Exhibit 10.5
SHINSUNG ENG CO., LTD.
US$10,855,000
ZERO COUPON BONDS DUE 2010
WITH WARRANTS
TO SUBSCRIBE FOR COMMON SHARES OF
SHINSUNG ENG CO., LTD.
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SUBSCRIPTION AGREEMENT
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Dated as of November 30, 2000
Hwang Mok Park & Jin
Seoul, Korea
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTIN AGREEMENT (the "Agreement") is entered into this 30th day of
November 2000 by and between
(1) SHINSUNG ENG CO., LTD., a corporation organized and existing under the laws
of the Republic of Korea ("Korea"), having its registered head office at
▇▇▇-▇, ▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇-▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ (the "Issuer"); and
(2) PRI AUTOMATION INC., a corporation organized and existing under the laws of
the State of Massachusetts, U.S.A., having its registered office at ▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, U.S.A. (the "Purchaser").
WITNESSETH:
WHEREAS, the Issuer has duly authorized the issue of US$10,855,000 in aggregate
principal amount of its Zero Coupon Bonds due 2010 (the "Bonds") with warrants
(the "Warrants") to subscribe for the common shares, par value Five Hundred
Korean Won (500 Won) each (the "Common Shares") of the Issuer by way of a
private placement;
WHEREAS, the Bonds will be issued substantially in accordance with the Terms and
Conditions of the Bonds attached hereto as Exhibit A (the "Terms and Conditions
of the Bonds") and the Warrants will be issued substantially in accordance with
the Terms and Conditions of the Warrants attached hereto as Exhibit B (the
"Terms and Conditions of the Warrants"). Each Warrant will entitle the holder
thereof to subscribe for the Won equivalent of US$5,000 for the Common Shares;
and
WHEREAS, certain capitalized terms shall have the same meaning ascribed thereto
in the Terms and Conditions of the Bonds or the Terms and Conditions of the
Warrants, as the case may be.
NOW THEREFORE, the Issuer and the Purchaser agree as follows:
1. SUBSCRIPTION
Subject to the terms and conditions of this Agreement, the Issuer agrees to
issue the Bonds and the Warrants to the Purchaser and the Purchaser agrees
to subscribe and pay for the Bonds and the Warrants on the Closing Date (as
defined below) at a subscription price of 100 per cent. of the principal
amount of the Bonds (the "Subscription Price").
2. CLOSING
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(1) The Subscription Price in respect of the Bonds with Warrants will
be paid by the Purchaser to the Issuer at 11:00 a.m. (Seoul time)
on December 6, 2000 or on such other date as may be agreed
between the Issuer and the Purchaser (the "Closing Date") against
delivery of duly executed certificates representing the Bonds and
the Warrants in the forms of Exhibit A and Exhibit B hereto,
respectively; provided that each of the conditions in Section 6
hereof have been satisfied prior to such date or are to be
satisfied concurrently with the closing of the transactions
contemplated hereunder (the "Closing"). Payment of the
Subscription Price shall be made or caused to be made by the
Purchaser by delivery of immediately available funds to such bank
account as the Issuer shall designate in writing.
(2) If at the Closing the Issuer shall fail to deliver the Bonds with
Warrants to the Purchaser as provided in Section 2(1) hereof, or
if any of the conditions specified in Section 6 hereof shall not
have been fulfilled to the satisfaction of the Purchaser, the
Purchaser shall, at its election, be relieved of all further
obligations under this Agreement, without thereby waiving any
other rights the Purchaser may have by reason of such failure or
such non-fulfillment.
3. EXPENSES
The Issuer shall bear and pay all costs and expenses incurred or to be
incurred in connection with the issue of the Bonds and the Warrants,
including the legal fees and expenses, the costs and expenses incurred
in connection with the printing, checking and initial delivery of the
Bonds and the Warrants, the printing and production of this Agreement
and all other documents connected with the issue and distribution of
the Bonds and the Warrants and the listing of the Common Shares and the
costs in connection with the maintenance of such listing and all
expenses incidental thereto.
4. REPRESENTATIONS AND WARRANTIES BY THE ISSUER.
The Issuer represents and warrants that the following are true and accurate
as of the date hereof and will be true and accurate in all material
respects as of the Closing Date except as otherwise provided herein.
(1) VALID EXISTENCE. The Issuer is duly incorporated and validly existing
under Korean law with power to own its assets and to conduct its
businesses in the manner presently conducted.
(2) AUTHORIZATION. The Issuer has full power and authority to enter into
and perform its obligations under this Agreement. This Agreement
(including the Terms and Conditions of the Bonds and the Terms and
Conditions of the Warrants) has been duly authorized, executed and
delivered by the Issuer after taking all required corporate actions
including approval by its board of directors and (assuming due
authorization, execution and delivery thereof by the Purchaser)
constitutes valid and legally binding obligations of the Issuer
enforceable in accordance with their
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respective terms subject to the laws of bankruptcy and other laws
affecting the rights of creditors generally.
(3) CAPITALIZATION. The number of authorized shares of the Issuer is
41,600,000 shares with a par value per share of 500 Won (of which up
to 840,000 shares may be non-voting preferred shares). As of the date
of this Agreement, 25,221,400 common shares have been fully paid,
issued and outstanding, but any non-voting preferred shares have not
been issued. There are no outstanding securities convertible into, or
exchangeable for, or warrants, rights or options to purchase from the
Issuer, or obligations of the Issuer to issue, Common Shares, except
for the (i) 9,300,000,000 Won Bonds due 2039 with Warrants, and (ii)
stock options granted to certain officers and employees of the Issuer
in March 1999 and March 2000.
(4) BOOKS AND RECORDS. The Issuer's minute books and accounting and other
corporate records have been kept properly and consistently pursuant to
the generally accepted Korean accounting principles, are up-to-date
and contain complete and accurate details in all material respects
regarding the transactions entered into by the Issuer.
(5) NO DEFAULT OR VIOLATION. The execution and delivery of this Agreement,
the issuance of the Bonds and the Warrants and the exercise of the
Warrants will not infringe and will not be contrary to any law or
regulation of any Korean governmental or regulatory body and will not
result in any breach of the terms of the Articles of Incorporation of
the Issuer or constitute a default under any deed, agreement, mortgage
or other instrument to which the Issuer is a party. The Issuer is not
in material breach of or in material default under any law, agreement,
license, certificate or authorization which is binding upon or affects
any of its assets or revenues or the operation of its business and no
circumstance has arisen such that any person is now entitled to
require payment of any material indebtedness of the Issuer by reason
of default.
(6) CERTIFICATES AND AUTHORITIES. The Issuer possesses such certificates,
authorities or permits issued by the appropriate national, provincial,
municipal or local regulatory agencies or bodies that are material to
the business now operated by it, and the Issuer has not received any
oral or written notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that is
material to the business now operated by it.
(7) NO WINDING-UP OR DISSOLUTION. The Issuer has not taken any action, nor
have any steps been taken, or legal, legislative or administrative
proceedings been started to wind up, dissolve, or eliminate the
Issuer.
(8) FINANCIAL STATEMENTS. The audited and consolidated (if available)
financial statements of the Issuer as of December 31, 1999, copies of
which have been delivered to the Purchaser, have been prepared on a
basis consistent with that of the previous financial year in
accordance with generally accepted Korean
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accounting principles and practices, including all applicable
statements of standard accounting practice generally accepted in
Korea, and fairly represent the financial data of the Issuer.
(9) GOOD AND MARKETABLE TITLE TO THE BONDS AND THE WARRANTS. The Bonds
with Warrants have been duly and validly authorized for issuance by
the Issuer and upon issuance and delivery of the Bonds and the
Warrants against payment therefor by the Purchaser, the Purchaser
shall have good and marketable title to the Bonds and the Warrants;
and the issuance of the Bonds and the Warrants in accordance with the
Terms and Conditions of the Bonds and the Terms and Conditions of the
Warrants, respectively, shall not be subject to preemptive or other
similar rights of any security holder of the Issuer.
(10) AUTHORIZATION OF THE COMMON SHARES. Upon issuance and delivery of the
Warrants in accordance with this Agreement, the Warrants will be
exercisable at the option of the holders thereof for Common Shares in
accordance with the Terms and Conditions of the Warrants; the Issuer
has available, free from preemptive rights and a third party interest
(however arising), out of its authorized but unissued Common Shares,
such number of Common Shares as would be required to be issued upon
exercise of the Warrants.
(11) ABSENCE OF PROCEEDINGS. The Issuer is not involved in any litigation,
arbitration or administrative proceedings, and the Issuer is not aware
of any pending or threatened litigation, arbitration or administrative
proceedings, relating to claims or amounts which are material in the
context of the issue of the Bonds and the Warrants by the Issuer.
(12) TAXES. The Issuer has duly, timely, correctly and properly filed all
tax returns required to be filed by it and has paid all taxes and
duties that are due and payable, other than those disclosed in
writing. It has paid all assessments and reassessments and all other
taxes, governmental charges, penalties, surcharge interest and fines
due and payable by it. There are no actions, suits, proceedings,
investigations or claims now threatened or pending against the Issuer
in respect of taxes, duties, governmental charges or assessments, nor
any matters under discussion with any governmental authority relating
to taxes, governmental charge or assessment asserted by any such
authority.
(13) TITLE TO PROPERTIES. The Issuer has good and marketable title to all
properties and other assets owned by it, and there are no charges,
liens, encumbrances or third party rights, conditions, planning
consents, orders, regulations or other restrictions affecting any of
such properties and other assets which could or might have a material
adverse effect on the issuance of the Bonds with Warrants.
(14) LISTING OF COMMON SHARES. The Common Shares of the Issuer into which
the Warrants are or may be exercisable pursuant to the Terms and
Conditions of the Warrants are listed on the Korea Stock Exchange and
are freely tradable by any shareholder of the Common Share(s) on the
Korea Stock Exchange.
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(15) NO MATERIAL ADVERSE CHANGES. Since December 31, 1999:
(a) there has been no adverse change in the financial condition or
prospects, assets or liabilities, or operations of the Issuer,
which may have a material impact upon the transactions
contemplated hereunder;
(b) no cash dividend has been declared or paid by the Issuer;
(c) the Issuer has not incurred any additional actual or contingent
liabilities, nor are any litigations, arbitrations or
administrative proceedings now pending which relate to claims or
amounts against the Issuer which are or may be material to the
issue of the Bonds with Warrants; or
(d) the Issuer has carried on its business in the ordinary and usual
course so as to continue as a going concern and in the same
manner as previously carried on and has not entered into any
contract or commitment of an unusual or extraordinary nature.
(16) GOVERNMENT CONSENTS. All consents, authorizations, orders or approvals
of the governmental department or other regulatory authorities of or
in Korea required by the Issuer for the execution and delivery of this
Agreement and the issue and distribution of the Bonds and the Warrants
and the performance of the terms of the Bonds and the Warrants
(including the issue by the Issuer of the Common Shares on exercise of
the Warrants in the manner contemplated by Exhibit B to this
Agreement) and this Agreement have been obtained and are in full force
and effect, except for (i) a submission to a foreign exchange bank of
documents required to verify that the amount being paid conforms to
the amount required to be paid under this Agreement and the Terms and
Conditions of the Warrants pursuant to the regulations under the
Foreign Exchange Transaction Act which will be required at the time of
each payment by the Issuer under this Agreement and the Terms and
Conditions of the Warrants, (ii) the registration of the issuance of
the Bonds with the registry office of the competent Korean court
having jurisdiction over the head office of the Issuer within two
weeks after the Closing Date, (iii) the registration of the issue of
the Common Shares with the competent Korean court having jurisdiction
over the Issuer, which will be made after the issue of the Common
Shares on exercise of the Warrants, and (iv) the report to the
Financial Supervisory Commission of Korea and the Korea Stock Exchange
on the exercise of the Warrants, as a result of which not less than
one-hundredth (1/100) of the total issued shares of the Issuer are
issued per month.
(17) NO DEFAULT. No event has occurred and is continuing in relation to the
Issuer which would constitute (after the issue of the Bonds with
Warrants) an event of default under the Terms and Conditions of the
Bonds or which, with the giving of notice or the lapse of time or
other condition would (after the issue of the Bonds with Warrants)
constitute an event of default.
