AMENDMENT NO. 1 TO DEPOSIT AGREEMENT
AMENDMENT
NO. 1 TO DEPOSIT AGREEMENT
AMENDMENT
NO. 1, dated
as
of April , 2008 (the “Amendment”), to the Deposit Agreement dated as of December
15, 2005 (as amended hereby, the “Deposit Agreement”), among Pixelplus Co.,
Ltd., incorporated under the laws of Republic of Korea (the “Company”), JPMorgan
Chase Bank, N.A., as depositary (the “Depositary”), and all holders from time to
time of American depositary receipts (“ADRs”) issued thereunder.
WITNESSETH:
WHEREAS,
the Company and the Depositary executed the Deposit Agreement for the purposes
set forth therein; and
WHEREAS,
pursuant to paragraph (16) of the form of ADR contained in the Deposit
Agreement, the Company and the Depositary desire to amend the terms of the
Deposit Agreement and ADRs.
NOW,
THEREFORE, for
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Depositary hereby agree to amend the Deposit
Agreement as follows:
ARTICLE
I
DEFINITIONS
SECTION
1.01. Definitions.
Unless
otherwise defined in this Amendment, all capitalized terms used, but not
otherwise defined, herein shall have the meaning given to such terms in the
Deposit Agreement.
ARTICLE
II
AMENDMENTS
TO DEPOSIT AGREEMENT
SECTION
2.01. All
references in the Deposit Agreement to the term “Deposit Agreement” shall, as of
the Effective Date (as herein defined), refer to the Deposit Agreement, dated
as
of December 15, 2005 as amended by this Amendment.
1
SECTION
2.02. Section
1(c) of the Deposit Agreement is amended by replacing "one-half of one share"
with "two shares".
ARTICLE
III
AMENDMENTS
TO THE FORM OF ADR
SECTION
3.01. All
references in the form of ADR to the number of Shares represented
by each ADS is amended to reflect that each ADS represents two
Shares.
SECTION
3.03. The
form
of ADR, reflecting the amendments set forth herein, is amended
and restated to read as set forth as Exhibit A hereto.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
SECTION
4.01. Representations
and Warranties.
The
Company represents and warrants
to, and agrees with, the Depositary and the Holders, that:
(a)
This
Amendment, when executed and delivered by the Company, will be duly and validly
authorized, executed and delivered by the Company, and it and the Deposit
Agreement as amended hereby constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equity principles; and
(b)
In
order to ensure the legality, validity, enforceability or admissibility into
evidence of this Amendment or the Deposit Agreement as amended hereby, neither
of such agreements need to be filed or recorded with any court or other
authority in the Republic of Korea, nor does any stamp or similar tax or
governmental charge need to be paid in the Republic of Korea on or in respect
of
such agreements.
ARTICLE
V
MISCELLANEOUS
SECTION
5.01. Effective
Date.
This
Amendment is dated as of the date set forth above and shall be effective as
the
open of business New York time on April 14, 2008 (the “Effective
Date”).
2
SECTION
5.02. Outstanding
ADRs.
ADRs
issued prior or subsequent to the date hereof, which do not reflect the changes
to the form of ADR effected hereby, do not need to be called in for exchange
and
may remain outstanding until such time as the Holders thereof choose to
surrender them for any reason under the Deposit Agreement. The Depositary is
authorized and directed to take any and all actions deemed necessary to effect
the foregoing.
SECTION
5.03. Indemnification.
The
parties hereto shall be entitled to the benefits of the indemnification
provisions of Section 16 of the Deposit Agreement in connection with any and
all
liability it or they may incur as a result of the terms of this Amendment and
the transactions contemplated herein.
SECTION
5.04. Counterparts.
This
Amendment may be executed in any number of counterparts, each of which shall
be
deemed an original and all of which taken together shall constitute one
instrument.
3
IN
WITNESS WHEREOF,
the
Company and the Depositary have caused this Amendment to be executed by
representatives thereunto duly authorized as of the date set forth
above.
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By:
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Name:
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Title:
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JPMORGAN
CHASE BANK, N.A.
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By:
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Name:
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Title:
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EXHIBIT
A
ANNEXED
TO AND INCORPORATED
IN
AMENDMENT NO. 1 TO DEPOSIT AGREEMENT
[FORM
OF
FACE OF ADR]
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No.
of ADSs:
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Number
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Each
ADS represents
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Two
Shares
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CUSIP:
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AMERICAN
DEPOSITARY RECEIPT
evidencing
AMERICAN
DEPOSITARY SHARES
representing
COMMON
SHARES
of
(Incorporated
under the
laws
of
the Republic of Korea)
JPMORGAN
CHASE BANK, N.A., a national banking association organized under the laws of
the
United States, as depositary hereunder (the "Depositary"), hereby certifies
that
is
the registered owner (a "Holder") of
American
Depositary Shares ("ADSs"), each (subject to paragraph (13)) representing two
common shares (including the rights to receive Shares described in paragraph
(1), "Shares" and, together with any other securities, cash or property from
time to time held by the Depositary in respect or in lieu of deposited Shares,
the "Deposited Securities"), of Pixelplus Co., Ltd., a corporation organized
under the laws of the Republic of Korea (the "Company"), deposited under the
Deposit Agreement dated as of December 15, 2005 (as amended from time to time,
the "Deposit Agreement") among the Company, the Depositary and all Holders
from
time to time of American Depositary Receipts issued thereunder ("ADRs"), each
of
whom by accepting an ADR becomes a party thereto. The Deposit Agreement and
this
ADR (which includes the provisions set forth on the reverse hereof) shall be
governed by and construed in accordance with the laws of the State of New
York.
1
(1)
Issuance
of ADRs.
This
ADR is one of the ADRs issued under the Deposit Agreement. Subject to paragraph
(4), the Depositary may so issue ADRs for delivery at the Transfer Office
(defined in paragraph (3)) only against deposit with the Custodian of: (a)
Shares in form satisfactory to the Custodian; (b) rights to receive Shares
from
the Company or any registrar, transfer agent, clearing agent or other entity
recording Share ownership or transactions; or, (c) other rights to receive
Shares (until such Shares are actually deposited pursuant to (a) or (b) above,
"Pre-released ADRs") only if (i) Pre-released ADRs are fully collateralized
(marked to market daily) with cash or such other collateral as the Depositary
deems appropriate held by the Depositary for the benefit of Holders (but such
collateral shall not constitute "Deposited Securities"), (ii) each recipient
of
Pre-released ADRs agrees in writing with the Depositary that such recipient
or
its customer (a) owns such Shares, (b) assigns all beneficial right, title
and
interest therein to the Depositary, (c) holds such Shares for the account of
the
Depositary and (d) will deliver such Shares to the Custodian as soon as
practicable and promptly upon demand therefor and (iii) all Pre-released ADRs
evidence not more than 30% of all ADSs (excluding those evidenced by
Pre-released ADRs), provided,
however,
that
the Depositary reserves the right to change or disregard such limit from time
to
time as it deems appropriate. The Depositary may retain for its own account
any
earnings on collateral for Pre-released ADRs and its charges for issuance
thereof. At the request, risk and expense of the person depositing Shares,
the
Depositary may accept deposits for forwarding to the Custodian and may deliver
ADRs at a place other than its office. Every person depositing Shares under
the
Deposit Agreement represents and warrants that such Shares are validly issued
and outstanding, fully paid, nonassessable and free of pre-emptive rights,
that
the person making such deposit is duly authorized so to do and that such Shares
(A) are not "restricted securities" as such term is defined in Rule 144 under
the Securities Act of 1933 unless at the time of deposit they may be freely
transferred in accordance with Rule 144(k) and may otherwise be offered and
sold
freely in the United States or (B) have been registered under the Securities
Act
of 1933. Such representations and warranties shall survive the deposit of Shares
and issuance of ADRs. If any of the representations or warranties are incorrect
in any way, the Company and the Depositary may, in their sole discretion, at
the
cost and expense of the Holder, take any and all actions necessary to correct
the consequences of such misrepresentation. The Depositary will not knowingly
accept for deposit under the Deposit Agreement any Shares required to be
registered under the Securities Act of 1933 and not so registered; the
Depositary may refuse to accept for such deposit any Shares identified by the
Company in order to facilitate the Company's compliance with such
Act.
(2)
Withdrawal
of Deposited Securities.
Subject
to paragraphs (4) and (5), upon surrender of (i) a certificated ADR in form
satisfactory to the Depositary at the Transfer Office or (ii) proper
instructions and documentation in the case of a Direct Registration ADR, the
Holder hereof is entitled to delivery at, or in the case of Deposited Securities
in dematerialized form from, the Custodian's office of the Deposited Securities
at the time represented by the ADSs evidenced by this ADR. At the request,
risk
and expense of the Holder hereof, the Depositary may deliver such Deposited
Securities at such other place as may have been requested by the Holder. As
of
the date of the Deposit Agreement, a Holder who wants to withdraw Shares must
register its identity with the Financial Supervisory Service of Korea before
the
acquisition of Shares if such registration has not been made unless such Holder
intends to sell the Shares within three months. Notwithstanding any other
provision of the Deposit Agreement or this ADR, the withdrawal of Deposited
Securities may be restricted only for the reasons set forth in General
Instruction I.A.(1) of Form F-6 (as such instructions may be amended from time
to time) under the Securities Act of 1933.
2
(3)
Transfers
of ADRs.
The
Depositary or its agent will keep, at a designated transfer office in the
Borough of Manhattan, The City of New York (the "Transfer Office"), (a) a
register (the "ADR Register") for the registration, registration of transfer,
combination and split-up of ADRs, and, in the case of Direct Registration ADRs,
shall include the Direct Registration System, which at all reasonable times
will
be open for inspection by Holders and the Company for the purpose of
communicating with Holders in the interest of the business of the Company or
a
matter relating to the Deposit Agreement and (b) facilities for the delivery
and
receipt of ADRs. The term ADR Register includes the Direct Registration System.
Title to this ADR (and to the Deposited Securities represented by the ADSs
evidenced hereby), when properly endorsed (in the case of ADRs in certificated
form) or upon delivery to the Depositary of proper instruments of transfer,
is
transferable by delivery with the same effect as in the case of negotiable
instruments under the laws of the State of New York; provided
that the
Depositary, notwithstanding any notice to the contrary, may treat the person
in
whose name this ADR is registered on the ADR Register as the absolute owner
hereof for all purposes and neither the Depositary nor the Company will have
any
obligation or be subject to any liability under the Deposit Agreement to any
holder of an ADR, unless such holder is the Holder thereof. Subject to
paragraphs (4) and (5), this ADR is transferable on the ADR Register and may
be
split into other ADRs or combined with other ADRs into one ADR, evidencing
the
aggregate number of ADSs surrendered for split-up or combination, by the Holder
hereof or by duly authorized attorney upon surrender of this ADR at the Transfer
Office properly endorsed (in the case of ADRs in certificated form) or upon
delivery to the Depositary of proper instruments of transfer and duly stamped
as
may be required by applicable law; provided
that the
Depositary may close the ADR Register at any time or from time to time when
deemed expedient by it or requested by the Company. At the request of a Holder,
the Depositary shall, for the purpose of substituting a certificated ADR with
a
Direct Registration ADR, or vice versa, execute and deliver a certificated
ADR
or a Direct Registration ADR, as the case may be, for any authorized number
of
ADSs requested, evidencing the same aggregate number of ADSs as those evidenced
by the certificated ADR or Direct Registration ADR, as the case may be,
substituted.
(4)
Certain
Limitations.
Prior
to the issue, registration, registration of transfer, split-up or combination
of
any ADR, the delivery of any distribution in respect thereof, or, subject to
the
last sentence of paragraph (2), the withdrawal of any Deposited Securities,
and
from time to time in the case of clause (b)(ii) of this paragraph (4), the
Company, the Depositary or the Custodian may require: (a) payment with respect
thereto of (i) any stock transfer or other tax or other governmental charge,
(ii) any stock transfer or registration fees in effect for the registration
of
transfers of Shares or other Deposited Securities upon any applicable register
and (iii) any applicable charges as provided in paragraph (7) of this ADR;
(b)
the production of proof satisfactory to it of (i) the identity of any signatory
and genuineness of any signature and (ii) such other information, including
without limitation, information as to citizenship, residence, exchange control
approval, beneficial ownership of any securities, payment of applicable Korean
or other taxes or governmental charges, or legal or beneficial ownership and
the
nature of such interest, information relating to the registration on the
shareholders' register of the Company (or the appointed agent of the Company
for
the transfer and registration of Shares) or the books of the CSD of the Shares
presented for deposit, compliance with applicable law, regulations, provisions
of or governing Deposited Securities and terms of the Deposit Agreement and
this
ADR, as it may deem necessary or proper; and (c) compliance with such
regulations as the Depositary may establish consistent with the Deposit
Agreement. As a condition of accepting Shares for deposit, the Depositary may
require that the person making such deposit furnish evidence satisfactory to
the
Depositary (which may be an opinion of counsel) that any necessary approvals
have been waived or granted by any governmental or quasi-governmental body
or
agency in Korea, including, without limitation, any such body which is then
performing the function of regulation of currency exchange. The issuance of
ADRs, the acceptance of deposits of Shares, the registration, registration
of
transfer, split-up or combination of ADRs or, subject to the last sentence
of
paragraph (2), the withdrawal of Deposited Securities may be suspended,
generally or in particular instances, when the ADR Register, any register for
Deposited Securities is closed, the books of the CSD are closed, or when any
such action is deemed advisable by the Depositary for any reason or the Company
by reason of any requirement of law or governmental or governmental body or
commission rule or regulation..
3
(5)
Taxes.
Holders
hereof and owners of an interest herein acknowledge that cash distributions
in
respect of Deposited Securities may be subject to withholding for taxes under
Korean law, and the Company will withhold for taxes any amounts that it is
required to withhold under applicable Korean law. If any tax or other
governmental charge shall become payable by or on behalf of the Custodian or
the
Depositary with respect to this ADR, any Deposited Securities represented by
the
ADSs evidenced hereby or any distribution thereon, such tax or other
governmental charge shall be paid by the Holder hereof to the Depositary. The
Depositary may refuse to effect any registration, registration of transfer,
split-up or combination hereof or, subject to the last sentence of paragraph
(2), any withdrawal of such Deposited Securities until such payment is made.
The
Depositary may also deduct from any distributions on or in respect of Deposited
Securities, or may sell by public or private sale for the account of the Holder
hereof any part or all of such Deposited Securities (after attempting by
reasonable means to notify the Holder hereof prior to such sale), and may apply
such deduction or the proceeds of any such sale in payment of such tax or other
governmental charge, the Holder hereof remaining liable for any deficiency,
and
shall reduce the number of ADSs evidenced hereby to reflect any such sales
of
Shares. In connection with any distribution to Holders, the Company or its
agent
will remit to the appropriate governmental authority or agency all amounts
(if
any) required to be withheld and owing to such authority or agency by the
Company or its agent; and the Depositary and the Custodian will remit to the
appropriate governmental authority or agency all amounts (if any) required
to be
withheld and owing to such authority or agency by the Depositary or the
Custodian. The Depositary shall, at the cost and expense of the Company, forward
to the Company or its agent such information from its records as the Company
may
reasonably request to enable the Company or its agent to file necessary reports
with governmental authorities or agencies. If the Depositary determines that
any
distribution in property other than cash (including Shares or rights) on
Deposited Securities is subject to any tax that the Depositary or the Custodian
is obligated to withhold, the Depositary may dispose of all or a portion of
such
property in such amounts and in such manner as the Depositary deems necessary
and practicable to pay such taxes, by public or private sale, and the Depositary
shall distribute the net proceeds of any such sale or the balance of any such
property after deduction of such taxes to the Holders entitled thereto.
Notwithstanding any other provision of the Deposit Agreement or this ADR ,before
making any distribution or other payment on any Deposited Securities, the
Company shall make such deductions (if any) which, by the laws of Korea, the
Company is required to make in respect of any income, capital gains or other
taxes and the Company may also deduct the amount of any tax or governmental
charges payable by the Company or for which the Company might be made liable
in
respect of such distribution or other payment or any document signed in
connection therewith. In making such deductions, neither the Company nor the
Depositary shall have any obligation to any Holder to apply a rate under any
treaty or other arrangement between Korea and the country within which such
Holder is resident unless such Holder has timely provided to the Company
directly or through the Depositary evidence of the residency of such Holder
that
is accepted by the relevant tax authorities of Korea. Each Holder of an ADR
or
an interest therein agrees to indemnify the Depositary, the Company, the
Custodian and any of their respective directors, employees, agents and
affiliates against, and hold each of them harmless from, any claims by any
governmental authority with respect to taxes, additions to tax, penalties or
interest arising out of any refund of taxes, reduced rate of withholding at
source or other tax benefit obtained. In connection with any distribution to
Holders, the Company or its agent will remit to the appropriate governmental
authority or agency all amounts (if any) required under applicable law to be
withheld and remitted by the Company or such agent and owing to such
governmental authority or agency by the Company or such agent; and the
Depositary or the Custodian will remit to the appropriate governmental authority
or agency all amounts (if any) required under applicable law to be withheld
and
remitted by the Depositary or the Custodian and owing to such authority or
agency by the Depositary or the Custodian. If the Company (or any of its agents)
withholds from any distribution or other payment any amount on account of taxes
or governmental charges, or pays any other tax in respect of such distribution
or other payment, the Company shall (and cause such agent to) remit promptly
to
the Depositary information about such taxes or governmental charges withheld
and
paid, and the tax receipt (or other proof of payment from the applicable
governmental authority therefor.
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(6)
Disclosure
of Interests.
To the
extent that the provisions of or governing any Deposited Securities may require
disclosure of or impose limits on beneficial or other ownership of Deposited
Securities, other Shares and other securities and may provide for blocking
transfer, voting or other rights to enforce such disclosure or limits, Holders
and all persons holding ADRs agree to comply with all such disclosure
requirements and ownership limitations and to comply with any reasonable Company
instructions in respect thereof. The Company reserves the right to instruct
Holders to deliver their ADSs for cancellation and withdrawal of the Deposited
Securities so as to permit the Company to deal directly with the Holder thereof
as a holder of Shares and Holders agree to comply with such instructions. The
Depositary agrees to cooperate with the Company in its efforts to inform Holders
of the Company_s
exercise of its rights under this paragraph and agrees to consult with, and
provide reasonable assistance without risk, liability or expense on the part
of
the Depositary, to the Company on the manner or manners in which it may enforce
such rights with respect to any Holder.
5
(7)
Charges
of Depositary.
The
Depositary may charge each person to whom ADSs are issued against deposits
of
Shares, including deposits in respect of Share Distributions, Rights and Other
Distributions (as such terms are defined in paragraph (10)), and each person
surrendering ADSs for withdrawal of Deposited Securities, up to U.S. $5.00
for
each 100 ADSs (or portion thereof) delivered or surrendered. The Depositary
may
sell (by public or private sale) sufficient securities and property received
in
respect of Share Distributions, Rights and Other Distributions prior to such
deposit to pay such charge. The following additional charges shall be incurred
by the Holders, by any party depositing or withdrawing Shares or by any party
surrendering ADRs or to whom ADRs are issued (including, without limitation,
issuance pursuant to a stock dividend or stock split declared by the Company
or
an exchange of stock regarding the ADRs or the Deposited Securities or a
distribution of ADRs pursuant to paragraph (10)), whichever is applicable (i)
a
fee of $0.02 or less per ADS (or portion thereof) for any Cash distribution
made
pursuant to the Deposit Agreement, (ii) to the extent not prohibited by the
rules of the primary stock exchange upon which the ADSs are listed, a fee of
$1.50 per ADR or ADRs for transfers made pursuant to paragraph (3) hereof,
(iii)
a fee for the distribution or sale of securities pursuant to paragraph (10)
hereof, such fee being in an amount equal to the fee for the execution and
delivery of ADSs referred to above which would have been charged as a result
of
the deposit of such securities (for purposes of this paragraph (7) treating
all
such securities as if they were Shares) but which securities or the net cash
proceeds from the sale thereof are instead distributed by the Depositary to
Holders entitled thereto,
(iv)
a fee
of US$0.02 per ADS (or portion thereof) per year for the services performed
by
the Depositary in administering the ADRs (which fee shall be assessed against
Holders as of the record date or dates set by the Depositary not more than
once
each calendar year and shall be payable at the sole discretion of the Depositary
by billing Holders or by deducting such charge from one or more cash dividends
or other cash distributions), and (v) such fees and expenses as are incurred
by
the Depositary (including without limitation expenses incurred on behalf of
Holders in connection with compliance with foreign exchange control regulations
or any law or regulation relating to foreign investment) in delivery of
Deposited Securities or otherwise in connection with the Depositary's or its
Custodian's compliance with applicable law, rule or regulation.
The
Company will pay all other charges and expenses of the Depositary and any agent
of the Depositary (except the Custodian) pursuant to agreements from time to
time between the Company and the Depositary, except (i) stock transfer or other
taxes and other governmental charges (which are payable by Holders or persons
depositing Shares), (ii) cable, telex and facsimile transmission and delivery
charges incurred at the request of persons depositing, or Holders delivering
Shares, ADRs or Deposited Securities (which are payable by such persons or
Holders), (iii) transfer or registration fees for the registration or transfer
of Deposited Securities on any applicable register or the books of the CSD,
in
any case in connection with the deposit or withdrawal of Deposited Securities
(which are payable by persons depositing Shares or Holders withdrawing Deposited
Securities; there are no such fees in respect of the Shares as of the date
of
the Deposit Agreement), (iv) expenses of the Depositary in connection with
the
conversion of foreign currency into U.S. dollars (which are paid out of such
foreign currency), and (v) any other charge payable by any of the Depositary,
any of the Depositary=s
agents,
including, without limitation, the custodian, or the agents of the
Depositary=s
agents
in connection with the servicing of the Shares or other Deposited Securities
(which charge shall be assessed against Holders as of the record date or dates
set by the depositary and shall be payable at the sole discretion of the
Depositary by billing such Holders or by deducting such charge from one or
more
cash dividends or other cash distributions). Such charges may at any time and
from time to time be changed by agreement between the Company and the
Depositary.
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(8)
Available
Information.
The
Deposit Agreement, the provisions of or governing Deposited Securities and
any
written communications from the Company, which are both received by the
Custodian or its nominee as a holder of Deposited Securities and made generally
available to the holders of Deposited Securities, are available for inspection
by Holders at the offices of the Depositary and the Custodian and at the
Transfer Office. The Depositary will distribute copies of such communications
(or English translations or summaries thereof) to Holders when furnished by
the
Company. The Company is subject to the periodic reporting requirements of the
Securities Exchange Act of 1934 and accordingly files certain reports with
the
United States Securities and Exchange Commission (the "Commission"). Such
reports and other information may be inspected and copied at public reference
facilities maintained by the Commission located at the date hereof at 000 X
Xxxxxx, XX, Xxxxxxxxxx, XX 00000.
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(9)
Execution.
This
ADR shall not be valid for any purpose unless executed by the Depositary by
the
manual or facsimile signature of a duly authorized officer of the
Depositary.
Dated:
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JPMORGAN
CHASE BANK, N.A., as Depositary
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By
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Authorized
Officer
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The
Depositary's office is located at 0 Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000.
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[FORM
OF
REVERSE OF ADR]
(10)
Distributions
on Deposited Securities.
Subject
to paragraphs (4) and (5), to the extent practicable, the Depositary will
distribute to each Holder entitled thereto on the record date set by the
Depositary therefor at such Holder's address shown on the ADR Register, in
proportion to the number of Deposited Securities (on which the following
distributions on Deposited Securities are received by the Custodian) represented
by ADSs evidenced by such Holder's ADRs: (a) Cash.
Any
U.S. dollars available to the Depositary resulting from a cash dividend or
other
cash distribution or the net proceeds of sales of any other distribution or
portion thereof authorized in this paragraph (10) ("Cash"), on an averaged
or
other practicable basis, subject to (i) appropriate adjustments for taxes
withheld, (ii) such distribution being impermissible or impracticable with
respect to certain Holders, and (iii) deduction of the Depositary's expenses
in
(1) converting any foreign currency to U.S. dollars by sale or in such other
manner as the Depositary may determine to the extent that it determines that
such conversion may be made on a reasonable basis, (2) transferring foreign
currency or U.S. dollars to the United States by such means as the Depositary
may determine to the extent that it determines that such transfer may be made
on
a reasonable basis, (3) obtaining any approval or license of any governmental
authority required for such conversion or transfer, which is obtainable at
a
reasonable cost and within a reasonable time and (4) making any sale by public
or private means in any commercially reasonable manner. (b) Shares.
(i)
Additional ADRs evidencing whole ADSs representing any Shares available to
the
Depositary resulting from a dividend or free distribution on Deposited
Securities consisting of Shares (a "Share Distribution") and (ii) U.S. dollars
available to it resulting from the net proceeds of sales of Shares received
in a
Share Distribution, which Shares would give rise to fractional ADSs if
additional ADRs were issued therefor, as in the case of Cash. (c) Rights.
(i)
Warrants or other instruments in the discretion of the Depositary representing
rights to acquire additional ADRs in respect of any rights to subscribe for
additional Shares or rights of any nature available to the Depositary as a
result of a distribution on Deposited Securities ("Rights"), to the extent
that
the Company timely furnishes to the Depositary evidence satisfactory to the
Depositary that the Depositary may lawfully distribute the same (the Company
has
no obligation to so furnish such evidence), or (ii) to the extent the Company
does not so furnish such evidence and sales of Rights are practicable, any
U.S.
dollars available to the Depositary from the net proceeds of sales of Rights
as
in the case of Cash, or (iii) to the extent the Company does not so furnish
such
evidence and such sales cannot practicably be accomplished by reason of the
nontransferability of the Rights, limited markets therefor, their short duration
or otherwise, nothing (and any Rights may lapse). (d) Other
Distributions.
(i)
Securities or property available to the Depositary resulting from any
distribution on Deposited Securities other than Cash, Share Distributions and
Rights ("Other Distributions"), by any means that the Depositary may deem
equitable and practicable, or (ii) to the extent the Depositary deems
distribution of such securities or property not to be equitable and practicable,
any U.S. dollars available to the Depositary from the net proceeds of sales
of
Other Distributions as in the case of Cash. Such U.S. dollars available will
be
distributed by checks drawn on a bank in the United States for whole dollars
and
cents. Fractional cents will be withheld without liability and dealt with by
the
Depositary in accordance with its then current practices.
9
(11)
Record
Dates.
The
Depositary may, after consultation with the Company if practicable, fix a record
date (which, to the extent applicable, shall be as near as practicable to any
corresponding record date set by the Company) for the determination of the
Holders who shall be responsible for the fee assessed by the Depositary for
administration of the ADR program and for any expenses provided for in paragraph
(7) hereof as well as for the determination of the Holders who shall be entitled
to receive any distribution on or in respect of Deposited Securities, to give
instructions for the exercise of any voting rights, to receive any notice or
to
act in respect of other matters and only such Holders shall be so entitled
or
obligated.
(12)
Voting
of Deposited Securities.
As soon
as practicable after receipt from the Company of notice of any meeting or
solicitation of consents or proxies of holders of Shares or other Deposited
Securities, the Depositary shall distribute to Holders a notice stating (a)
such
information as is contained in such notice and any solicitation materials,
(b)
that each Holder on the record date set by the Depositary therefor will, subject
to applicable provisions of Korean law, be entitled to instruct the Depositary
as to the exercise of the voting rights, if any, pertaining to the Deposited
Securities represented by the ADSs evidenced by such Holder's ADRs and (c)
the
manner in which such instructions may be given, including instructions to give
a
discretionary proxy to a person designated by the Company. Upon receipt of
instructions of a Holder on such record date in the manner and on or before
the
date established by the Depositary for such purpose, the Depositary shall
endeavor insofar as practicable and permitted under the provisions of or
governing Deposited Securities to vote or cause to be voted the Deposited
Securities represented by the ADSs evidenced by such Holder's ADRs in accordance
with such instructions. The Depositary will not itself exercise any voting
discretion in respect of any Deposited Securities. To the extent such
instructions are not so received by the Depositary from any Holder, the
Depositary shall take such action as is necessary, upon the written request
of
the Company and subject to applicable law, and the terms and conditions of
the
Deposited Securities, to cause such underlying Shares to be counted for the
purposes of satisfying applicable quorum requirements; provided, however that,
except to the extent Holders and beneficial owners of ADSs have been given
at
least 30 days to provide the Depositary with voting instructions, the Shares
shall not be so counted with respect to any matter as to which the Company
informs the Depositary (and the Company agrees to provide such information
promptly in writing) or the Depositary reasonably believes that (x) substantial
opposition exists or (y) materially affects the rights of holders of Shares.
For
purposes hereof, by way of example and not limitation, it is agreed that routine
matters, such as appointing auditors and directors (except where a competing
director or slate of directors is proposed), and resolutions to approve the
public offering or private placement of de minimis amounts of securities (i.e.
issuances of Shares which, based on the number of Shares issued and outstanding
prior to giving effect to such issuance, represents less than ten percent of
the
then outstanding Shares), would not materially affect the rights of holders
of
Shares. There can be no assurance that Holders generally or any Holder in
particular will receive the notice described above with sufficient time to
enable such Holder to return voting instructions to the Depositary in a timely
manner.
(13)
Changes
Affecting Deposited Securities.
Subject
to paragraphs (4) and (5), the Depositary may, in its discretion, amend this
ADR
or distribute additional or amended ADRs (with or without calling this ADR
for
exchange) or cash, securities or property on the record date set by the
Depositary therefor to reflect any change in par value, split-up, consolidation,
cancellation or other reclassification of Deposited Securities, any Share
Distribution or Other Distribution not distributed to Holders or any cash,
securities or property available to the Depositary in respect of Deposited
Securities from (and the Depositary is hereby authorized to surrender any
Deposited Securities to any person and, irrespective of whether such Deposited
Securities are surrendered or otherwise cancelled by operation of law, rule,
regulation or otherwise, to sell by public or private sale any property received
in connection with) any recapitalization, reorganization, merger, consolidation,
liquidation, receivership, bankruptcy or sale of all or substantially all the
assets of the Company, and to the extent the Depositary does not so amend this
ADR or make a distribution to Holders to reflect any of the foregoing, or the
net proceeds thereof, whatever cash, securities or property results from any
of
the foregoing shall constitute Deposited Securities and each ADS evidenced
by
this ADR shall automatically represent its pro rata interest in the Deposited
Securities as then constituted.
10
(14)
Exoneration.
The
Depositary, the Company, their agents and each of them shall: (a) incur no
liability (i) if any present or future law, rule or regulation of the United
States, the Republic of Korea or any other country, or of any governmental
or
regulatory authority or any securities exchange or market or automated quotation
system, the provisions of or governing any Deposited Securities, any present
or
future provision of the Company's charter, any act of God, war, terrorism or
other circumstance beyond its control shall prevent, delay or subject to any
civil or criminal penalty any act which the Deposit Agreement or this ADR
provides shall be done or performed by it or them (including, without
limitation, voting pursuant to paragraph (12) hereof), or (ii) by reason of
any
exercise or failure to exercise any discretion given it in the Deposit Agreement
or this ADR; (b) assume no liability except to perform its obligations to the
extent they are specifically set forth in this ADR and the Deposit Agreement
without gross negligence or bad faith; (c) in the case of the Depositary and
its
agents, be under no obligation to appear in, prosecute or defend any action,
suit or other proceeding in respect of any Deposited Securities or this ADR;
(d)
in the case of the Company and its agents hereunder be under no obligation
to
appear in, prosecute or defend any action, suit or other proceeding in respect
of any Deposited Securities or this ADR, which in its opinion may involve it
in
expense or liability, unless indemnity satisfactory to it against all expense
(including fees and disbursements of counsel) and liability be furnished as
often as may be required; or (e) not be liable for any action or inaction by
it
in reliance upon the advice of or information from legal counsel, accountants,
any person presenting Shares for deposit, any Holder, or any other person
believed by it to be competent to give such advice or information. The
Depositary, its agents and the Company may rely and shall be protected in acting
upon any written notice, request, direction or other document believed by them
to be genuine and to have been signed or presented by the proper party or
parties. The Depositary and its agents will not be responsible for any failure
to carry out any instructions to vote any of the Deposited Securities (provided
such act was in good faith), for the manner in which any such vote is cast
or
for the effect of any such vote. For the avoidance of doubt, the Depositary
shall have no responsibility whatsoever to the Company, any Holder or beneficial
owner or any other person with respect to any deficiency which might arise
because the Depositary is subject to any tax in respect of the Deposited
Securities or any part thereof or any income therefrom or any proceeds thereof.
