EXHIBIT 10.45
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JOINT VENTURE AGREEMENT
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THIS AGREEMENT, made and entered into this day _______of March,
1998, by and among:
Kopin Corporation, a corporation organized and existing under the laws of
the State of Delaware, having its principle place of
business at Taunton, Massachusetts, U.S.A. ("Foreign Investor"),
Kowon Technology Co., Ltd., a corporation organized and existing
under the laws of the Republic of Korea, having its principle
place of business at 000-0, Xxxxxxxxxxxx-xxxx, Xxxxxx-xx,
Kyunggi-do, Korea ( the "JVC"), and
Korean Shareholders listed in Schedule A hereto, all being the
current shareholders of the JVC, being either citizens of the
Republic of Korea or corporations organized and existing under
the laws of the Republic of Korea with the addresses set forth in
Schedule A opposite their names ("Korean Investors"), represented
by one of such Korean Investors, Xxx Xxxxx-Xxxx ("Xxx"),
WITNESSETH THAT:
WHEREAS, Foreign Investor is engaged in the development,
manufacture and distribution of certain semiconductor materials
and devices in the worldwide market; and
WHEREAS, the JVC was incorporated by the Korean Investors with
the business purposes to engage in the manufacture and marketing
of certain semiconductor materials and device products in Korea;
WHEREAS, the Korean Investors are currently the shareholders of
the JVC; and
WHEREAS, Foreign Investor and Korean Investors desire to operate
the JVC's business as a joint venture and thus, Foreign Investor
desires to subscribe for certain shares to be newly issued by the
JVC and the JVC and the Korean Investors agree to issue the
additional shares to Foreign Investor as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, the parties agree as follows:
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Article 1. Definitions
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1.1 The terms defined in this Article shall have the meaning
ascribed to them herein whenever they are used in this
Agreement, unless otherwise clearly indicated by the con-
text.
1.2 An "affiliate" shall mean any corporation, association, or
other entity which, directly or indirectly, controls a party
hereto or is controlled by said party or is under common
control with said party, where "control" means power and
ability to direct the management and policies of the con-
trolled enterprise through ownership of voting shares of the
controlled enterprise or by contract or otherwise.
1.3 "Government Approval" of any action to be taken by either
party or by the JVC herein shall mean such approval of,
confirmation of, or consent to said action, together with
such licenses, permits, or other permissions reasonably
required for said action, all as the statutes, decrees,
regulations, and rulings of governmental authority (collec-
tively "legal authority") within Korea may require to be
obtained in connection with said action from such govern-
mental authority or from political subdivisions thereof.
Whenever any form of "Government Approval" is used herein,
it shall be interpreted and construed to include the re-
quirement that such approval be in form and substance ac-
ceptable to the parties hereto.
1.4 "Product" shall mean semiconductor materials and devices to
be agreed upon by the parties from time to time as the
products to be manufactured and sold by the JVC.
1.5 "Party" or "Parties" shall mean the Korean Investors or the
Foreign Investors acting as if they were a single entity,
respectively, or the both Investors acting so.
Article 2. Purpose of the Agreement
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The purpose of this Agreement is to provide for the ownership,
and operation by the parties of the JVC.
Article 3. Purpose of the JVC
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3.1 The purpose of the JVC will be to engage in the following
business activities:
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(a) the manufacture, sale, export and distribution of semiconductor
materials and devices; and
(b) any and all acts, things, business and activities which are related,
incidental or conducive directly or indirectly to the attainment of
the foregoing objectives.
3.2 The JVC's Articles of Incorporation shall be as agreed to by and
between the parties, and the parties shall cause them to be amended
from time to time as may be required to ensure that they at all times
conform with the terms and conditions of this Agreement and any
amendments to this Agreement.
3.3 The duration of the JVC shall be perpetual subject to the provisions
of the Articles of Incorporation and of this Agreement.
Article 4. Subscription for and Issuance of Shares
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4.1 Subject to the Government Approval of this Agreement, the
JVC shall issue to Foreign Investors and Foreign Investors
shall acquire from the JVC, the shares of the JVC in
accordance with terms and conditions hereunder.
4.2 The total initial investment and the total number of common
shares to be initially subscribed for by the Foreign
Investors under this Agreement shall be 1.8 billion Won in
exchange for 114,000 common shares of the JVC, five thousand
(5,000) Won par value per share.
4.3 The total initial investment amount of Foreign Investor set
forth in Article 4.2 above shall be paid within twenty-four
(24) months from receipt of Government Approval of this
Agreement. The schedule of the initial investment by
Foreign Investor shall be mutually agreed upon by Foreign
Investor and the Korean Investors.
4.4 Upon completion of the initial investment by the Foreign
Investor as contemplated in Article 4.2 above, the parties
will hold shares of the JVC as follows:
Korean Investors: 120,000 shares (51%)
Foreign Investor: 114,000 shares (49%)
Unless the parties otherwise agree in writing, each party (together
with such lawful transferees as are permitted
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herein) shall hold, throughout the life of the JVC, the above-
mentioned proportion of the voting common shares of the JVC.
4.5 All shares to be issued to Foreign Investor by the JVC pursuant to
this Agreement shall be common shares of one class registered in
nominative form evidenced by share certificates and shall rank pari
passu in all respects with all other common shares issued by the
JVC.
4.6 Any shares of stock subscribed for and accepted by Foreign Investor
shall be fully paid for prior to issuance thereof. Cash amounts
payable by any party shall be paid by wire transfer of funds to such
bank accounts as the JVC (or its promoters) shall by writing
designate.
4.7 During 'the term of the Agreement, each stock certificate issued
hereunder will bear the following words:
"Sale, transfer or pledge of the shares of stock
represented by this certificate is restricted
subject to the Joint Venture Agreement dated
______________________, 1998, between Kopin
Corporation and Korean Individual Investors,
a copy of which is on file at the principal
office of the Company."
4.8 Future financing needs of the JVC shall be met primarily through a
combination of equity borrowing and application of internally
generated funds consistent with a general philo-sophy of maintaining
a prudent capital structure.
4.9 The parties shall have the preemptive right to subscribe for any
shares to be issued by the JVC in proportion to their shareholding
ratio. In the event that additional capital contributions by the
parties are needed above and beyond those set forth in Article 4.2
above, each Foreign Investor and each Korean Investor will have the
right to contribute sufficient capital to keep the percentage of its
ownership interest in JVC constant.
4.10 Notwithstanding anything contained in this Article 4 to the contrary
(including without limitation Articles 4.4, 4.8 and 4.9), following
the completion of the initial investment by the Foreign Investor as
contemplated in Article 4.2 above, the Foreign Investor will have
the right to subscribe for an additional 108,858 common shares (or
to acquire notes of the JVC convertible into such number of common
shares) in exchange for 1.2 billion Won. The parties will use their
best efforts to obtain Government Approval of such
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additional investment promptly following the initial investment by
the Foreign Investor. Following receipt of Government Approval, the
schedule of the additional investment by Foreign Investor shall be
mutually agreed upon by Foreign Investor and the Korean Investors.
Upon completion of the additional investment by the Foreign Investor
as contemplated by this Article 4.10, the parties will hold shares
of the JVC as follows:
Korean Investors: 120,000 shares (35%)
Foreign Investors: 222,858 shares (65%)
In the event that Foreign Investor is unable to complete the
additional investment contemplated hereby for any reason (other than
due to the election by the Foreign Investor or a breach of Foreign
Investor's obligations hereunder) within six (6) months following
the completion of its initial investment under Article 4.2, then
Foreign Investor will have the right to sell and transfer, and the
JVC will purchase, all or a portion of Foreign Investor's shares in
the JVC at the fair market price of the shares to be determined by
an appraiser mutually acceptable to the parties concerned. The JVC
will pay the Foreign Investor promptly following the final
determination of the purchase price in cash or at its election by
delivery of a promissory note having a maturity of not more than two
years from the closing, bearing a commercial rate of interest and
secured by a pledge of the sold shares.
Article 5. Representations and Warranties of the Parties
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5.1 The JVC and Korean Investors hereby jointly make each of the
representations, warranties and agreements set forth in Schedule B
attached to this Agreement.
5.2 Foreign Investor hereby makes each of the representations,
warranties and agreements set forth in Schedule C to this Agreement.
Article 6. Conditions Precedent to Issuance of Shares
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All obligations of the JVC to issue to Foreign Investor, and of Foreign
Investor to acquire from the JVC, shares pursuant to the provisions of
Article 4 hereof are subject to and conditioned upon fulfillment of each
of the following conditions:
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(a) All Government Approvals of this Agreement have been obtained in
form and substance satisfactory to Foreign Investor and the Korean
Investors;
(b) Korean Investors are satisfied that all representations and
warranties made by Foreign Investor under Article 5.2 above, as set
forth in Schedule C hereto, were true when made and are true and
accurate in all respects at the time of the JVC's issuance of shares
under Article 4.1 hereof; and
(c) Foreign Investor is satisfied that all representations and
warranties made by the JVC or and the Korean Investors under Article
5.1 above, as set forth in Schedule B hereto, were true when made
and are true and accurate in all respects at the time of its
subscription for shares under Article 4.1 hereof.
(d) New Articles of Incorporation of the JVC in the form and substance
agreed upon by the parties should have been adopted by the JVC prior
to the subscription of the shares by the Foreign Investor.
Article 7. Indemnification
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7.1 Each of the Korean Investors and the JVC, jointly and sever-ally,
agrees to indemnify, defend and hold harmless Foreign Investor (and
its directors, officers, employees, affiliates, agents,
representatives, successors and assigns) from and against any and
all losses, liabilities, damages, deficiencies, demands, claims,
actions, judgments or causes of action, assessments, costs or
expenses (including, with-out limitation, bonds, interest, penalties
and reasonable attorneys' fees and disbursements) ("Losses") based
upon, arising out of or otherwise in respect of any inaccuracy in or
any breach of any representation, warranty, covenant or agreement of
the Korean Investors contained in this Agreement or any Schedule
hereto, or any document or other papers delivered by the Korean
Investors to Foreign Investor in connection with this Agreement.
7.2 Foreign Investor agrees to indemnify, defend and hold harmless the
Korean Investors (and their agents, representatives, heirs,
executors, administrators, successors and assigns) from and against
any and all Losses based upon, arising out of or otherwise in
respect of any inaccuracy in or any breach of any representation,
warranty, covenant or agreement of Foreign Investor contained in
this
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Agreement or any Schedule hereto, or in any document or other papers
delivered by Foreign Investor to the Korean Investors in connection
with this Agreement.
7.3 Any material losses and any liabilities in any form whatsoever that
arise in connection with acts or omissions of the JVC or any of its
shareholders, directors, officers or employees prior to the date
Foreign Investor first sub-scribes for shares of the JVC that are
discovered within one (1) year from the date Foreign Investor first
subscribes for shares of the JVC (whether actually paid or merely
claimed or disclosed within that period), and that were not dis-
closed fully and accurately in the representations and warranties of
the JVC and Korean Investors set forth in Schedule B hereto, shall
be at the Korean Investors' own expense and they shall fully and
without delay satisfy all claims and hold harmless Foreign Investor
and the JVC for any such losses or liabilities.
Article 8. Transfer of Shares
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8.1 If either party hereto desires to sell, assign or other-wise
transfer all or any portion of its shares in the JVC, such party
("selling party") shall offer all such shares by written notice
first to the other party ("offeree party") specifying price, terms
and conditions of sale; provided, however, that if, pursuant to the
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policies of the Korean Government, Foreign Investor is
required to sell or transfer any portion of its shares of the JVC,
Foreign Investor shall be free to sell or transfer such portion of
its shares free of the restrictions of this Article 8.1;
(a) If the offeree party does not accept the offer with- in sixty
(60) days from the date of its dispatch ("acceptance period"),
then the selling party shall thereafter be free to dispose of
its shares within a period of sixty (60) days ("free sale
period") after the expiration of said acceptance period;
provided, however, that the selling party shall not sell such
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shares to any third party either (i) at a lower price than the
price at which such shares were offered to the offeree party,
or (ii) on other terms or conditions more favorable than those
on which shares were offered to the offeree party, except for
such other terms and conditions as are reasonably necessary to
meet foreign exchange or foreign investment regulations of
Korea.
(b) If the shares are not sold or transferred to third parties
upon the terms established herein and within
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the free sale period, then they shall automatically become
subject once more to the terms of this Article as if they had
never before been offered for sale.
(c) The Foreign Investor shall have the right to designate a third
party acceptable to the Korean Government who may exercise the
right granted to the Foreign Investor as offeree party
hereunder.
8.2 Notwithstanding the foregoing Article 8.1, (i) transfer or
assignment of all or any portion of its shares in the JVC by any
Foreign Investor to or among its affiliates or the other Foreign
Investor, or (ii) transfer or assignment of all or any portion of
its shares in the JVC by any Korean Investor to or among the other
Korean Investors will not be subject to the restrictions or
requirements under this Article 8.
8.3 In the event of the death, bankruptcy, insolvency, termination from
the JVC employment, or mental or physical disability an individual
JVC shareholder, his shares that are not otherwise subject to the
JVC's repurchase right under Article 8.5 shall be offered in the
first instance to the Foreign Investor, and in the second instance
to the Korean Investors, at a purchase price equal to two times the
individual JVC shareholder's purchase price for his shares.
8.4 Anything to the contrary notwithstanding, any sale or transfer
contemplated by this Article 8 shall be subject to Government
Approval, if required. If necessary, the ac-ceptance period and/or
the free sale period referred to in Article 8.1 above shall be
extended until such Approval has been obtained or officially and
finally denied, provided that the party seeking to extend such
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acceptance period shall have used due diligence in soliciting
such Approval.
8.5 Notwithstanding any other rights which may be granted by this
Agreement or otherwise, each Korean Investor hereby agrees that
he/it shall not sell or otherwise transfer, or cause to be sold or
transferred, his/its ownership, or any part of his/its ownership, in
the JVC to more than one individual, without the express prior
approval of Foreign Investor. The shares of the JVC held by any such
Korean investor who is an employee of the JVC (a "Founding
Employee") shall be subject to a right of repurchase by the JVC or a
party designated by the JVC at the price originally paid therefor by
the Founding Employee. Such repurchase right shall be exercisable at
any time within ninety (90) days after the termination of the
Founding Employee's employment with the JVC for any reason by
delivery to the Founding Employee or his or her estate, personal
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representative, or beneficiary with a check in the amount of the
purchase price for the shares being repurchased. 33 1/3% of each
Founding Employee's shares shall be released from the repurchase
option under this Article 8.5 on each of the next three (3)
successive anniversaries of this Agreement.
8.6 If either party hereto shall sell or otherwise transfer all or any
part of its shares to a third party (other than the offeree party's
designee), such selling party shall cause the third party acquiring
such shares, as a condition of such acquisition, to furnish a
written undertaking to the other party and the JVC agreeing to
observe and be bound by all provisions of this Agreement as if it
had executed this Agreement in place of the party who sold the
shares. In addition, such selling party shall (so long as it owns
any shares in the JVC) be responsible to the offeree party in
respect of such purchaser or transferee, to secure complete and
timely observance of the provisions of this Agreement by such
purchaser or transferee.
8.7 No party shall pledge or hypothecate the shares of the JVC nor
otherwise use them as collateral nor for any other purpose which
could result in an involuntary transfer or assignment of such shares
to third parties, unless consent to such pledge, hypothecation or
other such application has been received in writing from the other
party.
8.8 Since damages arising from breach of the above-mentioned obligations
under Article 8 may be difficult to compute with precision, the
parties agree that any party found to have sold or transferred any
shares in violation of the terms of this Article shall pay to the
non-breaching party twice the value of the shares transferred in
violation of this Article (as appraised by the Korea Appraisal
Board) or twice the consideration received for said shares,
whichever shall be greater. The parties agree that such computation
of damages is fair and reasonable. Application of this provision
shall not prevent a party hereto from enforcing its rights or
augmenting its protection by such other remedies as may be
available.
Article 9. General Meetings of Shareholders
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9.1 The Board of Directors shall decide the time and place for convening
all meetings of the shareholders subject to the Articles of
Incorporation and applicable requirements of Korean law.
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9.2 The Ordinary General Meeting of Shareholders shall be held within
three (3) months after the end of each fiscal year.
9.3 An Extraordinary General Meeting of Shareholders may be held at any
time in compliance with resolutions of the Board of Directors and
applicable requirements of Korean law.
9.4 Except as otherwise required by Korean law, or by this Agreement,
all actions and resolutions of the shareholders shall be adopted by
the vote of a majority of the total number of shares issued and
outstanding entitled to vote thereon.
9.5 Notwithstanding the foregoing Article 9.4, the following corporate
actions shall be adopted by the vote of two-thirds or more of the
total issued and outstanding shares of the JVC entitled to vote:
(a) any change to the Articles of Incorporation of JVC
(b) any increase of, or reduction in, the authorized share capital
of JVC or variation of the rights attaching to any shares of
JVC;
(c) any reduction of the issued share capital of JVC;
(d) the dissolution or liquidation of JVC or its merger into, or
consolidation or amalgamation with, any other company;
(e) the dismissal of a director or of a statutory auditor;
(f) transfer or pledge of the whole or a substantial part of the
assets or undertakings of JVC or the acquisition by JVC of the
whole or part of the undertaking of any other person or
entity, or the capital stock or loan capital of any company,
or entry by JVC into any joint venture or partnership;
(g) any other matters the adoption of which requires a special
resolution of the shareholders at a general meeting under the
Korean Commercial Code.
9.6 The Representative Director elected in accordance with Article 9.1
shall preside at all General Meetings of Share holders. In the event
that the Representative Director is absent or fails to serve as
Presiding Officer of any General Meeting of Shareholders, the
directors shall elect someone from among themselves to preside in
his place.
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9.7 All General Meetings of Shareholders shall be conducted both in the
English and Korean languages. All minutes of the General Meetings of
Shareholders shall be prepared both in the English and Korean
languages. In the event of any conflict between the English and
Korean versions of the minutes, the English version shall prevail.
Article 10. Board of Directors and Statutory Auditor
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10.1 Foreign Investor and Korean Investors will exercise their respective
voting rights in JVC and take such other steps as are necessary to
ensure:
(a) that the Board of Directors of JVC consists of five (5)
members;
(b) that of such five (5) members, three (3) shall be nominated by
Korean Investors and two (2) shall be nominated by Foreign
Investor and that the parties shall procure the nomination and
election of members nominated by the other parties, provided
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that following completion of the additional investment
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contemplated by Article 4.10 of this Agreement, Foreign
Investor shall nominate (3) directors and Korean Investors
shall nominate (2);
(c) that if either party wishes to change its nominated directors
with or without cause, the other party will vote accordingly;
provided, however, that if such dismissal is without cause, the
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party proposing the dismissal shall indemnify and hold JVC and
the other party harmless for any and all damages and other
expen-ses that may arise from such action.
10.2 In case the position of a director of JVC becomes vacant for any
reason, Korean Investors and Foreign Investor agree to cause their
shares to be voted to elect as director a person nominated by the
party who nominated the director whose office is vacant.
10.3 Ordinary meetings of the Board of Directors shall be held
immediately following the Ordinary General Meeting of Shareholders
each fiscal year. Upon the request of any director, the JVC shall
convene additional meetings of the Board of Directors upon due
notice as required by the Articles of Incorporation and law.
10.4 Except as otherwise provided in this Agreement, all important
corporate matters, including but not limited to
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the following, shall require a resolution by the Board of Directors
to be adopted by an affirmative vote of at least three (3) directors
in office including each of the members nominated by the Foreign
Investor:
(a) increase of the paid-in capital of the JVC;
(b) approval or modification of the annual and multi-year business
(budget and operational) plan, approval modi-fication of
financing, accounting and pricing policies or practices;
(c) approval of annual financial statements and any recom-mendation
to the shareholders regarding allocation of net profit,
including declaration of dividends or other form of
distribution to shareholders;
(d) entering into a contract or contracts during any 3 month period
for:
(i) capital expenditures in excess of an aggregate amount of
US$50,000;
(ii) any acquisition or disposition of assets in excess of an
aggregate amount of US$50,000; and
(iii) any expenditure in excess of the approved capital budget;
(f) any arrangement relating to the creation of indebted-ness of
JVC for borrowed money;
(g) establishing any pledge, mortgage, or encumbrance on the JVC's
assets or entering into an agreement to bind the JVC on any
surety or guarantee;
(h) addition of new product lines;
(i) filing a suit against or entering into a settlement with any
third party with respect to any claim in excess of US$15,000;
(j) redemption, repurchase or other acquisition of any shares of
the JVC;
(k) any of the matters described in Article 9.5; and
(1) any grant of stock options.
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10.6 All meetings of the Board of Directors shall be conducted both in
the English and Korean languages. All minutes of the meetings of the
Board of Directors shall be prepared both in the English and Korean
languages. In the event of any conflict between the English and
Korean versions of the minutes, the English version shall prevail.
10.7 The parties shall nominate, by mutual agreement, the statutory
auditor to perform the legally required functions of the office as
defined by the statutes. It is understood that the statutory auditor
shall not replace or serve as the Independent Public Accountant of
JVC.
Article 11. The Representative Director and Other Officers
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11.1 The Board of Directors shall elect from its members a Representative
Director of JVC who shall be nominated by Foreign Investor. The
Representative Director shall also hold the title of President and
shall have the authority to manage day-to-day operations of the JVC.
11.2 The Board of Director shall elect from its members a Vice President
who shall be nominated by Korean Investors.
11.3 Managers of the JVC shall be nominated by Korean Investors and
appointed by the Board of Directors.
11.4 The duties and powers of the officers shall be specified in the
Articles of Incorporation or internal regulations of JVC. The Board
of Directors shall approve internal regula-tions and job
descriptions that specify in detail the areas of responsibility of
the executive officers.
Article 12. Compensation of Officers and Employees
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12.1 In principle, only directors serving in a management capacity
("standing directors") will be compensated, provided, however, that
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non-standing directors may be reimbursed for such travel and other
expenses as may reasonably be incurred by them in the performance of
their duties to the JVC.
12.2 Salaries, bonuses and other emoluments of directors, au-ditors and
employees of the JVC shall be reviewed annually by the parties in
consultation with the directors of the JVC, and the general practice
current in Korea shall be taken into consideration.
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Article 13. Operating Committee
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The JVC may have an Operating Committee to be formed by members designated
by the Board of Directors. The Operating Committee will have such powers,
authorities, and obligations as determined and delegated by the Board of
Directors. The Board of Directors may not, however, delegate any powers
and authorities with respect to the matters set forth in Articles 7.4 and
7.5 above.
Article 14. Accounts and Auditing
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14.1 The JVC shall keep its accounting books and records at the head
office of the JVC for inspection by the parties or their
representatives upon request of either party.
14.2 The parties agree to cause the books and records of JVC to be
audited at the end of each fiscal year during the term of this
Agreement by an independent public accounting firm of international
reputation which is mutually acceptable to the parties. The
Independent Public Accountant shall yearly provide the parties with
a financial report ("Annual Re-port") in the English and Korean
languages in accordance with generally accepted Korean accounting
principles and practices no later than 45 days after the end of the
fiscal year in question. Copies of such Annual Report shall be
provided to both parties hereto at JVC's expense. Subject to the
approval of an ordinary general meeting of shareholders, such Annual
Audits shall be final and binding upon the parties as to the
revenue, cost, fees, expenses, losses and profits of JVC, in the
absence of manifest error or fraud.
14.3 In addition to the Annual Report, the JVC shall submit the
shareholders, on a quarterly basis, within a reasonable period of
time following each quarter, a summary financial report with copies
of the balance sheet and income statement in Korean and English.
14.4 In addition to the Annual Report and quarterly reports, the JVC
shall submit to the shareholders on a monthly basis, within 25 days
of the end of each month, financial statements as of the end of such
month in the form customarily prepared by managers for internal use.
14.5 The fiscal year of JVC shall commence on January 1 and end on
December 31 of each year.
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Article 15. Dividends
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The shareholders shall amicably discuss and unanimously agree upon
disposition of profits that ZVC earns in any year, taking into account the
capital requirements of JVC, requirements of the annual budget and
operational plan approved by the Board of Directors and future growth of
JVC.
Article 16. 0peration of the JVC
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16.1 The JVC will have the right to sell the Products in Korea and other
countries of the Pacific Rim as agreed upon by the parties hereto.
16.2 The JVC shall purchase adequate insurance to insure those business
risks as are customarily covered in the industry in Korea, including
but not limited to product liability.
Article 17. Support of the JVC
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17.1 Foreign Investor shall assist the JVC with its expertise in research
& development, designing, prototyping, tooling and manufacturing the
Products, and equipment and plant layout, etc. in accordance with a
Technical Assistance Agreement. As soon as possible after
incorporation of the JVC, the parties shall cause the JVC to enter
into a Technical Assistance Agreement with Foreign Investor.
17.2 Korean Investors shall assist the JVC with their expertise in plant
engineering, maintenance, plant building, environmental issues,
finance, human resources, and sales and marketing of the Product.
17.3 The JVC and the Korean Investors shall not and JVC shall assure that
its employees do not, disclose to any third party any information,
data or technology or any other proprietary information of Foreign
Investor provided to JVC under this Agreement. JVC shall, during and
after the term of this Agreement, keep such proprietary information
strict-ly in confidence for use solely as authorized under this
Agreement and the Technical Assistance Agreement contemplated
hereunder.
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Article 18. Term and Termination
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18.1 This Agreement shall continue in effect until terminated pursuant to
the provisions of this Agreement or by mutual agreement of the
parties hereto.
18.2 This Agreement shall be terminable forthwith upon sending notice in
writing upon the occurrence of one or more of the following events:
(a) by either party hereto, if Government Approval of this
Agreement has not been obtained within six (6) months of the
date this Agreement has been signed by both parties hereto or
if Government Approval for all ac-tions to be taken by either
party or JVC herein, as reasonably required for the conduct of
JVC's business as contemplated herein and for enjoyment of the
bene-fits to be secured by each party herein, fails to be
obtained or is withdrawn; or if any subsequent enact-ment of
law or regulation or any subsequent act of governmental
authority in Korea or in Canada shall, in the reasonable
opinion of the party desiring to ter-minate this Agreement, (i)
make performance of this Agreement impossible or unreasonably
expensive or unreasonably difficult for said party, or (ii)
materially alter the rights and obligations of the parties from
those agreed and contemplated by this Agreement, or (iii)
materially interfere with the benefits contemplated herein to
be received by said party;
(b) by either party hereto, if the other party shall be or becomes
incapable for a period of one hundred twenty (120) days of
performing any of its said obligations under this Agreement
because of force majeure, as provided in Article 22 hereof;
(c) by either party hereto, if the other party commits a breach of
any of its obligations under this Agreement that is not
remedied within sixty (60) days from the giving of written
notice requiring said breach to be remedied;
(d) by either party (the "misled party"), if the warranties or
representations made to the misled party in this Agreement are
found to be false or misleading in any material respect, or if
any of the covenants made therein for the benefit of the misled
party are not complied with;
17
(e) by either party hereto, if the other party (the "embarrassed
party") or its creditors or any other eligi-ble party shall
file for said embarrassed party's liquidation, bankruptcy,
reorganization, compulsory composition, or dissolution, or if
the embarrassed party is unable to pay any debts as they become
due, has explicitly or implicitly suspended payment of any
debts as they became due (except those debts which are
contested in good faith), or if the creditors of the
embarrassed party have taken over its management, or if the
relevant financial institutions have suspended the embarrassed
party's clearing house privileges, or if any material or
significant part of the embarrassed party's undertaking,
property, or assets shall be intervened in, expropriated, or
totally or partially confiscated by action of any government;
(f) by Foreign Investor, if at any time the Foreign Invest-or'
collective ownership of shares of the JVC falls below thirty-
four (34%) percent unless otherwise agreed to by Foreign
Investor in writing or unless Foreign Investor voluntarily
sells or transfers its shares; or
Article 19. Consequences of Termination
----------- ---------------------------
19.1 Termination of this Agreement shall be without prejudice to the
accrued rights and liabilities of the parties at the date of
termination, unless waived in writing by mutual agreement of the
parties.
19.2 Upon termination of transfer of all of the shares of Foreign
Investor in the JVC, Korean Investors shall take all steps necessary
to ensure that the name of the JVC is immediately limited so that it
no longer contains any reference to any tradename or trademark then
owned by Foreign Investor or any of its affiliates nor the Korean
equivalent of any such name or xxxx.
19.3 If this Agreement is terminated by Foreign Investor for any
reason except those specified in Articles 18.2 (a) and (b)
of this Agreement, then
(a) Foreign Investor shall enjoy the right to secure, at the JVC's
expense, an appraisal of the fair market value of the JVC's
shares from the Korea Appraisal Board or from another appraiser
mutually acceptable to the parties; and
18
(b) Foreign Investor shall have the following rights (with-out prejudice
to any right it may have to receive damages in consequence of breach
of this Agreement) and Korean Investors shall have corresponding
obligations:
(i) the right to require Korean Investors to purchase all or
any portion of the shares of the JVC owned by Foreign
Investor at their value as thus appraised.
(ii) the right to require Korean Investors to sell all of its
shares of the JVC to Foreign Investor or its designee at
the value as thus appraised; or
(iii) the right to require Korean Investors to join with
Foreign Investor and vote to cause the JVC to go into
liquidation; and contract for the sale and purchase of
shares shall be deemed to have been entered into upon the
dispatch of written notice to Korean Investors of the
election of Foreign Investor to exercise either of the
options set forth in (b) (i) or (b) (ii) above, and
payment for the shares shall be due within sixty (60)
days of the completion of the appraisal of the shares or
of the issuance of any Government Approval requi-red for
the sale and purchase, whichever occurs later.
19.4 If this Agreement is terminated by Korean Investors for any reasons
except those specified in Articles 18.2 (a) and (b) of this
Agreement, then Korean Investors shall have the rights and
privileges granted to Foreign Investor in Article 19.3 above,
mutatis mutandis.
------- --------
19.5 If this Agreement is terminated by Korean Investors or Foreign
Investor for the reason specified in Article 18.2 (a) and (b) of
this Agreement, then the party terminating the agreement has the
right to require the other party or its heir(s) to join with such
terminating party and vote to cause the JVC to go into liquidation.
Article 20. Non Waiver/Other Remedies
----------- --------------------------
20.1 Failure of either party hereto to insist upon the strict and
punctual performance of any provision hereof shall not constitute
waiver of or estoppel against asserting the right to require such
performance, nor does a waiver or estoppel in one case constitute a
waiver or estoppel with respect to a later breach whether of similar
nature or otherwise.
19
20.2 Nothing in this Agreement shall prevent a party from enforcing its
rights by such remedies as may be available in lieu of termination.
Article 21. 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, either party
may, by notice in writing, terminate this Agreement forthwith subject to
the provisions of this Agreement relating to consequences of termination.
Article 22. Force Majeure
----------- -------------
22.1 The failure or delay of either party hereto to perform any
obligation under this Agreement solely by reason of acts of God,
acts of government (except as otherwise enumerated herein), riots,
wars, strikes, lockouts, accidents in transportation or other causes
beyond its control shall not be deemed to be a breach of this
Agreement; provided, however, that the party so prevented from
-------- -------
complying herewith shall continue to take all actions within its
power to comply as fully as possible herewith.
22.2 Except where the nature of the event shall prevent it from doing so,
the party suffering such force majeure shall notify the other party
in writing within fourteen (14) days after the occurrence of such
force majeure and shall in every instance, to the extent it is
capable of doing so, use its best efforts to remove or remedy such
cause with all reasonable dispatch.
Article 23. Agency
----------- -------
23.1 This Agreement shall not be deemed to constitute either party hereto
the agent of the other party hereto, nor shall it constitute JVC an
agent of either party hereto.
20
23.2 Each of the Korean Investors other than Xxx hereby agrees with
Foreign Investor that it has conferred full and irrevocable power
and authority upon Xxx to act on its behalf in all matters relating
to execution, performance and enforcement of this Agreement, and any
agreements referred to in this Agreement, and that Foreign Investor
may rely and act upon any representation by or agreement of Xxx on
behalf of such Korean Investor as fully as though made by such
Korean Investor itself.
Article 24. Government Approval
----------- -------------------
24.1 Korean Investors shall use their best efforts to assist Foreign
Investor in obtaining Government Approval of this Agreement. Korean
Investors, however, shall apprise Foreign Investor of any and all
actions it plans to take with Korean governmental authorities well
in advance of the proposed action, and shall take no action to which
Foreign Investor objects. If such Approval is conditioned upon
changes in the terms and conditions of this Agreement, such changes
shall be effective only if accompanied by a formal amendment hereto
executed by both parties. No provision of this Agreement shall be
construed to require either party to enter into any such amendment.
24.2 If, after the Effective Date of this Agreement as hereinafter
defined, further government review and approval of this Agreement or
of any amendment thereto is required under the laws or regulations
or other legal authority of the Republic of Korea, Korean Investors
shall use their best efforts to assist Foreign Investor in obtaining
such approv-al. Korean Investors shall provide Foreign Investor with
copies of all correspondence and documents transmitted to and
received from the governmental authorities relating to such
approval.
Article 25. Dispute Resolution Arbitration
----------- -------------------------------
25.1 It is agreed that in case any controversy or claim arises out of or
in relation to this Agreement or with respect to breach thereof, the
parties shall seek to solve the matter amicably through discussions
between the parties. Only if the parties fail to resolve such
controversy, claim or breach within thirty (30) days by amicable
arrangement and compromise, may the aggrieved party seek arbitration
as set forth below.
21
25.2 Any controversy or claim arising out of or in relation to this
Agreement, or breach hereof, shall be finally settled by
arbitration.
(a) Arbitration shall be conducted in Boston, Massachusetts.
(b) Arbitration shall be conducted before one arbitrator in
accordance with the Rules of Arbitration and Concilia-tion of
the International Chamber of Commerce then in effect.
(c) The proceedings shall be conducted in English, and the
arbitrator shall be conversant in and have a thorough command
of the English language.
(d) Both parties shall be bound by the award rendered by the
arbitrators and judgment thereon may be entered in any court of
competent jurisdiction.
(e) Notwithstanding any other provision of this Agreement, either
party shall be entitled to seek preliminary injunctive relief
from any court of competent jurisdiction pending the final
decision or award of the arbitrator.
Article 26. 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, but neither this
Agreement nor any rights hereunder shall be assignable directly or
indirectly by any party hereto without the prior written consent of the
other party.
Article 27. Execution by the JVC
----------- --------------------
Promptly after organization of the JVC, the parties shall cause the JVC to
become a party to this Agreement. In addition, the parties shall take
whatever actions or steps are necessary to permit or require the JVC to
carry out and perform the various terms of this Agreement. Such actions or
steps shall include voting their shares of the JVC and causing their
representatives on the Board of Directors of the JVC to effect such
necessary actions or steps.
22
Article 28. Expenses and Enforcement Costs
----------- ------------------------------
Korean Investors shall pay the expenses and costs incurred in
connection with the preparation for an incorporation of the JVC.
Article 29. Notice
----------- ------
29.1 All written notices, requests, demands, and other communications
under this Agreement or in connection herewith shall be given by
letter (delivered by hand, by air courier, or by registered air
mail) or by cable, telex, or facsimile transmission confirmed by
such a letter, which shall be addressed to the respective parties as
follows:
To: Korean Investors
000-0, Xxxxxxxxxxxx-xxxx, Xxxxxx-xx, Xxxxxxx-xx, Xxxxx
Facsimile Transmission No.:
To: Foreign Investor
Attention: Xxxx C.C. Fan
Facsimile Transmission No.: 000-000-0000
29.2 Either party may change the address at any time by written
notice to the other party.
Article 30. Language
----------- --------
This Agreement is written in the English language and executed in two (2)
counterparts, each of which shall be deemed an original. The English-
language text of the Agreement shall prevail over any translation thereof.
Article 31. Entire Agreement
----------- ----------------
31.1 This Agreement shall, as of the date of execution hereof, supersede
all previous representations, understandings or agreements, oral or
written, between the parties with re-spect to the subject matter
hereof, and together with the Attachments hereto and the agreements
and documents con-templated hereby, contains the entire
understanding of the parties as to the terms and conditions of their
relation-ship.
31.2 Terms included herein may not be contradicted by evidence of any
prior oral or written agreement or of a contemporaneous oral or
written agreement.
23
31.3 No changes, alterations or modifications hereto shall be effective
unless in writing and signed by authorized representative of all
parties hereto and, if required, upon approval by the competent
authorities of the relevant government.
31.4 Headings of Articles in this Agreement are for convenience only and
do not substantively affect the terms of this Agreement.
IN WITNESS WHEREOF, the authorized representatives of the parties hereto
have set their hands or their names and seals, the day and year first
above written.
24
Foreign Investor Korean Shareholders
By. /s/ Xxxx C.C. Fan By: /s/ Xxxxx Xxx
----------------- ---------------
Name. Xxxx C.C. Fan
Title: CEO and President
JVC
By: /s/ Xxxxx Xxx
---------------
Name: Xxxxx Xxx
Title: President
25
SCHEDULE A
KOREAN INVESTORS
----------------
================================================================================
Name Address Number of Shares
and Equity Ratio
--------------------------------------------------------------------------------
1 Xxx, Xxxx-Suk 66,000
--------------------------------------------------------------------------------
2 Oh, Xxxx-Xxx 6,000
--------------------------------------------------------------------------------
3 Xxx, Xxxxx-Xxx 30,000
--------------------------------------------------------------------------------
4 Xxx, Xxxx-Won 6,000
--------------------------------------------------------------------------------
5 Xxx, Xxxx-Xxx 6,000
--------------------------------------------------------------------------------
6 Han, Man-Chun 3,000
--------------------------------------------------------------------------------
7 Xxx, Xxxx-Xxx 3,000
--------------------------------------------------------------------------------
================================================================================
26
SCHEDULE B
REPRESENTATIONS AND WARRANTIES
-------------------------------
OF THE JVC AND KOREAN INVESTORS
-------------------------------
The JVC and the Korean Investors hereby represent and warrant to Foreign
Investor that the following are true as of the date hereof and will be true at
the time when the JVC issues shares to Foreign Investor under Article 4.1 of the
Joint Venture Agreement (the "Agreement") except as otherwise provided herein or
in the Agreement.
a. The JVC is a joint stock company (chusik hoesa) duly organized and validly
existing under and by virtue of the laws of the Republic of Korea, with
corporate power and all necessary licenses, franchises and permits to own its
properties and to conduct its business as now conducted and as contemplated
in Article 3 of this Agreement.
b. The total issued paid-in capital shares of the JVC as of the date of the
initial investment by Foreign Investor consist of 120,000 shares having a par
value of 5,000 Won per share, all of which shares are common shares of one
class. The JVC has no other class of capital shares authorized, issued or
outstanding other than the common shares described above.
c. The JVC has full legal right, power and authority to enter into and perform
this Agreement, which constitutes a valid and binding agreement of the JVC.
Each of the Korean Investors has full legal rights, power and authority to
enter into and perform the Agreement, which constitutes a valid and binding
Agreement of each of the Korean Investors.
d. All of the issued and outstanding shares of the JVC, as of he date of Foreign
Investor's initial investment, are held by the Korean Investors free and
clear of all liens, charg-es, security interests, adverse claims, pledges,
encumbranc-es and demands whatsoever.
e. No person, entity or corporation has any agreement or option, or any right,
privilege or preemptive right (whether contractual or by law) capable of
becoming an agreement or option, including (but not limited to) convertible
securi-ties, warrants or convertible obligations of any nature, for the
subscription, allotment or issuance any unissued shares in the capital of the
JVC, or for the purchase of any issued shares of the JVC from the Korean
Investors.
27
f. Annex 1 to this Schedule B is an accurate and full disclo-sure of the assets,
liabilities (whether accrued, absolute, contingent or otherwise) and the
financial condition of the JVC prepared in accordance with generally accepted
Korean accounting principles consistently applied in sufficient detail to
show profits and losses and the results of opera-tions of the JVC and all
taxation and other actual or poten-tial liabilities and any adverse changes
in the financial position of the JVC as of the execution date hereof.
g. The JVC has observed and performed all terms and conditions on its part to be
observed and performed under any previous contracts to third parties. The JVC
will not hereafter be required to undertake any contracts except such as are
set forth in Annex 2 to this Schedule B.
h. Neither the JVC nor any of its officers, agents or employees (during the
course of their duties in relation to the JVC) has committed or omitted to do
any act or thing the commission or omission of which is or could be in
contraven-tion of any law, ordinance, regulation or the like giving rise to
any fine, penalty, default proceedings or other liability on the part of the
JVC.
i. Annex 3 to this Schedule B describes in detail all the claims, actions, suits
or proceedings pending or (to the knowledge of the Korean Investors) relative
to their owner-ship of shares in the JVC. Except as shown in Annex 3, the
Korean Investors are not parties to any action, suit or proceeding as a party
plaintiff, nor are they presently contemplating the initiation of any such
action, suit or proceeding.
j. The JVC is not a party to nor bound by any agreement of guarantee,
indemnification, assumption or endorsement or any other like obligation or
liability (contingent or otherwise) or indebtedness of any other person,
entity or corporation except those identified in Annex 4 to this Schedule B.
k. All company regulations and written policies, together with Rules of
Employment and any and all labor employment agree-ments or collective
bargaining agreements, of the JVC are attached to this Schedule B as Annex 5
and are current as of the date Foreign Investor first subscribes for shares
of the JVC. A complete list of all directors, officers, and employees of the
JVC is also attached to this Schedule B as Annex 6, and the annual
compensation (including salary, bonuses, and benefits) to be paid to each
director, officer, and employee and the number of years of continuous employ-
ment of each director, officer and employee, as calculated
28
for severance pay purposes, is correctly set forth in the said list.
l. The JVC is the lawful owner and has good and valid record and marketable
title to all of the assets described on Schedule I attached hereto (the
"Acquired Assets"), without any Encumbrances (as defined below). None of the
property, real estate assets, undertaking, goodwill or capital equipment of
the JVC is subject to any encumbrances not specifically identified in the
relevant Schedules hereto (including, without limitation, easements,
debentures, mortgages, charges, liens, deposits by way of security, bills of
sale, lease, conditional sale agreements, credit-sale and other agreements
for payment on deferred terms, "Encumbrances") or any agreement or commitment
to give or create any of the foregoing not specifically identified in the
relevant Schedules hereto but the same are the sole absolute property of the
JVC free from Encumbrances.
m. The JVC 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. 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 JVC in respect of taxes, duties, govern-
mental charges or assessments, nor any matters under dis-cussion with any
governmental authority relating to taxes, governmental charge or assessment
asserted by any such authority. The JVC has withheld from all payments made
to all persons, including but not limited to its officers, directors and
employees, the amount of all taxes, including but not limited to income tax,
and other deductions required to be withheld therefrom, and has paid the same
to the proper tax or other receiving officers within the time required under
applicable legislation.
n. Neither the execution and delivery of this Agreement by the JVC and Korean
Investors nor the consummation by the JVC and Korean Investors of the
transactions contemplated hereby will constitute a violation of, or be in
conflict with, or constitute or create a default under, or result in the
creation or imposition of any Encumbrance upon any property of the JVC
(including, without limitation, any of the Acquired Assets) pursuant to, (a)
the charter documents or By-Laws of the JVC, each as amended to date; (b) any
agreement or commitment to which the JVC and Korean Investors is a party or
by which the JVC and Korean
29
Investors or any of their respective properties (including, without
limitation, any of the Acquired Assets) is bound or to which the JVC and
Korean Investors or any of such properties is subject; or (c) any statute or
any judgment, decree, order, regulation or rule of any court or governmental
authority.
o. No action, suit, proceeding or investigation is pending or, to the knowledge
of the JVC and Korean Investors, threatened, relating to or affecting any of
the Acquired Assets or relating to or affecting the activities of the JVC and
Korean Investors carried on with any of the Acquired Assets, or which
questions the validity of this Agreement or challenges any of the
transactions contemplated hereby, nor is there any basis for any such action,
suit, proceeding or investigation.
p. The JVC has complied with, and is in compliance with, (a) all laws, statutes,
governmental regulations and all judicial or administrative tribunal orders,
judgments, writs, injunctions, decrees or similar commands applicable to its
business or any of the Acquired Assets (including, without limitation, any
labor, environmental, occupational health, zoning or other law, regulation or
ordinance), (b) all unwaived terms and provisions of all contracts,
agreements and indentures to which the JVC is a party, or by which the JVC or
any of the Acquired Assets is subject, and (c) its charter documents and By-
Laws, each as amended to date. The JVC has not committed, been charged with,
or been under investigation with respect to, nor does there exist, any
violation of any provision of any federal, state or local law or
administrative regulation in respect of its business or any of the Acquired
Assets.
q. Except as will be obtained prior to closing of the Foreign Investor's initial
investment or as specifically contemplated under Article 4.10 with respect to
any additional investment, the JVC and Korean Investors has no obligation to
secure any consent from any third party in order to permit the consummation
of the transactions contemplated by this Agreement.
r. On or before the execution of this Agreement, each Founding Employee has
executed and delivered a noncompetition, nondisclosure and invention
ownership agreement with the JVC in form and substance reasonable
satisfactory to the Foreign Investor.
30
s. None of this Agreement or any certificate, document or statement in writing
which has been supplied by or on behalf of the Korean Investors or the JVC or
by any of the JVC's officers or directors, in connection with the
transactions contemplated hereby, contains any untrue statement of a material
fact, or omits any statement of a material fact required to be stated or
necessary in order to make the statements contained herein or therein not
misleading.
31
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT ("Agreement"), made and entered into this _______
day of April 1998, by and among:
Kopin Corporation, a corporation organized and existing under the laws of the
State of Delaware, having its principle place of business at Taunton,
Massachusetts, U,S.A. ("Foreign Investor"),
Kowon Technology Co., Ltd., a corporation organized and existing under the laws
of the Republic of Korea, having its principle place of business at 000-0,
Xxxxxxxxxxxx-xxxx, Xxxxxx-xx, Kyunggi-do, Korea ( the "JVC"), and
Korean Shareholders listed in Schedule A of the Joint Venture Agreement entered
into with respect to the JVC on March 3, 1998 (the "JVA"), being the citizens of
the Republic of Korea with the addresses set forth in Schedule A opposite their
names ("Korean Investors"), represented by Xxxxx Xxx ("Xxx").
WITNESSETH THAT.
WHEREAS, the Parties have entered into the JVA on March 3, 1998 to jointly own
and manage the JVC; and WHEREAS, Article 4.10 of the JVA contemplates an
additional investment by the Foreign Investor into the JVC and the parties now
wish for such investment to be completed.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein and in the JVA, the parties agree as fol1ows:
1. Subscription for New Shares. The JVC shall issue and the
----------------------------
Foreign Investor shall subscribe for 108,858 new common
shares (the "New Shares") of the JVC at a purchase price of
1.2 billion Won. Upon completion of this additional
investment into the JVC by the Foreign Investor, the parties
will hold shares of the JVC as follows:
Korean Investors: 120,000 shares (35%)
Foreign Investor: 222,858 shares (65%)
32
2. Amendment to the Articles of Incorporation. The parties
------------------------------------------
shall cause the Articles of Incorporation of the JVC to be
amended to provide that the Board of Directors may allocate
all of the New Shares to the Foreign Investor.
3. Replacement of Director. Following the Foreign Investor's
------------------------
subscription for the New Shares, at the request of the
Foreign Investor, the Korean Investors ehaI1 cause one of
the directors nominated by them to resign. This director
shall be replaced by a director nominated by the Foreign
Investor.
4. Miscellaneous. In the event of any conflict between the
--------------
provisions of this Agreement and the JVA, the provisions of
this Agreement shall supersede the conflicting JVA
provisions. In all other respects, the JVA shall remain in
full force and effect, and any disputes arising from this
Agreement shall be resolved pursuant to the JVA's terms.
IN WITNESS WHEREOF, the authorized representatives of the parties hereto have
set their hands or their names and seals, on the day and year first above
written.
Foreign Investors Korean Investors
By:/s/Xxxx C.C. Fan By:/s/Xxxxx Xxx
------------------- ---------------
Name: Xxxx C. C. Fan Name: Xxxxx Xxx
Title: CFO and President
JVC
By: /s/Xxxxx Xxx
----------------
Name: Xxxxx Xxx
33
SCHEDULE C
REPRESENTATIONS AND WARRANTIES OF FOREIGN INVESTOR
--------------------------------------------------
a. Foreign Investor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, U.S.A., with the
requisite corporate power and author-ity to make, execute, deliver and perform
this Agreement.
b. Foreign Investor is not subject to any charter, by-law, mortgage, lien,
lease, agreement, instrument, order, law, rule, regulation, judgment or decree,
or any other restriction of any kind or character, which would prevent
consummation of the transactions contemplated by this Agreement or compliance by
the Foreign Investor with the terms, conditions and provisions of this Agreement
or any other agreement entered into by the Foreign Investor in connection with
the transaction contemplated hereby. The execution and delivery of this
Agreement by Foreign Investor and the consummation of the transactions
contemplated hereby have been duly authorized by all required corporate action.
This Agreement has been duly and validly authorized, executed and delivered by
Foreign Investor and constitutes a valid and binding agreement of Foreign
Investor enforceable against it in accor-dance with its terms, subject to
applicable bankruptcy, insolven-cy, fraudulent conveyance, reorganization,
moratorium, and similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
c. Foreign Investor will acquire the shares for its own account for investment
and not with a view toward any resale or distribu-tion thereof. d. No consent,
approval or authorization of, or declaration or registration with, any
governmental or regulatory authority is required in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
e. None of this Agreement or any certificate, document or statement in writing
which has been supplied by or on behalf of the Foreign Investor or by any of the
Foreign Investor's direc-tors or officers, in connection with the transactions
contemplat-ed hereby, contains any untrue statement of a material fact, or omits
any statement of a material fact required to be stated or necessary in order to
make the statements contained herein or therein not misleading.
