EXHIBIT
10.52
[***] DENOTES CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT
NTC/MICRON CONFIDENTIAL
JOINT VENTURE AGREEMENT
This
JOINT VENTURE
AGREEMENT , dated this 21st day of April, 2008, is made and
entered into by and between MICRON SEMICONDUCTOR B.V. (hereinafter
“ MNL
”), a private limited liability company organized under the
laws of the Netherlands and NANYA TECHNOLOGY CORPORATION (
Nanya
Technology Corporation [Translation from Chinese] )
(hereinafter “ NTC ”), a company
incorporated under the laws of the Republic of China (“
ROC ”
or “ Taiwan ”) (MNL
and NTC are each referred to individually as a “ Shareholder ,”
and collectively as the “ Shareholders
”).
RECITALS
A. Micron
Technology, Inc., a Delaware corporation (“ Micron ”),
and NTC have entered into that certain Master Agreement dated
as of the date hereof (the “ Master Agreement
”) which provides, among other things, that the
Shareholders will enter into a joint venture by contributing
equally to the capital of a company incorporated in Taiwan so
as to enable such company to manufacture and sell Stack DRAM
Products exclusively to Micron and NTC.
B.
NTC has formed MeiYa Technology Corporation (
MeiYa Technology
Corporation [Translation from Chinese] ), a company
incorporated under the laws of the ROC (the “
Joint Venture
Company ”), as such joint venture
company.
C.
The Shareholders are now entering into this Agreement to
set forth certain agreements regarding the ownership,
governance and operation of the Joint Venture
Company.
NOW,
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, do hereby agree as
follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section
1.1
Definitions
. In addition to the terms defined elsewhere in
this Agreement, capitalized terms used in this Agreement shall
have the respective meanings set forth below:
“
Accountants
” shall have the meaning set forth in Section
10.2(c)(ii) of this Agreement.
“
Affiliate ”
means, with respect to any specified Person, any other Person
that, directly or indirectly, including through one or more
intermediaries, controls, is controlled by, or is
under
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common
control with such specified Person; and the term “
affiliated ”
has a meaning correlative to the foregoing.
“
Agreement ”
means this Joint Venture Agreement.
“
Annual
Budget ” shall have the meaning set forth in
Section 7.5(b)(ii) of this Agreement.
“
Annual
Business Plan ” shall have the meaning set forth
in Section 7.5(b)(i) of this Agreement.
“
Answer
Notice ” shall have the meaning set forth in
Section 7.3(b) of this Agreement.
“
Applicable
Law ” means any applicable laws, statutes, rules,
regulations, ordinances, orders, codes, arbitration awards,
judgments, decrees or other legal requirements of any
Governmental Entity.
“
Articles of
Incorporation ” means the Articles of
Incorporation of the Joint Venture Company in the form and
substance as Exhibit A
attached to the Master Agreement, and as amended from time to
time.
“
Baseline
Flow ” shall have the meaning set forth in
Section 7.2(b)(iv) of this Agreement.
“
Board of
Directors ” means the board of directors of the
Joint Venture Company.
“
Boundary
Conditions ” means, with respect to any fab, a
requirement that, at any point in time:
(i)
there shall be [***] qualified Process Nodes in use for the
manufacture of Stack DRAM Products; provided
that at such fab there also may be [***] unqualified Process
Node in use for setup, engineering and testing purposes so
long as such unqualified Process Node is not in use for the
manufacture of Stack DRAM Products for eventual resale to end
customers of either Micron or NTC;
(ii)
such fab shall manufacture Stack DRAM Products with [***]
Design IDs for Micron; and
(iii) such
fab shall manufacture Stack DRAM Products with [***] Design
IDs for NTC.
“
Business
Day ” means a day that is not a Saturday, Sunday
or other day on which commercial banking institutions in
either the ROC or the State of New York are authorized or
required by Applicable Law to be closed.
“
Business
Plan ” means the Initial Business Plan or any
Annual Business Plan.
“
Buyout
Notice ” shall have the meaning set forth in
Section 13.1(a) of this Agreement.
“
Buyout
Price ” shall have the meaning set forth in
Section 12.3(a) of this Agreement.
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“
Buyout
Shares ” shall have the meaning set forth in
Section 13.1(a) of this Agreement.
“
Chairman ”
means the Chairman of the Board of Directors.
“
Change
Notice ” shall have the meaning set forth in
Section 7.3(b) of this Agreement.
“
Closing ”
means the remittance of the capital contribution to the Joint
Venture Company as set forth in Section 2.6 of the Master
Agreement.
“
Closing
Date ” means the date on which the Closing
occurs. For purposes of this Agreement and the
other agreements and instruments referenced herein, the
Closing shall be deemed to have occurred at 11:59 p.m. in
Taipei, Taiwan on such date.
“
Competitively
Sensitive Information ” means any information, in
whatever form, that has not been made publicly available
relating to products and services that Micron or a Subsidiary
of Micron, on the one hand, and NTC or a Subsidiary of NTC, on
the other hand, sells in competition with the other at the
execution of this Agreement or thereafter, including Stack
DRAM Products, to the extent such information of the Person
selling such products and services includes price or any
element of price, customer terms or conditions of sale,
seller-specific costs, volume of sales, output (but not
including the Joint Venture Company’s output), bid terms
of the foregoing type and such similar information as is
specifically identified electronically or in writing to the
Joint Venture Company by Micron or a Subsidiary of Micron, on
the one hand, and NTC or a Subsidiary of NTC, on the other
hand, as competitively sensitive information.
“
Compliant
Shareholder ” shall have the meaning set forth in
Section 13.1(a) of this Agreement.
“
Confidentiality
Agreement ” shall have the meaning set forth in
Section 15.13(a) of this Agreement.
“
Contributing
Shareholder ” shall have the meaning set forth in
Section 3.5 of this Agreement.
“
Control ”
(whether or not capitalized) means the power or authority,
whether exercised or not, to direct the business, management
and policies of a Person, directly or indirectly, whether
through the ownership of voting securities, by contract or
otherwise, which power or authority shall conclusively be
presumed to exist upon possession of beneficial ownership or
power to direct the vote of [***] of the votes entitled to be
cast at a meeting of the members, shareholders or other equity
holders of such Person or power to control the composition of
a majority of the board of directors or like governing body of
such Person; and the terms “ controlling
” and “ controlled ”
have meanings correlative to the foregoing.
“
Cure
Period ” shall have the meaning set forth in
Section 12.5 of this Agreement.
“
Deadlock ”
shall have the meaning set forth in Section 12.1 of this
Agreement.
“
Defaulting
Shareholder ” shall have the meaning set forth in
Section 12.4 of this Agreement.
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“
Design
ID ” means a part number that is assigned to a
unique Stack DRAM Design of a particular Stack DRAM Product,
which may include a number or letter designating a specific
device revision.
“
Design
SOW ” means [***].
“
Divestiture
Action ” shall have the meaning set forth in
Section 2.4(c)(v) of this Agreement.
“
DRAM
Product ” means any stand-alone
semiconductor device that is a dynamic random access memory
device and that is designed or developed primarily for the
function of storing data, in die, wafer or package
form.
“
Equity
Interest ” means a Shareholder’s percentage
ownership of the Shares as determined by dividing the number
of Shares owned by such Shareholder at the time of
determination by the total issued and outstanding Shares at
the time of determination.
“
Event of
Default ” shall have the meaning set forth in
Section 12.4 of this Agreement.
“
Executive
Vice President ” shall have the meaning set forth
in Section 5.5(b) of this Agreement.
“
Exercise
Notice ” shall have the meaning set forth in
Section 12.6(a) of this Agreement.
“
Fab
Lease ” means that certain Lease and License
Agreement between NTC, as landlord, and the Joint Venture
Company, as tenant, referred to on Schedule
2.3 of the Master Agreement Disclosure
Letter.
“
Fair
Value ” means (i) if it is after the Listing of
the Joint Venture Company, the [***] of the Shares immediately
prior to the date of the Exercise Notice or the Buyout Notice,
as applicable; or (ii) if prior to the Listing of the Joint
Venture Company, the fair value immediately prior to the date
of the Exercise Notice or Buyout Notice, as applicable, as
determined by independent appraisers selected as follows: each
Shareholder shall appoint one independent appraiser, which
shall be an internationally recognized accounting or
investment banking firm, and these two independent appraisers
shall mutually select a third independent
appraiser. Each such appraiser shall in good faith
conduct its own independent appraisal to determine the fair
value of the Shares (ignoring any applicable minority
discounts or effects of illiquidity that may be associated
with the Shares of the Joint Venture Company), and [***] that
are the closest in value shall be the Fair Value of the
Shares.
“
Filing
” shall have the meaning set forth in Section 2.4 of
this Agreement.
“
Filing
Event ” shall have the meaning set forth in
Section 2.4 of this Agreement.
“
Fiscal
Year ” shall have the meaning set forth in
Section 10.1 of this Agreement.
“
GAAP
” means generally accepted accounting principles,
consistently applied for all periods at issue.
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“
Governmental
Entity ” means any governmental authority or
entity, including any agency, board, bureau, commission,
court, municipality, department, subdivision or
instrumentality thereof, or any arbitrator or arbitration
panel.
“
ICDR
” means the International Centre for Dispute Resolution
of the American Arbitration Association.
“
Imaging
Product ” means any (i) semiconductor device
having a plurality of photo elements ( e.g. ,
photodiodes, photogates, etc.) for converting impinging light
into an electrical representation of the information in the
light, (ii) image processor or other semiconductor device for
balancing, correcting, manipulating or otherwise processing
such electrical representation of the information in the
impinging light, or (iii) combination of the devices described
in clauses (i) and (ii).
“
Initial
Budget ” shall have the meaning set forth in
Section 7.5(a)(iii) of this Agreement.
“
Initial
Business Plan ” shall have the meaning set forth
in Section 7.5(a)(i) of this Agreement.
“
Initial
Period ” shall have the meaning set forth in
Section 7.5(a)(i) of this Agreement.
“
Initiating
Shareholder ” shall have the meaning set
forth in Section 7.3(b) of this Agreement.
“
JDP
Agreement ” means that certain Joint Development
Program Agreement between NTC and Micron referred to on
Schedule
2.1 of the Master Agreement Disclosure
Letter.
“
JDP
Committee ” means the committee formed and
operated by Micron and NTC to govern the performance of Micron
and NTC under the JDP Agreement in accordance with the JDP
Committee Charter.
“
JDP Committee
Charter ” means the charter attached as
Schedule
2 to the JDP Agreement.
“
JDP
Design ” means any Stack DRAM Design resulting
from the research and development activities of Micron and NTC
pursuant to the JDP Agreement.
“
JDP Process
Node ” means any Primary Process Node or
Optimized Process Node resulting from the research and
development activities of Micron and NTC pursuant to the JDP
Agreement.
“
JDP Work
Product ” means [***].
“
Joint Venture
Company ” shall have the meaning set forth in the
Recitals to this Agreement.
“
Joint Venture
Documents ” means the Master Agreement and each
of the agreements listed on Schedules
2.1 through 2.5 of
the Master Agreement Disclosure Letter.
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“
Joint Venture
Reportable Events ” shall have the meaning set
forth in Section 10.3 of this Agreement.
“
Leased
Fab ” means the Property as that term is defined
in the Fab Lease.
“
Listing ”
shall have the meaning set forth in Section 11.4(a) of this
Agreement.
“
Manufacturing
Capacity ” shall have the meaning set forth in
Section 7.2(b)(iv) of this Agreement.
“
Manufacturing
Committee ” shall have the meaning set forth in
Section 7.2(b)(i) of this Agreement.
“
Manufacturing
Plan ” shall have the meaning set forth in
Section 7.2(c) of this Agreement.
“
Master
Agreement ” shall have the meaning set forth in
the Recitals to this Agreement.
“
Master
Agreement Disclosure Letter ” means that certain
Master Agreement Disclosure Letter, between NTC and Micron,
dated as of the date hereof, containing the Schedules required
by the provisions of the Master Agreement.
“
Micron
” shall have the meaning set forth in the Recitals to
this Agreement.
“
Micron
Assigned Employee Agreement ” means that certain
Micron Assigned Employee Agreement between Micron and the
Joint Venture Company referred to on Schedule
2.4 of the Master Agreement Disclosure
Letter.
[***]
“
MNL
” shall have the meaning set forth in the preamble to
this Agreement.
“
NAND Flash
Memory Product ” means a non-volatile
semiconductor memory device containing memory cells that are
electrically programmable and electrically erasable whereby
the memory cells consist of one or more transistors that have
a floating gate, charge trapping regions or any other
functionally equivalent structure utilizing one or more
different charge levels (including binary or multi-level cell
structures), with or without any on-chip control, I/O and
other support circuitry, in wafer, die or packaged
form.
“
Non-compliant
Shareholder ” shall have the meaning set forth in
Section 13.1(a) of this Agreement.
“
Non-contributing
Shareholder ” shall have the meaning set forth in
Section 3.5 of this Agreement.
“
Non-Defaulting
Shareholder ” shall have the meaning set forth in
Section 12.5 of this Agreement.
“
Notice of
Default” shall have the meaning set forth in
Section 12.5 of this Agreement.
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“
NTC
” shall have the meaning set forth in the preamble to
this Agreement.
“
NTC Assigned
Employee Agreement ” means that certain NTC
Assigned Employee Agreement between NTC and the Joint Venture
Company referred to on Schedule
2.3 of the Master Agreement Disclosure
Letter.
[***]
“
NT$
” means the lawful currency of the ROC.
“
Offered
Shares ” means the Shares as defined in Section
9.3(a) of this Agreement.
“
Optimized
Process Node ” means [***].
“
Option
Period ” shall have the meaning set forth in
Section 9.3(b) of this Agreement.
“
Other
Shareholder ” shall have the meaning set forth in
Section 7.3(b) of this Agreement.
“
Output
Percentage ” means, with respect to a Shareholder
and subject to Sections 7.3(b) and 8.4(d), the percentage as
of the [***]; provided
, however ,
that notwithstanding anything to the contrary in this
Agreement, if all of the Shares owned by one Shareholder and
its Subsidiaries (including its SPV) have been Transferred to
the other Shareholder and/or its Affiliates in accordance with
Section 3.5, 12.3, 12.6 or 13.1, the Output Percentage of the
Shareholder that Transferred such Shares shall, [***]; and
provided
further ,
however ,
that if there is a merger or similar transaction involving the
Joint Venture Company that results in the Shareholders either
not owning shares of the survivor or in the Shareholders
owning shares of the survivor in a relative proportion
different than their relative Equity Interests immediately
prior to such transaction, the Shareholders’ Output
Percentages shall [***].
“
Patent
Rights ” means all rights associated with any and
all issued and unexpired patents and pending patent
applications in any country in the world, together with any
and all divisionals, continuations, continuations-in-part,
reissues, reexaminations, extensions, foreign counterparts or
equivalents of any of the foregoing, wherever and whenever
existing.
“
Permitted
Transfer ” shall have the meaning set forth in
Section 9.2 of this Agreement.
“
Person
” means any natural person, corporation, joint stock
company, limited liability company, association, partnership,
firm, joint venture, organization, business, trust, estate or
any other entity or organization of any kind or
character.
“
Phantom
Shares ” shall have the meaning set forth in
Section 7.3(b) of this Agreement.
“
President ”
shall have the meaning set forth in Section 5.5(a) of this
Agreement.
“
Primary
Process Node ” means [***].
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“
Probe
T esting
” means testing, using a wafer test program as set
forth in the applicable specifications, of a wafer that has
completed all processing steps deemed necessary to complete
the creation of the desired Stack DRAM integrated circuits in
the die on such wafer, the purpose of which test is to
determine how many and which of the die meet the applicable
criteria for such die set forth in the
specifications.
“
Process
Node ” means [***].
“
Process
Technology ” means that process technology
developed before expiration of the Term (as defined in the JDP
Agreement) and utilized in the manufacture of Stack DRAM
wafers, including Probe Testing and technology developed
through Product Engineering thereof, regardless of the form in
which any of the foregoing is stored, but excluding any Patent
Rights and any technology, trade secrets or know-how that
relate to and are used in any back-end operations (after Probe
Testing).
“
Product
Engineering ” means any one or more of the
engineering activities described on Schedule
7 of the JDP Agreement as applied to Stack DRAM
Products or Stack DRAM Modules
“
Proposing
Shareholder ” shall have the meaning set forth in
Section 12.3(a) of this Agreement.
“
Receiving
Party ” shall have the meaning set forth in
Section 9.3(a) of this Agreement.
“
Receiving
Shareholder ” shall have the meaning set forth in
Section 12.3(a) of this Agreement.
“
Regulatory
Law ” shall have the meaning set forth in Section
2.4 of this Agreement.
“
Replacement
Period ” means, with respect to any Shares
Transferred to employees of a Transferring Shareholder or its
Wholly-Owned Subsidiary (or, if MNL is the Transferring
Shareholder, to employees of Micron or its Wholly-Owned
Subsidiaries) as contemplated by Section 8.4(b), the period
[***].
“
ROC
” shall have the meaning set forth in the preamble to
this Agreement.
“
ROC Company
Law ” means the
Company Law of the ROC, promulgated on December 26, 1929, and
as last amended on February 3, 2006.
“
ROC
Securities Exchange Law ” means the Securities
and Exchange Law of the ROC, promulgated on April 30, 1968,
and as last amended on May 30, 2006.
“
Sale
Offer ” shall have the meaning set forth in
Section 9.3(a) of this Agreement.
“
Share
Acquisition ” shall have the meaning set
forth in Section 7.3(b) of this Agreement.
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“
Share
Disposition ” shall have the meaning set
forth in Section 7.3(b) of this Agreement.
“
Shareholder
” shall have the meaning set forth in the preamble to
this Agreement.
“
Shareholders’
Meeting ” or “ Shareholders’
Meetings ” shall have the meaning set forth in
Section 6.2 of this Agreement.
“
Shares
” means the ordinary shares of the Joint Venture
Company, each having a par value of [***].
“
SOW
” means a statement of the work that describes research
and development work to be performed under the JDP Agreement
and that has been adopted by the JDP Committee pursuant to
Section 3.2 of the JDP Agreement.
“
Software ”
means computer program instruction code, whether in human
readable source code form, machine executable binary form,
firmware, scripts, interpretive text, or
otherwise. The term “Software” does not
include databases and other information stored in electronic
form, other than executable instruction codes or source code
that is intended to be compiled into executable instruction
codes.
“
SPV
” shall have the meaning set forth in Section 8.4(a) of
this Agreement.
“
Stack
DRAM ” means dynamic random access memory cell
that functions by using a capacitor arrayed
predominantly above the semiconductor substrate.
“
Stack
DRAM Design ”
means, with respect to a Stack DRAM Product, the corresponding
design components, materials and information listed on
Schedule
3 of the JDP Agreement or as otherwise determined by
the JDP Committee in a SOW.
“
Stack DRAM
Module ” means one or more Stack DRAM Products in
a JEDEC-compliant package or module (whether as part of a
SIMM, DIMM, multi-chip package, memory card or other memory
module or package).
“
Stack DRAM
Product ” means any memory comprising Stack DRAM,
whether in die or wafer form.
“
Subsidiary ”
means with respect to any specified Person, any other Person
that, directly or indirectly, including through one or more
intermediaries, is controlled by such specified
Person.
“
Supply
Agreement ” means that certain Supply Agreement
among NTC, Micron and the Joint Venture Company referred to on
Schedule
2.5 of the Master Agreement Disclosure
Letter..
“
Taiwan
” shall have the meaning set forth in the preamble to
this Agreement.
“
Taiwan
GAAP ” means GAAP used in the ROC, as in effect
from time to time.
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“
Technology
Transfer Agreement ” means that certain
Technology Transfer Agreement among NTC, Micron and the Joint
Venture Company referred to on Schedule
2.5 of the Master Agreement Disclosure
Letter.
“
Third
Party ” means any Person other than Micron, NTC,
the Joint Venture Company or any of their respective
Subsidiaries.
