EXHIBIT H
FORM OF MANAGEMENT RIGHTS AGREEMENT
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[Insert Date]
Hanaro Telecom, Inc.
000, Xxxxxxxx-0xxxx
Xxxxx-xx
Xxxxxx, Xxxxx 411-778
Dear [Insert]:
This letter agreement (this "Letter Agreement") is being
executed and delivered to confirm agreements with respect to the purchase and
ownership by [********] ("[********]") of [ ] common shares (all or any portion
thereof, individually and collectively, the "Investment") of Hanaro Telecom,
Inc. (the "Company") and certain management rights that the Company conferred
upon [********] in connection with such Investment so that Investment may
qualify as a "venture capital investment" within the meaning of the Department
of Labor regulation Section 2510.3-101 (the "Plan Asset Regulation"). Except as
provided in Section I(b) and Section II(b) hereof, the rights conferred under
this Letter Agreement shall automatically terminate on the date [********] no
longer owns, directly or indirectly, any portion of the Investment.
I. Management Rights
(a) [********] shall have the following rights and
entitlements:
(i) [********] shall be entitled, from time to time, to make
proposals, recommendations and suggestions to the board of directors of the
Company (the "Board of Directors") relating to the business and affairs of the
Company and any subsidiary of the Company. The Board of Directors shall consider
in good faith all proposals, recommendations and suggestions made by [********]
pursuant to the foregoing sentence; provided, however, that nothing in this
clause (a) shall obligate, or be deemed to obligate, the Board of Directors to
adopt or implement any proposal, recommendation or suggestion made by or on
behalf of [********].
(ii) The Company shall permit [********], at all reasonable
times and at [********]'s expense, to discuss the business and affairs of the
Company and its subsidiaries with the Board of Directors and its officers and
independent accountants (or their equivalents); provided, in all cases, that:
(A) [********] shall give at least seven (7) business
days prior written notice to an officer of the Company
identifying all person(s) with whom [********] wishes to have
discussions and specifying in reasonable detail the nature of
the information sought from such person(s) and the purpose(s)
for which [********] wishes to obtain such information;
(B) During any discussion or at any meeting between
[********] and such person(s), [********] shall not inquire
into matters not specified in such notice; and
(C) The Company shall have the right to have a
representative, in addition to the person(s) being made
available, present during any such discussion or meeting.
(iii) The Company shall permit [********], at all reasonable
times and at [********]'s expense, to examine such books, records, documents and
other written information in the possession of the Company relating to the
affairs of the Company and its subsidiaries as [********] may reasonably
request; provided, in all cases, that [********] shall give at least seven (7)
business days prior written notice to the Company describing in reasonable
detail the books, records, documents and other written information which
[********] wishes to examine and specifying the purpose(s) for which [********]
wishes to make such examination.
(iv) The Company shall permit [********], at all reasonable
times and at [********]'s expense, to visit and inspect the properties of the
Company and its subsidiaries so long as such visitation and inspection do not
unreasonably interfere with the business and operation of the Company; provided,
in all cases, that [********] shall give at least seven (7) business days prior
written notice to the Company describing in reasonable detail the properties
which [********] wishes to inspect and specifying the purpose(s) for which
[********] wishes to make such inspection.
(v) The Company shall inform [********] in advance with
respect to any significant corporate actions, including, without limitation,
extraordinary dividends or distributions, mergers, acquisitions or dispositions
of assets, issuances of significant amounts of debt or equity and material
amendments to its certificate of incorporation or by-laws (or their equivalents)
with respect to the Company or its subsidiaries, and provide [********] with the
opportunity to consult with the Company with respect to such actions.
(vi) [********] shall have the right to have a representative
present at all meetings of the Board of Directors.
(b) [********] hereby agrees that it will not request or
otherwise seek to obtain any information pursuant to the foregoing provisions,
and will not use (or permit to be used) any information obtained pursuant to the
foregoing provisions, except for lawful purposes relating solely to [********]'s
interest as investor. Without limitation of the foregoing, [********] hereby
agrees that it will not use (or permit to be used) any information obtained in
connection with the foregoing provisions in any manner which is unlawful or is
adverse or detrimental to the Company. As a condition to exercising their
examination and inspection rights under Sections I(a)(iii) and I(a)(iv) above,
[********] shall be required to comply with the Company's normal requirements
regarding health, safety, security and operational matters.
(c) [****] agrees that it will keep confidential and not
disclose any confidential, proprietary or secret information which [****] may
obtain from the Company, unless such information is or becomes known to [****]
from a source other than the Company or is or becomes publicly known, or unless
the Company gives its written consent to [****]'s release of such information,
except that no such written consent shall be required (and [****] shall be free
to release such information to such recipient) if such information is to be
provided to the [****]'s counsel or accountant, or to an officer, director or
partner of [****], provided that [****] shall inform the recipient of the
confidential nature of such information, and shall instruct the recipient to
treat the information as confidential.
(d) Any reference to "subsidiary" or "subsidiaries" hereunder
shall exclude Dreamline Corporation and Hanaro Dream Co., Ltd.
2. Miscellaneous
(a) Anything herein or elsewhere to the contrary
notwithstanding, the rights and obligations of the Company and [********] under
this agreement are subject to all applicable laws. Accordingly, [********] shall
not be entitled to exercise or enforce any right purported to be conferred upon
it by the provisions of this agreement and the Company shall not be required to
perform any of its covenants contained in this agreement, in each case, if and
to the extent the exercise or enforcement of such right or the performance of
such obligation, as the case may be, would violate or constitute or result in a
breach of (i) any law, statute (including, without limitation, antitrust laws),
ordinance, rule or regulation or any injunction, restraining order or other
court order or decree applicable to the Company or any of its directors,
officers or employees (or their equivalents) or any pronouncement having the
effect of law or (ii) any contract, lease, commitment, agreement or other
instrument binding upon the Company.
(b) In the event that [********] transfers all or any portion
of the Investment to an affiliated entity that is intended to qualify as a
venture capital operating company under the Plan Asset Regulation, such
transferee shall be afforded the same rights with respect to the Company
afforded to [********] hereunder and shall be treated, for such purposes, as a
third party beneficiary hereunder; provided, however, that [********] shall
promptly notify the Company of such transfer.
(c) This Letter Agreement and its validity, construction and
performance shall be governed in all respects by, and construed in accordance
with, the laws of the State of New York, without regard to principles of
conflicts of law. This Letter Agreement may be executed in counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same instrument.
(d) This Letter Agreement represents the entire agreement of
the parties with respect to the subject matter hereof and supercedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter.
To indicate your agreement of the foregoing, please sign and
return the duplicate enclosed copy of this Letter Agreement to the undersigned.
Very truly yours,
[********]
By: [********]
By:
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Name:
Title:
ACKNOWLEDGED AND AGREED TO
AS OF THE DATE FIRST ABOVE WRITTEN:
HANARO TELECOM, INC.
By:
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Name:
Title:
