all
amendments and supplements thereto, unless otherwise noted. The
Preliminary Offering Circular as of its date does not, and the Offering
Circular as of its date and as of the Closing Date does not and will not,
and any supplement or amendment to them will not, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The preceding sentence does not apply to statements in or omissions from
the Offering Document based upon written information furnished to the
Issuer by any Initial Purchaser through Credit Suisse First Boston ("CSFB")
specifically for use therein, it being understood and agreed that the only
such information is that described as such in Section 7(b) hereof. No stop
order preventing the use of the Offering Document, or any order asserting
that any of the Transactions are subject to the registration requirements
of the Securities Act, has been issued.
(b) Each of the Issuer, MergerCo and ChipPAC has been duly
incorporated and is an existing corporation in good
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standing (to the extent such a concept exists in such jurisdiction) under
the laws of the jurisdiction of its incorporation, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Offering Document; and each of the Issuer, MergerCo and
ChipPAC is duly qualified to do business as a foreign corporation in good
standing (to the extent such a concept exists in such jurisdiction) in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not reasonably be
expected to individually or in the aggregate (x) result in a material
adverse effect on the properties, business, result of operations, financial
condition or prospects of ChipPAC and its subsidiaries taken as a whole,
(y) interfere with or adversely affect the issuance or marketability of the
Offered Securities or (z) in any manner draw into question the validity of
this Agreement, any other Transaction Document or any Transaction (any of
the events set forth in clauses (x), (y) or (z), a "Material Adverse
Effect").
(c) Each subsidiary of ChipPAC has been duly incorporated and is an
existing corporation in good standing (to the extent such a concept exists
in such jurisdiction) under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering Document;
and each subsidiary is duly qualified to do business as a foreign
corporation in good standing (to the extent such a concept exists in such
jurisdiction) in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified and in good standing could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; all of the issued and outstanding capital stock of
the Issuer, MergerCo, ChipPAC and of each subsidiary has been, and
immediately following the Recapitalization will be, duly authorized and
validly issued and fully paid and nonassessable; and except for pledges in
favor of Credit Suisse First Boston, as collateral agent, under the Credit
Agreement, the capital stock of ChipPAC and each subsidiary owned by
ChipPAC, directly or through subsidiaries, will be owned free from liens,
encumbrances and defects immediately following the Recapitalization.
(d) The Indenture has been duly authorized by the Issuer and
MergerCo, and will be duly authorized by each other Guarantor immediately
following consummation of the Recapitalization, by all necessary corporate
action; the Offered Securities have been duly authorized by the Issuer by
all necessary corporate action; and when the Offered Securities are
delivered and paid for pursuant to this Agreement and the Indenture on the
Closing Date (as defined below), the Indenture will have been duly executed
and delivered by the Issuer and MergerCo, such Offered Securities will have
been duly executed, authenticated, issued and delivered by the Issuer and
will conform in all material respects to the description thereof contained
in the Offering
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Document and the Indenture and such Offered Securities will constitute
valid and legally binding obligations of the Issuer and MergerCo and, upon
consummation of the Recapitalization, each other Guarantor, enforceable in
accordance with their terms and entitled to the benefits of the Indenture,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in
equity). The Exchange Securities have been duly and validly authorized for
issuance by the Issuer and, when duly executed, authenticated, issued and
delivered by the Issuer and each Guarantor in accordance with the terms of
the Exchange Offer and the Indenture, will constitute valid and legally
binding obligations of the Issuer and each Guarantor, enforceable in
accordance with their terms and entitled to the benefits of the Indenture,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws for general applicability relating to or
affecting creditors' rights and to general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in
equity).
(e) Except as disclosed or reflected in the fees and expenses set
forth in the Offering Document, there are no contracts, agreements or
understandings among the Issuer, MergerCo or ChipPAC or its subsidiaries
and any person that would give rise to a valid claim against the Issuer,
MergerCo or ChipPAC or its subsidiaries or any Initial Purchaser for a
brokerage commission, finder's fee or other like payment in connection with
the Transactions.
(f) Subject to the express assumptions set forth in Section 2(s)
below, no consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the Transactions as contemplated by (i) this Agreement and
the Registration Rights Agreement, or (ii) any other Transaction Document,
in each case, in connection with the consummation of the transactions
contemplated therein, except as have already been obtained or as may be
required (i) in connection with the registration of the Exchange Securities
under the Securities Act, (ii) in connection with the qualification of the
Indenture under the Trust Indenture Act (as defined in paragraph (s) below)
pursuant to the Registration Rights Agreement, or (iii) pursuant to state
securities or "Blue Sky" laws.
(g) The execution, delivery and performance by each of the Issuer,
MergerCo and ChipPAC and the subsidiaries of ChipPAC (to the extent a party
thereto) of each of the Transaction Documents and compliance with the terms
and provisions thereof and consummation of the Transactions will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any statute, any rule, regulation or order
of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Issuer, MergerCo or ChipPAC or any of its
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subsidiaries or any of their properties, or (ii) the Transaction Documents
or any other agreement or instrument to which the Issuer, MergerCo or
ChipPAC or any of its subsidiaries is a party or by which the Issuer,
MergerCo or ChipPAC or any of its subsidiaries is bound or to which any of
the properties of the Issuer, MergerCo or ChipPAC or its subsidiaries is
subject, or (iii) the charter, by-laws or similar governing document of the
Issuer, MergerCo or ChipPAC or any of its subsidiaries, except (A) in each
case, that any rights to indemnity and contribution may be limited by
federal and state securities laws and public policy considerations and (B)
in the case of clauses (i) and (ii) for such breaches, violations or
defaults as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; and the Issuer has full
corporate power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement, and each of the Issuer and
MergerCo have full corporate power and authority, and ChipPAC has full
corporate power, to execute, deliver and perform the Transaction Documents
to which it is a party and to consummate the Recapitalization.
(h) This Agreement has been duly authorized, executed and delivered
by the Issuer and MergerCo. Each of the other Operative Documents has been,
or as of the Closing Date will have been, duly authorized, executed and
delivered by each of the Issuer and MergerCo, and immediately upon
consummation of the Recapitalization will be duly authorized, executed and
delivered by each of ChipPAC and its subsidiaries (to the extent a party
thereto). Each of the Transaction Agreements have been or will be as of or
on the Recapitalization Closing Date, duly authorized, executed and
delivered by each of ChipPAC and its subsidiaries (to the extent a party
thereto). Each Transaction Document conforms or will conform in all
material respects to the descriptions thereof contained in the Offering
Document and each Operative Document (other than this Agreement) is or will
constitute valid and legally binding obligations of the Issuer and MergerCo
(to the extent each is a party thereto) and each Transaction Agreement
constitutes or will constitute valid and legally binding obligations of
ChipPAC and each Guarantor, enforceable in accordance with its respective
terms, except that any rights to indemnity and contribution may be limited
by federal and state securities laws and public policy considerations and
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in
equity).
(i) Except as disclosed in the Offering Document, ChipPAC and its
subsidiaries have, or following consummation of the Recapitalization will
have, good and marketable title to all real properties and all other
properties and assets owned by them that are material to ChipPAC and its
subsidiaries taken as a whole, in each case free from liens, encumbrances
and defects that would materially affect the value thereof or materially
interfere with the use made or proposed to be made thereof by them; and
except as disclosed
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in the Offering Document, ChipPAC and its subsidiaries hold any leased real
or personal property that is material to ChipPAC and its subsidiaries taken
as whole under valid and enforceable leases with no exceptions that would
materially interfere with the use made or proposed to be made thereof by
them.
(j) ChipPAC and its subsidiaries possess all certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to ChipPAC or any of its subsidiaries, would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(k) No labor strike, slowdown, stoppage or dispute with the
employees of ChipPAC or any of its subsidiaries exists or, to the knowledge
of the Issuer or MergerCo, is imminent, that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. None
of ChipPAC or any of its subsidiaries has violated (A) any federal, state
or local law or foreign law relating to discrimination in hiring, promotion
or pay of employees, (B) any applicable wage or hour laws of, or (C) any
provision of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the rules and regulations thereunder, except those
violations that could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(l) ChipPAC and its subsidiaries own, possess, have the right to
use or can acquire on reasonable terms, adequate trademarks, trade names
and other rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively, "intellectual
property rights") used in the conduct of the business now operated by them,
or presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect to
any intellectual property rights that, if determined adversely to ChipPAC
or any of its subsidiaries, would reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect. To the knowledge of
ChipPAC, the use of the intellectual property rights in connection with the
business and operations of ChipPAC or any of its subsidiaries does not
infringe on the rights of any person, except such infringements as would
not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(m) Neither ChipPAC nor any of its subsidiaries (i) is in violation
of any statute, any rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "environmental laws"), (ii) owns or
operates any real property contaminated
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with any substance that is subject to any environmental laws, (iii) is
liable for any off-site disposal or contamination pursuant to any
environmental laws, or (iv) is subject to any claim relating to any
environmental laws, in each case, which violation, contamination, liability
or claim would reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect; and the Issuer and MergerCo are not aware
of any pending investigation which might lead to such a claim.