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5. UNDERTAKINGS BY THE ISSUER
The Issuer undertakes and covenants with the Purchaser that: it will
(1) bear and pay any stamp or other duties or taxes on or in connection
with the issue and delivery of the Bonds and Warrants and the
execution and delivery of this Agreement and any value added or other
such tax payable in connection with the amounts payable or allowed
under this Agreement and otherwise in connection with the transactions
envisaged by this Agreement.
(2) not, between the date hereof and the Closing Date (both dates
inclusive), take any action or decision which (had the Warrants
already been issued) would result in an adjustment to the Subscription
Price under the terms of the Warrants.
(3) indemnify the Purchaser and its directors, officers, employees and
controlling persons (each an "Indemnified Person") against any losses,
liabilities, costs, claims, actions, damages, expenses or demands
which any of them may incur, or which may be made against any of them,
as a result of or in relation to any actual or alleged
misrepresentation in, or actual or alleged breach of, any of the above
representations and warranties by the Issuer, and will reimburse any
such person for all costs, charges and expenses which they may pay or
incur in connection with investigating, disputing or defending any
such action or claim. Each Indemnified Person shall give prompt notice
to the Issuer of any action commenced against it in respect of which
indemnity may be sought under this Agreement.
(4) not, between the date hereof and the Closing Date (both dates
inclusive), make any public statement or announcement, or
communications to the press, on any matter associated with, or
disclosing any information in relation to the Bonds and the Warrants
without prior written consent of the Purchaser, except that such
public statement, announcement or communications required by any laws
and regulations shall not be subject to such consent requirement.
(5) forthwith notify the Purchaser of any material change affecting any of
the representations and warranties by the Issuer (set forth in Section
4) at any time before payment is made to the Issuer on the Closing
Date and that it will take those steps which may be reasonably
requested by the Purchaser to remedy and/or publicize such material
change(s). Upon any material breach of any of the representations and
warranties (set forth in Section 4) inaccurate in a material respect
coming to the notice of the Purchaser before payment being made to the
Issuer on the Closing Date, the Purchaser shall be entitled (but not
bound) by notice to the Issuer to elect to treat such breach or change
as (except as otherwise specifically provided) releasing and
discharging the Purchaser from its obligations under this Agreement.
(6) will use its best efforts to maintain the listing of the Common Shares
into which
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the Warrants are or may be exercisable pursuant to the Terms and
Conditions of the Warrants on the Korea Stock Exchange and the free
tradability of the Common Shares on the Korea Stock Exchange.
6. CONDITIONS TO CLOSING
The obligations of the Purchaser under this Agreement are subject to the
fulfillment to the satisfaction of the Purchaser, prior to or at the
Closing, of each of the following conditions precedent:
(1) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Issuer shall be true and correct in all material respects as of
the date when made and as of the Closing Date as though made at that
time (except for representations and warranties that speak as of a
specific date).
(2) PERFORMANCE OF OBLIGATIONS. The Issuer shall have performed all of its
obligations under this Agreement to be performed on or before the
Closing Date.
(3) CERTIFICATES. The Issuer shall have delivered to the Purchaser
certificates representing the Bonds to be acquired hereunder in the
form attached as Schedule 1 to Exhibit A to this Agreement and
certificates representing the Warrants to be acquired hereunder in the
form attached as Schedule 1 to Exhibit B to this Agreement.
(4) REGISTER OF BONDHOLDERS AND REGISTER OF WARRANTHOLDERS. The Issuer
shall have delivered to the Purchaser a certified copy of the Register
of Bondholders (as defined in Condition 1.2 of the Terms and
Conditions of the Bonds) and a certified copy of the Register of
Warrantholders (as defined in Condition 1.1 of the Terms and
Conditions of the Warrants).
(5) CERTIFICATE OF ISSUER. The Issuer shall have delivered to the
Purchaser a certificate of an authorized officer of the Issuer,
substantially in the form attached hereto as Exhibit C to this
Agreement, dated as of the Closing Date and the documents listed in
such a certificate.
(6) GOVERNMENTAL FILINGS. The Issuer shall have made all filings under all
applicable Korean laws and regulations and obtained all consents and
approvals necessary to consummate the issuance of the Bonds and the
Warrants pursuant to this Agreement in compliance with such laws and
shall have made such other filings and obtained all such consents and
approvals necessary to consummate the transactions contemplated by the
Agreement.
7. NON WAIVER; OTHER REMEDIES
Failure of any party to insist upon the strict and punctual performance of
any provision
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hereof shall not constitute waiver of the right to require such
performance, nor shall a waiver in one case constitute a waiver with
respect to a later case whether of similar nature or otherwise. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
8. UNENFORCEABLE TERMS
In the event any term or provision of this Agreement is for any reason
found invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect the validity of any
remaining portion, which shall remain in full force and effect as if the
invalid portion was never a part of this Agreement when it was executed. If
the severance of any such part of this Agreement materially affects any
rights and obligations of the parties hereunder, the parties hereto will
negotiate in good faith to amend this Agreement in a manner satisfactory to
the parties. If there is no agreement on such amendment, any party may, by
notice in writing, terminate this Agreement forthwith, but in any event
before the Closing Date.
9. GOVERNING LAW AND JURISDICTION.
This Agreement shall be governed by, and construed in accordance with, the
laws of Korea. Each of the parties hereto irrevocably consents and agrees
that any legal action, suit or proceeding against it with respect to its
obligations, liabilities or any other matter arising out of or in
connection with this Agreement or the transaction contemplated hereby may
be brought in the courts of Korea until all amounts due and to become due
in respect of this Agreement have been paid, or until any such legal
action, suit or proceeding commenced prior to such payment has been
concluded.
10. TERMINATION
(1) TERMINATION OF AGREEMENT. This Agreement may be terminated (a) by
mutual written agreement of the Purchaser and the Issuer, or (b) by
the Purchaser by written notice to the Issuer, if the conditions set
forth in Section 6 hereof shall not have been complied with or
performed or the Issuer shall have breached any of its representations
and warranties, undertakings or agreements contained herein.
(2) EFFECT OF TERMINATION. In the event that this Agreement shall be
terminated pursuant to Section 10(1), all further obligations of the
parties hereto under this Agreement shall terminate without further
liability or obligation of either party to the other party hereunder,
except for the liability of the Issuer in relation to expenses as
provided in Section 3 and except for any liability arising before or
in elation to such termination.
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11. ASSIGNABILITY
This Agreement and each and every covenant, term and condition hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, devisees and successors, and the rights and obligations
hereunder may not be assigned to a third party.
12. NOTICES
(1) ADDRESSES. Any notices given hereunder shall be in writing and shall
be served by hand or by being sent by facsimile transmission or
prepaid post to the following addresses and numbers:
To the Issuer: Shinsung Eng Co., Ltd.
▇▇▇-▇, ▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇-▇▇,
▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
Fax: ▇▇-▇-▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇, Manager
To the Purchaser: PRI Automation Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
▇.▇.▇.
Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Director
(2) METHOD OF NOTICE. Any such notice shall be deemed to be served at the
time of delivery (if delivered by hand), at the time of transmission
(if served by facsimile) or on the fifth business day immediately
after the date of posting (if served by prepaid post). Evidence that
the notice was properly addressed, stamped and put into the post shall
be conclusive evidence of posting. Without prejudice to the
effectiveness thereof, a notice served by facsimile shall be confirmed
promptly in writing delivered by hand or sent by prepaid post.
(3) PERIOD OF NOTICE. Any party may by seven days' prior written notice
served aforesaid change the address or facsimile number for service
referred to above.
(4) LANGUAGE. All notices hereunder shall be made in the English language
or shall be accompanied by an English translation thereof certified by
an officer of the person giving or making the same as being a true and
accurate translation thereof.
13. LANGUAGE AND COUNTERPARTS
This Agreement is written in the English language and may be executed in
any number of
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counterparts, each of which shall be deemed an original all of which taken
together shall constitute one instrument. The English language text of this
Agreement shall prevail over any translation thereof.
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IN WITNESS WHEREOF, the Purchaser and the Issuer have caused this Agreement to
be duly executed as of the date first written above.
ISSUER
SHINSUNG ENG CO., LTD.
By: /s/ ▇.▇. ▇▇▇
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Name: ▇▇▇ ▇▇▇▇ ▇▇▇
Title: President
PURCHASER
PRI AUTOMATION INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
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EXHIBIT A
TERMS AND CONDITIONS OF THE BONDS
The US$10,855,000 Zero Coupon Bonds due 2010 (the "Bonds") of Shinsung Eng Co.,
Ltd. (the "Issuer") are issued with warrants (the "Warrants") to subscribe for
common shares of the Issuer. The issue of the Bonds was authorized by
resolutions of the Board of Directors of the Issuer passed on November 30, 2000.
The Bonds are constituted by these Terms and Conditions (the "Terms and
Conditions") and the Subscription Agreement dated November 30, 2000. Copies of
these Terms and Conditions are available for inspection by the Bondholders (as
defined hereinbelow) during the normal business hours at the specified office of
the Issuer. All Bondholders are entitled to the benefit of, are bound by, and
are deemed to have notice of, all the provisions of the Terms and Conditions.
1. STATUS, FORM, DENOMINATION, TITLE, TRANSFER OF BONDS AND ISSUE OF
CERTIFICATES
1.1. Status
The Bonds constitute direct and unsubordinated and unsecured obligations of
the Issuer and rank pari passu among themselves and (subject as aforesaid
and other than any obligations preferred by mandatory provisions of law)
with all other present and future direct and unsecured and unsubordinated
obligations of the Issuer.
1.2. Form and Denomination
The Bonds are issued in registered form in the denomination of US$5,000 and
integral multiples thereof. The Bondholder may at its discretion exchange a
certificate representing the Bonds the form of which is set out in Schedule
1 (the "Certificate") in the denomination of an integral multiple of
US$5,000 for certificates in smaller integral multiples thereof at any time
thereafter, and the Issuer will issue or cause to be issued such
certificates in accordance with Condition 1.5. Each Certificate will have
the name
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of the Bondholder and an identifying number which will be recorded in the
Register of Bondholders (the "Register of Bondholders") to be kept by the
Issuer.
1.3. Title
The holder of any Bond will (except as otherwise required by law) be
treated as its absolute owner for all purposes (whether or not it is
overdue and regardless of any notice of ownership, trust or any interest in
it or any writing on, or the theft or loss of, the Certificate issued in
respect of it) and no person will be liable for so treating the holder. In
these Conditions, "Bondholder", (in relation to ▇▇▇▇) "holder" or
"Holder(s)" means the person(s) in whose name a Bond is registered in the
Register of Bondholders.
1.4. Transfers
A Bond may be transferred to the transferees by (i) depositing the
Certificate issued in respect of that Bond, together with the Form of
Transfer (in the form set out in Schedule 2) duly completed and signed, at
the specified office of the Issuer as set forth in the Certificate, (ii)
the Issuer's delivery of new Certificates to the respective transferee in
accordance with Condition 1.5 below, and (iii) the Issuer's registration of
such transfer in the Register of Bondholders and recording of the name of
the transferee of the Bonds on the relevant new Certificate.
1.5. Delivery of New Certificates
Each new Certificate to be issued upon the exchange request of the
Bondholder or upon a transfer of Bonds in accordance with Condition 1.4
will, within 14 business days of receipt by the Issuer, as the case may be,
of the appropriately written request for the exchange or the Form of
Transfer together with the relevant Certificate, be mailed by reputable
international courier service to the address of such holder of the Bonds
appearing on the Register of Bondholders or the address of such transferee
of the Bonds appearing in the Form of Transfer, as the case may be. For the
purpose of this Condition 1.5, "business day" shall mean a day on which
banks are open for business in Seoul. Where only a certain portion of the
Bonds in respect of which a Certificate is issued is to be transferred or
converted, a new Certificate in respect of the Bonds not so transferred or
converted will, within 14 business days of deposit of the Form of Transfer
or Conversion
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Notice together with the original Certificate, as the case may be, with or
to the Issuer, be mailed by reputable international courier service to the
address in the Register of Bondholders of such transferring or converting
holder of the Bonds.
1.6. Formalities Free of Charge
The exchange of Certificates and the transfer of Bonds will be effected
without charge by or on behalf of the Issuer.
