CONVERTIBLE BONDS SUBSCRIPTION AGREEMENT by and between Cintel Corp. Subscriber and STS Semiconductor & Telecommunications Co., Ltd. Issuer April 19, 2007
by
and
between
Subscriber
and
STS
Semiconductor & Telecommunications Co., Ltd.
Issuer
April
19,
2007
This
CONVERTIBLE
BONDS SUBSCRIPTION AGREEMENT (the "Agreement")
is
made and entered into as of April 19, 2007 by and between the parties stated
hereunder:
| (1) |
STS
Semiconductor & Telecommunications Co., Ltd.,
a
company incorporated under the laws of the Republic of Korea
(“Korea”)
having its principal office at ▇▇▇-▇, ▇▇▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ (the “Company”);
and.
|
| (2) |
Cintel
Corp., a
corporation incorporated under the laws of the State of Nevada having
its
principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇
▇▇▇▇▇, U.S.A. (the “Subscriber”)
|
Recitals
WHEREAS,
the
Company has authorized the sale of convertible bonds in an aggregate principal
amount of Korean Won (“KRW”
or
“Won”)
10,000,000,000 (Ten Billion Won) (the “Bonds”
or
“Convertible
Bonds”),
convertible into shares of the Company’s common stock, having the par value of
KRW 500 (Five Hundred Won) (the “Common
Stock”);
and
WHEREAS,
the
Subscriber desires to subscribe for the Bonds on the terms and conditions set
forth herein.
NOW
THEREFORE,
in
consideration of the foregoing recitals and the mutual promises,
representations, warranties and covenants hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
|
1.
|
Issuance
of the Convertible Bonds.
|
|
|
Pursuant
to the terms and conditions set forth in this Agreement on the
Closing
Date (as defined below), the Company shall issue to the Subscriber,
and
the Subscriber shall subscribe for KRW 10,000,000,000 (Ten Billion
Won)
Convertible Bonds due on April 20, 2012 in accordance with the
terms and
conditions set forth in Exhibit A. The Bonds will be issued at
an issue
price (the “Subscription
Price”)
equal to 100 per cent. of the principal amount of the Convertible
Bonds.
|
||
|
2.
|
Payment
of Subscription Price for the Convertible Bonds.
|
|
|
The
Subscription Price for the Convertible Bonds shall be paid or caused
to be
paid by the Subscriber to the Company at ▇▇ ▇.▇., ▇▇▇▇▇, ▇▇▇▇▇
time, on
the Closing Date in same day funds.
|
||
|
3.
|
Closing
|
|
|
3.1
|
Closing
Date and Place.
The closing of the issuance and subscription of the Convertible
Bonds (the
“Closing”)
will be held at the office of the Company or such other place as
agreed
between the parties hereto, at ▇▇ ▇.▇., ▇▇▇▇▇, ▇▇▇▇▇ time, on April
20,
2007, or such other date as agreed between the parties hereto (the
“Closing
Date”).
|
-
2
-
|
3.2
|
Conditions
to Closing.
The Closing is conditional upon fulfillment or waiver by the Company
of
the followings:
|
| (i) |
The
issue and subscription of the Convertible Bonds on the terms and
conditions herein provided shall not violate any requirements of law
applicable to the Company or the Subscriber;
|
| (ii) |
The
Subscriber and the Company shall have completed or obtained all requisite
governmental or internal approvals, consents and filing of reports;
and
|
| (iii) |
The
Subscriber shall have reported its subscription of the Convertible
Bonds
to the Bank of Korea.
|
|
3.3
|
Closing
Deliveries of the Company
|
|
| On the Closing Date, the Company shall deliver or cause to be delivered to the Subscriber all the following documents at the same time, in form and substance reasonably satisfactory to the Subscriber: | ||
| (i) |
a
receipt signed by a duly authorized officer of the Company, acknowledging
receipt of the Subscription Price;
|
| (ii) |
bond
certificates representing the Convertible Bonds;
|
| (iii) |
a
certificate of a duly authorized officer of the Company attaching
copies,
certified by such officer as true and complete, of the resolutions
of its
board of directors in connection with the authorization and approval
of
the execution, delivery and performance of this Agreement and the
consummation of the transaction contemplated hereunder and of all
other
documents evidencing all necessary corporate action taken in connection
therewith;
|
| (iv) |
a
certified copy of the Commercial Registry extract of the Company
dated as
of a date no later than the date
hereof;
|
| (v) |
the
Articles of Incorporation of the Company;
and
|
| (vi) |
such
other documents as the Subscriber may reasonably
request.
|
|
4.
|
Termination
|
|
|
4.1
|
Termination
of Agreement. This Agreement may be terminated by notice in writing
at any
time prior to the Closing by:
|
|
| (i) |
the
Company or the Subscriber, if any governmental authority of competent
jurisdiction shall have issued any judgment, injunction, order, ruling
or
decree or taken any other action restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated by
this
Agreement and such judgment, injunction, order, ruling, decree or
other
action becomes final and non-appealable; provided, that the party
seeking
to terminate this Agreement pursuant to this clause (i) shall have
used its best and reasonable efforts to have such judgment, injunction,
order, ruling or decree lifted, vacated or
denied;
|
| (ii) |
the
Company and the Subscriber, if the Company and the Subscriber so
mutually
agree in writing;
|
| (iii) |
the
Company or the Subscriber, if there has been a material breach on
the part
of the other party of its representations, warranties and undertakings,
and the failure to perform its obligations, set forth in this Agreement
and the other party fails to cure such breach in fourteen (14) calendar
days after the other party receives a notice of such breach;
|
-
3
-
| (iv) |
the
Company or the Subscriber, if any of the conditions specified Section
3.2
hereof has not been satisfied or waived;
and.
|
| (v) |
the
Subscriber (i) if trading in any securities of the Company has been
suspended or limited on the Korea Securities Dealers Automated Quotation
Division of the Korea Exchange (the “KOSDAQ”)
or (ii) if trading generally on the KOSDAQ or the Korea Exchange
has been
suspended or limited, or minimum or maximum prices for trading have
been
fixed, or (iii) maximum ranges for prices have been required, by
the
KOSDAQ or the Korea Exchange or any other governmental authority,
or a
material disruption has occurred in commercial banking or bond settlement
or clearance services in Korea.
|
|
4.2
|
Effect
of Termination. If this Agreement is terminated in accordance with
Section 4.1 hereof and the transactions contemplated hereby are not
consummated, this Agreement shall become null and void and shall
be of no
further force and effect. No party shall be under any liability
to the
other party in respect of this Agreement, only if this Agreement
is
terminated pursuant to Article 4.1(i), (ii) and (v) hereof.
|
|
|
4.3
|
Indemnification.
In case of termination hereof under Article 4.1(iii) or (iv) above,
the
party with the fault causing such termination shall indemnify and
hold the
other party, its directors, officers, employees, sub-contractors
or agents
harmless from any and all reasonable losses and damages incurred
by the
non-breaching party.
|
|
|
5.
|
Representations,
Warranties and undertakings of the Company.
|
|
|
5.1
|
Representations
and Warranties: The Company represents to the Subscriber as of
the date of
this Agreement and the Closing Date:
|
|
a.
|
that
the Company is duly organized and validly existing under the
law of the
jurisdiction in which it is incorporated, and has the requisite
corporate
power to own its properties and to carry on its business as now
being
conducted;
|
|
b.
|
that
the Company is duly qualified as a corporation to do business
and is in
good standing in every jurisdiction in which the nature of the
business
conducted by it makes such qualification necessary and where
the failure
so to qualify would have a Material Adverse Effect;
|
|
“Material
Adverse Effect”
means any material adverse effect on the business, properties,
operations,
assets, financial condition or results of operations of the Subscriber
or
the Company, as the case may be, taken as a whole, or on the
transactions
contemplated hereby or by the agreements or instruments to be
entered into
in connection herewith.
|
|
|
c.
|
that
(i) the Company has the requisite corporate power and authority
to execute
and deliver this Agreement and to perform its obligations under
this
Agreement, and to issue the Convertible Bonds and the shares
of Common
Stock issuable upon conversion of the Convertible Bonds (the
“Bond
Shares”),
in accordance with the terms hereof, (ii) the execution and delivery
of
this Agreement by the Company and the consummation by it of the
transactions contemplated hereby have
been duly authorized by its board of directors and no further
consent or
authorization of the Company, or its board of directors or stock
holder is
required, (iii) this Agreement has been duly executed and delivered,
and
(iv) this Agreement constitutes a valid and binding obligation
of the
Company enforceable against the Company in accordance with its
terms;
|
-
4
-
|
d.
|
that
the Company has an authorized
share capital of 200,000,000 shares with the par value
of
Won 500 and an issued and outstanding share capital of 15,066,357
common
shares as of the date hereof;
|
|
e.
|
that
all of the outstanding shares have been duly listed and admitted
for
trading on the KOSDAQ;
|
|
f.
|
that
the Convertible Bonds are duly authorized and are validly issued,
fully
paid and non-assessable, free of any encumbrances, and are not
subject to
preemptive rights of the Company’s Articles of Incorporation, By-laws and
other constitutional documents;
|
|
g.
|
that
the Company has available, and will maintain available, free
from
pre-emptive or other rights, out of its authorized but unissued
shares
such number of the Bond Shares as would or may be required to
be issued
upon conversion of the Convertible Bonds.
|
|
h.
|
that
the execution, delivery and performance of this Agreement and
the
Convertible Bonds issued by the Company and the consummation
by the
Company of the transactions contemplated hereby will not (i)
result in a
violation of the Certificate of Incorporation, By-laws or other
constitutional documents of the Company or (ii) conflict with,
or
constitute a default (or an event which with notice or lapse
of time or
both could become a default) in material respects under, or give
to others
any rights of termination, amendment or cancellation of, any
agreement,
indenture or instrument to which the Company is a party, or (iii)
result
in a violation of any law, rule, regulation, order, judgment
or decree
(including federal and state securities laws and regulations)
in material
respects applicable to the Company or by which any material property
or
asset of the Company is bound or affected;
|
|
i.
|
that
except as specifically contemplated by this Agreement and as
required
under the Korea Securities and Exchange Act and the regulations
thereunder, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration
with, any
court or governmental agency or any regulatory or self regulatory
agency
in order for it to execute, deliver or perform any of its obligations
under this Agreement in accordance with the terms
hereof;
|
|
j.
|
that
there is no action, suit, proceeding, inquiry or investigation
before or
by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company,
threatened against or affecting the Company that is reasonably
likely to
have a Material Adverse Effect;
|
|
k.
|
that
the Company (i) owns or has the right to use, free and clear
of all liens,
claims, encumbrances, pledges, security interests, and other
adverse
interests of any kind whatsoever, all patents, inventions, know-how,
trade
secrets, trademarks, service marks, trade names, copyrights,
technology,
and all licenses and rights with respect to the foregoing, used
in the
conduct of its business as now conducted or proposed to be conducted
without, to the best knowledge of the Company, infringing upon
or
otherwise acting adversely to the right or claimed right of any
person,
the Company or other entity, (ii) is not obligated or under any
liability
whatsoever to make any payments by way of royalties, fees or
otherwise to
any owner or licensee of, or other claimant to, any patent, trademark,
service ▇▇▇▇, trade name, copyright, know-how, technology or
other
intangible asset, with respect to the use thereof or in connection
with
the conduct of its business or otherwise and (iii) has not received
any
notice of infringement of or conflict with asserted rights of
others with
respect to any of the foregoing which, singly or in the aggregate,
if the
subject of an unfavorable decision, ruling or finding, might
have a
Material Adverse Effect;
|
-
5
-
|
l.
|
that
(i) the Company has filed or caused to be filed all income
tax returns
which is required to be filed and has paid or caused to be
paid all taxes
and all assessments received by them to the extent that such
taxes and
assessments have become due, except taxes and assessments the
validity or
amount of which is being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have
been set
aside, and except for such returns for which the failure to
file would not
have a Material Adverse Effect upon the Company and (ii) the
Company has
paid or caused to be paid, or has established reserves that
the Company
reasonably believes to be adequate in all material respects,
for all
federal income tax liabilities and state income tax liabilities
applicable
to the Company for all fiscal years which have not been examined
and
reported on by the taxing authorities (or closed by applicable
statutes);
|
|
m.
|
that
there has been no material adverse change in the business and
financial
conditions of the Company since the date of its last audited
financial
statements;
|
|
n.
|
that
the
Company is not in violation of and is not under investigation
with respect
to and, to the best knowledge of the Company, has not been
threatened to
be charged with or given notice of any violation of, any law
or government
order, which would have a Material Adverse Effect;
|
|
o.
|
that
neither the Company nor any person acting on its or their behalf
has,
directly or indirectly, made offers or sales of the Convertible
Bonds, or
solicited offers to buy the Convertible Bonds, under circumstances
that
would require the registration of the Convertible Bonds
(or the Bond Shares issuable on conversion of the Convertible
Bonds) under
the United States Securities Act of 1933 (the “U.S.
Securities Act”);
|
|
p.
|
that
neither the Company nor any person acting on its or their behalf
has
engaged in any directed selling efforts (as defined in Regulation
S under
the U.S. Securities Act) with respect to the Convertible Bonds
(or the
Bond Shares issuable on conversion thereof). The Company reasonably
believes that there is no substantial U.S. market interest
(as defined in
Regulation S) in its Convertible Bonds (or the Bond Shares
issuable on
conversion thereof);
|
|
q.
|
that
the Company is a "foreign company" (as such term is defined
in Regulation
S) and reasonably believes that there is no substantial U.S.
market
interest (as defined in Regulation S) in the debt securities,
the shares
of the Company or any securities of the same class as the shares
of the
Company and that the Company and any person acting on its or
their behalf
have complied with and will comply with the offering restrictions
requirement of Regulation S;
|
|
r.
|
that
the Company (i) is not a person described or designated in
the Specially
Designated Nationals and Blocked Persons List of the Office
of Foreign
Assets Control of the U.S. Department of the Treasury (“OFAC”)
or in Section 1 of the Anti-Terrorism Order and (ii) does not
engage in
any dealings or transactions with whom the Company reasonably
believes to
be any such person; and
|
|
s.
|
that
none of the Company, to the knowledge of the Company, any director,
officer, agent or employee of the Company are currently subject
to any
U.S. sanctions administered by OFAC.
|
-
6
-
|
|
5.2 Undertaking.
|
|
|
|
|
a.
|
Listing.
The Company shall:
|
|
|
(i) (including,
without limitation, furnishing to the KOSDAQ from time to time
any and all
documents, instruments, information and undertakings that may
be
necessary) maintain a listing for all the issued shares of
the Company on
the KOSDAQ;
|
|
|
(ii) apply
for listing of the Bond Shares on the KOSDAQ promptly after
the issue of
the Bond Shares, and obtain such listing as soon as practicable
thereafter
and
maintain such listing; and
|
|
|
(iii) minimise
any trading halt or temporary suspension of trading of the
shares of the
Company on the KOSDAQ, and, if trading of the shares on the
KOSDAQ is
so
halted or temporarily suspended, limit such halt or temporary
suspension of trading to as short as period as
possible.
|
|
|
|
|
b.
|
Registration
of Convertible Bonds and Bonds Shares The Company shall register
the
issuance of the Convertible Bonds in the bond registry maintained
and kept
by it immediately upon the issuance of the Convertible Bonds.
The Company
shall register the issuance of the Convertible Bonds with the
Registry
Office of the competent Korean court having jurisdiction over
the Company
in accordance with the Commercial Code of Korea. In addition,
the Company
shall register the issuance of the Bond Shares to be issued
upon
conversion of the Convertible Bonds with the Registry Office
of the
competent Korean court having jurisdiction over the Company
in a timely
manner in accordance with the Commercial Code of Korea.
|
|
|
|
|
c.
|
Inspection
and Information Provision. The Company shall prepare and deliver,
to the
extent permissible under the applicable law, to the Subscriber:
(i) audited annual financial statements and management report within
90 days after the end of each fiscal year; (ii) unaudited quarterly
financial and management information within 45 days after the
end of each
quarter; (iii) material information concerning the management
and
operation of the Company at least on a quarterly basis; (iv)
copies of all
documents or other information sent to any shareholder or bondholder
that
are material to the rights and/or obligations of the Subscriber;;
and (v)
copies of any material reports filed by the Company with any
relevant
securities exchange, regulatory authority or government agency.
The
Company shall make available to the Subscriber, the directors
or other
responsible officers of the Subscriber as to the matters relating
to this
Agreement and copies of all notices, statements and documents
in
connection therewith that the Subscriber may reasonably request.
More
specifically, while the Subscriber is a shareholder or bondholder
of the
Company, the Company shall, to the extent permissible under
the applicable
law, (i) give the Subscriber and its representatives reasonable
access to
the offices and properties during normal business hours of
the Company and
to books and records of the Company; (ii) furnish to the Subscriber
and
its advisors such financial and operating data and other information
relating to the Company as such persons shall reasonably request;
and
(iii) instruct employees and advisors of the Company to cooperate
with the
Subscriber in respect of the foregoing.
|
|
|
|
|
d.
|
Notice
Obligation: In case there is any material change at the Company,
the
Company shall promptly inform the Subscriber in
writing.
|
-
7
-
|
5.3 Negative
Covenant. Unless specifically
permitted in writing by the Subscriber, so long as any of the
Bonds remain
outstanding, the Company undertakes with the Subscriber
that:
|
|
|
a.
|
it
will not take any steps for capital reduction;
|
|
b.
|
it
will not
go
through the delisting process nor take any steps that may cause
the
delisting of shares of the Company;
|
|
c.
|
it
will not enter into dissolution, liquidation, bankruptcy or other
similar
proceeding;
|
|
d.
|
It
will not spin-off or transfer all or substantial parts of its
business to
other entities or persons; and
|
|
e.
|
it
will not cause any change in control where Bokwang Group of Korea
will
decrease its interest or shares in and eventually lose the management
control over the Company.
|
|
5.4 Merger
and Consolidation. The Company agrees to follow all of
the procedures and measures provided for the protection of the
Subscriber
under the Commercial Code of Korea in the event the Company undertakes
merger or consolidation.
|
|
6.
Miscellaneous.
|
|
|
6.1 Entire
Agreement. This Agreement, the exhibits and schedules hereto,
and the
other documents delivered pursuant hereto constitute the full
and entire
understanding and agreement between the parties with regard to
the
subjects hereof and no party shall be liable or bound to any
other in any
manner by any representations, warranties, covenants and agreements
except
as specifically set forth herein and therein.
|
|
|
6.2 Notices.
All notices required or permitted hereunder shall be in writing
and shall
be deemed effectively given: (a) upon personal delivery to the party
to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on
the next
business day, (c) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or
(d) one
day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt.
All
communications shall be as follows at such other address as the
Company or
the Subscriber may designate by ten days advance written notice
to the
other parties hereto:
|
to
the
Subscriber:
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
U.S.A.
Attention: Sang
▇▇▇
▇▇▇
Telephone
No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile
No.: 822-512-5111
with
a
copy to
Pheonix
Asset Management Inc.
26th
Fl.,
Hanwha Securities ▇▇▇▇.
▇▇-▇,
▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇
▇▇▇-▇▇▇, ▇▇▇▇▇
-
8
-
Attention: ▇▇▇▇▇▇▇
▇.▇. Oh
Telephone
No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile
No.: ▇▇▇-▇▇▇-▇▇▇▇
to
the
Company:
STS
Semiconductor & Telecommunications Co., Ltd.
▇▇▇-▇,
▇▇▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
Attention: Jong-Muk
Wi
Telephone
No.: ▇▇▇▇-▇▇▇-▇▇▇▇
Facsimile
No.: ▇▇▇▇-▇▇▇-▇▇▇▇
|
6.3 Titles
and Subtitles. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
|
|
|
6.4 Facsimile
Signatures; Counterparts. This Agreement may be executed by facsimile
signatures and in any number of counterparts, each of which shall
be an
original, but all of which together shall constitute one
instrument.
|
|
|
6.5 Broker's
Fees.
Each party hereto represents and warrants that no agent, broker,
investment banker, person or firm acting on behalf of or under the
authority of such party hereto is or will be entitled to any broker's
or
finder's fee or any other commission directly or indirectly in connection
with the transactions contemplated herein, except as specified herein
with
respect to the Company.
|
|
|
6.6 Waiver
of Immunity. Each of the parties hereto irrevocably waives any immunity
to
which it or its property may at any time be or become entitled, whether
characterized as sovereign immunity or otherwise, from any set-off
or
legal action in Korea or elsewhere, including immunity from service
of
process, immunity from jurisdiction of any court or tribunal, and
immunity
of any of its property from attachment prior to judgment or from
execution
of a judgment.
|
|
|
6.7 Governing
Law;
Jurisdiction. This Agreement shall be governed by and construed in
accordance with the laws of Korea. The Seoul Central District Court
of
Korea shall have jurisdiction to settle any disputes which may arise
out
of or in connection with this Agreement and accordingly any legal
action
or proceedings arising out of or in connection with this Agreement
shall
be brought in such court.
|
|
|
6.8 Successors
in
Interest. This Agreement may not be assigned or transferred by the
Company
without the prior written consent of the Subscriber. Except as otherwise
provided herein, all provisions of this Agreement shall be binding
upon,
inure to the benefit of, and be enforceable by and against the respective
heirs, executors, administrators, personal representatives and successors
and permitted assigns of any of the parties to this Agreement.
|
|
|
6.9 Severability.
If any term or other provision of this Agreement is invalid, illegal
or
incapable of being enforced by any rule of law or public policy,
all other
conditions and provisions of this Agreement shall nevertheless remain
in
full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the
parties
hereto shall negotiate in good faith to modify this Agreement so
as to
effectuate the original intent of the parties as closely as possible.
|
|
|
6.10 Construction.
Each party acknowledges that its legal counsel participated in the
preparation of this Agreement and, therefore, stipulates that the
rule of
construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Agreement
to
favor any party against the other.
|
-
9
-
|
6.11 Costs,
Expenses and Taxes. Each of the Company and the Subscriber shall
be
responsible for any and all costs, expenses and taxes (including,
without
limitation, attorney fees) respectively incurred by it in connection
with
the execution and delivery of this Agreement and the performance
of its
obligations under this Agreement.
|
|
|
6.12 Confidentiality.
Each
of the Company and the Subscriber agrees
not to disclose to any person any information relating to the
business, finances or other matters of the other party that it
may have
obtained as a result of the execution of this Agreement or of which
it may
otherwise become possessed as a result of being party to this Agreement
or
the performance of its obligations hereunder. Each
of the Company and the Subscriber
shall use all reasonable endeavors to prevent any such disclosure;
provided, however, that the provisions of this Section 7.12 shall
not
apply:
|
|
|
(a) to
the
disclosure
of
any information: (i) to any person who is required to know the
same to
perform its obligations under this Agreement; (ii) already known
to the
recipient otherwise than as a result of entering into this Agreement;
(iii) subsequently received by the recipient which it would otherwise
be
free to disclose; (iv) which is or becomes public knowledge otherwise
than
as a result of the breach of this Section 7.12 of the recipient;
(v) to
professional advisers or auditors who receive the same under a
duty of
confidentiality on a need to know basis; and (vi) with the consent
of all
the parties to whom such confidential information relates;
and
|
|
|
(b) to
any
extent that the recipient is required to disclose any information
pursuant
to any law or order
of
any court or pursuant to any direction, request or requirement
(whether or
not having the force of law) of any governmental or other regulatory
or
taxation authority or stock exchange on which the Convertible Bonds
or the
Bonds Shares are listed from time to time (including, without limitation,
any official bank examiners or
regulators).
|
-
10
-
In
Witness Whereof, the parties hereto have executed this CONVERTIBLE BONDS
SUBSCRIPTION AGREEMENT as of the date set forth in the first paragraph
hereof.
|
For
and on behalf of
/s/
Sang ▇▇▇ ▇▇▇
|
For
and on behalf of
STS
Semiconductor & Telecommunications Co., Ltd.
/s/
Ha Hae Don
|
|
| Name:
Sang ▇▇▇ ▇▇▇
Title:
Chief Executive Officer
|
Name:
Ha Hae Don
Title:
Chief Executive Officer
|
|
|
|
||
-
11
-
EXHIBIT
A
THIS
BOND
HAS NOT BEEN REGISTERED AND WILL NOT BE REGISTERED UNDER THE SECURITIES AND
EXCHANGE ACT OF KOREA (THE “SECURITIES ACT”). THIS BOND MAY NOT BE CONVERTED
INTO THE SHARES OF COMMON STOCK FOR A PERIOD OF ONE YEAR AFTER THE ISSUE OF
THE
BOND, EXCEPT AS OTHERWISE PERMITTED BY APPLICABLE KOREAN LAWS AND REGULATIONS.
Convertible
Bond - STS
Semiconductor & Telecommunications Co., Ltd.
/
Bond
Certificate No.: [ ]
Korean
Won 10,000,000,000 (Ten Billion Korean Won) April 20, 2007 (the
“Issue
Date”)
(representing
one (1) Bond with the face value of Korean Won 10,000,000,000 (Ten Billion
Korean Won)
This
bond
certificate may not be subdivided for a period of one year from the Issue
Date;;
provided
further that additional certificate(s) of different denomination(s) may be
created by STS Semiconductor & Telecommunications Co., Ltd. (the
“Company”)
in
case of partial redemption or conversion of the Bonds by the Subscriber and/or
the Holder.
This
certificate is issued in respect of one (1) bond which is duly authorized issue
of Korean Won 10,000,000,000 Convertible Bond due on April 20, 2012 (the
“Bond”)
of the
Company. References herein to the Conditions shall be to the terms and
conditions of the Bond attached hereto (the “Conditions”).
For
value
received, the Company, subject to and in accordance with the Conditions,
promises to pay to Cintel Corp. (the “Subscriber”)
or its
registered assigns (collectively the “Holder”)
upon
presentation and surrender of this Certificate the principal sum of Korean
Won
10,000,000,000 (Ten Billion Korean Won) (or such other amount as is shown on
the
register of the bondholder with respect to the Bond as being represented by
this
Certificate) on April 20, 2012 (the “Maturity
Date”)
or on
such earlier date as such sum becomes due and repayable under the Conditions,
together with any other sums payable under the Conditions, all subject to and
in
accordance with the Conditions.
The
coupon rate of the Bond shall be at the compounded interest rate of 0.0% per
annum until the date of conversion thereof; however, if conversion right is
not
exercised during the conversion period (i.e., the period from one year after
the
Issue Date until one month prior to the Maturity Date), then regardless of
the
coupon rate, the Company shall guarantee a compounded interest rate of 8.0%
per
annum in total on the Bond. At any time between one year after the Issue Date
and one month prior to the Maturity Date, the Bond may, at the option of the
Holder, be converted into common shares in the Company by the number of shares
which will be calculated by dividing the principal amount of the Bond by Korean
Won 8,010, and a remaining fractional amount, if any, which is less than the
Conversion Price (as defined in the Terms and Conditions of the Bonds), shall
be
returned to the Subscriber without any interest on the Maturity Date.
This
Certificate is governed by, and shall be construed in accordance with, the
laws
of the Republic of Korea. The Company has submitted to the exclusive
jurisdiction of the Seoul Central District Court of Korea for all purposes
in
connection with this Certificate.
IN
WITNESS WHEREOF the Company has caused this Certificate to be duly executed
on
its behalf and under its corporate seal.
STS
SEMICONDUCTOR & TELECOMMUNICATIONS CO., LTD.
By:
_________________________
Name:
Title:
-
12
-
TERMS
AND CONDITIONS OF THE BONDS
The
statements in these terms and conditions (the “Conditions”)
constitute Korean Won 10,000,000,000 Convertible Bonds of STS Semiconductor
& Telecommunications Co., Ltd. (the “Company”)
due on
April 20, 2012 (the “Bonds”)
and
the holder of the Bonds (the “Holder”)
is
entitled to the benefit of and is bound by all the provisions of the Conditions.
The term “Agreement” as used herein shall refer to the Convertible Bonds
Subscription Agreement executed by and between the Company and the Subscriber
dated as of April 19, 2007.
|
1.
|
Status,
Type, Denomination, Repayment of Principal and Interest
|
|
The
Bonds constitute direct, unsecured and unsubordinated obligations
of the
Company and rank at least with all other present and future unsecured
and
unsubordinated debt and obligations of the Company. The Bonds are
in
registered form (Ki-▇▇▇▇▇▇-▇▇▇▇).
The Bonds are due and payable as follows:
|
|
|
(A)
|
The
principal amount of the Bonds, together with all accrued and unpaid
interest then outstanding, shall be due and payable on April 20,
2012 (the
“Maturity
Date”).
|
|
(B)
|
Certificate(s)
of different denomination(s) may be created by the Company only after
one
(1) year from the Issue Date in case of partial redemption or conversion
of the Bonds by the Subscriber and/or the Holder.
|
|
(C)
|
The
coupon rate of the Bonds shall be at the compounded interest rate
of 0.0%
per annum until the date of conversion thereof; however, if conversion
right is not exercised during the conversion period (i.e., the period
from
one year after the Issue Date until one month prior to the Maturity
Date),
then regardless of the coupon rate, the Company shall guarantee a
compounded interest rate of 8.0% per annum in total on the Bonds.
|
|
2.
|
Conversion
|
|
(A)
|
Conversion
Period and Conversion Price
|
| At any time between one year after the issuance date of the Bonds and one month prior to the Maturity Date, the Holder has a right to convert any Bond, whether wholly or in part, into shares of common stock of the Company (the “Common Shares”) at the option of the Holder (the “Conversion Right)”. The number of the Common Shares to be issued will be determined by dividing the principal amount of the Bonds deposited for conversion by the Conversion Price, as adjusted herein, at the Conversion Date (both as hereinafter defined), and a remaining fractional amount, if any, which is less than the Conversion Price shall be returned to the Holder without any interest on the Maturity Date. | |
| The price at which the Common Shares of the Company will be issued upon conversion will be Korean Won 8,010 per Common Share (the “Initial Conversion Price”) but will be subject to adjustment in the manner provided in Conditions 2(C) and 2(D) (the “Conversion Price”). | |
|
(B)
|
Procedure
for Conversion
|
| To exercise the Conversion Right attaching to any Bond, the Holder must complete, execute and deposit at his own expense during normal business hours at the specified office of the Company a notice of conversion (a “Conversion Notice”) in duplicate in the form obtainable from the Company together with the relevant Bond. | |
-
13
-
|
As
a condition precedent to conversion, on or prior to delivering
a
Conversion Notice, a Holder, who is a foreigner or foreign corporation,
exercising its Conversion Right must obtain an investment registration
card issued by the Korean Financial Supervisory Service by registering
its
identity with the Korean Financial Supervisory Service in accordance
with
applicable Korean laws and regulations, including the regulations
of the
Korean Financial Supervisory Commission unless it has previously
obtained
an investment registration card. However, the registration requirement
does not apply to foreign investors who acquire Common Shares with
the
intention of selling such Common Shares within three months from
the date
of acquisition of the Common Shares.
|
|
|
|
The
date on which any Bond and the Conversion Notice (in duplicate)
relating
thereto are deposited with the Company or, if later, the date on
which all
conditions precedent to the conversion thereof are fulfilled is
hereinafter referred to as the “Deposit
Date”
applicable to such Bond and must fall at a time when the Conversion
Right
attaching to such Bond is expressed in these Terms and Conditions
to be
exercisable. The request for conversion shall be deemed to have
been made
at 23:59 hours (Seoul time) on the Deposit Date applicable to the
relevant
Bond (herein referred to as the “Conversion
Date”
applicable to such Bond). A Conversion Notice once deposited may
not be
withdrawn without the consent in writing of the
Company.
|
|
With
effect from the Conversion Date, the Company will deem the converting
Holder to have become the holder of record of the number of Common
Shares
to be issued to such Holder upon such conversion (disregarding
any
retroactive adjustment of the Conversion Price referred to below
prior to
the time such retroactive adjustment shall have become effective).
Thereafter the Company will, subject to any applicable limitations
then
imposed by Korean laws and regulations, according to the request
made in
the relevant Conversion Notices, or cause its share transfer agent
as soon
as practicable, and in any event within 10 Business Days (as defined
below) after the Conversion Date, (i) to deliver or cause to be
delivered
to the order of the person named for that purpose in the relevant
Conversion Notice for the time being of the share transfer agent
a
certificate or certificates for the relevant Common Shares registered
in
the name of the converting Holder or, in cases permitted under
Korean law,
any other person named for that purpose in the relevant Conversion
Notices, or (ii) to credit the relevant Shares to the electronic
book-entry account of the converting Holder, together with any
other
securities, property or cash (including, without limitation, cash
payable
pursuant to Condition 2) required to be delivered upon conversion
and such
assignments and other documents (if any) as may be required by
law to
effect the delivery thereof. If the Conversion Date in relation
to any
Bond shall be on or after a date with effect from which an adjustment
to
the Conversion Price takes retroactive effect pursuant to any of
the
provisions referred to in paragraphs (C) and (D) of this Condition
2 and
the relevant Conversion Date falls on a date when the relevant
adjustment
has not yet been reflected in the then current Conversion Price,
the
Company will procure that the provisions of this paragraph shall
be
applied, mutatis
mutandis,
to
such number of Common Shares as is equal to the excess of the number
of
Common Shares which would have been required to be issued on conversion
of
such Bond if the relevant retroactive adjustment had been given
effect as
at the said Conversion Date over the number of Common Shares previously
issued pursuant to such conversion, and in such event and in respect
of
such number of Common Shares references in this paragraph to the
Conversion Date shall be deemed to refer to the date upon which
such
retroactive adjustment becomes effective (disregarding the fact
that it
becomes effective retroactively).
|
|
|
|
Any
dividend on the Common Shares issued upon conversion of a Bond
or Bonds
with respect to the Fiscal Period (as defined below) during which
the
relevant Conversion Date falls will be paid with respect to the
full
Fiscal Period on the basis that the conversion took effect immediately
before the beginning of such Fiscal Period. The Common Shares issued
upon
conversion of the Bonds will in all other respect rank pari
passu
with the Common Shares in issue on the relevant Conversion Date
(except
for any right the record date for which precedes such Conversion
Date and
any other right excluded by mandatory provisions of applicable
law).
“Fiscal
Period”
means an annual period commencing on January 1 and ending on December
31
in any year unless changed in accordance with the provisions of
the
Article of Incorporation of the
Company.
|
-
14
-
“Business
Day”
means
any day on which banks are open for business in Seoul.
| (C) |
Adjustment
of Conversion Price
|
The
Conversion Price shall be subject to adjustment as follows:
|
(i)(x)
|
If
the Company shall (a) make a free distribution of Common Shares,
(b)
sub-divide its outstanding Common Shares, (c) consolidate its outstanding
Common Shares into a smaller number of Common Shares, or (d) re-classify
any of its Common Shares into other securities of the Company, then
the
Conversion Price shall be appropriately adjusted so that the Holder,
the
Conversion Date in respect of which occurs after the coming into
effect of
the adjustment described in this paragraph (i)(x), shall be entitled
to
receive the number of Common Shares or other securities of the Company
which he would have held or have been entitled to receive after the
happening of any of the events described above had such Bond been
converted immediately prior to the happening of such event (or, if
the
Company has fixed a prior record date for the determination of
shareholders entitled to receive any such free distribution of Common
Shares or other securities issued upon any such sub-division,
consolidation or re-classification, immediately prior to such record
date), but without prejudice to the effect of any other adjustment
to the
Conversion Price made with effect from the date of the happening
of such
event (or such record date) or at any time thereafter. An adjustment
made
pursuant to this paragraph (i)(x) shall become effective immediately
on
the relevant event referred to above becoming effective or, if a
record
date is fixed therefor, immediately after such record date; provided,
that in the case of a free distribution of Common Shares which must,
under
the applicable law, be submitted for approval to a general meeting
of
shareholders or be approved by a meeting of the Board of Directors
of the
Company before being legally paid or made, and which is so approved
after
the record date fixed for the determination of shareholders entitled
to
receive such distribution, such adjustment shall, immediately upon
such
approval being given by such meeting, become effective retroactively
to
immediately after such record date.
|
If
the
Company shall authorize a free distribution of Common Shares which distribution
is to be paid or made to shareholders as of a record date which is
also:
|
(a)
|
the
record date for the issue of any rights or warrants which requires
an
adjustment of the Conversion Price pursuant to paragraph (ii) or
(iii)
below;
|
|
|
(b)
|
the
day immediately before the date of issue of any securities convertible
into or exchangeable for Common Shares which requires an adjustment
of the
Conversion Price pursuant to paragraph (v) below;
|
|
|
(c)
|
the
day immediately before the date of issue of any Common Shares which
requires an adjustment of the Conversion Price pursuant to paragraph
(vi)
below; or
|
|
|
(d)
|
the
day immediately before the date of issue of any rights or warrants
which
requires an adjustment of the Conversion Price pursuant to paragraph
(vii)
below,
|
|
|
then
(except where such free distribution gives rise to a retroactive
adjustment of the Conversion Price under this paragraph (i)(x))
no
adjustment of the Conversion Price in respect of such free distribution
shall be made under this paragraph (i)(x), but in lieu thereof
an
adjustment shall be made under paragraph (ii), (iii), (v), (vi)
or (vii)
below (as the case may be) by including in the denominator of the
fraction
described therein the aggregate number of Common Shares to be issued
pursuant to such free
distribution.
