EXECUTION COPY
EXHIBIT 10.93

 
 
 
EQUITY TRANSFER AGREEMENT
 
 
 

 

 
 
DATED JULY 29, 2010

 
 
 
between
 
 
 
 
HYNIX SEMICONDUCTOR INC.
 

 
 
and
 
 

 
 
NUMONYX B.V.

 
 

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Table of Content
 
 

1.
DEFINITIONS
4
2.
TRANSFER OF THE EQUITY INTEREST
7
3.
PURCHASE PRICE
7
4.
CALL CLOSING AND CONDITIONS PRECEDENT
9
5.
REPRESENTATIONS AND WARRANTIES OF HYNIX
11
6.
REPRESENTATIONS AND WARRANTIES OF NUMONYX
12
7.
 COVENANTS OF THE PARTIES
14
8.
TERMINATION
16
9.
GOVERNING LAW
16
10.
DISPUTE RESOLUTION
17
11.
NOTICES
17
12.
MISCELLANEOUS
18

 
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EQUITY TRANSFER AGREEMENT

THIS EQUITY TRANSFER AGREEMENT (the “Agreement”) is entered into on July 29,
2010

BY and BETWEEN:

1.
Hynix Semiconductor Inc., a company duly incorporated under the laws of the
Republic of Korea, having its principal place of business at San 136-1, Ami-ri,
Bubal-eup, Icheon-si, Kyunggi-do, 467-701, Republic of Korea (“Hynix”); and

2.
Numonyx B.V., a private company with limited liability organized under the laws
of The Netherlands, with its corporate seat in Amsterdam (“Numonyx”).

Hynix and Numonyx are referred to collectively as the “Parties” and individually
as a “Party”.

PREAMBLE

(A)
Hynix and STMicroelectronics N.V., a company incorporated under the laws of the
Netherlands (“ST”), entered into a joint venture agreement dated November 16,
2004, as amended from time to time (the “JV Agreement”) for the incorporation
and establishment of Hynix-ST Semiconductor Ltd., a joint venture company under
the laws of the People’s Republic of China (the “PRC”), having its registered
address at Land Lot K7, Wuxi Export Processing Zone, Jiangsu Province, PRC (the
“JV”). The JV was issued its original approval certificate of foreign investment
enterprise by the Ministry of Commerce of the PRC on April 19, 2005 and,
subsequently, the original business license “Qi Du Su Xi Zong Zi No. 007520”
(the “Business License”) was granted by the Wuxi Administration of Industry and
Commerce (the “Registration Authority”) on April 26, 2005.

(B)
The registered capital of the JV was initially seven hundred fifty million US
Dollars (US$750,000,000) and was registered to be increased to one billion five
hundred million dollars (US$1,500,000,000) on October 10, 2007.

(C)
Pursuant to the equity transfer agreement dated January 14, 2008 between ST and
Numonyx, Numonyx acquired from ST, and ST transferred to Numonyx, ST’s rights,
title and interests to and in all of its equity interests in the JV. To reflect
the equity transfer, the JV was subsequently renamed “Hynix Numonyx
Semiconductor Ltd.”  As such, a revised approval certificate was issued by the
Ministry of Commerce of the PRC on February 15, 2008 and a revised Business
License (No. 320200400012736) was granted by the Registration Authority on March
28, 2008.

(D)
Pursuant to the equity transfer agreement dated September 24, 2008 between Hynix
and Numonyx, in partial exercise of its option to purchase from Hynix part of
Hynix’s equity interest in the JV under the JV Agreement, Numonyx acquired from
Hynix and Hynix transferred to Numonyx part of Hynix’s equity interest in the JV
for a price of one hundred million US Dollars (US$100,000,000).

(E)
Pursuant to the amended and restated JV Agreement dated as of December 1, 2008
among

 
 
 
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Hynix,  Numonyx and a new investor, Hynix Semiconductor (Wuxi) Limited, a
company duly incorporated under the laws of the PRC (“Hynix Wuxi”), the parties
thereto agreed to increase the registered capital of the JV by an amount of four
hundred fifty million US Dollars (US$450,000,000), of which (i) Hynix was
entitled to subscribe an amount of two hundred sixty million US Dollars
(US$260,000,000) and (ii) Hynix Wuxi was entitled to subscribe an amount of one
hundred ninety million US Dollars (US$190,000,000), all of which Hynix Wuxi has
invested in the JV.  Of Hynix’s two hundred sixty million US Dollars
(US$260,000,000) subscription, Hynix invested eighty million US Dollars
(US$80,000,000) on June 21, 2010 and is scheduled to invest the following
amounts on the following dates: forty million US Dollars (US$40,000,000) on July
21, 2010, forty million US dollars (US$40,000,000) in August 2010 and one
hundred million US dollars (US$100,000,000) in September 2010. Upon the
completion of this capital increase, the registered capital of the JV shall
amount to one billion nine hundred fifty million US Dollars (US$1,950,000,000),
among which, Numonyx shall hold three hundred fifty million US Dollars
(US$350,000,000).  After the Call Closing, Hynix shall hold ninety point two-six
percent (90.26%) of the registered capital of the JV, while Hynix Wuxi shall
hold nine point seven-four percent (9.74%) of the registered capital of the JV.

 
(F)
Pursuant to the JV Agreement, Hynix has the option (the “Call Option”) to
purchase all of the equity interests in the JV held by Numonyx if more than
fifty percent (50%) of the outstanding voting securities of Numonyx is acquired,
directly or indirectly, by any “competitor” of Hynix, as defined in the JV
Agreement.

(G)
Numonyx has notified Hynix of its being acquired by Micron Technology, Inc.
(“Micron”), a competitor of Hynix as defined in the JV Agreement, and Hynix has
determined to exercise the Call Option to acquire all Equity Interests from
Numonyx, as evidenced by the notice delivered by Hynix to Numonyx on May 28,
2010.

(H)
Subject to the terms and conditions of this Agreement and the JV Agreement,
Numonyx shall transfer and Hynix will receive and purchase the Equity Interests.

IT IS AGREED as follows:

1.
DEFINITIONS

1.1
Definitions

For purposes of this Agreement, the following terms shall have the meanings set
forth below:

 “Affiliate” shall mean with respect to any Person, any other Person
Controlling, Controlled by or under common Control with such Person.

“Agreement” shall mean this Equity Transfer Agreement entered into between Hynix
Semiconductor Inc. and Numonyx B.V.

“Amended Articles” means amended and restated articles of association of the JV
executed by Hynix and Hynix Wuxi.

“Amended JV Agreement” means an amended and restated joint venture agreement of
the JV executed by Hynix and Hynix Wuxi.

 
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“Approval Authority” means the Jiangsu Commission of Commerce and its local
counterpart.

“Approval Certificate” means the certificate to be issued by the Approval
Authority approving and reflecting the Equity Transfer consistent with the terms
and conditions set forth in this Agreement.

“Business Day” shall mean a day (other than Saturday and Sunday) on which banks
are permitted to be open and transact business in the PRC, the Republic of Korea
and Switzerland.

“Business License” shall have the meaning set forth in Preamble (A).

“Call Closing” shall have the meaning set forth in Section 4.2(a).

“Call Closing Balance Sheet” shall have the meaning set forth in Section 4.3(a).

“Call Closing Date” shall have the meaning set forth in Section 4.2(a).

“Call Option” shall have the meaning set forth in Preamble (F).

“Closing Date Equity Percentage” means the percentage obtained by dividing (i)
three hundred and fifty million US Dollars (US$350,000,000) by (ii) the paid-up
capital of the JV as of the Call Closing Date as it may be increased by
additional Hynix subscriptions (which are described in Preamble (E)), rounded to
the nearest hundredth.  As of the Execution Date, the paid-up capital of the JV
is one billion eight hundred and ten million US Dollars (US$1,810,000,000).

“Control” (including its correlative meanings, “Controlled by”, “Controlling”
and “under common Control with”) shall mean possession, directly or indirectly,
of the power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise) of a Person.

“Effective Date” shall mean the date on which the Approval Authority approves
the Equity Transfer on the basis of the Submission Documents and issues the
Approval Certificate.

“Equity Interests” shall mean all of the equity interests held by Numonyx in the
JV corresponding to its existing capital contribution of three hundred and fifty
million US Dollars (US$350,000,000).

“Equity Transfer” shall have the meaning set forth in Article 2.

“Execution Date” shall mean the date when this Agreement is duly signed by the
Parties.

“Governmental Entity” shall mean any national, regional, municipal, county or
other governmental, quasi-governmental, administrative or regulatory authority,
body, agency, court, tribunal, commission or other similar entity.

“Hynix Wuxi” shall have the meaning set forth in Preamble (E).

 
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“Independent Accounting Firm” shall mean RSM China (Beijing Office).

“JV Agreement” shall have the meaning set forth in Preamble (A).

“JV Pre-Closing Information” shall mean the books, records, documents, files and
correspondence in the possession or under the control of a Party (including, in
the case of Hynix, the JV) to the extent relating to the business and affairs,
operations, financial condition and results of operations of the JV, in each
case on or prior to the Call Closing Date.

“Law” shall mean any law, treaty, statute, ordinance, rule, principle of common
law or equity, code or regulation of a Governmental Entity or judgment, decree,
order, writ, award, injunction or determination of an arbitrator or court or
other Governmental Entity.

“Lien” shall mean any pledge, assignment, security interest, option or other
agreement or arrangement having a similar effect.

“Net Assets” shall mean, as of the date of determination thereof, the positive
difference, if any, between the book value of the JV’s total assets and the book
value of the JV’s total liabilities as of such date.

“Person” shall mean any individual, corporation (including any non-profit
corporation), association, general or limited partnership, organization,
business, limited liability company, firm, Governmental Entity, joint venture,
estate, trust, unincorporated organization or any other entity, association or
organization.

“Post-Closing Adjustment Amount” shall have the meaning set forth in Section
4.3(d).

“Post-Closing Balance Sheet” shall have the meaning set forth in Section 4.3(d).

“PRC” shall have the meaning set forth in Preamble (A).

“PRC GAAP” shall mean generally accepted accounting principles in the PRC.

“Pre-Closing Balance Sheet” shall have the meaning set forth in Section 3.1(d).

“Purchase Price” shall have the meaning set forth in Section 3.1(a).

“Registration Authority” shall have the meaning set forth in Preamble (A).

“Registration Date” shall have the meaning set forth in Section 4.2(d).

“Submission” means the submission of the Submission Documents and any other
required documents to the Approval Authority for the approval of the Equity
Transfer and the Submission Documents.

“Submission Condition” means any condition in Section 4.1.

“Submission Documents” means this Agreement, the Amended JV Agreement and the
 
 
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Amended Articles.

“Tax” shall mean any national, regional, local or foreign income, gross
receipts, license, severance, occupation, capital gains, premium, environmental,
customs, duties, profits, disability, registration, alternative or add-on
minimum, estimated, withholding, payroll, employment, unemployment insurance,
social security (or similar), excise, production, sales, use, value-added,
occupancy, franchise, real property, personal property, business and occupation,
mercantile, windfall profits, capital stock, stamp, transfer, workmen’s
compensation or other tax, fee or imposition of any kind whatsoever of any
Governmental Entity, including any interest, penalties, additions, assessments
or deferred liability with respect thereto, and any interest in respect of such
penalties, additions, assessments or deferred liability, whether disputed or
not.

  1.2
Other Definitional Provisions

 
(a)
The words “hereof”, “herein”, “hereby” and “hereunder” and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement.

 
(b)
The terms defined in the singular shall have a comparable meaning when used in
the plural, and vice versa.

 
(c)
The terms “US$”, “dollars” and “$” shall mean and refer to the lawful currency
of the United States of America.

 
(d)
Unless the context otherwise requires, whenever reference is made in this
Agreement to any Article or Section, such reference shall be deemed to apply to
the specified Article or Section of this Agreement.

 
(e)
Words importing gender include both genders.

 
(f)
Each accounting term not otherwise defined in this Agreement has the meaning
commonly applied to it in accordance with PRC GAAP.

 
(g)
The term “including” means “including without limitation”.

2.
TRANSFER OF THE EQUITY INTEREST

At the Call Closing and subject to the terms and conditions provided herein,
Numonyx shall sell, transfer and deliver to Hynix, and Hynix shall receive and
purchase from Numonyx, all right, title and interest of Numonyx in and to the
Equity Interests (the “Equity Transfer”), free and clear of any Liens.

3. 
PURCHASE PRICE

3.1
Purchase Price

 
(a)
As consideration for the Equity Transfer pursuant to the exercise by Hynix of
its Call Option under the JV Agreement, the purchase price to be paid by Hynix
for the Equity Interests (the “Purchase Price”) shall be an amount in cash (U.S.
dollars) equal to the product of (x) the JV’s Net Assets as of the Call Closing
Date times (y) the Closing Date Equity Percentage.

 
 
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(b)
Except for any stamp duty imposed on Hynix or any other Taxes which are levied
on Hynix or the JV in the PRC or elsewhere in connection with the Equity
Transfer (which Taxes shall be the JV’s or Hynix’s responsibility), Numonyx
shall be responsible for the payment of any Taxes imposed in connection with the
Equity Transfer.

 
(c)
From the Execution Date until the date the JV delivers the Pre-Closing Balance
Sheet to Hynix and Numonyx pursuant to Section 3.1(d) below, the Parties shall
cause the JV to (i) prepare and deliver to each of the Parties, within ten
Business Days after the end of each calendar month, a monthly balance sheet
prepared in a manner consistent with the JV’s past accounting practices and on
the same basis on which the Pre-Closing Balance Sheet will be prepared (each
such balance sheet, a “Monthly Balance Sheet”); and (ii) make members of its
management team available, upon reasonable notice and during normal business
hours, to respond to questions with respect to the Monthly Balance Sheets,
including with respect to the methodology, procedures, audits and analyses
undertaken in connection therewith for purposes of verification of the Monthly
Balance Sheets.  For the avoidance of doubt, these rights are intended to be in
addition to, and not in lieu of, the information and verification rights of the
Parties under the JV Agreement.

 
 
(d)
Two (2) days prior to the anticipated Call Closing Date, the JV shall prepare in
good faith and deliver to Hynix (with a copy to Numonyx) a preliminary estimate
of the balance sheet as well as a calculation of Net Assets as of the Call
Closing Date (together, the “Pre-Closing Balance Sheet”), prepared (i) in a
manner consistent with the JV’s past accounting practices and (ii) in compliance
with the provisions of Section 6.8 of the JV Agreement; provided, that in the
event of a conflict between (i) and (ii), (ii) shall control.  No later than ten
(10) Business Days prior to the anticipated Call Closing Date, the JV shall
deliver to Hynix and Numonyx a draft Pre-Closing Balance Sheet prepared (i) in a
manner consistent with the JV’s past accounting practices and (ii) in compliance
with the provisions of Section 6.8 of the JV Agreement (provided that in the
event of a conflict between (i) and (ii), (ii) shall control), and Hynix shall
cause the JV to consider in good faith any written comments provided by Numonyx
to Hynix and the JV within such ten (10) Business Day period.

 

3.2
Escrow Arrangements and Payment of Purchase Price

 
(a)
Concurrently with the execution hereof, Hynix shall deposit an amount equal to
$422,891,544.08 (the “Initial Estimated Purchase Price”) in an escrow account
(the “Escrow Account”) with DBS Bank Ltd. in Singapore (the “Escrow Agent”),
which shall be subject to the terms of that certain escrow agreement by and
among Hynix, Numonyx and DBS Trustee Limited, dated July __, 2010  (the “Escrow
Agreement”).  If the product of (x) the Net Assets amount shown on the
Pre-Closing Balance Sheet multiplied by (y) the Closing Date Equity Percentage
(such amount, the “Closing Date Purchase Price”) is greater than the Initial
Estimated Purchase Price, then Hynix shall deposit an additional amount of cash
equal to such difference into the Escrow Account.  If the Closing Date Purchase
Price is less than the Initial Estimated Purchase Price, then Hynix and Numonyx
shall jointly instruct the Escrow Agent to distribute to Hynix from the Escrow
Account an amount of cash equal to such difference.

 
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(b)
On the Call Closing Date, in accordance with the terms of the Escrow Agreement,
each of Numonyx and Hynix shall be entitled to unilaterally instruct the Escrow
Agent to release to the account or accounts designated by Numonyx all funds
standing to the credit of the Escrow Account as of such date (less any interest
earned on such funds, which shall be remitted to Hynix in accordance with the
terms of the Escrow Agreement).  Upon receipt by Hynix and Numonyx of written
acknowledgement from the Escrow Agent of receipt of such unilateral notice to
release funds to Numonyx, Hynix shall be deemed to have paid the Closing Date
Purchase Price in full (subject to further adjustment pursuant to Section 4.3
below).  Hynix and Numonyx agree that all of Numonyx’s right, title and interest
in and to the Equity Interests shall be transferred to and succeeded by Hynix,
and Hynix shall be the owner of the Equity Interests upon the Call Closing.

4. 
CALL CLOSING AND CONDITIONS PRECEDENT

4.1
Submission Conditions

The Submission Documents shall only be filed with the Approval Authority for
approval if each of the following Submission Conditions has been satisfied or
waived jointly by the Parties hereto (or, in the case of Section 4.1(b) or
Section 4.1(d), waived by Hynix, and, in the case of Section 4.1(c), waived by
Numonyx):

 
(a)
The Board of Directors of the JV shall have approved the Equity Transfer;

 
(b)
Each of the representations and warranties made by Numonyx as of the date hereof
shall be true and correct in all material respects as of the date of the
Submission as if made on such date, and Numonyx shall not have breached any
covenant hereunder in any material respect;

 
(c)
Each of the representations and warranties made by Hynix as of the date hereof
shall be true and correct in all material respects as of the date of the
Submission as if made on such date, and Hynix shall not have breached any
covenant hereunder in any material respect; and

 
(d)
Numonyx shall have (a) taken such actions as are required by applicable Law and
by the JV Agreement to remove each director and supervisor of the JV appointed
by Numonyx from his or her position effective as of the issuance of the Approval
Certificate, and (b) used its commercially reasonable efforts to obtain the
resignation of each officer of the JV nominated by Numonyx, effective as of the
issuance of the Approval Certificate.

4.2
Call Closing and Registration

 
(a)
Upon the terms and subject to the conditions of this Agreement, the Equity
Transfer shall take place at a closing (the “Call Closing”) on the fifth
Business Day following the date on which the Approval Authority issues the
Approval Certificate, at 10:00 a.m., local time at the offices of the Escrow
Agent in Singapore; provided, that in the event that Hynix has not delivered to
Numonyx a correct and complete copy of the Approval Certificate  pursuant to
Section 4.2(b) below, the date of the Call Closing shall be extended until such
time as Numonyx has received such copy of the Approval Certificate from
Hynix.  Such date, including as it may be extended pursuant to the proviso of
the immediately preceding sentence, the (“Call Closing Date”).

 
 
 
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(b)
On the Call Closing Date, Numonyx shall deliver to Hynix such documentation as
Hynix may reasonably request to evidence delivery to Hynix of the Equity
Interests, and (unless previously delivered by Hynix to Numonyx) Hynix shall
deliver to Numonyx a correct and complete copy of the Approval Certificate.

 
(c)
Hynix agrees that it shall not be entitled to, and shall not permit the JV to,
submit any documentation to the Registration Authority in respect of the Equity
Transfer unless and until the Call Closing shall have occurred.  Subject to the
preceding sentence, within thirty (30) days of the Effective Date, Hynix shall
use its commercially reasonable efforts to procure that the JV submits to the
Registration Authority all necessary documents to enable the Equity Transfer to
be duly registered pursuant to the applicable PRC regulations; provided, that if
this Agreement is terminated in accordance with its terms, Hynix shall not, and
Hynix shall take all necessary actions to ensure that the JV does not, submit
any documentation to the Registration Authority in respect of the Equity
Transfer.  Without limiting the foregoing, each Party agrees to use its
commercially reasonable efforts to procure the registration of the Equity
Transfer following the Call Closing, including by responding to any comments or
requests for information issued by the Registration Authority in respect of the
registration of the Equity Transfer.

 
(d)
The day when the Registration Authority duly registers the Equity Transfer and
issues the revised Business License reflecting the Equity Transfer is the
“Registration Date”.

4.3
Adjustment of Purchase Price

 
The Closing Date Purchase Price shall be subject to the adjustment determined as
follows:

 
 
(a)
Within sixty (60) days after the Call Closing Date, Hynix shall prepare in good
faith and deliver to Numonyx an audited balance sheet and its own calculation of
Net Assets (together, the “Call Closing Balance Sheet”), prepared in a manner
(i) consistent with the JV’s past accounting practices (through the Call Closing
Date), including the JV’s accounting practices used to prepare the Pre-Closing
Balance Sheet, and (ii) in compliance with the provisions of Section 6.8 of the
JV Agreement; provided, that in the event of a conflict between (i) and (ii),
(ii) shall control.

 
 
(b)
Numonyx may dispute any amounts reflected on the Call Closing Balance Sheet, but
only on the basis that the Call Closing Balance Sheet (i) was not prepared or
determined (x) in a manner consistent with the JV’s past accounting practices
(through the Call Closing Date), including the JV’s past accounting practices
used to prepare the Pre-Closing Balance Sheet, or (y) in compliance with the
provisions of Section 6.8 of the JV Agreement, or (ii) contains arithmetic
computational errors; provided, however, that Numonyx shall notify Hynix in
writing of each disputed amount, and specify the amount thereof in dispute and
the reasons therefore, within thirty (30) days of the receipt of the Call
Closing Balance Sheet by Numonyx.  During such 30-day period, Hynix shall give
Numonyx and the accountants and authorized representatives of Numonyx reasonable
access at all reasonable times to the personnel, accountants and books, records,
documents, working papers (subject to execution of a customary accountant’s
access letter) of Hynix and the JV, and other information related to the
preparation of the Call Closing Balance Sheet, including any description of the
methodology, procedures, audits and analyses undertaken in connection therewith
for purposes of preparing, reviewing and resolving any disputes with respect
thereto.

 
 
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(c)
In the event of a dispute with respect to the Call Closing Balance Sheet, the
Parties shall attempt to reconcile their differences and any resolution by them
as to any disputed amounts shall be final, binding and conclusive on the
Parties.  If the Parties are unable to reach a resolution to such effect of all
disputed amounts within thirty (30) days of receipt of the written notice of
dispute sent by Numonyx to Hynix, the Parties shall submit the amount remaining
in dispute for resolution to the Independent Accounting Firm, which shall,
within thirty (30) days after such submission, determine and report to the
Parties upon such remaining disputed amounts, and such report shall be final,
binding and conclusive on the Parties with respect to the amounts disputed.  The
Independent Accounting Firm shall limit the scope of its review to that portion
of the disputed amounts from the notice of dispute sent by Numonyx that the
Parties have failed to resolve. The fees and disbursements of the Independent
Accounting Firm shall be born equally by the Parties.

 
 
(d)
Once the Call Closing Balance Sheet has been finally determined (the
“Post-Closing Balance Sheet”), the Closing Date Purchase Price shall be adjusted
by the difference between Net Assets as of the Call Closing Date as determined
from the Pre-Closing Balance Sheet and Net Assets as of the Call Closing Date as
determined from the Post-Closing Balance Sheet (the “Post-Closing Adjustment
Amount”).   If the Post-Closing Adjustment Amount is negative (i.e., the amount
of Net Assets determined from the Pre-Closing Balance Sheet is more than the
amount of Net Assets determined from the Post-Closing Balance Sheet), then
Numonyx shall pay Hynix the Post-Closing Adjustment Amount in cash by wire
transfer within ten (10) Business Days after the Post-Closing Adjustment Amount
has been finally determined, without interest.  If the Post-Closing Adjustment
Amount is positive (i.e., the amount of Net Assets determined from the
Pre-Closing Balance Sheet is less than the amount of Net Assets determined from
the Post-Closing Balance Sheet), then Hynix shall pay Numonyx the Post-Closing
Adjustment Amount in cash by wire transfer within ten (10) Business Days after
the Post-Closing Adjustment Amount has been finally determined, without
interest.

 

5.
REPRESENTATIONS AND WARRANTIES OF HYNIX

 
Hynix hereby represents and warrants to Numonyx as follows:

5.1
Organization

 
Hynix is duly organized and validly existing under the laws of the Republic of
Korea.  Hynix has the requisite corporate power and authority to execute and
deliver this Agreement and the Escrow Agreement and to consummate the
transactions contemplated hereby and thereby.

 
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5.2
Corporate Authority

 
(a)
This Agreement and the Escrow Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by Hynix by all
requisite corporate action prior to the Submission and no other corporate or
similar proceedings on the part of Hynix or its stockholders are necessary for
Hynix to authorize the execution or delivery of this Agreement or the Escrow
Agreement or to perform any of their obligations hereunder or thereunder.  This
Agreement and the Escrow Agreement have been duly executed and delivered by
Hynix, and each of this Agreement and the Escrow Agreement constitute a valid
and legally binding obligation of Hynix, enforceable against it, as the case may
be, in accordance with its terms, except as enforceability may be affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar Laws relating to or affecting creditors’ rights generally, and
general equitable principles (whether considered in a proceeding in equity or at
law).

 
(b)
The execution and delivery of this Agreement and the Escrow Agreement by Hynix,
the performance by Hynix of its obligations hereunder and thereunder and the
consummation by Hynix of the transactions contemplated hereby and thereby do not
and will not (A) violate or conflict with any provision of the respective
certificate of incorporation or by laws of Hynix, (B) result in any material
violation or material breach of, or constitute any material default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any material obligation or a loss
of a material benefit under, or result in the creation of any Lien under any
material contract, indenture, mortgage, lease, note or other agreement or
instrument to which Hynix is subject or is a party or to which any assets of
Hynix are subject, or (C) materially violate, conflict with or result in any
breach under any provision of any material Law applicable to Hynix or any of its
properties or assets.

5.3
No Litigation

 
Hynix is not aware of any pending or threatened claim, action, suit,
arbitration, investigation or any other legal proceedings against it, nor it is
subject to any governmental order, provisions, determination, decree, judgment,
injunction or order which could affect the legality, validity or enforceability
of this Agreement, the Escrow Agreement or the consummation of the transactions
contemplated hereby or thereby.

5.4
No Other Representations and Warranties

 
Except for the representations and warranties contained in this Article 5,
Numonyx acknowledges and agrees that neither Hynix nor any other Person makes
any other express, implied or statutory representation or warranty with respect
to Hynix.

6.
REPRESENTATIONS AND WARRANTIES OF NUMONYX

 
Numonyx hereby represents and warrants to Hynix as follows:

6.1
Organization

 
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Numonyx is duly organized and validly existing under the laws of The
Netherlands.  Numonyx has the requisite corporate power and authority to execute
and deliver this Agreement and the Escrow Agreement and to consummate the
transactions contemplated hereby and thereby.

6.2
Corporate Authority

 
(a)
This Agreement and the Escrow Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by Numonyx by all
requisite corporate action prior to the Submission and no other corporate or
similar proceedings on the part of Numonyx or its stockholders are necessary for
Numonyx to authorize the execution or delivery of this Agreement or the Escrow
Agreement or to perform any of their obligations hereunder or thereunder.  This
Agreement and the Escrow Agreement have been duly executed and delivered by
Numonyx, and each of this Agreement and the Escrow Agreement constitute a valid
and legally binding obligation of Numonyx, enforceable against it, as the case
may be, in accordance with its terms, except as enforceability may be affected
by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar Laws relating to or affecting creditors’ rights generally, and
general equitable principles (whether considered in a proceeding in equity or at
law).

 
(b)
The execution and delivery of this Agreement and the Escrow Agreement by
Numonyx, the performance by Numonyx of its obligations hereunder and thereunder
and the consummation by Numonyx of the transactions contemplated hereby and
thereby do not and will not (A) violate or conflict with any provision of the
respective certificate of incorporation or by laws of Numonyx, (B) result in any
material violation or material breach of, or constitute any material default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any material obligation or
a loss of a material benefit under, or result in the creation of any Lien under
any material contract, indenture, mortgage, lease, note or other agreement or
instrument to which Numonyx is subject or is a party or to which any assets of
Numonyx are subject, or (C) materially violate, conflict with or result in any
breach under any provision of any material Law applicable to Numonyx or any of
its properties or assets.

6.3
No Litigation

 
Numonyx is not aware of any pending or threatened claim, action, suit,
arbitration, investigation or any other legal proceedings against it, nor it is
subject to any governmental order, provisions, determination, decree, judgment,
injunction or order which could affect the legality, validity or enforceability
of this Agreement, the Escrow Agreement or the consummation of the transactions
contemplated hereby or thereby.

6.4
No Encumbrance

 
Numonyx is the sole legal and registered owner of the Equity Interests, and the
Equity Interests are free and clear of any Liens.

6.5
No Other Representations and Warranties

 
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Except for the representations and warranties contained in this Article 6, Hynix
acknowledges and agrees that neither Numonyx nor any other Person makes any
other express, implied or statutory representation or warranty with respect to
Numonyx or the JV.

7.
COVENANTS OF THE PARTIES

7.1
Execution and Delivery of Documents

 
Subject to Section 4.1, on or as soon as possible after the date hereof, each
Party shall deliver to the other Party, or procure to deliver to the other
Party, to the extent doing so is reasonably within such Party’s control, all
necessary copies of all duly executed documents, including the Submission
Documents, in the mutually agreed language and in a form corresponding to the
formal requirements of PRC law so as to enable the Parties or the JV, as the
case may be, to carry out all formalities and take all necessary actions to
consummate the transactions contemplated hereunder, including the approval and
the registration of the Equity Transfer.

7.2 
[RESERVED]

7.3
Commercially Reasonable Efforts and Other Covenants

 
(a)
Between the date hereof and the Call Closing Date, each Party shall use its
commercially reasonable efforts to cause the JV to conduct its operations in the
ordinary course of business in a manner consistent with past practices, in
compliance in all material respects with all applicable Laws and all material
agreements to which the JV is subject, and in compliance in all material
respects with the Strategic Direction Plan last approved by the JV’s Board of
Directors prior to the Execution Date; provided, however, that this Section 7.3
shall not require either Party to take any action that such Party is prohibited
from taking pursuant to the terms of any agreement with a non-affiliated third
party to which it is a Party as of the date hereof.  Notwithstanding the
immediately preceding proviso, from the date hereof until the Call Closing Date,
neither Party shall take any action that would result in a change to the
accounting practices or policies of the JV, except to the extent expressly
required by PRC GAAP.  Hynix agrees that it shall not willfully and in bad faith
cause the JV to take any action, or refrain from taking any action, with the
primary purpose of impairing Net Asset Value.

 
(b)
Hynix agrees that, from the issuance of the Approval Certificate until the Call
Closing Date, it shall not, without the prior written consent of Numonyx, permit
the JV to take any action that would have required the unanimous approval of the
Board of Directors of the JV as constituted as of the date hereof.

7.4
Public Communication

Each Party agrees and understands that any public communication concerning this
Agreement and the discussions with respect hereto not made in accordance with
the terms hereof may cause serious harm to each Party and that, as a result, the
press release announcing the execution of this Agreement (in the form previously
agreed upon by Hynix and Numonyx) shall be released jointly by Hynix and Numonyx
promptly following the execution hereof, and each of Hynix and Numonyx shall
obtain the prior consent of the other Party prior to issuing any press releases
or otherwise making public announcements with respect to the transactions
contemplated herein, and shall consult with each other prior to making any
filing with any Governmental Entity or with any securities exchange with respect
thereto, in each case except as may be required by Law or by obligations
pursuant to any listing agreement with or rules of any securities exchange.

 
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7.5
Notification

Between the Execution Date and the Call Closing Date, each Party shall promptly
notify the other Party in writing if such Party becomes aware of any fact or
condition that causes or constitutes a breach of any of such Party’s
representations and warranties and covenants hereunder, or if such Party becomes
aware of the occurrence of any fact or condition that could reasonably be
expected to cause or constitute a breach of any such representation or warranty
or covenants.  Each Party shall promptly notify the other Party of the
occurrence of any event that may make the satisfaction of the conditions in
Articles 4.1 and 4.2 impossible or not reasonably likely.

7.6
Expenses

Except as otherwise expressly provided herein, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereunder
shall be paid by the Party incurring such expense. Without limiting the
generality of the foregoing, each of Hynix and Numonyx shall pay all legal,
accounting and investment banking fees and other fees to consultants and
advisors incurred by it relating to this Agreement and the transactions
contemplated hereunder.

7.7
Access to Records and Personnel

 
 (a)
Exchange of Information.  After the Call Closing, each Party agrees to provide,
or cause to be provided, to each other, as soon as reasonably practicable after
written request therefor and at the requesting Party’s sole expense, reasonable
access (including using commercially reasonable efforts to procure access to
third parties possessing information, including auditors), during normal
business hours, to such Party’s JV Pre-Closing Information, and to make members
of its management team (or that of the JV) available, upon reasonable notice and
during normal business hours, to respond to questions with respect to such
information, in each case to the extent the requesting Party reasonably needs
such information (i) to comply with reporting, disclosure, filing or other
requirements imposed on the requesting Party or its stockholders (including
under applicable securities Laws) by a Governmental Entity having jurisdiction
over the requesting Party or its stockholders, (ii) for use in any other
judicial, regulatory, administrative or other proceeding or in order to satisfy
Tax, audit, accounting, claims, regulatory or other similar requirements or
(iii) to comply with its obligations under this Agreement; provided, however,
that no Party shall be required to provide access to or disclose information
where such access or disclosure would violate any Law or agreement, or waive any
attorney client or other similar privilege, and each Party may redact
information regarding itself or its subsidiaries (other than the JV, in the case
of Hynix) or otherwise not relating to the requesting Party and its subsidiaries
(other than the JV, in the case of Hynix), and, in the event such provision of
information could reasonably be expected to violate any Law or agreement or
waive any attorney client or other similar privilege, the Parties shall take all
reasonable measures to permit the compliance with such obligations in a manner
that avoids any such harm or consequence.

 
 
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(b)
Ownership of Information.  Any information owned by a Party that is provided to
a requesting Party pursuant to this Section 7.7 shall be deemed to remain the
property of the providing Party.  Unless specifically set forth herein, nothing
contained in this Agreement shall be construed as granting or conferring rights
of license or otherwise in any such information.

 
 
(c)
Confidential Information.  Nothing in this Section 7.7 shall require either
Party or any of its subsidiaries to violate any agreement with any third party
regarding the confidentiality of confidential and proprietary information;
provided, however, that in the event that either Party is required under this
Section 7.7 to disclose any such information, that Party shall use all
commercially reasonable efforts to seek to obtain such third party’s consent to
the disclosure of such information and implement requisite procedures to enable
the disclosure of such information.

 

8.
TERMINATION

8.1
Grounds for Termination

 
This Agreement and the transactions contemplated hereby may be terminated at any
time before the Call Closing Date:

 
(a)
by mutual written agreement of the Parties;

 
(b)
by Numonyx, if Hynix has breached any representation, warranty, covenant or
agreement contained in this Agreement in any material respect, which breach
cannot reasonably be cured within twenty (20) Business Days or such breach, if
curable, is not cured within twenty (20) Business Days; or

 
(c)
by Hynix, if Numonyx has breached any representation, warranty, covenant or
agreement contained in this Agreement in any material respect, which breach
cannot reasonably be cured within twenty (20) Business Days or such breach, if
curable, is not cured within twenty (20) Business Days.

8.2
Procedure and Effect of Termination

Upon termination of this Agreement under Article 8.1, written notice thereof
shall forthwith be given to the other Party, and this Agreement (other than the
provisions of Article 7.4 (Public Communication), Article 7.6 (Expenses),
Article 9 (Governing Law) and Article 10 (Dispute Resolution) and this Article
8) shall terminate with immediate effect.  If this Agreement is terminated in
accordance with the terms hereof on or after the date of submission of the
Submission Documents to the Approval Authority, the Parties shall cooperate, and
shall cause the JV to cooperate, in notifying the Approval Authority of such
termination and, if such termination occurs on or after the Effective Date,
requesting that the Approval Authority revoke the Approval Certificate.

9. 
GOVERNING LAW

 
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This Agreement shall be governed by and construed in accordance with the laws of
the PRC which are published and publicly available.

10.
DISPUTE RESOLUTION

 
(a)
All disputes arising out of, relating to or in connection with this Agreement
shall be resolved by binding arbitration, and each Party hereby waives any right
it may otherwise have to such a resolution of any dispute within the scope of
this Article 10 by any means other than arbitration pursuant to this Article 10.
Notwithstanding the foregoing, each of Hynix and Numonyx shall be entitled to
seek temporary and preliminary injunctive relief in a court of competent
jurisdiction for any violation by the other Party or any of its Affiliates of
the provisions of this Agreement.

 
(b)
The place of arbitration shall be New York, New York, USA. The arbitration shall
be held in the English language in accordance with the Rules of Arbitration of
the International Chamber of Commerce (the “Rules”) and shall be heard by three
(3) arbitrators appointed under the Rules; provided, however, that each
arbitrator shall be an attorney or former judicial officer admitted to practice
law in New York. Any award of the arbitral tribunal must be rendered in writing,
must state the grounds on which it was based and will be final and binding on
the Parties hereto. The administrative costs and fees of arbitration shall as an
initial matter be borne equally by the Parties to such arbitration, but the
arbitral tribunal shall have the authority to award the administrative costs and
fees of arbitration.

 
(c)
Judgment upon any arbitral award rendered under the preceding paragraph may be
entered in any competent court, and either Party may apply to such court for
judicial recognition of that award and an order of enforcement as the law of
such jurisdiction may require and allow. Each Party hereby agrees that any
judgment upon an arbitral award rendered against it hereunder may be executed
against its assets in any jurisdiction. Each of the Parties hereby irrevocably
submits to the exclusive jurisdiction of the federal and state courts located in
the city and county of New York in any action, suit or proceeding with respect
to the enforcement of the arbitration provisions of this Agreement.  Each Party
agrees that service of process upon such Party at the address so provided in
Article 11.3 or through publication as permitted under applicable Law shall be
deemed in every respect effective service of process upon such Party in any such
action, suit or proceeding.

 
(d)
The arbitrators shall have no authority to award punitive or exemplary damages.
Neither shall any Party be entitled to recover, nor shall the arbitrators have
any power to award, any incidental or consequential damages, including but not
limited to any claim for lost profits. Each Party shall bear its own attorneys’
fees, but the arbitrators shall have the authority to award attorneys’ fees, in
whole or in part, to any Party.

 
(e)
Any matter expressed in this Agreement to be a matter for review, consultation,
consent, decision or agreement by the Parties or any of them shall not, in the
event of failure of decision or agreement, constitute a dispute or difference to
be referred to or settled by arbitration proceedings.

11.
NOTICES

 
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11.1
Any communication in connection with this Agreement must be in writing and may
be given in person, by an international courier or may be, in the case of
facsimile and post, confirmed by registered letter with notice of receipt (or
any equivalent proof of delivery generally accepted for international courier).

11.2
Any communication in connection with this Agreement shall be deemed to be
delivered on the date of receipt (or, in the case of a registered letter with
notice receipt, on the date of first presentation).

11.3
The contact details of each Party for all communication in connection with this
Agreement are as follows:

For Hynix:                                                Hynix Semiconductor
Inc.
Daechi Tower, 891, Daechi-dong
Kangnam-gu, Seoul, 135-738, Korea
Attn:                 Keum Sun Ma
Phone:              +82-2-3459-3630
Fax:                   +82-31-645-8174

For Numonyx:                                          Numonyx B.V.
A-ONE Biz Center
Route de l’Etraz Rolle 1180
Switzerland
Attention:        General Counsel
Fax:                   +41-21-822-3703

with a copy (which shall not constitute notice) to:

Micron Technology, Inc.
8000 South Federal Way
Boise, Idaho 83716-9632
Attn:                 General Counsel
Fax:                   +1-208-363-1309

with a copy (which shall not constitute notice) to:

Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Attn:                 John A. Fore, Esq.
Fax:                   +1-650-493-6811
 
Either Party may change its address for notices upon giving ten (10) days
written notice of such change to the other Party in the manner provided above.

12.
MISCELLANEOUS

12.1
Assignments; Successors; No Third Party Rights.

 

 
 
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No Party may assign any of its rights under this Agreement (including by merger
or other operation of law) without the prior written consent of the other Party,
and any attempted or purported such assignment without such consent or without
strict compliance with this Agreement shall be void. Subject to the foregoing,
this Agreement and all of the provisions hereof shall apply to, be binding upon,
and inure to the benefit of the Parties and their successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended to confer
upon any Person other than the Parties any rights or remedies of any nature
whatsoever under or by reason of this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the Parties and their successors and permitted
assigns.

12.2
Entire Agreement

This Agreement, the JV Agreement, the Escrow Agreement and any other written
agreement entered into by the Parties on the date hereof related to the subject
matter hereof constitute the final and complete expression of the agreement and
understanding between the Parties with respect to the subject matter herein and
supersede all previous agreements, undertakings and covenants between the
Parties with respect to the subject matter herein.  If any provision of this
Agreement is found to conflict with any provision of the JV Agreement, this
Agreement shall control.

12.3
Amendment or Modification

This Agreement may be amended or modified only by a written instrument signed by
each of the Parties.

12.4
Severability

In the event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect, such provision or provisions shall be ineffective
only to the extent of such invalidity, illegality or unenforceability, without
invalidating the remainder of such provision or provisions or the remaining
provisions of this Agreement, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision or provisions had never been
contained herein, unless such a construction would be unreasonable.

12.5
Waiver

 
To the extent permitted by applicable Law: (i) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one Party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other Party; (ii) no waiver that may be
given by a Party will be applicable except in the specific instance for which it
is given; and (iii) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of such Party or of the right of the Party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.

12.6
Descriptive Headings; Construction

The descriptive headings herein are inserted for convenience of reference only
and are not intended to be part of, or to affect the meaning, construction or
interpretation of, this Agreement.

 
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12.7
Counterparts

 

For the convenience of the Parties, this Agreement may be executed in any number
of counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts shall together constitute one and the same
agreement.

12.8
Language

This Agreement is written in both the English language and the Chinese
language.  Both versions have equal effect in law, it being acknowledged by the
Parties that these versions are consistent in all material respects. Any
translations of this Agreement into any other languages shall be only for the
convenience of a party and shall in no way affect the interpretation or
enforcement of any of the provisions of this Agreement.

12.9
Effectiveness

Except for Sections 2, 3.1(a), 3.1(b), 3.2(b), 4.2(a), 4.2(b) and 4.3 of this
Agreement, which shall only become effective on the Effective Date, this
Agreement shall become effective upon execution hereof by the parties hereto.

[No Text Below, Followed by Signature Pages]

 
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IN WITNESS WHEREOF, the Parties have caused this Equity Transfer Agreement to be
duly executed as of the date first above written.

Hynix Semiconductor Inc.

/s/ O.C. Kwon                                                    
Name: Oh Chul Kwon
Title: Chief Executive Officer

Numonyx B.V.

/s/ Thomas S. Laws                                          
Name: Thomas S. Laws
Title:   Director

/s/ Jan Sebastien Donner                                                     
Name:  Jan Sebastien Donner
Title:  Director
 
 
[SIGNATURE PAGE TO EQUITY TRANSFER AGREEMENT]

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