1.7. Closed Periods
No Bondholder may require the exchange of Certificates or the transfer of a
Bond to be registered during the period of fifteen (15) days ending on and
including the Principal Record Date (as defined in Condition 2).
2. PAYMENTS
2.1. Principal and Early Redemption Amounts
Payments of principal and early redemption amounts in respect of the Bonds
will be made by telegraphic transfer to the registered account of the
Bondholder shown on the Register of Bondholders at the close of business on
the fifteenth day before the due date for the payment of principal or early
redemption amount (the "Principal Record Date"). Payments of principal and
early redemption amounts will only be made against surrender of the
relevant Certificate at the specified office of the Issuer.
2.2. Registered Accounts
For the purposes of this Condition 2, a Bondholder's "registered account"
means the U.S. dollar account maintained by or on behalf of it with an
internationally reputable bank in Seoul or, at the Bondholder's discretion,
New York, NY, details of which appear on the Register of Bondholders at the
close of business on the Principal Record Date.
2.3. Delay in Payment
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Bondholders will not be entitled to any interest or other payment for any
delay after the due date in receiving the amount due if the due date is not
a business day (and the amount due is received on the next following
business day) or if the Bondholder is late in surrendering its Certificate
(if required to do so).
2.4. Non-business Days
If the due date for payment of any amount in respect of any Bond (or any
later date on which a Bond could otherwise be presented for payment) is not
at any place of payment a business day, then the holder of the relevant
Bond shall not be entitled to payment at that place of payment of the
amount due until the next following business day at that place of payment
and shall not be entitled to any further payment in respect of such delay.
In this Condition "business day" means any day on which banks are open for
business in the relevant place of payment and (in the case of payment by
transfer to a U.S. dollar account as referred to above) on which dealings
in foreign currency are carried on both in Seoul and in such place of
payment.
3. REDEMPTION, PURCHASE AND CANCELLATION
3.1. Redemption on the Maturity Date
Unless previously redeemed or purchased and in each case cancelled as
herein provided, the Issuer will redeem the Bonds at their principal amount
on December 6, 2010 (the "Maturity Date").
3.2. Purchases
The Issuer may at any time and from time to time purchase Bonds at any
price in the open market or otherwise. Such Bonds may, at the option of the
Issuer, be held, resold or canceled.
3.3. Cancellation
15
All Bonds which are converted or purchased as provided in paragraph 3.2.
above and surrendered to the Issuer for cancellation will forthwith be
canceled. All Bonds canceled may not be reissued or resold.
4. TAXATION
All payments in respect of the Bonds by the Issuer will be made without
deduction of or withholding for or on account of any present or future
taxes, duties, assessments or governmental charges of whatever nature
imposed or levied by or on behalf of Korea or any political subdivision
thereof or any authority thereof or therein having power to tax, unless
deduction or withholding of such taxes, duties, assessments or governmental
charges is compelled by law. In that event, the Issuer will pay such
additional amounts as will result (after such deduction or withholding) in
the receipt by the Bondholders of the amounts which would otherwise have
been receivable (in the absence of such deduction or withholdings) except
that no such additional amount shall be payable in respect of any Bond
presented for payment:-
(a) to a holder who is subject to such taxes, duties, assessments or
governmental charges in respect of such Bond by reason of his being
connected with Korea (or any political subdivision thereof) otherwise
than merely by holding the Bond or by the receipt of any payment in
respect of any Bond; or
(b) (if surrender of the relevant Certificate is a condition to payment)
where the Certificate in respect of such ▇▇▇▇ is surrendered more than
30 days after the relevant date except to the extent that the holder
thereof would have been entitled to such additional amount on
surrendering the relevant Certificate for payment on the last day of
such 30 day period, assuming, whether or not it is in fact the case,
such last day to be a business day.
For this purpose the "relevant date" in relation to any payment means the
due date for that payment thereof.
Reference in these Conditions to principal or redemption amount shall be
deemed also to refer to any additional amounts which may be payable under
this Condition.
16
5. COVENANTS
5.1. Books of Account
The Issuer will keep proper books, records and other documentation of
account and, at any time after the occurrence of an Event of Default, so
far as permitted by applicable law, allow each Holder and anyone appointed
by such ▇▇▇▇▇▇(s) to whom the Issuer has no reasonable objection, access to
the books, records and other documentation of account of the Issuer at all
reasonable times during normal business hours;
5.2. Notice of Events of Default
So long as any Bonds are outstanding, the Issuer will notify each Holder in
writing immediately on becoming aware of the occurrence of any Event of
Default.
6. EVENTS OF DEFAULT
If any of the following events occurs and is continuing, the Required
Holder(s) may give notice in writing to the Issuer that the Bonds are
immediately due and payable:
(A) a default is made in the payment of any amount due in respect of any
of the Bonds, when and as the same ought to be paid in accordance with
these Conditions and such default continues for the period of 14 days; or
(B) a default is made in any material respect by the Issuer in the
performance or observance of any covenant, condition or provision contained
in the Bonds and on its part to be performed or observed (other than the
covenant to pay any amount due in respect of any of the Bonds) and such
default continues for the period of 30 days next following the service by
the Required Holder(s) on the Issuer of notice requiring such default to be
remedied; or
(C) a resolution is passed or an order of a court of competent
jurisdiction is made that the Issuer be wound up or dissolved otherwise
than for the purposes of or pursuant to and followed by a consolidation,
amalgamation, merger or reconstruction the terms for which shall have
previously been notified in writing to the Bondholders; or
17
(D) an encumbrancer takes possession or a receiver is appointed for the
whole or a material part of the assets or undertaking of the Issuer; or
(E) a distress, execution or seizure before judgment is levied or enforced
upon or sued out against a part of the property of the Issuer which is
material in its effect upon the business or operations of the Issuer and is
not discharged within 30 days thereof (or such longer period as the
Required Holder(s) may consider appropriate in relation to the jurisdiction
concerned); or
(F) the Issuer (i) stops payment (within the meaning of Korean or any
other applicable bankruptcy law) or (ii) (otherwise than for the purposes
of such a consolidation, amalgamation, merger, reconstruction or voluntary
solvent winding-up or dissolution as is referred to in (C) above) ceases or
through an official action of the Board of Directors of the Issuer
threatens to cease to carry on business; or
(G) proceedings shall have been initiated against the Issuer under any
applicable bankruptcy, composition, reorganization or insolvency law; or
(H) the Issuer shall initiate or consent to proceedings relating to itself
under any applicable bankruptcy, reorganization or insolvency law or make
an assignment for the benefit of, or enter into any composition with, its
creditors; or
(I) any event occurs which under the terms of any relevant jurisdiction
has analogous effect to any of the events referred to in the foregoing
paragraphs (C) through (H).
Upon the receipt by the Issuer of such notice from the Required Holder(s),
all outstanding Bonds will immediately become due and payable at the Early
Redemption Amount together with any amount due in respect of the Bonds
according to the terms hereof.
As used in this Condition, "Required Holder(s)" shall mean at any time the
holder(s) of the Bonds holding in aggregate of more than 66.66 per cent. in
principal amount of the Bonds then outstanding;
7. CURRENCY INDEMNITY
7.1. Currency of Account and Payment
18
U.S. dollar (the "Contractual Currency") is the sole currency of account
and payment for all sums payable by the Issuer under or in connection with
these Terms and Conditions, including damages.
7.2. Extent of discharge
An amount received or recovered in a currency other than the Contractual
Currency (whether as a result of, or of the enforcement of, a judgement or
order of a court of any jurisdiction, in the winding-up or dissolution of
the Issuer or otherwise), by any Holder in respect of any sum expressed to
be due to it from the Issuer will only constitute a discharge to the Issuer
to the extent of the Contractual Currency amount which the recipient is
able to purchase with the amount so received or recovered in that other
currency on the date of that receipt or recovery (or, if it is not
practicable to make that purchase on that date, on the first date on which
it is practicable to do so).
7.3. Indemnity
If that Contractual Currency amount is less than the Contractual Currency
amount expressed to be due to the recipient under these Terms and
Conditions, the Issuer will indemnify it against any loss sustained by it
as a result. In any event, the Issuer will indemnify the recipient against
the cost of making any such purchase.
8. PRESCRIPTION
Claims in respect of the Bonds will become void unless made within 10 years
from the relevant date for payment in respect thereof.
9. ENFORCEMENT
At any time after the Bonds shall have become due and repayable, any Holder
may, at its discretion and without further notice, take such proceedings
against the Issuer as it may think fit to enforce repayment of the Bonds,
together with any amount payable in respect of the Bonds to enforce the
provisions of these Terms and Conditions.
19
10. REPLACEMENT OF CERTIFICATES
If any of the Certificates are mutilated, defaced, destroyed, stolen or
lost, they may be replaced at the specified office of the Issuer upon
payment by the claimant of such costs as may be incurred in connection
therewith and on such terms as to evidence and indemnity as the Issuer may
reasonably require. Mutilated or defaced Certificates must be surrendered
before replacements will be issued.
11. NOTICES
Any communication under these Terms and Conditions shall be in English and
made by reputable express courier service, or by fax. All such
communications to a Holder shall be made to the address as set forth with
respect to such Holder in the Register of the Bondholders.
12. GOVERNING LAW AND JURISDICTION
The Bonds are governed by, and shall be construed, in accordance with the
laws of Korea. The Issuer irrevocably consents and agrees that any legal
action, suit or proceeding against it with respect to its obligations,
liabilities or any other matter arising out of or in connection with these
Terms and Conditions or the transaction contemplated hereby may be brought
in the courts of Korea until all amounts due and to become due in respect
of these Terms and Conditions have been paid, or until any such legal
action, suit or proceeding commenced prior to such payment has been
concluded.
20
SCHEDULE 1
FORM OF CERTIFICATE OF BONDS
Identifying
Number:
SHINSUNG ENG CO., LTD.
(INCORPORATED IN THE REPUBLIC OF KOREA WITH LIMITED LIABILITY)
US$10,855,000 ZERO COUPON BONDS DUE 2010 WITH WARRANTS
TO SUBSCRIBE FOR COMMON SHARES OF SHINSUNG ENG CO., LTD.
Principal Amount of Bonds:_______________________
Name of Bondholder: _________________________
The Bonds in respect of which this Certificate is issued, the identifying
numbers of which are noted above, are in registered form and form part of the
duly authorized issue of Zero Coupon Bonds due 2010 (the "Bonds") of Shinsung
Eng Co., Ltd. (the "Issuer") in the aggregate principal amount of US$10,855,000
and constituted by the terms and conditions (the "Terms and Conditions")
attached hereto.
The Issuer hereby certifies that _________________________ is, at the date
hereof, entered in the Register of Bondholders as the holder of Bonds in the
principal amount of US$____________ (___________ United States Dollars). For
value received, the Issuer promises to pay the person who appears at the
relevant time on this Certificate and on the Register of Bondholders as holder
of the Bonds in respect of which this Certificate is issued (the "Holder") (i)
the redemption amount which shall become due and repayable in respect of the
Bonds and (ii) any other sums payable in respect of such Bonds and otherwise to
comply with the Terms and Conditions.
The Certificate is evidence of entitlement only. Title to the Bonds passes only
on due registration in the Register of Bondholders, entering the name of the
transferee in the newly issued Certificate and delivery of such new Certificate
to the transferee, and only the duly registered holder is entitled to payments
on Bonds in respect of which the new Certificate is issued.
21
The Certificate is governed by, and shall be construed in accordance with, the
laws of Korea.
Issued as of __________, 2000
SHINSUNG ENG CO., LTD.
------------------------
Name :
Title: Representative Director
22
THE SPECIFIED OFFICE OF THE ISSUER
8th Floor, ▇▇▇▇ ▇▇▇▇ ▇▇▇ Building, #▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇, ▇-▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇, ▇▇▇▇▇
(Terms and Conditions of the Bonds will be attached)
23
SCHEDULE 2
FORM OF TRANSFER
FOR VALUE RECEIVED the undersigned hereby transfers to
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)
US$10,855,000 principal amount of the Bonds in respect of which this/these
Certificate(s) is/are issued, and all rights in respect thereof.
All payments in respect of the Bonds hereby transferred are to be made (unless
otherwise instructed by the transferee) to the following account:
Name of bank:
U.S. dollar account number:
For the account of:
Dated:
Certifying Signature
Name:
--------------
Notes:
(i) The signature of the persons effecting a transfer shall
conform to any list of duly authorized specimen signatures
supplied by the registered holder or be certified by a
recognized bank, notary public or in such other manner as
the Issuer may require.
(ii) This form of transfer should be dated as of the date it is
dispatched to the Issuer.
24
EXHIBIT B
TERMS AND CONDITIONS OF THE WARRANTS
This warrant is one of a series of warrants (the "Warrants") to subscribe up to
Won 12,374,700,000 (being the equivalent of US$10,855,000 at the rate of Won
1,140.00 = US$1.00) for common shares (the "Common Shares") of Shinsung Eng Co.,
Ltd. (the "Issuer") issued in conjunction with the US$10,855,000 Zero Coupon
Bonds due 2010 of the Issuer (the "Bonds"). The issue of the Warrants was
authorized by resolutions of the Board of Directors of the Issuer passed on
November 30, 2000. The Warrants are constituted by these Terms and Conditions
(the "Terms and Conditions") and the Subscription Agreement dated November 30,
2000. Copies of these Terms and Conditions are available for inspection by the
Warrantholders (as defined hereinbelow) during the normal business hours at the
specified office of the Issuer. All Warrantholders are entitled to the benefit
of, are bound by, and are deemed to have notice of, all the provisions of the
Terms and Conditions.
1. FORM, DENOMINATION, TITLE, TRANSFER OF WARRANTS AND ISSUE OF CERTIFICATES
1.1. Form and Denomination
The Warrants are issued in registered form in the denomination of Won
5,700,000 (the "Denominated Amount"), being the equivalent of US$5,000 at
the rate of Won 1,140.00 = US$1.00, and integral multiples thereof. The
Warrantholder may at its discretion exchange a certificate representing the
Warrants the form of which is set out in Schedule 1 (the "Certificate") in
the denomination of an integral multiple of Won 5,700,000 for certificates
in smaller integral multiples thereof at any time thereafter, and the
Issuer will issue or cause to be issued such certificates in accordance
with Condition 1.4. Each Certificate will have the name of the
Warrantholder and an identifying number which will be recorded in the
register of Warrantholders (the "Register of Warrantholders") to be kept by
the Issuer.
1.2. Title
25
The holder of any Warrant will (except as otherwise required by law) be
treated as its absolute owner for all purposes (whether or not the Issuer
shall be in default in respect of it and regardless of any notice of
ownership, trust or any interest in it or any writing on, or the theft or
loss of, the Certificate issued in respect of it) and no person will be
liable for so treating the holder. In these Conditions, "Warrantholder",
(in relation to Warrant) "holder" or "Holder(s)" means the person(s) in
whose name a Warrant is registered in the Register of Warrantholders.
1.3. Transfers
A Warrant may be transferred to the transferees by (i) depositing the
Certificate issued in respect of that Warrant, together with the Form of
Transfer (in the form set out in Schedule 2) duly completed and signed, at
the specified office of the Issuer as set forth in the Certificate (ii) the
Issuer's delivery of new Certificates to the respective transferee in
accordance with Condition 1.4 below and (iii) the Issuer's registration of
such transfer in the Register of Warrantholders and recording of the name
of the transferee of the Warrants on the relevant new Certificate.
1.4. Delivery of New Certificates
Each new Certificate to be issued upon the exchange request of the
Warrantholder or upon a transfer of Warrants in accordance with Condition
1.3 will, within 14 business days of receipt by the Issuer, as the case may
be, of the appropriately written request for the exchange or the Form of
Transfer together with the relevant Certificate, be mailed by reputable
international courier service to the address of such holder of the Warrants
appearing on the Register of Warrantholders or the address of such
transferee of the Warrants appearing in the Form of Transfer, as the case
may be. For the purpose of this Condition 1.4, "business day" shall mean a
day on which banks are open for business in Seoul. Where only a certain
portion of the Warrants in respect of which a Certificate is issued is to
be transferred or exercised, a new Certificate in respect of the Warrants
not so transferred or exercised will, within 14 business days of deposit of
the Form of Transfer or Exercise Notice together with the original
Certificate, as the case may be, with or to the Issuer, be mailed by
reputable international courier service to the address in the Register of
Warrantholders of such transferring or exercising holder of the Warrants.
26
1.5. Formalities Free of Charge
The exchange of Certificates and the transfer of Warrants will be effected
without charge by or on behalf of the Issuer.
1.6. Closed Periods
No Warrantholder may require the exchange of Certificates or the transfer
of a Warrant to be registered after the Certificate in respect of such
Warrant has been deposited for exercise pursuant to Condition 3.
2. SUBSCRIPTION RIGHT
(a) The holder for the time being of each Warrant will have the right, by
way of exercise of such Warrant (in whole and not in part only), at any
time during the Subscription Period (as defined in paragraph (b) below), to
subscribe, in the manner set forth in Condition 3 and otherwise upon the
terms of and subject to the Conditions set our below, an amount in Won
equal to the Denominated Amount for fully-paid Common Shares at a price per
Common Share (the "Subscription Price") equal to Won 3,200 or to such
adjusted Won amount as, in accordance with Condition 7, is applicable
(disregarding any retroactive adjustment not then determined, but without
prejudice to the Issuer's obligations in respect thereof) on the
Subscription Date (as defined in Condition 3(c)). The number of Common
Shares to which the holder of one or more Warrants will be entitled upon
exercise of such Warrant(s) will be calculated by dividing (i) the
Denominated Amount multiplied by the number of Warrant(s) deposited at the
same time by the same Warrantholder (the "Subscription Money") by (ii) the
Subscription Price applicable on the Subscription Date, subject as provided
in Condition 5 and without prejudice to the Issuer's obligations in respect
of any retroactive adjustment of the Subscription Price.
(b) The Subscription Period means the period commencing on (and including)
December 7, 2001 and expiring at the close of banking business in Seoul on
November 5, 2010. On the expiry of the Subscription Period, any Warrants,
which have not been exercised, will lapse and cease to be valid for any
purpose.
27
3. PROCEDURE FOR EXERCISE OF WARRANTS
(a) In order to exercise one or more Warrant(s), the Warrantholders must
pay the Subscription Money in the manner mentioned in paragraph (b) below
and fulfill the following additional conditions precedent (the "Deposit
Conditions"): -
(i) the deposit of the relevant Certificate(s) at the specified office of
the Issuer, together with a notice of exercise in respect thereof (the
"Exercise Notice") in duplicate in the form (for the time being
current) obtainable from the specified office of the Issuer duly
completed and signed by or on behalf of the Warrantholder;
(ii) the payment of, or the causing to be paid, or the provision for the
payment of, all (if any) stamp, issue or registration or other similar
taxes or duties arising on exercise of the relevant Warrant(s) in the
place in which such Warrant(s) is or are deposited for exercise
thereof or in consequence of the delivery of certificates for the
Common Shares to be issued on exercise to or to the order of a person
other than the exercising Warrantholder; and
(iii) compliance with any exchange control, fiscal or other laws or
regulations applicable to the exercise of such Warrant(s) in such
place.
Once the Deposit Conditions have been fulfilled, neither the relevant
Certificate(s) nor the relevant Exercise Notice may be withdrawn from
deposit without the consent in writing of the Issuer, but the relevant
Warrant(s) shall not be cancelled before the close of banking business in
Seoul on the Subscription Date. The day (in the country in which the
relevant Warrant(s) is or are deposited for exercise) on which the Deposit
Conditions are fulfilled, or (if fulfilled on different days) on which the
last of the Deposit Conditions is fulfilled, is referred to in these Terms
and Conditions as the "Deposit Date" applicable to such Warrant(s).
(b) The payment of the Subscription Money in relation to the relevant
Warrant(s) must be made by the exercising Warrantholder in Won to the
specified office in Seoul of the payment handling bank (the "Payment
Handling Bank"), for credit to the Special Account
28
(as defined in the relevant Exercise Notice), such payment to be made free
and net of any foreign exchange commissions, remittance charges or other
deductions and to be accompanied by a payment advice complying with the
provisions described below (the "Payment Advice").
The Payment Advice to the Payment Handling Bank must include the name of
the exercising Warrantholder and, in order to enable the Payment Handling
Bank to relate the payment received by it to the exercise of particular
Warrant(s), identify (by reference to serial numbers) the relevant
Warrant(s). If the Payment Advice fails to comply with the above
provisions, the Payment Handling Bank may, in its discretion and without
liability incurred by itself or the Issuer, refuse to recognize the
relevant payment as relating to the exercise of particular Warrant(s) and
the exercise of the relevant Warrant(s) may be delayed or frustrated
accordingly. If the amount received by the Payment Handling Bank in respect
of any exercising Warrantholder's purported payment of the Subscription
Money relating to all of the relevant Warrant(s) is less than the full
amount of such Subscription Money, the Payment Handling Bank will, provided
that such payment has otherwise been made in accordance with the
requirements set out above, treat the amounts so received as payment in
full of the Subscription Money in respect of as many of such Warrants as
the subscription Money so received will cover. In such circumstances (i)
exercise of the relevant Warrant(s) will constitute authority to the
Payment Handling Bank to select that Warrant or those Warrants in respect
of which the Subscription Money is so treated as having been paid and such
Warrant(s) shall be treated for all purposes (including for the purposes of
Condition 5) as being or having been deposited for exercise separately from
those Warrant(s) in respect of which the moneys originally received as
aforesaid by the Payment Handling Bank are not treated as payment in full
of the relevant Subscription Money, and (ii) the Payment Handling Bank
shall be entitled to recover from the exercising Warrantholders such
reasonable handling charges and such reasonable out-of-pocket expenses
incurred by it as are attributable to the non-receipt by the Payment
Handling Bank of the full amount of the Subscription Money originally
payable and to the extra work involved in receiving and applying any
subsequent payment of the deficiency.
If the Payment Handling Bank considers, in its discretion and without
liability incurred by itself or the Issuer, that no payment has been made
with regard to the exercise of particular Warrant(s) within 14 days after
the deposit of Warrant(s) pursuant to paragraph (a) above, the Issuer shall
return, upon receipt of a notice to that effect sent by the Payment
Handling
29
Bank, such Warrant(s) and the relevant Exercise Notice to the exercising
Warrantholder at the risk and expense of such Warrantholder.
(c) The relevant Warrant(s) shall be treated as exercised at the close of
banking business in Seoul on the Subscription Date. The "Subscription Date"
means (i) the business day in Seoul (being a day falling within the
Subscription Period) immediately following the deposit date, if payment of
the relevant Subscription Money (either accompanied by a Payment Advice
complying with the requirements mentioned in paragraph (b) above or
recognized by the Payment Handling Bank as relating to the exercise of the
relevant Warrant(s)) is made before the close of banking business in Seoul
on, or has been made before, such business day in Seoul or (ii) if no such
payment has been made as aforesaid, the business day in Seoul (being a day
falling after the Deposit Date but within the Subscription Period) on which
such payment is so made before the close of banking business in Seoul;
provided in each case that if such business day in Seoul is not an
international banking day in Seoul, the Subscription Date shall be the next
succeeding international banking day in Seoul, unless (in the case of (i)
above) the said payment of the relevant Subscription Money was made before
such business day in Seoul, in which event the Subscription Date shall be
such business day in Seoul. For this purpose, "business day in Seoul" means
a day on which banks are open for business in Seoul and "international
banking day in Seoul" means a business day in Seoul as of which
international money transfers are permitted to be settled in accordance
with generally recognized Korean banking practice.
