<PAGE>
EXHIBIT 10.1
CERTIFIED RESOLUTION
Borrower: IASIAWORKS KOREA LTD.,
a Korean corporation
Guarantor: IASIAWORKS, INC.,
a Delaware corporation
Address: 2000 Alameda de las Pulgas, Suite 125
San Mateo, CA 94403
Date: October 7, 2000
I, the undersigned, Secretary or Assistant Secretary of the above-named
guarantor, a corporation organized under the laws of the state set forth above,
do hereby certify that the following is a full, true and correct copy of
resolutions duly and regularly adopted by the Board of Directors of said
corporation as required by law, and by the by-laws of said corporation, and that
said resolutions are still in full force and effect and have not been in any way
modified, repealed, rescinded, amended or revoked.
WHEREAS, Korea First Bank ("KFB") and iAsiaWorks Korea Ltd., a Korean
corporation ("Borrower") are in the process of entering into a loan
agreement dated as of October 7, 2000 (the "Loan Agreement") whereby KFB is
agreeing to extend certain financial accommodations to Borrower.
WHEREAS, KFB has declined to extend such financial accommodations to
Borrower unless and until this corporation executes a continuing guaranty
of the obligations of Borrower to KFB (the "Guaranty").
WHEREAS, because of the business interrelationship of Borrower and
this corporation, it is in the direct interest and advantage of this
corporation to execute and deliver the Guaranty to KFB.
RESOLVED, that any officer of this corporation (the "Authorized
Officers"), hereby are authorized, directed, and empowered to enter into
and to deliver to KFB this corporation's absolute and unconditional
continuing guaranty of the due performance and payment by Borrower of all
indebtedness to KFB under the Loan Agreement.
RESOLVED FURTHER, that the Authorized Officers hereby are authorized,
directed, and empowered, in the name of this corporation, to enter into,
execute, and deliver to KFB, and KFB is requested to accept, the Guaranty
and any and all renewals, extensions, and amendments thereof.
RESOLVED FURTHER, that any and all acts of the Authorized Officers
done or made heretofore in connection with the financial accommodations
extended by KFB to Borrower, including but not limited to the execution
and/or delivery of the Guaranty, are hereby ratified and approved.
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IN WITNESS WHEREOF, I have hereunto set my hand as such Secretary or
Assistant Secretary on the date set forth above.
/s/ Derrick N.D. Hansen
-----------------------------------------
Derrick N.D. Hansen, Secretary
2
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Execution Copy
LOAN AGREEMENT
KRW14,000,000,000
dated as of October 7, 2000
between
iAsiaWorks Korea Ltd.
as Borrower
and
Korea First Bank, Yangjae-dong Branch
as Lender
_____________________________________________
LEE & KO
Seoul, Korea
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TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Section Page
------- ----
<S> <C>
1. Interpretation............................................. 1
2. The Facility............................................... 5
3. The Drawdowns.............................................. 6
4. Interest................................................... 7
5. Repayment, Prepayment and Cancellation..................... 8
6. Fees and Expenses.......................................... 9
7. Payments and Evidence of Debt.............................. 10
8. Market Disruption.......................................... 11
9. Change of Law or Circumstances............................. 11
10. Security................................................... 12
11. Taxes and other Deductions................................. 14
12. Representations and Warranties............................. 14
13. Covenants.................................................. 16
14. Events of Default.......................................... 19
15. Default Interest........................................... 22
16. Indemnities and Pro Rata Sharing........................... 22
17. Assignment................................................. 23
18. Governing Law and Jurisdiction............................. 23
19. Notices.................................................... 24
20. Miscellaneous.............................................. 24
</TABLE>
SCHEDULES
Schedule I CONDITIONS PRECEDENT DOCUMENTS
EXHIBITS
Exhibit A FORM OF NOTICE OF DRAWDOWN
Exhibit B FORM OF GUARANTY
Exhibit C FORM OF PROCESS AGENT APPOINTMENT LETTER
Exhibit D-1 FORM OF LEGAL OPINION (BORROWER'S KOREAN COUNSEL)
Exhibit D-2 FORM OF LEGAL OPINION (GUARANTOR'S U.S. COUNSEL)
Exhibit D-3 FORM OF LEGAL OPINION (Post Closing)
Exhibit E FORM OF ASSIGNMENT OF INSURANCE AGREEMENT
<PAGE>
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is made on this 10th day of October, 2000
BY AND BETWEEN:
(1) iAsiaWorks Korea Ltd., a corporation duly organized and existing under the
laws of the Republic of Korea with its registered head office at BoRaMae
DaeKyo Building, 6th Floor, 729-21, Bongchon-dong, Kwanak-Gu, Seoul, Korea
151-706 as borrower ("Borrower"); and
(2) KOREA FIRST BANK, Yangjae-dong Branch as lender ("Lender").
IT IS HEREBY AGREED as follows:
Section 1. Interpretation
1.1 Definitions. In this Agreement, unless the context requires otherwise:
-----------
"Affiliates" means any person directly or indirectly controlling, directly
or indirectly controlled by, or under direct or indirect common control
with, Borrower. For purposes of this definition, "control" (including
"controlled by" and "under common control with") means the power, directly
or indirectly, to direct or cause the direction of the management and
policies of any person whether through the ownership of voting securities
or by contract or otherwise, provided that, in any event, any person which
owns directly or indirectly fifty percent (50%) or more of the securities
having ordinary voting power for the election of directors or other
governing body of a corporation or fifty percent (50%) or more of the
partnership or other ownership interests of any other person will be deemed
to control such corporation or other person;
"Assignment of Insurance" means the insurance assignment agreement to be
entered into by and between the Borrower and the Lender to assign
Borrower's interest on the right of claims to Insurance Proceeds to secure
the full performance of the Borrower's obligations hereunder substantially
in the form of Exhibit E hereto;
"Availability Period" means the period commencing on the date of this
Agreement and ending on the earlier of (i) the date one (1) month from the
date of this Agreement, and (ii) the date on which the Commitment (defined
hereinafter) is fully drawn, cancelled or terminated under the provisions
of this Agreement;
"Banking Day" means a day (excluding Sunday) on which banks are open for
business in Seoul, Korea;
"Base Rate" means the final quotation yield rate for A+ three (3) year
Korean Won-
<PAGE>
denominated corporate bond as published by the Korea Securities Dealers
Association or a comparable substitute publication medium on the date
immediately preceding the Funding Date or the Interest Refixing Date, as
the case may be;
"Commitment" means the obligation of the Lender to make Drawdowns available
to the Borrower hereunder up to the aggregate principal amount of Fourteen
Billion Korean Won(KRW14,000,000,000) upon terms and subject to the
conditions of this Agreement or, where the context so requires, such
principal amount.
"Drawdown" means the borrowing by the Borrower of the Commitment pursuant
to Section 3 or, where the context so requires, the amount of such
drawdown;
"EBITDA" means earnings before interest, tax, depreciation and amortization
in accordance with generally accepted accounting principles in Korea;
"Encumbrance" means:
(a) any mortgage, charge, pledge, lien, encumbrance, hypothecation or
other security interest or security arrangement of any kind ;
(b) any arrangement whereby any rights are subordinated to any rights of
any third party; and
(c) any contractual right of set - off whereby the terms and conditions of
the set-off right granted to other party is more favorable to such
party than the terms and conditions of the set-off right granted under
the Civil Code of Korea;
"Event of Default" means any event or circumstance specified as such in
Section 13; and "prospective Event of Default" means any event or
circumstance which with the giving of notice and/or the passage of time
and/or the making of any relevant determination and/or the forming of any
necessary opinion would be an Event of Default;
"Facility" means the loan facility to be made available under this
Agreement not to exceed Fourteen Billion Korean Won (14,000,000,000) Korean
Won;
"Funding Date" means the date on which the Drawdown actually occurs;
"Guarantor" means iAsiaWorks, Inc., a corporation organized and existing
under the laws of Delaware with its registered head office at 2000 Alameda
de las Pulgas Suite 125, San Mateo, CA 94403, U.S.A;
"Guaranty" means the unconditional and irrevocable guaranty to be executed
by Guarantor in the form set forth in Exhibit B;
"Indebtedness for Borrowed Money" means, as to any Person, without
duplication, (a) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase
price of property or services (other than any deferral in connection with
the provision of credit in the ordinary course of business, including by
any trade creditor, supplier or utility); (b) all obligations for
2
<PAGE>
the reimbursement of letters of credit issued for the account of such
Person (other than letters of credit issued in connection with trade
transactions in the ordinary course of business); and (c) the aggregate
amount required to be capitalized under leases under which such Person is
the lessee;
"Insurance Policies" means the insurance policies issued by the insurers of
recognized standing acceptable to the Lender in connection with fire
insurance and such other insurances as reasonably requested by the Lender
pursuant to the terms of this Agreement and the Kun-Mortgage Agreements to
be taken out by the Borrower in respect of the Senan Building, in the
amount and upon the terms and conditions as reasonable and customary for
businesses of a like nature in the jurisdiction in which such properties
and assets are located or in which such businesses are conducted;
"Insurance Proceeds" means all moneys payable to the Borrower (or the
security agent on its behalf) as the result of a claim under any of the
Insurance Policies.
"Interest Rate" has the meaning set forth in Section 4.3 (a);
"Interest Refixing Date" means the third anniversary of the Funding Date;
provided, however, if such date is not a Banking Day, then it shall be the
immediately preceding Banking Day;
"Interest Payment Date" means the last day of an Interest Period;
"Interest Period" means, in relation to the Loan, an interest period
ascertained in accordance with Section 4;
"Korea" means the Republic of Korea;
"KRW" or "Korean Won" means the lawful currency of Korea;
"Kun-Mortgage Agreement I" means the kun-mortgage amendment agreement to be
entered into by and among the Borrower, the Senan Building Owners and the
Lender pursuant to Section 10.2 in order to modify and expand the scope of
the secured obligation secured under the existing kun-mortgage of the first
priority (in the maximum mortgage amount of Thirteen Billion Korean Won
(KRW 13,000,000,000) on the Senan Building created by the Senan Building
Owners for the benefit of the Lender) so as to cover the Facility under
this Agreement and replace the Senan Building Owners (as existing obligor)
with the Borrower (as new obligor), in form and substance satisfactory to
the Lender;
"Kun-Mortgage Agreement II" means the kun-mortgage agreement to be dated on
or before the Funding Date entered into by and between the Borrower and the
Lender for the creation of a new kun-mortgage of the second priority in the
maximum mortgage amount of Five Billion two hundred million Korean Won
(KRW5,200,000,000) on Senan Building to secure the Borrower's obligation to
repay the Facility under this Agreement, in form and substance satisfactory
to the Lender.
"Kun-Mortgage Agreements" means both the Kun-Mortgage Agreement I and the
Kun-Mortgage Agreement II collectively;
3
<PAGE>
"Kun-Mortgage I" means the first priority kun-mortgage created on the Senan
Building with the maximum mortgage amount of Thirteen Billion Korean Won
(KRW 13,000,000,000) as modified pursuant to the Kun-Mortgage Agreement I;
"Kun-Mortgage II" means the kun-mortgage established pursuant to the Kun-
Mortgage Agreement II;
"Loan" means the aggregate principal amount drawn and for the time being
outstanding under the Facility;
"Margin" means two percent (2%);
"Notice of Drawdown" means a notice in the form set forth in Exhibit A;
"Repayment Date" means the date five (5) years after the date of the
Drawdown.
"Senan Building" means the land of 4,801.2 square meters located at 1423-1
and 1423-2, Seocho-dong, Seocho-ku, Seoul, Korea and the building located
thereon. For the avoidance of doubt, any reference to Senan Building will
include all future additional constructions, improvements and renovations
thereto, including but not limited to, the construction of any and all
additional floors and/or levels;
"Senan Building Owners" means Senan Corporation, a corporation duly
organized in Korea with its registered office at 1423-1 and 1423-2,
Seocho-dong, Seocho-ku, Seoul, Korea and Mr. Eui-Suk Lee or any other
persons who own the Senan Building; and
"Senan Loan" means the principal of and interest on, and all other amounts
due with respect to the loan extended by the Lender to the Senan
Corporation under the loan agreement dated April, 21, 2000 entered into by
and between the Lender and the Senan Building Owners.
1.2 Construction. In this Agreement, unless the context requires otherwise,
------------
any reference to:
an "authorization" includes any approvals, consents, licenses, permits,
franchises, permissions, registrations, resolutions, directions,
declarations and exemptions;
"indebtedness" includes any obligation of any person for the payment or
repayment of money, whether present or future, actual or contingent,
including but not limited to any such obligation:
(a) under or in respect of any acceptance, bill, bond, debenture, note or
similar instrument;
(b) under or in respect of any guarantee, indemnity, counter-security or
other assurance against financial loss;
(c) in respect of the purchase, hire or lease of any asset or service; or
4
<PAGE>
(d) in respect of any indebtedness of any other person whether or not
secured by or benefiting from an Encumbrance on any property or asset
of such person;
"law" and/or "regulation" includes, whether or not having the force of
law, any constitutional provisions, treaties, conventions, statutes, acts,
laws, decrees, ordinances, subsidiary and subordinate legislation, orders,
rules and regulations having the force of law and rules of civil and common
law and equity;
a "month" means a period starting on one day in a calendar month and ending
on the numerically corresponding day in the next calendar month or (if
there is no such numerically corresponding day or if a period starts on the
last day in a calendar month) on the last day of such next calendar month;
an "order" includes any judgment, injunction, decree, determination or
award of any court, arbitration or administrative tribunal;
a "person" includes any individual, company, body corporate or
unincorporated or other juridical person, partnership, firm, joint venture
or trust or any federation, state or subdivision thereof or any government
or agency of any thereof; and
"tax" includes any tax, levy, duty, charge, impost, fee, deduction or
withholding of any nature now or hereafter imposed, levied, collected,
withheld or assessed by any taxing or other authority and includes any
interest, penalty or other charge payable or claimed in respect thereof and
"taxation" shall be construed accordingly.
1.3 Successors and Assigns. The expressions "Borrower" and "Lender" shall,
----------------------
where the context permits, include their respective successors and
permitted assigns and any persons deriving title under them.
1.4 Miscellaneous. In this Agreement, unless the context requires otherwise,
-------------
references to statutory provisions shall be construed as references to
those provisions as replaced, amended, modified or re-enacted from time to
time; words importing the singular include the plural and vice versa and
words importing a gender include every gender; references to this Agreement
shall be construed as references to such document as the same may be
amended, supplemented or novated from time to time; unless otherwise
stated, references to Sections, the Schedules and the Exhibits are to
sections of and the schedules and the exhibit to this Agreement and
references to this Agreement include the Schedules and the Exhibits.
Section headings are inserted for reference only and shall be ignored in
construing this Agreement.
Section 2. The Facility
2.1 Amount. Subject to the provisions of this Agreement, the aggregate
------
principal amount of the Facility available to Borrower is Fourteen Billion
Korean Won (KRW14,000,000,000).
2.2 Purpose. The proceeds of the Facility shall be used exclusively for
-------
Borrower's acquisition of the Senan Building and prepayment of the Senan
Loan. The Lender shall not have any responsibility for the application of
the proceeds by Borrower.
5
<PAGE>
Section 3. The Drawdowns
3.1 Availability of Drawdown. Subject to Sections 3.2 and 3.3 and the other
------------------------
terms and conditions of this Agreement, Borrower may borrow the Commitment
on any Banking Day during the Availability Period in a single Drawdown.
3.2 Conditions Precedent to Drawdown. The obligation of the Lender to make the
--------------------------------
Facility available to Borrower in respect of the Drawdown are subject to
the conditions that:
(a) The Lender shall have received, before the Notice of Drawdown is given
or at such later time as the Lender may agree, all of the documents
and evidence specified in Schedule I in form and substance reasonably
satisfactory to the Lender. Copies required to be certified shall be
certified in a manner satisfactory to the Lender by a duly authorized
officer of Borrower or other party concerned;
(b) The Lender shall have received not later than 12:00 noon (Seoul time)
on the Banking Day before the date on which such Drawdown is proposed
to be made (or such later time as the Lender may agree) a duly
completed and signed Notice of Drawdown;
(c) The Kun-Mortgage Agreements and the Assignment of Insurance are duly
executed by the parties thereto;
(d) No Event of Default or prospective Event of Default shall have
occurred (or would occur as a result of any Drawdown being made) and
all representations and warranties made by Borrower in or in
connection with this Agreement shall be true and correct as at the
date of such Drawdown with reference to the facts and circumstances
then subsisting; and
(e) Not later than 11:00 a.m. (Seoul time) on the Banking Day before the
date on which such Drawdown is proposed to be made, the Lender shall
have received and found satisfactory such additional information,
legal opinions and documents relating or relevant to this Agreement as
the Lender may reasonably require as a result of circumstances arising
or becoming known to the Lender since the date of this Agreement.
3.3 Notice of Drawdown Irrevocable. A Notice of Drawdown once given shall be
------------------------------
irrevocable and Borrower shall be bound to make a Drawdown in accordance
therewith, except as otherwise provided in this Agreement. If for any
reason a Drawdown is not made in accordance with the corresponding Notice
of Drawdown, Borrower shall on demand pay to the Lender such amount (if
any) as the Lender may certify to be necessary to compensate it for any
loss or expense incurred in liquidating or redeploying funds arranged for
the purpose of the proposed Drawdown or otherwise as a consequence of the
proposed Drawdown not having been made in accordance with such Notice of
Drawdown.
6
<PAGE>
3.4 Cancellation. Any part of the Facility not drawn at the end of the
------------
Availability Period shall be cancelled.
3.5 Post Closing
-------------
The Borrower shall, within ten (10) Banking Days from the Funding Date,
deliver to the Lender:
(a) a certified copy of the Real Estate Registry Extracts related to Senan
Building showing proper registration of the Kun-Mortgage I and Kun-
Mortgage II;
(b) a legal opinion from DW Partners, as Korean counsel to the Borrower,
(substantially in the form attached as Exhibit D-3) confirming that
the Kun-Mortgage I, Kun Mortgage II and the Assignment of Insurance
have been duly created, registered, recorded and perfected in
accordance with the terms of the relevant Kun-Mortgage Agreements and
the Insurance Assignment Agreement; and
(c) a copy of the Insurance Policies, with endorsements thereto as
required under this Agreement.
Section 4. Interest
4.1 Interest. Borrower shall pay interest on the Loan in accordance with the
--------
provisions of this Section.
4.2 Interest Periods. The Interest Periods applicable to the Drawdown shall be
----------------
three (3) months, provided that:
(a) the first Interest Period shall commence on the date on which such
Drawdown is made;
(b) each Interest Period (except the first Interest Period in relation to
the Drawdown) shall commence on the last day of the preceding Interest
Period;
(c) any Interest Period which would otherwise end on a non-Banking Day
shall instead end on the next following Banking Day or, if that
Banking Day is in another calendar month, on the immediately preceding
Banking Day;
(d) if any Interest Period commences on the last Banking Day of a calendar
month or on a day for which there is no numerically corresponding day
in the calendar month three (3) months thereafter that Interest Period
shall, subject to paragraph (e), end on the last Banking Day of such
later calendar month; and
(e) any Interest Period which would otherwise extend beyond the Repayment
Date shall instead end on that date.
4.3 Interest Rate and Calculation. (a) The rate of interest applicable to Loan
-----------------------------
for each Interest Period ("Interest Rate") shall be the rate per annum
--- -----
determined as follows:
7
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(i) in respect of the period starting from and including the Funding
Date to but excluding the Interest Refixing Date, the applicable
Interest Rate shall be the rate determined by adding the Margin
to the higher of (x) the Base Rate or (y) 9% p.a. ; and
(ii) in respect of the period starting from and including the Interest
Refixing Date until full payment of the Facility, the applicable
Interest Rate shall be the sum of the Margin and the Base Rate.
(b) Interest shall accrue at the Interest Rate from day to day, shall be
calculated on the basis of the actual number of days elapsed and a 365
day year, including the first day of the period during which it
accrues but excluding the last, and shall be paid in arrears on each
Interest Payment Date. The Lender shall notify Borrower of each
Interest Rate determined under this Section. For clarification
purposes of this Section 4.3, the interest rate shall not compound
daily and rather shall compound on a quarterly basis.
Section 5. Repayment, Prepayment and Cancellation
5.1 Repayment. Subject as otherwise provided herein, Borrower shall repay the
---------
Loan in one lump sum, together with all accrued interest and other monies
due and payable in connection with the Facility, on the Repayment Date.
5.2 Voluntary Prepayment. Borrower may prepay all or part of the Loan on any
--------------------
Interest Payment Date after the end of the Availability Period, provided
that:
(a) Borrower shall have given to the Lender not less than thirty (30)
days' prior written notice specifying the amount and date of
prepayment;
(b) the amount of any partial prepayment shall be at least Two Billion
Korean Won (KRW2,000,000,000) and an integral multiple of One Billion
Korean Won (KRW1,000,000,000) except in the case of a prepayment in
full of the entire remaining balance of the Loan; and
(c) all other sums then due and payable under this Agreement shall have
been paid.
5.3 Provisions Applicable to Prepayments. The Borrower may not prepay the Loan
------------------------------------
or any part thereof except in accordance with the express terms of this
Agreement. Any notice of prepayment given by Borrower under any provision
of this Agreement shall be irrevocable and Borrower shall be bound to make
a prepayment in accordance therewith.
5.4 Prepayment Fee. If the Loan or any part thereof is prepaid under any
--------------
provision of this Agreement, unless otherwise expressly provided in this
Agreement, the Borrower shall pay to the Lender a prepayment fee in an
amount calculated as set forth below:
F = P x 1.00% + P x V x (D/365)
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F: prepayment fee
P: Principal amount of the Loan that is being prepaid
V: Value (not less than zero) equal to the applicable Base Rate
less the final quotation yield rate for A+ three (3) year Korean
Won-denominated corporate bond as published by the Korea
Securities Dealers Association one (1) Banking Day immediately
prior to the prepayment date
D: Actual number of days from the prepayment date to the date of
next interest rate re-fixing (or maturity) for the Loan
5.5 Other Amounts. If the Loan or any part thereof is prepaid under any
-------------
provision of this Agreement, Borrower shall also pay to the Lender, at the
time of prepayment, such interest accrued up to the date of prepayment and
all other sums payable by Borrower under this Agreement.
Section 6. Fees and Expenses
6.1 Front-end Fee. Borrower shall pay to the Lender a front-end fee in the
-------------
amount equivalent to zero point three percent (0.3%) flat of the amount of
the Facility. Such front-end fee shall be payable on the earlier of the
date thirty (30) days from the date of this Agreement and the date of the
Drawdown.
6.2 Expenses. Borrower shall forthwith, on demand, and whether or not any
--------
Drawdown is made, pay to or reimburse the Lender for all reasonable costs,
charges and expenses (including legal and other fees on a full indemnity
basis and translation, communication, advertisement, travel and all other
out-of-pocket expenses) incurred by it in connection with the negotiation,
preparation, execution and (where relevant) registration of this Agreement
and any other documentation required hereunder and the arrangement of the
Facility and any amendment hereto and any inspection, calculation,
approval, consent or waiver to be conducted, made or given by the Lender
pursuant to any provision of this Agreement.
6.3 Enforcement Costs. Borrower shall from time to time forthwith on demand
-----------------
pay to or reimburse the Lender for all reasonable costs, charges and
expenses (including legal and other fees on a full indemnity basis and all
other out-of-pocket expenses) incurred by it in exercising any of its
rights or powers under this Agreement or in suing for or seeking to recover
any sums due under this Agreement or otherwise preserving or enforcing its
rights under this Agreement or in defending any claims brought against it
in respect of this Agreement.
6.4 Taxes. Borrower shall pay all present and future stamp and other like
-----
duties and taxes and all notarial, registration, recording and other like
fees which may be payable in respect of this Agreement and shall indemnify
the Lender against all liabilities, costs and expenses which may result
from any default in paying such duties, taxes or fees.
Section 7. Payments and Evidence of Debt
9
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7.1 Drawdowns.
---------
(a) Amounts to be advanced by the Lender to Borrower under this Agreement
shall be made available to the Lender not later than 11:00 a.m. (Seoul
time) on the date of the relevant Drawdown in same day funds.
(b) Subject to paragraph (c) below, the Lender shall make available to
Borrower the amounts by payment to the account to be designated by
Borrower in the relevant Notice of Drawdown.
(c) In order to eliminate unnecessary movement of cash, the Lender shall
be entitled to set off from the Drawdown amount, the amount equal to
the sum of the principal amount of the Senan Loan, interest accrued
thereon up to the Funding Date and all other sums payable under the
Senan Loan and deposit only the remaining amount into the Borrower's
account. For avoidance of doubt, the Borrower shall be deemed to have
borrowed the full amount of the Drawdown as specified in the Notice of
Drawdown when the Lender deposits into the Borrower's account the
portion of the Drawdown amount remaining amount after set-off of the
Senan Loan.
7.2 Payments by Borrower. Unless otherwise instructed by the Lender, all
--------------------
payments by Borrower under this Agreement shall be made to the Lender not
later than 11:00 a.m. (Seoul time) on the relevant due date in same day
funds at the Lending Office of the Lender.
7.3 Allocation of Receipts. If any amount received by the Lender is less than
----------------------
the full amount due, the Lender shall have the right to allocate the amount
received towards principal, interest and/or other sums owing hereunder as
it considers appropriate.
7.4 Banking Days. Subject to Section 4.2, if any sum would otherwise become
------------
due for payment on a non-Banking Day that sum shall become due on the next
following Banking Day and interest shall be adjusted accordingly, except
that if the repayment due under Section 5.1 would then become due in
another calendar month such repayment shall become due on the immediately
preceding Banking Day.
7.5 Evidence of Debt. The Lender shall maintain on its books in accordance
----------------
with its usual practice a set of accounts recording the amounts from time
to time owing by Borrower hereunder. In any legal proceeding and otherwise
for the purposes of this Agreement the entries made in such accounts shall,
in the absence of manifest error, be conclusive and binding on Borrower as
to the existence and amounts of the obligations of Borrower recorded
therein.
7.6 Certificate Conclusive and Binding. Where any provision of this Agreement
----------------------------------
provides that the Lender may certify or determine an amount or rate payable
by Borrower, a certificate by the Lender as to such amount or rate shall be
conclusive and binding on Borrower in the absence of manifest error.
Section 8 Substitute Basis of Borrowing
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<PAGE>
8.1 Notwithstanding anything in this Agreement to the contrary if, on or prior
to the Interest Refixing Date, the Lender reasonably determines that the
quotation of interest rate referred to in the definition of the Base Rate
is no longer published for purposes of determining the Interest Rate, then
the Lender shall notify the Borrower in writing of such fact and the
following provisions shall apply:
(a) during the thirty (30) day period following the date of any such
notice to the Borrower by the Lender ("Negotiation Period"), the
Lender and the Borrower shall negotiate in good faith for the purpose
of agreeing upon an alternative, mutually acceptable basis
("Substitute Basis") for determining the rate of interest to be
applicable to the Loan and if, at the expiration of the Negotiation
Period, the Lender and the Borrower have agreed upon the Substitute
Basis, the Substitute Basis shall take effect from the date the Lender
delivered notice to the Borrower hereunder; or
(b) if at the expiration of the Negotiation Period, the Substitute Basis
has not been agreed upon, then the Lender shall have the right, by
written notice delivered to the Borrower, to declare that for all
purposes of this Agreement, the Interest Rate shall be, as of the date
of the expiration of the Negotiation Period, the then prevailing
interest rate as applied by the Lender to its borrowers for three(3)
year loan in Korean Won. In such event, the Borrower shall have the
option to prepay the Loan, without any payment of prepayment fee as
set forth in the Section 5.4 of this Agreement, by giving written
notice to the Lender specifying the prepayment date which is not less
than fourteen (14) days after such notice is given. If Borrower
elects to exercise such option, the Facility shall be cancelled and
the Borrower shall prepay the Loan in full together with interest
accrued thereon up to the date of prepayment.
8.2 Notwithstanding anything contained in Section 8.1, if the condition
referred to in Section 8.1 ceases to exist, then interest on the Loan shall
again be determined in accordance with the provisions of Section 4.3,
commencing as of the next Interest Period occurring after the date such
condition ceases to exist.
Section 9. Change of Law or Circumstances
9.1 Unlawfulness. If it becomes unlawful for the Lender to give effect to its
------------
obligations hereunder, the Lender shall so notify Borrower, whereupon the
Lender's Commitment shall be cancelled and its obligation to maintain the
Loan shall cease. Borrower shall forthwith after such notification, or
such longer period as the Lender may certify as being permitted by the
relevant law, prepay such Loan, without any payment of prepayment fee as
set forth in the Section 5.4 of this Agreement, in full together with
interest accrued thereon to the date of prepayment and any other monies
owing hereunder to the Lender.
9.2 Increased Cost. If the Lender determines that any change in any applicable
--------------
law or regulation or in the interpretation or application thereof or
compliance by the Lender with any applicable direction, request or
requirement (whether or not having the force of law) of any competent
governmental or other authority does or will:
11
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(a) subject the Lender to any tax or other payment with reference to sums
payable by Borrower under this Agreement or oblige the Lender to forgo
any interest or other return on or calculated by reference to the
amount of any sum received or receivable by it under this Agreement;
or
(b) impose on the Lender any other condition the effect of which is to (i)
increase the cost to the Lender of participating in the Facility,
including without limitation increased costs resulting from complying
with applicable capital adequacy requirements, or (ii) reduce the
amount of any payment receivable by, or the effective return to, the
Lender in respect of the Facility;
the Lender may so notify Borrower, and Borrower shall from time to time
upon demand (whether or not the Loan has been repaid) pay to the Lender
such amounts as the Lender may certify to be necessary to compensate it for
such tax, payment, increased cost or reduction (each an "increased cost").
Where such increased cost arises from circumstances contemplated above
which affect the Lender's business generally or the manner in which or
extent to which the Lender allocates capital resources, the Lender shall be
entitled to such increased cost as it determines and certifies is fairly
allocable to the Facility. So long as the circumstances giving rise to
such increased cost continue, Borrower may, after giving the Lender not
less than thirty (30) days' prior written notice, prepay all (but not only
part) of the Loan, without any payment of prepayment fee as set forth in
the Section 5.4 of this Agreement, and upon the giving of such notice the
Lender's Commitment shall be cancelled and no further Drawdowns shall be
made.
Section 10. Security
10.1 Mortgage of the Senan Building. As collateral security for the prompt
------------------------------
payment when due of the principal of and interest on, and all other amounts
due with respect to the Loan outstanding and all other amounts owing
hereunder, the Borrower hereby agrees to grant and confirms unto the
Lender, a first priority kun-mortgage interest on Senan Building to be
purchased by the Borrower and the maximum mortgage amount of such kun-
mortgage shall be Eighteen Billion Two Hundred Million Korean Won
(KRW18,200,000,000).