“
Transfer ”
shall have the meaning set forth in Section 9.1(a) of this
Agreement.
“
Transfer
Notice ” shall have the meaning set forth in
Section 9.3(a) of this Agreement.
“
Transfer
Period ” shall have the meaning set forth in
Section 9.3(d) of this Agreement.
“
Transfer
Restriction Period ” shall have the meaning set
forth in Section 9.1(a) of this Agreement.
“
Transferor ”
shall have the meaning set forth in Section 9.3(a) of this
Agreement.
“
Transferred
Technology ” means [***].
“
Transferring
Shareholder ” shall have the meaning set forth in
Section 8.4(a) of this Agreement.
“
TTA
68-50 ” means that certain Technology Transfer
Agreement for 68-50 nm Process Nodes between Micron and the
Joint Venture Company referred to on Schedule
2.4 of the Master Agreement Disclosure
Letter.
“
U.S.
GAAP ” means GAAP used in the United States, as
in effect from time to time.
“
Vice-Chairman
” means the Vice Chairman of the Board of
Directors.
“
Wholly-Owned
Subsidiary ” of a Person means a Subsidiary, all
of the shares of stock or other ownership interests of which
are owned, directly or indirectly through one or more
intermediaries, by such Person, other than a nominal number of
shares or a nominal amount of other ownership interests issued
in order to comply with requirements that such shares or
interests be held by one or more other Persons, including
requirements for directors’ qualifying shares or
interests, requirements to have or maintain two or more
stockholders or equity owners or other similar
requirements.
Section
1.2 Certain
Interpretive Matters.
(a) Unless
the context requires otherwise, (i) all references to
Sections, Articles, Exhibits, Appendices or Schedules are to
Sections, Articles, Exhibits, Appendices or Schedules of or to
this Agreement, (ii) each accounting term not otherwise
defined in this Agreement has the meaning commonly applied to
it in accordance with Taiwan GAAP, (iii) words in the singular
include the plural and vice versa, (iv) the term “
including ”
means “including without limitation,” and (v) the
terms “ herein ,”
“ hereof ,”
“ hereunder ”
and words of similar import shall mean references to
this
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Agreement
as a whole and not to any individual section or portion
hereof. Unless otherwise denoted, all references to
“ $ ” or
dollar amounts will be to lawful currency of the United States
of America. All references to “ day ” or
“ days ” mean
calendar days.
(b) No
provision of this Agreement will be interpreted in favor of,
or against, either Shareholder by reason of the extent to
which (i) such Shareholder or its counsel participated in the
drafting thereof, or (ii) such provision is inconsistent with
any prior draft of this Agreement or such
provision.
ARTICLE II
THE JOINT VENTURE COMPANY
Section
2.1
General
Matters .
(a)
Name
. The Joint Venture Company shall be named “
MeiYa Technology
Corporation” [Translation from Chinese] in
Chinese and “MeiYa Technology Corporation” in
English. The Shareholders acknowledge and agree
that the Joint Venture Company shall be continued as a
company-limited-by-shares under the laws of the
ROC.
(b)
Purpose
. The purpose of the Joint Venture Company shall be
the manufacturing and sale of certain Stack DRAM Products
exclusively for and to Micron and NTC; and the entry of, or
engagement in, any such lawful transactions or activities in
furtherance of the foregoing purpose.
(c)
Business
Scope . Subject to amendment by the
Shareholders from time to time and any necessary approval from
the relevant Governmental Entities, the registered business
scope of the Joint Venture Company shall be as set forth in
its business license, other incorporation documents and the
Articles of Incorporation, all as mutually agreed upon by the
Shareholders.
(d)
Principal
Place of Business . The registered address
and the principal place of business of the Joint Venture
Company shall be at 5F, 201-36 Tung Hwa North RD, Taipei City,
Taiwan, ROC. The Board of Directors may change the
registered address and the principal place of business of the
Joint Venture Company to such other place as the Board of
Directors may from time to time determine, and, if necessary,
the Board of Directors shall cause the Joint Venture
Company’s registration documents to be amended in
accordance with the requirements of the Applicable Laws so as
to effectuate the change in the registered address and the
principal place of business of the Joint Venture
Company. The Joint Venture Company may maintain
offices and places of business at such other place or places
within or outside of Taiwan as the Board of Directors may deem
to be advisable.
Section
2.2
Articles of
Incorporation . The Shareholders shall, at
or promptly after the Closing, cause the Joint Venture Company
to adopt the Articles of Incorporation as its articles of
incorporation and to file the Articles of Incorporation in
accordance with Applicable Laws of the ROC. In case
of any conflict or inconsistency between the provisions of the
Articles of Incorporation and the terms of this Agreement, the
terms of
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this
Agreement shall prevail as between the Shareholders to the
extent permitted under the Applicable Laws. The
Shareholders shall exercise all rights available to them to
give effect to the terms of this Agreement to the extent
permissible under the Applicable Laws and to take such
reasonable steps to amend the Articles of Incorporation as
soon as practicable to the extent necessary to remove any such
conflict or inconsistency.