(d) Subscription Money received by the Payment Handling Bank for credit to
the Special Account will be transferred out of such account to an account
of the Issuer with the specified office or any other office in Seoul of the
Payment Handling Bank on the Subscription Date relating to the relevant
Warrant(s) in payment of the Common Shares to be issued on such
Subscription Date in consequence of the exercise of such Warrant(s). If
Subscription Money is paid to the Payment Handling Bank and such payment is
not accompanied by a Payment Advice complying with the requirements
mentioned in paragraph (b) above and is not recognized by the Payment
Handling Bank as relating to the exercise of the relevant Warrant(s) and/or
the Deposit Conditions have not then been fulfilled in relation to the
exercise of such Warrant(s), such Subscription Money will remain in the
Special Account pending compliance with such requirements or recognition of
such payment and/or fulfillment of the Deposit Conditions (as the case may
be), but at the end of
30
14 days after receipt thereof by the Payment Handling Bank, or, if earlier,
at the expiry of the Subscription Period (or, if necessary in either case,
on the next international banking day in Seoul), will be returned to the
person remitting such subscription Money (after deduction of applicable
handling and remittance charges and expenses) if the Subscription Date has
not then occurred, whereupon the Issuer will, if it is possible to relate
the money so returned to any Certificate(s) previously deposited with the
Issuer, return such Certificate(s) and the relative Exercise Notice to the
exercising Warrantholder at the risk and expense of such Warrantholder. So
long as any particular Subscription Money is credited to the Special
Account and the relevant Subscription Date has not occurred, it will
continue to belong to the exercising Warrantholder but (in a case where the
Deposit Conditions have been fulfilled in relation to the exercise of the
relevant warrant(s)) may not be withdrawn within the above-mentioned 14-day
period unless the Issuer consents in writing to the withdrawal of such
Warrant(s) and Exercise Notice. Warrantholders shall not be entitled to
interest on any amount held in the Special Account.
(e) The Common Shares to be issued on exercise of any Warrant(s) shall be
deemed to have been issued at the close of banking business on the relevant
Subscription Date and the Issuer will deem the exercising Warrantholder to
have become the holder of record at the close of banking business in Seoul
on the Subscription Date of the number of Common Shares to which the
exercising Warrantholder is entitled upon exercise of the relevant
Warrant(s) (disregarding any fraction of a Common Share resulting from such
exercise, except as mentioned in Condition 5(b), and also disregarding any
retroactive adjustment of the Subscription Price pursuant to Condition 7
prior to the time such retroactive adjustment becomes effective, but
without prejudice to the Issuer's obligations in respect thereof).
The Issuer will pay all expenses, including all stamp, issue, registration
or other similar taxes or duties (if any) payable in Korea, arising on the
issue of Common Shares or the delivery of certificates therefor on exercise
of Warrant(s) (other than those taxes and duties required to be paid by the
exercising Warrantholder as mentioned in paragraph (a)(ii) above as part of
the Deposit Conditions) and all (if any) charges of the Payment Handling
Bank in connection therewith.
(f) The Issuer will, subject to any applicable limitations then imposed by
Korean laws and regulations, according to the request made in the relevant
Exercise Notice, within 21 days after the Subscription Date, register Korea
Security Depository (or its successor
31
organization) as holder of the relevant number of Common Shares in the
Issuer's shareholders' register and cause Korea Securities Depository (or
its successor organization) to credit such Common Shares to the deposit
account of the custodian designated by the exercising Warrantholder in the
relevant Exercise Notice, together with any other securities, property or
cash (including, without limitation, cash payable pursuant to this
Condition) required to be delivered upon exercise and such assignments and
other documents (if any) as may be required by law to effect the transfer
thereof.
(g) If the Subscription Date in relation to any Warrant shall be on or
after a date with effect from which any adjustment of the Subscription
Price takes retroactive effect pursuant to any of the provisions referred
to in Condition 6 and the relevant Subscription Date falls on a date when
the relevant adjustment has not yet been reflected in the then current
Subscription Price, the Issuer will procure that the provisions of this
Condition 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 exercise of such Warrant if the relevant
retroactive adjustment had been given effect as at the said Subscription
Date over the number of Common Shares previously issued pursuant to such
exercise, and in such event and in respect of such number of Common Shares,
references in this Condition to the Subscription Date shall be deemed to
refer to the date upon which such retroactive adjustment becomes effective
(disregarding the fact that it becomes effective retroactively).
4. COMMON SHARES ISSUED UPON EXERCISE OF WARRANTS
All Common Shares issued upon exercise of Warrants shall be fully-paid and
non-assessable and shall, subject to the proviso below, entitle the holders
thereof to participate in full in all dividends and other distributions
paid or made on the Common Shares the record date for which falls on or
after the relevant Subscription Date. Any dividend on the Common Shares
issued upon exercise of Warrants with respect to the Dividend Accrual
Period during or at the end of which the relevant Subscription Date falls
shall be paid for the full Dividend Accrual Period as if the Common Shares
had been issued at the beginning of such Dividend Accrual Period and such
Common Shares will in all other respects rank pari passu with the Common
Shares in issue on the relevant Subscription Date (except for any right the
record date for which precedes such Subscription Date and any other right
32
excluded by mandatory provisions of applicable law). "Dividend Accrual
Period" means an annual period ending on December 31 in any year, provided
that, if the Issuer changes its financial year so as to end on a date other
than December 31, then the foregoing period shall be deemed to have been
amended mutatis mutandis.
5. FRACTIONS
(a) No fractions of a Common Share will be issued (except as mentioned
blow) on exercise of any Warrant and, subject to the next sentence, no
refund will be made to the exercising Warrantholder in respect of that part
of the Subscription Money which represents such a fraction (if any);
provided that if more than one Warrant is exercised at the same time by the
same Warrantholder then, for the purpose of determining the number of
Common Shares issuable upon the exercise of such Warrants and whether any
(and if so what) fraction of a Common Share arises, the Denominated Amounts
of such Warrants will be aggregated. The Issuer will in respect of that
part of the Subscription Money which represents such a fraction (if any)
upon exercise of such Warrant(s) pay in cash a sum in US dollars equal to
such part only if such sum exceeds the equivalent of US$10 calculated by
reference to the exchange rate of Won 1,140.00 = US$1.00.
(b) Notwithstanding the foregoing, in the event of a consolidation or
re-classification of Common Shares or non-voting Shares by operation of law
or otherwise and of the Issuer being permitted by applicable law then in
effect to issue fractions of Common Shares upon exercise of Warrants, the
Issuer will upon exercise of Warrants issue such fractions of Common Shares
to the extent permitted by such applicable law and will deliver a
certificate or certificates therefor (and in addition to the extent, if
any, that the Issuer is not permitted by such applicable law to issue
fractions of Common Shares, a cash refund will be made in respect of a
corresponding amount of Subscription Money, but only if such corresponding
amount equals or exceeds the Won equivalent of US$10 calculated by
reference to the exchange rate of Won 1,140.00 = U.S.$1.00); provided that
if Korean law as then in effect affords to Warrantholders some alternative
right or remedy as against the Issuer (whether arising or exercisable
before or on or resulting from the exercise of Warrants), any Warrantholder
may, by notice in writing to the Issuer, elect to have the benefit of or
exercise such right or remedy in lieu of the issue of fractions of Common
Shares and to
33
receive the delivery of a certificate or certificates therefor (and the
making in addition, if applicable, of a cash refund) as aforesaid.
6. ADJUSTMENTS TO THE SUBSCRIPTION PRICE
The Subscription Price with respect to the Common Shares shall be subject to
adjustment as follows:
6.1. Free Distribution, Sub-division, Consolidation or Reclassification of
Shares.
If the Issuer shall make a free distribution of Shares, sub-divide any of
its outstanding Shares, consolidate any of its outstanding Shares into a
smaller number of Shares, or re-classify any of its Shares into other
securities of the Issuer, then the following provisions shall apply:
(1) Adjustment
the Subscription Price shall be appropriately adjusted so that the holder
of any Warrant, the Subscription Date in respect of which occurs after the
coming into effect of the adjustment described in this Condition 6.1, shall
be entitled to receive the number of Common Shares and/or other securities
of the Issuer which he would have held or have been entitled to receive
after the happening of any of the events described above had such Warrant
been exercised immediately prior to the happening of such event (or, if the
Issuer has fixed a prior Record Date for the determination of shareholders
entitled to receive any such free distribution or 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 Subscription Price
made with effect from the date of the happening of such event (or such
Record Date) or any time thereafter; and
(2) Effective Date of Adjustment
an adjustment made pursuant to this Condition 6.1 shall become effective
immediately on the relevant event referred to above becoming effective or,
if a Record Date is fixed
34
therefor, immediately after such Record Date; provided that in case where
the relevant event referred to above, under applicable Korean Law, requires
to be approved by a general meeting of shareholders of the Issuer or a
meeting of the Board of Directors of the Issuer before being legally 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.
As used in this Terms and Conditions, the "Shares" means, Common Shares,
non-voting shares of the Issuer and shares of any other class or classes
resulting from any sub-division, consolidation or re-classification
thereof.
The term "Record Date" means a date fixed by the Articles of Incorporation
of the Issuer or otherwise specified by the Issuer for the purpose of
determining entitlement to dividends or other distributions to, or rights
of, holders of Shares.
6.2. Declaration of Dividends in Shares
If the Issuer shall declare a dividend in Shares, then the following
provisions shall apply:
(1) Adjustment
the Subscription Price effective on the date when such dividend is declared
(or, if the Issuer 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:
NSP = OSP x N + v
----------
N + n
where:
NSP = the Subscription Price after such adjustment
OSP = the Subscription Price before such adjustment
N = the number of Shares outstanding (having regard to
Condition 6.13 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)
35
n = the number of Shares to be distributed to the Shareholders as a
dividend; and
v = the number of Shares which the aggregate par value of such
Shares to be distributed to the shareholders as a dividend
would purchase at the Current Market Price per Share on the
date of declaration of such dividend (or, if a prior Record
Date has been fixed as aforesaid, such Record Date).
(2) Effective Date of Adjustment
an adjustment made pursuant to this Condition 6.2 shall become effective as
provided with respect to Condition 6.1(2); provided that if a dividend in
Shares must, under applicable Korean law, be submitted for approval to a
general meeting of shareholders of the Issuer before being legally paid,
and if such approval is given 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.
6.3. Concurrent Adjustment Events
If the Issuer shall declare a dividend in, or make a free distribution of,
Shares which dividend or 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 Subscription Price pursuant to Condition 6.4, 6.5
or 6.6 below;
b) the day immediately before the date of issue of any securities
convertible into or exchangeable for Shares which requires an
adjustment of the Subscription Price pursuant to Condition 6.8 below;
c) the day immediately before the date of issue of any Shares which
requires an adjustment of the Subscription Price pursuant to Condition
6.9 below; or
36
d) the day immediately before the date of issue of any rights or warrants
which requires an adjustment of the Subscription Price pursuant to
Condition 6.10 below,
then (except where such dividend or free distribution gives rise to a
retroactive adjustment of the Subscription Price under Condition 6.1 or
6.2) no adjustment of the Subscription Price in respect of such dividend or
free distribution shall be made under Condition 6.1 or 6.2, but in lieu
thereof an adjustment shall be made under Condition 6.4, 6.5, 6.6, 6.8, 6.9
or 6.10 below (as the case may require) by including in the denominator of
the fraction described therein the aggregate number of Shares to be issued
pursuant to such dividend or free distribution and, in the case of such
dividend, including in the numerator of the fraction described therein the
number of Shares which the aggregate par value of Shares to be so
distributed would purchase at the Current Market Price per Share
(determined in accordance with Condition 6.11).
6.4. Rights Issues to Shareholders
If the Issuer shall grant, issue or offer to the holders of Shares rights
entitling them to subscribe for or purchase Shares:
(x) at a consideration per Share receivable by the Issuer which is fixed
on or prior to the Record Date mentioned below and is less than the
Current Market Price per Share at such Record Date; or
(y) at a consideration per Share receivable by the Issuer which is fixed
after the Record Date mentioned below and is less than the Current
Market Price per Share on the date the Issuer fixes the said
consideration, then the following provisions shall apply:
(1) Adjustment
the Subscription Price in effect (in a case within (x) above) on the
Record Date for the determination of shareholders entitled to receive
such rights or (in a case within (y) above) on the date the Issuer
fixes the said consideration shall be adjusted in accordance with the
following formula:
37
NSP = OSP x N + v
------
N + n
where:
NSP and OSP have the meanings ascribed thereto in Condition 6.2
above
N = the number of Shares outstanding (having regard to
Condition 6.13 below) at the close of business in Korea (in a
case within (x) above) on such Record Date or (in a case
within (y) above) on the date the Issuer fixes the said
consideration
n = the number of Shares initially to be issued upon
exercise of such rights at the said consideration
v = the number of Shares which the aggregate consideration
receivable by the Issuer (determined as provided in Condition
6.12) would purchase at such Current Market Price per Share
specified in (x) or, as the case may be, (y) above;
(2) Effective Date of Adjustment
such adjustment shall become effective (in a case falling under (x)
above) immediately after the Record Date for the determination of
shareholders entitled to receive such rights or (in a case falling
under (y) above) immediately after the Issuer fixes the said
consideration but retroactively to immediately after the Record Date
mentioned above;
(3) Rights not taken up by Shareholders
if, in connection with a grant, issue or offer to the holders of
Shares of rights entitling them to subscribe for or purchase Shares,
any Shares which are not subscribed for or purchased by the persons
entitled thereto are offered to and/or subscribed by others, no
further adjustment shall be required or made to the Subscription Price
by reason of such offer and/or subscription.