|
-
15
-
|
(i)(y)
|
If
the Company shall declare a dividend in Common Shares then the Conversion
Price in effect on the date when such dividend is declared (or, if
the
Company has fixed a prior record date for the determination of
shareholders entitled to receive such dividend, on such record date)
shall
be adjusted in accordance with the following formula:
|
NCP
= OCP
´
[(N + y)
¸
(N +
n)]
where:
|
NCP
|
=
|
the
Conversion Price after such adjustment
|
|
|
OCP
|
=
|
the
Conversion Price before such adjustment
|
|
|
N
|
=
|
the
number of Common Shares outstanding (having regard to paragraph
(x) below)
at the time of declaration of such dividend (or at the close of
business
in Korea on such record date as the case may be)
|
|
|
n
|
=
|
the
number of Common Shares to be distributed to the shareholders as
a
dividend
|
|
|
y
|
=
|
the
number of Common Shares which the aggregate par value of such Common
Shares to be distributed to the shareholders as a dividend would
purchase
at the current market price per Common Share on the date of the
declaration of such dividend (or, if a prior record date has been
fixed as
aforesaid, such record date). An adjustment made pursuant to this
paragraph (i)(y) shall become effective as provided with respect
to
paragraph (i)(x); provided
that in the case of a dividend in Common Shares which must, under
the
applicable law, be submitted for approval to a general meeting
of
shareholders of the Company before being legally paid, and which
is so
approved after the record date fixed for the determination of shareholders
entitled to receive such dividend, such adjustment shall, immediately
upon
such approval being given by such meeting, become effective retroactively
to immediately after such record
date.
|
If
the
Company shall declare a dividend in Common Shares which dividend is to be paid
or made to shareholders as of a record date which is also:
|
(a)
|
the
record date for the issue of any rights or warrants which requires
an
adjustment of the Conversion Price pursuant to paragraph (ii) or
(iii)
below;
|
|
|
(b)
|
the
day immediately before the date of issue of any securities convertible
into or exchangeable for Common Shares which requires an adjustment
of the
Conversion Price pursuant to paragraph (v) below;
|
|
|
(c)
|
the
day immediately before the date of issue of any Common Shares which
requires an adjustment of the Conversion Price pursuant to paragraph
(vi)
below; or
|
|
|
(d)
|
the
day immediately before the date of issue of any rights or warrants
which
requires an adjustment of the Conversion Price pursuant to paragraph
(vii)
below,
|
|
|
then
(except where such dividend gives rise to a retroactive adjustment
of the
Conversion Price under the first paragraph of paragraph (i)(x)
above) no
adjustment of the Conversion Price in respect of such dividend
shall be
made under this paragraph (i)(y), but in lieu thereof an adjustment
shall
be made under paragraph (ii), (iii), (v), (vi) or (vii) below (as
the case
may require) by including in the denominator of the fraction described
therein the aggregate number of Common Shares to be issued pursuant
to
such dividend and including in the numerator of the fraction described
therein the number of Common Shares which the aggregate par value
of
Common Shares to be so distributed would purchase at the current
market
price per Common Share.
|
-
16
-
| (ii) |
if
the Company shall grant, issue or offer to the holders of Common
Shares
rights or warrants entitling them to subscribe for or purchase Common
Shares:
|
|
(a)
|
at
a consideration per Common Share receivable by the Company (determined
as
provided in paragraph (ix) below) which is fixed on or prior to
the record
date mentioned below and is less than the current market price
per Common
Share at such record date; or
|
|
|
(b)
|
at
a consideration per Common Share receivable by the Company (determined
as
aforesaid) which is fixed after the record date mentioned below
and is
less than the current market price per Common Share on the date
the
Company fixes the said consideration, then the Conversion Price
in effect
(in a case within (a) above) on the record date for the determination
of
shareholders entitled to receive such rights or warrants or (in
a case
within (b) above) on the date the Company fixes the said consideration
shall be adjusted in accordance with the following formula:
|
NCP
= OCP
´
[(N + v)
¸
(N +
n)]
where:
|
NCP
|
=
|
the
Conversion Price after such adjustment
|
|
|
OCP
|
=
|
the
Conversion Price before such adjustment
|
|
|
N
|
=
|
the
number of Common Shares outstanding (having regard to paragraph
(x) below)
at the close of business in Korea (in a case within (a) above)
on such
record date or (in a case within (b) above) on the date the Company
fixes
the said consideration
|
|
|
n
|
=
|
the
number of Common Shares initially to be issued upon exercise of
such
rights or warrants at the said consideration
|
|
|
v
|
=
|
the
number of Common Shares which the aggregate consideration receivable
by
the Company (determined as provided in paragraph (ix) below) would
purchase at such current market price per Common Share specified
in (a)
or, as the case may be, (b)
above.
|
Such
adjustment shall become effective (in a case within (a) above) immediately
after
the record date for the determination of shareholders entitled to receive such
rights or warrants or (in a case within (b) above) immediately after the Company
fixes the said consideration but retroactively to immediately after the record
date for the said determination.
If,
in
connection with a grant, issue or offer to the holders of Common Shares of
rights or warrants entitling them to subscribe for or purchase Common Shares,
any Common Shares which are not subscribed for or purchased by the persons
entitled thereto are offered to or subscribed by others (whether as places
or
members of the public or pursuant to underwriting arrangements or otherwise),
no
further adjustment shall be required or made to the Conversion Price by reason
of such offer or subscription.
|
(iii)
|
If
the Company shall grant, issue or offer to the holders of Common
Shares
rights or warrants entitling them to subscribe for or purchase
any
securities convertible into or exchangeable for Common Shares (other
than
those rights and warrants granted, issued or offered to and accepted
by
existing employees of the Company in accordance with mandatory
provisions
of the applicable law):
|
-
17
-
|
(a)
|
at
a consideration per Common Share receivable by the Company (determined
as
provided in paragraph (ix) below) which is fixed on or prior
to the record
date mentioned below and is less than the current market price
per Common
Share at such record date; or
|
|
|
(b)
|
at
a consideration per Common Share receivable by the Company (determined
as
aforesaid) which is fixed after the record date mentioned below
and is
less than the current market price per Common Share on the date
the
Company fixes the said consideration,
|
|
|
then
the Conversion Price in effect (in a case within (a) above) on
the record
date for the determination of shareholders entitled to receive
such rights
or warrants or (in a case within (b) above) on the date the Company
fixes
the said consideration shall be adjusted in accordance with the
following
formula:
|
||
NCP
= OCP
´
[(N + v)
¸
(N +
n)]
where:
|
NCP
and OCP have the meanings ascribed thereto in paragraph (ii)
above.
|
|||
|
N
|
=
|
the
number of Common Shares outstanding (having regard to paragraph
(x) below)
at the close of business in Korea (in a case within (a) above)
on such
record date or (in a case within (b) above) on the date the Company
fixes
the said consideration
|
|
|
n
|
=
|
the
number of Common Shares initially to be issued upon exercise of
such
rights or warrants and conversion or exchange of such convertible
or
exchangeable securities at the said consideration
|
|
|
v
|
=
|
the
number of Common Shares which the aggregate consideration receivable
by
the Company (determined as provided in paragraph (ix) below) would
purchase at such current market price per Common Share specified
in (a)
or, as the case may be, (b)
above.
|
|
Such
adjustment shall become effective (in a case within (a) above) immediately
after
the record date for the determination of shareholders entitled to receive such
rights or warrants or (in a case within (b) above) immediately after the Company
fixes the said consideration but retroactively to immediately after the record
date for the said determination.
If,
in
connection with a grant, issue or offer to the holders of Common Shares of
rights or warrants entitling them to subscribe for or purchase securities
convertible into or exchangeable for Common Shares, any such securities
convertible into or exchangeable for Common Shares which are not subscribed
for
or purchased by the persons entitled thereto are offered to or subscribed by
others (whether as places or members of the public or pursuant to underwriting
arrangements or otherwise) no further adjustments shall be required or made
to
the Conversion Price by reason of such offer or subscription or the conversion
or exchange of such securities.
-
18
-
|
(iv)
|
If
the Company shall distribute to the holders of Common Shares evidences
of
its indebtedness, shares of capital stock of the Company (other than
Common Shares), assets (excluding annual cash dividends) or rights
or
warrants to subscribe for or purchase shares or securities at less
than
fair market value (excluding those rights and warrants referred to
in
paragraphs (ii) and (iii) above and any rights and warrants granted,
issued or offered to and accepted by existing employees of the Company
in
accordance with mandatory provisions of the applicable law), then
the
Conversion Price in effect on the record date for the determination
of
shareholders entitled to receive such distribution shall be adjusted
in
accordance with the following
formula:
|
NCP
= OCP
´
[(CMP -
fmv) ¸
CMP]
where:
|
NCP
and OCP have the meanings ascribed thereto in paragraph (ii)
above.
|
|||
|
CMP
|
=
|
the
current market price per Common Share on the record date for the
determination of shareholders entitled to receive such
distribution
|
|
|
fmv
|
=
|
the
fair market value (as determined by the Company or, if pursuant
to the
applicable law such determination is to be made by application
to a court
of competent jurisdiction, as determined by such court or by an
appraiser
appointed by such court) of the portion of the evidences of indebtedness,
shares, assets, rights or warrants so distributed applicable to
one Common
Shares less any consideration paid for the same by the relevant
shareholder.
|
|
In
making
a determination of the fair market value of any such rights or warrants, the
Company shall consult a leading independent securities company or bank in Seoul
selected by the Company and approved in writing by the Holder and shall take
fully into account the advice received from such company or bank.
Such
adjustment shall become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution;
provided,
that (a)
in the case of such a distribution which must, under the applicable law, be
submitted for approval to a general meeting of shareholders or be approved
by a
meeting of the Board of Directors of the Company before such distribution may
legally be made and is so approved after the record date fixed for the
determination of shareholders entitled to receive such distribution, such
adjustment shall, immediately upon such approval being given by such meeting,
become effective retroactively to immediately after such record date and (b)
if
the fair market value of the evidences of indebtedness, shares, assets, rights
or warrants so distributed cannot be determined until after the record date
fixed for the determination of shareholders entitled to receive such
distribution, such adjustment shall, immediately upon such fair market value
being determined, become effective retroactively immediately after such record
date.
|
(v)
|
If
the Company shall grant, issue or offer any securities convertible
into or
exchangeable for Common Shares (other than in any of the circumstances
described in paragraph (iii) above and paragraph (vii) below) and
the
consideration per Common Share receivable by the Company (determined
as
provided in paragraph (ix) below) shall be less than the current
market
price per Common Share on the date in Korea on which the Company
fixes the
said consideration (or, if the issue of such securities is subject
to
approval by a general meeting of shareholders, on the date on which
the
Board of Directors of the Company fixes the consideration to be
recommended at such meeting), then the Conversion Price in effect
immediately prior to the date of issue of such convertible or exchangeable
securities shall be adjusted in accordance with the following
formula:
|
NCP
= OCP
´
[(N + v)
¸
(N +
n)]
where :
|
NCP
and OCP have the meanings ascribed thereto in paragraph (ii)
above.
|
|||
|
N
|
=
|
the
number of Common Shares outstanding (having regard to paragraph
(x) below)
at the close of business in Korea on the day immediately prior
to the date
of such issue
|
|
|
n
|
=
|
the
number of Common Shares to be issued upon conversion or exchange
of such
convertible or exchangeable securities at the initial conversion
or
exchange price or rate
|
|
|
v
|
=
|
the
number of Common Shares which the aggregate consideration receivable
by
the Company (determined as provided in paragraph (ix) below) would
purchase at such current market price per Common
Share.
|
|
Such
adjustment shall become effective as of the calendar day in Korea corresponding
to the calendar day at the place of issue on which such convertible or
exchangeable securities are issued.
-
19
-
|
(vi)
|
If
the Company shall issue any Common Shares (other than Common Shares
issued
(a) on conversion of the Bonds or on conversion or exchange of any
convertible or exchangeable securities issued by the Company prior
to the
Issue Date or (b) on exercise of any rights or warrants granted,
issued or
offered by the Company prior to the Issue Date or (c) in any of the
circumstances described above or (d) to shareholders of any company
which
merges into the Company in proportion to their shareholdings in such
company immediately prior to such merger, upon such merger) for a
consideration per Common Share receivable by the Company (determined
as
provided in paragraph (ix) below) less than the current market price
per
Common Share on the date in Korea on which the Company fixes the
said
consideration (or, if the issue of such Common Shares is subject
to
approval by a general meeting of shareholders, on the date on which
the
Board of Directors of the Company fixes the consideration to be
recommended at such meeting), then the Conversion Price in effect
immediately prior to the issue of such additional Common Shares shall
be
adjusted in accordance with the following
formula:
|
NCP
= OCP
´
[(N + v)
¸
(N +
n)]
where:
|
NCP
and OCP have the meanings ascribed thereto in paragraph (ii)
above.
|
|||
|
N
|
=
|
the
number of Common Shares outstanding (having regard to paragraph
(x) below)
at the close of business in Korea on the day immediately prior
to the date
of issue of such additional Common Shares.
|
|
|
n
|
=
|
the
number of additional Common Shares issued as aforesaid.
|
|
|
v
|
=
|
the
number of Common Shares which the aggregate consideration receivable
by
the Company (determined as provided in paragraph (ix) below) would
purchase at such current market price per Common
Share.
|
|
Such
adjustment shall become effective as of the calendar day in the Korea of the
issue of such additional Common Shares.
|
(vii)
|
If
the Company shall issue rights or warrants to subscribe for or purchase
Common Shares or securities convertible into or exchangeable for
Common
Shares (other than any rights or warrants granted, issued or offered
to
the holders of Common Shares and to existing employees of the Company
in
accordance with mandatory provisions of the applicable law) and the
consideration per Common Share receivable by the Company (determined
as
provided in paragraph (ix) below) shall be less than the current
market
price per Common Share on the date in Korea on which the Company
fixes the
said consideration (or, if the issue of such rights or warrants is
subject
to approval by a general meeting of shareholders, on the date on
which the
Board of Directors of the Company fixes the consideration to be
recommended at such meeting), then the Conversion Price in effect
immediately prior to the date of the issue of such rights or warrants
shall be adjusted in accordance with the following
formula:
|
NCP
= OCP
´
[(N + v)
¸
(N +
n)]
where:
|
NCP
and OCP have the meanings ascribed thereto in paragraph (ii)
above.
|
|||
|
N
|
=
|
the
number of Common Shares outstanding (having regard to paragraph
(x) below)
at the close of business in Korea on the day immediately prior
to the date
of such issue
|
|
|
n
|
=
|
the
number of Common Shares to be issued on exercise of such rights
or
warrants and (if applicable) conversion or exchange of such convertible
or
exchangeable securities at the said consideration
|
|
|
v
|
=
|
the
number of Common Shares which the aggregate consideration receivable
by
the Company (determined as provided in paragraph (ix) below) would
purchase at such current market price per Common
Share.
|
|
Such
adjustment shall become effective as of the calendar day in Korea corresponding
to the calendar day at the place of issue on which such rights or warrants
are
issued.
-
20
-
| (viii) |
For
the purposes of this
Clause (C), the current market price per Common Share on any date
shall be
deemed to be the volume-weighted average of the daily closing prices
of
the Common Shares for the 30 consecutive trading days commencing
45
trading days before such date. The closing price of the Common Shares
for
each trading day shall be the last reported selling price of the
Common
Shares as reported by the KOSDAQ for such day or, if no sale takes
place
on such day, the higher of the closing bid or offered price of the
Common
Shares on the KOSDAQ. For the purposes of this paragraph (viii),
the term
“trading
day”
means a day when the KOSDAQ is open for business, but does not include
a
day when (a) no such last selling price or closing bid or offered
price is
reported and (b) (if the Common Shares are not admitted to trading
on such
exchange)
no such closing bid and offered prices are furnished as aforesaid.
If
during the said 45 trading days or any period thereafter up to but
excluding the date as of which the adjustment of the Conversion Price
in
question shall be effected, any event (other than the event which
requires
the adjustment in question) shall occur which gives rise to a separate
adjustment to the Conversion Price under the provisions of this
Clause (C), then the current market price as determined above shall
be
adjusted in such manner and to such extent as a leading independent
securities company or bank in Seoul selected by the Company and approved
in writing by the Holders
shall in its absolute discretion deem appropriate and fair to compensate
for the effect thereof.
|
|
(ix) For
the purposes of any calculation of the consideration receivable
by the
Company
pursuant to paragraphs (ii), (iii), (v), (vi) and (vii) of Condition
2(C),
the following provisions shall be
applicable:
|
|
(a)
|
in
the case of the issue of Common Shares for cash, the consideration
shall
be the amount of such cash;
|
|
|
(b)
|
in
the case of the issue of Common Shares for a consideration in whole
or in
part other than cash, the consideration other than cash shall be
deemed to
be the fair value thereof as determined by an independent financial
institution or, if pursuant to applicable law of Korea such determination
is to be made by application to a court of competent jurisdiction,
as
determined by such court or an appraiser appointed by such court,
irrespective of the accounting treatment thereof;
|
|
|
(c)
|
in
the case of the issue (whether initially or upon the exercise of
rights or
warrants) of securities convertible into or exchangeable for Common
Shares, the aggregate consideration receivable by the Company shall
be
deemed to be the consideration received by the Company for such
securities
and (if applicable) rights or warrants plus the additional consideration
(if any) to be received by the Company upon (and assuming) the
conversion
or exchange of such securities at the initial conversion or exchange
price
or rate and (if applicable) the exercise of such rights or warrants
at the
initial subscription or purchase price (the consideration in each
case to
be determined in the same manner as provided in this paragraph
(ix) of
Condition 2(C)) and the consideration per Common Share receivable
by the
Company shall be such aggregate consideration divided by the number
of
Common Shares to be issued upon (and assuming) such conversion
or exchange
at the initial conversion or exchange price or rate and (if applicable)
the exercise of such rights or warrants at the initial subscription
or
purchase price;
|
|
|
(d)
|
in
the case of the issue of rights or warrants to subscribe for or
purchase
Common Shares, the aggregate consideration receivable by the Company
shall
be deemed to be the consideration received by the Company for any
such
rights or warrants plus the additional consideration to be received
by the
Company upon (and assuming) the exercise of such rights or warrants
at the
initial subscription or purchase price (the consideration in each
case to
be determined in the same manner as provided in this paragraph
(ix) of
Condition 2(C)) and the consideration per Common Share receivable
by the
Company shall be such aggregate consideration divided by the number
of
Common Shares to be issued upon (and assuming) the exercise of
such rights
or warrants at the initial subscription or purchase
price;
|
|
|
(e)
|
if
any of the consideration referred to in any of the preceding paragraphs
of
this paragraph (viii)(c) of Condition 2(C) is receivable in a currency
other than Korean Won, such consideration shall (in any case where
there
is a fixed rate of exchange between Korean Won and the relevant
currency
for the purposes of the issue of the Common Shares, the conversion
or
exchange of such securities or the exercise of such rights or warrants)
be
translated into Korean Won for the purposes of this paragraph (ix)
of
Condition 2(C) at such fixed rate of exchange and shall (in all
other
cases) be translated into Korean Won at such rate of exchange as
may be
determined in good faith by an independent financial institution
to be the
spot rate ruling at the close of business on the date as of which
the said
consideration is required to be calculated as aforesaid;
|
|
|
(f)
|
in
the case of the issue of Common Shares credited as fully paid out
of
retained earnings or capitalisation of reserves at their par value,
the
aggregate consideration receivable by the Company shall be deemed
to be
zero (and accordingly the number of Common Shares which such aggregate
consideration receivable by the Company could purchase at the relevant
current market price per Common Share shall also be deemed to be
zero);
and
|
|
|
(g)
|
in
making any such determination, no deduction shall be made for any
commissions or any expenses paid or incurred by the
Company.
|
|
(x)
|
If,
at the time of computing an adjustment (the “later
adjustment”)
of the Conversion Price pursuant to any of paragraphs (ii), (iii),
(v),
(vi) and (vii) above, the Conversion Price already incorporates an
adjustment made (or taken or to be taken into account pursuant to
the
proviso to paragraph (xi) below) to reflect an issue of Common Shares
or
of securities convertible into or exchangeable for Common Shares
or of
rights or warrants to subscribe for or purchase Common Shares or
securities, to the extent that the number of such Common Shares or
securities taken into account for the purposes of such adjustment
exceeds
the number of such Common Shares in issue at the time relevant for
ascertaining the number of outstanding Common Shares for the purposes
of
computing the later adjustment, such Common Shares shall be deemed
to be
outstanding for the purposes of making such
computation.
|
|
(xi)
|
No
adjustment of the Conversion Price shall be required unless such
adjustment would require an increase or decrease in such price of
at least
Korean Won 10; provided,
that any adjustment which by reason of this paragraph (xi) is not
required
to be made shall be carried forward and taken into account (as if
such
adjustment had been made at the time when it would have been made
but for
the provisions of this paragraph (xi)) in any subsequent adjustment.
All
calculations under this Condition 2(C) shall be made to the nearest
Korean
Won.
|
-
21
-
|
(xii)
|
Notwithstanding
the provisions of this Condition 2(C), the Conversion Price shall
not be
reduced below the par value of the Common Shares as a result of any
adjustment made hereunder unless under applicable law then in effect
Bonds
may be converted at such reduced Conversion Price into legally issued,
fully-paid Common Shares.
|
|
(xiii)
|
Any
references herein to the date on which a consideration is “fixed”
shall, where the consideration is originally expressed by reference
to a
formula which cannot be expressed an actual cash amount until a later
date, be construed as a reference to the first day on which such
actual
cash amount can be ascertained.
|
|
(xiv)
|
No
adjustment involving an increase in the Conversion Price will be
made,
except in the case of a consolidation of the Common Shares, as referred
to
in paragraph (i) of Condition 2(C).
|
|
(xv)
|
The
Company may purchase its Common Shares to the extent permitted by
law.
|
|
(xvi)
|
Notice
of any adjustment in the Conversion Price shall be given to Holder
in
accordance with Condition 9 as soon as practicable after the determination
thereof.
|
|
(xvii)
|
Where
more than one event which gives or may give rise to an adjustment
to the
Conversion Price occurs within such a short period of time that in
the
opinion of a leading investment bank of international repute (acting
as
expert), selected by the Company and approved in writing by the Holder
at
the expense of the Company, the foregoing provisions would need to
be
operated subject to some modification in order to give the intended
result, such modification shall be made to the operation of the foregoing
provisions as may be advised by a leading investment bank of international
repute (acting as expert), selected by the Company and approved in
writing
by the Holder at the expense of the Company, to be in their opinion
appropriate in order to give such intended
result.
|
|
(D)
|
The
Conversion Price shall be subject to resetting as
follows:
|
|
(i)
|
If
the higher of (x) the simple arithmetic average of (i) the volume
weighted
average of the Closing Prices (as defined below) of the Common Shares
on
the KOSDAQ for the one month prior to each relevant Setting Date
(as
defined below), (ii) the volume weighted average of the Closing Prices
for
the one week prior to the relevant Setting Date, and (iii) the Closing
Price one trading day prior to the relevant Setting Date, being rounded
upwards (if necessary) to the nearest Korean Won, and (y) the Closing
Price at the close of business in Korea one trading day prior to
each
relevant Setting Date (the higher of (x) and (y), “Adjusted
Share Price”)
is lower than the then applicable Conversion Price on the relevant
Setting
Date, then the Conversion Price shall be adjusted to the Adjusted
Share
Price in effect on and from the relevant Setting Date (such adjusted
Conversion Price being rounded upwards (if necessary) to the nearest
Korean Won).
|
PROVIDED
THAT:
|
(1)
|
the
provisions of Condition 2(C) shall apply mutatis
mutandis to
this Condition 2(D)(i) to ensure that appropriate adjustments shall
be
made to any Closing Price to reflect any adjustments made to the
Conversion Price in accordance with Condition
2(C);
|
|
(2)
|
any
such adjustment to the Conversion Price pursuant to this Condition
2(D)(i)
shall be limited so that the Conversion Price shall not be reduced
below
70 per cent. of (x) the Initial Conversion Price or (y) if any adjustment
has been made to the Conversion Price in accordance with Condition
2(C),
such adjusted Conversion Price;
|
-
22
-
|
(3)
|
the
Conversion Price shall not be reduced below the par value of the
Common
Shares (currently Korean Won 500 per Common Share as of the Issue
Date) as
a result of any adjustment made hereunder unless under applicable
law then
in effect, the Bonds may be converted at such reduced Conversion
Price
into legally issued, fully-paid and non-assessable Common
Shares;
|
|
(4)
|
the
adjustment of the Conversion Price in respect of any Setting Date
shall be
subject to the provisions of the applicable law and regulations then
in
effect; and
|
|
(5)
|
for
the avoidance of doubt (x) any adjustments to the Conversion Price
made
pursuant to this Condition 2(D)(i) shall only be downward adjustments,
(y)
no adjustment will be made where such adjustment would be less than
Korean
Won 10 and (z) an adjustment may be made in respect of a Setting
Date
notwithstanding that an adjustment may have been made in respect
of a
prior Setting Date or Setting
Dates.
|
|
(ii)
|
Notwithstanding
anything to the contrary in these Conditions, in the event that
the
Company’s Common Shares become de-registered or de-listed from the KOSDAQ,
the Conversion Price shall be immediately adjusted to the par
value of the
Common Shares with effect on and from the date such event takes
effect.
|
|
The
term “Closing
Price”
for any day means the last selling price or, if no sales take
place on
such day, the closing bid or offered price in each case as reported
by the
KOSDAQ are listed for such day. The term “trading
day”
is a day when the Stock Exchange the Common Shares are listed
is open for
business, but does not include a day when (a) no such last selling
price
or closing bid or offered price is reported and (b) (if the Common
Shares
is not admitted to trading on such Stock Exchange) no such closing
bid and
offered prices are furnished as aforesaid. If during the said
45 trading
days or any period thereafter up to but excluding the date as
of which the
adjustment of the Conversion Price in question shall be effected,
any
event (other than the event which requires the adjustment in
question)
shall occur which gives rise to a separate adjustment to the
Conversion
Price under the provisions of Condition 2(C), then the current
market
price as determined above shall be adjusted in such manner and
to such
extent as a leading independent securities company or bank in
New York
selected by the Company and approved in writing by the Holder
shall in its
absolute discretion deem appropriate and fair to compensate for
the effect
thereof.
|
|
|
The
term “Setting
Date”
means a day falling one calendar month after the Issue Date (i.e.
May 20,
2007) and thereafter every three calendar months after the previous
Setting Date (starting with August 20, 2007) up to one month
prior to the
Maturity Date. If any Setting Date would otherwise fall on a
day which is
not a Business Day, it shall be postponed to the next day which
is a
Business Day unless it would thereby fall into the next calendar
month in
which event it shall be brought forward to the immediately preceding
Business Day.
|
|
|
Such
adjustments (if any) shall be notified promptly to the Holder
in
accordance with Condition 9.
|
|
(E)
|
If,
while any Conversion Right is or is capable of being or becoming
exercisable, there shall be any adjustment to the Conversion
Price, the
Company shall (i) as soon as practicable notify the Holder of
particulars
of the event giving rise to the adjustment, the Conversion Price
after
such adjustment, the date on which such adjustment takes effect
and such
other particulars and information as the Holder may require and
(ii)
promptly after the date upon which such adjustment takes effect,
give
notice to the Holder in a form previously approved in writing
by the
Holder, stating that the Conversion Price has been adjusted and
setting
both the Conversion Price in effect prior to such adjustment,
the adjusted
Conversion Price and the effective date of such adjustment. The
Conversion
Notice shall be made in a form agreed upon by and between the
Company and
the Holders.
|
-
23
-
|
3.
|
Redemption
at Maturity
|
|
Unless
previously redeemed or converted or purchased and in each case
canceled as
herein provided, the Company will redeem on the Maturity Date the
Bonds at
one hundred per cent. (100%) of their face principal amount and
interest
on the amount of the Bonds calculated at the compounded rate of
eight per
cent. (8%) per annum.
|
|
|
4.
|
Redemption
at the option of the Company
|
|
At
any time after April 20 2008, if the Closing Price of a Common
Share of
the Company remains higher than 135% of the Conversion Price then
in
effect for thirty (30) consecutive trading dates of the KOSDAQ
and the
Holder fails to exercise its Conversion Rights during such thirty
day
period, on the trading date immediately following the end of such
thirty
day period, the Company may send a notice requesting the Holder
to
exercise his Conversion Right within five (5) trading dates from
the date
of receipt of such notice. If the Holder fails to exercise his
Conversion
Right during such five (5) day period, the Company may redeem all
or some
of the issued and outstanding Bonds at 100% of the principal amount
of the
Bonds without any interest or premium thereon.
|
|
|
5.
|
Charges,
Taxes and Expenses
|
|
Issuance
of the equity interest upon the conversion of the Bonds shall be
made
without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such equity interest,
all
of which taxes and expenses shall be paid by the Company.
|
|
|
6.
|
Events
of Default
|
|
If
any of the following events (each, an “Event
of Default”)
occurs and is continuing, the Company shall promptly inform the
Holder of
such Event of Default. In such case, the Holder at its discretion
may give
notice to the Company that the Bonds are, and they shall immediately
become, due and payable, in which case the entire unpaid principal
balance
of the Bonds and all of the unpaid interest accrued thereon shall
be
immediately due and payable.
|
|
|
(i)
|
Non-Payment
|
|
The
Company fails to pay principal, premium, interest and/or any other
amount
owing by the Company to the Holder hereunder when due and payable
and such
failure continues for seven (7) days; or
|
|
|
(ii)
|
Breach
of Other Obligations
|
|
The
Company defaults in the performance or observance of or compliance
with
any of its obligations set out in this Agreement and/or these Conditions
which default is incapable of remedy or, if it is capable of remedy,
is
not remedied within thirty (30) days after such default;
or
|
|
|
(iii)
|
Breach
of Representation or Warranty
|
|
Any
representation or warranty given by the Company under these Conditions
is
no longer correct in material respect on the date on which it was
made or
repeated and this situation continues for a period of thirty (30)
days;
or
|
-
24
-
|
(iv)
|
Cross
Default
|
|
a.
|
Any
other present or future indebtedness for borrowed money of the
Company
becomes due and payable prior to its stated maturity by reason
of an Event
of Default; or
|
|
b.
|
Any
such indebtedness for borrowed money is not paid when due, as the
case may
be, within any applicable grace period originally provided for;
or
|
|
c.
|
The
Company fails to pay when due (or within any applicable grace period
originally provided for) any amount payable by it under any present
or
future guarantee or indemnity in respect of indebtedness for borrowed
money.
|
|
(v)
|
Enforcement
Proceedings
|
|
A
distress, execution or other legal process is levied, enforced
or sued
upon or against any material part of the property, assets or revenues
of
the Company and is not discharged or stayed within ninety (90)
days of
having been so levied, enforced or sued out unless enforcement
or suit is
being contested in good faith and by appropriate proceedings;
or
|
|
|
(vi)
|
Security
Enforced
|
|
An
encumbrancer takes possession or a receiver, manager or other similar
person is appointed over, or an attachment order is issued in respect
of
the whole or any material part of the undertaking, property, assets
or
revenues of the Company and in any such case such possession, appointment
or attachment is not stayed or terminated or the debt on account
of which
such possession was taken or appointment or attachment was made
is not
discharged or satisfied within thirty (30) days of such possession,
appointment or the issue of such order; or
|
|
|
(vii)
|
Insolvency
|
|
The
Company is declared by a court of competent jurisdiction to be
insolvent,
bankrupt or unable to pay its debts, or stops, suspends or threatens
to
stop or suspend payment of all or a material part of its debts
as they
mature or applies for or consents to or suffers the appointment
of an
administrator, liquidator or receiver or other similar person in
respect
of the Company or over the whole or any material part of the undertaking,
property, assets or revenues of the Company pursuant to any insolvency
law
and such appointment is not discharged within thirty (30) days
of its
taking effect or takes any proceedings under any law for a readjustment
or
deferment of its obligations or any part of them or makes or enters
into a
general assignment or an arrangement or composition with or for
the
benefit of its creditors except, in any such case, for the purpose
of and
followed by a reconstruction, amalgamation, reorganization, merger
or
consolidation on terms approved by the Holder; or
|
|
|
(viii)
|
Winding-up
|
|
An
order of a court of competent jurisdiction is made or an effective
resolution passed for the winding-up or dissolution of the Company
or the
Company ceases to carry on all or any material part of its business
or
operations except, in any such case, for the purpose of and followed
by a
reconstruction, amalgamation, reorganization, merger or consolidation
on
terms approved by the Holder; or
|
-
25
-
|
(ix)
|
Expropriation
|
|
Any
governmental authority or agency compulsorily purchases or expropriates
all or any material part of the assets of the Company without fair
compensation; or
|
|
|
(x)
|
Unlawfulness
|
|
The
Company is in breach of any law or regulation in any jurisdiction
in
material respects to which it and/or any of its properties are
subject.
|
|
|
(xi)
|
Analogous
Events
|
|
Any
event, which under the laws of the U.S. has an analogous effect
to any of
the events referred to in (vii) and (viii) above,
occurs.
|
|
|
7.
|
Replacement
of Bonds
|
|
Upon
receipt by the Company of evidence reasonably satisfactory to it
of the
loss, theft or destruction of the Bonds and of indemnity or security
reasonably satisfactory to it, the Company will make and deliver
a new
security which shall carry the same rights to interest (unpaid
and to
accrue) carried by the Bonds, stating that such security is issued
in
replacement of the Bonds, making reference to the original date
of
issuance of the Bonds (and any successors hereto) and dated as
of such
cancellation, in lieu of the Bonds.
|
|
|
8.
|
Governing
Law and Jurisdiction
|
|
The
Bonds shall be construed in accordance with the laws of the Republic
of
Korea, excluding
its conflicts of laws rules.
|
|
|
9.
|
Dispute
Resolution
|
|
The
Company and the Holder shall attempt in good faith to resolve all
disputes, controversies or claims arising out of or in connection
with the
interpretation or application of the provisions of the terms and
conditions hereto or in connection with the determination of any
matters
which are subject to objective determination pursuant to the terms
and
conditions hereto (each, a “Dispute”)
by mutual agreement. If any Dispute cannot be resolved by the parties
hereto pursuant to above or otherwise, then such Dispute shall
be brought
to the Seoul Central District Court of Korea.
|
|
|
10.
|
Notices
|
|
Any
notice, request or other communication required or permitted hereunder
shall be in writing and shall be deemed to have been duly given
if
personally delivered or mailed by registered or certified mail,
postage
prepaid, or by recognized overnight courier or personal delivery
at the
respective addresses of the parties as set forth in the Convertible
Bonds
Subscription Agreement or on the register maintained by the Company.
Any
party hereto may change its address for future notice hereunder
by giving
notice of such change to the other party. Notice shall conclusively
be
deemed to have been given where received.
|
-
26
-
|
11.
|
Miscellaneous
|
|
(A)
|
No
Waiver.
|
|
No
failure or delay by the Holder to exercise any right hereunder
shall
operate as a waiver thereof, nor shall any single or partial
exercise of
any right, power or privilege preclude any other right, power
or
privilege.
|
|
|
(B)
|
Attorneys’
Fees.
|
|
If
the Holder retains an attorney for collection of the Bonds, or
if any suit
or proceeding is brought for the recovery of all, or any part
of, or for
protection of the indebtedness respected by the Bonds, then the
Company
agrees to pay all costs and expenses of the suit or proceeding,
or any
appeal thereof, incurred by the Holder, including without limitation,
reasonable attorneys' fees.
|
|
|
(C)
|
Default
Rate.
|
|
The
default interest rate shall be the compounded rate of nineteen
per cent.
(19%) per annum.
|
|
|
(D)
|
Assignment.
|
|
The
Holder may assign, transfer or establish security interests on
the Bonds,
in whole or in part, at the Holder's sole discretion to any other
person
subject to restrictions under the relevant laws of Korea.
The Company shall cooperate with and provide any reasonably necessary
assistance to the Holder to complete and effect such assignment,
transfer
or establishment of security
interest.
|
-
27
-