Section
2.3
Maintenance of
Joint Venture Company . The Shareholders
shall cause the Board of Directors, or officers of the Joint
Venture Company, to make or cause to be made, from time to
time, filings and applications to the relevant Governmental
Entities in the ROC to amend any registration, license or
permit of the Joint Venture Company as the Board of Directors
reasonably considers necessary or appropriate under the
Applicable Laws so as to ensure (a) the due incorporation and
continuation of the Joint Venture Company as a
company-limited-by-shares under the laws of the ROC and (b)
compliance with the terms of this Agreement.
Section
2.4
Governmental
Approvals . In the event that either
Shareholder takes or desires to take any action contemplated
by this Agreement that could reasonably be expected to result
in an event or transaction, including without limitation (i)
the purchase by either Shareholder of Shares pursuant to
Section 3.5, 9.3, 12.3, 12.6 or Article XIII or
(ii) the making of a contribution to the capital of
the Joint Venture Company as contemplated by Section 3.2 or
3.3, which event or transaction, as to each of the foregoing,
would require either Shareholder to make a filing,
notification or any other required or requested submission
under antitrust, competition, foreign investment, company or
fair trade law (any such event or transaction, a “
Filing
Event ” and any such filing, notification, or any
such other required or requested submission, a “
Filing
” and any such law, a “ Regulatory Law
”), then:
(a) the
Shareholder taking such action, in addition to complying with
any other applicable notice provisions under this Agreement,
shall promptly notify the other Shareholder of such Filing
Event, which notification shall include an indication that
Filings under the Regulatory Law will be
required;
(b) notwithstanding
any provision to the contrary in this Agreement, a Filing
Event may not occur or close until after any applicable
waiting period (including any extension thereof) under the
Regulatory Law, as applicable to such Filing Event, shall have
expired or been terminated, and all approvals under regulatory
Filings in any jurisdiction that shall be necessary for such
Filing Event to occur or close shall have been obtained, and
any applicable deadline for the occurrence or closing of such
Filing Event contained in this Agreement shall be delayed, so
long as both Shareholders are proceeding diligently in
accordance with this Section 2.4 to seek any such expiration,
termination or approval, and so long as there are no other
outstanding conditions preventing the occurrence or closing of
the Filing Event;
(c) the
Shareholders shall, and shall cause any of their relevant
Affiliates to:
(i)
as promptly as practicable, make their respective Filings
under the applicable Regulatory Law;
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Venture Agreement
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(ii)
promptly respond to any requests for
additional information from the applicable Governmental
Entity;
(iii) subject
to applicable Regulatory Laws, use commercially reasonable
efforts to cooperate with each other in the preparation of,
and coordinate, such Filings (including the exchange of drafts
between each party’s outside counsel) so as to reduce
the length of any review periods;
(iv) subject
to applicable Regulatory Laws, cooperate and use their
respective commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all
things necessary under Regulatory Law in connection with such
Filing Event, including using commercially reasonable efforts
to provide information, obtain necessary exemptions, rulings,
consents, clearances, authorizations, approvals and waivers,
and effect necessary registrations and filings;
(v)
subject to applicable Regulatory Laws, use their
commercially reasonable efforts to (a) take actions that are
necessary to prevent the applicable Governmental Entity from
filing an action with a court or Governmental Entity that, if
the Governmental Entity prevailed, would restrict, enjoin,
prohibit or otherwise prevent or materially delay the
consummation of the Filing Event, including an action by any
such Governmental Entity seeking a requirement to (i) sell,
license or otherwise dispose of, or hold separate and agree to
sell or otherwise dispose of, assets, categories of assets or
businesses of either Shareholder, the Joint Venture Company,
or any of their respective Subsidiaries; (ii) terminate
existing relationships and contractual rights and obligations
of either Shareholder, the Joint Venture Company or any of
their respective Subsidiaries; (iii) terminate any relevant
joint venture or other arrangement; or (iv) effectuate any
other change or restructuring of either Shareholder or the
Joint Venture Company (as to each of the foregoing, a “
Divestiture
Action ”), and (b) contest and resist any action,
including any legislative, administrative or judicial action,
and to have vacated, lifted, reversed or overturned any order
that restricts, enjoins, prohibits or otherwise prevents or
materially delays the occurrence or closing of such Filing
Event; and
(vi) subject
to applicable Regulatory Laws, prior to the making or
submission of any analysis, appearance, presentation,
memorandum, brief, argument, opinion or proposal by or on
behalf of either Shareholder in connection with proceedings
under or relating to the applicable Regulatory Law, consult
and cooperate with one another, and consider in good faith the
views of one another, in connection with any such analyses,
appearances, presentations, memoranda, briefs, arguments,
opinions and proposals, and provide one another with copies of
all material communications from and filings with, any
Governmental Entities in connection with any Filing
Event;
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(d) notwithstanding
anything to the contrary in this Section 2.4, nothing in this
Section 2.4 shall require either Shareholder or its respective
Affiliates, or the Joint Venture Company, to take any
Divestiture Action; and
(e) if
the Filing Event is prevented from occurring or closing as a
result of any applicable Regulatory Laws, after exhausting all
efforts required under this Section 2.4 to obtain the
necessary approval of any applicable Governmental Entity, then
the Shareholders shall negotiate in good faith to agree upon
an alternative event or transaction that would be permissible
under applicable Regulatory Laws, and would approximate, as
closely as possible, the intent and contemplated effect of the
original Filing Event.