38
(4) Issues to Employees
For the avoidance of doubt, if any rights which would otherwise be the
subject of this Condition 6.4, are issued to existing employees of the
Issuer in their capacity as employees in accordance with mandatory
provisions of Korean law, then such rights shall not be taken into
account for the purposes of the adjustment of the Subscription Price
pursuant to this Condition 6.4.
6.5. Warrants Issued to Shareholders
If the Issuer shall grant, issue or offer to the holders of Shares warrants
entitling them to subscribe for or purchase Shares:
(x) at a consideration per Share receivable by the Issuer which
is fixed on or prior to the Record Date for the determination of
shareholders entitled to receive such warrants and is less than
the Current Market Price per Share at such Record Date; or
(y) at a consideration per Share receivable by the Issuer which
is fixed after the Record Date mentioned above and is less than
the Current Market Price per Share on the date the Issuer fixes
the said consideration, then the following provisions shall
apply:
(1) Adjustment
the Subscription Price in effect (in a case within (x) above) on the
Record Date for the determination of shareholders entitled to receive
such warrants or (in a case within (y) above) on the date the Issuer
fixes the said consideration shall be adjusted in accordance with the
following formula:
NSP = OSP x N + v
-----
N + n
where:
NSP and OSP have the meanings ascribed thereto in Condition 6.2 above
39
N = the number of Shares outstanding (having regard to
Condition 6.13 below) at the close of business in Korea (in a
case within (x) above) on such Record Date or (in a case
within (y) above) on the date the Issuer fixes the said
consideration
n = the number of Shares initially to be issued upon exercise of
such warrants at the said consideration
v = the number of Shares which the aggregate consideration
receivable by the Issuer (determined as provided in Condition
6.12) would purchase at such Current Market Price per Share
specified in (x) or, as the case may be, (y) above;
(2) Effective Date of Adjustment
such adjustment shall become effective (in a case falling under (x)
above) immediately after the Record Date for the determination of
shareholders entitled to receive such warrants or (in a case falling
under (y) above) immediately after the Issuer fixes the said
consideration but retroactively to immediately after the Record Date
mentioned above;
(3) Warrants not taken up by Shareholders
if, in connection with a grant, issue or offer to the holders of
Shares of warrants entitling them to subscribe for or purchase Shares,
any Shares which are not subscribed for or purchased by the persons
entitled thereto are offered to and/or subscribed by others, no
further adjustment shall be required or made to the Subscription Price
by reason of such offer and/or subscription.
(4) Issues to Employees
For the avoidance of doubt, if any warrants which would otherwise be
the subject of this Condition 6.5, are issued to existing employees of
the Issuer in their capacity as employees in accordance with mandatory
provisions of Korean law, then such warrants shall not be taken into
account for the purposes of the adjustment of the Subscription Price
pursuant to this Condition 6.5.
6.6. Issues of Rights or Warrants for Convertible or Exchangeable Securities to
Shareholders
40
If the Issuer shall grant, issue or offer to the holders of Shares rights
or warrants entitling them to subscribe for or purchase any securities
convertible into or exchangeable for Shares:
(x) at a consideration per Share receivable by the Issuer which is fixed
on or prior to the Record Date mentioned below and is less than the
Current Market Price per Share at such Record Date; or
(y) at a consideration per Share receivable by the Issuer which is fixed
after the Record Date mentioned below and is less than the Current
Market Price per Share on the date the Issuer fixes the said
consideration, then the following provisions shall apply:
(1) Adjustment
the Subscription Price in effect (in a case within (x) above) on the
Record Date for the determination of shareholders entitled to receive
such rights or warrants or (in a case within (y) above) on the date
the Issuer fixes the said consideration shall be adjusted in
accordance with the following formula:
NSP = OSP x N + v
-----
N + n
where:
NSP and OSP have the meanings ascribed thereto in Condition 6.2 above
N = the number of Shares outstanding (having regard to
Condition 6.13 below) at the close of business in Korea (in a
case within (x) above) on such Record Date or (in a case
within (y) above) on the date the Issuer fixes the said
consideration
n = the number of 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.
41
v = the number of Shares which the aggregate consideration
receivable by the Issuer (determined as provided in Condition
6.12 below) would purchase at such Current Market Price per
Share specified in (x) or, as the case may be, (y) above;
(2) Effective Date of Adjustment
such adjustment shall become effective (in a case falling under (x)
above) immediately after the Record Date for the determination of
shareholders entitled to receive such rights or warrants or (in a case
falling under (y) above) immediately after the Issuer fixes the said
consideration but retroactively to immediately after the Record Date
mentioned above;
(3) Rights or Warrants not taken up by Shareholders
if, in connection with a grant, issue or offer to the holders of
Shares of rights or warrants entitling them to subscribe for or
purchase Shares, any Shares which are not subscribed for or purchased
by the persons entitled thereto are offered to and/or subscribed by
others, no further adjustment shall be required or made to the
Subscription Price by reason of such offer and/or subscription.
(4) Issues to Employees
For the avoidance of doubt, if any rights or warrants which would
otherwise be the subject of this Condition 6.6, are issued to existing
employees of the Issuer in their capacity as employees in accordance
with mandatory provisions of Korean law, then such rights or warrants
shall not be taken into account for the purposes of the adjustment of
the Subscription Price pursuant to this Condition 6.6.
6.7. Other distributions to Shareholders
If the Issuer shall distribute to the holders of Shares evidence of its
indebtedness, shares of capital stock of the Issuer (other than Shares),
assets (excluding annual cash dividends) or rights or warrants to subscribe
for or purchase shares or securities (excluding those rights and warrants
referred to in Conditions 6.4, 6.5 and 6.6 above), then the following
provisions shall apply:
42
(1) Adjustment
the Subscription 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:
NSP = OSP x CMP - fmv
---------
CMP
where:
NSP and OSP have the meanings ascribed thereto in Condition 6.2 above
CMP = the Current Market Price per Share on the Record Date
for the determination of shareholders entitled to receive such
distribution fmv = the fair market value (as determined by the
Issuer or, if pursuant to applicable Korean 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
evidence of indebtedness, shares, assets, rights or warrants
so distributed applicable to one Share less any consideration
payable for the same by the relevant shareholder
In making a determination of the fair market value of any such
rights or warrants, the Issuer shall consult a leading
independent securities Issuer or bank in Seoul selected by the
Issuer and shall take fully into account the advice received
from such Issuer or bank;
(2) Effective Date of Adjustment
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 applicable Korean law, be submitted for approval to
a general meeting of shareholders or be approved by a meeting of the
Board of Directors of the Issuer 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
43
of the evidence 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 to immediately
after such Record Date; and
(3) Issues to Employees
for the avoidance of doubt, if a portion of the rights or warrants to
subscribe for or purchase shares or securities which would otherwise
be subject of this Condition 6.7 is issued to and applied or
subscribed for by existing employees of the Issuer in their capacity
as employees in accordance with mandatory provisions of Korean law,
then such portion of the rights or warrants issued and applied or
subscribed for shall not be taken into account for the purposes of the
adjustment of the Subscription Price pursuant hereto.
6.8. Issue of convertible or exchangeable securities
If the Issuer shall issue any securities convertible into or exchangeable
for Shares (other than the Warrants or in any of the circumstances
described in Condition 6.6 above and Condition 6.10 below) and the
consideration per Share receivable by the Issuer shall be less than the
Current Market Price per Share on the date in Korea on which the Issuer
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 Issuer fixes the consideration to be
recommended at such meeting), then the following provisions shall apply:
(1) Adjustment
the Subscription 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:
NSP = OSP x N + v
-----
N + n
where:
44
NSP and OSP have the meanings ascribed thereto in Condition 6.2 above
N = the number of Shares outstanding (having regard to
Condition 6.13 below) at the close of business in Korea on the
day immediately prior to the date of such issue
n = the number of 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 Shares which the aggregate consideration
receivable by the Issuer (determined as provided in Condition
6.12 below) would purchase at such Current Market Price per
Share; and
(2) Effective Date of Adjustment
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.
(3) Issues to Employees
for the avoidance of doubt, if a portion of the securities convertible
into or exchangeable for Shares which would otherwise be subject of
this Condition 6.8 are issued to and applied or subscribed for by
existing employees of the Issuer in their capacity as employees in
accordance with mandatory provisions of Korean law, then such portion
of the securities convertible into or exchangeable for Shares issued
and applied or subscribed for shall not be taken into account for the
purposes of the adjustment of the Subscription Price pursuant hereto.
6.9. Other issues of Shares
If the Issuer shall issue any Shares (other than Shares issued upon
conversion or exchange of any convertible or exchangeable securities issued
by the Issuer or upon exercise of any rights or warrants granted, offered
or issued by the Issuer or in any of the circumstances described in
Conditions 6.1 and 6.2 above or issued to shareholders of any Issuer which
merges with the Issuer in proportion to their shareholdings in such Issuer
immediately prior
45
to such merger, upon such merger) for a consideration per Share receivable
by the Issuer less than the Current Market Price per Share on the date in
Korea on which the Issuer fixes the said consideration (or, if the issue of
such Shares is subject to approval by a general meeting of shareholders, on
the date on which the Board of Directors of the Issuer fixes the
consideration to be recommended at such meeting), then the following
provisions shall apply:
(1) Adjustment
the Subscription Price in effect immediately prior to the date
of issue of such additional Shares shall be adjusted in
accordance with the following formula:
NSP = OSP x N + v
-----
N + n
where:
NSP and OSP have the meanings ascribed thereto in Condition 6.2 above
N = the number of Shares outstanding (having regard to
Condition 6.13 below) at the close of business in Korea on the
day immediately prior to the date of issue of such additional
Shares
n = the number of additional Shares issued as aforesaid
v = the number of Shares which the aggregate consideration
receivable by the Issuer (determined as provided in Condition
6.12 below) would purchase at such Current Market Price per
Share; and
(2) Effective Date of Adjustment
such adjustment shall become effective as of the calendar day in Korea
of the issue of such additional Shares.
(3) Issues to Employees
for the avoidance of doubt, if a portion of the Shares which would
otherwise be the subject of this Condition 6.9 is issued to and
applied or subscribed for by existing employees of the Issuer in their
capacity as employees in accordance with
46
mandatory provisions of Korean law, then such portion of the Shares
issued and applied or subscribed for shall not be taken into account
for the purposes of the adjustment of the Subscription Price pursuant
hereto.
6.10. Issue of Rights or Warrants for Shares or Convertible or Exchangeable
Securities other than to Shareholders
If the Issuer shall grant, issue or offer rights or warrants to subscribe
for or purchase Shares or securities convertible into or exchangeable for
Shares (other than any rights or warrants granted, issued or offered to
the holders of Shares and to and accepted by existing employees of the
Issuer in their capacity as employees in accordance with the mandatory
provisions of Korean law) and the consideration per Share receivable by
the Issuer shall be less than the Current Market Price per Share on the
date in Korea on which the Issuer fixes the said consideration (or, if the
issue of such Shares is subject to approval by a general meeting of
shareholders, on the date on which the Board of Directors of the Issuer
fixes the consideration to be recommended at such meeting), then the
following provisions shall apply:
(1) Adjustment
the Subscription Price in effect immediately prior to the date of
issue of such rights or warrants shall be adjusted in accordance with
the following formula:
NSP = OSP x N + v
-----
N + n
where:
NSP and OSP have the meanings ascribed thereto in Condition 6.2 above
N = the number of Shares outstanding (having regard to
Condition 6.13 below) at the close of business in Korea on the
day immediately prior to the date of such issue
n = the number of Shares issued on exercise of such rights or
warrants and (if applicable) conversion or exchange of such
convertible or exchangeable securities at the said
consideration
47
v = the number of Shares which the aggregate consideration
receivable by the Issuer (determined as provided in Condition
6.12 below) would purchase at such Current Market Price per
Share; and
(2) Effective Date of Adjustment
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.
(3) Issues to Employees
for the avoidance of doubt, if a portion of the rights or warrants for
Shares or securities convertible into or exchangeable for Shares which
would otherwise be the subject of this Condition 6.10 is issued to and
applied or subscribed for by existing employees of the Issuer in their
capacity as employees in accordance with mandatory provisions of
Korean law, then such portion of the rights or warrants for Shares or
securities convertible into or exchangeable for Shares issued and
applied or subscribed for shall not be taken into account for the
purposes of the adjustment of the Subscription Price pursuant hereto.
6.11. Current Market Price per Share
For the purposes of this Condition 6, the Current Market Price per Share
on any date shall be deemed to be the average of the daily closing prices
of the relevant Shares for the 5 consecutive trading days commencing 20
trading days before such date. The closing price of the Shares for each
trading day shall be the last reported selling price of the Shares on the
Korea Stock Exchange for such day or, if no sale takes place on such day,
the average of the closing bid and offered price of the Shares on the
Korea Stock Exchange or, if the Shares are not listed or admitted to
trading on such exchange, the average of the closing bid and offered price
of Shares for such day as furnished by an independent member firm of the
Korea Stock Exchange selected from time to time by the Issuer for the
purpose. This Condition 6.11 shall be subject to the following provisions.
For the purposes of this Condition 6.11., the term "trading day" means a
day when the Korea Stock Exchange is open for business, but does not
include a day when (a) no such last selling price or closing bid and
offered prices is/are reported and (b) (if the Shares are not listed or
admitted to
48
trading on such exchange) no such closing bid and offered prices are
furnished as aforesaid. If during the said 20 trading days or any period
thereafter up to but excluding the date as of which the adjustment of the
Subscription 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 Subscription Price under the
provisions of this Condition 6, then the Current Market Price per Share as
determined above shall be adjusted in such manner and to such extent as a
leading independent securities Issuer or bank in Seoul selected by the
Issuer shall in its absolute discretion deem appropriate and fair to
compensate for the effect thereof.
6.12. Consideration Receivable by the Issuer
For the purposes of any calculation of the Consideration per Share, or the
aggregate consideration, receivable by the Issuer pursuant to Conditions
6.4, 6.5, 6.6, 6.8, 6.9 and 6.10 above, the following provisions shall be
applicable:
(A) in the case of the issue of Shares for cash, the consideration shall
be the amount of such cash, provided that in no such case shall any
deduction be made for any commissions or any expenses paid or incurred by
the Issuer for any underwriting of the issue or otherwise in connection
therewith;
(B) in the case of the issue of 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 the Issuer (and in making
such determination the Issuer shall consult a leading independent
securities Issuer or bank in Seoul selected by the Issuer and shall take
fully into account the advice received from such Issuer or bank) or, if
pursuant to applicable Korean law 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
Shares, the aggregate consideration receivable by the Issuer shall be
deemed to be the consideration received by the Issuer for such securities
and (if applicable) rights or warrants plus the additional consideration
(if any) to be received by the Issuer upon (and assuming) the conversion
or exchange of such securities at the initial conversion or exchange price
or rate and (if applicable) the exercise
49
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 Condition 6.12 (A) and 6.12 (B) above) and the Consideration
per Share receivable by the Issuer shall be such aggregate consideration
divided by the number of 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;
(D) in the case of the issue of rights or warrants to subscribe for or
purchase Shares, the aggregate consideration receivable by the Issuer
shall be deemed to be the consideration received by the Issuer for any
such rights or warrants plus the additional consideration to be received
by the Issuer 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 Condition 6.12 (A)
and 6.12 (B) above) and the Consideration per Share receivable by the
Issuer shall be such aggregate consideration divided by the number of
Shares to be issued upon (and assuming) the exercise of such rights or
warrants at the initial subscription or purchase price; and
(E) if any of the consideration referred to in any of the preceding
sub-Conditions of this Condition 6.12 is receivable in a currency other
than Won, such consideration shall (in any case where there is a fixed
rate of exchange between the Won and the relevant currency for the
purposes of the issue of the Shares, the conversion or exchange of such
securities or the exercise of such rights or warrants) be translated into
Won for the purposes of this Condition 6.12 at such fixed rate of exchange
and shall (in all other cases) be translated into Won at the market
average exchange rate between Won and the relevant currency (being
announcements for the cross rate through dollars if no direct exchange
rate is announced) announced by Korea Financial Telecommunications &
Clearings Institute for buying and selling units of the relevant currency
against Won on the date as of which the said consideration is required to
be calculated as aforesaid.
6.13. Cumulative Adjustments
If, at the time of computing an adjustment (the "later adjustment") of the
Subscription Price pursuant to any of Conditions 6.2, 6.4, 6.5, 6.6, 6.8,
6.9 and 6.10 above, the Subscription Price already incorporates an
adjustment made (or taken or to be taken into account pursuant to the
proviso to Condition 6.14 below) to reflect an issue of Shares or of
securities convertible into or exchangeable for Shares or of rights or
warrants to subscribe for or
50
purchase Shares or securities, to the extent that the number of such
Shares taken into account for the purposes of calculating such adjustment
exceeds the number of such Shares in issue at the time relevant for
ascertaining the number of outstanding Shares for the purposes of
computing the later adjustment, such Shares shall be deemed to be
outstanding for the purpose of making such computation.
6.14. Minor Adjustments
No adjustment of the Subscription Price shall be required unless such
adjustment would require an increase or decrease in such price of at least
Won 100; PROVIDED that any adjustment which by reason of this Condition
6.14 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 Condition 6.14) in any
subsequent adjustment. All calculations under this Condition 6 shall be
made to the nearest Won with half or more of a Won to be considered one
Won.
6.15. Minimum Subscription Price
Notwithstanding the provisions of this sub-Condition, the Subscription
Price shall not be reduced to less than the par value of the Common Shares
(Won 500 at the date hereof) as a result of any adjustment made hereunder,
unless the legal requirements then in effect have been met such that the
Warrants may be exercised at such reduced Subscription Price into legally
issued, fully-paid and non-assessable Common Shares.
6.16. Reference to "fixed"
Any reference 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 as 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.
7. COVENANTS IN RELATION TO THE SUBSCRIPTION RIGHT
So long as any of the Warrants remains unexercised, the Issuer will:
51
7.1. Availability of Common Shares
keep available, free from pre-emptive or other rights, out of its
authorized but unissued Common Shares such number of Common Shares as
would be required to be issued upon exercise of all the Warrants from time
to time remaining unexercised and to satisfy in full all other rights of
conversion into or exchange or subscription for Common Shares and shall
ensure that all Common Shares delivered upon exercise of Warrants pursuant
to these Terms and Conditions will be duly and validly issued as
fully-paid and non-assessable;
7.2. Closure of Register
not close its register of shareholders or take any other action which
prevents the transfer of its Shares generally unless, under Korean law as
then in effect, the Warrants may be exercised legally and the Common
Shares issued upon exercise may (subject to any limitation imposed by law)
be transferred (as between transferor and transferee although not as
against the Issuer) at all times during the periods of such closure or
while such other action is effective, nor take any action which prevents
the exercise of the Warrants or the issue of Common Shares in respect
thereof;
7.3. Dividend Accrual Period
not change its Dividend Accrual Period or change the Record Date for the
payment of any dividend unless and until such amendments to these Terms
and Conditions shall have been made pursuant to the provisions of these
Terms and Conditions and notice of such changes and amendments has been
given to the Warrantholders in accordance with Condition 10 (such notice
to be given not later than 14 days prior to the proposed change in such
Dividend Accrual Period or Record Date, as the case may be, taking effect
and to be in a form approved by the Required Holders).
As used in this Terms and Conditions, "Required Holder(s)" shall mean at
any time the holder(s) of the Warrants holding in aggregate of more than
66.66 per cent. in principal amount of the Warrants then outstanding;
7.4. Minimum Subscription Price
52
not take any action which would result in any adjustment of the
Subscription Price if, after giving effect thereto, the Subscription Price
would be decreased to such an extent that the Common Shares to be issued
on exercise of any Warrant could not, under any applicable law then in
effect, be legally issued, fully-paid and non-assessable;
7.5. Listing of Common Shares
obtain and maintain a listing on the Korea Stock Exchange for all the
issued Common Shares;
7.6. Equity Securities
procure that no securities of the Issuer are, without the consent of the
Required Holders, converted into or exchanged for Shares, and that no
rights or warrants to subscribe for or purchase Shares are created,
otherwise in each case than in accordance with the terms of issue thereof
(except to the extent that such terms are amended as a result of any
change in Korean law or regulations);
7.7. Other Classes of Share Capital
not create or issue any class of share capital other than Common Shares or
non-voting preferred shares authorized at the date of these Terms and
Conditions without giving to the Warrantholders notice in accordance with
Condition 10 prior to the relevant record date for the determination of
shareholders entitled to vote at the general meeting of shareholders at
which an amendment to the Issuer's Articles of Incorporation to enable the
Issuer to create such class of share capital is to be voted upon;
7.8. Take-over
if any offer is made to all holders of Shares (or such holders other than
the offeror and/or any Issuer controlled by the offeror and/or persons
associated or acting in concert with the offeror) to acquire all or a
portion of the Shares and such offer comes to the knowledge of the Issuer,
give immediate notice in accordance with Condition 10 of such offer to the
Warrantholders;
7.9. Merger etc.
53
if it is a party to any transaction such as consolidation, amalgamation or
merger with any other corporation in which the Issuer is not the
continuing corporation, use its best endeavors to obtain all consents
which may be necessary or appropriate under Korean law to enable the
continuing corporation to give effect to the subscription right of the
Warrantholders;
7.10. Notice of Adjustment Events
give a notice to the Warrantholders within 5 business days if:
(A) the Issuer shall authorize the granting, issue or offer to the
holders of Shares of rights or warrants to subscribe for or purchase
either any Shares or any securities convertible into or exchangeable
for Shares; or
(B) the Issuer shall declare a dividend in or make any other
distribution on, or pay or make any cash or other distribution in
respect of, Shares, other than an annual cash dividend, or shall
authorize the granting, issue or offer to the holders of Shares of
rights or warrants to subscribe for or purchase any shares or
securities other than Shares or any securities convertible into or
exchangeable for Shares; or
(C) the Issuer shall authorize the issue of any securities convertible
into or exchangeable for Shares or rights or warrants to subscribe
for or purchase Shares or securities (other than those referred to
in Condition 7.10(A) or 7.10(B) above) which will, or shall
authorize the issue of any Shares which will, (or, if in any such
case a relevant consideration or offering price fixed by the Board
of Directors of the Issuer to be recommended at a relevant general
meeting of shareholders is adopted, will) upon issue give rise to
any adjustment to the Subscription Price pursuant to Condition 6; or
(D) there shall be a voluntary or involuntary dissolution, liquidation
or winding-up of the Issuer.
7.11. Notice to Refer to Adjustment of Subscription Price
ensure that, if the event referred to in the notice required pursuant to
Condition 7.10 would
54
result in an adjustment to the Subscription Price, such notice shall also
state the Subscription Price in effect at the time such notice is required
to be given and the Subscription Price which will result after giving
effect to such event or, if such adjusted Subscription Price is not then
determinable, the fact that an adjustment in the Subscription Price may
result. The Issuer will also ensure that, without prejudice to the
provisions of Condition 7.4, if, after giving effect to the event covered
by any such notice and to any adjustment in the Subscription Price, the
Common Shares could not or might not, under applicable law then in effect,
be legally issued upon exercise of Warrants as fully-paid and
non-assessable, any such notice shall also state such fact and the extent
to which, by reason of such provisions, effect will not be given to such
adjustment; and
7.12. Notice of Adjustment of Subscription Price
If there shall be any adjustment to the Subscription Price, (1) as soon as
practicable notify the Warrantholders of particulars of the events giving
rise to the adjustment, the Subscription Price after such adjustment, the
date on which such adjustment takes effect and such other particulars and
information as any Warrantholder may require and (2) promptly after the
date upon which such adjustment takes effect, give notice to the
Warrantholders stating that the Subscription Price has been adjusted and
setting forth the Subscription Price in effect prior to such adjustment,
the adjusted Subscription Price and the effective date of such adjustment;
provided that where a notice has been given pursuant to Condition 7.11
correctly stating any information required to be given pursuant to this
Condition 7.12, then such notice shall, as to such information, satisfy
the requirements of this Condition.