The Depositary and its agents may own and deal in any class of securities of
the
Company and its affiliates and in ADRs. Notwithstanding anything to the contrary
set forth in the Deposit Agreement or an ADR, the Depositary and its agents
may
fully respond to any and all demands or requests for information maintained
by
or on its behalf in connection with the Deposit Agreement, any Holder or
Holders, any ADR or ADRs or otherwise related hereto to the extent such
information is requested or required by or pursuant to any lawful authority,
including without limitation laws, rules, regulations, administrative or
judicial process, banking, securities or other regulators. The Company has
agreed to indemnify the Depositary and its agents under certain circumstances
and the Depositary has agreed to indemnify the Company under certain
circumstances. Neither the Company nor the Depositary nor any of their
respective agents shall be liable to Holders or beneficial owners of interests
in ADSs for any indirect, special, punitive or consequential damages. No
disclaimer of liability under the Securities Act of 1933 is intended by any
provision hereof.
11
(15)
Resignation
and Removal of Depositary; the Custodian.
The
Depositary may resign as Depositary by at least 30 days prior written notice
of
its election to do so delivered to the Company, or be removed as Depositary
by
the Company by at least 30 days prior written notice of such removal delivered
to the Depositary. The Depositary may, after consultation with the Company
if
practicable,appoint substitute or additional Custodians and the term
"Custodian"
refers
to each Custodian or all Custodians as the context requires.
(16)
Amendment.
Subject
to the last sentence of paragraph (2), the ADRs and the Deposit Agreement may
be
amended by the Company and the Depositary, provided
that any
amendment that imposes or increases any fees or charges (other than stock
transfer or other taxes and other governmental charges, transfer or registration
fees, cable, telex or facsimile transmission costs, delivery costs or other
such
expenses), or that shall otherwise prejudice any substantial existing right
of
Holders, shall become effective 30 days after notice of such amendment shall
have been given to the Holders. Every Holder of an ADR at the time any amendment
to the Deposit Agreement so becomes effective shall be deemed, by continuing
to
hold such ADR, to consent and agree to such amendment and to be bound by the
Deposit Agreement as amended thereby. In no event shall any amendment impair
the
right of the Holder of any ADR to surrender such ADR and receive the Deposited
Securities represented thereby, except in order to comply with mandatory
provisions of applicable law. Any amendments or supplements which (i) are
reasonably necessary (as agreed by the Company and the Depositary) in order
for
(a) the ADSs to be registered on Form F-6 under the Securities Act of 1933
or
(b) the ADSs or Shares to be traded solely in electronic book-entry form and
(ii) do not in either such case impose or increase any fees or charges to be
borne by Holders, shall be deemed not to prejudice any substantial rights of
Holders. Notwithstanding the foregoing, if any governmental body or regulatory
body should adopt new laws, rules or regulations which would require amendment
or supplement of the Deposit Agreement or the form of ADR to ensure compliance
therewith, the Company and the Depositary may amend or supplement the Deposit
Agreement and the ADR at any time in accordance with such changed laws, rules
or
regulations. Such amendment or supplement to the Deposit Agreement in such
circumstances may become effective before a notice of such amendment or
supplement is given to Holders or within any other period of time as required
for compliance.
12
(17)
Termination.
Upon
the resignation or removal of the Depositary pursuant to the Deposit Agreement,
the Depositary may, and shall at the written direction of the Company, terminate
the Deposit Agreement and this ADR by mailing notice of such termination to
the
Holders at least 30 days prior to the date fixed in such notice for such
termination. After the date so fixed for termination, the Depositary and its
agents will perform no further acts under the Deposit Agreement and this ADR,
except to receive and hold (or sell) distributions on Deposited Securities
and
deliver Deposited Securities being withdrawn. As soon as practicable after
the
expiration of six months from the date so fixed for termination, the Depositary
shall sell the Deposited Securities and shall thereafter (as long as it may
lawfully do so) hold in a segregated account the net proceeds of such sales,
together with any other cash then held by it under the Deposit Agreement,
without liability for interest, in trust for the pro rata
benefit
of the Holders of ADRs not theretofore surrendered. After making such sale,
the
Depositary shall be discharged from all obligations in respect of the Deposit
Agreement and this ADR, except to account for such net proceeds and other cash.
After the date so fixed for termination, the Company shall be discharged from
all obligations under the Deposit Agreement except for its obligations to the
Depositary and its agents.
(18)
Further
Assurances.
The
Holders and each person holding an interest in this or any ADR shall take,
and
the Depositary is hereby authorized to take on their behalf, such additional
actions as may be necessary or appropriate under applicable law in order to
effectuate, carry out and perform all of the terms, conditions and purposes
of
the Deposit Agreement, all the transactions contemplated by the Deposit
Agreement, including, without limitation, the designation of one of the Holders
or persons holding an interest in this or any ADR as the representative of
all
Holders and persons holding an interest in ADRs.
13