ARTICLE III
CAPITALIZATION; CONTRIBUTION OF CAPITAL
Section
3.1
Authorized
Capital . The Joint Venture Company shall
have an initial authorized capital of [***] divided into [***]
Shares. In accordance with Section 6.5, the
authorized capital may be amended from time to time by the
Shareholders, as may be necessary or desirable to consummate
the transactions contemplated herein and in accordance with
the Applicable Laws of the ROC.
Section
3.2
Capital
Contributions at or Prior to the Closing .
(a) In
connection with the formation of the Joint Venture Company,
NTC shall have contributed to the Company, prior to the
Closing, NT$ 1,000,000 as an initial contribution to the
capital of the Joint Venture Company for the subscription of
one hundred thousand (100,000) Shares.
(b) Pursuant
to the Master Agreement and subject to the terms and
conditions thereof, at the Closing, NTC shall contribute to
the Joint Venture Company, through the subscription of one
hundred nineteen million nine hundred thousand (119,900,000)
Shares, NT$ 1,199,000,000. Pursuant to the Master
Agreement and subject to the terms and conditions thereof, at
the Closing, MNL shall contribute to the Joint Venture
Company, through the subscription of one hundred twenty
million (120,000,000) Shares, NT$
1,200,000,000.
Section
3.3
Additional
Capital Contributions . In addition to the
capital contributions referred to in Section 3.2, each of MNL
and NTC commits to making, on or prior to December
31, 2009, additional capital contributions of the NT$
equivalent (rounded down to the nearest NT$10,000) of $510
million each, for total capital contributions by each
Shareholder to the Joint Venture Company of $550
million. The timing of the capital increase by the
Joint Venture Company and the injection of additional capital
by the Shareholders under this Section 3.3, including the per
Share purchase price with respect to the purchase of Shares at
each capital increase, shall be mutually agreed by the
Shareholders and approved by the Board of Directors, as
appropriate; provided
, that, the timing of the completion of the capital
contributions by the Shareholders as contemplated under this
Section 3.3 shall in no event be later than December 31,
2009.
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Section
3.4
Further Capital
Contributions .
(a)
No
Further Obligation . Unless otherwise agreed
by the Shareholders in writing, neither Shareholder shall be
obligated to make any further contribution of capital to the
Joint Venture Company beyond those contemplated by Section 3.2
and Section 3.3.
(b)
Future
Cash Requirements . To the extent possible,
in addition to the use of proceeds from the subscription of
any Shares, all future cash requirements of the Joint Venture
Company shall be satisfied first from cash flow generated by
operations of the Joint Venture Company and second from
financing that the Joint Venture Company may procure pursuant
to Article IV of this Agreement.
Section
3.5
Failure of a
Shareholder to Contribute Capital .
(a)
Put
or Call Rights . In the event that a
Shareholder (for purpose of this Section 3.5, the “
Non-contributing
Shareholder ”) fails to contribute to the capital
of the Joint Venture Company as contemplated by Section 3.2
and 3.3, the other Shareholder (for purpose of this Section
3.5, the “ Contributing
Shareholder ”) shall have the right, but not the
obligation, by written notice to the Non-contributing
Shareholder, to require the Non-contributing Shareholder
to:
(i)
[***]; or
(ii)
[***].
(b)
Completion
of Put/Call .
(i)
The Shareholders shall in good faith complete the sale or
purchase transaction contemplated under Section 3.5(a) as soon
as practicable, but in no event later than [***] days after
delivery of the notice by the Contributing
Shareholder.
(ii)
[***].
Section
3.6
Miscellaneous
Capital Provision .
(a)
No
Interest . No interest shall be payable to a
Shareholder on its capital contributions to the Joint Venture
Company. Except through a reduction of capital or
upon dissolution of the Joint Venture Company, a Shareholder
shall not be entitled to withdraw or the return of any of its
capital contributions.
(b) [***].
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ARTICLE IV
BANK LOANS
If
the Board of Directors shall at any time determine that there
is a need for the Joint Venture Company to obtain external
financing, the Shareholders will assist the Joint Venture
Company to seek and obtain commercial loans or other financing
arrangements from banks and other financial institutions on
competitive market terms and otherwise as the Joint Venture
Company may reasonably require; provided
, however ,
that any such loans from external sources shall be secured
only by the assets of the Joint Venture Company and repaid
from the cash flow of the Joint Venture
Company. None of the Shareholders (or any of their
representatives) shall be obligated under this Agreement or
otherwise to provide any guarantee or security for any such
loans in favor of the Joint Venture Company, unless
specifically agreed in writing by such Shareholder (or its
duly authorized representative). The Shareholders
shall cause the Joint Venture Company to use commercially
reasonable efforts, from and after the Closing, to obtain
[***] in commercial loans to be used in accordance with the
Initial Business Plan.
ARTICLE V
MANAGEMENT OF THE JOINT VENTURE COMPANY
Section
5.1
Board of
Directors .