(n) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Issuer,
MergerCo or ChipPAC or any of its subsidiaries or any of their respective
properties that, if determined adversely to the Issuer, MergerCo or ChipPAC
or any of its subsidiaries, would reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect, or would materially
and adversely affect the ability of the Issuer, MergerCo or ChipPAC or any
of its subsidiaries to perform their respective obligations under the
Transaction Documents, or which are otherwise material in the context of
the sale of the Offered Securities and the consummation of the other
Transactions; and no such actions, suits or proceedings are, to Issuer's or
MergerCo's knowledge, threatened or contemplated.
(o) The financial statements included in the Offering Document
present fairly the financial position of ChipPAC and its combined
subsidiaries as of the dates shown and their results of operations and cash
flows for the periods shown, and such financial statements have been
prepared in conformity with the generally accepted accounting principles in
the United States applied on a consistent basis and the schedules included
in the Offering Document present fairly the information required to be
stated therein. The assumptions used in preparing the pro forma financial
data included in the Offering Document provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts. Except as otherwise
disclosed in the Offering Document, such pro forma financial data comply as
to form in all material respects with the requirements that would have been
applicable to pro forma financial statements had this Offering Document
been a prospectus included in a registration statement on Form S-1 filed
with the Commission under the Securities Act.
(p) Except as disclosed in the Offering Document, since the date of
the latest audited financial statements included in the Offering Document
there has been (i) no material adverse change, nor any development or event
involving a prospective material adverse change, in the financial
condition, business, properties or results of operations of ChipPAC and its
subsidiaries taken as a whole, (ii) except as disclosed in or contemplated
by the Offering Document, there has been no dividend or distribution of any
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kind declared, paid or made by ChipPAC or any of its subsidiaries on any
class of capital stock owned by any of them, (iii) none of ChipPAC or any
of its subsidiaries has incurred any liabilities or obligations, direct or
contingent, which are material, individually or in the aggregate, to
ChipPAC and its subsidiaries, taken as a whole, nor entered into any
transaction not in the ordinary course of business, and (iv) none of
ChipPAC or any of its subsidiaries has incurred any liabilities or
obligations, direct or contingent, that are material, individually or in
the aggregate, to ChipPAC and its subsidiaries, taken as a whole, and that
are required to be disclosed on a balance sheet or notes thereto in
accordance with generally accepted accounting principles and are not
disclosed on the latest balance sheet or notes thereto included in the
Offering Document.
(q) None of the Issuer or any Guarantor is, and following the
Recapitalization none of them will be, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the United States Investment Company
Act of 1940 (the "Investment Company Act"); and none of the Issuer or any
Guarantor is and, after giving effect to the offering and sale of the
Offered Securities and the application of the proceeds thereof as described
in the Offering Document and the consummation of the other Transactions,
none of them will be, an "investment company" as defined in the Investment
Company Act.
(r) The Offered Securities are eligible for resale to "qualified
institutional buyers" pursuant to Rule 144A under the Securities Act and no
securities of the Issuer, MergerCo or ChipPAC or any of its subsidiaries
are of the same class (within the meaning of Rule 144A(d)(3) under the
Securities Act) as the Offered Securities, or are listed on any national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system.
(s) Assuming that the representations and warranties of the Initial
Purchasers contained in Section 4(a) below are true in all material
respects, and assuming compliance in all material respects by the Initial
Purchasers with their covenants in Section 4 below, the offer and sale of
the Offered Securities in the manner contemplated by this Agreement will be
exempt from the registration requirements of the Securities Act by reason
of Section 4(2) thereof and Regulation S thereunder and it is not necessary
to qualify an indenture in respect of the Offered Securities under the
United States Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act").
(t) None of the Issuer, MergerCo, ChipPAC, or any of their
respective affiliates, or any person acting on its or their behalf (i) has,
within the six-month period prior to the date hereof, offered or sold in
the United States or to any U.S. person (as such terms are defined in
Regulation S under the Securities Act) the Offered Securities or any
security of the same class or series as the Offered Securities or (ii) has
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offered or will offer or sell the Offered Securities (A) in the United
States by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act or (B) with
respect to any such securities sold in reliance on Rule 903 of Regulation S
("Regulation S") under the Securities Act, by means of any directed selling
efforts within the meaning of Rule 902(c) of Regulation S. The Issuer,
MergerCo, ChipPAC, their respective affiliates and each person acting on
their behalf have complied and will comply with the offering restrictions
requirement of Regulation S. None of the Issuer, MergerCo or ChipPAC or any
of its subsidiaries has entered or will enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for this Agreement.
(u) Each of ChipPAC and its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that: (A) transactions are executed in accordance with management's general
or specific authorizations; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(v) Each of ChipPAC and its subsidiaries maintains insurance
covering its properties, operations, personnel and businesses, insuring
against such losses and risks as are consistent with industry practice to
protect ChipPAC and its subsidiaries and their respective businesses. None
of ChipPAC or any of its subsidiaries has received notice from any insurer
or agent of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such insurance.
(w) Except as disclosed in the Offering Document, no relationship,
direct or indirect, exists between or among the Issuer, MergerCo, ChipPAC
or any of its subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Issuer, MergerCo, ChipPAC or
any of its subsidiaries on the other hand, which would be required by the
Securities Act to be described in the Offering Document if the Offering
Document were a prospectus included in a registration statement on Form S-1
filed with the Commission under the Securities Act.
(x) The statements made in the Offering Circular under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations-Year 2000 Compliance" are true and correct in all material
respects and accurately reflect ChipPAC's Year 2000 compliance readiness.
(z) The statistical and market-related data included in the
Offering Document are based on or derived from sources which the Issuer and
ChipPAC believe to be reliable and accurate in all material respects.
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(aa) The Offering Document, as of its date, and each amendment or
supplement thereto, as of its date, contains the information specified in,
and meets the requirements of, Rule 144A(d)(4) under the Act.
(bb) None of the Issuer, MergerCo or ChipPAC or any of its
subsidiaries intends to, nor believes that it will, incur debts beyond its
ability to pay such debts as they mature. The present fair saleable value
of the assets of each of the Issuer and ChipPAC and its subsidiaries
exceeds the amount that will be required to be paid on or in respect of its
existing debts and other liabilities (including contingent liabilities) as
they become absolute and matured following the Recapitalization. The assets
of each of the Issuer, MergerCo and ChipPAC and each of its subsidiaries do
not constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. Upon the issuance of the Offered
Securities and the consummation of the Recapitalization, the present fair
saleable value of the assets of the Issuer and the Guarantors will exceed
the amount that will be required to be paid on or in respect of their
existing debts and other liabilities (including contingent liabilities) as
they become absolute and matured. Upon the issuance of the Offered
Securities and the consummation of the Recapitalization, the assets of the
Issuer and the Guarantors will not constitute unreasonably small capital to
carry out its business as now conducted, including the capital needs of
each such entity, taking into account the projected capital requirements
and capital availability.
(cc) None of the Issuer, MergerCo or ChipPAC or any of its
subsidiaries has (A) taken, directly or indirectly, any action designed to,
or that might reasonably be expected to, cause or result in stabilization
or manipulation of the price of any security of the Issuer, MergerCo,
ChipPAC or any of its subsidiaries to facilitate the sale or resale of the
Offered Securities or (B) since the date of the Preliminary Offering
Circular (1) sold, bid for, purchased or paid any person any compensation
for soliciting purchases of the Offered Securities or (2) paid or agreed to
pay to any person any compensation for soliciting another to purchase any
other securities of ChipPAC or any of its subsidiaries.
(dd) None of the Issuer, MergerCo or ChipPAC or any of its
subsidiaries has used or will use any form of general solicitation in
connection with the offer and sale of any of the Offered Securities,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been
invited by any general solicitation.
(ee) Each certificate signed by any officer of the Issuer or
MergerCo and delivered to the Initial Purchasers or counsel for the Initial
Purchasers dated as of the Closing Date and indicating that it is being
delivered pursuant to this Section 2(ee) shall be deemed to be a
representation and warranty by the Issuer or MergerCo, as applicable, to
the Initial Purchasers as to the matters covered thereby.
11
(ff) None of the Issuer, MergerCo or ChipPAC or any of its
subsidiaries or, to the best knowledge of the Issuer, MergerCo and ChipPAC
and its subsidiaries, any director, officer, agent, employee or other
person associated with or acting on behalf of the Issuer, MergerCo or
ChipPAC or its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Issuer agrees to sell to the Initial
Purchasers, and the Initial Purchasers agree, severally and not jointly, to
purchase from the Issuer, at a purchase price of 97% of the principal amount
thereof plus accrued interest from July 29, 1999 to the Closing Date (as
hereinafter defined), the respective principal amounts of the Offered Securities
set forth opposite the names of the Initial Purchasers in Schedule A hereto.
