<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
SCHEDULE 14D-1/A
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D/A
UNDER THE SECURITIES ACT OF 1934
ZENITH ELECTRONICS CORPORATION
- --------------------------------------------------------------------------------
(NAME OF SUBJECT COMPANY)
LG ELECTRONICS INC.
LG SEMICON CO., LTD.
- --------------------------------------------------------------------------------
(BIDDERS)
Common Stock, par value $1.00 per share (Including the Associated Rights)
- --------------------------------------------------------------------------------
(TITLE OF CLASS OF SECURITIES)
989349 10 5
- --------------------------------------------------------------------------------
(CUSIP NUMBER OF CLASS OF SECURITIES)
K.S. Cho
Managing Director
LG Electronics Inc.
LG Twin Towers
20, Yoido-dong
Youngdungpo-gu
Seoul, Korea 150-721
011-82-2-3777-3480
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON
BEHALF OF BIDDER)
Copy to:
Scott J. Davis
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, IL 60603
(312) 782-0600
<PAGE>
This Amendment No. 4 amends and supplements the Tender Offer Statement
on Schedule 14D-1 and Schedule 13D dated July 21, 1995, as amended (the
"Schedule 14D-1") of LG Electronics Inc., a corporation organized under the laws
of the Republic of Korea (the "Purchaser") and LG Semicon Co., Ltd., a
corporation organized under the laws of the Republic of Korea ("LG Semicon"),
filed in connection with the Purchaser's offer to purchase up to 18,619,000
shares of the outstanding common stock, par value $1.00 per share (the "Common
Stock"), of Zenith Electronics Corporation, a Delaware corporation (the
"Company"), and the associated Common Stock purchase rights (the "Rights" and,
together with the Common Stock, the "Shares") upon the terms and subject to the
conditions set forth in the Schedule 14D-1. Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to those terms in the
Schedule 14D-1.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Although the Offer is being made solely by the Purchaser, the
Purchaser will direct, pursuant to its rights under the Stock Purchase
Agreement, that 80% of the Offer Shares and the Issue Shares purchased, if the
transactions contemplated by the Stock Purchase Agreement are consummated, will
be acquired by the Purchaser's majority owned subsidiary, LG Semicon. The total
amount of funds required by the Purchaser to purchase the Offer Shares and the
Issue Shares and to pay related fees and expenses will be approximately $360
million. The Purchaser will obtain 80% of such funds from LG Semicon for the 80%
of the Offer Shares and the Issue Shares to be acquired by LG Semicon. The
Purchaser expects to obtain the remaining 20% of the required funds from a new
U.S. $70 million bank term loan facility pursuant to the Purchaser Credit
Agreement described below. Of the funds to be provided by LG Semicon,
approximately 25% will be from internal sources and approximately 75% is
expected to be obtained from a new U.S. $210 million term loan facility pursuant
to the LG Semicon Credit Agreement described below.
Purchaser Credit Agreement
- --------------------------
Purchaser has entered into a credit agreement (the "Purchaser Credit
Agreement") dated October 31, 1995 with Cho Hung Bank, DKB Asia Limited, The
Korea Development Bank and Societe Generale Asia Limited as arrangers (the
"Arrangers" and each an "Arranger"), the other lenders party thereto and Cho
Hung Bank, London Branch as agent (in this capacity the "Agent"), pursuant to
which the lenders have agreed, subject to the terms and conditions set forth in
the Purchaser Credit Agreement, to provide Purchaser with up to an aggregate of
$70 million in financing.
The Purchaser Credit Agreement provides for two facilities (the
"Purchaser Credit Facilities"): (i) a $17,625,000 revolving term loan facility
(the "Purchaser Tranche A Revolving Credit Facility") and (ii) a $52,375,000
million revolving term loan facility (the "Purchaser Tranche B Revolving Credit
Facility" and, together with the Purchaser Tranche A Revolving Credit Facility,
the "Purchaser Credit Facilities"). The proceeds of the Purchaser
<PAGE>
Credit Facilities are to be used to finance Purchaser's acquisition of the Offer
Shares and the Issue Shares and to pay related fees and expenses.
Loans under the Purchaser Credit Facilities will mature on the date
falling five years from the first drawdown for the relevant tranche. All loans
under the Purchaser Credit Agreement will bear interest at a rate per annum
equal to the London Interbank Offered Rate ("LIBOR") (as determined by
procedures set forth in the Credit Agreement) plus a margin of 0.40%.
Purchaser will pay the Arrangers, the lenders, and the Agent certain
fees which are customary for similar types of financings including a front-end
fee, a commitment fee on the undrawn portion of each of the Purchaser Credit
Facilities and an annual agent's fee under each of the Purchaser Credit
Facilities.
Purchaser may voluntarily repay any loans, in whole or in part, under
the Purchaser Credit Facilities at the end of each interest period in minimum
principal amounts of $20 million. The commitments of the lenders to provide
credit under the Purchaser Credit Agreement will terminate on the date falling
three months after the Agreement Date.
The Purchaser Credit Agreement governing the Purchaser Credit
Facilities contains customary representations and warranties, affirmative and
negative covenants, events of default and other terms and conditions. The
obligations of each of the lenders to provide credit under the Purchaser Credit
Agreement is subject to various conditions precedent, including but not limited
to: (i) board resolutions, Articles of Incorporation and Korean Commercial
Registry extracts; (ii) resolutions, authorizations, approvals, consents and
licenses, including the foreign exchange approvals; (iii) satisfactory legal
opinions; (iv) accuracy of representations and warranties in all material
respects; and (v) absence of default or an event of default.
LG Semicon Credit Agreement
- ---------------------------
In addition, LG Semicon has entered into a credit agreement (the "LG
Semicon Credit Agreement") dated October 31, 1995 with the Arrangers, the other
lenders party thereto and the Agent, pursuant to which the lenders have agreed,
subject to the terms and conditions set forth in the LG Semicon Credit
Agreement, to provide LG Semicon with up to an aggregate of $210 million in
financing.
<PAGE>
The LG Semicon Credit Agreement provides for two facilities (the "LG
Semicon Credit Facilities"): (i) a $52,875,000 revolving term loan facility
(the "LG Semicon Tranche A Revolving Credit Facility") and (ii) a $157,125,000
million revolving term loan facility (the "LG Semicon Tranche B Revolving Credit
Facility" and, together with the LG Semicon Tranche A Revolving Credit Facility,
the "LG Semicon Credit Facilities"). The proceeds of the LG Semicon Credit
Facilities are to be used to finance LG Semicon's acquisition of a portion of
the Offer Shares and the Issue Shares and to pay related fees and expenses.
Loans under the LG Semicon Credit Facilities will mature on the date
falling five years from the first drawdown for the relevant tranche. All loans
under the LG Semicon Credit Agreement will bear interest at a rate per annum
equal to the London Interbank Offered Rate ("LIBOR") (as determined by
procedures set forth in the LG Semicon Credit Agreement) plus a margin of 0.40%.
LG Semicon will pay the Arrangers, the lenders, and the Agent certain
fees which are customary for similar types of financings including a front-end
fee, a commitment fee on the undrawn portion of each of the LG Semicon Credit
Facilities and an annual agent's fee under each of the LG Semicon Credit
Facilities.
LG Semicon may voluntarily repay any loans, in whole or in part, under
the LG Semicon Credit Facilities at the end of each interest period in minimum
principal amounts of $20 million. The commitments of the lenders to provide
credit under the LG Semicon Credit Agreement will terminate on the date falling
three months after the Agreement Date.
The LG Semicon Credit Agreement governing the LG Semicon Credit
Facilities contains customary representations and warranties, affirmative and
negative covenants, events of default and other terms and conditions. The
obligations of each of the lenders to provide credit under the LG Semicon Credit
Agreement is subject to various conditions precedent, including but not limited
to: (i) board resolutions, Articles of Incorporation and Korean Commercial
Registry extracts; (ii) resolutions, authorizations, approvals, consents and
licenses, including the foreign exchange approvals; (iii) satisfactory legal
opinions; (iv) accuracy of representations and warranties in all material
respects; and (v) absence of default or an event of default.
Other
- -----
The foregoing descriptions of the Purchaser Credit Agreement and the
LG Semicon Credit Agreement are qualified in their entirety by reference to the
text thereof filed as exhibits to the Schedule 14D-1/A, copies of which may be
obtained from the offices of the Commission in the manner set forth in the Offer
to Purchase.
<PAGE>
It is anticipated that the indebtedness incurred by Purchaser and LG
Semicon through borrowings under the Purchaser Credit Agreement and the LG
Semicon Credit Agreement will be repaid from funds generated internally by
Purchaser and LG Semicon and from other sources which may include the proceeds
of the private or public sale of debt or equity securities. No final decisions
have been made concerning the method Purchaser and LG Semicon will employ to
repay such indebtedness. Such decisions will be made based on Purchaser's and
LG Semicon's review from time to time of the advisability of particular actions,
as well as on prevailing interest rates and financial and other economic
conditions.
ITEM 10. ADDITIONAL INFORMATION.
The Purchaser issued a press release on November 1, 1995. The press
release is attached as an exhibit hereto and is incorporated herein by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. Description
- ----------- -----------
99(a)(12) Press Release dated November 1, 1995.
99(b)(1) Credit Agreement dated October 31, 1995 among Purchaser and the
lenders party thereto.
99(b)(2) Credit Agreement dated October 31, 1995 among LG Semicon and the
lenders party thereto.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 1, 1995
LG ELECTRONICS INC.
/s/ K.S. Cho
-----------------------------------------
Name: K.S. Cho
Title: Managing Director
LG SEMICON CO., LTD.
/s/ Young-Pyo Bae
-----------------------------------------
Name: Young-Pyo Bae
Title: Executive Director
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99(a)(12) Press Release dated November 1, 1995.
99(b)(1) Credit Agreement dated October 31, 1995 among Purchaser and the
lenders party thereto.
99(b)(2) Credit Agreement dated October 31, 1995 among LG Semicon and the
lenders party thereto.
<PAGE>
EXHIBIT 99(a)(12)
FOR IMMEDIATE RELEASE
LG ELECTRONICS INC. ANNOUNCES FINANCING FOR PURCHASE OF ZENITH STOCK
Seoul, Korea, November 1, 1995 -- LG Electronics announced today that it
has arranged financing for its purchase of shares of Zenith Electronics
Corporation. LG Electronics and its majority-owned subsidiary, LG Semicon Co.,
Ltd. have signed bank credit facilities for an aggregate of up to $280 million
which will provide approximately 80% of the total purchase price for the Zenith
shares being purchased. The receipt of financing was not a condition to the
tender offer for up to 18,619,000 Zenith shares and the direct purchase of an
additional 16,500,000 newly issued shares from Zenith. The tender offer and the
direct purchase remain subject to a number of conditions including the approval
of Zenith's stockholders.
Zenith has scheduled its special stockholders' meeting seeking stockholder
approval of the transactions for 9:00 a.m. Chicago time on Tuesday, November 7,
1995. The tender offer is currently scheduled to expire at 12:00 midnight New
York City time on November 7.
LG Electronics Inc. is a leading manufacturer of consumer electronics,
multimedia products, home appliances and, through LG Semicon, semiconductors
with combined worldwide sales of $8 billion in 1994.
Zenith Electronics Corporation, based in Glenview, Ill., has been a leader
in electronics for more than 75 years. Zenith's core business--Consumer
Electronics and Network Systems--is at the center of the company's digital
strategy, which includes interactive television, digital video disc (DVD)
players, digital and wireless cable, video dial-tone, data communication and
HDTV systems.
Media Contacts: Matt Afflixio--LGE (Access Public Relations)
415/904-7070 ext. 278 or 1-800-501-2945
John Taylor--Zenith Electronics Corporation
708/391-8181
Investor Contact: Bill McNitt--Zenith Electronics Corporation
708/391-7713
# # #
<PAGE>
AGREEMENT
DATED 31st October, 1995
US$70,000,000
CREDIT FACILITY
FOR
LG ELECTRONICS INC.
as Borrower
ARRANGED BY
CHO HUNG BANK
DKB ASIA LIMITED
THE KOREA DEVELOPMENT BANK
SOCIETE GENERALE ASIA LIMITED
as Arrangers
WITH
CHO HUNG BANK, LONDON BRANCH
as Agent
Hong Kong
<PAGE>
INDEX
<TABLE>
<CAPTION>
CLAUSE PAGE
<S> <C>
1. INTERPRETATION................................................ 1
1.1 Definitions........................................... 1
1.2 Construction.......................................... 6
2. THE COMPOSITE FACILITY........................................ 7
2.1 Facilities............................................ 7
2.2 Nature of a Finance Party's rights and obligations.... 7
3. PURPOSE....................................................... 7
4. CONDITIONS PRECEDENT.......................................... 7
4.1 Documentary conditions precedent...................... 7
4.2 Further conditions precedent.......................... 8
5. DRAWDOWN...................................................... 8
5.1 Commitment Period..................................... 8
5.2 Completion of Requests................................ 8
5.3 Amount of each Bank's participation in each Loan...... 9
6. REPAYMENT..................................................... 9
7. PREPAYMENT AND CANCELLATION................................... 9
7.1 Voluntary Prepayment.................................. 9
7.2 Voluntary Cancellation................................ 9
7.3 Additional right of prepayment and cancellation....... 10
7.4 Miscellaneous provisions.............................. 10
8. INTEREST PERIODS.............................................. 10
8.1 Interest Periods...................................... 10
8.2 Non-Business Days..................................... 10
8.3 Consolidation......................................... 11
8.4 Coincidence with Repayment Date....................... 11
8.5 Other adjustments..................................... 11
8.6 Notification.......................................... 11
9. INTEREST...................................................... 11
9.1 Interest rate......................................... 11
9.2 Due dates............................................. 11
9.3 Default interest...................................... 12
9.4 Notification.......................................... 12
10. PAYMENTS...................................................... 12
10.1 Place................................................. 12
10.2 Funds................................................. 12
10.3 Distribution.......................................... 13
10.4 Currency.............................................. 13
10.5 Set-off and counterclaim.............................. 13
10.6 Non-Business Days..................................... 13
10.7 Partial payments...................................... 13
11. TAXES......................................................... 14
11.1 Gross-up.............................................. 14
11.2 Tax receipts.......................................... 14
12. MARKET DISRUPTION............................................. 14
12.1 Absence of quotations................................. 15
12.2 Market disruption..................................... 15
12.3 Suspension of drawdowns............................... 15
12.4 Alternative basis for outstanding Loans............... 15
13. INCREASED COSTS............................................... 16
</TABLE>
<PAGE>
13.1 Increased costs........................................... 16
13.2 Exceptions................................................ 16
14. ILLEGALITY....................................................... 17
15. REPRESENTATIONS AND WARRANTIES................................... 17
15.1 Representations and warranties............................ 17
15.2 Status.................................................... 17
15.3 Powers and authority...................................... 17
15.4 Legal validity............................................ 17
15.5 Non-conflict.............................................. 17
15.6 No default................................................ 18
15.7 Authorisations............................................ 18
15.8 Accounts.................................................. 18
15.9 Litigation................................................ 18
15.10 Information Memorandum.................................... 19
15.18 Times for making representations and warranties........... 20
16. UNDERTAKINGS..................................................... 21
16.1 Duration.................................................. 21
16.2 Financial Information..................................... 21
16.3 Information - Miscellaneous............................... 21
16.4 Notification of Default................................... 21
16.5 Compliance certificates................................... 21
16.6 Authorisations............................................ 22
16.7 Pari passu ranking........................................ 22
16.8 Negative pledge........................................... 22
16.9 Transactions similar to security.......................... 22
16.10 Disposals................................................. 23
16.11 Change of business........................................ 23
16.12 Mergers and acquisitions.................................. 23
16.14 Financial covenant........................................ 23
17. DEFAULT.......................................................... 24
17.1 Events of Default......................................... 24
17.2 Non-payment............................................... 25
17.3 Breach of other obligations............................... 25
17.4 Misrepresentation......................................... 25
17.5 Cross-default............................................. 25
17.6 Insolvency................................................ 25
17.7 Insolvency proceedings.................................... 26
17.8 Appointment of receivers and managers..................... 26
17.9 Creditors' process........................................ 26
17.10 Analogous proceedings..................................... 27
17.11 Cessation of business..................................... 27
17.12 Unlawfulness.............................................. 27
17.13 Ownership of the Borrower................................. 27
17.19 Material adverse change................................... 28
17.20 Acceleration.............................................. 28
18. THE AGENT, THE ARRANGERS AND THE CO-ARRANGERS.................... 28
18.1 Appointment and duties of the Agent....................... 28
18.2 Role of the Arrangers and the Co-Arrangers................ 28
18.3 Relationship.............................................. 29
18.4 Majority Banks' directions................................ 29
18.5 Delegation................................................ 29
18.6 Responsibility for documentation.......................... 29
18.7 Default................................................... 29
18.8 Exoneration............................................... 30
<PAGE>
18.9 Reliance ........................................................ 30
18.10 Credit approval and appraisal ................................... 30
18.11 Information ..................................................... 30
18.12 The Agent, and the Arrangers and the Co-Arrangers individually .. 31
18.13 Indemnities ..................................................... 31
18.14 Compliance ...................................................... 31
18.15 Resignation of the Agent ........................................ 32
18.16 Banks ........................................................... 32
19. Fees .................................................................... 32
19.1 Front-end fee .................................................... 32
19.2 Commitment fee ................................................... 33
19.3 Agent's fee ...................................................... 33
19.4 VAT/Goods and services tax ....................................... 33
20. Expenses ................................................................ 33
20.1 Initial and special costs ........................................ 33
20.2 Enforcement costs ................................................ 34
21. Stamp Duties ............................................................ 34
22. Indemnities ............................................................. 34
22.1 Currency indemnity ............................................... 34
22.2 Other indemnities ................................................ 34
23. Evidence and Calculations ............................................... 35
23.1 Accounts ......................................................... 35
23.2 Certificates and denominations ................................... 35
23.3 Calculations ..................................................... 35
24. Amendments and Waivers .................................................. 35
24.1 Procedure ........................................................ 35
24.2 Exceptions ....................................................... 35
24.3 Waivers and Remedies Cumulative .................................. 36
25. Changes to the Parties .................................................. 36
25.1 Transfers by the Borrower ........................................ 36
25.2 Transfers by Banks ............................................... 36
25.3 Procedure for novations .......................................... 37
25.4 Reference Banks .................................................. 38
25.5 Register ......................................................... 38
26. Funding ................................................................. 38
27. Disclosure of Information ............................................... 41
28. Set-off ................................................................. 41
29. Pro Rata Sharing ........................................................ 41
29.1 Redistribution ................................................... 41
29.2 Reversal of redistribution ....................................... 42
29.3 Exception ........................................................ 42
30. Severability ............................................................ 42
31. Counterparts ............................................................ 43
32. Notices ................................................................. 43
32.1 Giving of notices ................................................ 43
32.2 Addresses for notices ............................................ 43
33. Waiver of Immunity ...................................................... 44
34. Jurisdiction ............................................................ 44
35. Language ................................................................ 45
36. Governing Law ........................................................... 45
Schedule 1 .................................................................. 46
Schedule 2 .................................................................. 47
Schedule 3 .................................................................. 49
Schedule 4 .................................................................. 50
<PAGE>
SIGNATORIES................................................................. 51
<PAGE>
1
THIS AGREEMENT is dated 31st October, 1995 between:-
(1) LG ELECTRONICS INC. a limited liability company (chusik hoesa) incorporated
under the laws of the Republic of Korea, having its head office at LG Twin
Towers, 20, Yoido-dong, Youngdungpo-gu, Seoul, 150-721, Korea as borrower
(the "BORROWER");
(2) CHO HUNG BANK, DKB ASIA LIMITED, THE KOREA DEVELOPMENT BANK and SOCIETE
GENERALE ASIA LIMITED as arrangers (in this capacity the "ARRANGERS" and
each an "ARRANGER");
(3) ABN AMRO BANK, N.V., SEOUL BRANCH, BAYERISCHE LANDESBANK GIROZENTRALE,
TOKYO BRANCH, DRESDNER BANK AG HONG KONG BRANCH, IBJ ASIA LIMITED, THE
LONG-TERM CREDIT BANK OF JAPAN, LIMITED, HONG KONG BRANCH, THE SUMITOMO
TRUST & BANKING CO., LTD., HONG KONG BRANCH, UNION BANK OF SWITZERLAND and
WESTLB ASIA PACIFIC LIMITED as co-arrangers (in this capacity the "CO-
ARRANGERS" and each a "CO-ARRANGER");
(4) THE FINANCIAL INSTITUTIONS listed in Part 1 of Schedule 1 as tranche A
banks (the "TRANCHE A BANKS" and each a "TRANCHE A BANK");
(5) CHO HUNG BANK, LONDON BRANCH as a tranche B bank (a "TRANCHE B BANK"); and
(6) CHO HUNG BANK, LONDON BRANCH as agent (in this capacity the "AGENT").
IT IS AGREED as follows:-
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement:-
"AFFILIATE"
means a subsidiary or a holding company (each as defined in Section 736 of
the Companies Act 1985) of a Bank or any other subsidiary of that holding
company.
"AGENT'S FEE LETTER"
means the letter dated the Agreement Date between the Agent and the
Borrower setting out the amount of the Agent's fee referred to in Clause
19.3 (Agent's fee).
"AGREEMENT DATE"
means the date of this Agreement.
"BANK"
means a Tranche A Bank or a Tranche B Bank.
"BUSINESS DAY"
means a day (other than a Saturday or a Sunday) on which banks are open for
business in Hong Kong, London, New York, Seoul and Tokyo.
"COMMITMENT"
<PAGE>
2
means, in relation to any Bank, its Tranche A Commitment and/or its Tranche
B Commitment (as the case may be).
"COMMITMENT PERIOD"
means, in respect of Tranche A and Tranche B, the period from the Agreement
Date to the Term Date (both dates inclusive).
"DEFAULT"
means an Event of Default or an event which, with the giving of notice,
lapse of time, determination of materiality or fulfilment of any other
applicable condition (or any combination of the foregoing), would
constitute an Event of Default.
"DRAWDOWN DATE"
means the date of the advance of a Loan.
"EVENT OF DEFAULT"
means an event specified as such in Clause 17.1 (Events of Default).
"FACILITY OFFICE"
means the office(s) notified by a Bank to the Agent:-
(a) on or before the date it becomes a Bank; or
(b) by not less than 5 Business Days' notice,
as the office(s) through which it will perform all or any of its
obligations under this Agreement.
"FINANCE DOCUMENT"
means this Agreement, the Agent's Fee Letter, the Front-end Fee Letter,
each Novation Certificate or any other document designated as such by the
Agent and the Borrower.
"FINANCE PARTY"
means an Arranger, a Co-Arranger, a Bank or the Agent.
"FINANCIAL INDEBTEDNESS"
means any indebtedness in respect of:-
(a) moneys borrowed and debit balances at banks; or
(b) any debenture, bond, note, loan stock or other security; or
(c) any acceptance credit; or
(d) receivables sold or discounted (otherwise than on a non-recourse
basis); or
(e) the acquisition cost of any asset to the extent payable before or
after the time of acquisition or possession by the party liable where
the advance or deferred payment is arranged primarily as a method of
raising finance or financing the acquisition of that asset; or
<PAGE>
3
(f) leases entered into primarily as a method of raising finance or
financing the acquisition of the asset leased; or
(g) currency swap or interest swap, cap or collar arrangements; or
(h) amounts raised under any other transaction having the commercial
effect of a borrowing or raising of money; or
(i) any guarantee, indemnity or similar assurance against financial loss
of any person,
but no particular indebtedness shall be taken into account more than once.
"FRONT-END FEE LETTER"
means the letter dated the Agreement Date between the Agent and the
Borrower setting out the amount of the front-end fee referred to in Clause
19.1 (Front-end fee).
"FUNDING ENTITY"
has the meaning given to it in Clause 26 (Funding).
"INFORMATION MEMORANDUM"
means the Information Memorandum and prepared from information provided by
the Borrower in connection with this Agreement.
"INTEREST PERIOD"
means each period determined in accordance with Clause 8 (Interest
Periods).
"KOREA"
means the Republic of Korea.
"LIBOR"
means:-
(a) the rate per annum of the offered quotations in US Dollars for a
period comparable to the required period and which appears on the
display designated as Telerate Page 3750 of the Dow Jones Telerate
Monitor Service (or any equivalent successor of that page) at or about
11:00 a.m. (London time) two days, during which banks are open for
dealing in interbank deposits in US Dollars in London, before the
first day of the relevant required period; or
(b) if the Agent determines that at or about 11:00 a.m. (London time), two
days, during which banks are open for dealing in interbank deposits in
US Dollars in London, before the first day of the relevant required
period no such rate appears on Telerate Page 3750 of the Dow Jones
Telerate Monitor Service, the relevant page is not on display or the
Dow Jones Telerate Monitor Service is not operating, the arithmetic
mean (rounded upwards, if necessary, to the nearest one sixteenth of
one per cent. (1/16%)) of the rates, as supplied to the Agent at its
request, quoted by the Reference Banks to be the respective rates at
which they are offering US Dollar deposits to leading banks in the
London Interbank Market at or about 11:00 a.m. (London time) two days,
during which banks are open for dealing in interbank deposits in US
Dollars in London, before the first day of the relevant required
period for a period comparable to the required period.
<PAGE>
4
For the purposes of this definition, "required period" means, in relation
to a Loan, each Interest Period or, in relation to any unpaid sum, the
period in respect of which LIBOR falls to be determined with respect to
such unpaid sum.
"LOAN"
means, subject to Clause 8 (Interest Periods), the principal amount of each
borrowing by the Borrower under this Agreement or the principal amount
outstanding of that borrowing.
"MAJORITY BANKS"
means, at any time, Banks:-
(a) whose participations in the Loans then outstanding aggregate more than
66-2/3 per cent. of all the Loans then outstanding; or
(b) if there are no Loans then outstanding, whose Commitments then
aggregate more than 66-2/3 per cent. of the Total Commitments; or
(c) if there are no Loans then outstanding and the Total Commitments have
been reduced to nil, whose Commitments aggregated more than 66-2/3 per
cent. of the Total Commitments immediately before the reduction.
"MARGIN"
means 0.40 per cent. per annum.
"NOVATION CERTIFICATE"
has the meaning given to it in Clause 25.3 (Procedure for novations).
"ORIGINAL ACCOUNTS"
means the audited accounts of the Borrower for the year ended 31st
December, 1994 in accordance with Korean generally acceptable accounting
principles.
"PARTY"
means a party to this Agreement.
"REFERENCE BANKS"
means, subject to Clause 25.4 (Reference Banks), the principal London
offices of Cho Hung Bank, The Dai-Ichi Kangyo Bank, The Korea Development
Bank and Societe Generale.
"REPAYMENT DATE"
means, in relation to the Loans comprising each Tranche, the date falling 5
years from the first Drawdown Date for the relevant Tranche.
"REQUEST"
means a request made by the Borrower for a Loan, substantially in the form
of Schedule 3.
"SECURITY INTEREST"
means any mortgage, pledge, lien, charge, assignment, hypothecation or
security interest or any other agreement or arrangement having the effect
of conferring security.
<PAGE>
5
"TERM DATE"
means the date falling 3 months from the Agreement Date.
"TOTAL COMMITMENTS"
means the aggregate for the time being of the Total Tranche A Commitments
and Total Tranche B Commitments, being US$70,000,000 at the Agreement Date.
"TOTAL TRANCHE A COMMITMENTS"
means the aggregate for the time being of the Tranche A Commitments of all
Tranche A Banks, being US$17,625,000 at the Agreement Date.
"TOTAL TRANCHE B COMMITMENTS"
means the aggregate for the time being of the Tranche B Commitments of the
Tranche B Banks, being US$52,375,000 at the Agreement Date.
"TRANCHE A"
means the tranche made available by the Tranche A Banks pursuant to Clause
2.1 (Facilities).
"TRANCHE A COMMITMENT"
means:-
(a) in relation to a Tranche A Bank which is a Bank on the Agreement
Date, the amount in US Dollars set opposite its name in Part 1 of
Schedule 1;
(b) in relation to a Bank which becomes a Tranche A Bank after the
Agreement Date, the amount of Tranche A Commitment acquired by it
under Clause 25 (Changes to the Parties),
to the extent not cancelled, reduced or transferred under this Agreement.
"TRANCHE A LOAN"
means a Loan drawndown or to be drawndown under Tranche A.
"TRANCHE B"
means the tranche made available by the Tranche B Banks pursuant to Clause
2.1 (Facilities).
"TRANCHE B COMMITMENT"
means:-
(a) in relation to a Tranche B Bank on the Agreement Date, the amount in
US Dollars set opposite its name in Part 2 of Schedule 1;
(b) in relation to a Bank which becomes a Tranche B Bank after the
Agreement Date, the amount of Tranche B Commitment acquired by it
under Clause 25 (Changes to the Parties),
to the extent not cancelled, reduced or transferred under this Agreement.
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6
"TRANCHE B LOAN"
means a Loan drawndown or to be drawndown under Tranche B.
"US DOLLAR", "US DOLLARS" or "US$"
means the lawful currency for the time being of the United States of
America.
1.2 CONSTRUCTION
(a) In this Agreement, unless the contrary intention appears, a reference to:-
(i) "ASSETS" includes properties, revenues and rights of every
description;
an "AUTHORISATION" includes an authorisation, consent, approval,
resolution, licence, exemption, filing and registration, permit,
franchise, permission, direction, declaration and notarisation;
a "MONTH" is a reference to a period starting on one day in a
calendar month and ending on the numerically corresponding day in the
next calendar month, except that, if there is no numerically
corresponding day in the month in which that period ends, that period
shall end on the last day in that calendar month;
a "REGULATION" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law) of any
governmental body, agency, department or regulatory, self-regulatory
or other authority or organisation;
(ii) a provision of law is a reference to that provision as amended or re-
enacted;
(iii) a Clause or a Schedule is a reference to a clause of or a schedule to
this Agreement;
(iv) a person includes its successors, transferees and assigns;
(v) a Finance Document or another document is a reference to that Finance
Document or other document as amended, novated or supplemented; and
(vi) a time of day is a reference to London time.
(b) Unless the contrary intention appears, a term used in any other Finance
Document or in any notice given under or in connection with any Finance
Document has the same meaning in that Finance Document or notice as in this
Agreement.
(c) The index to and the headings in this Agreement are for convenience only
and are to be ignored in construing this Agreement.
2. THE COMPOSITE FACILITY
2.1 FACILITIES
Subject to the terms of this Agreement:-
(a) each Tranche A Bank agrees to participate during the Commitment
Period in the making of Tranche A Loans up to an aggregate principal
amount not exceeding its Tranche A Commitment; and
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7
(b) each Tranche B Bank agrees to participate during the Commitment
Period in the making of Tranche B Loans up to an aggregate principal
amount not exceeding its Tranche B Commitment.
No Bank is obliged to lend more than its Commitment.
2.2 NATURE OF A FINANCE PARTY'S RIGHTS AND OBLIGATIONS
(a) The obligations of a Finance Party under the Finance Documents are several.
Failure of a Finance Party to carry out those obligations does not relieve
any other Party of its obligations under the Finance Documents. No Finance
Party is responsible for the obligations of any other Finance Party under
the Finance Documents.
(b) The rights of a Finance Party under the Finance Documents are divided
rights. A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce those rights.
3. PURPOSE
The Borrower shall apply each Loan towards financing the Borrower's acquisition
of shares in the share capital of Zenith Electronics Corp., U.S.A. Without
affecting the obligations of the Borrower in any way, no Finance Party is bound
to monitor or verify the application of any Loan.
4. CONDITIONS PRECEDENT
4.1 DOCUMENTARY CONDITIONS PRECEDENT
The obligations of each Finance Party to the Borrower under this Agreement are
subject to the condition precedent that the Agent has notified the Borrower and
the Banks that it has received all of the documents set out in Schedule 2 in
form and substance satisfactory to the Agent.
4.2 FURTHER CONDITIONS PRECEDENT
The obligation of each Bank to make any amount available under Clause 5.5
(Advance of Loans) is subject to the further conditions precedent that:-
(a) on both the date of the Request and the relevant Drawdown Date:-
(i) the representations and warranties in Clause 15 (Representations
and Warranties) to be repeated on those dates are correct and will be
correct immediately after the relevant Loan is made; and
(ii) no Default is outstanding or might result from the making of
the relevant Loan;
and
(b) the Agent has received all other documents, opinions, certificates,
consents and assurances as it may reasonably request in connection
with the relevant Loan.
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8
5. DRAWDOWN
5.1 COMMITMENT PERIOD
The Borrower may borrow a Loan during the Commitment Period if the Agent
receives, not later than 5 Business Days before the proposed Drawdown Date, a
duly completed Request. The undrawn amount (if any) of the Total Commitments
shall automatically be cancelled at close of business in London on the Term
Date.
5.2 COMPLETION OF REQUESTS
A Request will not be regarded as having been duly completed unless:-
(a) the Drawdown Date is a Business Day falling on or before the Term
Date;
(b) it specifies the amount of the Tranche A Loan and the amount of the
Tranche B Loan to be drawndown. Subject to paragraphs (c) and (d)
below, the principal amount of the Tranche A Loan so requested when
expressed as a percentage of the Total Tranche A Commitments shall
equal the principal amount of the Tranche B Loan so requested when
expressed as a percentage of the Total Tranche B Commitments;
(c) in relation to Tranche A, the principal amount of the Tranche A Loan
is in a minimum of US$5,000,000 or the balance of the undrawn Total
Tranche A Commitments;
(d) in relation to Tranche B, the principal amount of the Tranche B Loan
is a minimum of US$5,000,000 or the balance of the undrawn Total
Tranche B Commitments; and
(e) the payment instructions comply with Clause 10 (Payments).
The Borrower may not, subject to the other terms of this Agreement, deliver more
than one Request on any one day. A Request, once made, is irrevocable.
5.3 AMOUNT OF EACH BANK'S PARTICIPATION IN EACH LOAN
(a) The amount of a Tranche A Bank's participation in each Tranche A Loan will
be the proportion of that Tranche A Loan which its Tranche A Commitment
bears to the Total Tranche A Commitments on the proposed Drawdown Date.
(b) The amount of a Tranche B Bank's participation in each Tranche B Loan will
be the proportion of that Tranche B Loan which its Tranche B Commitment
bears to the Total Tranche B Commitments on the proposed Drawdown Date.
5.4 NOTIFICATION TO BANKS
The Agent shall promptly (and in any event no later than 11:00 a.m. (Hong Kong
time) three Business Days before the proposed Drawdown Date) notify each Bank of
the details of the requested Loan and the amount of its participation in that
Loan.
5.5 ADVANCE OF LOANS
Subject to the terms of this Agreement, each Bank shall make its participation
in each Loan available to the Agent for the Borrower on the relevant Drawdown
Date.
6. REPAYMENT
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9
The Borrower shall repay the Loans in full on the relevant Repayment Date.
7. PREPAYMENT AND CANCELLATION
7.1 VOLUNTARY PREPAYMENT
The Borrower may, by giving not less than 30 days' prior notice to the Agent,
prepay any Loan without penalty but subject to Clause 22.2 (Other indemnities)
on the last day of an Interest Period for that Loan in whole or in part (but, if
in part, in a minimum amount of US$20,000,000 and an integral multiple of
US$5,000,000 or, if less, the outstanding balance of that Loan).
7.2 VOLUNTARY CANCELLATION
The Borrower may, by giving not less than 30 days' prior notice to the Agent,
cancel the undrawn amount of the Total Commitments in whole or in part (but, if
in part, in a minimum amount of US$20,000,000 and an integral multiple of
US$10,000,000 or, if less, the outstanding balance of the Total Commitments).
Any cancellation shall be applied against the Total Tranche A Commitments and
Total Tranche B Commitments pro rata. Any cancellation in part of the Total
Tranche A Commitments shall be applied against the Tranche A Commitment of each
Tranche A Bank pro rata. Any cancellation in part of the Total Tranche B
Commitments
shall be applied against the Tranche B Commitment of each Tranche B Bank pro
rata.
7.3 ADDITIONAL RIGHT OF PREPAYMENT AND CANCELLATION
If:-
(a) the Borrower is required to pay to a Bank any additional amounts under
Clause 11 (Taxes); or
(b) the Borrower is required to pay to a Bank any amount under Clause 13
(Increased Costs); or
(c) interest on a Bank's participation in a Loan is being calculated in
accordance with Clause 12.4(c) (Alternative basis for outstanding Loans),
then, without prejudice to the obligations of the Borrower under those Clauses,
the Borrower may, whilst the circumstances continue, serve a notice of
prepayment and cancellation on that Bank through the Agent. On the date falling
5 Business Days after the date of service of the notice:-
(i) the Borrower shall prepay that Bank's participation in all the Loans
together with all other amounts payable by it to that Bank under the
Finance Documents; and
(ii) that Bank's undrawn Commitment shall be cancelled.
7.4 MISCELLANEOUS PROVISIONS
(a) Any notice of prepayment and/or cancellation under this Agreement is
irrevocable. The Agent shall notify the Banks promptly of receipt of any
such notice.
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10
(b) All prepayments under this Agreement shall be made together with accrued
interest on the amount prepaid to the date of prepayment and any amount due
in respect of that prepayment under Clause 22.2 (Other indemnities).
(c) No prepayment or cancellation is permitted except in accordance with the
express terms of this Agreement.
(d) No amount prepaid under this Agreement may subsequently be re-borrowed. No
amount of the Total Commitments cancelled under this Agreement may
subsequently be reinstated.
8. INTEREST PERIODS
8.1 INTEREST PERIODS
Each Interest Period for each Loan shall be 6 months. Each Interest Period
for each Loan will commence on its Drawdown Date or the expiry of its preceding
Interest Period.
8.2 NON-BUSINESS DAYS
If an Interest Period would otherwise end on a day which is not a Business Day,
that Interest Period shall instead end on the next Business Day in that calendar
month (if there is one) or the preceding Business Day (if there is not).
8.3 CONSOLIDATION
Notwithstanding Clause 8.1 (Interest Periods):-
(a) the first Interest Period for each Tranche A Loan shall end on the
same day as the current Interest Period for any other Tranche A Loan.
On the last day of those Interest Periods, those Tranche A Loans shall
be consolidated and treated as one Tranche A Loan; and
(b) the first Interest Period for each Tranche B Loan shall end on the
same day as the current Interest Period for any other Tranche B Loan.
On the last day of those Interest Periods, those Tranche B Loans shall
be consolidated and treated as one Tranche B Loan.
8.4 COINCIDENCE WITH REPAYMENT DATE
If an Interest Period would otherwise overrun the Repayment Date, it shall be
shortened so that it ends on the Repayment Date.
8.5 OTHER ADJUSTMENTS
The Agent and the Borrower may enter into such other arrangements as they may
agree for the adjustment of Interest Periods and the consolidation and/or
splitting of Loans.
8.6 NOTIFICATION
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11
The Agent shall notify the Borrower and the Banks of the duration of
each Interest Period promptly after ascertaining its duration.
9. INTEREST
9.1 INTEREST RATE
The rate of interest on each Loan for each of its Interest Periods is
the rate per annum determined by the Agent to be the aggregate of
the:-
(a) Margin; and
(b) applicable LIBOR.
9.2 DUE DATES
Except as otherwise provided in this Agreement, accrued interest on
each Loan is payable by the Borrower on the last day of each Interest
Period for that Loan.
9.3 DEFAULT INTEREST
(a) If the Borrower fails to pay any amount payable by it under any Finance
Document, it shall forthwith on demand by the Agent pay interest on the
overdue amount from the due date up to the date of actual payment, as well
after as before judgment, at a rate (the "DEFAULT RATE") determined by the
Agent for such successive Interest Periods of such duration as the Agent
may determine (each a "DESIGNATED INTEREST PERIOD") to be 1 per cent. per
annum above the higher of:-
(i) the rate on the overdue amount under Clause 9.1 (Interest rate)
immediately before the due date (if of principal); and
(ii) the rate which would have been payable if the overdue amount had,
during the period of non-payment, constituted a Loan in the currency
of the overdue amount for the relevant Designated Interest Period.
(b) The default rate will be determined by the Agent on each Business Day or
two days during which banks are open for dealing in interbank deposits in
US Dollars in London before the first day of the relevant Designated
Interest Period, as appropriate.
(c) If the Agent determines that deposits in the currency of the overdue amount
are not at the relevant time being made available by the Reference Banks to
leading banks in the London interbank market, the default rate will be
determined by reference to the cost of funds to the Agent from whatever
sources it may select.
(d) Default interest will be compounded at the end of each Designated Interest
Period.
9.4 NOTIFICATION
The Agent shall promptly notify each relevant Party of the
determination of a rate of interest under this Agreement.
10. PAYMENTS
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12
10.1 PLACE
All payments by the Borrower or a Bank under this Agreement shall be
made to the Agent to its account at such office or bank as it may
notify to the Borrower or Bank for this purpose.
10.2 FUNDS
Payments under this Agreement to the Agent shall be made for value on
the due date at such times and in such funds as the Agent may specify
to the Party concerned as being customary at the time for the
settlement of transactions in US Dollars.
10.3 DISTRIBUTION
(a) Each payment received by the Agent under a Finance Document for another
Party shall, subject to paragraphs (b) and (c) below, be made available by
the Agent to that Party by payment (on the date and in the currency and
funds of receipt) to its account with such office or bank in the principal
financial centre of the country of the relevant currency as it may notify
to the Agent for this purpose by not less than 5 Business Days' prior
notice.
(b) The Agent may apply any amount received by it for the Borrower in or
towards payment (on the date and in the currency and funds of receipt) of
any amount due from the Borrower under this Agreement or any Finance
Document or in or towards the purchase of any amount of any currency to be
so applied.
(c) Where a sum is to be paid to the Agent under any Finance Document for
another Party, the Agent is not obliged to pay that sum to that Party until
it has established that it has actually received that sum. The Agent may,
however, assume that the sum has been paid to it in accordance with the
terms of the relevant Finance Document and, in reliance on that assumption,
make available to that Party a corresponding amount. If the sum
has not been made available but the Agent has paid a corresponding amount
to another Party, that Party shall forthwith on demand by the Agent refund
the corresponding amount together with interest on that amount from the
date of payment to the date of receipt, calculated at a rate determined by
the Agent to reflect its cost of funds.
10.4 CURRENCY
(a) Amounts payable in respect of costs, expenses and taxes and the like are
payable in the currency in which they are incurred.
(b) Any other amounts payable under this Agreement or any other Finance
Document are, except as otherwise provided in this Agreement or the
relevant Finance Document, payable in US Dollars.
10.5 SET-OFF AND COUNTERCLAIM
All payments made by the Borrower under any Finance Document shall be
made without set-off or counterclaim.
10.6 NON-BUSINESS DAYS
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13
(a) If a payment under any Finance Document is due on a day which is not a
Business Day, the due date for that payment shall instead be the next
Business Day in the same calendar month (if there is one) or the preceding
Business Day (if there is not).
(b) During any extension of the due date for payment of any principal under any
Finance Document interest is payable on that principal at the rate payable
on the original due date.
10.7 PARTIAL PAYMENTS
(a) If the Agent receives a payment insufficient to discharge all the amounts
then due and payable by the Borrower under any Finance Document, the Agent
shall apply that payment towards the obligations of the Borrower under the
relevant Finance Document in the following order:-
(i) FIRST, in or towards payment pro rata of any unpaid fees, costs and
expenses of the Agent under any Finance Document;
(ii) SECONDLY, in or towards payment pro rata of any accrued interest due
but unpaid under this Agreement;
(iii) THIRDLY, in or towards payment pro rata of any principal due but
unpaid under this Agreement; and
(iv) FOURTHLY, in or towards payment pro rata of any other sum due but
unpaid under any Finance Document.
(b) The Agent shall, if so directed by all the Banks, vary the order set out in
sub-paragraphs (a)(ii) to (iv) above.
(c) Paragraphs (a) and (b) above shall override any appropriation made by the
Borrower.
11. TAXES
11.1 GROSS-UP
(a) All payments by the Borrower under the Finance Documents shall be made
without any deduction and free and clear of and without deduction for or on
account of any taxes, except to the extent that the Borrower is required by
law to make payment subject to any taxes. If any tax or amounts in respect
of tax must be deducted, or any other deductions must be made, from any
amounts payable or paid by the Borrower, or paid or payable by the Agent to
a Bank, under the Finance Documents, the Borrower shall pay such additional
amounts as may be necessary to ensure that the relevant Bank receives a net
amount equal to the full amount which it would have received had payment
not been made subject to tax.
(b) A Finance Party intending to make a claim pursuant to paragraph (a) above
shall notify the Agent of the event by reason of which it is entitled to do
so, whereupon the Agent shall notify the Borrower thereof, provided that
nothing herein shall require such Finance Party to disclose any
confidential information relating to the organisation of its affairs.
11.2 TAX RECEIPTS
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14
All taxes required by law to be deducted or withheld by the Borrower
from any amounts paid or payable under the Finance Documents shall be
paid by the Borrower when due and the Borrower shall, within 15 days
of request by the Agent, deliver to the Agent for the relevant Bank
evidence satisfactory to that Bank (including all relevant tax
receipts) that the payment has been duly remitted to the appropriate
authority.
12. MARKET DISRUPTION
12.1 ABSENCE OF QUOTATIONS
If LIBOR is being determined in accordance with paragraph (b) of that
definition and a Reference Bank does not supply an offered rate by
1.00 p.m. two days during which banks are open for dealing in
interbank deposits in US Dollars in London before the first day of an
Interest Period, the applicable LIBOR shall, subject to Clause 12.2
(Market disruption), be determined on the basis of the quotations of
the remaining Reference Banks.
12.2 MARKET DISRUPTION
If:-
(a) LIBOR is being determined in accordance with paragraph (b) of that
definition and no, or only one, Reference Bank supplies a rate for the
purposes of determining LIBOR or the Agent otherwise determines that
adequate and fair means do not exist for ascertaining LIBOR; or
(b) the Agent receives notification from Banks whose participations in a
Loan exceed 50 per cent. of that Loan that, in their opinion:-
(i) matching deposits may not be available to them in the London
interbank market in the ordinary course of business to fund their
participations in that Loan for the relevant Interest Period; or
(ii) the cost to them of obtaining matching deposits in the London
interbank market would be in excess of LIBOR for the relevant
Interest Period,
the Agent shall promptly notify the Borrower and the Banks of the fact and
that this Clause 12 (Market Disruption) is in operation.
12.3 SUSPENSION OF DRAWDOWNS
If a notification under Clause 12.2 (Market disruption) applies to a
Loan which has not been made, that Loan shall not be made. However,
within 5 Business Days of receipt of the notification, the Borrower
and the Agent shall enter into negotiations for a period of not more
than 30 days with a view to agreeing an alternative basis for the
borrowing of that and any future Loan. Any alternative basis agreed
shall be, with the prior consent of all the Banks, binding on all the
Parties.
12.4 ALTERNATIVE BASIS FOR OUTSTANDING LOANS
If a notification under Clause 12.2 (Market disruption) applies to a
Loan which is outstanding, then, notwithstanding any other provision
of this Agreement:-
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15
(a) within 5 Business Days of receipt of the notification, the Borrower
and the Agent shall enter into negotiations for a period of not more
than 30 days with a view to agreeing an alternative basis for
determining the rate of interest and/or funding applicable to that
Loan and/or any other Loans;
(b) any alternative basis agreed under paragraph (a) above shall be, with
the prior consent of all the Banks, binding on all the Parties;
(c) if no alternative basis is agreed, each Bank shall (through the Agent)
certify on or before the last day of the Interest Period to which the
notification relates an alternative basis for maintaining its
participation in that Loan;
(d) any such alternative basis may include an alternative method of fixing
the interest rate, alternative Interest Periods or alternative
currencies but it must reflect the cost to the Bank of funding its
participation in the Loan from whatever sources it may select plus the
Margin; and
(e) each alternative basis so certified shall be binding on the Borrower
and the certifying Bank and treated as part of this Agreement.
13. INCREASED COSTS
13.1 INCREASED COSTS
(a) Subject to Clause 13.2 (Exceptions), the Borrower shall forthwith on demand
by a Finance Party pay to that Finance Party the amount of any increased
cost incurred by it as a result of any law or regulation (including any law
or regulation relating to taxation, or reserve asset, special deposit, cash
ratio, liquidity or capital adequacy requirements or any other form of
banking or monetary control).
(b) In this Agreement "INCREASED COST" means:-
(i) an additional cost incurred by a Finance Party as a result of it
having entered into, or performing, maintaining or funding its
obligations under, this Agreement; or
(ii) that portion of an additional cost incurred by a Finance Party in
making, funding or maintaining all or any advances comprised in a
class of advances formed by or including its participations in the
Loans made or to be made under this Agreement as is attributable to
it making, funding or maintaining those participations; or
(iii) a reduction in any amount payable to a Finance Party or the
effective return to a Finance Party under this Agreement or on its
capital; or
(iv) the amount of any payment made by a Finance Party, or the amount of
any interest or other return foregone by a Finance Party, calculated
by reference to any amount received or receivable by that Finance
Party from any other Party under this Agreement.
13.2 EXCEPTIONS
Clause 13.1 (Increased costs) does not apply to any increased cost:-
(a) compensated for by the operation of Clause 11 (Taxes); or
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16
(b) attributable to any change in the rate of tax on the overall net
income of a Bank (or the overall net income of a division or branch of
the Bank) imposed in the jurisdiction in which its principal office or
Facility Office for the time being is situated; or
(c) to a Finance Party which is attributable to the gross negligence or
wilful misconduct of that Finance Party.
14. ILLEGALITY
If it is or becomes unlawful in any jurisdiction for a Bank to give
effect to any of its obligations as contemplated by this Agreement or
to fund or maintain its participation in any Loan, then:-
(a) that Bank may notify the Borrower through the Agent accordingly; and
(b) (i) the Borrower shall forthwith prepay that Bank's participation in
all the Loans together with all other amounts payable by it to
that Bank under this Agreement; and
(ii) the Bank's undrawn Commitment shall forthwith be cancelled.
15. REPRESENTATIONS AND WARRANTIES
15.1 REPRESENTATIONS AND WARRANTIES
The Borrower makes the representations and warranties set out in this
Clause 15 (Representations and Warranties) to each Finance Party.
15.2 STATUS
(a) It is a limited liability company, duly incorporated and validly existing
under the laws of Korea; and
(b) it has the power to own its assets and carry on its business as it is being
conducted.
15.3 POWERS AND AUTHORITY
It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and delivery
of, the Finance Documents to which it is or will be a party and the
transactions contemplated by those Finance Documents.
15.4 LEGAL VALIDITY
Each Finance Document to which it is or will be a party constitutes,
or when executed in accordance with its terms will constitute, its
legal, valid and binding obligation enforceable in accordance with its
terms.
15.5 NON-CONFLICT
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The entry into and performance by it of, and the transactions
contemplated by, the Finance Documents do not and will not:-
(a) conflict with any law or regulation or judicial or official order; or
(b) conflict with its constitutional documents; or
(c) conflict with any document which is binding upon it or any of its
material assets.
15.6 NO DEFAULT
(a) No Default is outstanding or might result from the making of any Loan; and
(b) no other event is outstanding which constitutes (or with the giving of
notice, lapse of time, determination of materiality or the fulfilment of
any other applicable condition or any combination of the foregoing, might
constitute) a default under any document which is binding on it or any of
its assets to an extent or in a manner which might have a material adverse
effect on its business or financial condition or on its ability to perform
its obligations under any Finance Document.
15.7 AUTHORISATIONS
All authorisations required or desirable in connection with the entry
into, performance, validity and enforceability of, and the
transactions contemplated by, the Finance Documents have been obtained
or effected (as appropriate) and are in full force and effect except
for the payment authorisation by the Borrower's designated bank in
Korea which will be required prior to any payment by the Borrower
under this Agreement.
15.8 ACCOUNTS
The audited accounts of the Borrower most recently delivered to the
Agent (which, at the Agreement Date, are the Original Borrower
Accounts):-
(a) have been prepared in accordance with accounting principles and
practices generally accepted in Korea consistently applied; and
(b) fairly represent the financial condition of the Borrower as at the
date to which they were drawn up,
and there has been no material adverse change in the financial condition of
the Borrower since the date to which those accounts were drawn up.
15.9 LITIGATION
No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened, which might, if adversely
determined, have a material adverse effect on the Borrower's business
or financial condition or the ability of the Borrower to perform its
obligations under the Finance Documents.
15.10 INFORMATION MEMORANDUM
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(a) The information contained in the Information Memorandum was true in all
material respects as at its date;
(b) the Information Memorandum did not omit as at its date any material
information which, if disclosed, might adversely affect the decision of a
person considering whether to enter into this Agreement; and
(c) nothing has occurred since the date of the Information Memorandum which
renders the information contained in it untrue or misleading in any
material respect which, if disclosed, might adversely affect the decision
of a person considering whether to enter into this Agreement.
15.11 NO IMMUNITY
(a) It is subject to civil and commercial law with respect to its obligations
under the Finance Documents;
(b) the entry into and performance of the Finance Documents by it constitute
private and commercial acts; and
(c) neither it nor any of its assets (other than assets which under Korean law
cannot be the subject of an order for execution) enjoys any right of
immunity from set-off, suit or execution in respect of its obligations
under the Finance Documents.
15.12 TAXES
(a) All amounts payable by the Borrower under the Finance Documents may be made
free and clear of and without deduction for or on account of any tax;
(b) under existing laws and regulations, no tax is or will be imposed on or by
virtue of the execution or delivery of this Agreement or any other document
or instrument to be executed or delivered under this Agreement or in
connection with this Agreement or on any payment of principal or
reimbursement of expenses under this Agreement except for Korean stamp
taxes of nominal amount which should be paid upon the execution in Korea of
each original copy of this Agreement; and
(c) the Borrower has complied with all taxation laws in all jurisdictions in
which it is subject to taxation and has paid all taxes due and payable by
it; no material claims are being asserted against it with respect to taxes.
15.13 ENFORCEABILITY, REGISTRATION AND STAMP DUTIES
(a) To ensure the enforceability or admissibility in evidence of this Agreement
in Korea, a translation of this Agreement into Korean is necessary, but it
is not necessary that any Finance Document or any other document be filed
or recorded or that any tax be paid, other than stamp duty payable on each
original of this Agreement or certain other documents provided for under
this Agreement if executed and delivered in Korea;
(b) subject to paragraph (a) above, in any proceedings taken in Korea in
relation to any Finance Document, the choice of English law as the
governing law of that Finance Document and any judgment obtained in England
will be recognised and enforced provided that:
(i) the judgment was finally given by a court having valid jurisdiction;
(ii) the party against whom the judgment was made received service of
process in conformity with the laws of England otherwise than by
publication or responded to the action without being served with
process;
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19
(iii) the judgment was not obtained by fraud, is not contrary to the
public policy of Korea and was not obtained in proceedings which
were contrary to natural justice; and
(iv) similar judgments of the courts of Korea are accorded similar
treatment under the laws of England.
15.14 NO NECESSITY TO CARRY ON BUSINESS
It is not necessary under the laws of Korea and/or the constitution of the
Borrower:
(a) in order to enable a Finance Party to enforce its rights under the
Finance Documents; or
(b) by reason only of the execution, delivery and performance of the
Finance Documents,
that a Finance Party should be licensed, qualified or otherwise entitled to
carry on business in Korea.
15.15 NO RESIDENCE/DOMICILE
No Finance Party is nor will be deemed to be resident, domiciled or
carrying on business in, or generally subject to, the laws of Korea by
reason only of the execution, delivery, performance and/or enforcement of
the Finance Documents.
15.16 INSOLVENCY
The Borrower has not taken any corporate action and no other steps been
taken or legal proceedings been started or threatened against the Borrower
for its winding-up, dissolution, administration or reorganisation or for
the appointment of a receiver, administrator, administrative receiver,
trustee or similar officer of it or of any or all of its assets or
revenues.
15.17 BUSINESS OF THE BORROWER
The Borrower is in compliance in all material respects with all laws and
regulations affecting its business and operations.
15.18 TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
The representations and warranties set out in this Clause 15
(Representations and Warranties):-
(a) are made on the Agreement Date; and
(b) (with the exception of Clause 15.10 (Information Memorandum)) are
deemed to be repeated by the Borrower on the date of each Request and
the first day of each Interest Period with reference to the facts and
circumstances then existing.
16. UNDERTAKINGS
16.1 DURATION
The undertakings in this Clause 16 (Undertakings) remain in force from
the Agreement Date for so long as any amount is or may be outstanding
under this Agreement or any Commitment is in force.
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20
16.2 FINANCIAL INFORMATION
The Borrower shall supply to the Agent in sufficient copies for all
the Banks:-
(a) as soon as the same are available (and in any event within 180 days of
the end of each of its financial years), the audited accounts of the
Borrower for that financial year; and
(b) as soon as the same are available (and in any event within 120 days of
the end of the first half-year of each of its financial years), the
unaudited accounts of the Borrower for that half-year.
16.3 INFORMATION - MISCELLANEOUS
The Borrower shall supply to the Agent:-
(a) all material documents despatched by it to its creditors (or any class
of them) at the same time as they are despatched;
(b) promptly upon becoming aware of them, details of any litigation,
arbitration or administrative proceedings which are current,
threatened or pending, and which might, if adversely determined, have
a material adverse effect on the financial condition of the Borrower
or on the ability of the Borrower to perform its obligations under
this Agreement; and
(c) promptly, such further information in the possession or control of the
Borrower regarding its financial condition and operations as any
Finance Party may reasonably request,
in sufficient copies for all of the Banks, if the Agent so requests.
16.4 NOTIFICATION OF DEFAULT
The Borrower shall notify the Agent of any Default (and the steps, if
any, being taken to remedy it) promptly upon its occurrence.
16.5 COMPLIANCE CERTIFICATES
The Borrower shall supply to the Agent:-
(a) together with the accounts specified in Clause 16.2(a) (Financial
Information); and
(b) promptly at any other time, if the Agent so requests,
a certificate signed by one officer of at least manager status on its
behalf certifying that no Default is outstanding or, if a Default is
outstanding, specifying the Default and the steps, if any, being taken to
remedy it.
16.6 AUTHORISATIONS
The Borrower shall promptly:-
(a) obtain, maintain and comply with the terms of; and
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21
(b) supply certified copies to the Agent of,
any authorisation required under any law or regulation to enable it to
perform its obligations under, or for the validity or enforceability of,
any Finance Document.
16.7 PARI PASSU RANKING
The Borrower shall procure that its obligations under the Finance Documents
do and will rank at least pari passu with all its other present and future
unsecured and unsubordinated obligations, except for obligations which are
mandatorily preferred by law applying to companies generally.
16.8 NEGATIVE PLEDGE
(a) The Borrower shall not create or permit to subsist any Security Interest on
any of its material assets.
(b) Paragraph (a) does not apply to any Security Interest arising by operation
of law in the ordinary course of business and securing amounts not more
than 30 days overdue or granted in the ordinary course of business to a
Korean bank or to a branch in Korea of a bank incorporated outside Korea.
(c) If the Borrower creates or permits to subsist any Security Interest on any
of its assets contrary to paragraph (a) above, all the obligations of the
Borrower under this Agreement shall immediately be secured upon the same
assets, ranking at least pari passu with the other obligations secured on
those assets and the Borrower shall at its own expense:
(i) execute and do all such things as the Agent may require for perfecting
or protecting that security; and/or
(ii) grant in favour of the Agent (as agent and trustee for the Finance
Parties) such additional security as the Agent may specify.
16.9 TRANSACTIONS SIMILAR TO SECURITY
The Borrower shall not without the prior consent of the Majority Banks:-
(a) sell, transfer or otherwise dispose of any of its material assets on
terms whereby it is or may be leased to or re-acquired or acquired by
a member of the Group or any of its related entities; or
(b) sell, transfer or otherwise dispose of any of its material receivables
on recourse terms, except for the discounting of bills or notes in the
ordinary course of trading,
in circumstances where the transaction is entered into primarily as a method of
raising finance or of financing the acquisition of an asset.
16.10 DISPOSALS
(a) The Borrower shall not either in a single transaction or in a series of
transactions, whether related or not and whether voluntarily or
involuntarily, sell, transfer, grant or lease or otherwise dispose of all
or any substantial part of its assets.
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22
(b) Paragraph (a) does not apply to:-
(i) disposals made in the ordinary course of business of the disposing
entity; or
(ii) disposals of assets in exchange for other assets comparable or
superior as to type, value and quality.
16.11 CHANGE OF BUSINESS
The Borrower shall procure that no substantial change is made to the
general nature or scope of the business of the Borrower from that carried
on at the Agreement Date which might materially and adversely affect the
financial condition of the Borrower or the ability of the Borrower to
perform its obligations under the Finance Documents.
16.12 MERGERS AND ACQUISITIONS
(a) The Borrower shall not enter into any substantial amalgamation, demerger,
merger or reconstruction except with the prior consent of the Majority
Banks.
(b) The Borrower shall not acquire any assets or business or make any
investment if the assets, business or investment is substantial in relation
to the Borrower except with the prior consent of the Majority Banks.
16.13 INSURANCE
The Borrower shall maintain with financially sound and reputable insurers,
insurance with respect to its assets against such risks, liabilities and
contingencies and of such types and in such amounts as is consistent with
prudent business practice of a company carrying on a business such as that
carried on by the Borrower.
16.14 FINANCIAL COVENANT
(a) In this Clause 16.14:-
"BALANCE SHEET"
means at any time, the latest audited or unaudited balance sheet of the
Borrower supplied in accordance with Clause 16.2 ( Financial Information).
"TANGIBLE NET WORTH"
means at any time the aggregate of:-
(i) the amount paid up or credited as paid up on the Borrower's issued
share capital; and
(ii) the amount standing to the credit of the Borrower's capital and
revenue reserves,
based on its relevant Balance Sheet but adjusted by:-
(1) adding any amount standing to the credit of the Borrower's profit and
loss account for the period ending on the date of its Balance Sheet to
the extent not included in sub-paragraph (ii) above and to the extent
the amount is not attributable to any dividend or other distribution
declared, recommended or made by it;
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23
(2) deducting any amount standing to the debit of the Borrower's profit
and loss account for the period ending on the date of the Balance
Sheet;
(3) deducting any amount attributable to goodwill or any other intangible
asset;
(4) deducting any amount attributable to a revaluation of assets after
31st December, 1994; and
(5) eliminating inconsistencies between the accounting principles applied
in connection with its Balance Sheet and those applied in connection
with the Original Accounts.
"TOTAL LIABILITIES"
means at any time the aggregate of the Borrower's Financial Indebtedness.
(b) All the terms used in paragraph (a) above are to be calculated in
accordance with the accounting principles applied in connection with the
Original Accounts of the Borrower.
(c) The Borrower shall procure that the ratio of Total Liabilities to Tangible
Net Worth is not, at any time, more than 5:1.
17. DEFAULT
17.1 EVENTS OF DEFAULT
Each of the events set out in Clauses 17.2 (Non-payment) to 17.19 (Material
adverse change) (inclusive) is an Event of Default (whether or not caused
by any reason whatsoever outside the control of the Borrower or any other
person).
17.2 NON-PAYMENT
The Borrower does not pay within three (3) Business Days of the due date
any amount payable by it under the Finance Documents at the place at and in
the currency in which it is expressed to be payable.
17.3 BREACH OF OTHER OBLIGATIONS
The Borrower does not comply with any provision of the Finance Documents
(other than those referred to in Clause 17.2 (Non-payment)) and such non-
compliance is not remediable in the opinion of the Majority Banks, or, if
deemed by the Majority Banks to be capable of remedy, continues unremedied
for a continuous period of 21 days from the date of non-compliance.
17.4 MISREPRESENTATION
A representation, warranty or statement made or repeated in or in
connection with any Finance Document or in any document delivered by or on
behalf of the Borrower under or in connection with any Finance Document is
incorrect in any respect when made or deemed to be made or repeated.
17.5 CROSS-DEFAULT
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24
(a) Any Financial Indebtedness of the Borrower is not paid when due; or
(b) an event of default howsoever described (or any event which with the giving
of notice, lapse of time, determination of materiality or fulfilment of any
other applicable condition or any combination of the foregoing would
constitute such an event of default) occurs under any document or contract
relating to Financial Indebtedness of the Borrower; or
(c) any Financial Indebtedness of the Borrower becomes prematurely due and
payable or is placed on demand as a result of an event of default
(howsoever described) under the document or contract relating to that
Financial Indebtedness; or
(d) any commitment for, or underwriting of, any Financial Indebtedness of the
Borrower is cancelled or suspended as a result of an event of default
(howsoever described) under the document or contract relating to that
Financial Indebtedness; or
(e) any Security Interest securing Financial Indebtedness over any asset of the
Borrower becomes enforceable,
and the Financial Indebtedness in respect of which all or any of the events
referred to in paragraphs (a) to (e) inclusive of above occur aggregates
US$7,500,000 (or its equivalent in other currencies) or more.
17.6 INSOLVENCY
(a) The Borrower is, or is deemed for the purposes of any law to be, unable to
pay its debts as they fall due or to be insolvent, or admits inability to
pay its debts as they fall due; or
(b) the Borrower suspends making payments on all or any class of its debts or
announces an intention to do so, or a moratorium is declared in respect of
any of its indebtedness; or
(c) the Borrower, by reason of financial difficulties, begins negotiations with
one or more of its creditors with a view to the readjustment or
rescheduling of any of its indebtedness.
17.7 INSOLVENCY PROCEEDINGS
(a) Any step (including petition, proposal or convening a meeting) is taken
with a view to a composition or arrangement with, or assignment to, any
creditors of the Borrower; or
(b) a meeting of the Borrower is convened for the purpose of considering any
resolution for (or to
petition for) its winding-up or for its administration or any such
resolution is passed; or
(c) any person presents a petition for the winding-up or for the administration
of the Borrower; or
(d) an order for the winding-up or administration of the Borrower is made; or
(e) any other step (including petition, proposal or convening a meeting) is
taken with a view to the rehabilitation, administration, custodianship,
liquidation, winding-up or dissolution of the Borrower or any other
insolvency proceedings involving the Borrower,
however, the taking of any steps referred to in paragraphs (a) to (e) inclusive
above shall not be an Event of Default if the relevant step is withdrawn,
discharged, revoked or struck out within 21 Business Days.
17.8 APPOINTMENT OF RECEIVERS AND MANAGERS
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25
(a) Any liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator or the like is
appointed in respect of the Borrower or any substantial part of its assets;
or
(b) the directors or the Borrower requests the appointment of a liquidator,
trustee in bankruptcy, judicial custodian, compulsory manager, receiver,
administrative receiver, administrator or the like; or
(c) any other steps are taken to enforce any Security Interest over any
substantial part of the assets of the Borrower,
however, any appointment or step referred to in paragraphs (a) to (c)
(inclusive) above shall not be a Event of Default if the relevant
appointment or step is terminated, withdrawn, discharged or struck out as
appropriate within 21 Business Days of such appointment or step (as the
case may be).
17.9 CREDITORS' PROCESS
Any attachment, sequestration, distress or execution affects any asset of
the Borrower and is not discharged within 21 Business Days.
17.10 ANALOGOUS PROCEEDINGS
There occurs, in relation to the Borrower, any event anywhere which, in the
opinion of the Majority Banks, appears to correspond with any of those
mentioned in Clauses 17.6 (Insolvency) to 17.9 (Creditors' process)
(inclusive).
17.11 CESSATION OF BUSINESS
The Borrower ceases, or threatens to cease, to carry on all or a
substantial part of its business.
17.12 UNLAWFULNESS
It is or becomes unlawful for the Borrower to perform any of its
obligations under the Finance Documents.
17.13 OWNERSHIP OF THE BORROWER
Any single person, or group of persons acting in concert acquires control
of the Borrower after the Agreement Date and control for this purpose means
the power to direct the management and the policies of the Borrower,
whether through the ownership of voting capital, by control of the
composition of the board of directors or otherwise except with the prior
consent of the Majority Banks.
17.14 EXPROPRIATION
All or any material part of the undertaking or assets of the Borrower shall
be expropriated, nationalised, compulsorily acquired or taken into public
ownership or the Borrower shall cease to be able or entitled to exercise
the rights of control or ownership of the same.
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26
17.15 CHANGE IN LAW
Any authorisation, decree, publication or other requirement of any
governmental or public body or authority necessary to enable or permit the
Borrower to comply with its obligations under any Finance Document or
required for the validity or enforceability of any such obligations shall
be revoked, withdrawn or withheld or shall otherwise fail to remain in full
force and effect or any law, decree or directive of any competent authority
of or in Korea shall be enacted or issued which shall impair the ability or
right of the Borrower to perform those obligations.
17.16 REPUDIATION
The Borrower repudiates any Finance Document or does or causes to be done
any act or thing evidencing an intention to repudiate any Finance Document.
17.17 NECESSITY TO CARRY ON BUSINESS
It is or becomes necessary under the laws of Korea and/or the
constitutional documents of the Borrower:-
(a) in order to enable a Finance Party to enforce its rights under the
Finance Documents; or
(b) by reason only of the execution, delivery and performance of the
Finance Documents,
that a Finance Party should be licensed, qualified or otherwise entitled to
carry on business in Korea.
17.18 RESIDENCE/DOMICILE
A Finance Party is or is deemed to be resident, domiciled or carrying on
business in, or generally subject to, the laws of Korea by reason only of
the execution, delivery, performance and/or enforcement of the Finance
Documents.
17.19 MATERIAL ADVERSE CHANGE
Any event or series of events occurs which, in the opinion of the Majority
Banks, might have a material and adverse effect on the financial condition
or operations of the Borrower or on the ability of the Borrower to comply
with its obligations under the Finance Documents.
17.20 ACCELERATION
On and at any time after the occurrence of an Event of Default the Agent
may, and shall if so directed by the Majority Banks, by notice to the
Borrower:-
(a) cancel the Total Commitments; and/or
(b) demand that all or part of the Loans, together with accrued interest
and all other amounts accrued under this Agreement be immediately due
and payable, whereupon they shall become immediately due and payable;
and/or
(c) demand that all or part of the Loans be payable on demand, whereupon
they shall immediately become payable on demand.
18. THE AGENT, THE ARRANGERS AND THE CO-ARRANGERS
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18.1 APPOINTMENT AND DUTIES OF THE AGENT
Each Finance Party (other than the Agent) irrevocably appoints the Agent to
act as its agent under and in connection with the Finance Documents, and
irrevocably authorises the Agent on its behalf to perform the duties and to
exercise the rights, powers and discretions that are specifically delegated
to it under or in connection with the Finance Documents, together with any
other incidental rights, powers and discretions. The Agent has only those
duties which are expressly specified in this Agreement, and those duties
are solely of a mechanical and administrative nature.
18.2 ROLE OF THE ARRANGERS AND THE CO-ARRANGERS
Except as specifically provided in this Agreement, no Arranger and no Co-
Arranger has any obligations of any kind to any other Party under or in
connection with any Finance Document.
18.3 RELATIONSHIP
The relationship between the Agent and the other Finance Parties is that of
agent and principal only. Nothing in this Agreement constitutes the Agent
as trustee or fiduciary for any other Party or any other person and the
Agent need not hold in trust any moneys paid to it for a Party or be liable
to account for interest on those moneys.
18.4 MAJORITY BANKS' DIRECTIONS
The Agent will be fully protected if it acts in accordance with the
instructions of the Majority Banks in connection with the exercise of any
right, power or discretion or any matter not expressly provided for in this
Agreement. Any such instructions given by the Majority Banks will be
binding on all the Banks. In the absence of such instructions, the Agent
may act as it considers to be in the best interests of all the Banks.
18.5 DELEGATION
The Agent may act under the Finance Documents through its personnel and
agents.
18.6 RESPONSIBILITY FOR DOCUMENTATION
Neither the Agent nor any Arranger nor any Co-Arranger is responsible to
any other Party for:-
(a) the execution, genuineness, validity, enforceability or sufficiency of
any Finance Document or any other document;
(b) the collectability of amounts payable under any Finance Document; or
(c) the accuracy of any statements (whether written or oral) made in or in
connection with any Finance Document (including the Information
Memorandum).
18.7 DEFAULT
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(a) The Agent is not obliged to monitor or enquire as to whether or not a
Default has occurred. The Agent will not be deemed to have knowledge of the
occurrence of a Default. However, if the Agent receives notice from a Party
referring to this Agreement, describing the Default and stating that the
event is a Default or otherwise has actual knowledge of a Default, it shall
promptly notify the Banks.
(b) The Agent may require the receipt of security satisfactory to it, whether
by way of payment in advance or otherwise, against any liability or loss
which it will or may incur in taking any proceedings or action arising out
of or in connection with any Finance Document before it commences those
proceedings or takes that action.
18.8 EXONERATION
(a) Without limiting paragraph (b) below, the Agent will not be liable to any
other Party for any action taken or not taken by it under or in connection
with any Finance Document, unless directly caused by its gross negligence
or wilful misconduct.
(b) No Party may take any proceedings against any officer, employee or agent of
the Agent in respect of any claim it might have against the Agent or in
respect of any act or omission of any kind (including gross negligence or
wilful misconduct) by that officer, employee or agent in relation to any
Finance Document.
18.9 RELIANCE
The Agent may:-
(a) rely on any notice or document believed by it to be genuine and correct and
to have been signed by, or with the authority of, the proper person;
(b) rely on any statement made by a director or employee of any person
regarding any matters which may reasonably be assumed to be within his
knowledge or within his power to verify; and
(c) engage, pay for and rely on legal or other professional advisers selected
by it (including those in the Agent's employment and those representing a
Party other than the Agent).
18.10 CREDIT APPROVAL AND APPRAISAL
Without affecting the responsibility of the Borrower for information
supplied by it or on its behalf in connection with any Finance Document,
each Bank confirms that it:-
(a) has made its own independent investigation and assessment of the financial
condition and affairs of the Borrower and its related entities in
connection with its participation in this Agreement and has not relied
exclusively on any information provided to it by the Agent or any Arranger
or any Co-Arranger in connection with any Finance Document; and
(b) will continue to make its own independent appraisal of the creditworthiness
of the Borrower and its related entities while any amount is or may be
outstanding under the Finance Documents or any Commitment is in force.
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29
18.11 INFORMATION
(a) The Agent shall promptly forward to the person concerned the original or a
copy of any document which is delivered to the Agent by a Party for that
person.
(b) The Agent shall promptly supply a Bank with a copy of each document
received by the Agent under Clause 4 (Conditions Precedent) upon the
request and at the expense of that Bank.
(c) Except where this Agreement specifically provides otherwise, the Agent is
not obliged to review or check the accuracy or completeness of any document
it forwards to another Party.
(d) Except as provided above, the Agent has no duty:-
(i) either initially or on a continuing basis to provide any Bank with any
credit or other information concerning the financial condition or
affairs of the Borrower or any related entity of the Borrower whether
coming into its possession before, on or after the Agreement Date; or
(ii) unless specifically requested to do so by a Bank in accordance with
this Agreement, to request any certificates or other documents from
the Borrower.
18.12 THE AGENT, AND THE ARRANGERS AND THE CO-ARRANGERS INDIVIDUALLY
(a) If it is also a Bank, each of the Agent, the Arrangers and the Co-Arrangers
has the same rights and powers under this Agreement as any other Bank and
may exercise those rights and powers as though it were not the Agent, an
Arranger or a Co-Arranger.
(b) Each of the Agent, each Arranger and each Co-Arranger may:-
(i) carry on any business with the Borrower or its related entities;
(ii) act as agent or trustee for, or in relation to any financing
involving, the Borrower or its related entities; and
(iii) retain any profits or remuneration in connection with its activities
under this Agreement or in relation to any of the foregoing.
18.13 INDEMNITIES
(a) Without limiting the liability of the Borrower under the Finance Documents,
each Bank shall forthwith on demand indemnify the Agent for its proportion
of any liability or loss incurred by the Agent in any way relating to or
arising out of its acting as the Agent, except to the extent that the
liability or loss arises directly from the Agent's gross negligence or
wilful misconduct.
(b) A Bank's proportion of the liability set out in paragraph (a) above will be
the proportion which its participation in the Loans (if any) bear to all
the Loans on the date of the demand. If, however, there are no Loans
outstanding on the date of demand, then the proportion will be the
proportion which its Commitment bears to the Total Commitments at the date
of demand or, if the Total Commitments have then been cancelled, bore to
the Total Commitments immediately before being cancelled.
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(c) The Borrower shall forthwith on demand reimburse each Bank for any payment
made by it under paragraph (a) above.
18.14 COMPLIANCE
(a) The Agent may refrain from doing anything which might, in its opinion,
constitute a breach of any law or regulation or be otherwise actionable at
the suit of any person, and may do anything which, in its opinion, is
necessary or desirable to comply with any law or regulation of any
jurisdiction.
(b) Without limiting paragraph (a) above, the Agent need not disclose any
information relating to the Borrower or any of its related entities if the
disclosure might, in the opinion of the Agent, constitute a breach of any
law or regulation or any duty of secrecy or confidentiality or be otherwise
actionable at the suit of any person.
18.15 RESIGNATION OF THE AGENT
(a) Notwithstanding its irrevocable appointment, the Agent may resign by giving
notice to the Banks and the Borrower, in which case the Agent may forthwith
appoint one of its Affiliates as successor Agent or, failing that, the
Majority Banks may appoint a successor Agent.
(b) If the appointment of a successor Agent is to be made by the Majority Banks
but they have not, within 30 days after notice of resignation, appointed a
successor Agent which accepts the appointment, the Agent may appoint a
successor Agent.
(c) The resignation of the Agent and the appointment of any successor Agent
will both become effective only upon the successor Agent notifying all the
Parties that it accepts its appointment. On giving the notification, the
successor Agent will succeed to the position of the Agent and the term
"AGENT" will mean the successor Agent.
(d) The retiring Agent shall, at its own cost, make available to the successor
Agent such documents and records and provide such assistance as the
successor Agent may reasonably request for the purposes of performing its
functions as the Agent under this Agreement.
(e) Upon its resignation becoming effective, this Clause 18 (The Agent, the
Arrangers and the Co-Arrangers) shall continue to benefit the retiring
Agent in respect of any action taken or not taken by it under or in
connection with the Finance Documents while it was the Agent, and, subject
to paragraph (d) above, it shall have no further obligations under any
Finance Document.
18.16 BANKS
The Agent may treat each Bank as a Bank, entitled to payments under this
Agreement and as acting through its Facility Office(s) until it has
received not less than 5 Business Days' prior notice from that Bank to the
contrary.
19. FEES
19.1 FRONT-END FEE
The Borrower shall pay to the Agent for the Arrangers a front-end fee in
the amount agreed in the Front-end Fee Letter. The front-end fee is payable
on the date falling 30 days after the Agreement Date or (if earlier) the
first Drawdown Date. The front-
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31
end fee shall be distributed by the Agent, on behalf of the Arrangers, among the
Banks in the proportions agreed between the Arrangers and the Banks prior to the
Agreement Date.
19.2 COMMITMENT FEE
(a) The Borrower shall pay to the Agent for each Bank a commitment fee computed
at the rate of 0.125 per cent. per annum on the undrawn, uncancelled amount
of that Bank's Commitment during the Commitment Period.
(b) Accrued commitment fee is payable in arrear, for the period from the date
falling 30 days from the Agreement Date, on the earlier of the Term Date
and the date of full utilisation or cancellation of the Total Commitments.
Accrued commitment fee is also payable to the Agent for a Bank on the
cancelled amount of its Commitment at the time the cancellation takes
effect.
19.3 AGENT'S FEE
The Borrower shall pay to the Agent for its own account an agency fee in the
amount agreed in the Agent's Fee Letter. The agency fee is payable annually in
advance. The first payment of this fee is payable on the first Drawdown Date and
each subsequent payment is payable on each anniversary of the first Drawdown
Date for so long as any amount is or may be outstanding under this Agreement or
any Commitment is in force.
19.4 VAT/GOODS AND SERVICES TAX
Any fee referred to in this Clause 19 (Fees) is exclusive of any value added
tax, goods and services tax or any other tax which might be chargeable in
connection with that fee. If any value added tax, goods and services tax or
other tax is so chargeable, it shall be paid by the Borrower at the same time as
it pays the relevant fee.
20. EXPENSES
20.1 INITIAL AND SPECIAL COSTS
The Borrower shall forthwith on demand pay the Agent and the Arrangers the
amount of all costs and expenses (including legal fees) incurred by any of them
in connection with:-
(a) the negotiation, preparation, printing and execution of:-
(i) this Agreement and any other documents referred to in this
Agreement; and
(ii) any other Finance Document (other than a Novation Certificate)
executed after the Agreement Date;
(b) any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by or on behalf of the
Borrower and relating to a Finance Document or a document referred to
in any Finance Document; and
(c) any other matter, not of an ordinary administrative nature, arising
out of or in connection with a Finance Document.
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20.2 ENFORCEMENT COSTS
The Borrower shall forthwith on demand pay to each Finance Party the amount of
all costs and expenses (including legal fees) incurred by it:-
(a) in connection with the enforcement of, or the preservation of any
rights under, any Finance Document; or
(b) in investigating any possible Default.
21. STAMP DUTIES
The Borrower shall pay and forthwith on demand indemnify each Finance Party
against any liability it incurs in respect of, any stamp, registration and
similar tax which is or becomes payable in connection with the entry into,
performance or enforcement of any Finance Document.
22. INDEMNITIES
22.1 CURRENCY INDEMNITY
(a) If a Finance Party receives an amount in respect of the Borrower's
liability under the Finance Documents or if that liability is converted
into a claim, proof, judgment or order in a currency other than the
currency (the "CONTRACTUAL CURRENCY") in which the amount is expressed to
be payable under the relevant Finance Document:-
(i) the Borrower shall indemnify that Finance Party as an independent
obligation against any loss or liability arising out of or as a
result of the conversion;
(ii) if the amount received by that Finance Party, when converted into the
contractual currency at a market rate in the usual course of its
business is less than the amount owed in the contractual currency,
the Borrower shall forthwith on demand pay to that Finance Party an
amount in the contractual currency equal to the deficit; and
(iii) the Borrower shall pay to the Finance Party concerned forthwith on
demand any exchange costs and taxes payable in connection with any
such conversion.
(b) The Borrower waives any right it may have in any jurisdiction to pay any
amount under the Finance Documents in a currency other than that in which
it is expressed to be payable.
22.2 OTHER INDEMNITIES
The Borrower shall forthwith on demand indemnify each Finance Party against any
loss or liability which that Finance Party incurs as a consequence of:-
(a) the occurrence of any Default;
(b) the operation of Clause 17.20 (Acceleration) or Clause 29 (Pro Rata
Sharing);
(c) any payment of principal or an overdue amount being received from any
source otherwise than on the last day of a relevant Interest Period
or Designated Interest
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33
Period (as defined in Clause 9.3 (Default interest))
relative to the amount so received; or
(d) (other than by reason of negligence or default by a Finance Party) a
Loan not being made after the Borrower has delivered a Request or a
Loan (or part of a Loan) not being prepaid in accordance with a
notice of prepayment.
The Borrower's liability in each case includes any loss of margin or other loss
or expense on account of funds borrowed, contracted for or utilised to fund any
amount payable under any Finance Document, any amount repaid or prepaid or any
Loan.
23. EVIDENCE AND CALCULATIONS
23.1 ACCOUNTS
Accounts maintained by a Finance Party in connection with any Finance Document
are prima facie evidence of the matters to which they relate.
23.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by a Finance Party of a rate or amount under
any Finance Document is, in the absence of manifest error, conclusive evidence
of the matters to which it relates.
23.3 CALCULATIONS
Interest and the fee payable under Clause 19.2 (Commitment fee) accrue from day
to day and are calculated on the basis of the actual number of days elapsed
(including the first day but excluding the last day) and a year of 360 days.
24. AMENDMENTS AND WAIVERS
24.1 PROCEDURE
(a) Subject to Clause 24.2 (Exceptions), any term of the Finance Documents may
be amended or waived with the agreement of the Borrower, the Majority Banks
and the Agent. The Agent may effect, on behalf of the Majority Banks, an
amendment or waiver to which they have agreed.
(b) The Agent shall promptly notify the other Parties of any amendment or
waiver effected under paragraph (a) above, and any such amendment or waiver
shall be binding on all the Parties.
24.2 EXCEPTIONS
An amendment or waiver which relates to:-
(a) the definition of "MAJORITY BANKS" in Clause 1.1;
(b) an extension of the date for, or a decrease in an amount or a change
in the currency of, any payment under the Finance Documents;
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34
(c) an increase in a Bank's Commitment;
(d) the incorporation of additional borrowers;
(e) a term of a Finance Document which expressly requires the consent of
each Bank; or
(f) Clause 29 (Pro Rata Sharing) or this Clause 24 (Amendments and
Waivers),
may not be effected without the consent of each Bank.
24.3 WAIVERS AND REMEDIES CUMULATIVE
The rights of each Finance Party under the Finance Documents:-
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the general
law; and
(c) may be waived only in writing and specifically.
Delay in the exercise or the partial exercise or non-exercise of any such right
is not a waiver of that right.
25. CHANGES TO THE PARTIES
25.1 TRANSFERS BY THE BORROWER
The Borrower may not assign, transfer, novate or dispose of any of, or any
interest in, its rights and/or
obligations under this Agreement.
25.2 TRANSFERS BY BANKS
(a) A Bank (the "EXISTING BANK") may at any time assign, transfer or novate any
of its rights and/or obligations under this Agreement to another bank or
financial institution (the "NEW BANK").
(b) A transfer of obligations will be effective only if either:-
(i) the obligations are novated in accordance with Clause 25.3 (Procedure
for novations); or
(ii) the New Bank confirms to the Agent and the Borrower that it
undertakes to be bound by the terms of this Agreement as a Bank in
form and substance satisfactory to the Agent. On the transfer
becoming effective in this manner the Existing Bank shall be relieved
of its obligations under this Agreement to the extent that they are
transferred to the New Bank.
(c) Nothing in this Agreement restricts the ability of a Bank to sub-contract
an obligation if that Bank remains liable under this Agreement for that
obligation.
(d) On each occasion an Existing Bank assigns, transfers or novates any of its
rights and/or obligations under this Agreement, the New Bank shall, on the
date the assignment, transfer and/or novation takes effect, pay to the
Agent for its own account a fee of US$200.
(e) An Existing Bank is not responsible to a New Bank for:-
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35
(i) the execution, genuineness, validity, enforceability or sufficiency
of any Finance Document or any other document;
(ii) the collectability of amounts payable under any Finance Document; or
(iii) the accuracy of any statements (whether written or oral) made in or
in connection with any Finance Document.
(f) Each New Bank confirms to the Existing Bank and the other Finance Parties
that it:-
(i) has made its own independent investigation and assessment of the
financial condition and affairs of the Borrower and its related
entities in connection with its participation in this Agreement and
has not relied exclusively on any information provided to it by the
Existing Bank in connection with any Finance Document; and
(ii) will continue to make its own independent appraisal of the
creditworthiness of the Borrower and its related entities while any
amount is or may be outstanding under this Agreement or any
Commitment is in force.
(g) Nothing in any Finance Document obliges an Existing Bank to:-
(i) accept a re-transfer from a New Bank of any of the rights and/or
obligations assigned, transferred or novated under this Clause; or
(ii) support any losses incurred by the New Bank by reason of the non-
performance by the Borrower of its obligations under this Agreement
or otherwise.
(h) Any reference in this Agreement to a Bank includes a New Bank but excludes
a Bank if no amount is or may be owed to or by it under this Agreement and
its Commitment has been cancelled or reduced to nil.
(i) If any assignment, transfer or novation of all or any part of the rights
and/or obligations of a Bank pursuant to this Clause 25 is made and this
results at that time in amounts becoming due under Clause 11.1 (Gross-up)
or additional amounts becoming due under Clause 13.1 (Increased costs),
then such assignee, transferee or novatee shall be entitled to receive such
amounts or additional amounts under those clauses only to the extent that
the assignee, transferee or novatee would have been so entitled had there
been no such assignment, transfer or novation.
25.3 PROCEDURE FOR NOVATIONS
(a) A novation is effected if:-
(i) the Existing Bank and the New Bank deliver to the Agent a duly
completed certificate, substantially in the form of Schedule 4 (a
"NOVATION CERTIFICATE"); and
(ii) the Agent executes it.
The Agent shall execute each Novation Certificate which has been duly completed
as soon as reasonably practicable following receipt by the Agent of the same.
(b) Each Party (other than the Existing Bank and the New Bank) irrevocably
authorises the Agent to execute any duly completed Novation Certificate on
its behalf. The Agent shall execute such Novation Certificate as soon as
reasonably practicable following the Agent's receipt of such notice.
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36
(c) To the extent that they are expressed to be the subject of the novation in
the Novation Certificate:-
(i) the Existing Bank and the other Parties (the "EXISTING PARTIES") will
be released from their obligations to each other (the "DISCHARGED
OBLIGATIONS");
(ii) the New Bank and the existing Parties will assume obligations towards
each other which differ from the discharged obligations only insofar
as they are owed to or assumed by the New Bank instead of the
Existing Bank;
(iii) the rights of the Existing Bank against the existing Parties and vice
versa (the "DISCHARGED RIGHTS") will be cancelled; and
(iv) the New Bank and the existing Parties will acquire rights against
each other which differ from the discharged rights only insofar as
they are exercisable by or against the New Bank instead of the
Existing Bank,
all on the date of execution of the Novation Certificate by the Agent or, if
later, the date specified in the Novation Certificate.
25.4 REFERENCE BANKS
If a Reference Bank (or, if a Reference Bank is not a Bank, the Bank of which it
is an Affiliate) ceases to be a Bank, the Agent shall (in consultation with the
Borrower) appoint another Bank or an Affiliate of a Bank to replace that
Reference Bank.
25.5 REGISTER
The Agent shall keep a register of all the Parties and shall supply any other
Party (at that Party's expense) with a copy of the register on request.
26. FUNDING
26.1 FUNDING
Each Tranche B Bank may fund the Tranche B Loans in any manner whatsoever
and for this purpose may enter into contractual arrangements with other banks or
financial institutions (each a "FUNDING ENTITY").
26.2 PAYMENTS TO FUNDING ENTITIES
(a) The Borrower acknowledges that any Tranche B Bank may agree to pay to each
Funding Entity the following:-
(i) any amount to compensate a Funding Entity for any loss, costs,
penalty or expense incurred or to be incurred by it under Clause 22
(Indemnities) as though that Clause also applied to that Funding
Entity and the amount funded or to be funded by it;
(ii) such additional amounts as may be necessary to ensure that, if any
payment by a Tranche B Bank to a Funding Entity is required by law to
be made after deduction for or on account of any present or future
taxes, that Funding Entity receives a net amount equal to the full
amount which it would have received had payment not been made subject
to any tax; and
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37
(iii) any amount to compensate a Funding Entity for any increased cost
incurred by it under Clause 13 (Increased Costs) as though that
Clause also applied to that Funding Entity, to the amount of the
Tranche B Commitment agreed to be funded by it and to the amount of
the Loans funded by it.
(b) The Borrower shall pay to each Tranche B Bank promptly on demand such
amounts as that Tranche B Bank may certify (through the Agent) to the
Borrower (on the basis of certificates given by the relevant Funding
Entity) as being required to be paid in relation to the funding provided by
that Funding Entity.
26.3 INTEREST FOR FUNDING ENTITIES
The cost of funds referred to in Clause 9.3 (Default interest) shall reflect the
costs of funds of the relevant Funding Entity for the portion of the overdue
amount funded by it.
26.4 MARKET DISRUPTION FOR FUNDING ENTITIES
If the circumstances envisaged by Clause 12 (Market Disruption) apply to any
Funding Entity (as though the references to the Tranche B Banks were to the
Funding Entities and references to the "LOAN" were to the amount of that Loan
funded or to be funded by those Funding Entities):-
(a) Clause 12 (Market Disruption) shall apply to that part of the Loan
funded or to be funded by the relevant Funding Entity; and
(b) the Agent, the relevant Tranche B Bank and the Borrower shall
establish an alternative basis for that part of the Loan in
consultation with the Funding Entities and in accordance with the
procedures set out therein, so as to take into account the costs to
each Funding Entity (as determined by it) of making the relevant
funds available to that Tranche B Bank from whatever sources it may
select plus the Margin.
26.5 ILLEGALITY FOR FUNDING ENTITIES
If it is or becomes unlawful for a Funding Entity to fund or to continue to
fund the amount of the Loan funded or to be funded by it:
(a) the Funding Entity shall notify the Agent and the relevant Tranche B
Bank of any illegality and that Tranche B Bank shall notify the
Borrower through the Agent; and
(b) (i) the Borrower shall forthwith prepay the amount of the Loans
funded or agreed to be funded by that Funding Entity; and
(ii) that part of the Tranche B Commitment corresponding to that part
of the Loan shall forthwith be cancelled.
26.6 FUNDING OBLIGATIONS
(a) Unless a Tranche B Bank has received notice from a Funding Entity not less
than one Business Day before the advance of a Loan, that it does not intend
to make available its agreed amount of funding to that Tranche B Bank, that
Tranche B Bank may assume that the relevant Funding Entity has made that
amount available to that Tranche B Bank on the due date. A Tranche B Bank
is under no obligation to make that assumption.
(b) A Tranche B Bank may, in reliance upon that assumption, make available to
the Borrower on the due date the corresponding amount due to the Borrower
under this Agreement.
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38
(c) If the amount of funding agreed by a Funding Entity is not made available
to the relevant Tranche B Bank on the due date and, when demanded by that
Tranche B Bank, is not paid forthwith, together with interest thereon
calculated in accordance with paragraph (d) below, that Tranche B Bank
shall be entitled to recover a corresponding amount on demand from the
Borrower, together with such interest.
(d) Interest on an amount not made available to a Tranche B Bank will be
charged for the period during which that Tranche B Bank makes a
corresponding amount available to the Borrower at a rate per annum
sufficient to enable that Tranche B Bank to recover the cost to it of
making that corresponding amount available to the Borrower.
(e) If any Funding Entity does not perform its obligations to make available to
a Tranche B Bank when due any amount required for the funding of any Loan,
that Tranche B Bank shall not be under an obligation to make available to
the Borrower the amount of that Loan.
26.7 ENFORCEMENT OF FUNDING AGREEMENT
If any Funding Entity fails to make available to a Tranche B Bank when due
any agreed amount of funding and that Tranche B Bank:-
(a) does not make available a corresponding amount; or
(b) becomes entitled to and does not recover from the Borrower a
corresponding amount it has already made available to the Borrower,
that Tranche B Bank agrees to use reasonable endeavours (and agrees to
consult with the Borrower regarding the steps to be taken) to enforce the
obligation of that Funding Entity to make the agreed amount of funding available
to that Tranche B Bank and to recover that amount with interest and expenses
from the Funding Entity and, upon recovery, that Tranche B Bank shall make
available to the Borrower a corresponding amount. The Borrower shall reimburse
that Tranche B Bank on demand for all costs, charges and expenses (including
fees and expenses of legal advisers) together with any tax incurred in enforcing
the obligation of the Funding Entity.
26.8 ASSIGNMENT ETC. BY FUNDING ENTITIES
Any additional (as compared to the situation immediately prior to the
assignment, transfer or novation) costs or expenses (including any additional
taxes) imposed on the Borrower as a consequence of the assignment, transfer or
novation by any Funding Entity of its rights against and/or obligations owed to
any Tranche B Bank, or arising solely as a result of any change by a Funding
Entity of the office through which it is acting in connection with the funding
provided by it shall be for the account of the assignee or transferee of such
Funding Entity or the Funding Entity which has changed such office (as the case
may be).
27. DISCLOSURE OF INFORMATION
A Bank may disclose to one of its Affiliates, any Funding Entity or any person
with whom it is proposing to enter, or has entered into, any kind of transfer,
participation or other agreement in relation to this Agreement:-
(a) a copy of any Finance Document; and
(b) any information which that Bank has acquired under or in connection
with any Finance Document.
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39
28. SET-OFF
A Finance Party may set off any matured obligation owed by the
Borrower under this Agreement (to the extent beneficially owned by
that Finance Party) against any obligation (whether or not matured)
owed by that Finance Party to the Borrower, regardless of the place of
payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Finance Party may convert
either obligation at a market rate of exchange in its usual course of
business for the purpose of the set-off. If either obligation is
unliquidated or unascertained, the Finance Party may set off in an
amount estimated by it in good faith to be the amount of that
obligation.
29. PRO RATA SHARING
29.1 REDISTRIBUTION
If any amount owing by the Borrower under this Agreement to a Finance
Party (the "RECOVERING FINANCE PARTY") is discharged by payment, set-
off or any other manner other than through the Agent in accordance
with Clause 10 (Payments) (a "RECOVERY"), then:-
(a) the recovering Finance Party shall, within 3 Business Days, notify
details of the recovery to the Agent;
(b) the Agent shall determine whether the recovery is in excess of the
amount which the recovering Finance Party would have received had the
recovery been received by the Agent and distributed in accordance with
Clause 10 (Payments);
(c) subject to Clause 29.3 (Exception), the recovering Finance Party shall
within 3 Business Days of demand by the Agent pay to the Agent an
amount (the "REDISTRIBUTION") equal to the excess;
(d) the Agent shall treat the redistribution as if it were a payment by
the Borrower under Clause 10 (Payments) and shall pay the
redistribution to the Finance Parties (other than the recovering
Finance Party) in accordance with Clause 10.7 (Partial payments); and
(e) after payment of the full redistribution, the recovering Finance Party
will be subrogated to the portion of the claims paid under paragraph
(d) above and the Borrower will owe the recovering Finance Party a
debt which is equal to the redistribution, immediately payable and of
the type originally discharged.
29.2 REVERSAL OF REDISTRIBUTION
If under Clause 29.1 (Redistribution):-
(a) a recovering Finance Party must subsequently return a recovery, or an
amount measured by reference to a recovery, to the Borrower; and
(b) the recovering Finance Party has paid a redistribution in relation to
that recovery,
each Finance Party shall, within 3 Business Days of demand by the
recovering Finance Party through the Agent, reimburse the recovering
Finance Party all or the appropriate portion of
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40
the redistribution paid to that Finance Party. Thereupon, the subrogation
in Clause 29.1(e) (Redistribution) will operate in reverse to the extent of
the reimbursement.
29.3 EXCEPTION
(a) A recovering Finance Party need not pay a redistribution to the extent that
it would not, after the payment, have a valid claim against the Borrower in
the amount of the redistribution pursuant to Clause 29.1(e)
(Redistribution).
(b) A Finance Party is not entitled to participate in a redistribution if the
redistribution results from the proceeds of legal proceedings taken by the
recovering Finance Party and the other Finance Party had adequate notice of
and opportunity to participate in the proceedings concerned but did not do
so.
30. SEVERABILITY
If a provision of any Finance Document is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:-
(a) the validity or enforceability in that jurisdiction of any other
provision of the Finance Documents; or
(b) the validity or enforceability in other jurisdictions of that or any
other provision of the Finance Documents.
31. COUNTERPARTS
This Agreement may be executed in any number of counterparts, and this
has the same effect as if the signatures on the counterparts were on a
single copy of this Agreement.
32. NOTICES
32.1 GIVING OF NOTICES
All notices or other communications under or in connection with this
Agreement shall be given in writing or by telex or facsimile. Any such
notice will be deemed to be given as follows:-
(a) if in writing, when delivered;
(b) if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start and at the
end of the sender's copy of the notice; and
(c) if by facsimile, when received.
However, a notice given in accordance with the above but received on a non-
working day or after business hours in the place of receipt will only be
deemed to be given on the next working day in that place.
32.2 ADDRESSES FOR NOTICES
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41
(a) The address, telex number and facsimile number of each Party (other than
the Agent) for all notices under or in connection with this Agreement are:-
(i) those notified by that Party for this purpose to the Agent on or
before the date it becomes a Party; or
(ii) any other notified by that Party for this purpose to the Agent by not
less than 5 Business Days' notice.
(b) The address, telex number and facsimile number of the Agent are:-
Cho Hung Bank, London Branch
Plantation House
31-35 Fenchurch Street
London EC3M 3DX
United Kingdom
Telephone: (0171) 623-7791
Telex: 8951125 CHOBNKG
Facsimile: (0171) 283-8464
Attention: Mr. J.K. Koo
or such other as the Agent may notify to the other Parties by not less than
5 Business Days' notice.
(c) All notices from or to the Borrower shall be sent through the Agent.
(d) The Agent shall, promptly upon request from any Party, give to that Party
the address, telex number or facsimile number of any other Party applicable
at the time for the purposes of this Clause.
33. WAIVER OF IMMUNITY
The Borrower irrevocably and unconditionally:
(a) agrees that should any Finance Party bring legal proceedings against
it or its assets in relation to a Finance Document, no immunity from
those legal proceedings (which shall be deemed to include, without
limitation, suit, attachment prior to judgment, other attachment, the
obtaining of judgment, execution or other enforcement) shall be
claimed by or on behalf of itself or with respect to its assets;
(b) waives any such right of immunity which it or its assets now has or
may hereafter acquire; and
(c) consents generally in respect of any such proceedings to the giving of
any relief or the issue of any process in connection with such
proceedings including, without limitation, the making, enforcement or
execution against any property whatsoever (irrespective of its use or
intended use) of any order or judgment which may be made or given in
such proceedings.
34. JURISDICTION
34.1 SUBMISSION
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42
For the benefit of each Finance Party, the Borrower agrees that the courts
of England have jurisdiction to settle any disputes in connection with any
Finance Document and accordingly submits to the jurisdiction of the English
courts.
34.2 SERVICE OF PROCESS
Without prejudice to any other mode of service, the Borrower:-
(a) irrevocably appoints LG Electronics U.K. Ltd. of LG House, 264 Bath
Road, Slough, Berkshire, SLI 4DT, England (Attention: Managing
Director) as its agent for service of process relating to any
proceedings before the English courts in connection with any Finance
Document;
(b) agrees that failure by a process agent to notify it of the process
will not invalidate the proceedings concerned; and
(c) consents to the service of process relating to any such proceedings by
prepaid posting of a copy of the process to its address for the time
being applying under Clause 32.2 (Addresses for notices).
34.3 FORUM NON CONVENIENS AND ENFORCEMENT ABROAD
The Borrower:-
(a) waives objection to the English courts on grounds of inconvenient
forum or otherwise as regards proceedings in connection with a Finance
Document; and
(b) agrees that a judgment or order of an English court in connection with
a Finance Document is conclusive and binding on it and may be enforced
against it in the courts of any other jurisdiction.
34.4 NON-EXCLUSIVITY
Nothing in this Clause 34 limits the right of a Finance Party to bring
proceedings against the Borrower in connection with any Finance Document:-
(a) in any other court of competent jurisdiction; or
(b) concurrently in more than one jurisdiction.
35. LANGUAGE
(a) Any notice given under or in connection with any Finance Document shall be
in English.
(b) All other documents provided under or in connection with any Finance
Document shall be:-
(i) in English; or
(ii) if not in English, accompanied by a certified English translation and,
in this case, the English translation shall prevail unless the
document is a statutory or other official document,
provided that the unaudited accounts of the Borrower to be delivered pursuant to
Clause 16.2 (Financial information), paragraph (b) may be provided in Korean
until such time as the Borrower prepares the same in English, whereafter the
Borrower shall provide the same in English.
36. GOVERNING LAW
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43
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
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44
SCHEDULE 1
BANKS AND COMMITMENTS
PART 1 - TRANCHE A
TRANCHE A BANKS COMMITMENTS (US$)
The Korea Development Bank, Tokyo Branch 7,000,000
Cho Hung Bank, London Branch 5,625,000
ABN AMRO International Financial Services Company 3,750,000
The Commercial Bank of Korea, Ltd., Chicago Branch 1,250,000
Total Tranche A Commitments: US$17,625,000
PART 2 - TRANCHE B
TRANCHE B BANK COMMITMENTS (US$)
Cho Hung Bank, London Branch 52,375,000
Total Tranche B Commitments: US$52,375,000
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45
SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS
1. Certified copies of the Korean texts and true and correct English
translations of the Articles of Incorporation of the Borrower and the
Korean Commercial Registry extracts of the Borrower.
2. A copy of a resolution of the board of directors of the Borrower:-
(a) approving the terms of, and the transactions contemplated by, this
Agreement and resolving that it execute this Agreement, the Agent's
Fee Letter and the Front-end Fee Letter;
(b) authorising a specified person or persons to execute this Agreement,
the Agent's Fee Letter and the Front-end Fee Letter on its behalf, if
necessary; and
(c) authorising a specified person or persons, on its behalf, to sign
and/or despatch all documents and notices to be signed and/or
despatched by it under or in connection with this Agreement, if
necessary.
3. A copy of all other resolutions, authorisations, approvals, consents and
licences, corporate, official or otherwise, necessary or desirable for the
entry into and performance of this Agreement and the transactions
contemplated hereby and for the validity and enforceability of this
Agreement including, without limitation, a copy of the foreign exchange
approvals that must be obtained by the Borrower from the competent foreign
exchange authorities with respect to its acquisition of shares in the share
capital of Zenith Electronics Corp., USA and its obligations under this
Agreement.
4. A copy of the signatures of those persons authorised to execute this
Agreement on behalf of the Borrower and of the persons authorised to sign
or despatch all Requests, notices, certificates and other documents in
connection with this Agreement on behalf of the Borrower hereunder, a seal
certificate of the representative director of the Borrower, as well as a
power of attorney of the representative director of the Borrower
authorising the person signing this Agreement on behalf of the Borrower.
5. A certificate of an authorised signatory of the Borrower certifying that
each copy document specified in this Schedule 2 is correct, complete and in
full force and effect as at a date no earlier than the Agreement Date.
6. A letter from LG Electronics U.K. Ltd. accepting its appointment as agent
for service pursuant to Clause 34.2 (Service of process).
7. A copy of any other authorisation or other document, opinion or assurance
which the Agent considers to be necessary or desirable in connection with
the entry into and performance of, and the transactions contemplated by,
any Finance Document or for the validity and enforceability of any Finance
Document.
8. A legal opinion of Kim & Chang, Korean legal advisers to the Agent,
addressed to the Finance Parties.
9. A legal opinion of Allen & Overy, legal advisers to the Agent, addressed to
the Finance Parties.
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46
SCHEDULE 3
FORM OF REQUEST
To: CHO HUNG BANK, LONDON BRANCH as Agent
From: LG ELECTRONICS INC.
Date: [ ]
LG ELECTRONICS INC. - US$70,000,000 CREDIT AGREEMENT DATED 31ST OCTOBER, 1995
1. We wish to borrow Loan(s) as follows:-
(a) Drawdown Date: [ ]
(b) Tranche A Loan amount: [ ]
(c) Tranche B Loan amount: [ ]
(d) Payment Instructions: [ ].
2. We confirm that each condition specified in Clause 4.2 (Further conditions
precedent) is satisfied on the date of this Request.
By:
___________________________________
LG ELECTRONICS INC.
Authorised signatory
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47
SCHEDULE 4
FORM OF NOVATION CERTIFICATE
To: CHO HUNG BANK, LONDON BRANCH as Agent
From: [THE EXISTING BANK] and [THE NEW BANK] Date: [ ]
LG ELECTRONICS INC. - US$70,000,000 CREDIT AGREEMENT DATED 31st OCTOBER, 1995
We refer to Clause 25.3 (Procedure for novations).
1. We [ ] (the "EXISTING BANK") and [ ] (the "NEW BANK")
agree to the Existing Bank and the New Bank novating all the Existing
Bank's rights and obligations referred to in the Schedule in accordance
with Clause 25.3 (Procedure for novations).
2. The specified date for the purposes of Clause 25.3(c) is [date of
novation].
3. The Facility Office and address for notices of the New Bank for the
purposes of Clause 32.2 (Addresses for notices) are set out in the
Schedule.
4. This Novation Certificate is governed by English law.
THE SCHEDULE
RIGHTS AND OBLIGATIONS TO BE NOVATED
[Details of the rights and obligations of the Existing Bank to be novated].
[Existing Bank] [New Bank]
By: By:
Date: Date:
[NEW BANK]
[Facility Office Address for notices]
CHO HUNG BANK, LONDON BRANCH
By:
Date:
<PAGE>
48
SIGNATORIES
BORROWER
LG ELECTRONICS INC.
By:
ARRANGERS
CHO HUNG BANK,
By:
DKB ASIA LIMITED
By:
THE KOREA DEVELOPMENT BANK
By:
SOCIETE GENERALE ASIA LIMITED
By:
CO-ARRANGERS
ABN AMRO BANK N.V., SEOUL BRANCH
By:
BAYERISCHE LANDESBANK GIROZENTRALE, TOKYO BRANCH
By:
DRESDNER BANK AG HONG KONG BRANCH
By:
IBJ ASIA LIMITED
By:
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED, HONG KONG BRANCH
By:
<PAGE>
49
THE SUMITOMO TRUST & BANKING CO., LTD., HONG KONG BRANCH
By:
UNION BANK OF SWITZERLAND
By:
WESTLB ASIA PACIFIC LIMITED
By:
TRANCHE A BANKS
THE KOREA DEVELOPMENT BANK, TOKYO BRANCH
By:
CHO HUNG BANK, LONDON BRANCH
By:
ABN AMRO INTERNATIONAL FINANCIAL SERVICES COMPANY
By:
THE COMMERCIAL BANK OF KOREA, LTD., CHICAGO BRANCH
By:
TRANCHE B BANK
CHO HUNG BANK, LONDON BRANCH
By:
AGENT
CHO HUNG BANK, LONDON BRANCH
By:
<PAGE>
AGREEMENT
DATED 31st October, 1995
US$210,000,000
CREDIT FACILITY
FOR
LG SEMICON CO., LTD.
as Borrower
ARRANGED BY
CHO HUNG BANK
DKB ASIA LIMITED
THE KOREA DEVELOPMENT BANK
SOCIETE GENERALE ASIA LIMITED
as Arrangers
WITH
CHO HUNG BANK, LONDON BRANCH
as Agent
-------------
ALLEN & OVERY
-------------
Hong Kong
<PAGE>
INDEX
<TABLE>
<CAPTION>
CLAUSE PAGE
<C> <S>
1. Interpretation 1
2. The Composite Facility 7
3. Purpose 8
4. Conditions Precedent 8
5. Drawdown 8
6. Repayment 10
7. Prepayment and Cancellation 10
8. Interest Periods 11
9. Interest 12
10. Payments 13
11. Taxes 15
12. Market Disruption 15
13. Increased Costs 17
14. Illegality 18
15. Representations and Warranties 18
16. Undertakings 22
17. Default 26
18. The Agent, the Arrangers and the Co-Arrangers 30
19. Fees 34
20. Expenses 35
21. Stamp Duties 35
22. Indemnities 36
23. Evidence and Calculations 37
24. Amendments and Waivers 37
25. Changes to the Parties 38
26. Funding 40
27. Disclosure of Information 43
28. Set-off 43
29. Pro Rata Sharing 43
30. Severability 45
31. Counterparts 45
32. Notices 45
33. Waiver of Immunity 46
34. Jurisdiction 46
35. Language 47
36. Governing Law 48
Schedule 1 - Banks and Commitments 49
Part 1 - Tranche A 49
Part 2 - Tranche B 49
Schedule 2 - Conditions Precedent Documents 50
Schedule 3 - Form of Request 52
</TABLE>
<PAGE>
Schedule 4 - Form of Novation Certificate 53
Signatories 54
<PAGE>
1
THIS AGREEMENT is dated 31st October, 1995 between:-
(1) LG SEMICON CO., LTD. a limited liability company (chusik hoesa)
incorporated under the laws of the Republic of Korea, having its head
office at LG Youngdong Building, 891, Daechi-dong, Kangnam-gu, Seoul, 135-
280, Korea as borrower (the "BORROWER");
(2) CHO HUNG BANK, DKB ASIA LIMITED, THE KOREA DEVELOPMENT BANK and SOCIETE
GENERALE ASIA LIMITED as arrangers (in this capacity the "ARRANGERS" and
each an "ARRANGER");
(3) ABN AMRO BANK, N.V., SEOUL BRANCH, BAYERISCHE LANDESBANK GIROZENTRALE,
TOKYO BRANCH, DRESDNER BANK AG HONG KONG BRANCH, IBJ ASIA LIMITED, THE
LONG-TERM CREDIT BANK OF JAPAN, LIMITED, HONG KONG BRANCH, THE SUMITOMO
TRUST & BANKING CO., LTD., HONG KONG BRANCH, UNION BANK OF SWITZERLAND and
WESTLB ASIA PACIFIC LIMITED as co-arrangers (in this capacity the "CO-
ARRANGERS" and each a "CO-ARRANGER");
(4) THE FINANCIAL INSTITUTIONS listed in Part 1 of Schedule 1 as tranche A
banks (the "TRANCHE A BANKS" and each a "TRANCHE A BANK");
(5) CHO HUNG BANK, LONDON BRANCH as a tranche B bank (a "TRANCHE B BANK"); and
(6) CHO HUNG BANK, LONDON BRANCH as agent (in this capacity the "AGENT").
IT IS AGREED as follows:-
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement:-
"AFFILIATE"
means a subsidiary or a holding company (each as defined in Section 736 of
the Companies Act 1985) of a Bank or any other subsidiary of that holding
company.
"AGENT'S FEE LETTER"
means the letter dated the Agreement Date between the Agent and the
Borrower setting out the amount of the Agent's fee referred to in Clause
19.3 (Agent's fee).
"AGREEMENT DATE"
means the date of this Agreement.
"BANK"
means a Tranche A Bank or a Tranche B Bank.
<PAGE>
2
"BUSINESS DAY"
means a day (other than a Saturday or a Sunday) on which banks are open for
business in Hong Kong, London, New York, Seoul and Tokyo.
"COMMITMENT"
means, in relation to any Bank, its Tranche A Commitment and/or its Tranche
B Commitment (as the case may be).
"COMMITMENT PERIOD"
means, in respect of Tranche A and Tranche B, the period from the Agreement
Date to the Term Date (both dates inclusive).
"DEFAULT"
means an Event of Default or an event which, with the giving of notice,
lapse of time, determination of materiality or fulfilment of any other
applicable condition (or any combination of the foregoing), would
constitute an Event of Default.
"DRAWDOWN DATE"
means the date of the advance of a Loan.
"EVENT OF DEFAULT"
means an event specified as such in Clause 17.1 (Events of Default).
"FACILITY OFFICE"
means the office(s) notified by a Bank to the Agent:-
(a) on or before the date it becomes a Bank; or
(b) by not less than 5 Business Days' notice,
as the office(s) through which it will perform all or any of its
obligations under this Agreement.
"FINANCE DOCUMENT"
means this Agreement, the Agent's Fee Letter, the Front-end Fee Letter,
each Novation Certificate or any other document designated as such by the
Agent and the Borrower.
"FINANCE PARTY"
means an Arranger, a Co-Arranger, a Bank or the Agent.
"FINANCIAL INDEBTEDNESS"
<PAGE>
3
means any indebtedness in respect of:-
(a) moneys borrowed and debit balances at banks; or
(b) any debenture, bond, note, loan stock or other security; or
(c) any acceptance credit; or
(d) receivables sold or discounted (otherwise than on a non-recourse
basis); or
(e) the acquisition cost of any asset to the extent payable before or
after the time of acquisition or possession by the party liable where
the advance or deferred payment is arranged primarily as a method of
raising finance or financing the acquisition of that asset; or
(f) leases entered into primarily as a method of raising finance or
financing the acquisition of the asset leased; or
(g) currency swap or interest swap, cap or collar arrangements; or
(h) amounts raised under any other transaction having the commercial
effect of a borrowing or raising of money; or
(i) any guarantee, indemnity or similar assurance against financial loss of
any person,
but no particular indebtedness shall be taken into account more than once.
"FRONT-END FEE LETTER"
means the letter dated the Agreement Date between the Agent and the
Borrower setting out the amount of the front-end fee referred to in Clause
19.1 (Front-end fee).
"FUNDING ENTITY"
has the meaning given to it in Clause 26 (Funding).
"INFORMATION MEMORANDUM"
means the Information Memorandum and prepared from information provided by
the Borrower in connection with this Agreement.
"INTEREST PERIOD"
means each period determined in accordance with Clause 8 (Interest
Periods).
"KOREA"
means the Republic of Korea.
"LIBOR"
<PAGE>
4
means:-
(a) the rate per annum of the offered quotations in US Dollars for a
period comparable to the required period and which appears on the
display designated as Telerate Page 3750 of the Dow Jones Telerate
Monitor Service (or any equivalent successor of that page) at or about
11:00 a.m. (London time) two days, during which banks are open for
dealing in interbank deposits in US Dollars in London, before the
first day of the relevant required period; or
(b) if the Agent determines that at or about 11:00 a.m. (London time), two
days, during which banks are open for dealing in interbank deposits in
US Dollars in London, before the first day of the relevant required
period no such rate appears on Telerate Page 3750 of the Dow Jones
Telerate Monitor Service, the relevant page is not on display or the
Dow Jones Telerate Monitor Service is not operating, the arithmetic
mean (rounded upwards, if necessary, to the nearest one sixteenth of
one per cent. (1/16%)) of the rates, as supplied to the Agent at its
request, quoted by the Reference Banks to be the respective rates at
which they are offering US Dollar deposits to leading banks in the
London Interbank Market at or about 11:00 a.m. (London time) two days,
during which banks are open for dealing in interbank deposits in US
Dollars in London, before the first day of the relevant required
period for a period comparable to the required period.
For the purposes of this definition, "required period" means, in relation
to a Loan, each Interest Period or, in relation to any unpaid sum, the
period in respect of which LIBOR falls to be determined with respect to
such unpaid sum.
"LOAN"
means, subject to Clause 8 (Interest Periods), the principal amount of each
borrowing by the Borrower under this Agreement or the principal amount
outstanding of that borrowing.
"MAJORITY BANKS"
means, at any time, Banks:-
(a) whose participations in the Loans then outstanding aggregate more than
66-2/3 per cent. of all the Loans then outstanding; or
(b) if there are no Loans then outstanding, whose Commitments then
aggregate more than 66-2/3 per cent. of the Total Commitments; or
(c) if there are no Loans then outstanding and the Total Commitments have
been reduced to nil, whose Commitments aggregated more than 66-2/3 per
cent. of the Total Commitments immediately before the reduction.
"MARGIN"
means 0.40 per cent. per annum.
"NOVATION CERTIFICATE"
<PAGE>
5
has the meaning given to it in Clause 25.3 (Procedure for novations).
"ORIGINAL ACCOUNTS"
means the audited accounts of the Borrower for the year ended 31st
December, 1994 in accordance with Korean generally acceptable accounting
principles.
"PARTY"
means a party to this Agreement.
"REFERENCE BANKS"
means, subject to Clause 25.4 (Reference Banks), the principal London
offices of Cho Hung Bank, The Dai-Ichi Kangyo Bank, The Korea Development
Bank and Societe Generale.
"REPAYMENT DATE"
means, in relation to the Loans comprising each Tranche, the date falling 5
years from the first Drawdown Date for the relevant Tranche.
"REQUEST"
means a request made by the Borrower for a Loan, substantially in the form
of Schedule 3.
"SECURITY INTEREST"
means any mortgage, pledge, lien, charge, assignment, hypothecation or
security interest or any other agreement or arrangement having the effect
of conferring security.
"TERM DATE"
means the date falling 3 months from the Agreement Date.
"TOTAL COMMITMENTS"
means the aggregate for the time being of the Total Tranche A Commitments
and Total Tranche B Commitments, being US$210,000,000 at the Agreement
Date.
"TOTAL TRANCHE A COMMITMENTS"
means the aggregate for the time being of the Tranche A Commitments of all
Tranche A Banks, being US$52,875,000 at the Agreement Date.
"TOTAL TRANCHE B COMMITMENTS"
means the aggregate for the time being of the Tranche B Commitments of the
Tranche B Banks, being US$157,125,000 at the Agreement Date.
"TRANCHE A"
<PAGE>
6
means the tranche made available by the Tranche A Banks pursuant to Clause
2.1 (Facilities).
"TRANCHE A COMMITMENT"
means:-
(a) in relation to a Tranche A Bank which is a Bank on the Agreement Date,
the amount in US Dollars set opposite its name in Part 1 of Schedule
1;
(b) in relation to a Bank which becomes a Tranche A Bank after the
Agreement Date, the amount of Tranche A Commitment acquired by it
under Clause 25 (Changes to the Parties),
to the extent not cancelled, reduced or transferred under this Agreement.
"TRANCHE A LOAN"
means a Loan drawndown or to be drawndown under Tranche A.
"TRANCHE B"
means the tranche made available by the Tranche B Banks pursuant to Clause
2.1 (Facilities).
"TRANCHE B COMMITMENT"
means:-
(a) in relation to a Tranche B Bank on the Agreement Date, the amount in
US Dollars set opposite its name in Part 2 of Schedule 1;
(b) in relation to a Bank which becomes a Tranche B Bank after the
Agreement Date, the amount of Tranche B Commitment acquired by it
under Clause 25 (Changes to the Parties),
to the extent not cancelled, reduced or transferred under this Agreement.
"TRANCHE B LOAN"
means a Loan drawndown or to be drawndown under Tranche B.
"US DOLLAR", "US DOLLARS" or "US$"
means the lawful currency for the time being of the United States of
America.
1.2 CONSTRUCTION
(a) In this Agreement, unless the contrary intention appears, a reference to:-
(i) "ASSETS" includes properties, revenues and rights of every description;
<PAGE>
7
an "AUTHORISATION" includes an authorisation, consent, approval,
resolution, licence, exemption, filing and registration, permit,
franchise, permission, direction, declaration and notarisation;
a "MONTH" is a reference to a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
calendar month, except that, if there is no numerically corresponding
day in the month in which that period ends, that period shall end on
the last day in that calendar month;
a "REGULATION" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law) of any
governmental body, agency, department or regulatory, self-regulatory
or other authority or organisation;
(ii) a provision of law is a reference to that provision as amended or re-
enacted;
(iii) a Clause or a Schedule is a reference to a clause of or a schedule
to this Agreement;
(iv) a person includes its successors, transferees and assigns;
(v) a Finance Document or another document is a reference to that Finance
Document or other document as amended, novated or supplemented; and
(vi) a time of day is a reference to London time.
(b) Unless the contrary intention appears, a term used in any other Finance
Document or in any notice given under or in connection with any Finance
Document has the same meaning in that Finance Document or notice as in this
Agreement.
(c) The index to and the headings in this Agreement are for convenience only
and are to be ignored in construing this Agreement.
2. THE COMPOSITE FACILITY
2.1 FACILITIES
Subject to the terms of this Agreement:-
(a) each Tranche A Bank agrees to participate during the Commitment Period
in the making of Tranche A Loans up to an aggregate principal amount
not exceeding its Tranche A Commitment; and
(b) each Tranche B Bank agrees to participate during the
Commitment Period in the making of Tranche B Loans up to an aggregate
principal amount not exceeding its Tranche B Commitment.
No Bank is obliged to lend more than its Commitment.
2.2 NATURE OF A FINANCE PARTY'S RIGHTS AND OBLIGATIONS
<PAGE>
8
(a) The obligations of a Finance Party under the Finance Documents are several.
Failure of a Finance Party to carry out those obligations does not relieve
any other Party of its obligations under the Finance Documents. No Finance
Party is responsible for the obligations of any other Finance Party under
the Finance Documents.
(b) The rights of a Finance Party under the Finance Documents are divided
rights. A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce those rights.
3. PURPOSE
The Borrower shall apply each Loan towards financing the Borrower's
acquisition of shares in the share capital of Zenith Electronics
Corp., U.S.A. Without affecting the obligations of the Borrower in
any way, no Finance Party is bound to monitor or verify the
application of any Loan.
4. CONDITIONS PRECEDENT
4.1 DOCUMENTARY CONDITIONS PRECEDENT
The obligations of each Finance Party to the Borrower under this
Agreement are subject to the condition precedent that the Agent has
notified the Borrower and the Banks that it has received all of the
documents set out in Schedule 2 in form and substance satisfactory to
the Agent.
4.2 FURTHER CONDITIONS PRECEDENT
The obligation of each Bank to make any amount available under Clause
5.5 (Advance of Loans) is subject to the further conditions precedent
that:-
(a) on both the date of the Request and the relevant Drawdown Date:-
(i) the representations and warranties in Clause 15 (Representations
and Warranties) to be repeated on those dates are correct and
will be correct immediately after the relevant Loan is made; and
(ii) no Default is outstanding or might result from the making of the
relevant Loan;
and
(b) the Agent has received all other documents, opinions, certificates,
consents and assurances as it may reasonably request in connection
with the relevant Loan.
5. DRAWDOWN
5.1 COMMITMENT PERIOD
<PAGE>
9
The Borrower may borrow a Loan during the Commitment Period if the
Agent receives, not later than 5 Business Days before the proposed
Drawdown Date, a duly completed Request. The undrawn amount (if any)
of the Total Commitments shall automatically be cancelled at close of
business in London on the Term Date.
5.2 COMPLETION OF REQUESTS
A Request will not be regarded as having been duly completed unless:-
(a) the Drawdown Date is a Business Day falling on or before the Term
Date;
(b) it specifies the amount of the Tranche A Loan and the amount of the
Tranche B Loan to be drawndown. Subject to paragraphs (c) and (d)
below, the principal amount of the Tranche A Loan so requested when
expressed as a percentage of the Total Tranche A Commitments shall
equal the principal amount of the Tranche B Loan so requested when
expressed as a percentage of the Total Tranche B Commitments;
(c) in relation to Tranche A, the principal amount of the Tranche A Loan
is in a minimum of US$10,000,000 or the balance of the undrawn Total
Tranche A Commitments;
(d) in relation to Tranche B, the principal amount of the Tranche B Loan
is a minimum of US$10,000,000 or the balance of the undrawn Total
Tranche B Commitments; and
(e) the payment instructions comply with Clause 10 (Payments).
The Borrower may not, subject to the other terms of this Agreement, deliver
more than one Request on any one day. A Request, once made, is irrevocable.
5.3 AMOUNT OF EACH BANK'S PARTICIPATION IN EACH LOAN
(a) The amount of a Tranche A Bank's participation in each Tranche A Loan will
be the proportion of that Tranche A Loan which its Tranche A Commitment
bears to the Total Tranche A Commitments on the proposed Drawdown Date.
(b) The amount of a Tranche B Bank's participation in each Tranche B Loan will
be the proportion of that Tranche B Loan which its Tranche B Commitment
bears to the Total Tranche B Commitments on the proposed Drawdown Date.
5.4 NOTIFICATION TO BANKS
The Agent shall promptly (and in any event no later than 11:00 a.m. (Hong
Kong time) three Business Days before the proposed Drawdown Date) notify
each Bank of the details of the requested Loan and the amount of its
participation in that Loan.
5.5 ADVANCE OF LOANS
Subject to the terms of this Agreement, each Bank shall make its
participation in each Loan available to the Agent for the Borrower on the
relevant Drawdown Date.
<PAGE>
10
6. REPAYMENT
The Borrower shall repay the Loans in full on the relevant Repayment
Date.
7. PREPAYMENT AND CANCELLATION
7.1 VOLUNTARY PREPAYMENT
The Borrower may, by giving not less than 30 days' prior notice to the
Agent, prepay any Loan without penalty but subject to Clause 22.2
(Other indemnities) on the last day of an Interest Period for that
Loan in whole or in part (but, if in part, in a minimum amount of
US$20,000,000 and an integral multiple of US$5,000,000 or, if less,
the outstanding balance of that Loan).
7.2 VOLUNTARY CANCELLATION
The Borrower may, by giving not less than 30 days' prior notice to the
Agent, cancel the undrawn amount of the Total Commitments in whole or
in part (but, if in part, in a minimum amount of US$20,000,000 and an
integral multiple of US$10,000,000 or, if less, the outstanding
balance of the Total Commitments). Any cancellation shall be applied
against the Total Tranche A Commitments and Total Tranche B
Commitments pro rata. Any cancellation in part of the Total Tranche A
Commitments shall be applied against the Tranche A Commitment of each
Tranche A Bank pro rata. Any cancellation in part of the Total Tranche
B Commitments shall be applied against the Tranche B Commitment of
each Tranche B Bank pro rata.
7.3 ADDITIONAL RIGHT OF PREPAYMENT AND CANCELLATION
If:-
(a) the Borrower is required to pay to a Bank any additional amounts under
Clause 11 (Taxes); or
(b) the Borrower is required to pay to a Bank any amount under Clause 13
(Increased Costs); or
(c) interest on a Bank's participation in a Loan is being calculated in
accordance with Clause 12.4(c) (Alternative basis for outstanding
Loans),
then, without prejudice to the obligations of the Borrower under those
Clauses, the Borrower may, whilst the circumstances continue, serve a
notice of prepayment and cancellation on that Bank through the Agent. On
the date falling 5 Business Days after the date of service of the notice:-
(i) the Borrower shall prepay that Bank's participation in all the Loans
together with all other amounts payable by it to that Bank under the
Finance Documents; and
<PAGE>
11
(ii) that Bank's undrawn Commitment shall be cancelled.
7.4 MISCELLANEOUS PROVISIONS
(a) Any notice of prepayment and/or cancellation under this Agreement is
irrevocable. The Agent shall notify the Banks promptly of receipt of any
such notice.
(b) All prepayments under this Agreement shall be made together with accrued
interest on the amount prepaid to the date of prepayment and any amount due
in respect of that prepayment under Clause 22.2 (Other indemnities).
(c) No prepayment or cancellation is permitted except in accordance with the
express terms of this Agreement.
(d) No amount prepaid under this Agreement may subsequently be re-borrowed. No
amount of the Total Commitments cancelled under this Agreement may
subsequently be reinstated.
8. INTEREST PERIODS
8.1 INTEREST PERIODS
Each Interest Period for each Loan shall be 6 months. Each Interest
Period for each Loan will commence on its Drawdown Date or the expiry
of its preceding Interest Period.
8.2 NON-BUSINESS DAYS
If an Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall instead end on the next
Business Day in that calendar month (if there is one) or the preceding
Business Day (if there is not).
8.3 CONSOLIDATION
Notwithstanding Clause 8.1 (Interest Periods):-
(a) the first Interest Period for each Tranche A Loan shall end on the
same day as the current Interest Period for any other Tranche A Loan.
On the last day of those Interest Periods, those Tranche A Loans shall
be consolidated and treated as one Tranche A Loan; and
(b) the first Interest Period for each Tranche B Loan shall end on the
same day as the current Interest Period for any other Tranche B Loan.
On the last day of those Interest Periods, those Tranche B Loans shall
be consolidated and treated as one Tranche B Loan.
8.4 COINCIDENCE WITH REPAYMENT DATE
<PAGE>
12
If an Interest Period would otherwise overrun the Repayment Date, it
shall be shortened so that it ends on the Repayment Date.
8.5 OTHER ADJUSTMENTS
The Agent and the Borrower may enter into such other arrangements as
they may agree for the adjustment of Interest Periods and the
consolidation and/or splitting of Loans.
8.6 NOTIFICATION
The Agent shall notify the Borrower and the Banks of the duration of
each Interest Period promptly after ascertaining its duration.
9. INTEREST
9.1 INTEREST RATE
The rate of interest on each Loan for each of its Interest Periods is
the rate per annum determined by the Agent to be the aggregate of
the:-
(a) Margin; and
(b) applicable LIBOR.
9.2 DUE DATES
Except as otherwise provided in this Agreement, accrued interest on
each Loan is payable by the Borrower on the last day of each Interest
Period for that Loan.
9.3 DEFAULT INTEREST
(a) If the Borrower fails to pay any amount payable by it under any Finance
Document, it shall forthwith on demand by the Agent pay interest on the
overdue amount from the due date up to the date of actual payment, as well
after as before judgment, at a rate (the "DEFAULT RATE") determined by the
Agent for such successive Interest Periods of such duration as the Agent
may determine (each a "DESIGNATED INTEREST PERIOD") to be 1 per cent. per
annum above the higher of:-
(i) the rate on the overdue amount under Clause 9.1 (Interest rate)
immediately before the due date (if of principal); and
<PAGE>
13
(ii) the rate which would have been payable if the overdue amount had,
during the period of non-payment, constituted a Loan in the currency
of the overdue amount for the relevant Designated Interest Period.
(b) The default rate will be determined by the Agent on each Business Day or
two days during which banks are open for dealing in interbank deposits in
US Dollars in London before the first day of the relevant Designated
Interest Period, as appropriate.
(c) If the Agent determines that deposits in the currency of the overdue amount
are not at the relevant time being made available by the Reference Banks to
leading banks in the London interbank market, the default rate will be
determined by reference to the cost of funds to the Agent from whatever
sources it may select.
(d) Default interest will be compounded at the end of each Designated Interest
Period.
9.4 NOTIFICATION
The Agent shall promptly notify each relevant Party of the
determination of a rate of interest under this Agreement.
10. PAYMENTS
10.1 PLACE
All payments by the Borrower or a Bank under this Agreement shall be
made to the Agent to its account at such office or bank as it may
notify to the Borrower or Bank for this purpose.
10.2 FUNDS
Payments under this Agreement to the Agent shall be made for value on
the due date at such times and in such funds as the Agent may specify
to the Party concerned as being customary at the time for the
settlement of transactions in US Dollars.
10.3 DISTRIBUTION
(a) Each payment received by the Agent under a Finance Document for another
Party shall, subject to paragraphs (b) and (c) below, be made available by
the Agent to that Party by payment (on the date and in the currency and
funds of receipt) to its account with such office or bank in the principal
financial centre of the country of the relevant currency as it may notify
to the Agent for this purpose by not less than 5 Business Days' prior
notice.
(b) The Agent may apply any amount received by it for the Borrower in or
towards payment (on the date and in the currency and funds of receipt) of
any amount due from the Borrower under this Agreement or any Finance
Document or in or towards the purchase of any amount of any currency to be
so applied.
<PAGE>
14
(c) Where a sum is to be paid to the Agent under any Finance Document for
another Party, the Agent is not obliged to pay that sum to that Party until
it has established that it has actually received that sum. The Agent may,
however, assume that the sum has been paid to it in accordance with the
terms of the relevant Finance Document and, in reliance on that assumption,
make available to that Party a corresponding amount. If the sum
has not been made available but the Agent has paid a corresponding amount
to another Party, that Party shall forthwith on demand by the Agent refund
the corresponding amount together with interest on that amount from the
date of payment to the date of receipt, calculated at a rate determined by
the Agent to reflect its cost of funds.
10.4 CURRENCY
(a) Amounts payable in respect of costs, expenses and taxes and the like are
payable in the currency in which they are incurred.
(b) Any other amounts payable under this Agreement or any other Finance
Document are, except as otherwise provided in this Agreement or the
relevant Finance Document, payable in US Dollars.
10.5 SET-OFF AND COUNTERCLAIM
All payments made by the Borrower under any Finance Document shall be
made without set-off or counterclaim.
10.6 NON-BUSINESS DAYS
(a) If a payment under any Finance Document is due on a day which is not a
Business Day, the due date for that payment shall instead be the next
Business Day in the same calendar month (if there is one) or the preceding
Business Day (if there is not).
(b) During any extension of the due date for payment of any principal under any
Finance Document interest is payable on that principal at the rate payable
on the original due date.
10.7 PARTIAL PAYMENTS
(a) If the Agent receives a payment insufficient to discharge all the amounts
then due and payable by the Borrower under any Finance Document, the Agent
shall apply that payment towards the obligations of the Borrower under the
relevant Finance Document in the following order:-
(i) FIRST, in or towards payment pro rata of any unpaid fees, costs and
expenses of the Agent under any Finance Document;
(ii) SECONDLY, in or towards payment pro rata of any accrued interest due
but unpaid under this Agreement;
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15
(iii) THIRDLY, in or towards payment pro rata of any principal due but
unpaid under this Agreement; and
(iv) FOURTHLY, in or towards payment pro rata of any other sum due but
unpaid under any Finance Document.
(b) The Agent shall, if so directed by all the Banks, vary the order set out in
sub-paragraphs (a)(ii) to (iv) above.
(c) Paragraphs (a) and (b) above shall override any appropriation made by the
Borrower.
11. TAXES
11.1 GROSS-UP
(a) All payments by the Borrower under the Finance Documents shall be made
without any deduction and free and clear of and without deduction for or on
account of any taxes, except to the extent that the Borrower is required by
law to make payment subject to any taxes. If any tax or amounts in respect
of tax must be deducted, or any other deductions must be made, from any
amounts payable or paid by the Borrower, or paid or payable by the Agent to
a Bank, under the Finance Documents, the Borrower shall pay such additional
amounts as may be necessary to ensure that the relevant Bank receives a net
amount equal to the full amount which it would have received had payment
not been made subject to tax.
(b) A Finance Party intending to make a claim pursuant to paragraph (a) above
shall notify the Agent of the event by reason of which it is entitled to do
so, whereupon the Agent shall notify the Borrower thereof, provided that
nothing herein shall require such Finance Party to disclose any
confidential information relating to the organisation of its affairs.
11.2 TAX RECEIPTS
All taxes required by law to be deducted or withheld by the Borrower
from any amounts paid or payable under the Finance Documents shall be
paid by the Borrower when due and the Borrower shall, within 15 days
of request by the Agent, deliver to the Agent for the relevant Bank
evidence satisfactory to that Bank (including all relevant tax
receipts) that the payment has been duly remitted to the appropriate
authority.
12. MARKET DISRUPTION
12.1 ABSENCE OF QUOTATIONS
If LIBOR is being determined in accordance with paragraph (b) of that
definition and a Reference Bank does not supply an offered rate by
1.00 p.m. two days during which banks are open for dealing in
interbank deposits in US Dollars in London before the first day of an
Interest Period, the applicable LIBOR shall, subject to Clause 12.2
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16
(Market disruption), be determined on the basis of the quotations of
the remaining Reference Banks.
12.2 MARKET DISRUPTION
If:-
(a) LIBOR is being determined in accordance with paragraph (b) of that
definition and no, or only one, Reference Bank supplies a rate for the
purposes of determining LIBOR or the Agent otherwise determines that
adequate and fair means do not exist for ascertaining LIBOR; or
(b) the Agent receives notification from Banks whose participations in a
Loan exceed 50 per cent. of that Loan that, in their opinion:-
(i) matching deposits may not be available to them in the London
interbank market in the ordinary course of business to fund
their participations in that Loan for the relevant Interest
Period; or
(ii) the cost to them of obtaining matching deposits in the London
interbank market would be in excess of LIBOR for the relevant
Interest Period,
the Agent shall promptly notify the Borrower and the Banks of the fact and
that this Clause 12 (Market Disruption) is in operation.
12.3 SUSPENSION OF DRAWDOWNS
If a notification under Clause 12.2 (Market disruption) applies to a
Loan which has not been made, that Loan shall not be made. However,
within 5 Business Days of receipt of the notification, the Borrower
and the Agent shall enter into negotiations for a period of not more
than 30 days with a view to agreeing an alternative basis for the
borrowing of that and any future Loan. Any alternative basis agreed
shall be, with the prior consent of all the Banks, binding on all the
Parties.
12.4 ALTERNATIVE BASIS FOR OUTSTANDING LOANS
If a notification under Clause 12.2 (Market disruption) applies to a
Loan which is outstanding, then, notwithstanding any other provision
of this Agreement:-
(a) within 5 Business Days of receipt of the notification, the Borrower
and the Agent shall enter into negotiations for a period of not more
than 30 days with a view to agreeing an alternative basis for
determining the rate of interest and/or funding applicable to that
Loan and/or any other Loans;
(b) any alternative basis agreed under paragraph (a) above shall be, with
the prior consent of all the Banks, binding on all the Parties;
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17
(c) if no alternative basis is agreed, each Bank shall (through the Agent)
certify on or before the last day of the Interest Period to which the
notification relates an alternative basis for maintaining its
participation in that Loan;
(d) any such alternative basis may include an alternative method of fixing
the interest rate, alternative Interest Periods or alternative
currencies but it must reflect the cost to the Bank of funding its
participation in the Loan from whatever sources it may select plus the
Margin; and
(e) each alternative basis so certified shall be binding on the Borrower
and the certifying Bank and treated as part of this Agreement.
13. INCREASED COSTS
13.1 INCREASED COSTS
(a) Subject to Clause 13.2 (Exceptions), the Borrower shall forthwith on demand
by a Finance Party pay to that Finance Party the amount of any increased
cost incurred by it as a result of any law or regulation (including any law
or regulation relating to taxation, or reserve asset, special deposit, cash
ratio, liquidity or capital adequacy requirements or any other form of
banking or monetary control).
(b) In this Agreement "INCREASED COST" means:-
(i) an additional cost incurred by a Finance Party as a result of it
having entered into, or performing, maintaining or funding its
obligations under, this Agreement; or
(ii) that portion of an additional cost incurred by a Finance Party in
making, funding or maintaining all or any advances comprised in a
class of advances formed by or including its participations in the
Loans made or to be made under this Agreement as is attributable to
it making, funding or maintaining those participations; or
(iii) a reduction in any amount payable to a Finance Party or the
effective return to a Finance Party under this Agreement or on its
capital; or
(iv) the amount of any payment made by a Finance Party, or the amount of
any interest or other return foregone by a Finance Party, calculated
by reference to any amount received or receivable by that Finance
Party from any other Party under this Agreement.
13.2 EXCEPTIONS
Clause 13.1 (Increased costs) does not apply to any increased cost:-
(a) compensated for by the operation of Clause 11 (Taxes); or
(b) attributable to any change in the rate of tax on the overall net
income of a Bank (or the overall net income of a division or branch of
the Bank) imposed in the jurisdiction in which its principal office or
Facility Office for the time being is situated; or
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18
(c) to a Finance Party which is attributable to the gross negligence or
wilful misconduct of that Finance Party.
14. ILLEGALITY
If it is or becomes unlawful in any jurisdiction for a Bank to give
effect to any of its obligations as contemplated by this Agreement or
to fund or maintain its participation in any Loan, then:-
(a) that Bank may notify the Borrower through the Agent accordingly; and
(b) (i) the Borrower shall forthwith prepay that Bank's participation in
all the Loans together with all other amounts payable by it to
that Bank under this Agreement; and
(ii) the Bank's undrawn Commitment shall forthwith be cancelled.
15. REPRESENTATIONS AND WARRANTIES
15.1 REPRESENTATIONS AND WARRANTIES
The Borrower makes the representations and warranties set out in this
Clause 15 (Representations and Warranties) to each Finance Party.
15.2 STATUS
(a) It is a limited liability company, duly incorporated and validly existing
under the laws of Korea; and
(b) it has the power to own its assets and carry on its business as it is being
conducted.
15.3 POWERS AND AUTHORITY
It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and delivery
of, the Finance Documents to which it is or will be a party and the
transactions contemplated by those Finance Documents.
15.4 LEGAL VALIDITY
Each Finance Document to which it is or will be a party constitutes,
or when executed in accordance with its terms will constitute, its
legal, valid and binding obligation enforceable in accordance with its
terms.
15.5 NON-CONFLICT
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19
The entry into and performance by it of, and the transactions
contemplated by, the Finance Documents do not and will not:-
(a) conflict with any law or regulation or judicial or official order; or
(b) conflict with its constitutional documents; or
(c) conflict with any document which is binding upon it or any of its
material assets.
15.6 NO DEFAULT
(a) No Default is outstanding or might result from the making of any Loan; and
(b) no other event is outstanding which constitutes (or with the giving of
notice, lapse of time, determination of materiality or the fulfilment of
any other applicable condition or any combination of the foregoing, might
constitute) a default under any document which is binding on it or any of
its assets to an extent or in a manner which might have a material adverse
effect on its business or financial condition or on its ability to perform
its obligations under any Finance Document.
15.7 AUTHORISATIONS
All authorisations required or desirable in connection with the entry
into, performance, validity and enforceability of, and the
transactions contemplated by, the Finance Documents have been obtained
or effected (as appropriate) and are in full force and effect except
for the payment authorisation by the Borrower's designated bank in
Korea which will be required prior to any payment by the Borrower
under this Agreement.
15.8 ACCOUNTS
The audited accounts of the Borrower most recently delivered to the
Agent (which, at the Agreement Date, are the Original Borrower
Accounts):-
(a) have been prepared in accordance with accounting principles and
practices generally accepted in Korea consistently applied; and
(b) fairly represent the financial condition of the Borrower as at the
date to which they were drawn up,
and there has been no material adverse change in the financial condition of
the Borrower since the date to which those accounts were drawn up.
15.9 LITIGATION
No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened, which might, if adversely
determined, have a material adverse
<PAGE>
20
effect on the Borrower's business or financial condition or the
ability of the Borrower to perform its obligations under the Finance
Documents.
15.10 INFORMATION MEMORANDUM
(a) The information contained in the Information Memorandum was true in all
material respects as at its date;
(b) the Information Memorandum did not omit as at its date any material
information which, if disclosed, might adversely affect the decision of a
person considering whether to enter into this Agreement; and
(c) nothing has occurred since the date of the Information Memorandum which
renders the information contained in it untrue or misleading in any
material respect which, if disclosed, might adversely affect the decision
of a person considering whether to enter into this Agreement.
15.11 NO IMMUNITY
(a) It is subject to civil and commercial law with respect to its obligations
under the Finance Documents;
(b) the entry into and performance of the Finance Documents by it constitute
private and commercial acts; and
(c) neither it nor any of its assets (other than assets which under Korean law
cannot be the subject of an order for execution) enjoys any right of
immunity from set-off, suit or execution in respect of its obligations
under the Finance Documents.
15.12 TAXES
(a) All amounts payable by the Borrower under the Finance Documents may be made
free and clear of and without deduction for or on account of any tax;
(b) under existing laws and regulations, no tax is or will be imposed on or by
virtue of the execution or delivery of this Agreement or any other document
or instrument to be executed or delivered under this Agreement or in
connection with this Agreement or on any payment of principal or
reimbursement of expenses under this Agreement except for Korean stamp
taxes of nominal amount which should be paid upon the execution in Korea of
each original copy of this Agreement; and
(c) the Borrower has complied with all taxation laws in all jurisdictions in
which it is subject to taxation and has paid all taxes due and payable by
it; no material claims are being asserted against it with respect to taxes.
15.13 ENFORCEABILITY, REGISTRATION AND STAMP DUTIES
(a) To ensure the enforceability or admissibility in evidence of this Agreement
in Korea, a translation of this Agreement into Korean is necessary, but it
is not necessary that any Finance Document or any other document be filed
or recorded or that any tax be paid, other than stamp
<PAGE>
21
duty payable on each original of this Agreement or certain other documents
provided for under this Agreement if executed and delivered in Korea;
(b) subject to paragraph (a) above, in any proceedings taken in Korea in
relation to any Finance Document, the choice of English law as the
governing law of that Finance Document and any judgment obtained in England
will be recognised and enforced provided that:
(i) the judgment was finally given by a court having valid jurisdiction;
(ii) the party against whom the judgment was made received service of
process in conformity with the laws of England otherwise than by
publication or responded to the action without being served with
process;
(iii) the judgment was not obtained by fraud, is not contrary to the
public policy of Korea and was not obtained in proceedings which
were contrary to natural justice; and
(iv) similar judgments of the courts of Korea are accorded similar
treatment under the laws of England.
15.14 NO NECESSITY TO CARRY ON BUSINESS
It is not necessary under the laws of Korea and/or the constitution of the
Borrower:
(a) in order to enable a Finance Party to enforce its rights under the
Finance Documents; or
(b) by reason only of the execution, delivery and performance of the
Finance Documents,
that a Finance Party should be licensed, qualified or otherwise entitled to
carry on business in Korea.
15.15 NO RESIDENCE/DOMICILE
No Finance Party is nor will be deemed to be resident, domiciled or
carrying on business in, or generally subject to, the laws of Korea by
reason only of the execution, delivery, performance and/or enforcement of
the Finance Documents.
15.16 INSOLVENCY
The Borrower has not taken any corporate action and no other steps been
taken or legal proceedings been started or threatened against the Borrower
for its winding-up, dissolution, administration or reorganisation or for
the appointment of a receiver, administrator, administrative receiver,
trustee or similar officer of it or of any or all of its assets or
revenues.
15.17 BUSINESS OF THE BORROWER
The Borrower is in compliance in all material respects with all laws and
regulations affecting its business and operations.
15.18 TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
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22
The representations and warranties set out in this Clause 15
(Representations and Warranties):-
(a) are made on the Agreement Date; and
(b) (with the exception of Clause 15.10 (Information Memorandum)) are
deemed to be repeated by the Borrower on the date of each Request and
the first day of each Interest Period with reference to the facts and
circumstances then existing.
16. UNDERTAKINGS
16.1 DURATION
The undertakings in this Clause 16 (Undertakings) remain in force from
the Agreement Date for so long as any amount is or may be outstanding
under this Agreement or any Commitment is in force.
16.2 FINANCIAL INFORMATION
The Borrower shall supply to the Agent in sufficient copies for all
the Banks:-
(a) as soon as the same are available (and in any event within 180 days of
the end of each of its financial years), the audited accounts of the
Borrower for that financial year; and
(b) as soon as the same are available (and in any event within 120 days of
the end of the first half-year of each of its financial years), the
unaudited accounts of the Borrower for that half-year.
16.3 INFORMATION - MISCELLANEOUS
The Borrower shall supply to the Agent:-
(a) all material documents despatched by it to its creditors (or any class
of them) at the same time as they are despatched;
(b) promptly upon becoming aware of them, details of any litigation,
arbitration or administrative proceedings which are current,
threatened or pending, and which might, if adversely determined, have
a material adverse effect on the financial condition of the Borrower
or on the ability of the Borrower to perform its obligations under
this Agreement; and
(c) promptly, such further information in the possession or control of the
Borrower regarding its financial condition and operations as any
Finance Party may reasonably request,
in sufficient copies for all of the Banks, if the Agent so requests.
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23
16.4 NOTIFICATION OF DEFAULT
The Borrower shall notify the Agent of any Default (and the steps, if
any, being taken to remedy it) promptly upon its occurrence.
16.5 COMPLIANCE CERTIFICATES
The Borrower shall supply to the Agent:-
(a) together with the accounts specified in Clause 16.2(a) (Financial
Information); and
(b) promptly at any other time, if the Agent so requests,
a certificate signed by one officer of at least manager status on its
behalf certifying that no Default is outstanding or, if a Default is
outstanding, specifying the Default and the steps, if any, being taken to
remedy it.
16.6 AUTHORISATIONS
The Borrower shall promptly:-
(a) obtain, maintain and comply with the terms of; and
(b) supply certified copies to the Agent of,
any authorisation required under any law or regulation to enable it to
perform its obligations under, or for the validity or enforceability of,
any Finance Document.
16.7 PARI PASSU RANKING
The Borrower shall procure that its obligations under the Finance
Documents do and will rank at least pari passu with all its other
present and future unsecured and unsubordinated obligations, except
for obligations which are mandatorily preferred by law applying to
companies generally.
16.8 NEGATIVE PLEDGE
(a) The Borrower shall not create or permit to subsist any Security Interest on
any of its material assets.
(b) Paragraph (a) does not apply to any Security Interest arising by operation
of law in the ordinary course of business and securing amounts not more
than 30 days overdue or granted in the ordinary course of business to a
Korean bank or to a branch in Korea of a bank incorporated outside Korea.
(c) If the Borrower creates or permits to subsist any Security Interest on any
of its assets contrary to paragraph (a) above, all the obligations of the
Borrower under this Agreement shall
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24
immediately be secured upon the same assets, ranking at least pari passu
with the other obligations secured on those assets and the Borrower shall
at its own expense:
(i) execute and do all such things as the Agent may require for perfecting
or protecting that security; and/or
(ii) grant in favour of the Agent (as agent and trustee for the Finance
Parties) such additional security as the Agent may specify.
16.9 TRANSACTIONS SIMILAR TO SECURITY
The Borrower shall not without the prior consent of the Majority
Banks:-
(a) sell, transfer or otherwise dispose of any of its material assets on
terms whereby it is or may be leased to or re-acquired or acquired by
a member of the Group or any of its related entities; or
(b) sell, transfer or otherwise dispose of any of its material receivables
on recourse terms, except for the discounting of bills or notes in the
ordinary course of trading,
in circumstances where the transaction is entered into primarily as a
method of raising finance or of financing the acquisition of an asset.
16.10 DISPOSALS
(a) The Borrower shall not either in a single transaction or in a series of
transactions, whether related or not and whether voluntarily or
involuntarily, sell, transfer, grant or lease or otherwise dispose of all
or any substantial part of its assets.
(b) Paragraph (a) does not apply to:-
(i) disposals made in the ordinary course of business of the disposing
entity; or
(ii) disposals of assets in exchange for other assets comparable or
superior as to type, value and quality.
16.11 CHANGE OF BUSINESS
The Borrower shall procure that no substantial change is made to the
general nature or scope of the business of the Borrower from that
carried on at the Agreement Date which might materially and adversely
affect the financial condition of the Borrower or the ability of the
Borrower to perform its obligations under the Finance Documents.
16.12 MERGERS AND ACQUISITIONS
(a) The Borrower shall not enter into any substantial amalgamation, demerger,
merger or reconstruction except with the prior consent of the Majority
Banks.
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25
(b) The Borrower shall not acquire any assets or business or make any
investment if the assets, business or investment is substantial in relation
to the Borrower except with the prior consent of the Majority Banks.
16.13 INSURANCE
The Borrower shall maintain with financially sound and reputable insurers,
insurance with respect to its assets against such risks, liabilities and
contingencies and of such types and in such amounts as is consistent with
prudent business practice of a company carrying on a business such as that
carried on by the Borrower.
16.14 FINANCIAL COVENANT
(a) In this Clause 16.14:-
"BALANCE SHEET"
means at any time, the latest audited or unaudited balance sheet of the
Borrower supplied in accordance with Clause 16.2 ( Financial Information).
"TANGIBLE NET WORTH"
means at any time the aggregate of:-
(i) the amount paid up or credited as paid up on the Borrower's issued
share capital; and
(ii) the amount standing to the credit of the Borrower's capital and
revenue reserves,
based on its relevant Balance Sheet but adjusted by:-
(1) adding any amount standing to the credit of the Borrower's profit and
loss account for the period ending on the date of its Balance Sheet to
the extent not included in sub-paragraph (ii) above and to the extent
the amount is not attributable to any dividend or other distribution
declared, recommended or made by it;
(2) deducting any amount standing to the debit of the Borrower's profit
and loss account for the period ending on the date of the Balance
Sheet;
(3) deducting any amount attributable to goodwill or any other intangible
asset;
(4) deducting any amount attributable to a revaluation of assets after
31st December, 1994; and
(5) eliminating inconsistencies between the accounting principles applied
in connection with its Balance Sheet and those applied in connection
with the Original Accounts.
"TOTAL LIABILITIES"
means at any time the aggregate of the Borrower's Financial Indebtedness.
<PAGE>
26
(b) All the terms used in paragraph (a) above are to be calculated in
accordance with the accounting principles applied in connection with the
Original Accounts of the Borrower.
(c) The Borrower shall procure that the ratio of Total Liabilities to Tangible
Net Worth is not, at any time, more than 5:1.
17. DEFAULT
17.1 EVENTS OF DEFAULT
Each of the events set out in Clauses 17.2 (Non-payment) to 17.19
(Material adverse change) (inclusive) is an Event of Default (whether
or not caused by any reason whatsoever outside the control of the
Borrower or any other person).
17.2 NON-PAYMENT
The Borrower does not pay within three (3) Business Days of the due
date any amount payable by it under the Finance Documents at the place
at and in the currency in which it is expressed to be payable.
17.3 BREACH OF OTHER OBLIGATIONS
The Borrower does not comply with any provision of the Finance
Documents (other than those referred to in Clause 17.2 (Non-payment))
and such non-compliance is not remediable in the opinion of the
Majority Banks, or, if deemed by the Majority Banks to be capable of
remedy, continues unremedied for a continuous period of 21 days from
the date of non-compliance.
17.4 MISREPRESENTATION
A representation, warranty or statement made or repeated in or in
connection with any Finance Document or in any document delivered by
or on behalf of the Borrower under or in connection with any Finance
Document is incorrect in any respect when made or deemed to be made or
repeated.
17.5 CROSS-DEFAULT
(a) Any Financial Indebtedness of the Borrower is not paid when due; or
(b) an event of default howsoever described (or any event which with the giving
of notice, lapse of time, determination of materiality or fulfilment of any
other applicable condition or any combination of the foregoing would
constitute such an event of default) occurs under any document or contract
relating to Financial Indebtedness of the Borrower; or
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27
(c) any Financial Indebtedness of the Borrower becomes prematurely due and
payable or is placed on demand as a result of an event of default
(howsoever described) under the document or contract relating to that
Financial Indebtedness; or
(d) any commitment for, or underwriting of, any Financial Indebtedness of the
Borrower is cancelled or suspended as a result of an event of default
(howsoever described) under the document or contract relating to that
Financial Indebtedness; or
(e) any Security Interest securing Financial Indebtedness over any asset of the
Borrower becomes enforceable,
and the Financial Indebtedness in respect of which all or any of the events
referred to in paragraphs (a) to (e) inclusive of above occur aggregates
US$7,500,000 (or its equivalent in other currencies) or more.
17.6 INSOLVENCY
(a) The Borrower is, or is deemed for the purposes of any law to be, unable to
pay its debts as they fall due or to be insolvent, or admits inability to
pay its debts as they fall due; or
(b) the Borrower suspends making payments on all or any class of its debts or
announces an intention to do so, or a moratorium is declared in respect of
any of its indebtedness; or
(c) the Borrower, by reason of financial difficulties, begins negotiations with
one or more of its creditors with a view to the readjustment or
rescheduling of any of its indebtedness.
17.7 INSOLVENCY PROCEEDINGS
(a) Any step (including petition, proposal or convening a meeting) is taken
with a view to a composition or arrangement with, or assignment to, any
creditors of the Borrower; or
(b) a meeting of the Borrower is convened for the purpose of considering any
resolution for (or to petition for) its winding-up or for its
administration or any such resolution is passed; or
(c) any person presents a petition for the winding-up or for the administration
of the Borrower; or
(d) an order for the winding-up or administration of the Borrower is made; or
(e) any other step (including petition, proposal or convening a meeting) is
taken with a view to the rehabilitation, administration, custodianship,
liquidation, winding-up or dissolution of the Borrower or any other
insolvency proceedings involving the Borrower,
however, the taking of any steps referred to in paragraphs (a) to (e)
inclusive above shall not be an Event of Default if the relevant step is
withdrawn, discharged, revoked or struck out within 21 Business Days.
17.8 APPOINTMENT OF RECEIVERS AND MANAGERS
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28
(a) Any liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator or the like is
appointed in respect of the Borrower or any substantial part of its assets;
or
(b) the directors or the Borrower requests the appointment of a liquidator,
trustee in bankruptcy, judicial custodian, compulsory manager, receiver,
administrative receiver, administrator or the like; or
(c) any other steps are taken to enforce any Security Interest over any
substantial part of the assets of the Borrower,
however, any appointment or step referred to in paragraphs (a) to (c)
(inclusive) above shall not be a Event of Default if the relevant
appointment or step is terminated, withdrawn, discharged or struck out as
appropriate within 21 Business Days of such appointment or step (as the
case may be).
17.9 CREDITORS' PROCESS
Any attachment, sequestration, distress or execution affects any asset
of the Borrower and is not discharged within 21 Business Days.
17.10 ANALOGOUS PROCEEDINGS
There occurs, in relation to the Borrower, any event anywhere which,
in the opinion of the Majority Banks, appears to correspond with any
of those mentioned in Clauses 17.6 (Insolvency) to 17.9 (Creditors'
process) (inclusive).
17.11 CESSATION OF BUSINESS
The Borrower ceases, or threatens to cease, to carry on all or a
substantial part of its business.
17.12 UNLAWFULNESS
It is or becomes unlawful for the Borrower to perform any of its
obligations under the Finance Documents.
17.13 OWNERSHIP OF THE BORROWER
Any single person, or group of persons acting in concert acquires
control of the Borrower after the Agreement Date and control for this
purpose means the power to direct the management and the policies of
the Borrower, whether through the ownership of voting capital, by
control of the composition of the board of directors or otherwise
except with the prior consent of the Majority Banks.
17.14 EXPROPRIATION
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All or any material part of the undertaking or assets of the Borrower shall
be expropriated, nationalised, compulsorily acquired or taken into public
ownership or the Borrower shall cease to be able or entitled to exercise
the rights of control or ownership of the same.
17.15 CHANGE IN LAW
Any authorisation, decree, publication or other requirement of any
governmental or public body or authority necessary to enable or permit the
Borrower to comply with its obligations under any Finance Document or
required for the validity or enforceability of any such obligations shall
be revoked, withdrawn or withheld or shall otherwise fail to remain in full
force and effect or any law, decree or directive of any competent authority
of or in Korea shall be enacted or issued which shall impair the ability or
right of the Borrower to perform those obligations.
17.16 REPUDIATION
The Borrower repudiates any Finance Document or does or causes to be done
any act or thing evidencing an intention to repudiate any Finance Document.
17.17 NECESSITY TO CARRY ON BUSINESS
It is or becomes necessary under the laws of Korea and/or the
constitutional documents of the Borrower:-
(a) in order to enable a Finance Party to enforce its rights under the
Finance Documents; or
(b) by reason only of the execution, delivery and performance of the
Finance Documents,
that a Finance Party should be licensed, qualified or otherwise entitled to
carry on business in Korea.
17.18 RESIDENCE/DOMICILE
A Finance Party is or is deemed to be resident, domiciled or carrying on
business in, or generally subject to, the laws of Korea by reason only of
the execution, delivery, performance and/or enforcement of the Finance
Documents.
17.19 MATERIAL ADVERSE CHANGE
Any event or series of events occurs which, in the opinion of the
Majority Banks, might have a material and adverse effect on the
financial condition or operations of the Borrower or on the ability of
the Borrower to comply with its obligations under the Finance
Documents.
17.20 ACCELERATION
On and at any time after the occurrence of an Event of Default the
Agent may, and shall if so directed by the Majority Banks, by notice
to the Borrower:-
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(a) cancel the Total Commitments; and/or
(b) demand that all or part of the Loans, together with accrued interest
and all other amounts accrued under this Agreement be immediately due
and payable, whereupon they shall become immediately due and payable;
and/or
(c) demand that all or part of the Loans be payable on demand, whereupon
they shall immediately become payable on demand.
18. THE AGENT, THE ARRANGERS AND THE CO-ARRANGERS
18.1 APPOINTMENT AND DUTIES OF THE AGENT
Each Finance Party (other than the Agent) irrevocably appoints the
Agent to act as its agent under and in connection with the Finance
Documents, and irrevocably authorises the Agent on its behalf to
perform the duties and to exercise the rights, powers and discretions
that are specifically delegated to it under or in connection with the
Finance Documents, together with any other incidental rights, powers
and discretions. The Agent has only those duties which are expressly
specified in this Agreement, and those duties are solely of a
mechanical and administrative nature.
18.2 ROLE OF THE ARRANGERS AND THE CO-ARRANGERS
Except as specifically provided in this Agreement, no Arranger and no
Co-Arranger has any obligations of any kind to any other Party under
or in connection with any Finance Document.
18.3 RELATIONSHIP
The relationship between the Agent and the other Finance Parties is
that of agent and principal only. Nothing in this Agreement
constitutes the Agent as trustee or fiduciary for any other Party or
any other person and the Agent need not hold in trust any moneys paid
to it for a Party or be liable to account for interest on those
moneys.
18.4 MAJORITY BANKS' DIRECTIONS
The Agent will be fully protected if it acts in accordance with the
instructions of the Majority Banks in connection with the exercise of
any right, power or discretion or any matter not expressly provided
for in this Agreement. Any such instructions given by the Majority
Banks will be binding on all the Banks. In the absence of such
instructions, the Agent may act as it considers to be in the best
interests of all the Banks.
18.5 DELEGATION
The Agent may act under the Finance Documents through its personnel
and agents.
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18.6 RESPONSIBILITY FOR DOCUMENTATION
Neither the Agent nor any Arranger nor any Co-Arranger is responsible to
any other Party for:-
(a) the execution, genuineness, validity, enforceability or sufficiency of any
Finance Document or any other document;
(b) the collectability of amounts payable under any Finance Document; or
(c) the accuracy of any statements (whether written or oral) made in or in
connection with any Finance Document (including the Information
Memorandum).
18.7 DEFAULT
(a) The Agent is not obliged to monitor or enquire as to whether or not a
Default has occurred. The Agent will not be deemed to have knowledge of the
occurrence of a Default. However, if the Agent receives notice from a Party
referring to this Agreement, describing the Default and stating that the
event is a Default or otherwise has actual knowledge of a Default, it shall
promptly notify the Banks.
(b) The Agent may require the receipt of security satisfactory to it, whether
by way of payment in advance or otherwise, against any liability or loss
which it will or may incur in taking any proceedings or action arising out
of or in connection with any Finance Document before it commences those
proceedings or takes that action.
18.8 EXONERATION
(a) Without limiting paragraph (b) below, the Agent will not be liable to any
other Party for any action taken or not taken by it under or in connection
with any Finance Document, unless directly caused by its gross negligence
or wilful misconduct.
(b) No Party may take any proceedings against any officer, employee or agent of
the Agent in respect of any claim it might have against the Agent or in
respect of any act or omission of any kind (including gross negligence or
wilful misconduct) by that officer, employee or agent in relation to any
Finance Document.
18.9 RELIANCE
The Agent may:-
(a) rely on any notice or document believed by it to be genuine and correct and
to have been signed by, or with the authority of, the proper person;
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(b) rely on any statement made by a director or employee of any person
regarding any matters which may reasonably be assumed to be within his
knowledge or within his power to verify; and
(c) engage, pay for and rely on legal or other professional advisers selected
by it (including those in the Agent's employment and those representing a
Party other than the Agent).
18.10 CREDIT APPROVAL AND APPRAISAL
Without affecting the responsibility of the Borrower for information
supplied by it or on its behalf in connection with any Finance Document,
each Bank confirms that it:-
(a) has made its own independent investigation and assessment of the financial
condition and affairs of the Borrower and its related entities in
connection with its participation in this Agreement and has not relied
exclusively on any information provided to it by the Agent or any Arranger
or any Co-Arranger in connection with any Finance Document; and
(b) will continue to make its own independent appraisal of the creditworthiness
of the Borrower and its related entities while any amount is or may be
outstanding under the Finance Documents or any Commitment is in force.
18.11 INFORMATION
(a) The Agent shall promptly forward to the person concerned the original or a
copy of any document which is delivered to the Agent by a Party for that
person.
(b) The Agent shall promptly supply a Bank with a copy of each document
received by the Agent under Clause 4 (Conditions Precedent) upon the
request and at the expense of that Bank.
(c) Except where this Agreement specifically provides otherwise, the Agent is
not obliged to review or check the accuracy or completeness of any document
it forwards to another Party.
(d) Except as provided above, the Agent has no duty:-
(i) either initially or on a continuing basis to provide any Bank with any
credit or other information concerning the financial condition or affairs
of the Borrower or any related entity of the Borrower whether coming into
its possession before, on or after the Agreement Date; or
(ii) unless specifically requested to do so by a Bank in accordance with this
Agreement, to request any certificates or other documents from the
Borrower.
18.12 THE AGENT, AND THE ARRANGERS AND THE CO-ARRANGERS INDIVIDUALLY
(a) If it is also a Bank, each of the Agent, the Arrangers and the Co-Arrangers
has the same rights and powers under this Agreement as any other Bank and
may exercise those rights and powers as though it were not the Agent, an
Arranger or a Co-Arranger.
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(b) Each of the Agent, each Arranger and each Co-Arranger may:-
(i) carry on any business with the Borrower or its related entities;
(ii) act as agent or trustee for, or in relation to any financing involving, the
Borrower or its related entities; and
(iii) retain any profits or remuneration in connection with its activities
under this Agreement or in relation to any of the foregoing.
18.13 INDEMNITIES
(a) Without limiting the liability of the Borrower under the Finance Documents,
each Bank shall forthwith on demand indemnify the Agent for its proportion
of any liability or loss incurred by the Agent in any way relating to or
arising out of its acting as the Agent, except to the extent that the
liability or loss arises directly from the Agent's gross negligence or
wilful misconduct.
(b) A Bank's proportion of the liability set out in paragraph (a) above will be
the proportion which its participation in the Loans (if any) bear to all
the Loans on the date of the demand. If, however, there are no Loans
outstanding on the date of demand, then the proportion will be the
proportion which its Commitment bears to the Total Commitments at the date
of demand or, if the Total Commitments have then been cancelled, bore to
the Total Commitments immediately before being cancelled.
(c) The Borrower shall forthwith on demand reimburse each Bank for any payment
made by it under paragraph (a) above.
18.14 COMPLIANCE
(a) The Agent may refrain from doing anything which might, in its opinion,
constitute a breach of any law or regulation or be otherwise actionable at
the suit of any person, and may do anything which, in its opinion, is
necessary or desirable to comply with any law or regulation of any
jurisdiction.
(b) Without limiting paragraph (a) above, the Agent need not disclose any
information relating to the Borrower or any of its related entities if the
disclosure might, in the opinion of the Agent, constitute a breach of any
law or regulation or any duty of secrecy or confidentiality or be otherwise
actionable at the suit of any person.
18.15 RESIGNATION OF THE AGENT
(a) Notwithstanding its irrevocable appointment, the Agent may resign by giving
notice to the Banks and the Borrower, in which case the Agent may forthwith
appoint one of its Affiliates as successor Agent or, failing that, the
Majority Banks may appoint a successor Agent.
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(b) If the appointment of a successor Agent is to be made by the Majority Banks
but they have not, within 30 days after notice of resignation, appointed a
successor Agent which accepts the appointment, the Agent may appoint a
successor Agent.
(c) The resignation of the Agent and the appointment of any successor Agent
will both become effective only upon the successor Agent notifying all the
Parties that it accepts its appointment. On giving the notification, the
successor Agent will succeed to the position of the Agent and the term
"AGENT" will mean the successor Agent.
(d) The retiring Agent shall, at its own cost, make available to the successor
Agent such documents and records and provide such assistance as the
successor Agent may reasonably request for the purposes of performing its
functions as the Agent under this Agreement.
(e) Upon its resignation becoming effective, this Clause 18 (The Agent, the
Arrangers and the Co-Arrangers) shall continue to benefit the retiring
Agent in respect of any action taken or not taken by it under or in
connection with the Finance Documents while it was the Agent, and, subject
to paragraph (d) above, it shall have no further obligations under any
Finance Document.
18.16 BANKS
The Agent may treat each Bank as a Bank, entitled to payments under this
Agreement and as acting through its Facility Office(s) until it has received not
less than 5 Business Days' prior notice from that Bank to the contrary.
19. FEES
19.1 FRONT-END FEE
The Borrower shall pay to the Agent for the Arrangers a front-end fee in the
amount agreed in the Front-end Fee Letter. The front-end fee is payable on the
date falling 30 days after the Agreement Date or (if earlier) the first Drawdown
Date. The front-end fee shall be distributed by the Agent, on behalf of the
Arrangers, among the Banks in the proportions agreed between the Arrangers and
the Banks prior to the Agreement Date.
19.2 COMMITMENT FEE
(a) The Borrower shall pay to the Agent for each Bank a commitment fee computed
at the rate of 0.125 per cent. per annum on the undrawn, uncancelled amount
of that Bank's Commitment during the Commitment Period.
(b) Accrued commitment fee is payable in arrear, for the period from the date
falling 30 days from the Agreement Date, on the earlier of the Term Date
and the date of full utilisation or cancellation of the Total Commitments.
Accrued commitment fee is also payable to the Agent for a Bank on the
cancelled amount of its Commitment at the time the cancellation takes
effect.
19.3 AGENT'S FEE
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The Borrower shall pay to the Agent for its own account an agency fee in the
amount agreed in the Agent's Fee Letter. The agency fee is payable annually in
advance. The first payment of this fee is payable on the first Drawdown Date and
each subsequent payment is payable on each anniversary of the first Drawdown
Date for so long as any amount is or may be outstanding under this Agreement or
any Commitment is in force.
19.4 VAT/GOODS AND SERVICES TAX
Any fee referred to in this Clause 19 (Fees) is exclusive of any value added
tax, goods and services tax or any other tax which might be chargeable in
connection with that fee. If any value added tax, goods and services tax or
other tax is so chargeable, it shall be paid by the Borrower at the same time as
it pays the relevant fee.
20. EXPENSES
20.1 INITIAL AND SPECIAL COSTS
The Borrower shall forthwith on demand pay the Agent and the Arrangers the
amount of all costs and expenses (including legal fees) incurred by any of them
in connection with:-
(a) the negotiation, preparation, printing and execution of:-
(i) this Agreement and any other documents referred to in this
Agreement; and
(ii) any other Finance Document (other than a Novation Certificate)
executed after the Agreement Date;
(b) any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by or on behalf of the
Borrower and relating to a Finance Document or a document referred to
in any Finance Document; and
(c) any other matter, not of an ordinary administrative nature, arising
out of or in connection with a Finance Document.
20.2 ENFORCEMENT COSTS
The Borrower shall forthwith on demand pay to each Finance Party the amount of
all costs and expenses (including legal fees) incurred by it:-
(a) in connection with the enforcement of, or the preservation of any
rights under, any Finance Document; or
(b) in investigating any possible Default.
21. STAMP DUTIES
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The Borrower shall pay and forthwith on demand indemnify each Finance Party
against any liability it incurs in respect of, any stamp, registration and
similar tax which is or becomes payable in connection with the entry into,
performance or enforcement of any Finance Document.
22. INDEMNITIES
22.1 CURRENCY INDEMNITY
(a) If a Finance Party receives an amount in respect of the Borrower's
liability under the Finance Documents or if that liability is converted
into a claim, proof, judgment or order in a currency other than the
currency (the "CONTRACTUAL CURRENCY") in which the amount is expressed to
be payable under the relevant Finance Document:-
(i) the Borrower shall indemnify that Finance Party as an independent
obligation against any loss or liability arising out of or as a
result of the conversion;
(ii) if the amount received by that Finance Party, when converted into the
contractual currency at a market rate in the usual course of its
business is less than the amount owed in the contractual currency,
the Borrower shall forthwith on demand pay to that Finance Party an
amount in the contractual currency equal to the deficit; and
(iii) the Borrower shall pay to the Finance Party concerned forthwith on
demand any exchange costs and taxes payable in connection with any
such conversion.
(b) The Borrower waives any right it may have in any jurisdiction to pay any
amount under the Finance Documents in a currency other than that in which
it is expressed to be payable.
22.2 OTHER INDEMNITIES
The Borrower shall forthwith on demand indemnify each Finance Party against any
loss or liability which that Finance Party incurs as a consequence of:-
(a) the occurrence of any Default;
(b) the operation of Clause 17.20 (Acceleration) or Clause 29 (Pro Rata
Sharing);
(c) any payment of principal or an overdue amount being received from any
source otherwise than on the last day of a relevant Interest Period
or Designated Interest Period (as defined in Clause 9.3 (Default
interest)) relative to the amount so received; or
(d) (other than by reason of negligence or default by a Finance Party) a
Loan not being made after the Borrower has delivered a Request or a
Loan (or part of a Loan) not being prepaid in accordance with a
notice of prepayment.
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The Borrower's liability in each case includes any loss of margin or other loss
or expense on account of funds borrowed, contracted for or utilised to fund any
amount payable under any Finance Document, any amount repaid or prepaid or any
Loan.
23. EVIDENCE AND CALCULATIONS
23.1 ACCOUNTS
Accounts maintained by a Finance Party in connection with any Finance Document
are prima facie evidence of the matters to which they relate.
23.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by a Finance Party of a rate or amount under
any Finance Document is, in the absence of manifest error, conclusive evidence
of the matters to which it relates.
23.3 CALCULATIONS
Interest and the fee payable under Clause 19.2 (Commitment fee) accrue from day
to day and are calculated on the basis of the actual number of days elapsed
(including the first day but excluding the last day) and a year of 360 days.
24. AMENDMENTS AND WAIVERS
24.1 PROCEDURE
(a) Subject to Clause 24.2 (Exceptions), any term of the Finance Documents may
be amended or waived with the agreement of the Borrower, the Majority Banks
and the Agent. The Agent may effect, on behalf of the Majority Banks, an
amendment or waiver to which they have agreed.
(b) The Agent shall promptly notify the other Parties of any amendment or
waiver effected under paragraph (a) above, and any such amendment or waiver
shall be binding on all the Parties.
24.2 EXCEPTIONS
An amendment or waiver which relates to:-
(a) the definition of "MAJORITY BANKS" in Clause 1.1;
(b) an extension of the date for, or a decrease in an amount or a change
in the currency of, any payment under the Finance Documents;
(c) an increase in a Bank's Commitment;
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(d) the incorporation of additional borrowers;
(e) a term of a Finance Document which expressly requires the consent of
each Bank; or
(f) Clause 29 (Pro Rata Sharing) or this Clause 24 (Amendments and
Waivers),
may not be effected without the consent of each Bank.
24.3 WAIVERS AND REMEDIES CUMULATIVE
The rights of each Finance Party under the Finance Documents:-
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the general
law; and
(c) may be waived only in writing and specifically.
Delay in the exercise or the partial exercise or non-exercise of any such right
is not a waiver of that right.
25. CHANGES TO THE PARTIES
25.1 TRANSFERS BY THE BORROWER
The Borrower may not assign, transfer, novate or dispose of any of, or any
interest in, its rights and/or obligations under this Agreement.
25.2 TRANSFERS BY BANKS
(a) A Bank (the "EXISTING BANK") may at any time assign, transfer or novate any
of its rights and/or obligations under this Agreement to another bank or
financial institution (the "NEW BANK").
(b) A transfer of obligations will be effective only if either:-
(i) the obligations are novated in accordance with Clause 25.3 (Procedure
for novations); or
(ii) the New Bank confirms to the Agent and the Borrower that it
undertakes to be bound by the terms of this Agreement as a Bank in
form and substance satisfactory to the Agent. On the transfer
becoming effective in this manner the Existing Bank shall be relieved
of its obligations under this Agreement to the extent that they are
transferred to the New Bank.
(c) Nothing in this Agreement restricts the ability of a Bank to sub-contract
an obligation if that Bank remains liable under this Agreement for that
obligation.
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(d) On each occasion an Existing Bank assigns, transfers or novates any of its
rights and/or obligations under this Agreement, the New Bank shall, on the
date the assignment, transfer and/or novation takes effect, pay to the
Agent for its own account a fee of US$200.
(e) An Existing Bank is not responsible to a New Bank for:-
(i) the execution, genuineness, validity, enforceability or sufficiency
of any Finance Document or any other document;
(ii) the collectability of amounts payable under any Finance Document; or
(iii) the accuracy of any statements (whether written or oral) made in
or in connection with any Finance Document.
(f) Each New Bank confirms to the Existing Bank and the other Finance Parties
that it:-
(i) has made its own independent investigation and assessment of the
financial condition and affairs of the Borrower and its related
entities in connection with its participation in this Agreement and
has not relied exclusively on any information provided to it by the
Existing Bank in connection with any Finance Document; and
(ii) will continue to make its own independent appraisal of the
creditworthiness of the Borrower and its related entities while any
amount is or may be outstanding under this Agreement or any
Commitment is in force.
(g) Nothing in any Finance Document obliges an Existing Bank to:-
(i) accept a re-transfer from a New Bank of any of the rights and/or
obligations assigned, transferred or novated under this Clause; or
(ii) support any losses incurred by the New Bank by reason of the non-
performance by the Borrower of its obligations under this Agreement
or otherwise.
(h) Any reference in this Agreement to a Bank includes a New Bank but excludes
a Bank if no amount is or may be owed to or by it under this Agreement and
its Commitment has been cancelled or reduced to nil.
(i) If any assignment, transfer or novation of all or any part of the rights
and/or obligations of a Bank pursuant to this Clause 25 is made and this
results at that time in amounts becoming due under Clause 11.1 (Gross-up)
or additional amounts becoming due under Clause 13.1 (Increased costs),
then such assignee, transferee or novatee shall be entitled to receive such
amounts or additional amounts under those clauses only to the extent that
the assignee, transferee or novatee would have been so entitled had there
been no such assignment, transfer or novation.
25.3 PROCEDURE FOR NOVATIONS
(a) A novation is effected if:-
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(i) the Existing Bank and the New Bank deliver to the Agent a duly
completed certificate, substantially in the form of Schedule 4 (a
"NOVATION CERTIFICATE"); and
(ii) the Agent executes it.
The Agent shall execute each Novation Certificate which has been duly completed
as soon as reasonably practicable following receipt by the Agent of the same.
(b) Each Party (other than the Existing Bank and the New Bank) irrevocably
authorises the Agent to execute any duly completed Novation Certificate on
its behalf. The Agent shall execute such Novation Certificate as soon as
reasonably practicable following the Agent's receipt of such notice.
(c) To the extent that they are expressed to be the subject of the novation in
the Novation Certificate:-
(i) the Existing Bank and the other Parties (the "EXISTING PARTIES") will
be released from their obligations to each other (the "DISCHARGED
OBLIGATIONS");
(ii) the New Bank and the existing Parties will assume obligations towards
each other which differ from the discharged obligations only insofar
as they are owed to or assumed by the New Bank instead of the
Existing Bank;
(iii) the rights of the Existing Bank against the existing Parties and vice
versa (the "DISCHARGED RIGHTS") will be cancelled; and
(iv) the New Bank and the existing Parties will acquire rights against
each other which differ from the discharged rights only insofar as
they are exercisable by or against the New Bank instead of the
Existing Bank,
all on the date of execution of the Novation Certificate by the Agent or, if
later, the date specified in the Novation Certificate.
25.4 REFERENCE BANKS
If a Reference Bank (or, if a Reference Bank is not a Bank, the Bank of which it
is an Affiliate) ceases to be a Bank, the Agent shall (in consultation with the
Borrower) appoint another Bank or an Affiliate of a Bank to replace that
Reference Bank.
25.5 REGISTER
The Agent shall keep a register of all the Parties and shall supply any other
Party (at that Party's expense) with a copy of the register on request.
26. FUNDING
26.1 FUNDING
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Each Tranche B Bank may fund the Tranche B Loans in any manner whatsoever
and for this purpose may enter into contractual arrangements with other banks or
financial institutions (each a "FUNDING ENTITY").
26.2 PAYMENTS TO FUNDING ENTITIES
(a) The Borrower acknowledges that any Tranche B Bank may agree to pay to each
Funding Entity the following:-
(i) any amount to compensate a Funding Entity for any loss, costs,
penalty or expense incurred or to be incurred by it under Clause 22
(Indemnities) as though that Clause also applied to that Funding
Entity and the amount funded or to be funded by it;
(ii) such additional amounts as may be necessary to ensure that, if any
payment by a Tranche B Bank to a Funding Entity is required by law to
be made after deduction for or on account of any present or future
taxes, that Funding Entity receives a net amount equal to the full
amount which it would have received had payment not been made subject
to any tax; and
(iii) any amount to compensate a Funding Entity for any increased cost
incurred by it under Clause 13 (Increased Costs) as though that
Clause also applied to that Funding Entity, to the amount of the
Tranche B Commitment agreed to be funded by it and to the amount of
the Loans funded by it.
(b) The Borrower shall pay to each Tranche B Bank promptly on demand such
amounts as that Tranche B Bank may certify (through the Agent) to the
Borrower (on the basis of certificates given by the relevant Funding
Entity) as being required to be paid in relation to the funding provided by
that Funding Entity.
26.3 INTEREST FOR FUNDING ENTITIES
The cost of funds referred to in Clause 9.3 (Default interest) shall reflect the
costs of funds of the relevant Funding Entity for the portion of the overdue
amount funded by it.
26.4 MARKET DISRUPTION FOR FUNDING ENTITIES
If the circumstances envisaged by Clause 12 (Market Disruption) apply to any
Funding Entity (as though the references to the Tranche B Banks were to the
Funding Entities and references to the "LOAN" were to the amount of that Loan
funded or to be funded by those Funding Entities):-
(a) Clause 12 (Market Disruption) shall apply to that part of the Loan
funded or to be funded by the relevant Funding Entity; and
(b) the Agent, the relevant Tranche B Bank and the Borrower shall
establish an alternative basis for that part of the Loan in
consultation with the Funding Entities and in accordance with the
procedures set out therein, so as to take into account the costs to
each Funding Entity (as determined by it) of making the relevant
funds available to that Tranche B Bank from whatever sources it may
select plus the Margin.
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26.5 ILLEGALITY FOR FUNDING ENTITIES
If it is or becomes unlawful for a Funding Entity to fund or to continue to
fund the amount of the Loan funded or to be funded by it:
(a) the Funding Entity shall notify the Agent and the relevant Tranche B
Bank of any illegality and that Tranche B Bank shall notify the
Borrower through the Agent; and
(b) (i) the Borrower shall forthwith prepay the amount of the Loans
funded or agreed to be funded by that Funding Entity; and
(ii) that part of the Tranche B Commitment corresponding to that
part of the Loan shall forthwith be cancelled.
26.6 FUNDING OBLIGATIONS
(a) Unless a Tranche B Bank has received notice from a Funding Entity not less
than one Business Day before the advance of a Loan, that it does not intend
to make available its agreed amount of funding to that Tranche B Bank, that
Tranche B Bank may assume that the relevant Funding Entity has made that
amount available to that Tranche B Bank on the due date. A Tranche B Bank
is under no obligation to make that assumption.
(b) A Tranche B Bank may, in reliance upon that assumption, make available to
the Borrower on the due date the corresponding amount due to the Borrower
under this Agreement.
(c) If the amount of funding agreed by a Funding Entity is not made available
to the relevant Tranche B Bank on the due date and, when demanded by that
Tranche B Bank, is not paid forthwith, together with interest thereon
calculated in accordance with paragraph (d) below, that Tranche B Bank
shall be entitled to recover a corresponding amount on demand from the
Borrower, together with such interest.
(d) Interest on an amount not made available to a Tranche B Bank will be
charged for the period during which that Tranche B Bank makes a
corresponding amount available to the Borrower at a rate per annum
sufficient to enable that Tranche B Bank to recover the cost to it of
making that corresponding amount available to the Borrower.
(e) If any Funding Entity does not perform its obligations to make available to
a Tranche B Bank when due any amount required for the funding of any Loan,
that Tranche B Bank shall not be under an obligation to make available to
the Borrower the amount of that Loan.
26.7 ENFORCEMENT OF FUNDING AGREEMENT
If any Funding Entity fails to make available to a Tranche B Bank when due
any agreed amount of funding and that Tranche B Bank:-
(a) does not make available a corresponding amount; or
(b) becomes entitled to and does not recover from the Borrower a
corresponding amount it has already made available to the Borrower,
<PAGE>
43
that Tranche B Bank agrees to use reasonable endeavours (and agrees to consult
with the Borrower regarding the steps to be taken) to enforce the obligation of
that Funding Entity to make the agreed amount of funding available to that
Tranche B Bank and to recover that amount with interest and expenses from the
Funding Entity and, upon recovery, that Tranche B Bank shall make available to
the Borrower a corresponding amount. The Borrower shall reimburse that Tranche B
Bank on demand for all costs, charges and expenses (including fees and expenses
of legal advisers) together with any tax incurred in enforcing the obligation of
the Funding Entity.
26.8 ASSIGNMENT ETC. BY FUNDING ENTITIES
Any additional (as compared to the situation immediately prior to the
assignment, transfer or novation) costs or expenses (including any additional
taxes) imposed on the Borrower as a consequence of the assignment, transfer or
novation by any Funding Entity of its rights against and/or obligations owed to
any Tranche B Bank, or arising solely as a result of any change by a Funding
Entity of the office through which it is acting in connection with the funding
provided by it shall be for the account of the assignee or transferee of such
Funding Entity or the Funding Entity which has changed such office (as the case
may be).
27. DISCLOSURE OF INFORMATION
A Bank may disclose to one of its Affiliates, any Funding Entity or any person
with whom it is proposing to enter, or has entered into, any kind of transfer,
participation or other agreement in relation to this Agreement:-
(a) a copy of any Finance Document; and
(b) any information which that Bank has acquired under or in connection
with any Finance Document.
28. SET-OFF
A Finance Party may set off any matured obligation owed by the Borrower under
this Agreement (to the extent beneficially owned by that Finance Party) against
any obligation (whether or not matured) owed by that Finance Party to the
Borrower, regardless of the place of payment, booking branch or currency of
either obligation. If the obligations are in different currencies, the Finance
Party may convert either obligation at a market rate of exchange in its usual
course of business for the purpose of the set-off. If either obligation is
unliquidated or unascertained, the Finance Party may set off in an amount
estimated by it in good faith to be the amount of that obligation.
29. PRO RATA SHARING
29.1 REDISTRIBUTION
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44
If any amount owing by the Borrower under this Agreement to a Finance Party (the
"RECOVERING FINANCE PARTY") is discharged by payment, set-off or any other
manner other than through the Agent in accordance with Clause 10 (Payments) (a
"RECOVERY"), then:-
(a) the recovering Finance Party shall, within 3 Business Days, notify
details of the recovery to the Agent;
(b) the Agent shall determine whether the recovery is in excess of the
amount which the recovering Finance Party would have received had the
recovery been received by the Agent and distributed in accordance
with Clause 10 (Payments);
(c) subject to Clause 29.3 (Exception), the recovering Finance Party
shall within 3 Business Days of demand by the Agent pay to the Agent
an amount (the "REDISTRIBUTION") equal to the excess;
(d) the Agent shall treat the redistribution as if it were a payment by
the Borrower under Clause 10 (Payments) and shall pay the
redistribution to the Finance Parties (other than the recovering
Finance Party) in accordance with Clause 10.7 (Partial payments); and
(e) after payment of the full redistribution, the recovering Finance
Party will be subrogated to the portion of the claims paid under
paragraph (d) above and the Borrower will owe the recovering Finance
Party a debt which is equal to the redistribution, immediately
payable and of the type originally discharged.
29.2 REVERSAL OF REDISTRIBUTION
If under Clause 29.1 (Redistribution):-
(a) a recovering Finance Party must subsequently return a recovery, or an
amount measured by reference to a recovery, to the Borrower; and
(b) the recovering Finance Party has paid a redistribution in relation to
that recovery,
each Finance Party shall, within 3 Business Days of demand by the recovering
Finance Party through the Agent, reimburse the recovering Finance Party all or
the appropriate portion of the redistribution paid to that Finance Party.
Thereupon, the subrogation in Clause 29.1(e) (Redistribution) will operate in
reverse to the extent of the reimbursement.
29.3 EXCEPTION
(a) A recovering Finance Party need not pay a redistribution to the extent that
it would not, after the payment, have a valid claim against the Borrower in
the amount of the redistribution pursuant to Clause 29.1(e)
(Redistribution).
(b) A Finance Party is not entitled to participate in a redistribution if the
redistribution results from the proceeds of legal proceedings taken by the
recovering Finance Party and the other Finance
<PAGE>
45
Party had adequate notice of and opportunity to participate in the
proceedings concerned but did not do so.
30. SEVERABILITY
If a provision of any Finance Document is or becomes illegal, invalid
or unenforceable in any jurisdiction, that shall not affect:-
(a) the validity or enforceability in that jurisdiction of any other
provision of the Finance Documents; or
(b) the validity or enforceability in other jurisdictions of that or any
other provision of the Finance Documents.
31. COUNTERPARTS
This Agreement may be executed in any number of counterparts, and this
has the same effect as if the signatures on the counterparts were on a
single copy of this Agreement.
32. NOTICES
32.1 GIVING OF NOTICES
All notices or other communications under or in connection with this
Agreement shall be given in writing or by telex or facsimile. Any such
notice will be deemed to be given as follows:-
(a) if in writing, when delivered;
(b) if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start and at the
end of the sender's copy of the notice; and
(c) if by facsimile, when received.
However, a notice given in accordance with the above but received on a non-
working day or after business hours in the place of receipt will only be
deemed to be given on the next working day in that place.
32.2 ADDRESSES FOR NOTICES
(a) The address, telex number and facsimile number of each Party (other than
the Agent) for all notices under or in connection with this Agreement are:-
(i) those notified by that Party for this purpose to the Agent on or
before the date it becomes a Party; or
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46
(ii) any other notified by that Party for this purpose to the Agent by not
less than 5 Business Days' notice.
(b) The address, telex number and facsimile number of the Agent are:-
Cho Hung Bank, London Branch
Plantation House
31-35 Fenchurch Street
London EC3M 3DX
United Kingdom
Telephone: (0171) 623-7791
Telex: 8951125 CHOBNKG
Facsimile: (0171) 283-8464
Attention: Mr. J.K. Koo
or such other as the Agent may notify to the other Parties by not less than
5 Business Days' notice.
(c) All notices from or to the Borrower shall be sent through the Agent.
(d) The Agent shall, promptly upon request from any Party, give to that Party
the address, telex number or facsimile number of any other Party applicable
at the time for the purposes of this Clause.
33. WAIVER OF IMMUNITY
The Borrower irrevocably and unconditionally:
(a) agrees that should any Finance Party bring legal proceedings against it
or its assets in relation to a Finance Document, no immunity from those legal
proceedings (which shall be deemed to include, without limitation, suit,
attachment prior to judgment, other attachment, the obtaining of
judgment, execution or other enforcement) shall be claimed by or on behalf of
itself or with respect to its assets;
(b) waives any such right of immunity which it or its assets now has or may
hereafter acquire; and
(c) consents generally in respect of any such proceedings to the giving of
any relief or the issue of any process in connection with such proceedings
including, without limitation, the making, enforcement or execution against any
property whatsoever (irrespective of its use or intended use) of any order or
judgment which may be made or given in such proceedings.
34. JURISDICTION
34.1 SUBMISSION
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47
For the benefit of each Finance Party, the Borrower agrees that the courts
of England have jurisdiction to settle any disputes in connection with any
Finance Document and accordingly submits to the jurisdiction of the English
courts.
34.2 SERVICE OF PROCESS
Without prejudice to any other mode of service, the Borrower:-
(a) irrevocably appoints LG Electronics U.K. Ltd. of LG House, 264 Bath
Road, Slough, Berkshire, SLI 4DT, England (Attention: Managing Director) as its
agent for service of process relating to any proceedings before the English
courts in connection with any Finance Document;
(b) agrees that failure by a process agent to notify it of the process will
not invalidate the proceedings concerned; and
(c) consents to the service of process relating to any such proceedings by
prepaid posting of a copy of the process to its address for the time being
applying under Clause 32.2 (Addresses for notices).
34.3 FORUM NON CONVENIENS AND ENFORCEMENT ABROAD
The Borrower:-
(a) waives objection to the English courts on grounds of inconvenient forum
or otherwise as regards proceedings in connection with a Finance Document; and
(b) agrees that a judgment or order of an English court in connection with
a Finance Document is conclusive and binding on it and may be enforced against
it in the courts of any other jurisdiction.
34.4 NON-EXCLUSIVITY
Nothing in this Clause 34 limits the right of a Finance Party to bring
proceedings against the Borrower in connection with any Finance Document:-
(a) in any other court of competent jurisdiction; or
(b) concurrently in more than one jurisdiction.
35. LANGUAGE
(a) Any notice given under or in connection with any Finance Document shall be
in English.
(b) All other documents provided under or in connection with any Finance
Document shall be:-
(i) in English; or
(ii) if not in English, accompanied by a certified English translation and, in
this case, the English translation shall prevail unless the document is a
statutory or other official document,
<PAGE>
48
provided that the unaudited accounts of the Borrower to be delivered pursuant to
Clause 16.2 (Financial information), paragraph (b) may be provided in Korean
until such time as the Borrower prepares the same in English, whereafter the
Borrower shall provide the same in English.
36. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
<PAGE>
49
SCHEDULE 1
BANKS AND COMMITMENTS
PART 1 - TRANCHE A
TRANCHE A BANKS COMMITMENTS (US$)
The Korea Development Bank, Tokyo Branch 21,000,000
Cho Hung Bank, London Branch 16,875,000
ABN AMRO International Financial Services Company 11,250,000
The Commercial Bank of Korea, Ltd., Chicago Branch 3,750,000
-----------
Total Tranche A Commitments: US$52,875,000
-----------
PART 2 - TRANCHE B
TRANCHE B BANK COMMITMENTS (US$)
Cho Hung Bank, London Branch
157,125,000
------------
Total Tranche B Commitments: US$157,125,000
------------
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50
SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS
1. Certified copies of the Korean texts and true and correct English
translations of the Articles of Incorporation of the Borrower and the
Korean Commercial Registry extracts of the Borrower.
2. A copy of a resolution of the board of directors of the Borrower:-
(a) approving the terms of, and the transactions contemplated by, this
Agreement and resolving that it execute this Agreement, the Agent's Fee
Letter and the Front-end Fee Letter;
(b) authorising a specified person or persons to execute this Agreement,
the Agent's Fee Letter and the Front-end Fee Letter on its behalf, if
necessary; and
(c) authorising a specified person or persons, on its behalf, to sign
and/or despatch all documents and notices to be signed and/or
despatched by it under or in connection with this Agreement, if
necessary.
3. A copy of all other resolutions, authorisations, approvals, consents and
licences, corporate, official or otherwise, necessary or desirable for the
entry into and performance of this Agreement and the transactions
contemplated hereby and for the validity and enforceability of this
Agreement including, without limitation, a copy of the foreign exchange
approvals that must be obtained by the Borrower from the competent foreign
exchange authorities with respect to its acquisition of shares in the share
capital of Zenith Electronics Corp., USA and its obligations under this
Agreement.
4. A copy of the signatures of those persons authorised to execute this
Agreement on behalf of the Borrower and of the persons authorised to sign
or despatch all Requests, notices, certificates and other documents in
connection with this Agreement on behalf of the Borrower hereunder, a seal
certificate of the representative director of the Borrower, as well as a
power of attorney of the representative director of the Borrower
authorising the person signing this Agreement on behalf of the Borrower.
5. A certificate of an authorised signatory of the Borrower certifying that
each copy document specified in this Schedule 2 is correct, complete and in
full force and effect as at a date no earlier than the Agreement Date.
6. A letter from LG Electronics U.K. Ltd. accepting its appointment as agent
for service pursuant to Clause 34.2 (Service of process).
7. A copy of any other authorisation or other document, opinion or assurance
which the Agent considers to be necessary or desirable in connection with
the entry into and performance of, and the transactions contemplated by,
any Finance Document or for the validity and enforceability of any Finance
Document.
8. A legal opinion of Kim & Chang, Korean legal advisers to the Agent,
addressed to the Finance Parties.
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51
9. A legal opinion of Allen & Overy, legal advisers to the Agent, addressed
to the Finance Parties.
<PAGE>
52
SCHEDULE 3
FORM OF REQUEST
To: CHO HUNG BANK, LONDON BRANCH as Agent
From: LG SEMICON CO., LTD.
Date:[ ]
LG SEMICON CO., LTD. - US$210,000,000 CREDIT AGREEMENT DATED 31ST OCTOBER, 1995
1. We wish to borrow Loan(s) as follows:-
(a) Drawdown Date: [ ]
(b) Tranche A Loan amount: [ ]
(c) Tranche B Loan amount: [ ]
(d) Payment Instructions: [ ].
2. We confirm that each condition specified in Clause 4.2 (Further conditions
precedent) is satisfied on the date of this Request.
By:
- -------------------------------
LG SEMICON CO., LTD.
Authorised signatory
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53
SCHEDULE 4
FORM OF NOVATION CERTIFICATE
To: CHO HUNG BANK, LONDON BRANCH as Agent
From: [THE EXISTING BANK] and [THE NEW BANK] Date: [ ]
LG SEMICON CO., LTD. - US$210,000,000 CREDIT AGREEMENT DATED 31ST OCTOBER, 1995
We refer to Clause 25.3 (Procedure for novations).
1. We [ ] (the "EXISTING BANK") and [ ] (the "NEW BANK")
agree to the Existing Bank and the New Bank novating all the Existing
Bank's rights and obligations referred to in the Schedule in accordance
with Clause 25.3 (Procedure for novations).
2. The specified date for the purposes of Clause 25.3(c) is [date of
novation].
3. The Facility Office and address for notices of the New Bank for the
purposes of Clause 32.2 (Addresses for notices) are set out in the
Schedule.
4. This Novation Certificate is governed by English law.
THE SCHEDULE
RIGHTS AND OBLIGATIONS TO BE NOVATED
[Details of the rights and obligations of the Existing Bank to be novated].
[Existing Bank] [New Bank]
By: By:
Date: Date:
[NEW BANK]
[Facility Office Address for notices]
CHO HUNG BANK, LONDON BRANCH
By:
Date:
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54
SIGNATORIES
BORROWER
LG SEMICON CO., LTD.
By:
ARRANGERS
CHO HUNG BANK,
By:
DKB ASIA LIMITED
By:
THE KOREA DEVELOPMENT BANK
By:
SOCIETE GENERALE ASIA LIMITED
By:
CO-ARRANGERS
ABN AMRO BANK N.V., SEOUL BRANCH
By:
BAYERISCHE LANDESBANK GIROZENTRALE, TOKYO BRANCH
By:
DRESDNER BANK AG HONG KONG BRANCH
By:
IBJ ASIA LIMITED
By:
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55
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED, HONG KONG BRANCH
By:
THE SUMITOMO TRUST & BANKING CO., LTD., HONG KONG BRANCH
By:
UNION BANK OF SWITZERLAND
By:
WESTLB ASIA PACIFIC LIMITED
By:
TRANCHE A BANKS
THE KOREA DEVELOPMENT BANK, TOKYO BRANCH
By:
CHO HUNG BANK, LONDON BRANCH
By:
ABN AMRO INTERNATIONAL FINANCIAL SERVICES COMPANY
By:
THE COMMERCIAL BANK OF KOREA, LTD., CHICAGO BRANCH
By:
TRANCHE B BANK
CHO HUNG BANK, LONDON BRANCH
By:
<PAGE>
56
AGENT
CHO HUNG BANK, LONDON BRANCH
By:
