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Business Transfer Agreement

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Title:

Business Transfer Agreement

Entities:

Citibank, NA; Infineon Technologies AG; Isron Corp ; Dechert LLP

Date:

2005

Size:

251KB total

Price:

$79

ID:

#2086655

► Miscellany ► Transfer ► Business Transfer Agreements
► Financial
► Technology ► Semiconductors
► Services ► Legal

Start of Preview

BUSINESS TRANSFER AGREEMENT

Dated as of June 12, 2004

between

HYNIX SEMICONDUCTOR INC.

and

SYSTEM SEMICONDUCTOR LTD.

TABLE OF CONTENTS


		Page
ARTICLE I THE TRANSACTION		1

1.1.	Sale and Purchase of Assets	1

1.2.	Assumed Liabilities	5

1.3.	Excluded Liabilities	7

1.4.	Consent of Third Parties; Authorities	8

1.5.	Closing	9

1.6.	Purchase Price	9

1.7.	Deliveries and Proceedings at Closing	14

1.8.	Allocation of Consideration	15

ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER		15

2.1.	Organization	15

2.2.	Authorization and Enforceability	16

2.3.	No Violation of Laws or Agreements	16

2.4.	Financial Statements	16

2.5.	No Changes	17

2.6.	Contracts	19

2.7.	Permits and Compliance With Laws Generally	21

2.8.	Environmental Matters	22

2.9.	Consents	23

2.10.	Title; All Assets	23

2.11.	Real Estate	24

2.12.	Taxes	26

2.13.	Intellectual Property Rights	27

2.14.	Inventory	30

2.15.	Accounts Receivable; Prepaid Expenses	30

2.16.	Labor Relations; Employees	30

2.17.	Employee Benefit Plans	31

2.18.	Absence of Undisclosed Liabilities	32

2.19.	No Pending Litigation or Proceedings	32

-i-

TABLE OF CONTENTS

(continued)


		Page
2.20.	Products Liability; Product Warranty	32

2.21.	Insurance	32

2.22.	Relationship with Customers and Suppliers	32

2.23.	Condition of Assets	33

2.24.	Transactions with Related Parties	33

2.25.	Brokerage	34

2.26.	Due Consideration	34

2.27.	Management Data	34

2.28.	Employee Bank Loans	34

2.29.	NO OTHER REPRESENTATIONS	34

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER		34

3.1.	Organization and Good Standing	34

3.2.	Authorization and Enforceability	34

3.3.	No Violation of Laws or Agreements	35

3.4.	Consents	35

3.5.	Brokerage	35

3.6.	Ability to Evaluate and Bear Risk	35

3.7.	Litigation	36

3.8.	Equity Financing	36

ARTICLE IV COVENANTS		36

4.1.	Conduct of Business	36

4.2.	Access, Information and Documents	37

4.3.	Implementation of Separation	37

4.4.	Monthly Financial Statements; Accounting Engagement	38

4.5.	Approvals; Financing	38

4.6.	Mutual Covenants	39

4.7.	Antitrust Filings	40

4.8.	Public Announcement	40

4.9.	Further Assurances	41

4.10.	Cooperation	41

-ii-

TABLE OF CONTENTS

(continued)


		Page
4.11.	Employees	41

4.12.	Taxes	43

4.13.	Capital Expenditure	43

4.14.	[intentionally left blank]	44

4.15.	Confidentiality	44

4.16.	No Solicitation	45

4.17.	Appraisal Financing	46

4.18.	Services for Cheongju Facilities	46

4.19.	Registration of Intellectual Property; Transfer of Intellectual Property after the Closing; Extension/Sublicense	46

4.20.	Use of Permits	47

4.21.	Youngdong Lease; Certain Transaction Documents; Apartment Complexes	47

4.22.	Shared Payables	48

4.23.	IP Dispute Consultation	48

4.24.	Equity Commitment Letter Amendment	49

4.25.	Outsourcing; Semiconductor Manufacturing Equipment	49

4.26.	Certain System IC Equipment	49

ARTICLE V CONDITIONS PRECEDENT; TERMINATION; LIQUIDATED DAMAGES		50

5.1.	Conditions Precedent to Obligations of Each Party	50

5.2.	Conditions Precedent to Obligations of Purchaser	50

5.3.	Conditions Precedent to Obligations of Seller	53

5.4.	Termination	56

5.5.	Liquidated Damages	56

ARTICLE VI CERTAIN ADDITIONAL COVENANTS		57

6.1.	Certain Taxes and Expenses	57

6.2.	Maintenance of Books and Records	58

6.3.	Indemnification	58

6.4.	Non-Compete; Non-Solicitation; Non-Interference	62

6.5.	Registration of Purchaser?s Lease Rights	65

-iii-

TABLE OF CONTENTS

(continued)


		Page
ARTICLE VII MISCELLANEOUS		67

7.1.	Nature and Survival of Covenants and Representations	67

7.2.	No Right to Setoff	67

7.3.	Notices	68

7.4.	Successors and Assigns	69

7.5.	Exhibits and Schedules	69

7.6.	Governing Law	70

7.7.	Consent to Jurisdiction	70

7.8.	Severability	70

7.9.	No Third Party Beneficiaries	70

7.10.	Entire Agreement	70

7.11.	Amendment and Waiver	70

7.12.	Counterparts	71

7.13.	Headings	71

7.14.	Construction; Certain Defined Terms	71

7.15.	Disclosure Schedules	73

-iv-

Schedules


Schedule 1.1(b)(iv)		Intellectual Property

Schedule 1.1(b)(v)		Accounts Receivable

Schedule 1.1(b)(vi)		Inventory

Schedule 1.1(b)(viii)		Other Receivables/Other Current Assets

Schedule 1.1(b)(x)		Permits

Schedule 1.1(b)(xv)		Company Loans

Schedule 1.1(c)(ii)		Excluded Contracts

Schedule 1.1(c)(xi)		Certain Excluded Assets

Schedule 1.2(b)		Severance Liability

Schedule 1.6(b)(i)-A		Accounting Principles; Closing Normalized Working Capital

Schedule 1.6(b)(i)-B		Reference Amount Calculation

Schedule 1.8		Allocation of Consideration

Schedule 2.1		Places of Business

Schedule 2.3		Consents

Schedule 2.4		Financial Statements

Schedule 2.5		Changes

Schedule 2.5(a)		Quarterly Management Performance Bonus Plan

Schedule 2.6		Contracts

Schedule 2.7(b)		Compliance With Laws; Violations; Proceedings

Schedule 2.8(a)		Environmental Permits

Schedule 2.8(b)(iii)		Underground Storage Tanks

Schedule 2.10(a)		Liens

Schedule 2.10(c)		Assets

Schedule 2.11		Facilities

Schedule 2.12		Jurisdictions for Tax Returns

Schedule 2.13(a)		Intellectual Property Rights

Schedule 2.13(b)		Licenses

Schedule 2.13(e)		Third Party Intellectual Property Claims

-v-


Schedule 2.13(f)		Post-Closing Intellectual Property Actions

Schedule 2.13(k)		Historical Third Party Intellectual Property Claims

Schedule 2.16(a)		Labor Relations

Schedule 2.16(c)		Employees

Schedule 2.17(a)		Employee Benefit Plans

Schedule 2.18		No Undisclosed Liabilities

Schedule 2.19		Litigation

Schedule 2.20		Warranty and Return Policies

Schedule 2.21		Insurance

Schedule 2.22		Relationship with Customers and Suppliers

Schedule 2.27		Management Data

Schedule 3.4		Purchaser Consents

Schedule 3.8(A)		CVC Equity Commitment Letter

Schedule 3.8(B)		CVC Asia Equity Commitment Letter

Schedule 4.1		Business Plan

Schedule 4.3		Separation Plan

Schedule 4.4(a)		Monthly Financial Statements Template

Schedule 4.13		Capital Expenditures

Schedule 4.19(c)		Contracts to be Extended or Sublicensed

Schedule 4.26		Certain System IC Equipment

Schedule 5.2(b)		Contracts Requiring Consent

Schedule 5.2(j)		Management

Schedule 5.2(l)		Certain Permits

Schedule 7.14(i)		Seller?s Knowledge

-vi-

Exhibits


Exhibit A		Business Plan

Exhibit B		Warrant Agreement

Exhibit C		Financing Term Sheet

Exhibit D		Youngdong Lease Agreement Term Sheet

Exhibit E		Term Sheets for Operating Agreements

Exhibit F		Form of Wafer Foundry Service Agreement

Exhibit G		Intellectual Property License Agreement Term Sheet

Exhibit H		Trademark License Agreement Term Sheet

Exhibit I		Securityholders Agreement Term Sheet

Exhibit J		Form of Wafer Mask Production and Supply Agreement

-vii-

List of Defined Terms


		PAGE
Accounting Engagement		38
Accounting Principles		9
Accrued Severance Payment		42
Acquired Assets		2
Acquired Contracts		8
Acquired Permits		8
Acquisition Proposal		45
Actual Severance Payment		42
Additional Key Money Deposit		47
Affiliate		71
Agere		47
Aggregate Accrued Severance Payment		42
Agreement		1
Allocation Principles		15
Antitrust Laws		40
Apartment Complex I		4
Apartment Complex II		4
Appraisal Rights Exercise Period		46
Assumed Financing Arrangement		39
Assumed Liabilities		5
Audits		38
AUP EBITDA		39
Authority		71
Benefit Plans		31
Business		1
Business Day		71
Business Plan		1
CAM		63
Cash Purchase Price		9
Cheongju Facilities		46
Closing		9
Closing Balance Sheet		10
Closing Date		9
Closing Normalized Working Capital		10
Closing Statement		10
Closing Transfer Tax Invoice		57
Company Loans		4
Contract		71

-viii-


Damages		59
Deductible Amount		61
Discovered Assets		13
DOJ		40
DRAM		63
Easement Rights		65
Easement Rights I		65
Easement Rights II		65
Easement Site		66
Easement Site I		65
Easement Site II		66
Effective Time		9
Employee Bank Loan Guarantees		43
Employee Bank Loans		43
Employees		71
Environmental Laws		22
Environmental Permits		22
Equipment and Other Tangible Personal Property		2
Equity Commitment Letters		36
Excess Appraisal Amount		46
Excess Severance		42
Excluded Assets		4
Excluded Contracts		5
Excluded Liabilities		7
Exclusivity Period		45
Facilities		24
Final Allocation		15
Financial Statements		17
Financing		51
Former Employees		71
FTC		40
Hazardous Substances		22
HSR Act		40
Hynix Payable		49
IBM		47
ICs		71
including		71
Indebtedness		72
Indemnified Party		59
Indemnifying Party		59
Independent Accounting Firm		11
Intellectual Property		29
Interim Balance Sheet Date		17
Interim Financial Statements		17

-ix-


Inventory		2
Inventory Date		9
Joint Accountants		38
KCAB		13
KEB Group		51
Key Customers		33
Key Suppliers		33
Knowledge		72
Korea		15
Korean GAAP		38
KRW		9
Land		65
Land Lease and Easement Agreement		65
Law		72
Lease Rights		65
Lease Rights Site		65
Leased Facilities		24
Leases		24
Licensed Software		29
Lien		72
Litigation Conditions		59
Loan Documents		39
LPSA		66
Material Adverse Effect		72
Material License Agreement		27
Memory Products		63
Missing Assets		12
Missing Assets Amount		12
Missing Assets Disputed Amount		12
Missing Assets Report		12
Missing Assets Review Period		12
Missing Equipment		49
Monthly Financial Statements		38
MRFTA		40
Net Exposure		43
Non-Solicit Exceptions		64
Owned Facilities