The Issuer will deliver against payment of the purchase price the Offered
Securities in the form of one or more permanent global securities in definitive
form (the "Global Securities") deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee for DTC. Interests in any permanent Global Securities will be held only
in book-entry form through DTC, except in the limited circumstances described in
the Offering Document. Payment for the Offered Securities shall be made by the
Initial Purchasers in Federal (same day) funds by wire transfer to an account
previously designated by the Issuer to CSFB at a bank acceptable to CSFB at the
office of Cravath, Swaine & Moore at 9:00 a.m. (New York time), on July 29,
1999, or at such other time not later than seven full business days thereafter
as CSFB and the Issuer determine, such time being referred to as the "Closing
Date", against delivery to the Trustee as custodian for DTC of the Global
Securities representing all of the Offered Securities. The Global Securities
will be made available for checking at the office of Cravath, Swaine & Moore at
least 24 hours prior to the Closing Date.
4. Representations by Initial Purchasers; Resale by Initial Purchasers.
(a) Each Initial Purchaser severally represents and warrants to
the Issuer that it is a "qualified institutional buyer" within the meaning
of Rule 144A under the Securities Act.
(b) Each Initial Purchaser severally acknowledges that the Offered
Securities have not been registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Regulation S or pursuant
to
12
an exemption from the registration requirements of the Securities Act, or
to non-U.S. persons outside the United States except in accordance with
Regulation S or pursuant to an exemption from the registration requirements
of the Securities Act. Each Initial Purchaser severally represents and
agrees that it has offered and sold the Offered Securities, and will offer
and sell the Offered Securities only in accordance with Rule 903 of
Regulation S or Rule 144A under the Securities Act ("Rule 144A").
Accordingly, neither such Initial Purchaser nor its affiliates, nor any
persons acting on its or their behalf, have engaged or will engage in any
directed selling efforts with respect to the Offered Securities, and such
Initial Purchaser, its affiliates and all persons acting on its or their
behalf have complied in all material respects and will comply in all
material respects with the offering restrictions requirements of Regulation
S and Rule 144A.
(c) Each Initial Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for any such arrangements with the other Initial Purchaser or
affiliates of the other Initial Purchaser or with the prior written consent
of the Issuer.
(d) Each Initial Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Offered Securities in the United
States by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act, including, but
not limited to (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. Each Initial Purchaser severally agrees, with respect to
resales made in reliance on Rule 144A of any of the Offered Securities, to
deliver either with the confirmation of such resale or otherwise prior to
settlement of such resale a notice to the effect that the resale of such
Offered Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A.
(e) Each of the Initial Purchasers severally represents and agrees
that (i) it has not offered or sold and prior to the date six months after
the date of issue of the Offered Securities will not offer or sell any
Offered Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995; (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the
Offered Securities in, from or otherwise involving the United Kingdom; and
(iii) it
13
has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Offered Securities to a person who is of a kind described in Article 11(3)
of the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1996 or is a person to whom such document may otherwise lawfully be
issued or passed on.
5. Certain Agreements of the Issuer and MergerCo. The Issuer and MergerCo
agree with the several Initial Purchasers that:
(a) The Issuer will advise CSFB promptly of any proposal to amend
or supplement the Offering Document and will not effect such amendment or
supplementation without CSFB's consent. If, at any time prior to the
completion of the resale of the Offered Securities by the Initial
Purchasers, any event occurs as a result of which the Offering Document as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, the Issuer promptly will notify CSFB of such
event and promptly will prepare, at its own expense, an amendment or
supplement which will correct such statement or omission or effect such
compliance. Upon receipt of such notice in written form, each Initial
Purchaser agrees to suspend use of the Offering Document until the Issuer
has amended or supplemented the Offering Document to correct such
misstatement or omission or to effect compliance with this paragraph (a).
Neither CSFB's consent to, nor the Initial Purchasers' delivery to offerees
or investors of, any such amendment or supplement shall constitute a waiver
of any of the conditions set forth in Section 6. The Issuer's and the
Initial Purchasers' obligations under this paragraph (a) shall terminate on
the earliest to occur of (i) expiration of the Exchange Offer (as defined
in the Registration Rights Agreement) pursuant to the Registration Rights
Agreement, (ii) the effective date of a shelf registration statement with
respect to the Offered Securities filed pursuant to the Registration Rights
Agreement, (iii) the date upon which no Initial Purchaser nor any of their
respective affiliates continues to hold Offered Securities acquired as part
of their initial distribution, and (iv) the date upon which no Initial
Purchaser nor any of their respective affiliates continues to hold Exchange
Securities, if any.
(b) The Issuer will furnish to the Initial Purchasers copies of any
preliminary offering circular, the Offering Document and all amendments and
supplements to such documents, in each case as soon as available and in
such quantities as the Initial Purchasers request, and the Issuer will
furnish to CSFB on the date hereof three copies of the Offering Document
signed by a duly authorized officer of the Issuer, one of which will
include the independent accountants' reports therein manually signed by
such independent accountants. At any time when the Issuer is not subject to
Section 13 or 15(d) of the Exchange Act, the Issuer will promptly furnish
or cause to be furnished to each Initial Purchaser and, upon request of
holders and prospective purchasers of the Offered Securities,
14
to such holders and purchasers, copies of the information required to be
delivered to holders and prospective purchasers of the Offered Securities
pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto) in order to permit compliance with Rule 144A in
connection with resales by such holders of the Offered Securities. The
Issuer will pay the expenses of printing and distributing to the Initial
Purchasers all such documents.
(c) The Issuer will advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing, of the
issuance by any state securities commission of any stop order suspending
the qualification or exemption from qualification of any of the Offered
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purpose by any state securities commission or other
regulatory authority. The Issuer shall use its best efforts to prevent the
issuance of any stop order suspending the qualification or exemption of any
of the Offered Securities under any state securities or Blue Sky laws and,
if at any time any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption of
any of the Offered Securities under any state securities or Blue Sky laws,
the Issuer shall use its best efforts to obtain the withdrawal or lifting
of such order at the earliest possible time.
(d) The Issuer and MergerCo will cooperate with the Initial
Purchasers and their counsel in connection with the registration and
qualification of the Offered Securities for sale and the determination of
their eligibility for investment under the laws of such jurisdictions as
CSFB designates and do all things necessary to continue such qualifications
in effect so long as required for the resale of the Offered Securities by
the Initial Purchasers, provided that the Issuer will not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any such jurisdiction.
(e) During the period of five years hereafter, the Issuer and
MergerCo (and, after the Merger, ChipPAC) will furnish to each Initial
Purchaser, as soon as practicable after the end of each fiscal year, a copy
of its annual report to stockholders for such year; and the Issuer and
MergerCo will furnish to each Initial Purchaser as soon as available, a
copy of each report and any definitive proxy statement of the Issuer,
MergerCo and ChipPAC and any of its subsidiaries filed with the Commission
under the Exchange Act or mailed to holders of Offered Securities or any
securities of the Issuer, MergerCo or ChipPAC or and any of its
subsidiaries which have been registered under Section 12 of the Exchange
Act. The obligations of the Issuer under this paragraph (ee) shall cease
if and when the Issuer or MergerCo becomes subject to the reporting
requirements of the Exchange Act.
(f) During the period of two years after the Closing Date, the Issuer
will, upon request, furnish to the Initial
15
Purchasers and any holder of Offered Securities a copy of the restrictions
on transfer applicable to the Offered Securities.
(g) During the period of two years after the Closing Date, none of
the Issuer or the Guarantors will permit any of their affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the Offered
Securities that have been reacquired by any of them unless such securities
are not and will not be Restricted Securities as defined in the
Registration Rights Agreement.
(h) During the period of two years after the Closing Date, none of
the Issuer or the Guarantors will be or become, an open-end investment
company, unit investment trust or face-amount certificate company that is
or is required to be registered under Section 8 of the Investment Company
Act.