8. PURCHASE OF WARRANTS
The Issuer may at any time purchase Warrants at any price in the open
market or otherwise. The Issuer may, at its option, retain such purchased
Warrants for its own account and/or resell or cancel or otherwise deal
with them at its discretion. No Warrant which has been exercised, or
purchased and cancelled, may be re-issued.
9. REPLACEMENT OF CERTIFICATES
55
If any of the Certificates are mutilated, defaced, destroyed, stolen or
lost, they may be replaced at the specified office of the Issuer upon
payment by the claimant of such costs as may be incurred in connection
therewith and on such terms as to evidence and indemnity as the Issuer may
reasonably require. Mutilated or defaced Certificates must be surrendered
before replacements will be issued.
10. NOTICES
Any communication under these Terms and Conditions shall be in English and
made by reputable express courier service, or by fax. All such
communications to a Warrantholder shall be made to the address as set
forth with respect to such Warrantholder in the Register of the
Warrantholders.
11. GOVERNING LAW AND JURISDICTION
The Warrants are governed by, and shall be construed, in accordance with
the laws of Korea. The Issuer irrevocably consents and agrees that any
legal action, suit or proceeding against it with respect to its
obligations, liabilities or any other matter arising out of or in
connection with these Terms and Conditions or the transaction contemplated
hereby may be brought in the courts of Korea.
56
SCHEDULE 1
FORM OF CERTIFICATE OF WARRANTS
Identifying
Number:
SHINSUNG ENG CO., LTD.
(INCORPORATED IN THE REPUBLIC OF KOREA WITH LIMITED LIABILITY)
WARRANTS TO SUBSCRIBE FOR COMMON SHARES OF SHINSUNG ENG CO., LTD.
Principal Amount of Warrants: _______________________
Name of Warrantholder: _________________________
The Warrants in respect of which this Certificate is issued, the identifying
numbers of which are noted above, are in registered form and form part of the
duly authorized issue of 2,171 warrants (the "Warrants") to subscribe in
aggregate up to Won 12,374,700,000 for common shares (the "Common Shares") of
Shinsung Eng Co., Ltd. (the "Issuer") and constituted by the terms and
conditions (the "Terms and Conditions") attached hereto.
The Issuer hereby certifies that ______________________ is, at the date hereof,
entered in the Register of Warrantholders as the holder of Warrants in the
principal amount of Won 12,374,700,000 and the person who appears at the
relevant time on this Certificate and on the Register of Warrantholders as
holder of the Warrants in respect of which this Certificate is issued is
entitled, upon and subject to the Terms and Conditions, at any time on or after
__________, ____ until the expiry of the Subscription Period (as defined in
Condition 2(b)), to subscribe Won 12,374,700,000 for Common Shares of the
Issuer.
The Certificate is evidence of entitlement only. Title to the Warrants passes
only on due registration in the Register of Warrantholders, entering the name of
the transferee in the newly issued Certificate and delivery of such new
Certificate to the transferee, and only the duly registered holder is entitled
to exercise the Warrants in respect of which the new Certificate is issued.
The Certificate is governed by, and shall be construed in accordance with, the
laws of Korea.
57
Issued as of __________, 2000
SHINSUNG ENG CO., LTD.
-------------------------------
Name :
Title: Representative Director
58
THE SPECIFIED OFFICE OF THE ISSUER
8th Floor, ▇▇▇▇ ▇▇▇▇ ▇▇▇ Building, #▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇, ▇-▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇, ▇▇▇▇▇
(Terms and Conditions of the Warrants will be attached)
59
SCHEDULE 2
FORM OF TRANSFER
FOR VALUE RECEIVED the undersigned hereby transfers to
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)
Won 12,374,700,000 principal amount of the Warrants in respect of which
this/these Certificate(s) is/are issued, and all rights in respect thereof.
All payments in respect of the Warrants hereby transferred are to be made
(unless otherwise instructed by the transferee) to the following account:
Name of bank:
U.S. dollar account number:
For the account of:
Dated:
Certifying Signature
Name:
---------------
Notes:
(i) The signature of the persons effecting a transfer shall
conform to any list of duly authorized specimen signatures
supplied by the registered holder or be certified by a
recognized bank, notary public or in such other manner as the
Issuer may require.
(ii) This form of transfer should be dated as of the date it is
dispatched to the Issuer.
60
SCHEDULE 3
FORM OF EXERCISE NOTICE
SHINSUNG ENG CO., LTD.
US$10,855,000 ZERO COUPON BONDS DUE 2010 WITH WARRANTS
TO SUBSCRIBE FOR COMMON SHARES OF SHINSUNG ENG CO., LTD.
EXERCISE NOTICE
(Please read the Notes in the overleaf before completing this Notice)
Name:
Date:
Address:
Signature:
To: SHINSUNG ENG CO., LTD. (the "Issuer")
I/We, being the holder(s) of the Warrant(s) specified below, hereby elect to
exercise such Warrant(s) to subscribe for common shares of the Issuer ("Shares")
in accordance with the Terms and Conditions of the Warrants.
1. Total number and of Warrant(s) to be exercised:-
Identifying Number(s) of Warrant(s): _______________
Total principal amount of Warrant(s) to be exercised: Won _________
N.B. IF NECESSARY, A LIST OF THE CERTIFICATE NUMBERS OF THE WARRANTS CAN BE
ATTACHED SEPARATELY.
2. The person by whom, or by whose direction, the payment of the subscription
money of
61
Won _______________ in respect of the above-mentioned Warrant(s) (i.e.,
Won ___________ for each of such Warrants) was/is being/will be* made is:-
Name:
Address:
Such payment was/is being/will be* made in Seoul in immediately available
funds in Won on ______________
*Delete whichever is inapplicable.
3. Name and address and (if required) investment registration card number of
the person in whose name the Shares required to be delivered on exercise
are to be registered:-
Name:
Address:
Investment Registration Card Number (SEE NOTE 3 OVERLEAF)
4. I/We hereby request that the certificate(s) for the Shares (together with
any other securities, property or cash) required to be delivered upon
exercise be delivered as follows:
Shares are to be credited to the account of my/our Custodian in the Korea
Securities Depository ("KSD") as set forth below:
Name:
KSD Account:
N.B.
62
(I) THIS EXERCISE NOTICE WILL BE VOID UNLESS SECTIONS 1, 2, 3 AND 4 ARE DULY
COMPLETED.
(II) YOUR ATTENTION IS DRAWN TO THE TERMS AND CONDITIONS OF THE WARRANTS WITH
RESPECT TO THE CONDITIONS PRECEDENT WHICH MUST BE FULFILLED BEFORE THE
WARRANTS SPECIFIED ABOVE WILL BE TREATED AS EFFECTIVELY DEPOSITED FOR
EXERCISE.
(III) IMPORTANT. IN ORDER TO AVOID ANY DELAY IN THE EXERCISE OF YOUR WARRANTS
BECOMING EFFECTIVE, PLEASE ENSURE THAT THE FOLLOWING INSTRUCTIONS
REGARDING PAYMENT OF THE SUBSCRIPTION MONEY PAYABLE ON EXERCISE ARE
COMPLIED WITH:-
(A) PAYMENT MUST BE MADE IN WON (AT THE RATE OF WON _______ PER WARRANT
EXERCISED).
(B) PAYMENT MUST BE MADE TO:-
[ ] AS THE ISSUER'S PAYMENT HANDLING BANK FOR CREDIT TO:-
"SHINSUNG ENG CO., LTD. 2000 WARRANT ACCOUNT" (ACCOUNT NUMBER
"[ ] BW")
(C) PAYMENT MUST REACH THE PAYMENT HANDLING BANK FREE OF ALL FOREIGN
EXCHANGE COMMISSIONS, REMITTANCE CHARGES OR OTHER DEDUCTIONS.
(D) THE PAYMENT ADVICE ADDRESSED TO THE PAYMENT HANDLING BANK SHOULD
SPECIFY:-
(1) THE ACCOUNT AND A/C NUMBER SPECIFIED IN (B) ABOVE;
(2) THE NAME OF THE PERSON SIGNING THIS EXERCISE NOTICE (IF
DIFFERENT FROM THE PERSON BY WHOM, OR BY WHOSE DIRECTION,
PAYMENT IS MADE); AND
(3) THE SERIAL NUMBER(S) OF THE EXERCISED WARRANT(S).
(E) NON-RESIDENTS OF KOREA MAY HAVE TO PRODUCE A "FOREIGN EXCHANGE
CERTIFICATE IN RESPECT OF WARRANTS DEPOSITED" TO A BANK IN KOREA WHEN
PURCHASING KOREAN WON AS SUBSCRIPTION MONEY FOR PAYMENT TO THE PAYMENT
HANDLING BANK. SUCH CERTIFICATES ARE AVAILABLE FROM THE ISSUER.
63
Date: Signature(s)
Print Name(s)
64
NOTES:
1. If a retroactive adjustment contemplated by the Terms and Conditions of
the Warrants is required in respect of an exercise of Warrants,
certificates for the additional Shares issuable pursuant to such
retroactive adjustment (together with any other securities, property or
cash) will be delivered or dispatched in the same manner as the Shares,
other securities, property and cash previously issued pursuant to the
relevant Exercise Notice.
2. An exercising Warrantholder who is not resident in Korea may appoint an
agent in Korea by means of a general power of attorney. The agent acts on
behalf of the registered shareholder in the exercise of shareholders'
rights and duties and under current Korean regulations must be a Issuer
authorized to act as an agent for foreign investors. The regulations
applicable to foreign investment are subject to change, and it is
recommended that Warrantholders consult with their legal advisers on the
Korean regulations applicable to them from time to time.
3. Under current Korean law an exercising Warrantholder who is a foreigner
(as defined in the regulations of the Financial Supervisory Service of
Korea) must, if such exercising Warrantholder has not so registered,
register with the Financial Supervisory Commission as a foreign investor
before the acquisition of the Shares through exercise of the Warrants and
report his acquisition of Shares or other shares of the Issuer to the
Governor of the Financial Supervisory Service in Korea.
4. A exercising Warrantholder who is not resident in Korea must also file a
mailing address in Korea with the agent.
65
Exhibit C
FORM OF CERTIFICATE OF OFFICER
OF SHINSUNG ENG CO., LTD.
I, _________________ hereby certify pursuant to Section 6(3) of the Subscription
Agreement, dated as of __________, 2000 (the "Agreement"), by and between
Shinsung Eng Co., Ltd. (the "Issuer") and PRI Automation Inc., that I am the
duly elected, qualified and acting authorized officer of the Issuer, and hereby
certify further that:
1. Attached hereto as Exhibit A is a true and correct copy of the Articles of
Incorporation of the Issuer, as in effect on the date hereof;
2. Attached hereto as Exhibit B is a true and correct copy of the Commercial
Registry extracts regarding the Issuer, as in effect on the hereof;
3. Attached hereto as Exhibit C are true and correct copies of the
resolutions of the Board of Directors of the Issuer duly held on November __,
2000 to authorize the execution, delivery and performance of the transactions
contemplated by the Agreement, which resolutions remain in full force and effect
on the date hereof; and
4. Attached hereto as Exhibit D is a true and correct copy of the report to a
designated foreign exchange bank of Korea with respect to the issuance of the
Bonds with Warrants (the "REPORT") which Report has been duly accepted by the
designated foreign exchange bank in accordance with the Foreign Exchange
Transaction Law of Korea and is in full force and effect on the date hereof.
66
Capitalized terms not otherwise defined herein shall have the same meanings as
specified in the Agreement.
IN WITNESS WHEREOF, I have signed this Certificate on this __th day of
__________, 2000.
Shinsung Eng Co., Ltd.
----------------------------
Name:
Title: