IA Execution Copy
EXHIBIT C
FORM OF INVESTORS' RIGHTS AGREEMENT
dated as of [ ], 2003
by and among
Hanaro Telecom, Inc.
AIF II NT, Ltd.
AIG Asian Opportunity Fund L.P.
Newbridge Asia HT, L.P.
and
Each of the Other Investors Named on Schedule I
TABLE OF CONTENTS
Section 1. DEFINITIONS....................................................1
1.1. Capitalized Terms..............................................1
1.2. Defined Terms..................................................1
1.3. General Interpretive Principles................................4
Section 2. REGISTRATION RIGHTS............................................5
2.1. Shelf Registration.............................................5
2.2. Demand Registrations...........................................6
2.3. Piggyback Registrations........................................9
2.4. Black-out Periods.............................................10
2.5. Registration Procedures.......................................11
2.6. Underwritten Offerings........................................16
2.7. No Inconsistent Agreements; Additional Rights.................16
2.8. Registration Expenses.........................................17
2.9. Indemnification...............................................17
2.10. Rules 144 and 144A; Regulation S..............................20
2.11. Piggyback Rights in Respect of Korean Offerings...............20
Section 3. MISCELLANEOUS.................................................21
3.1. Investors' Representatives....................................21
3.2. Term..........................................................21
3.3. Injunctive Relief.............................................21
3.4. Attorneys' Fees...............................................22
3.5. Notices.......................................................22
3.6. Successors, Assigns and Transferees...........................23
3.7. Governing Law; Service of Process; Consent to Jurisdiction....23
3.8. Headings......................................................25
3.9. Severability..................................................25
3.10. Amendment; Waiver.............................................25
3.11. Counterparts..................................................25
INVESTORS' RIGHTS AGREEMENT
INVESTORS' RIGHTS AGREEMENT dated as of [ ], 200_ (this
"Agreement") by and among Hanaro Telecom, Inc., a chusik-hoesa duly organized
and existing under the laws of Korea (the "Company"), AIF II NT, Ltd. a company
duly organized and existing under the laws of Labuan on behalf of an entity or
entities to be formed for the purposes and entering into the Transactions ("AIG
AIF Sub"), AIG Asian Opportunity Fund, L.P., a limited partnership duly
organized and existing under the laws of the Cayman Islands on behalf of an
entity or entities to be formed for the purposes and entering into the
Transactions ("AOF" and together with AIG AIF Sub, acting jointly, "AIG
Sponsor") and Newbridge Asia HT, L.P., an exempted limited partnership duly
organized and existing under the laws of the Cayman Islands on behalf of an
entity or entities to be formed for the purposes and entering into the
Transactions ("Newbridge Sub", and together with AIG Sponsor, the "Sponsors")
and the investors named on Schedule I attached hereto (each of AIG AIF Sub, AOF,
Newbridge and each such investor, an "Investor" and collectively, the
"Investors").
Recitals
WHEREAS, the Company and the Investors have entered into the
Investment Agreement dated September 9, 2003 by and among the Company and the
Investors (the "Investment Agreement") pursuant to which the Investors have
agreed to purchase from the Company, and the Company has agreed to issue and
sell to the Investors an aggregate 182,812,500 shares of common stock of the
Company, par value Won 5,000 per share ("Common Stock"); and
WHEREAS, as an inducement to the Investors to enter into the
Investment Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement.
Agreement
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises, covenants and agreements of the parties hereto, and for other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1. Capitalized Terms. Capitalized terms used but not defined
herein shall have the respective meanings assigned to such terms in the
Investment Agreement.
1.2. Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Adverse Disclosure" means public disclosure of material
non-public information which, in the good faith judgment of the Board of
Directors after consultation with independent outside counsel to the Company,
(i) would be required to be made in any Registration Statement filed by the
Company so that such Registration Statement would not be false or misleading in
any material respect, (ii) would not be required to be made at such time but for
the filing of such Registration Statement and (iii) would have a material
adverse effect on the Company or its business or on the Company's ability to
effect a material acquisition, disposition or financing.
"Agreement" has the meaning set forth in the preamble.
"AIG AIF Sub" has the meaning set forth in the preamble.
"AIG Sponsor" has the meaning set forth in the preamble.
"AOF" has the meaning set forth in the preamble.
"Closing Date" has the meaning set forth in the Investment
Agreement.
"Common Stock" has the meaning set forth in the recitals.
"Company" has the meaning set forth in the preamble and shall
include the Company's successors by merger, acquisition, reorganization or
otherwise.
"Demand Period" has the meaning set forth in Section 2.2(d).
"Demand Registration" has the meaning set forth in Section
2.2(a)(i).
"Demand Registration Statement" has the meaning set forth in
Section 2.2(a)(iii).
"Demand Suspension" has the meaning set forth in Section
2.2(e).
"Depositary Shares" means American depositary shares or other
securities representing Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor thereto, and any rules and regulations promulgated
thereunder, all as the same shall be in effect from time to time.
"Financial Statements" has the meaning set forth in the
Investment Agreement.
"holder" or "holders" means any holder or holders of
Registrable Securities who is a party hereto or who succeeds to rights hereunder
pursuant to Section 3.6.
"ICC" has the meaning set forth in Section 3.7(b).
"Included Securities" has the meaning set forth in Section
2.3(b).
"Investment Agreement" has the meaning set forth in the
recitals.
"Investors" has the meaning set forth in the preamble.
"Investors' Representatives" has the meaning set forth in
Section 3.1(a).
"Loss" has the meaning set forth in Section 2.9(a).
"NASD" means the National Association of Securities Dealers,
Inc.
"Newbridge Sub" has the meaning set forth in the preamble.
"Piggyback Registration" has the meaning set forth in Section
2.3(a).
"Prospectus" means the prospectus included in any Registration
Statement, all amendments and supplements to such prospectus, including
post-effective amendments, and all other material incorporated by reference in
such prospectus.
"Registrable Securities" means the Investment Shares, whether
in the form of Common Stock, Depositary Shares or otherwise, any securities that
may be issued or distributed or be issuable in respect of any Investment Shares
by way of stock dividend, stock split or other distribution, merger,
consolidation, exchange offer, recapitalization or reclassification or similar
transaction, or any securities issued or distributed upon the exercise or
conversion of any of the foregoing and any securities of the same class as any
of the foregoing, held by any holder of any of the foregoing classes of
Registrable Securities; provided, however, that any such Registrable Securities
shall cease to be "Registrable Securities" to the extent (i) a Registration
Statement with respect to their sale has been declared effective under the
Securities Act and they have been disposed of pursuant to such Registration
Statement, (ii) they have been distributed pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act or (iii) they shall have been
otherwise transferred and, if applicable, new certificates for them not bearing
a legend restricting transfer shall have been delivered by the Company and such
securities may be publicly resold in the United States (without volume or method
of sale restrictions) without Registration under the Securities Act as evidenced
by a legal opinion reasonably acceptable to the Investors. For purposes of this
Agreement, a "class" of Registrable Securities shall mean all Registrable
Securities with the same terms and a "percentage" (or a "majority") of the
Registrable Securities (or, where applicable, of any other securities) shall be
determined (x) based on the number of shares of such securities, in the case of
Registrable Securities which are equity securities, and (y) based on the
principal amount of such securities, in the case of Registrable Securities which
are debt securities.
"Registration" means a registration with the SEC of the
Company's securities for offer and sale to the public under a Registration
Statement. The term "Register" shall have a correlative meaning.
"Registration Statement" means any registration statement of
the Company filed with, or to be filed with, the SEC under the rules and
regulations promulgated under the Securities Act, including the related
Prospectus, amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.
"Securities Act" means the Securities Act of 1933, as amended,
and any successor thereto, and any rules and regulations promulgated thereunder,
all as the same shall be in effect from time to time.
"Shareholders' Agreement" means the agreement by and among the
Investors, dated as of [ ], 200_, in respect of certain matters relating to the
management of the Company and the voting and transfer of shares of Common Stock.
"Shelf Registration" means a registration effected pursuant to
Section 2.1.
"Shelf Registration Statement" means a Registration Statement
of the Company filed with the SEC on Form F-3 (or any successor form or other
appropriate form under the Securities Act) for an offering to be made on a
continuous or delayed basis pursuant to Rule 415 under the Act (or any similar
rule that may be adopted by the SEC) covering the Registrable Securities.
"Sponsors" has the meaning set forth in the preamble.
"Underwritten Offering" means a Registration in which
Registrable Securities are sold to an underwriter or underwriters on a firm
commitment basis for reoffering to the public or in which an underwriter or
underwriters commit to acquire such securities if and to the extent they are not
acquired by third parties.
1.3. General Interpretive Principles. This Agreement is to be
interpreted in accordance with the following rules of construction:
(a) Number and Gender. All definitions of terms apply equally
to both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.
(b) "Including," "Herein," Etc. The words "include,"
"includes" and "including" are deemed to be followed by the phrase "without
limitation." The words "herein," "hereof," and "hereunder" and words of similar
import refer to this Agreement (including all Exhibits and Schedules) in its
entirety and are not limited to any part hereof unless the context shall
otherwise require. The word "or" is not exclusive and means "and/or."
(c) Subdivisions and Attachments. All references in this
Agreement to Sections, subsections and Schedules are, respectively, references
to Sections and subsections of, and Schedules attached to, this Agreement,
unless otherwise specified.
(d) References to Documents and Laws. All references to the
Investment Agreement are to such document as amended, modified or supplemented
from time to time in accordance with its terms. All references to (x) any other
agreement or instrument or (y) any Requirement of Law, License or similar item
are to it as amended and supplemented from time to time (and, in the case of a
Law, to any corresponding provisions of successor Laws), unless otherwise
specified.
(e) References to Days. Any reference in this Agreement to a
"day" or number of "days" (without the explicit qualification "Business") is a
reference to a calendar day or number of calendar days. If any action or notice
is to be taken or given on or by a particular calendar day, and such calendar
day is not a Business Day, then such action or notice may be taken or given on
the next Business Day.
(f) Examples. If, in any provision of this Agreement, any
example is given (through the use of the words "such as," "for example," "e.g."
or otherwise) of the meaning, intent or operation of any provision, such example
is intended to be illustrative only and not exclusive.
(g) Participation in Drafting. The parties and their
respective legal counsel have participated in the drafting of this Agreement,
and this Agreement will be construed simply and according to its fair meaning
and without any presumption or prejudice for or against any party.
(h) Headings. The table of contents and section headings
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 2. REGISTRATION RIGHTS
2.1. Shelf Registration.
(a) Filing. Subject to Section 2.1(c), within ninety (90) days
after the written request of the Investors' Representative (made not less than
three hundred sixty days (360) following the Closing) the Company shall file
with the SEC a Shelf Registration Statement relating to the offer and sale of
the Registrable Securities by the holders thereof from time to time in
accordance with the methods of distribution elected by the Investors'
Representatives and shall use its best efforts to cause such Shelf Registration
Statement to be declared effective under the Securities Act.
(b) Continued Effectiveness. Subject to Section 2.1(c), the
Company shall use its best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming a part thereof
to be usable by the holders during the term of this Agreement. The Company shall
not be deemed to have used its best efforts to keep the Shelf Registration
Statement effective if the Company voluntarily takes any action or omits to take
any action and such action or omission results in the inability of any holder of
Registrable Securities covered by such Registration Statement to be able to
offer and sell any such Registrable Securities pursuant to such Shelf
Registration Statement at any time during the term of this Agreement, unless
such action or omission is required by applicable Law.
(c) Suspension of Registration. If the filing, initial
effectiveness or continued use of the Shelf Registration Statement at any time
would require the Company to make an Adverse Disclosure, the Company may, upon
giving prompt written notice of such action to the holders, delay the filing or
initial effectiveness of, or suspend use of, the Shelf Registration Statement;
provided, however, that the Company shall not be permitted to do so (A) more
than once during any six (6) month period, (B) for a period exceeding thirty
(30) days on any one occasion or (C) for a period exceeding forty-five (45) days
in any twelve-month period. In the event the Company exercises its rights under
the preceding sentence, the holders agree to suspend, immediately upon their
receipt of the notice referred to above, their use of the Prospectus relating to
the Shelf Registration in connection with any sale or offer to sell Registrable
Securities. The Company shall immediately notify the holders upon the expiration
of any period during which it exercised its rights under this Section 2.1(c).
(d) Underwritten Offering. If the Investors' Representatives
so elect, such offering shall be in the form of an Underwritten Offering and the
Company, if necessary, shall amend or supplement the Shelf Registration
Statement for such purpose. The Investors' Representatives shall, after
consulting with the Company, have the right to select the managing underwriter
or underwriters for the offering.
(e) Effect on Demand Registration Obligation. The provisions
of Section 2.2 shall not apply at any time the Company is eligible to file and
maintain the effectiveness of a Shelf Registration Statement and is complying
with its obligations under this Section 2.1 with respect to all Registrable
Securities.
(f) Limitation on Shelf Registrations. In no event shall the
Company be required to file and effect more than three (3) Shelf Registration
Statements.
2.2. Demand Registrations.
(a) Demand by Holders. (i) At any time after three hundred
sixty days (360) following the Closing, the Investors' Representatives may make
a written request to the Company for Registration of all or part of the
outstanding Registrable Securities held by the Investors and any other holders,
provided, that the estimated market value of such Registrable Securities is at
least US$15 million in the aggregate. Any such requested Registration shall
hereinafter be referred to as a "Demand Registration." Each request for a Demand
Registration shall specify the class and the aggregate amount of Registrable
Securities to be Registered and the intended methods of disposition thereof.
(ii) Within five (5) days following receipt of any request for
a Demand Registration, the Company shall deliver written notice of such request
to all other holders of the class or classes to be registered. Thereafter, the
Company shall include in such Demand Registration any additional Registrable
Securities of each such class that the holder or holders thereof have requested
in writing be included in such Demand Registration; provided, that all requests
therefore have been received by the Company within ten (10) days of the
Company's having sent the applicable notice to such holder or holders. All such
requests shall specify the aggregate amount and class of Registrable Securities
to be registered and the intended method of distribution of the same. The
Company may not, without the prior written consent of the Investors'
Representatives, include in such Registration additional securities of the class
or classes of the Registrable Securities to be registered hereunder, including
securities to be sold for the Company's own account or for the account of
Persons who are not holders.
(iii) The Company shall file, as promptly as practicable (and,
in any event, within ninety (90) days) following receipt of a request for a
Demand Registration, a Registration Statement relating to such Demand
Registration (a "Demand Registration Statement"), and shall use its reasonable
best efforts to cause such Demand Registration Statement promptly to be declared
effective under the Securities Act, the "Blue Sky" laws of such jurisdiction as
the Investors' Representatives or underwriter(s), if any, reasonably request, or
any other Law, as applicable, and cause such Demand Registration Statement to
remain effective for a period of not less than one hundred eighty (180) days (or
such shorter period as will terminate when all Registrable Securities covered by
such Demand Registration Statement have been sold or withdrawn).
(b) Limitation on Demand Registrations. Subject to Section
2.2(g), in no event shall the Company be required to effect and complete more
than six (6) Demand Registrations. The Company shall not be required to effect a
Demand Registration pursuant to this Section 2.2 if such Demand Registration
would require an audit of the Company's Financial Statements as of or for a
period ended on a date other than the last day of its fiscal year unless the
Investors agree to bear the expenses of such audit or unless such Financial
Statements are otherwise available.
(c) Demand Withdrawal. Any holder may withdraw its Registrable
Securities from a Demand Registration at any time prior to the effectiveness of
the applicable Demand Registration Statement. The Investors' Representatives may
withdraw their request for a Demand Registration at any time prior to the
effectiveness of the applicable Demand Registration Statement. Upon receipt of a
written notice from the Investors' Representatives to such effect, the Company
shall cease all efforts to secure Registration. Such Registration nonetheless
shall be deemed a Demand Registration for purposes of Section 2.2(b), unless (i)
the withdrawal is based on the determination by the Investors' Representatives
that there has been, since the date of such request, a material adverse change
in the business or prospects of the Company or in general market conditions, or
(ii) the holders shall have paid or reimbursed the Company for all of the
reasonable out-of-pocket fees and expenses incurred by the Company in connection
with such withdrawn Registration.
(d) Effective Registration. The Company shall be deemed to
have effected a Demand Registration if the Demand Registration Statement is
declared effective by the SEC and remains effective for not less than one
hundred eighty (180) days (or such shorter period as will terminate when all
Registrable Securities covered by such Demand Registration Statement have been
sold or withdrawn), or, if such Registration Statement relates to an
Underwritten Offering, such longer period as, in the opinion of counsel for the
underwriter or underwriters, is required by Law for the delivery of a Prospectus
in connection with the sale of Registrable Securities by an underwriter or
dealer (the applicable period, the "Demand Period"). No Demand Registration
shall be deemed to have been effected if (i) during the Demand Period such
Registration is interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental or regulatory agency or court or
(ii) the conditions to closing specified in the applicable underwriting
agreement, if any, are not satisfied other than by reason of a wrongful act,
misrepresentation or breach of such underwriting agreement by the holders.
(e) Suspension of Registration. If the filing, initial
effectiveness or continued use of a Demand Registration Statement at any time
would require the Company to make an Adverse Disclosure, the Company may, upon
giving prompt written notice of such action to the holders, delay the filing or
initial effectiveness of, or suspend use of, such Demand Registration Statement
(a "Demand Suspension"); provided, however, that the Company shall not be
permitted to exercise a Demand Suspension (A) more than once during any six (6)
month period, (B) for a period exceeding thirty (30) days on any one occasion or
(C) for a period exceeding forty-five (45) days in any twelve-month period. In
the case of a Demand Suspension, the holders agree to suspend, immediately upon
their receipt of the notice referred to above, their use of the Prospectus
relating to such Demand Registration in connection with any sale or purchase, or
offer to sell or purchase, Registrable Securities. The Company shall immediately
notify the holders upon termination of any Demand Suspension, amend or
supplement the Prospectus, if necessary, so it does not contain any untrue
statement or omission and furnish to the holders such number of copies of the
Prospectus as so amended or supplemented as the holders may reasonably request.
(f) Underwritten Offering. If the Investors' Representatives
so elect, the offering of Registrable Securities pursuant to a Demand
Registration shall be in the form of an Underwritten Offering. The Investors'
Representatives shall, after consulting with the Company, have the right to
select the managing underwriter or underwriters for the offering.
(g) Priority of Securities Registered Pursuant to Demand
Registrations. If the managing underwriter or underwriters of a proposed
Underwritten Offering of a class of Registrable Securities included in a Demand
Registration (or, in the case of a Demand Registration not being underwritten,
the Investors' Representatives) inform the holders of such class of Registrable
Securities in writing that, in its or their opinion, the number of securities of
such class requested to be included in such Demand Registration exceeds the
number that can be sold in (or during the time of) such offering without being
likely to have a significant adverse effect on the price, timing or distribution
of the class of securities offered or the market for the class of securities
offered or the Common Stock, then the number of Registrable Securities of such
class to be included in such Demand Registration Statement shall be (i) first
the number of Registrable Securities requested to be included in such
registration by holders, (ii) second the number of securities of the same class
as the Registrable Securities that the Company wishes to include, if any, in
such offering and (iii) third the number, if any, of securities of the same
class as the Registrable Securities requested to be included in such
registration held by persons other than holders. To the extent that any
Registrable Securities requested to be registered are so excluded, the
Investors' Representatives shall have the right to make an additional Demand
Registration under this Section 2.2.
(h) Registration Statement Form. Registrations under this
Section 2.2 shall be on such appropriate registration form of the SEC (i) as
shall be selected by the Company and as shall be acceptable to the Investors'
Representatives and (ii) as shall permit the disposition of the Registrable
Securities in accordance with the intended method or methods of disposition
specified in the applicable holders' requests for such Registration.
Notwithstanding the foregoing, if, pursuant to a Demand Registration, (x) the
Company proposes to effect registration by filing a Registration Statement on
Form F-3 (or any successor or similar short-form registration statement), (y)
such registration is in connection with an Underwritten Offering and (z) the
managing underwriter or underwriters shall advise the Company in writing that,
in its or their opinion, the use of another form of registration statement (or
the inclusion, rather than the incorporation by reference, of information in the
Prospectus related to a Registration Statement on Form F-3 (or other short-form
registration statement)) is of material importance to the success of such
proposed offering, then such Registration shall be effected on such other form
(or such information shall be so included in such Prospectus).
2.3. Piggyback Registrations.
(a) Participation. (i) If the Company at any time proposes to
file a Registration Statement under the Securities Act with respect to any
offering of its securities for its own account or for the account of any holders
of its securities (other than (A) a registration under Section 2.1 or 2.2
hereof, (B) a registration on Form F-4 or S-8 or any successor form to such
forms, or (C) a registration of securities solely relating to an offering and
sale to employees or directors of the Company pursuant to any employee stock
plan or other employee benefit plan arrangement), then, as soon as practicable
(but in no event less than forty-five (45) days prior to the proposed date of
filing of such Registration Statement), the Company shall give written notice of
such proposed filing to all holders, and such notice shall offer holders the
opportunity, subject to Section 2.3(b), to Register under such Registration
Statement such number of Registrable Securities as each such holder may request
in writing (a "Piggyback Registration"). Pursuant and subject to Section 2.3(b),
the Company shall include in such Registration Statement all such Registrable
Securities that are requested to be included therein within twenty-one (21) days
after the receipt by such holder of any such notice. If at any time after giving
written notice of its intention to Register any securities and prior to the
effective date of the Registration Statement filed in connection with such
Registration, the Company shall determine for any reason not to Register or to
delay Registration of such securities, the Company may, at its election, give
written notice of such determination to each holder and, thereupon, (x) in the
case of a determination not to Register, shall be relieved of its obligation to
Register any Registrable Securities in connection with such Registration (but
not from its obligation to pay the Registration expenses in connection
therewith), and (y) in the case of a determination to delay Registration, shall
be permitted to delay Registering any Registrable Securities for the same period
as the delay in Registering such other securities.
(ii) If the offering pursuant to such Registration Statement
is to be an Underwritten Offering, then each holder making a request for a
Piggyback Registration pursuant to this Section 2.3 must, and the Company shall
use reasonable best efforts to make such arrangements with the underwriters so
that each such holder may, participate, subject to Section 2.3(b), in such
Underwritten Offering on the same terms as the Company and other Persons selling
securities in such Underwritten Offering. If the offering pursuant to such
registration is to be on any other basis, then each holder making a request for
a Piggyback Registration pursuant to this Section 2.3(a) must, and the Company
will make reasonable best efforts such arrangements so that each holder may,
participate, subject to Section 2.3(b), in such offering on such basis.
(iii) Each holder shall be permitted to withdraw all or part
of such holder's Registrable Securities from a Piggyback Registration at any
time prior to the effective date thereof.
(b) Priority of Piggyback Registration. If the managing
underwriter or underwriters of any proposed Underwritten Offering of a class of
Registrable Securities included in a Piggyback Registration (or in the case of a
Piggyback Registration not being underwritten, the Company) informs the holders
of such class of Registrable Securities in writing that, in its or their
opinion, the number of securities of such class which such holders and any other
Persons intend to include in such offering exceeds the number which can be sold
in such offering without being likely to have a significant adverse effect on
the price, timing or distribution of the class or classes of the securities
offered or the market for the class or classes of securities offered or the
Common Stock, then the securities of each class to be included in such
Registration (the "Included Securities") shall be allocated as follows:
(i) first, the securities of such class of primary securities
that the Company initially proposed to sell, up to the total aggregate number of
Included Securities;
(ii) second, the number of Registrable Securities of such
class to the extent requested to be included by the Investors' Representatives
in such offering; and
(iii) third, and only if all of the securities referenced in
clauses (i) and (ii) have been included, any other securities eligible for
inclusion in such Registration shall be included therein.
2.4. Black-out Periods.
(a) Black-out Periods for Holders. In the event of a
Registration by the Company involving the offering and sale by the Company of
equity securities or securities convertible into or exchangeable for its equity
securities, the holders agree, if requested by the Company (or, in the case of
an Underwritten Offering, by the managing underwriter or underwriters), not to
effect any public sale or distribution (excluding any sale pursuant to Rule 144
under the Securities Act) of any securities (except, in each case, as part of
the applicable Registration, if permitted), which securities are the same as or
similar to those being Registered in connection with such Registration, or which
are convertible into or exchangeable or exercisable for such securities, during
the period beginning seven (7) days before, and ending ninety (90) days (or such
lesser period as may be permitted by the Company or such managing underwriter or
underwriters) after, the effective date of the Registration Statement filed in
connection with such Registration, to the extent such holders are timely
notified in writing by the Company or the managing underwriter or underwriters.
(b) Black-out Periods for the Company and Others. (i) In the
case of a Registration of a class of Registrable Securities pursuant to Section
2.1 or Section 2.2, the Company agrees, if requested by the Investors'
Representatives (or, in the case of an Underwritten Offering, by the managing
underwriter or underwriters), not to effect (or register for sale) any public
sale or distribution of any securities which are the same as or similar to those
being Registered, or any Securities convertible into or exchangeable or
exercisable for such securities, during the period beginning seven (7) days
before, and ending ninety (90) days (or such lesser period as may be permitted
by such holders or such underwriter or underwriters) after, the effective date
of the Registration Statement filed in connection with such Registration (or, in
the case of an Underwritten Offering under a Shelf Registration, the date of the
closing under the underwriting agreement in connection therewith), to the extent
the Company is timely notified in writing by a holder of Registrable Securities
covered by such Registration Statement or the managing underwriter or
underwriters. Notwithstanding the foregoing, the Company may effect a public
sale or distribution of securities of the type described above and during the
periods described above if the same (A) is made pursuant to registrations on
Form F-4 or S-8 or any successor form to such Forms, or (B) as part of any
registration of securities for offering and sale to employees or directors of
the Company pursuant to any employee stock plan or other employee benefit plan
arrangement.
(ii) The Company agrees to use its reasonable best efforts to
obtain from each holder of restricted securities of the Company that are the
same as or similar to the Registrable Securities being Registered, or any
restricted securities convertible into or exchangeable or exercisable for any of
its securities, an agreement not to effect any public sale or distribution of
such securities during any period referred to in this Section 2.4(b), except as
part of any such Registration if permitted. Without limiting the foregoing (but
subject to Section 2.7), if after the date hereof the Company grants any Person
(other than a holder of Registrable Securities) any rights to demand or
participate in a registration, the Company agrees that the agreement with
respect thereto shall include such Person's agreement as contemplated by the
previous sentence.
2.5. Registration Procedures.
(a) In connection with the Company's Registration obligations
in this Agreement, the Company will use its best efforts to effect any such
Registration so as to permit the sale of the applicable Registrable Securities
in accordance with the intended method or methods of distribution thereof as
expeditiously as practicable, and in connection therewith the Company will:
(i) prepare the required Registration Statement including all
exhibits and financial statements required under the Securities Act, or any
other rule or regulation or Law, as applicable, to be filed therewith, and
before filing a Registration Statement or Prospectus, or any amendments or
supplements thereto and in connection therewith, furnish to the underwriter or
underwriters, if any, and to the Investors' Representatives, copies of all
documents prepared to be filed, which documents will be subject to the review of
such underwriters and such holders and their respective counsel and, except in
the case of a registration under Section 2.3, not file any Registration
Statement or Prospectus or amendments or supplements thereto to which the
Investors' Representatives or the underwriter or underwriters, if any, shall
reasonably object;
(ii) prepare and file with the SEC and any other applicable
Government Authority or listing authority such amendments or post-effective
amendments to such Registration Statement or supplements to the Prospectus as
may be (A) reasonably requested by any participating holder (to the extent such
request relates to information relating to such holder), (B) necessary to keep
such registration effective for the period of time required by this Agreement or
(C) reasonably requested by the Investors' Representatives;
(iii) notify the participating holders, the Investors'
Representatives, and the managing underwriter or underwriters, if any, and (if
requested) confirm such advice in writing and provide copies of the relevant
documents, as soon as practicable after notice thereof is received by the
Company (A) when the applicable Registration Statement or any amendment thereto
has been filed or becomes effective or when the applicable Prospectus or any
amendment or supplement thereto has been filed, (B) of any written comments by
the SEC or Government Authority or listing authority, as applicable, or any
request by the SEC or other Governmental Authority or listing authority, as
applicable, for amendments to such Registration Statement or supplements to such
Prospectus or for additional information, (C) of the issuance by the SEC or
Government Authority or listing authority, as applicable, of any stop order
suspending the effectiveness of such Registration Statement or any order
preventing or suspending the use of any preliminary or final Prospectus or the
initiation or threat of any proceedings for such purposes, (D) if, at any time,
the representations and warranties of the Company in any applicable underwriting
agreement cease to be true and correct in all material respects and (E) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for offering or sale in any
jurisdiction or the initiation or threat of any proceeding for such purpose;
(iv) promptly notify the Investors' Representatives, each
selling holder of Registrable Securities and the managing underwriter or
underwriters, if any, when the Company becomes aware of the happening of any
event as a result of which the applicable Registration Statement or Prospectus
(as then in effect) contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein (in the case of
the Prospectus and any preliminary Prospectus, in light of the circumstances
under which they were made) not misleading or, if for any other reason it shall
be necessary to amend or supplement such Registration Statement or Prospectus in
order to comply with the Securities Act, or any other rule or regulations or
Law, as applicable, and, in either case as promptly as practicable thereafter,
prepare and file with the SEC and any other applicable Government Authority or
listing authority, as the case may be, and furnish without charge to the
Investors' Representatives, the selling holders and the managing underwriters or
underwriters, if any, an amendment or supplement to such Registration Statement
or Prospectus which will correct such statement or omission or effect such
compliance;
(v) use reasonable best efforts to prevent or obtain at the
earliest possible moment the withdrawal of any stop order with respect to the
applicable Registration Statement or other order suspending the use of any
preliminary or final Prospectus;
(vi) promptly incorporate in a Prospectus supplement or
post-effective amendment to the applicable Registration Statement such
information as the managing underwriter or underwriters, if any, or the
Investors' Representatives agree should be included therein relating to the plan
of distribution with respect to such Registrable Securities; and make all
required filings of such Prospectus supplement or post-effective amendment as
soon as practicable after being notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment;
(vii) furnish to the Investors' Representatives, each selling
holder of Registrable Securities and each managing underwriter, if any, without
charge, as many conformed copies as the Investors' Representatives, such holder
or managing underwriter may reasonably request of the applicable Registration
Statement and any amendment or post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including these incorporated by reference);
(viii) deliver to the Investors' Representatives, each selling
holder of Registrable Securities and each underwriter, if any, without charge,
as many copies of the applicable Prospectus (including each preliminary
Prospectus) as the Investors' Representatives, such holder or managing
underwriter may reasonably request (it being understood that the Company
consents to the use of such Prospectus or any amendment of supplement thereto by
the Investors' Representatives, each of the selling holders and the underwriter
or underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment of supplement
thereto) and such other documents as the Investors' Representatives, such
selling holder or managing underwriter may request in order to facilitate the
disposition of the Registrable Securities by such holder or underwriter;
(ix) on or prior to the date on which the applicable
Registration Statement is declared effective, use its reasonable best efforts to
register or qualify, and cooperate with the selling holders, the Investors'
Representatives, the managing underwriter or underwriters, if any, any of their
respective counsel, in connection with the Registration or qualification of such
Registrable Securities for the offer and sale under the securities or "Blue Sky"
laws of each state and other jurisdiction of the United States, as any such
selling holder or underwriter, if any, or their respective counsel reasonably
requests in writing, and do any and all other acts or things necessary or
advisable to keep such registration or qualification in effect for so long as
such Registration Statement remains in effect and so as to permit the
commencement and continuance of sales and dealings in such jurisdictions for as
long as may be necessary to complete the distribution of the Registrable
Securities covered by the Registration Statement; provided, that the Company
will not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or to take any action which would subject it
to taxation or general service of process in any such jurisdiction where it is
not then so subject;
(x) cooperate with the selling holders, the Investors'
Representatives, and the managing underwriter, underwriters or agent, if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends;
(xi) use its reasonable best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other Governmental Authorities or listing authority as
may be necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(xii) not later than the effective date of the applicable
Registration Statement, provide a CUSIP or ISIN number, as appropriate, for all
Registrable Securities and provide the applicable transfer agent with printed
certificates for the Registrable Securities which certificates shall be in a
form eligible for deposit with The Depository Trust Company;
(xiii) obtain for delivery to the holders of each class of
Registrable Securities being registered and to the underwriter or underwriters,
if any, an opinion or opinions from counsel for the Company dated the effective
date of the Registration Statement or, in the event of an Underwritten Offering,
the date of the closing under the underwriting agreement, in customary form,
scope and substance, which counsel and opinions shall be reasonably satisfactory
to the Investors' Representatives and underwriter or underwriters, if any, and
their respective counsel;
(xiv) in the case of an Underwritten Offering, obtain for
delivery to the Company and the underwriter or underwriters, if any, with copies
to the Investors' Representatives and holders included in such Registration, a
cold comfort letter from the Company's independent certified public accountants
in customary form and covering such matters of the type customarily covered by
cold comfort letters as the managing underwriter or underwriters reasonably
request, dated the date of execution of the underwriting agreement and brought
down to the closing under the underwriting agreement;
(xv) cooperate with each selling holder, the Investors'
Representatives and each underwriter or agent, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the SEC, NASD and any other
relevant Government Authority or listing authority, as applicable;
(xvi) use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC and any other Government Authority
or listing authority, as applicable, and make generally available to its
security holders, as soon as practicable (but not more than fifteen (15) months)
after the effective date of the applicable Registration Statement, an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act and
the rules and regulations promulgated thereunder;
(xvii) provide and cause to be maintained a transfer agent and
registrar in any jurisdiction reasonably requested by the Investors'
Representatives for all Registrable Securities covered by the applicable
Registration Statement from and after a date not later than the effective date
of such Registration Statement;
(xviii) cause all Registrable Securities of a class covered by
the applicable Registration Statement to be listed on each U.S. and Korean
securities exchange on which any of the Company's securities of such class are
then listed or quoted and on U.S. and Korean each inter-dealer quotation system
on which any of the Company's securities of such class are then quoted;
(xix) make available upon reasonable notice at reasonable
times and for reasonable periods for inspection by the Investors'
Representatives, by any managing underwriter or underwriters participating in
any disposition to be effected pursuant to such Registration Statement and by
any attorney, accountant or other agent retained by the Investors'
Representatives or any such managing underwriter, all pertinent financial and
other records, pertinent corporate documents and properties of the Company, and
cause all of the Company's officers, directors and employees and the independent
public accountants who have certified its financial statements to make
themselves available to discuss the business of the Company and to supply all
information reasonably requested by any such Person in connection with such
Registration Statement as shall be necessary to enable them to exercise his or
her due diligence responsibility;
(xx) in the case of an Underwritten Offering, cause the senior
executive officers of the Company to participate in the customary "road show"
presentations that may be requested by the managing underwriter in any such
Underwritten Offering and otherwise to facilitate, cooperate with, and
participate in each proposed offering contemplated herein and customary selling
efforts related thereto;
(xxi) promptly after the issuance of an earnings release or
upon the request of the Investors' Representatives, prepare a current report on
Form 6-K with respect to such earnings release or a matter of disclosure as
requested by such holder and submit such Form 6-K to the SEC;
(xxii) use its reasonable best efforts to cause the Company's
depositary to execute and deliver a deposit agreement in respect of any
Registrable Securities that are Depositary Shares, in form and substance
satisfactory to the Investors' Representatives, and to furnish to the Investors'
Representatives certificates and other evidence related to the registration of
such Registrable Securities as the Investors' Representatives shall reasonably
request; and
(xxiii) use its reasonable best efforts to obtain the consent
or approval of each Korean, United States or other Governmental Authority or
listing authority, which may be required to satisfy the purposes established in
this Agreement.
(b) The Company may require each selling holder of Registrable
Securities as to which any Registration is being effected to furnish to the
Company such information regarding the distribution of such securities and such
other information relating to such holder and its ownership of Registrable
Securities as the Company may from time to time reasonably request in writing.
Each holder agrees to furnish such information to the Company and to cooperate
with the Company as reasonably necessary to enable the Company to comply with
the provisions of this Agreement.
(c) Each holder agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 2.5(a)(iv) hereof, such holder will
forthwith discontinue disposition of Registrable Securities pursuant to such
Registration Statement until such holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 2.5(a)(iv), or until
such holder is advised in writing by the Company that the use of the Prospectus
may be resumed, and has received copies of any additional or supplemental
filings that are incorporated by reference in the Prospectus and, if so directed
by the Company, such holder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such holder's
possession, of the Prospectus covering such Registrable Securities which are
current at the time of the receipt of such notice. In the event that the Company
shall give any such notice, the period during which the applicable Registration
Statement is required to be maintained effective shall be extended by the number
of days during the period from and including the date of the giving of such
notice to and including the date when each selling holder of Registrable
Securities covered by such Registration Statement either receives the copies of
the supplemented or amended Prospectus contemplated by Section 2.5(a)(iv) hereof
or is advised in writing by the Company that the use of the Prospectus may be
resumed.
(d) The Investors' Representatives may seek to register
different types of Registrable Securities and different classes of the same type
of Registrable Securities simultaneously and the Company shall use its best
efforts to effect such Registration and sale in accordance with the intended
method or methods of disposition specified the Investors' Representatives.
2.6. Underwritten Offerings.
(a) Underwriting Agreements. If requested by the underwriters
for any Underwritten Offering requested by holders pursuant to Section 2.1 or
Section 2.2, the Company and the holders to be included therein shall enter into
an underwriting agreement with such underwriters, such agreement to be
reasonably satisfactory in substance and form to the Company, the Investors'
Representatives and the underwriters, and to contain such terms and conditions
as are generally prevailing in agreements of that type, including, without
limitation, indemnities no less favorable to the recipient thereof than those
provided in Section 2.9. The holders to be included in any Underwritten Offering
pursuant to Section 2.3 shall enter into such an underwriting agreement at the
request of the Company. All of the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
underwriters included in each such underwriting agreement shall also be made to
and for the benefit of such holders and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such holders. No holder
shall be required in any such underwriting agreement (a) to make any
representations or warranties to or agreements with, the Company or the
underwriters other than representations or warranties regarding such holder,
such holder's Registrable Securities, such holder's intended method of
distribution and any other representations required by Law or (b) to provide any
indemnities, other than indemnity for breach of such representations and
warranties.
(b) Price and Underwriting Discounts. In the case of an
Underwritten Offering requested by holders pursuant to Section 2.1 or Section
2.2, the price, underwriting discount and other financial terms for each class
of Registrable Securities of the related underwriting agreement shall be
determined by the Investors' Representatives. In the case of any Underwritten
Offering pursuant to Section 2.3, such price, discount and other terms shall be
determined by the Company, subject to the right of the holders to withdraw their
request to participate in the registration pursuant to Section 2.3(a)(iii) after
being advised of such price, discount and other terms.
(c) Participation in Underwritten Offerings. No Person may
participate in any Underwritten Offering unless such Person (i) agrees to sell
such Person's securities on the basis provided in any underwriting arrangements
approved by the Persons entitled to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
2.7. No Inconsistent Agreements; Additional Rights. The
Company will not enter into, and is not currently a party to, any agreement that
is, or could be, inconsistent with the rights granted to the holders by this
Agreement and, other than the registration rights granted as provided herein,
has not granted to any party rights with respect to the Registration of any
Registrable Securities or any other securities issued or to be issued by it.
Except for the registration rights granted as provided herein, the Company shall
not provide any other holders of its securities rights with respect to the
registration of such securities under the Securities Act or any other rule or
regulation or Law, as applicable, without the prior written consent of the
Investors' Representatives.
2.8. Registration Expenses. (a) The Company shall pay all of
the expenses incident to the Company's performance of or compliance with this
Agreement, including, without limitation (i) all registration and filing fees,
and any other fees and expenses associated with filings required to be made with
the SEC, the NASD or any other Governmental Authority or listing authority, (ii)
all fees and expenses in connection with compliance with state securities or
"Blue Sky" laws, (iii) all translating, printing, duplicating, word processing,
messenger, telephone, facsimile and delivery expenses (including expenses of
printing certificates for the Registrable Securities in a form eligible for
deposit with The Depository Trust Company or other similar depository
institution and of printing prospectuses), (iv) all fees and disbursements of
counsel for the Company and of all independent certified public accountants of
the Company (including the expenses of any special audit and cold comfort letter
required by or incident to such performance, unless such special audit was
required by the holders), (v) all fees and expenses relating to the preparation
of a deposit agreement, the deposit of the underlying Common Stock under the
deposit agreement, the issuance thereunder of Depositary Shares representing
such deposited securities, the issuance of American depositary receipts of the
Company evidencing such Depositary Shares and the fees of the depositary, (vi)
Securities Act or similar liability insurance if the Company so desires or the
underwriter or underwriters, if any, so require in accordance with
then-customary underwriting practice, (vii) all fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange or the quotation of the Registrable Securities on any inter-dealer
quotation system, (viii) all applicable rating agency fees with respect to any
applicable Registrable Securities, (ix) any reasonable fees and disbursements of
underwriters customarily paid by issuers or sellers of securities and (x) all
fees and expenses of any special experts or other Persons retained by the
Company in connection with any Registration. In addition, in all cases the
Company shall pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any audit and the fees and expenses of any
Person, including special experts, retained by the Company. In addition, the
Company shall pay all reasonable fees and disbursements of one law firm or other
counsel selected by the Investors' Representatives and all fees and expenses of
accountants to the holders of Registrable Securities being sold. The Company
shall not be required to pay any underwriting discounts and selling commissions
attributable to the sale of Registrable Securities.
2.9. Indemnification.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the full extent permitted by Law, each holder,
each of its respective Affiliates, each of its respective Representatives and
each Person who controls (within the meaning of the Securities Act or the
Exchange Act) such Persons (each an "indemnified party" for the purposes of this
Section 2.9(a)) from and against any and all losses, claims, damages,
liabilities (or actions or proceedings in respect thereof, whether or not such
indemnified party is a party thereto) and expenses (including reasonable costs
of investigation and legal expenses), joint or several (each, a "Loss" and
collectively "Losses"), arising out of or based upon (i) any untrue or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Registrable Securities were Registered under the Securities Act
or other applicable Law (including any final, preliminary or summary Prospectus
contained therein or any amendment thereof or supplement thereto or any
documents incorporated by reference therein) or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a Prospectus or
preliminary Prospectus, in light of the circumstances under which they were
made) not misleading; provided, however, that the indemnity agreement contained
in this Section 2.9(a) shall not apply to amounts paid in settlement of any
matter if such settlement is effected without the consent of the Company, which
consent shall not be unreasonably withheld, nor shall the Company be liable to
any indemnified party in any such case to the extent that any such Loss arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any such Registration Statement in reliance
upon and in conformity with written information furnished to the Company by such
indemnified party expressly for use in the preparation thereof. This indemnity
shall be in addition to any liability Company may otherwise have. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such holder or any indemnified party and shall survive the transfer
of such securities by such holder. The Company will also indemnify, if
applicable and if requested, underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in any distribution
pursuant hereto, their officers and directors and each Person who controls such
Persons (within the meaning of the Securities Act or the Exchange Act) to the
same extent as provided above with respect to the indemnification of the
indemnified parties.
(b) Indemnification by the Holders. Each selling holder of
Registrable Securities agrees (severally and not jointly) to indemnify and hold
harmless, to the full extent permitted by law, the Company, its directors and
officers and each Person who controls the Company (within the meaning of the
Securities Act or the Exchange Act) from and against any Losses resulting from
any untrue statement of a material fact or any omission of a material fact
required to be stated in the Registration Statement under which such Registrable
Securities were Registered under the Securities Act (including any final,
preliminary or summary Prospectus contained therein or any amendment thereof or
supplement thereto or any documents incorporated by reference therein), or
necessary to make the statements therein (in the case of a Prospectus or
preliminary Prospectus, in light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that such untrue
statement or omission had been contained in any information furnished in writing
to the Company by or on behalf of such selling holder specifically for inclusion
in such Registration Statement and was not corrected in a subsequent writing
prior to or concurrently with the sale of the Registrable Securities to the
Person asserting such loss, claim, damage, liability or expense. In no event
shall the liability of any selling holder of Registrable Securities hereunder be
greater in amount than the dollar amount of the proceeds received by such holder
under the sale of the Registrable Securities giving rise to such indemnification
obligation, except in the case of willful fraud by such selling shareholder. The
Company shall be entitled to receive indemnities from, if applicable and if
requested, underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, to the same extent as
provided above (with appropriate modification) with respect to information so
furnished in writing by such Persons specifically for inclusion in any
Prospectus or Registration Statement. Each holder also shall indemnify any
underwriters of the Registrable Securities, their officers and directors and
each Person who controls such underwriters (within the meaning of the Securities
Act or the Exchange Act) to the same extent as provided above with respect to
the indemnification of the Company.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided, that any delay or failure to so notify the indemnifying party shall
relieve the indemnifying party of its obligations hereunder only to the extent,
if at all, that it is actually and materially prejudiced by reason of such delay
or failure) and (ii) permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party;
provided, however, that any Person entitled to indemnification hereunder shall
have the right to select and employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such Person unless (A) the indemnifying party has agreed in writing
to pay such fees or expenses, (B) the indemnifying party shall have failed to
assume the defense of such claim within a reasonable time after having received
notice of such claim from the Person entitled to indemnification hereunder and
to employ counsel reasonably satisfactory to such Person, (C) in the reasonable
judgment of any such Person, based upon advice of its counsel, a conflict of
interest exists between such Person and the indemnifying party with respect to
such claims or (D) the indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party; in the case of clauses (B), (C) and (D), if the Person
notifies the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of
such Person. If such defense is not assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent, but such consent may not be unreasonably withheld or
delayed. If the indemnifying party assumes the defense, the indemnifying party
shall have the right to settle such action with the consent of the indemnified
party, which consent shall not be unreasonably withheld, provided, that the
indemnified party shall not be required to consent to any settlement (i)
imposing equitable remedies or other obligations on any indemnified party, or
(ii) that includes any admission of wrongdoing on the part of the indemnified
party or any restriction on the indemnified party or its officers or directors.
No indemnifying party shall consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to each indemnified party of an unconditional release
from all liability in respect to such claim or litigation. The indemnifying
party or parties shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm (together with
one firm of local counsel) at any one time from all such indemnified party or
parties unless (x) the employment of more than one counsel has been authorized
in writing by the indemnifying party or parties, (y) a conflict or potential
conflict exists or may exist (based on advice of counsel to an indemnified
party) between such indemnified party and the other indemnified parties or (z)
an indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it that are different from or in
addition to those available to the other indemnified parties, in each of which
cases the indemnifying party shall be obligated to pay the reasonable fees and
expenses of such additional counsel or counsels.
(d) Contribution. If for any reason the indemnification
provided for in the paragraphs (a) and (b) of this Section 2.9 is unavailable to
an indemnified party or insufficient to hold it harmless as contemplated by
paragraphs (a) and (b) of this Section 2.9, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such Loss in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and the indemnified party on the other.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. Notwithstanding anything in this
Section 2.9(d) to the contrary, no indemnifying party (other than the Company)
shall be required pursuant to this Section 2.9(d) to contribute any amount in
excess of the amount by which the net proceeds received by such indemnifying
party from the sale of Registrable Securities in the offering to which the
Losses of the indemnified parties relate exceeds the amount of any damages which
such indemnifying party has otherwise been required to pay by reason of such
untrue statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 2.9(d) were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. If
indemnification is available under this Section 2.9, the indemnifying parties
shall indemnify each indemnified party to the full extent provided in Sections
2.9(a) and 2.9(b) hereof without regard to the relative fault of said
indemnifying parties or indemnified party.
2.10. Rules 144 and 144A; Regulation S. The Company covenants
that it will file the reports required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder (or, if the Company is not required to file such reports, it will,
upon the request of any holder of Registrable Securities, make publicly
available such necessary information for so long as necessary to permit sales
pursuant to Rule 144, Rule 144A or Regulation S under the Securities Act), and
it will take such further action as any holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
holder to sell Registrable Securities without Registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 or 144A or
Regulation S under the Securities Act, as such rules or regulations may be
amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the SEC. Upon the request of any holder of Registrable Securities,
the Company will deliver to such holder a written statement as to whether it has
complied with such requirements and, if not, the specifics thereof.
2.11. Piggyback Rights in Respect of Korean Offerings. If the
Company at any time proposes to offer any securities of the same class as any
Registrable Securities for its own account or for the account of any holders of
its securities (y) to an underwriter or underwriters on a firm commitment basis
for re-offering to the public in Korea, or (z) in an offering in Korea in which
an underwriter or underwriters commit to acquire such securities if and to the
extent not acquired by third parties, then in such event the holders of
Registrable Securities shall have with respect to such offering in Korea
participation rights as against the Company and the underwriter(s) equivalent to
the rights the holders would enjoy in respect of a Piggyback Registration
hereunder.
SECTION 3. MISCELLANEOUS
3.1. Investors' Representatives. (a) Each holder authorizes
and appoints the Sponsors (acting jointly) (the "Investors' Representatives") as
its sole representative and attorney-in-fact to take all actions (including any
decisions on behalf of the holders with respect to their rights and obligations
hereunder), with the power to sign, on each of their behalf, all modifications,
amendments, consents, notices and waivers related to this Agreement and to act
on the behalf of each of them and as the representative hereunder. This
appointment and grant of authority and power is coupled with an interest and is
in consideration of the mutual covenants made herein, and is irrevocable and
shall not be terminated by any act of any holder or by operation of law. Each
party agrees that the Investors' Representatives shall have no obligation or
liability to any Person as a result of any action or omission taken or omitted
by the Investors' Representatives in good faith hereunder, and each holder shall
on a pro rata basis, based on its ownership of Registrable Securities at the
time of the alleged act or omission, indemnify and hold harmless the Investors'
Representatives from any Losses incurred by it as a result of such action or
omission of the Investors' Representatives. The actions and decisions of the
Investors' Representatives are hereby affirmed, ratified and confirmed and
approved in all respects. The holders further agree that should any Sponsor,
together with its Affiliates, cease to hold at least five percent (5%) of the
fully-diluted share capital of the Company, this appointment shall terminate
with respect to such Sponsor, and the remaining Sponsor, if it, together with
its Affiliates, holds at least five percent (5%) of the fully-diluted share
capital of the Company, may exercise its powers as Investors' Representative
individually.
(b) The Investors' Representatives may at any time and from
time to time by notice to the holders given pursuant to the Shareholders'
Agreement assign and delegate all or part of its rights and obligations
hereunder to holders of a majority of Registrable Securities requested to be
included in a proposed offering (in respect of any decision to be made or act to
be taken in respect of any proposed offering) or to holders of a majority of
Registrable Securities (in respect of any other decision or act). The consent of
the holders shall not be required in respect of any such assignment or
delegation. The Investors' Representatives shall have no obligation to act at
the instruction of the holders, except as provided in the Shareholders'
Agreement.
3.2. Term. This Agreement shall terminate upon earlier of (i)
the sixth (6th) anniversary of the Closing Date or (ii) the date as of which (A)
all of the Registrable Securities have been sold pursuant to a Registration
Statement (but in no event prior to the applicable period referred to in Section
4(3) of the Securities Act and Rule 174 thereunder) or (B) the holders are
permitted to sell their Registrable Securities under Rule 144(k) under the
Securities Act (or any similar provision then in force permitting the sale of
restricted securities without limitation on the amount of securities sold or the
manner of sale), except that the provisions of Sections 2.9 and 2.10 and this
Section 3 shall survive any such of termination.
3.3. Injunctive Relief. It is hereby agreed and acknowledged
that it will be impossible to measure in money the damages that would be
suffered if the parties fail to comply with any of the obligations herein
imposed on them and that in the event of any such failure, an aggrieved Person
will be irreparably damaged and will not have an adequate remedy at law. Any
such Person shall, therefore, be entitled (in addition to any other remedy to
which it may be entitled in law or in equity) to injunctive relief, including,
without limitation, specific performance, to enforce such obligations, and if
any action should be brought in equity to enforce any of the provisions of this
Agreement, none of the parties hereto shall raise the defense that there is an
adequate remedy at Law.
3.4. Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall, to the extent permitted by
applicable Law, be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
3.5. Notices. All notices, requests, demands, claims, and
other communications hereunder shall be in writing, shall be effective upon
receipt and shall be delivered personally or by an internationally recognized
express courier or sent by facsimile as follows:
(a) if to the Company to:
Hanaro Telecom, Inc.
000, Xxxxxxxx-0xxxx
Xxxxx-xx
Xxxxxx, Xxxxx 411-778
Telephone: (00-0) 0000-0000
Facsimile: (00-0) 0000-0000
Attention: Kyounglim Yun, Senior Vice President
with copies to:
Xxxxx Xxxx Xxxx
Shin & Xxx
C.P.O. Box 8261
Ace Tower, 0xx Xxxxx
0-000 Xxxxxxx-xxxx, Xxxxx-Xx
Xxxxx, Xxxxx 100-712
Telephone: (00-0) 000-0000
Facsimile: (00-0) 000-0000
(b) if to the Investors to the address or number set forth
below each Investors' name on Schedule I,
with copies to:
Xxxx Xxxxxxxxx
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
39th Floor, Bank of China Xxxxx
Xxx Xxxxxx Xxxx
Xxxx Xxxx,
Xxxxx
Telephone: (000) 0000-0000
Facsimile: (000) 0000-0000
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
facsimile transmission, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.
3.6. Successors, Assigns and Transferees. (a) The rights of
any holder under this Agreement with respect to any Registrable Securities may
be transferred and assigned (in whole or in part), provided, that, other than an
assignment to an Affiliate of any Investor, no such assignment shall be binding
upon or obligate the Company, the Investors' Representatives or any other holder
to any such assignee unless and until the Company and the Investors'
Representatives shall have received notice of such assignment as herein provided
and a written agreement of the assignee to be bound by the provisions of this
Agreement. Any purported transfer or assignment by any party hereto other than
transfers and assignments made by a holder as provided in the first sentence of
this Section 3.6 shall be null and void.
(b) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto, and their respective successors and permitted
assigns.
3.7. Governing Law; Service of Process; Consent to
Jurisdiction. (a) This Agreement shall be governed by and construed and
interpreted in accordance with the law of the State of New York, which shall
govern this Agreement and any controversy or claim arising out of or relating to
this Agreement.
(b) Any controversy, claim or dispute arising out of or
relating to or in connection with this Agreement, including, without limitation,
a dispute regarding the breach, termination, enforceability or validity hereof
shall be finally settled by binding arbitration in Hong Kong before a panel of
three arbitrators. The arbitration shall be administered by the International
Court of Arbitration of the International Chamber of Commerce (the "ICC") under
its Rules of Arbitration as in effect at the time of the arbitration, except as
they may be modified herein by agreement of the parties and shall be conducted
in the English language. The Investors' Representatives, on the one hand, and
the Company, on the other, shall each nominate one arbitrator, obtain its
nominee's acceptance of such nomination, and deliver written notification of
such nomination and acceptance to the other party within thirty (30) days after
delivery of the request for arbitration. In the event a party fails to nominate
an arbitrator or deliver notification of such nomination to the other party
within this time period, upon request of any party, such arbitrator shall
instead be appointed by the ICC within thirty (30) days of receiving such
request. The two arbitrators nominated in accordance with the above provisions
shall nominate the third arbitrator, obtain the nominee's acceptance of such
nomination and notify the parties in writing of such nomination and acceptance
within thirty days of their nomination. If the first two nominated arbitrators
fail to nominate a third arbitrator or notify the parties of that nomination
within this time period, then, upon request of either party, the third
arbitrator shall be appointed by the ICC within thirty (30) days of receiving
such request. The third arbitrator shall act as chair. For the sake of clarity,
it is expressly understood that the function of such chair is administrative
only and shall not signify that such chair has greater or different powers as
arbitrator from the other arbitrators. The award of the arbitrators shall be
final and binding upon the parties, and shall not be subject to any appeal or
review. The parties agree to submit to the non-exclusive personal jurisdiction
of the federal and state courts sitting in the City of New York, New York for
the purpose of enforcing this agreement to arbitrate.
(c) No provision of, nor the exercise of any rights under,
this Section 3.7 shall limit the right of any party to request and obtain from a
court of competent jurisdiction in the City of New York (which shall have
non-exclusive jurisdiction for purposes of this Section 3.7(c)) before, during
or after the pendency of any arbitration, provisional or ancillary remedies and
relief including, but not limited to, injunctive or mandatory relief or the
appointment of a receiver. The institution and maintenance of an action or
judicial proceeding for, or pursuit of, provisional or ancillary remedies shall
not constitute a waiver of the right of any party, even if it is the plaintiff,
to submit the dispute to arbitration if such party would otherwise have such
right. Each of the parties hereby submits unconditionally to the non-exclusive
jurisdiction of the state and federal courts located in the City of New York,
County of New York for purposes of this provision, waives objection to the venue
of any proceeding in any such court or that any such court provides an
inconvenient forum and consents to the service of process upon it in connection
with any proceeding instituted under this Section 3.7(c) in the same manner as
provided for the giving of notice hereunder.
(d) Judgment upon the award rendered may be entered in any
court having jurisdiction. The parties hereby expressly consent to the
non-exclusive jurisdiction of the state and federal courts situated in the City
of New York, County of New York for this purpose and waive objection to the
venue of any proceeding in such court or that such court provides an
inconvenient forum.
(e) Each of the parties participating in an arbitration
pursuant to the terms of this Agreement shall, subject to the award of the
arbitrators, pay an equal share of the arbitrators' fees. The arbitrators shall
have the power to award recovery of all costs (including reasonable attorneys'
fees, administrative fees, arbitrators' fees and court costs) to the prevailing
party.
(f) Each of:
(i) the Company hereby irrevocably designates CT
Corporation System, with offices situated at present at
000 Xxxxxx Xxxxxx - XX, Xxx Xxxx, XX 00000, X.X.X.; and
(ii) each Investor hereby irrevocably designates the party
set forth opposite its name under the column titled
"Authorized Agent" on Schedule I;
as its authorized agent, respectively, to accept and acknowledge on its behalf
service of any process which may be served in any proceeding in New York and
each party agrees that any process or other paper to be served in connection
with any action or proceeding under this Agreement, shall, if delivered, sent or
mailed in accordance with Section 3.5 of this Agreement, constitute good, proper
and sufficient service thereof.
3.8. Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
3.9. Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable Law. If any provision of this
Agreement or the application thereof to any person or circumstance is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision outside of the
jurisdiction of such court or to Persons or circumstances other than those as to
which it has been held invalid, void or unenforceable, shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby.
3.10. Amendment; Waiver.
(a) This Agreement may not be amended or modified and waivers
and consents to departures from the provisions hereof may not be given, except
by an instrument or instruments in writing making specific reference to this
Agreement and signed by the Company, the Investors' Representatives. Each holder
of any Registrable Securities at the time or thereafter outstanding shall be
bound by any amendment, modification, waiver or consent authorized by this
Section 3.10(a), whether or not such Registrable Securities shall have been
marked accordingly.
(b) The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. Except as otherwise expressly provided herein, no failure on the part of
any party to exercise, and no delay in exercising, any right, power or remedy
hereunder, or otherwise available in respect hereof at law or in equity, shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
3.11. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to constitute one and the same agreement. In addition
to any other lawful means of execution or delivery, this Agreement may be
executed by facsimile signatures and may be delivered by the exchange of
counterparts of signature pages by means of telecopier transmission.
[The remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed as of the date first written above.
HANARO TELECOM, INC.
By
----------------------------------------
Name:
Title:
AIF II NT, LTD.
By
----------------------------------------
Name:
Title:
AIG ASIAN OPPORTUNITY FUND L.P.
By: AIG Asian Opportunity G.P., L.L.C.,
its General Partner
By
----------------------------------------
Name:
Title:
NEWBRIDGE ASIA HT, L.P.
By: Newbridge Asia HT, Ltd.,
its General Partner
By
----------------------------------------
Name:
Title:
[EACH OF THE OTHER INVESTORS]
By:
---------------------------------------
Name:
Title:
SCHEDULE I
List of Investors
Investor/Address and
Contact Number of Investor Authorized Agent
AIF II NT, Ltd. Emerging Markets Partnership
Unit 3(1) 0000 Xxxxxxxxxxxx Xxxxxx
Main Office Tower NW, Suite 1100
Financial Park Labuan Xxxxxxxxxx
Xxxxx Xxxxxxx XX 00000
8/000 Labuan U.S.A.
F.T. Labuan Tel: 0-000-000-0000
Malaysia Fax: 0-000-000-0000
Tel: 00-00-000-000 / 439-685
Fax: 00-00-000-000
AIG Asian Opportunity Fund, L.P. Emerging Markets Partnership
c/o AIG Global Investment Corp. (Asia) Ltd. 0000 Xxxxxxxxxxxx Xxxxxx
Xxxxx 0000 Xxxxxxx Xxxxx XX, Xxxxx 0000
00 Xxxxxxxxx Xxxxxxxxxx
Xxxx Xxxx XX 00000
Tel: 000-0000-0000 U.S.A.
Fax: 000-0000-0000 Tel: 0-000-000-0000
Fax: 0-000-000-0000
Newbridge Asia HT, L.P. Newbridge Capital, LLC
c/o M&C Corporate Services Ltd. 000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxx 0000
X.X. Xxx 000 Xxxx Xxxxx, XX 00000
Xxxxxx Town USA
Grand Cayman Tel: 0-000-000-0000
Fax: 0-000-000-0000
With a copy to:
Newbridge Capital Limited
Korea Xxxxx Xxxx Xxxxxxxx, 00/X
000 Xxxxxxxxx-xxxx
Xxxxxx-xx
Xxxxx
Xxxxx 110-702
Tel: 000-000-0000
Fax: 000 000 0000
