LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is entered into as of this 21st day of
March, 1997 by and between
AST RESEARCH, INC., a corporation organized and existing under the laws of the
State of Delaware with its principal office at 00000 Xxxxx Xxxxxxx, Xxxxxx,
Xxxxxxxxxx 00000-0000, X.X.X. (the "Borrower"); and
CREDIT LYONNAIS SEOUL Branch, a foreign bank branch duly licensed in Korea,
having its registered office at You One Xxxxxxxx, 00-00, Xxxxxxxx-Xxxx, Xxxxx-
Xx, Xxxxx, Xxxxx (the "Lender") and worldwide headquarters located in France.
WITNESSETH:
WHEREAS, the Borrower has requested the Lender to extend to the Borrower a loan
facility in the aggregate principal amount of up to Thirty Million United Stated
Dollars ("Dollars") (US$30,000,000) to finance the working capital requirement
of the borrower for its business operations and the Lender has agreed thereto on
the terms hereinafter set out;
NOW, THEREFORE, in consideration of the covenants herein contained, the parties
hereby agree as follows:
1. Loan
(A) Subject to the terms and conditions of this Agreement, the Lender hereby
agrees to make advances (the "Advance") in favor of the Borrower according to
the procedure set out in Subsection (B) below; provided that the total amount of
the Advances outstanding at any time shall not exceed Thirty million Dollars
(US$30,000,000) (the "Commitment").
(B) The Borrower may draw the loan in one or more drawdowns in Dollars which
the Lender determines in its sole discretion to be eligible for the purpose of
the loan transactions pursuant hereto; provided, that on the date four (4)
Banking Days prior to the proposed date of drawdown, all applicable conditions
precedent specified in Article 8 shall have been met. In this Agreement, "Loan"
shall mean the aggregate amount of principal of the Advances or, where the
context may require, the amount thereof then outstanding. "Banking Day" shall
mean a day on which (i) banks are open for business in New York and Seoul and
(ii) deposit transactions are carried on in Dollars in the London interbank
market ("Interbank Market").
(C) The Borrower shall give the Lender a notice of Drawdown substantially in the
form of Exhibit B hereto, at least four (4) Banking Days (or such shorter period
as the Lender shall otherwise agree) prior to the proposed date of such
Drawdown. Such notice, once received by the Lender, shall be irrevocable and
binding on the Borrower, and the Borrower shall reimburse the Lender for any
costs or losses incurred by the Lender in the event the Borrower does not
continue to satisfy such condition precedents as of the date of drawdown.
(D)The Commitment shall be terminated before the date (Commitment Termination
Date) falling one year after the date of the first drawdown.
(E) The Loan shall be used for purposes of funding the working capital
requirements of the Borrower for its business operation. However, the Lender
shall not have any responsibility as the Borrower's application of the loan.
2. INTEREST
(A)Interest shall be paid in arrears on each Interest Payment Date and shall be
calculated on the basis of the actual number of days elapsed and a year of 360
days at the interest rate equal to 0.40% per annum above the rate (the
"Interbank Rate") determined by the Lender to be the arithmetic mean (rounded
upwards, if necessary, to the nearest 1/16%) of the per annum interest rates for
deposits in Dollars for the relevant Loan Period quoted on page 3750 of the AP
Telerate System as at approximately 11:00 a.m. (London time) on the two (2)
Business Days prior to the first day of each Interest Period.
(B) If the Lender determines that the Interbank Rate is not available, the
Lender shall so notify the Borrower. The Lender and the Borrower shall then
enter into negotiations in good faith with a view to agreeing on an alternative
mutually acceptable basis for maintaining the Loan and for determining the
interest rates from time to time applicable to the Loan (hereinafter referred to
as the "Substitute Basis of Borrowing"). If at the expiry of twenty-five (25)
days from the date of any such notice, no Substitute Basis of Borrowing has been
agreed upon, then (i) the Borrower shall prepay the Loan on the thirtieth day
after the date of such notice, and (ii) interest shall be payable during such
period at the interest rate which has been applicable immediately prior to such
notice.
(C) If the Borrower fails to make payment when due of any sum hereunder
(whether at its stated maturity, by acceleration or otherwise), the Borrower
shall pay interest on the unpaid amount, to the extent permitted by law, from
and including such due date until the payment of said sum in full (after as well
as before judgment) at the rate of Two percent (2%) per annum above the
Interbank Rate, payable on demand by the Lender.
3. REPAYMENT
The Borrower shall repay each Advance in one lump sum on the last day of the
relevant Loan Period stated in the notice of drawdown set forth in Section 1(C),
together with all unpaid interest accrued on that Advance. Any amount repaid to
the Lender before the Commitment Termination Date will remain available for
reborrowing on the terms and conditions of this Agreement.
4. PAYMENTS
(A) Payments to be made by the Borrower hereunder shall be made in Dollars
without set-off or deduction to the Lender's account, account
No. 01-08411-0-001-00 with Credit Lyonnais New York Branch, New York, N.Y.
U.S.A. or such other account as the Lender may designate.
(B) Any payment made to or collected by the Lender hereunder, under the
Promissory Note (defined in Sub-section 8(A) (i) hereof) or under the Guarantee
shall be applied first against costs, expenses and indemnities due hereunder;
then against default interest, if any; then against interest due on the Loan,
then against the outstanding principal on the Loan.
(C)All sums payable by the Borrower hereunder, whether of principal, interest,
fees, expenses or otherwise, shall be paid in full, free of any deductions or
withholdings. In the event that the Borrower is prohibited by law from making
payments hereunder free of deductions or withholdings, then the Borrower shall
pay such additional amount to the Lender as may be necessary in order that the
actual amount received after deduction or withholding (and after payment of any
additional taxes or other charges due as a consequence of the payment of such
additional amount) shall equal the amount that would have been received if such
deduction or withholding had not been made.
(D)The Borrower shall pay directly to the appropriate taxing authority any and
all present and future taxes, levies, imposts, deductions, stamp and other
duties, filing and other fees or charges and any and all liabilities with
respect thereto imposed by law or by any taxing authority on or with regard to
any aspect of the transactions contemplated in this Agreement or the execution
and delivery of this Agreement or other documentation hereunder, except taxes
(other than taxes imposed on any payment made pursuant to Section 4(C) or this
Section 4(D))imposed on the overall net income of the Lender by the Republic of
Korea. The Borrower shall hold the Lender harmless from any liability with
respect to the delay or failure by the Borrower to pay any such taxes or
charges, and shall reimburse the Lender upon demand for any such taxes paid by
the Lender in connection herewith, together with any interest, penalties and
expenses in connection therewith.
(E)If the Borrower shall pay any tax or charge as provided herein or shall make
any deductions or withholdings from amounts paid hereunder, the Borrower shall
forthwith forward to the Lender official receipts or other evidence acceptable
to the Lender establishing payment of such amounts.
5. GUARANTEE
The Borrower shall deliver to the Lender the Guarantee duly executed by SAMSUNG
ELECTRONICS CO., LTD. with its registered head office at 000, 0-Xx, Xxxxxxxx-Xx,
Xxxxx-Xx, Xxxxx, Xxxxx (the "Guarantor") substantially in the form of Exhibit A
hereof and in any event satisfactory to the Lender and its counsel. The
Guarantee provided hereunder shall remain legal, valid and enforceable
throughout the term of this Agreement in all respects.
6. REPRESENTATIONS AND WARRANTIES
(A)The Borrower hereby represents and warrants:
i)that it has been duly organized and is in good standing under the laws of the
State of Delaware, has full legal power to enter into and perform this Agreement
and the Promissory Note and to borrow the funds available hereunder;
ii)that it has obtained or will obtain before the date of first drawdown all
necessary government approvals, consents and authorizations in United States of
America and Korea for the execution and delivery of this Agreement and
performance and observance of the terms of this Agreement including without
limitation payment hereunder in Dollars, and such terms will not materially
conflict with any existing law, with any other agreement to which the Borrower
is a party, nor with the Memorandum and Articles of Association, the regulations
or equivalent documents of the Borrower;
iii)the execution, delivery and performance by the Borrower of this Agreement
and all other documents and instruments to be executed and delivered hereunder
have been duly authorized or will be authorized prior to the date of first
drawdown by all appropriate actions of the Borrower (including without
limitation its Board of Directors);
iv)that the Borrower is not in default under any agreement to which it is a
party or by which it may be bound, a default in respect of which might have a
material adverse effect on the Borrower or its operations, properties or
financial condition, taken as a whole, and no litigation, administrative
proceeding or arbitration is presently pending or, to the best knowledge of the
Borrower, threatened against it or its properties, which might have a material
adverse effect on its operations, properties or financial conditions, taken as a
whole;
v)that the Loan when made will rank at least pari passu with all other present
or future indebtedness of the Borrower; and
vi)that this Agreement constitutes a valid and legally binding obligation of the
Borrower enforceable in accordance with its terms.
(B)The above representations and warranties shall be deemed to be repeated on
and as of the date of each Advance.
7. COVENANTS
The Borrower hereby covenants with the Lender that during the life of this
Agreement and while any amount is owing by the Borrower to the Lender hereunder
the Borrower shall:
i)forward promptly to the Lender at any time such financial information
regarding its affairs as the Lender may reasonably request;
ii)pay to the Lender reasonable costs, fees and expenses, including fees and
expenses of counsel, which the Lender may expend or become liable for in
preparation, implementation and enforcement of the Loan Agreement including
demanding, suing for, recovering and receiving payment of any sum due to the
Lender hereunder and under any documents executed pursuant hereto;
iii)pay all taxes, assessments and governmental charges upon it or upon its
properties promptly when due and, in any event, prior to the date on which
material penalties may become attached thereto;
iv)as soon as possible but in any event within five (5) days after occurrence,
give written notice to the Lender of any Event of Default as defined in Article
9 hereof or any event which, with the giving of notice or passage of time, or
both, would become an Event of Default and of any other matter which has
resulted or might result in a material adverse change in the Borrower's
financial condition or operations, taken as a whole;
v)maintain its corporate existence in good standing in compliance with all
applicable laws, regulations and other governmental requirements and continue to
conduct its business substantially as such business is now conducted;
vi)obtain and continue in full force and effect all governmental approvals,
consents, licenses, authorizations, declarations, filings and registrations as
may be necessary or advisable for the performance of all the terms and
conditions of this Agreement and every document, the execution and delivery of
which is contemplated herein, and to take all such additional action as may be
proper or advisable in connection therewith;
vii)not, without prior written notice to the Lender, permit any indebtedness,
obligation or liability, actual or contingent, of the Borrower to be secured by
or to benefit from any lien, pledge, mortgage, charge, encumbrance, security
interest or segregation or other preferential arrangement (whether or not
constituting a security interest) in favor of any creditor or class of creditors
in respect of any present or future properties, assets or revenues of the
Borrower or of the right of the Borrower to receive income except as otherwise
provided herein and except for encumbrances or any segregation or other
preferential arrangement (i) for taxes, assessments or other governmental
charges or levies on properties or assets of the Borrower if the same shall not
at the time be delinquent or thereafter can be paid without penalty or the
validity of which is being contested in good faith by appropriate proceedings
upon stay of execution of the enforcement thereof, (ii) imposed by law, such as
carriers', warehousemen and mechanics' liens and other similar liens arising in
the ordinary course of business and not material in amount, (iii) arising out of
pledges or deposits under workmen's compensation laws, unemployment insurance,
old age pensions, or social security or retirement benefits or similar
legislation, or (iv) on properties or assets of the Borrower created at the time
of acquisition of such properties or assets solely to secure the purchase price
of such property or assets; and
viii)not, without the prior written notice to the Lender, (i) merge or
consolidate with any other corporation, partnership or sole proprietorship, or
(ii) acquire all or a substantial part of the assets of any other corporation,
partnership or sole proprietorship.
ix)not, without the prior written consent of the Lender, (i) liquidate or
dissolve, or (ii) sell, transfer or otherwise dispose of its business, or any
significant portion of its property or assets.
8. CONDITIONS PRECEDENT TO DRAWDOWN
The obligation of the Lender to make available any part of the Loan is subject
to the fulfillment, as determined solely by the Lender, of the following
conditions precedent four (4) Business Days prior to the date of initial
drawdown (except as otherwise indicated below) and the continued fulfillment of
such conditions on the date of each succeeding drawdown:
(A)The Lender shall have received, in form and substance satisfactory to it, the
following:
i)a blank promissory note (the "Promissory Note") duly executed and delivered by
the Borrower and guaranteed by the Guarantor together with the power of attorney
authorizing the Lender to complete the Promissory Note;
ii)the Memorandum and Articles of Association (or equivalent documents), as
amended to date of the borrower;
iii)the Certificate of Incorporation concerning the Borrower, as amended to
date;
iv)a copy, certified a true copy by a duly authorized officer, of minutes of the
Board of Directors of the Borrower authorizing the execution and performance of
this Agreement and the Promissory Note, including the incurring of the debt
obligations hereunder, upon the terms of this Agreement and authorizing the
person(s) who signed, or will sign, the Agreement, the Promissory Note, and all
other documents to be executed pursuant hereto on the Borrower's behalf to do
so;
v)a certificate of the Secretary or the Director of the Borrower setting out the
names and signatures of the persons authorized to sign, on behalf of the
Borrower, the Agreement and all documents to be delivered by it pursuant hereto;
vi)the Certificate of Incorporation concerning the Guarantor, as amended to
date;
vii)the executed Guarantee, a duly authenticated copy of the minutes of the
Board of Directors' meeting of the Guarantor at which the resolutions
authorizing the execution, delivery and performance of the Guarantee and
authorizing the persons(s) who have or will execute the Guarantee to do so were
validly adopted;
viii)the seal certificate of the representative director of the Guarantor
together with the representative director's certificate certifying the
genuineness of the seal impressions of each member of the Guarantor's Board of
Directors participating at the Board of Directors' meeting referred to in (vii)
above and of the person(s) authorized to execute the Guarantee on the
Guarantor's behalf;
ix)copies, certified by a duly authorized officer of the Borrower to be true
copies and then to be currently in full force and effect, of any governmental
consents or approvals necessary in connection with the execution or performance
of the terms of this Agreement, the Promissory Note, or the Guarantee;
x)the notice of Drawdown as specified in Section 1(C); and
xi)such other documents as shall be requested by, and in form and substance
satisfactory to the Lender.
(B)The obligation of the Lender to advance the Loan is also subject to the
condition that no Event of Default and no event which with the passage of time
or the giving of notice, or both, would become an Event of Default shall have
occurred and be continuing, and the representations and warranties made herein
shall have remained and then be true and correct as if also made on the date of
the relevant drawdown and all legal matters in connection with the Agreement
shall be satisfactory to the Lender.
9. EVENT OF DEFAULT
In the event that:
i)the Borrower fails to pay in full any sum due hereunder and/or the Promissory
Note on the due date hereof or thereof; or
ii)the Borrower fails to perform or observe any term, covenant or agreement
contained herein or any term, covenant or agreement contained in any document
executed pursuant hereto; or
iii)any representation, warranty or statement made by the Borrower herein or
under any document executed or delivered pursuant hereto proves to have been
incorrect as of the date it was made or deemed made, or is breached in any
material respect; or
iv)any governmental consent, filing or approval granted or required in
connection with this Agreement, the Promissory Note, the Guarantee or any
document executed or delivered pursuant hereto is canceled, revoked, withdrawn
or modified in any way, or any new law or decree is issued which in the Lender's
opinion would prevent the Borrower from fulfilling its obligations hereunder or
under the documents related hereto, or be otherwise detrimental to the Lender's
interest; or
v)The Borrower or the Guarantor fails to pay when due any indebtedness or fails
to observe or perform any term, convenant or agreement contained in any
agreement by which it is bound, evidencing or securing any indebtedness, if the
effect of such failure is to accelerate or to permit (assuming the giving of
notice or passage of time or both, if required) the holder or holders thereof or
of any obligations issued thereunder to accelerate the maturity thereof or of
any such obligations whether or not such acceleration occurs or such default is
waived; or
vi)the Borrower or the Guarantor becomes insolvent or generally unable to pay
its debts when due, or takes any corporate action or other steps are taken or
legal proceedings are started for its winding-up, bankruptcy, administration,
reorganization, compulsory composition, liquidation, or dissolution or any
equivalent or analogous proceedings as for the appointment of a receiver,
trustee, administrator or similar officer of it or any or all of its revenues
and assets; or
vii)the Guarantee for any reason has been revoked, modified or becomes
unacceptable to the Lender or the Guarantor has breached any one of the terms
thereof or any event of default has occurred under and as defined in any other
loan agreement between the Lender and the Guarantor; or
viii)the whole or a substantial part of the business or assets of the Borrower
or the Guarantor is confiscated for any reason or sold, transferred or otherwise
disposed of without the prior written consent of the Lender or an action is
taken for the winding-up of the Borrower or the Guarantor, or the Borrower or
the Guarantor stops or threatens to stop payment of its debts or makes or seeks
to make any arrangement or composition with its creditors; or
ix)it becomes unlawful for the Borrower to perform any obligation hereunder, or
for the Guarantor to perform its obligations under the Guarantee, or
x)any circumstances occur which in the opinion of the Lender give reasonable
grounds for belief that the Borrower or the Guarantor may not (or may not be
able to) perform its obligation hereunder or under any of the Promissory Note or
under the Guarantee;
then, at the option of the Lender, the obligation of the Lender to advance the
Loan hereunder shall immediately cease and the Lender may declare, by notice to
the Borrower, the principal of the Loan, accrued interest thereon and all other
amounts then owed by the Borrower to the Lender immediately due and payable, and
interest shall begin to accrue on all such sums at the interest rate specified
in Section 2(C) hereof and the Lender may take all such other actions as are
permitted by law.
10. CHANGES IN APPLICABLE LAW
If any change in any present or future applicable law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration thereof or any new law or regulation or directive shall make it
impossible or unlawful for the Lender to give effect to its obligations
hereunder or to maintain the Loan, the Lender shall give notice of such an
occurrence to the Borrower, whereupon the Lender's obligations hereunder shall
immediately terminate and the Borrower shall, within 30 days after receipt of
such notice, repay or prepay to the Lender the Loan together with accrued
interest thereon and all other amounts owing or becoming due to the Lender
hereunder.
11. MISCELLANEOUS
(A)This Agreement and all documents executed pursuant hereto shall be governed
by and construed in accordance with the laws of the Republic of Korea.
(B)The representations and warranties of the Borrower set forth herein shall
survive the making of the Loan, and the obligations of the Borrower hereunder to
pay interest, costs or other amounts to the Lender shall survive the repayment o
the Loan.
(C)Whenever any payment or computation is to be made on a day which is not a
Banking Day, such payment or computation shall be made on the next succeeding
Banking Day unless, with respect to payment, as a result thereof, such payment
would be made in the next calendar month, in which case payment shall be made on
the preceding Banking Day. Any adjustment so made shall, as appropriate, be
reflected in the computation of interest, fees and other amounts due hereunder.
(D) All taxes, stamp duties, public imposts and other charges and expenses
payable in the United States of America or Korea on account of or in connection
with the execution and performance of this Agreement, the Promissory Note and
the Guarantee shall be borne solely by the Borrower.
(E)The Borrower represents and warrants that this Agreement and the Loan are
commercial rather than public or governmental acts and that the Borrower is not
entitled to claim immunity from legal proceedings with respect to itself or any
of its property on the grounds of sovereignty or otherwise under any law or in
any jurisdiction where an action may be brought for the enforcement of any of
the obligations arising under or relating to this Agreement or the Promissory
Note. To the extent that the Borrower or any of its properties has or hereafter
may acquire any right to immunity from set-off, legal proceedings, attachment
prior to judgment, other attachment or execution of judgment on the grounds of
sovereignty or otherwise, the Borrower hereby irrevocably waives such rights to
immunity in respect of its obligations arising under or relating to this
Agreement or the Promissory Note.
(F)This Agreement may be amended or supplemented only in writing by mutual
agreement by the Lender and the Borrower and subject to government approval, if
required.
(G)This Agreement shall be binding upon and inure to the benefit of the Borrower
and the Lender and their respective successors and assigns, except that the
Borrower may not assign any of its rights or obligations hereunder, except upon
the prior written consent of Lender.
(H)All notices, demands, requests, statements or other communications to be made
or given by the Borrower hereunder shall be in the English language. Any
documents required to be delivered pursuant to this Agreement which are not in
the English language must be accompanied by a certified English language
translation thereof and in the event of any conflict between the original of the
document and the English language translation thereof, the English language
translation shall prevail.
(I)No delay or omissions by the Lender in exercising any of its rights under
this Agreement shall operate or be construed as a waiver thereof nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. In case any one or more of
the provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
(J)i)The Borrower hereby irrevocably consents that any legal action or
proceeding against it or any of its properties or assets with respect to any of
the obligations arising under or relating to this Agreement or the Promissory
Note may be brought in Seoul Civil District Court and by execution and delivery
of this Agreement, the Borrower hereby submits to and accepts with regard to any
such action or proceeding, for itself and in respect of its properties and
assets, generally and unconditionally, the jurisdiction of the aforesaid court.
The Borrower hereby agrees, upon demand of the Lender at any time, to appoint
and report to the competent court an agent to receive for and on its behalf
service of process in Seoul, Korea in any legal action or proceeding with
respect to this Agreement or the Promissory Note. The foregoing, however, shall
not limit the rights of the Lender to serve process in any other manner
permitted by law or to bring any legal action or proceeding or to obtain
execution of judgment in any other jurisdiction. The Borrower further agrees
that, to the extent permitted by law, final judgment against it in any such
action or proceeding shall be conclusive and may be enforced in any other
jurisdiction within or outside Korea by suit on the judgment, a certified copy
of which shall be conclusive evidence of the fact and of the amount of its
indebtedness.
ii)The Borrower hereby waives any right it may have under the laws of any
jurisdiction to commence by publication any legal action or proceeding with
respect to this Agreement, or the Promissory Note.
iii)The Borrower hereby irrevocably waives any objection which it may now or
hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement, or any of the Promissory Note in
Seoul, Korea, and hereby further irrevocably waives any claim that Seoul is not
a convenient forum for any such suit, action or proceeding.
(K)This Agreement and the documents referred to herein constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
shall supersede any prior or simultaneous expressions of intent or understanding
with respect to this transaction.
(L)Any notice required or permitted to be given hereunder shall be in writing
and shall be (i) personally delivered; (ii) transmitted by postage prepaid mail
(airmail if international), or (iii) transmitted by telex or facsimile to the
parties as follows, as elected by the party giving such notice:
To the Borrower:AST Research, Inc.
Attn: Treasurer
00000 Xxxxx Xxxxxxx
Xxxxxx, XX 00000 U.S.A.
Facsimile: (000) 000-0000
To the Lender:Credit Lyonnais, Seoul Branch
You One Building, 00-00, Xxxxxxxx-Xxxx
Xxxxx-Xx, Xxxxx, Xxxxx
Telex: K23474 CREDIKO
Facsimile: (000) 000-0000
The date of any notice or other communication hereunder shall be deemed to be
(i) the date of receipt if delivered personally, (ii) the date ten (10) days
after posting if transmitted by mail or (iii) the date of transmission with
confirmed answerback or appropriate evidence of receipt if transmitted by telex
or by facsimile, whichever shall first occur, provided, that any notice to be
given to the Lender shall be effective only when received by the Lender. Any
party may change its address for purposes hereof by written notice to the other
in a manner as set forth in this section.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized representatives as of the day and year first
written above.
Borrower: AST RESEARCH, INC.
/s/ WON X. XXXX
Name: Won X. Xxxx
Title: Senior Vice President, Finance and
Chief Financial Officer (Acting)
Lender: CREDIT LYONNAIS, SEOUL BRANCH
/s/ P.H. JO
Name:P.H. Jo
Title:Assistant General Manager