(a)
Power
and Authority . The Board of Directors shall
be responsible for the overall management of the business,
affairs and operations of the Joint Venture
Company. The Board of Directors shall have all the
rights and powers given to it under the Articles of
Incorporation and the Applicable Laws of the ROC, including
without limitation, the ROC Company Law.
(b)
Number
of Directors . The Articles of Incorporation
shall provide for the Joint Venture Company to have a Board of
Directors consisting of [***] directors. The
directors shall be designated and elected as
follows:
(i)
MNL shall be entitled to designate a number of Persons
as its representatives to be elected as directors of the Joint
Venture Company equal to [***]; and
(ii) NTC
shall be entitled to designate a number of Persons as its
representatives to be elected as directors of the Joint
Venture Company equal to [***].
(c)
Agreement
to Vote .
(i) The
Shareholders agree to vote, in any meeting of the shareholders
where directors are elected, in a coordinated manner, to elect
all of the Persons designated by the Shareholders in
accordance with Section 5.1(b) above, which shall
[***]. As soon as practicable after the Closing,
the Shareholders shall elect the [***].
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(ii) If
for any reason the Shareholders shall be unable to elect [***]
Persons to be their representatives to serve as directors
pursuant to Section 5.1(b), the Shareholders shall vote, in a
coordinated manner, to elect as many of such Persons as
possible. The number of Persons so elected shall be
allocated between the Shareholders as follows:
(A) MNL
shall be entitled to designate a number of Persons to be so
elected that is equal to [***]; and
(B) NTC
shall be entitled to designate a number of Persons to be so
elected that is equal to [***].
(iii) Notwithstanding
Section 5.1(c)(ii) above, if [***].
(d)
Removal
and Replacement . Any of the representatives
serving as directors on the Board of Directors may be removed
or replaced for any reason by the Shareholder that designated
him or her. If any such representative serving on
the Board of Directors is so removed or replaced or otherwise
ceases to serve as a director on the Board of Directors, the
Shareholder that designated such representative shall be
entitled to designate another Person to fill such
vacancy.
(e)
Compensation
. The directors, except for the independent
directors, if any, shall not receive any compensation for
serving as such, although the Board of Directors may authorize
the reimbursement of expenses reasonably incurred in
connection with the performance of their duties.
(f)
Meetings
of the Board of Directors; Notice .
(i)
The Board of Directors shall meet from time to time but at
least once per fiscal quarter in Taiwan (or such other place
as the Board of Directors may decide) by not less than ten
(10) days notice in writing. Emergency meetings of
the Board of Directors may be convened from time to time by
the Chairman, or the Vice-Chairman pursuant to Section 5.2(c),
by not less than three (3) days notice in
writing.
(ii)
A notice of a meeting of the Board of
Directors shall contain the time, date, location and agenda
for such meeting. The presence of any director at a
meeting (including attendance by means of video conference)
shall constitute a waiver of notice of the meeting with
respect to such director.
(iii) The
Board of Directors shall cause written minutes to be prepared
of all actions, determinations and resolutions taken by the
Board of Directors and a copy thereof sent to each director
and supervisor of the Joint Venture Company within twenty (20)
days of each meeting.
(g)
Proxy
and Video Conference . In any case where a
director cannot attend a meeting of the Board of Directors,
that director may appoint another director as his or her proxy
in accordance with the ROC Company Law. All or any
of the directors may
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Venture Agreement
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participate
in a meeting of the Board of Directors by means of a video
conference which allows all persons participating in the
meeting to see and hear each other. A director so
participating shall be deemed to be present in person at the
meeting and shall be entitled to vote or be counted in a
quorum accordingly.
(h)
Quorum
. The presence of at least [***] of the directors
in office (including at least [***] directors (or with respect
to a Shareholder that only appoints [***], that [***])
appointed by each of the Shareholders), in person, by proxy or
by video conference, shall be necessary and sufficient to
constitute a quorum for the purpose of taking action by the
directors at any meeting of the Board of
Directors. No action taken by the Board of
Directors at any meeting shall be valid unless the requisite
quorum is present.
(i)
Voting
. Unless a higher majority of votes is specifically
required under the ROC Company Law or the Articles of
Incorporation, all actions, determinations or resolutions of
the Board of Directors shall require the affirmative vote of a
[***] majority of the directors present at any meeting of the
Board of Directors at which a quorum is present.
(j)
Matters
Requiring the Approval of the Board of Directors
. Each of the following actions shall require the
approval of the Board of Directors by resolution adopted in
accordance with Section 5.1(i) above (which approval may be
obtained through the adoption of a Business Plan by the Board
of Directors in accordance with Section 7.5, provided
, that the relevant Business Plan sets forth such action in
reasonable detail):
(i)
appointing or removing the Chairman or Vice Chairman of the
Board of Directors and appointing or removing the President,
the Executive Vice President or any Vice Presidents
of the Joint Venture Company;
(ii) approving
or amending any Business Plan;
(iii) issuing
new Shares within the authorized capital of the Joint Venture
Company;
(iv) determining
long-term policies of the Joint Venture Company including
substantial chang