(i) The Issuer will pay all expenses incidental to the performance of
the Issuer's, MergerCo's and ChipPAC's and its subsidiaries' obligations
under this Agreement, the Indenture, the Registration Rights Agreement and
the other Transaction Documents, including (i) the fees and expenses of
counsel and accountant for the Issuer, the Guarantors and of the Trustee
and its professional advisers; (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the
Offered Securities and, as applicable, the Exchange Securities, the
preparation of this Agreement, the Registration Rights Agreement, the
Offered Securities, the Exchange Securities, the Indenture and any
supplemental indenture, and the preparation and printing of the Offering
Document and amendments and supplements thereto, and any other document
relating to the issuance, offer, sale and delivery of the Offered
Securities and as applicable, the Exchange Securities; (iii) the cost of
listing the Offered Securities and qualifying the Offered Securities for
trading in The Portal(SM) Market ("PORTAL") and any expenses incidental
thereto; (iv) the cost of any advertising approved by the Issuer in
connection with the issue of the Offered Securities; (v) for any expenses
(including reasonable fees and disbursements of counsel to the Initial
Purchasers) incurred in connection with qualification of the Offered
Securities or the Exchange Securities for sale under the laws of such
jurisdictions as CSFB designates and the printing of memoranda relating
thereto; (vi) for any fees charged by investment rating agencies for the
rating of the Offered Securities or the Exchange Securities; and (vii) for
expenses incurred in printing and distributing preliminary offering
circulars and the Offering Document (including any amendments and
supplements thereto) to or at the direction of the Initial Purchasers. The
Issuer will also reimburse the Initial Purchasers (to the extent incurred
by them) for all reasonable travel expenses of ChipPAC's officers and
employees and any other expenses of ChipPAC in connection with attending or
hosting meetings with prospective purchasers of the Offered Securities from
the Initial Purchasers; it being understood that the only fees and expenses
of counsel to the Initial Purchasers to be paid by the Issuer shall be
pursuant to the foregoing clause (v).
16
(j) In connection with the offering, until CSFB shall have notified
the Issuer and the other Initial Purchaser of the completion of the resale
of the Offered Securities, neither the Issuer nor any Guarantor nor any of
their affiliates has or will, either alone or with one or more other
persons, bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest any Offered Securities or attempt to
induce any person to purchase any Offered Securities; and neither the
Issuer nor any Guarantor nor any of their affiliates will make bids or
purchases for the purpose of creating actual, or apparent, active trading
in, or of raising the price of, the Offered Securities.
(k) For a period of 90 days after the date of the initial offering of
the Offered Securities by the Initial Purchasers, none of the Issuer,
MergerCo or ChipPAC or any of its subsidiaries, will offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, any United
States dollar denominated debt securities issued or guaranteed by any of
the Issuer, MergerCo or ChipPAC or any of its subsidiaries, and having a
maturity of more than three years from the date of issue. None of the
Issuer, MergerCo or ChipPAC or any of its subsidiaries will at any time
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
pledge, contract or disposition would cause the exemption afforded by
Section 4(2) of the Securities Act, the safe harbor of Regulation S
thereunder or the resale exemption under Rule 144A thereunder to cease to
be applicable to the offer and sale of the Offered Securities.
(l) The Issuer will use the proceeds from the sale of the Offered
Securities in the manner described in the Offering Document under the
caption "Sources and Uses of Funds."
(m) None of the Issuer, MergerCo or ChipPAC or any of its
subsidiaries will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the
Securities Act) that would be integrated with the sale of the Offered
Securities in a manner that would require the registration under the
Securities Act of the sale to the Initial Purchasers of the Offered
Securities or to take any other action that would result in the resale of
the Offered Securities not being exempt from registration under the
Securities Act.
(n) None of the Issuer, MergerCo or ChipPAC or any of its
subsidiaries, will take, directly or indirectly, any action designed to, or
that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Issuer to facilitate the
resale of the Offered Securities. Except as permitted by the Securities
Act, the Issuer will not distribute any (i) preliminary offering memorandum
or offering memorandum, including without limitation, the Offering Document
or (ii) other offering material in connection with the offering and sale of
the Offered Securities.
17
(o) On the Recapitalization Closing Date, the Initial Purchasers
shall receive one or more counterparts of the Purchase Agreement which
shall have been executed and delivered by duly authorized officers of each
of ChipPAC International Company Limited, ChipPAC and the Guarantors.
(p) On the Recapitalization Closing Date, the Issuer and MergerCo
shall cause the Initial Purchasers to receive an opinion, dated the
Recapitalization Closing Date, from Kirkland & Ellis, counsel for ChipPAC,
Inc. upon consummation of the Recapitalization, substantially in the form
of Exhibit A-2.
(q) On the Recapitalization Closing Date, the Issuer and MergerCo
shall cause the Initial Purchasers to receive an opinion, dated the
Recapitalization Closing Date, from HWR Services Limited, counsel for the
Surviving Issuer upon consummation of the Recapitalization, substantially
in the form of Exhibit B-2.
(r) On the Recapitalization Closing Date, the Issuer and MergerCo
shall cause the Initial Purchaser to receive opinions, each dated the
Recapitalization Closing Date, of counsel for each of the subsidiaries of
ChipPAC, Inc. listed on Annex B of this Agreement, each substantially in
the form of Exhibit C, with the exception that counsel for ChipPAC Assembly
and Test (Shanghai) Company, Ltd. and Hyundai Electronics (Shanghai)
Company Ltd. (to be renamed ChipPAC (Shanghai) Company Ltd. after the
Recapitalization)) need not opine as to paragraph (iv) of Exhibit C.
(s) On the Recapitalization Closing Date, the Issuer and MergerCo
shall cause the Initial Purchasers to receive a copy of the opinions
delivered in connection with the consummation of the Credit Agreement,
which opinions shall expressly state that the Initial Purchasers are
justified in relying upon the opinions therein.
6. Conditions of the Obligations of the Initial Purchasers. The
obligations of the several Initial Purchasers to purchase and pay for the
Offered Securities will be subject to the accuracy of the representations and
warranties on the part of the Issuer and MergerCo (and, after the Merger,
ChipPAC) herein, to the accuracy of the statements of officers of the Issuer,
MergerCo and ChipPAC made pursuant to the provisions hereof, to the performance
by the Issuer and MergerCo of their respective obligations hereunder and to the
following additional conditions precedent:
(a) The Initial Purchasers shall have received a letter, dated the
date of this Agreement, of PricewaterhouseCoopers LLP in agreed form
confirming that they are independent public accountants within the meaning
of the Securities Act and the applicable published rules and regulations
thereunder ("Rules and Regulations") and to the effect that:
(i) in their opinion the financial statements and schedules
examined by them and included in the Offering
18
Document comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
related published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements and certain specified financial information
included in the Offering Document;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of ChipPAC, and of all subsidiaries of ChipPAC for which such interim
financial statements are provided, inquiries of officials of ChipPAC
and of such subsidiaries who have responsibility for financial and
accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) with respect to the unaudited financial statements
included in the Offering Document, that any material
modifications should be made to such unaudited financial
statements for them to be in conformity with generally accepted
accounting principles;
(B) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of this Agreement,
there was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Issuer, MergerCo
or ChipPAC and its combined subsidiaries or, at the date of the
latest available balance sheet read by such accountants, there
was any decrease in consolidated net current assets or net
assets, as compared with amounts shown on the latest balance
sheet included in Offering Document; or
(C) for the period from the closing date of the latest
income statement included in the Offering Document to the closing
date of the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year and with the period of
corresponding length ended the date of the latest income
statement included in the Offering Document, in revenues,
operating income or net income or in the ratio of earnings to
fixed charges;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Offering Document disclose have
occurred or may occur or which are described in such letter; and
19
(iv) they have performed the procedures specified therein on
the pro forma financial statements included in the Offering Document;
(v) on the basis of the review referred to in clause (iv)
above, nothing came to their attention that caused them to believe
that the pro forma financial statements included in the Offering
Document do not comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
related published Rules and Regulations or that the pro forma
adjustments have not been properly applied to the historical amounts
in the compilation of those statements; and
(vi) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Offering Document (in each case to the
extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of ChipPAC
and its subsidiaries subject to the internal controls of ChipPAC's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
(b) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any material adverse change in general
economic, political or financial conditions or if the effect of
international conditions on the financial markets in the United States
shall be such as, in the Initial Purchasers' reasonable judgment, makes it
inadvisable or impracticable to proceed with the delivery of the Offered
Securities as contemplated hereby, or (ii) (A) in the reasonable judgment
of the Initial Purchasers, any material adverse change in the condition
(financial or other), business, properties, assets, liabilities, prospects,
net worth, results of operations or cash flows of the ChipPAC or its
subsidiaries, taken as a whole, other than set forth in the Offering
Document; (B) (i) any downgrading, suspension or withdrawal of, nor shall
any notice have been given of any potential or intended downgrading,
suspension or withdrawal of, or of any review for a possible change that
does not indicate the direction of possible change in, any rating of the
Issuer including, without limitation, the placing of any of the foregoing
ratings on credit watch with negative or developing implications or under
review with an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act, (ii) any change, nor shall any
notice have been given of any potential or intended change, in the outlook
for any rating of the Issuer by any such rating organization, and (iii) any
notice by any such rating organization that it has assigned (or is
considering
20
assigning) a lower rating to the Offered Securities than that on which the
Offered Securities were marketed; (C) any suspension or material limitation
of trading in securities generally on the New York Stock Exchange, the
American Stock Exchange, the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange, the Chicago Board of Trade or the Nasdaq National
Market, or any establishment of minimum or maximum prices for trading, or
any requirement of maximum ranges for prices for securities, on such
exchange or the Nasdaq National Market, or by such exchange or other
regulatory body or governmental authority having jurisdiction (other than
limitations on price fluctuations or minimums or maximums in effect as of
the date of this Agreement); (D) any banking moratorium declared by federal
or state authorities, or any moratorium declared in foreign exchange
trading by major international banks or persons; or (E) any outbreak or
escalation of armed hostilities involving the United States on or after the
date hereof, or if there has been a declaration by the United States of a
national emergency or war, the effect of which shall be, in the Initial
Purchasers' judgment, to make it inadvisable or impracticable to proceed
with this offering or delivery of the Offered Securities on the terms and
in the manner contemplated in the Offering Document.
(c) Concurrently with the issuance and sale of the Offered Securities
by the Issuer, the Transactions shall be consummated on terms that conform
in all material respects to the description thereof in the Offering
Document and the Transaction Documents; provided, however, that in order to
-------- -------
satisfy certain requirements of Korean law, the Recapitalization may be
consummated after the issuance and sale of the Offered Securities; and the
Initial Purchasers shall have received true and correct copies of all
documents pertaining thereto and evidence reasonably satisfactory to the
Initial Purchasers of the consummation thereof.
(d) There shall exist at and as of the Closing Date and the date of
the consummation of the Recapitalization (after giving effect to the
transactions contemplated by this Agreement and the Transactions) no
condition that would constitute a default (or an event that with notice or
lapse of time, or both, would constitute a default) under any Transaction
Agreement.
(e) The Initial Purchasers shall have received an opinion, dated the
Closing Date, of Kirkland & Ellis, counsel for MergerCo, substantially in
the form of Exhibit A-1.
(f) The Initial Purchasers shall have received an opinion, dated the
Closing Date, of Harney Westwood Riegels, counsel for the Issuer,
substantially in the form of Exhibit B-1.
(g) The Initial Purchasers shall have received from Cravath, Swaine &
Moore, counsel for the Initial Purchasers, such opinion or opinions, dated
the Closing Date, with respect to the validity of the Offered Securities,
the Offering Document, the exemption from registration for the offer and
sale of the Offered Securities by the Issuer to the several
21
Initial Purchasers and the resales by the several Initial Purchasers as
contemplated hereby and other related matters as CSFB may require, and the
Issuer and ChipPAC shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters
with reference to same in the Offering Circular.
(h) The Initial Purchasers shall have received a certificate, dated
the Closing Date, of the President or any Vice President and a principal
financial or accounting officer of ChipPAC in which such officers shall
state that the representations and warranties of the Issuer and ChipPAC in
this Agreement are true and correct, that the Issuer and ChipPAC have
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date, and that,
subsequent to the respective dates of the most recent financial statements
in the Offering Document, there has been no material adverse change, nor
any development or event involving a prospective material adverse change,
in the financial condition, business, properties or results of operations
of ChipPAC and its subsidiaries taken as a whole except as set forth in or
contemplated by the Offering Document or as described in such certificate.
(i) The Initial Purchasers shall have received a letter, dated the
Closing Date, of PricewaterhouseCoopers LLP which meets the requirements
of subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three days prior to the
Closing Date for the purposes of this subsection.
(j) The Issuer, MergerCo and the Trustee shall have entered into the
Indenture and you shall have received counterparts, conformed as
executed, thereof.
(k) The Issuer and MergerCo shall have entered into the Registration
Rights Agreement and you shall have received counterparts, conformed as
executed, thereof.
(l) The Issuer shall have entered into the Escrow Agreement and
deposited the amounts required in the Escrow Agreement into an escrow
account, pursuant to the terms of the Escrow Agreement.
(m) The Offered Securities shall have been designated PORTAL
securities in accordance with the rules and regulations adopted by the NASD
relating to trading in the PORTAL market.
(n) On or prior to the Closing Date, the Issuer shall have provided
to each of the Initial Purchasers and counsel to the Initial Purchasers
copies of all Transaction Documents executed and delivered on or prior to
such date (and drafts of Transaction Agreements to be executed on the
Recapitalization Closing Date, if later) to the parties relating to the
Transactions (including but not limited to legal opinions relating
thereto).
22
(o) The Initial Purchasers shall have been furnished with a copy of
the opinions delivered on behalf of the Issuer and MergerCo, which opinions
shall expressly state that the Initial Purchasers are justified in relying
upon the opinions therein.
The Issuer will furnish the Initial Purchasers with such conformed copies
of such opinions, certificates, letters and documents as the Initial Purchasers
reasonably request. CSFB may in its sole discretion waive on behalf of the
Initial Purchasers compliance with any conditions to the obligations of the
Initial Purchasers hereunder.
7. Indemnification and Contribution. (a) Each of the Issuer and the
Guarantors will jointly and severally indemnify and hold harmless each Initial
Purchaser, its partners, directors and officers and each person, if any, who
controls such Initial Purchaser within the meaning of Section 15 of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Initial Purchaser may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Offering Document, or any amendment or supplement thereto, or
any related preliminary offering circular or the Exchange Act Reports, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, including any losses, claims, damages or liabilities
arising out of or based upon the Issuer's or any Guarantor's failure to perform
its obligations under Section 5(a) of this Agreement, and will reimburse each
Initial Purchaser for any legal or other expenses reasonably incurred by such
Initial Purchaser in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
--------
however, (i) that the Issuer and the Guarantors will not be liable in any such
- -------
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Issuer by any Initial
Purchaser through CSFB specifically for use therein, it being understood and
agreed that the only such information consists of the information described as
such in subsection (b) below and (ii) that the Issuer and the Guarantors shall
not be liable to any such Initial Purchaser with respect to any untrue statement
or alleged untrue statement or omission or alleged omission in the Preliminary
Offering Circular to the extent that any such loss, liability, claim, damage or
expense of such Initial Purchaser results from the fact that such Initial
Purchaser sold Offered Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
Offering Circular as then amended or supplemented if the Issuer had previously
furnished copies thereof to such Initial Purchaser and the loss, liability,
claim, damage or expense of such Initial Purchaser results from an untrue
statement or omission of a
23
material fact contained in the Preliminary Offering Circular which was corrected
in the Offering Circular.
(b) Each Initial Purchaser will severally and not jointly indemnify
and hold harmless the Issuer and each Guarantor and their respective directors
and officers and each person, if any, who controls the Issuer and each Guarantor
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities to which the Issuer and each Guarantor may become
subject, under the Securities Act or the Exchange Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Offering Document, or any amendment or
supplement thereto, or any related preliminary offering circular, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Issuer by such Initial Purchaser through CSFB specifically for
use therein, and will reimburse the Issuer and each Guarantor for any legal or
other expenses reasonably incurred by the Issuer or such Guarantor in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, it being understood and agreed that the
only such information furnished by any Initial Purchaser consists of the
following information in the Offering Document furnished on behalf of each
Initial Purchaser: under the caption "Plan of Distribution", the first, third,
fifth, eighth and tenth paragraphs and the second sentence of the seventh
paragraph; provided, however, that the Initial Purchasers shall not be liable
-------- -------
for any losses, claims, damages or liabilities arising out of or based upon the
Company's failure to perform its obligations under Section 5(a) of this
Agreement.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section except to the extent that it has
been prejudiced in any material respect by such failure or from any liability
which it may otherwise have). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
24
have been authorized in writing by the indemnifying parties in connection with
the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to take charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses of counsel shall be borne by the indemnifying
parties; provided, however, that the indemnifying party under subsection (a) or
(b) above shall only be liable for the legal expenses of one counsel (in
addition to any local counsel) for all indemnified parties in each jurisdiction
in which any claim or action is brought. No indemnifying party shall, without
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action and does not include a statement as to and an admission of
fault, culpability or failure to act by or on behalf of any indemnified party.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its prior written consent, provided that such consent was not
unreasonably withheld, and that if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees it shall be liable for any
settlement effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Issuer and the Guarantors on the one hand and the Initial Purchasers on the
other from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Issuer and the
Guarantors on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Issuer and the Guarantors on the one hand and
the Initial Purchasers on the other
25
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Issuer bear to the total
discounts and commissions received by the Initial Purchasers from the Issuer
under this Agreement. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer or a Guarantor or the Initial Purchasers and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Initial Purchaser shall be required to contribute any amount
in excess of the amount by which the total price at which the Offered Securities
purchased by it were resold exceeds the amount of any damages which such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Initial Purchasers'
obligations in this subsection (d) to contribute are several in proportion to
their respective purchase obligations and not joint.
(e) The obligations of the Issuer and the Guarantors under this
Section shall be in addition to any liability which the Issuer and the
Guarantors may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Initial Purchaser within
the meaning of the Securities Act or the Exchange Act; and the obligations of
the Initial Purchasers under this Section shall be in addition to any liability
which the respective Initial Purchasers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Issuer or any Guarantor within the meaning of the Securities Act or the Exchange
Act.
8. Default of Initial Purchasers. If either of the Initial Purchasers
defaults in its obligation to purchase Offered Securities hereunder and the
aggregate principal amount of Offered Securities that such defaulting Initial
Purchaser agreed but failed to purchase does not exceed 10% of the total
principal amount of Offered Securities, CSFB may make arrangements satisfactory
to the Issuer for the purchase of such Offered Securities by other persons,
including the other Initial Purchaser, but if no such arrangements are made by
the Closing Date, the non-defaulting Initial Purchaser shall be obligated to
purchase the Offered Securities that such defaulting Initial Purchaser agreed
but failed to purchase. If one Initial Purchaser so defaults and the aggregate
principal amount of Offered Securities with respect to which such default occurs
exceeds 10% of the total principal amount of Offered Securities and arrangements
satisfactory to CSFB and the Issuer for the purchase of such Offered Securities
by other persons are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of the non-defaulting Initial
Purchaser or the Issuer, except as provided in Section 9. As used in this
Agreement, the term "Initial Purchaser" includes any person substituted for an
26
Initial Purchaser under this Section. Nothing herein will relieve the defaulting
Initial Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuer, MergerCo and the Guarantors or any of their officers and of the several
Initial Purchasers set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation, or statement as to
the results thereof, made by or on behalf of any Initial Purchaser, the Issuer,
any Guarantor or any of their respective representatives, officers or directors
or any controlling person, and will survive delivery of and payment for the
Offered Securities. If this Agreement is terminated pursuant to Sections 8 or
10, or if for any reason the purchase of the Offered Securities by the Initial
Purchasers is not consummated, the Issuer and the Guarantors shall remain
responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Issuer and the Guarantors and
the Initial Purchasers pursuant to Section 7 shall remain in effect; if any
Offered Securities have been purchased hereunder, the Issuer and the Guarantors
shall remain responsible for the expenses to be paid or reimbursed by them
pursuant to Section 5 and the respective obligations of the Issuer and the
Guarantors and the Initial Purchasers pursuant to Section 7 shall remain in
effect, and the representations and warranties in Section 2 and all other
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Initial Purchasers is not consummated for any reason
other than solely because of the termination of this Agreement pursuant to
Section 8 or the occurrence of any event specified in Section 6(b)(ii) (whether
pursuant to Section 10 or otherwise), the Issuer and the Guarantors will
reimburse the Initial Purchasers for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Termination. The Initial Purchasers shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the Issuer
from the Initial Purchasers, without liability (other than with respect to
Section 7) on the Initial Purchasers' part to the Issuer if, on or prior to such
date, upon the occurrence of any of the events set forth in Section 6(b).
11. Notices. All communications hereunder will be in writing and, if sent
to the Initial Purchasers will be mailed, delivered or telegraphed and confirmed
to the Initial Purchasers, c/o Credit Suisse First Boston Corporation, Eleven
Madison Avenue, New York, New York 10019 Attention: Transactions Advisory
Group, or, if sent to the Issuer, will be mailed, delivered or telegraphed and
confirmed to it at ChipPAC, Inc., 3151 Coronado Drive, Santa Clara, California
95054 Attention: Chief Financial Officer, with a copy to Kirkland & Ellis, 300
South Grand Avenue, Suite 3000, Los Angeles, California, 90071 Attention: Eva
Herbst Davis, Esq.; provided, however, that any notice to an Initial Purchaser
pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to
such Initial Purchaser.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective
27
successors and the controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder, except that holders of
Offered Securities shall be entitled to enforce the agreements for their benefit
contained in the second and third sentences of Section 5(b) hereof against the
Issuer as if such holders were parties thereto.
13. Representation of Initial Purchasers. You will act for the several
Initial Purchasers in connection with the transactions contemplated by this
Agreement, and any action under this Agreement taken by you jointly or by CSFB
on behalf of the Initial Purchasers will be binding upon all the Initial
Purchasers.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement. Delivery by
telecopy or facsimile transmission of an executed counterpart of this Agreement
shall be considered due and sufficient delivery.
15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
THE ISSUER, MERGERCO AND EACH GUARANTOR HEREBY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF THE FEDERAL AND STATE COURTS IN THE BOROUGH OF MANHATTAN IN THE
CITY OF NEW YORK IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
28
If the foregoing is in accordance with the Initial Purchasers'
understanding of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between the
Issuer, MergerCo and each Guarantor and the Initial Purchasers in accordance
with its terms.
Very truly yours,
CHIPPAC INTERNATIONAL LIMITED
by: /s/ Tony Lin
--------------------------
Name: Tony Lin
Title: Chief Financial Officer
CHIPPAC MERGER CORP.
by: /s/ Paul C. Schorr IV
---------------------------
Name: Paul C. Schorr IV
Title:
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
Credit Suisse First Boston Corporation
Donaldson, Lufkin & Jenrette Securities Corporation
By: Credit Suisse First Boston
Corporation
/s/ David M. Wah
___________________________________
Name: David M. Wah
Title: Director
By: Donaldson, Lufkin & Jenrette
Securities Corporation
/s/ Edward Biggins
___________________________________
Name: Edward Biggins
Title: Vice President
The foregoing Agreement is executed in counterpart by the following
Guarantors:
CHIPPAC (BARBADOS) LTD.
by: /s/ P.J. Kim
-------------------------
Name: P.J. Kim
Title: Secretary
CHIPPAC LIMITED
by: /s/ P.J. Kim
-------------------------
Name: P.J. Kim
Title: Secretary
CHIPPAC KOREA COMPANY LTD.
by: /s/ P.J. Kim
-------------------------
Name: P.J. Kim
Title: Secretary
CHIPPAC LUXEMBOURG S.A.R.L.
by: /s/ P.J. Kim
-------------------------
Name: P.J. Kim
Title: Secretary
CHIPPAC LIQUIDITY MANAGEMENT HUNGARY LIMITED
LIABILITY COMPANY
by: /s/ P.J. Kim
-------------------------
Name: P.J. Kim
Title: Secretary
30
SCHEDULE A
Principal Amount
Initial Purchasers of
------------------ Offered
Securities
----------------
Credit Suisse First Boston Corporation................ $120,000,000
Donaldson, Lufkin & Jenrette Securities
Corporation.......................................... $ 30,000,000
------------
Total.................................. $150,000,000
============
31
SCHEDULE B
Jurisdiction Counsel
- ------------ -------
Barbados Chancery Chamber
British Virgin Islands HWR Services Limited
China Lovell White Durrant
Korea Kim Shin & Yu
Hungary PricewaterhouseCoopers
Luxembourg PricewaterhouseCoopers
32
Exhibit A-1
(i) MergerCo is duly incorporated and is existing as a corporation
in good standing under the Delaware General Corporation Laws and has all
requisite corporate power and authority to carry on its business as it is
currently being conducted and as described in the Offering Circular.
(ii) The Purchase Agreement has been duly authorized and executed by
MergerCo.
(iii) Each of the Registration Rights Agreement and the Escrow
Agreement has been duly authorized, executed and delivered by MergerCo,
and, assuming the due authorization, execution and delivery of such
agreements by the Issuer, constitutes a valid and legally binding
obligation of the Issuer and MergerCo, enforceable against the Issuer and
MergerCo in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar
laws affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(iv) The Indenture has been duly authorized, executed and delivered
by MergerCo, and, assuming (i) the due authorization, execution and
delivery of the Indenture by the Issuer under the laws of the British
Virgin Islands and (ii) the due authorization, execution and delivery of
the Indenture by the Trustee, the Indenture constitutes a valid and legally
binding obligation of the Issuer and MergerCo, enforceable against the
Issuer and MergerCo in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(v) The execution and delivery by MergerCo of, and performance by
MergerCo of its obligations under, the Indenture, the Purchase Agreement
and the Escrow Agreement and the issuance and sale of the Offered
Securities will not (i) violate the certificate of incorporation or bylaws
of MergerCo, (ii) conflict with or constitute a breach of, or a default
under, any agreement listed on a certificate of an officer of MergerCo as
being the material agreements of MergerCo and its subsidiaries, (iii) to
our knowledge, breach or otherwise violate any provision in any court or
administrative order, writ, judgment or decree that names MergerCo and is
specifically directed to any of its property or (iv) constitute a violation
by MergerCo of any applicable provision of Federal, California or New York
State law, statute or regulation (except that for purposes of this
paragraph, we express no opinion with respect to federal or state
securities laws or other anti-fraud laws and no opinion as to whether
performance of the indemnification or contribution provisions in the
Purchase Agreement will be enforceable.)
33
(vi) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court of the United States or
the State of New York is required for the issuance and sale by the Issuer
of the Offered Securities to the Initial Purchasers and the issuance of the
Guarantees by the Guarantors or the consummation by the Issuer and MergerCo
of the other transactions contemplated by the Purchase Agreement and the
Indenture, except such as have been obtained and made under the Securities
Act and the Trust Indenture Act and such as may be required under foreign
securities laws and U.S. "Blue Sky" laws.
(vii) To our knowledge, there is no action, suit, proceeding or
investigation before or by any court or governmental agency or body,
domestic or foreign, pending or threatened against, MergerCo or the Issuer
that (i) has caused us to conclude that such action, suit, proceeding or
investigation is required to be described in the Offering Document but is
not so described or (ii) would be reasonably likely to adversely affect the
consummation of any of the transactions contemplated by the Purchase
Agreement or the Indenture.
(viii) The Offering Circular, as of its date, and each amendment or
supplement thereto, as of its date (except for the financial statements and
related notes, the financial statement schedules and other financial and
statistical data included therein or omitted therefrom, as to which no
opinion need be expressed), contains the type of information specified in
and required by Rule 144A(d)(4) under the Securities Act.
(ix) When the Offered Securities are issued and delivered pursuant
to the Purchase Agreement, no Offered Securities will be of the same class
(within the meaning of Rule 144A under the Securities Act) as securities of
the Issuer that are listed on a national securities exchange registered
under Section 6 of the Exchange Act or that are quoted in a United States
automated inter-dealer quotation system.
(x) Neither the Issuer nor MergerCo is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act; and neither the Issuer nor MergerCo, after giving
effect to the sale of the Offered Securities in the Offering Document, will
be, an "investment company" or a company controlled by an "investment
company" within the meaning of the Investment Company Act.
(xi) To our knowledge, no stop order preventing the use of the
Offering Document, or any order asserting that the issuance of the Offered
Securities and the Guarantees are subject to the registration rights
requirements of the Securities Act, has been issued.
(xii) It is not necessary in connection with (i) the offer, sale and
delivery of the Offered Securities to the several Initial Purchasers
pursuant to this Agreement or (ii) the resales of the Offered Securities by
the several Initial Purchasers in the manner contemplated in the Offering
Circular to register the Offered Securities under the Securities Act or
34
to qualify an indenture in respect thereof under the Trust Indenture Act.
(xiii) The Offered Securities, the Registration Rights Agreement, the
Guarantee, the Escrow Agreement and the Indenture conform in all material
respects to the descriptions thereof contained in the Offering Circular;
the description in the Offering Circular under the heading "Description of
Other Financing Arrangements-Senior Credit Facilities" is correct and
complete in all material respects; and the description in the Offering
Circular of United States federal income tax matters under the heading
"Certain Income Tax Considerations" insofar as such statements purport to
describe certain United States federal income tax consequences of the
purchase, ownership and disposition of the Offered Securities under current
law, provide a fair summary of such consequences.
(xiv) Assuming that the Offered Securities have been duly authorized
by the Issuer, when executed and issued by the Issuer and authenticated by
the Trustee in accordance with the terms of the Indenture, and delivered
and paid for by the Initial Purchasers in accordance with the terms of the
Purchase Agreement, the Offered Securities will constitute valid and
legally binding obligations of the Issuer enforceable against the Issuer in
accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws affecting
creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law
or in equity).
(xv) The Parent Guaranty has been duly authorized by MergerCo, and
assuming due authorization, execution and delivery of the Indenture by the
Trustee, the Parent Guaranty will constitute a valid and legally binding
obligation of MergerCo, enforceable against MergerCo in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws affecting creditors'
rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
(xvi) Assuming due authorization of the Exchange Securities by the
Surviving Issuer, when, as and if (i) the Exchange Offer Registration
Statement shall have become effective pursuant to the provisions of the
Securities Act, (ii) the Indenture shall have been qualified pursuant to
the provisions of the Trust Indenture Act, (iii) the Offered Securities
shall have been validly tendered to the Issuer, (iv) the Exchange
Securities shall have been duly executed, authenticated and issued in
accordance with the provisions of the Indenture and duly delivered to the
purchasers thereof in exchange for the Offered Securities, (v) the board of
directors and the appropriate officers of the Surviving Issuer have taken
all necessary action to fix and approve the terms of the Exchange
Securities (vi) the board of directors and appropriate officers of each
Guarantor have taken all necessary action to approve the Guaranties of the
Exchange Securities and (vii) any legally required consents, approvals,
35
authorizations or other order of the Commission or any other regulatory
authorities have been obtained, the Exchange Securities when issued
pursuant to the Exchange Offer Registration Statement will constitute valid
and binding obligations of the Surviving Issuer and the Guarantors, as
applicable, in each case enforceable against the Surviving Issuer and the
Guarantors, as applicable, in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws affecting creditors' rights and remedies
generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(xvii) Such counsel shall also state that the purpose of such
counsel's professional engagement was not to establish factual matters, and
preparation of the Offering Circular involved many determinations of a
wholly or partially nonlegal character. Such counsel need make no
representation that it has independently verified the accuracy,
completeness or fairness of the Offering Circular or that the actions taken
in connection with the preparation of the Offering Circular (including the
actions described below) were sufficient to cause the Offering Circular to
be accurate, complete or fair. Such counsel need not pass upon and need not
assume any responsibility for the accuracy, completeness or fairness of the
Offering Circular except to the extent otherwise explicitly indicated in
numbered paragraph (xiv) above. Such counsel shall however confirm that it
has participated in discussions with representatives of the Issuer,
MergerCo and ChipPAC, representatives of the Initial Purchasers, counsel
for the Initial Purchasers and representatives of the independent
accountants for the Issuer and MergerCo during which disclosures in the
Offering Circular and related matters were discussed. Based upon such
counsel's participation in the conferences identified above, such counsel's
understanding of applicable law and the experience such counsel has gained
in such counsel's practice thereunder and relying to a large extent upon
the opinions and statements of officers of the Issuer and MergerCo, such
counsel can, however, advise the Initial Purchasers that nothing has come
to such counsel's attention that has caused such counsel to conclude that
the Offering Circular at the date it bears or on the date of this letter
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
36
Exhibit A-2
(i) ChipPAC (a) is duly incorporated and is existing as a
corporation in good standing under the laws of the State of California, (b)
has all requisite corporate power and authority to carry on its business as
it is currently being conducted and as described in the Offering Circular
and to own, lease and operate its properties and (c) is duly qualified and
in good standing as a foreign corporation, authorized to do business in
each jurisdiction set forth opposite its name on a schedule to this opinion
(which jurisdictions have been certified by an officer of ChipPAC as being
the material jurisdictions in which ChipPAC conducts business).
(ii) The Purchase Agreement has been duly authorized and executed by
ChipPAC.
(iii) The Supplemental Indenture has been duly authorized, executed
and delivered by ChipPAC and, assuming due authorization, execution and
delivery by the Surviving Issuer and the Trustee, the Supplemental
Indenture constitutes a valid and legally binding obligation of the
Surviving Issuer and ChipPAC, enforceable against the Surviving Issuer and
ChipPAC in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar
laws affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(iv) The execution and delivery by ChipPAC of, and performance by
ChipPAC of its obligations under the Purchase Agreement and the
Supplemental Indenture will not (i) violate the certificate of
incorporation or bylaws of ChipPAC, (ii) conflict with or constitute a
breach of, or a default under, any agreement listed on a certificate of an
officer of ChipPAC as being the material agreements of ChipPAC and its
subsidiaries, (iii) to our knowledge, breach or otherwise violate any
provision in any court or administrative order, writ, judgment or decree
that names ChipPAC and is specifically directed to any of its property or
(iv) constitute a violation by ChipPAC of any applicable provision of
Federal, California or New York State law, statute or regulation (except
that for purposes of this paragraph, we express no opinion with respect to
federal or state securities laws or other anti-fraud laws and no opinion as
to whether performance of the indemnification or contribution provisions in
the Purchase Agreement will be enforceable.)
(vi) Other than those already obtained, no consent, approval,
authorization or order of, or filing with, any governmental agency or body
or court of the United States is required in connection with the
consummation of the transactions contemplated by the Transaction Documents
by ChipPAC, except for such consents, approvals, authorizations, orders or
filings the failure of which to obtain or make would not result in a
Material Adverse Effect.
37
(vii) To our knowledge, there is no action, suit, proceeding or
investigation before or by any court or governmental agency or body,
domestic or foreign, pending or threatened against, ChipPAC or any of its
subsidiaries that (i) has caused us to conclude that such action, suit,
proceeding or investigation is required to be described in the Offering
Document but is not so described or (ii) would be reasonably likely to
adversely affect the consummation of the Recapitalization.
(viii) The Credit Agreement and the Transaction Agreements conform in
all material respects to the descriptions thereof contained in the Offering
Document.
(ix) The Parent Guaranty has been duly authorized by ChipPAC, and
assuming due authorization, execution and delivery of the Supplemental
Indenture by the Trustee, the Parent Guaranty will constitute a valid and
legally binding obligation of ChipPAC, enforceable against ChipPAC in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws affecting
creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law
or in equity).
(x) Assuming due authorization, execution and delivery of the
Subsidiary Guaranty Agreement by each of the Subsidiary Guarantors, ChipPAC
and the Surviving Issuer, the Subsidiary Guaranty Agreement constitutes
valid and legally binding obligations of the Subsidiary Guarantors,
enforceable against the Subsidiary Guarantors in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of
whether enforcement is sought via proceeding at law or in equity).
38
Exhibit B-1
(i) The Issuer is duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to carry
on its business as it is currently being conducted and as described in the
Offering Document.
(ii) The Issuer has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Purchase Agreement
and each of the other Operating Documents to which it is a party and to
consummate the transactions contemplated thereby, including, without
limitation, to the extent applicable, the corporate power and authority to
issue, sell and deliver the Offered Securities as provided in the Purchase
Agreement.
(iii) The Purchase Agreement has been duly and validly authorized and
executed by the Issuer.
(iv) Each of the Registration Rights Agreement and the Escrow
Agreement has been duly authorized, executed and delivered by the Issuer.
(v) The Indenture and the Offered Securities have been duly
authorized by the Issuer by all necessary corporate action.
(vi) The execution and delivery by the Issuer of, and performance by
the Issuer of its obligations under, the Indenture, the Supplemental
Indenture, the Purchase Agreement, the Registration Rights Agreement and
the Escrow Agreement, and compliance by the Issuer with all of the
respective provisions thereof, and the issuance and sale of the Offered
Securities will not (i) violate the certificate of incorporation or bylaws
of the Issuer, (ii) conflict with or constitute a breach of, or a default
under, any agreement listed on a certificate of an officer of the Issuer as
being the material agreements of the Issuer and its subsidiaries, (iii) to
our knowledge, breach or otherwise violate any provision in any court or
administrative order, writ, judgment or decree that names the Issuer and is
specifically directed to any of its property or (iii) constitute a
violation by the Issuer of any applicable provision of British Virgin
Islands law, statute or regulation.
(vii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court of the British Virgin
Islands required for the issuance and sale by the Issuer of the Offered
Securities to the Initial Purchasers and the issuance of the Guarantees by
the Guarantors or the consummation by the Issuer of the other transactions
contemplated by the Purchase Agreement and the Indenture, except such as
have been obtained.
(viii) To our knowledge, there is no action, suit, proceeding or
investigation before or by any court or governmental agency or body,
domestic or foreign, pending or
39
threatened against, the Issuer that (i) has caused us to conclude that such
action, suit, proceeding or investigation is required to be described in
the Offering Document but is not so described or (ii) would be reasonably
likely to adversely affect the consummation of any of the transactions
contemplated by the Purchase Agreement or the Indenture.
(ix) The Exchange Securities have been duly and validly authorized
for issuance by the Issuer.
40
Exhibit B-2
(i) The Surviving Issuer is duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to carry on its business as it is currently being conducted and
as described in the Offering Document and to own, lease and operate its
properties.
(ii) The Surviving Issuer has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Purchase Agreement and each of the Transaction Documents to which it is a
party and to consummate the transactions contemplated thereby, including
without limitation, to the extent applicable, the corporate power and
authority to issue, sell and deliver the Offered Securities as provided in
the Purchase Agreement.
(iii) Each of the Transaction Documents to which it is a party has
been duly authorized, executed and delivered by the Surviving Issuer and,
to the extent governed by British Virgin Island law, constitutes a valid
and legally binding obligation of the Surviving Issuer, enforceable against
the Surviving Issuer in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(iv) The Supplemental Indenture has been duly authorized, executed
and delivered by the Surviving Issuer by all necessary corporate action.
(v) The execution and delivery by the Surviving Issuer of, and
performance by the Surviving Issuer of its obligations under each of the
Transaction Documents to which it is a party, and compliance by the
Surviving Issuer with all of the respective provisions thereof, and the
issuance and sale of the Offered Securities will not (i) violate the
certificate of incorporation or bylaws of the Surviving Issuer, (ii)
conflict with or constitute a breach of, or a default under, any agreement
listed on a certificate of an officer of MergerCo as being the material
agreements of MergerCo and its subsidiaries, (iii) to our knowledge, breach
or otherwise violate any provision in any court or administrative order,
writ, judgment or decree that names the Surviving Issuer and is
specifically directed to any of its property or (iii) constitute a
violation by the Surviving Issuer of any applicable provision of British
Virgin Islands law, statute or regulation.
(vi) Other than those already obtained, no consent, approval,
authorization or order of, or filing with, any governmental agency or body
or court of the British Virgin Islands is required in connection with the
consummation of the Transaction Documents by the Surviving Issuer, except
for such consents, approvals, authorizations, orders or filings the
41
failure of which to obtain or make would not result in a Material Adverse
Effect.
(vii) To our knowledge, there is no action, suit, proceeding or
investigation before or by any court or governmental agency or body,
domestic or foreign, pending or threatened against, the Surviving Issuer
that (i) has caused us to conclude that such action, suit, proceeding or
investigation is required to be described in the Offering Document but is
not so described or (ii) would be reasonably likely to adversely affect the
consummation of the Recapitalization.
(viii) The choice of New York law to govern the Operative Documents
constitutes a valid choice of law insofar as the law of the British Virgin
Islands is concerned. The submission by the British Virgin Islands
Guarantor to the non-exclusive jurisdiction of any federal or state court
in the Borough of Manhattan, The City of New York (a "New York Court") is a
valid submission insofar as the law of the British Virgin Islands is
concerned.
(ix) Neither the British Virgin Islands Guarantor nor any of its
property have any immunity from the jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution or otherwise) under the laws of
the British Virgin Islands.
(x) In a suit on the merits brought before a the British Virgin
Islands court, a British Virgin Islands court will respect and enforce the
agreement of the parties as to judgment currency.
42
Exhibit C
(i) [Insert Name] (a) is duly incorporated and is validly existing
as a corporation in good standing under the laws of [Insert Jurisdiction]
and (b) has all requisite corporate power and authority to carry on its
business as it is currently being conducted and as described in the
Offering Document and to own, lease and operate its properties.
(ii) [Insert Name] has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Purchase
Agreement and each of the Transaction Documents to which it is a party and
to consummate the transactions contemplated thereby.
(iii) Each of the Transaction Documents to which it is a party, has
been duly authorized, executed and delivered by [Insert Name] and, to the
extent governed by the laws of [Insert Jurisdiction], constitutes a valid
and legally binding obligation of [Insert Name], enforceable against
[Insert Name] in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(iv) The Subsidiary Guaranty Agreement has been duly authorized,
executed and delivered by [Insert Name] by all necessary corporate action.
(v) The execution and delivery by [Insert Name] of, and performance
by [Insert Name] of its obligations under each of the Transaction Documents
to which it is a party, and compliance by [Insert Name] with all of the
respective provisions thereof, and the issuance and sale of the Offered
Securities will not (i) violate the certificate of incorporation or bylaws
of [Insert Name], (ii) conflict with or constitute a breach of, or a
default under, any agreement listed on a certificate of an officer of
[Insert Name] as being the material agreements of [Insert Name] and its
subsidiaries, (iii) to our knowledge, breach or otherwise violate any
provision in any court or administrative order, writ, judgment or decree
that names [Insert Name] and is specifically directed to any of its
property or (iv) constitute a violation by [Insert Name] of any applicable
provision of [Insert Jurisdiction] law, statute or regulation.
(vi) Other than those already obtained, no consent, approval,
authorization or order of, or filing with, any governmental agency or body
or court of [Insert Jurisdiction] in connection with the consummation of
the Transaction Documents by [Insert Name], except for such consents,
approvals, authorizations, orders or filings the failure of which to obtain
or make would not result in a Material Adverse Effect.
(vii) To our knowledge, there is no action, suit, proceeding or
investigation before or by any court or
43
governmental agency or body, domestic or foreign, pending or threatened
against, [Insert Name] that (i) has caused us to conclude that such action,
suit, proceeding or investigation is required to be described in the
Offering Document but is not so described or (ii) would be reasonably
likely to adversely affect the consummation of the Recapitalization.
(viii) The choice of New York law to govern the Operative Documents
constitutes a valid choice of law insofar as the law of [Insert
Jurisdiction] is concerned. The submission by [Insert Name] to the non-
exclusive jurisdiction of any federal or state court in the Borough of
Manhattan, The City of New York (a "New York Court") is a valid submission
insofar as the law of the [Insert Jurisdiction] is concerned.
(ix) Neither [Insert Name] nor any of its property have any immunity
from the jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid
of execution or otherwise) under the laws of [Insert Jurisdiction].
(x) In a suit on the merits brought before [Insert Jurisdiction]
court, a [Insert Jurisdiction] court will respect and enforce the agreement
of the parties as to judgment currency.
44