10.2 Mitigation of Costs and Expense related to Registration of Mortgage.
---------------------------------------------------------------------
(a) Currently, a first priority kun-mortgage ("Existing Mortgage") with the
maximum mortgage amount being Thirteen Billion Korean Won (KRW
13,000,000,000) exists on the Senan Building, which is created to secure
the Senan Loan extended by the Lender to the Senan Corporation. The
outstanding principal amount of the Senan Loan as of the date of this
Agreement is Ten Billion Korean Won (KRW10,000,000,000). In order to
reduce the costs and expenses related to the registration of the mortgage
referred to in Section 10.1 above, the Borrower and the Lender hereby
agrees to use the Existing Mortgage to secure the Borrower's payment
obligations hereunder instead of creating a new first priority kun-mortgage
to secure such obligations. To this end, instead of deregistering the
Existing Mortgage and registering a new first priority kun-mortgage on the
Senan Building, the Borrower agrees to assume all of the Senan
Corporation's obligation under the Senan Loan and
12
<PAGE>
under the Existing Mortgage and expand the scope of the secured obligations
under the Existing Mortgage so that the Facility shall be added as secured
obligations in addition to the Senan Loan. For that purpose, the following
steps will be taken:
(i) At least one (1) Banking Day prior to the Funding Date, Kun-
Mortgage Agreement I shall be entered into by and among the Borrower,
the Senan Building Owners and the Lender.
(ii) At least one (1) Banking Day prior to the Funding Date, Kun-
Mortgage Agreement II shall be duly entered into by and between the
Borrower and the Lender.
(b) The Borrower agrees it shall prepay the Senan Loan in full on the
Funding Date with the proceeds of the Loan hereunder.
10.3 New Registration of Mortgage.
----------------------------
(a) The Borrower expressly acknowledges and agrees that Lender has agreed
to the measures under Section 10.2 solely for the benefit of the
Borrower to save costs and expenses related to the registration of
kun-mortgage and that, at all times, the economic effect of having
Kun-Mortgage I and Kun-Mortgage II, as contemplated under Section 10.2
should be the same as if a new first priority kun-mortgage is
registered in the maximum mortgage amount of Eighteen Billion Two
Hundred Million Korean Won (KRW18,200,000,000) for the benefit of the
Lender for the purpose of securing the Facility. If, for any reason,
the appropriation of the Existing Mortgage becomes impractical or, at
the reasonable discretion of the Lender, the Lender's enforcement of
either Kun-Mortgage I or Kun Mortgage II is adversely affected, the
Lender shall be entitled to require the Borrower to create a new first
priority kun-mortgage in the maximum mortgage amount of Eighteen
Billion Two Hundred Million Korean Won (KRW18,200,000,000) for the
benefit of the Lender to secure all of the Borrower's obligations
under this Agreement as originally contemplated in Section 10.1 in
lieu of Kun-Mortgage I and Kun-Mortgage II.
(b) The Borrower currently plans to extend two floors (third and fourth
floors) to the Senan Building in the near future and hereby expressly
agrees and acknowledges that such addition to the building will be
automatically subject to the effects of the Kun-Mortgage I and Kun-
Mortgage II. The Borrower further covenants that within sixty (60)
days from the completion of the construction of the third and fourth
floors of Senan Building, (i) the Borrower shall submit an appraisal
report prepared by the Korean Appraisal Board showing the appraisal
results conducted on the Senan Building after the construction of
third and fourth floors is completed, and (ii) the Borrower shall file
an application with the competent Real Estate Registry Offices to
modify the description of the Senan Building recorded on the Real
Estate Registry (the "Pyojebu" portion of the Real Estate Registry) to
include such addition of the two floors to the Senan Building.
(c) If the application to modify the Pyojebu portion of the Real Estate
Registry of the Senan Building is rejected by the registry office due
to the fact that any of the future additional construction, extension,
improvement, refurbishment,
13
<PAGE>
remodeling or renovation to the Senan Building has caused the Senan
Building to be no longer considered as the same as a result of such
additional construction, extension, improvement, refurbishment,
remodeling or renovation, the Borrower shall, within fifteen (15) days
from such rejection by the registry office, complete a new ownership
registration in the name of the Borrower in respect of the Senan
Building and registration of a first priority kun-mortgage in the
maximum mortgage amount of Eighteen Billion two hundred million Korean
Won (KRW18,200,000,000) securing all of the Borrower's obligations
under this Agreement for the benefit of the Lender.
10.4 Assignment of Claims to Insurance Proceeds. As a security for the prompt
-------------------------------------------
payment when due of the principal of and interest on, and all other amounts
due with respect to the Loan outstanding and all other amounts owing
hereunder, the Borrower agrees, to assign all of its rights to claim
insurance proceeds under the Insurance Policies pursuant to the Assignment
of Insurance. The Borrower shall duly complete necessary procedures
required for perfection of the Assignment of Insurance.
Section 11. Taxes and other Deductions
11.1 Payments to be Free and Clear. All sums payable by Borrower under this
-----------------------------
Agreement shall be paid in full without set-off or counterclaim or any
restriction or condition and free and clear of any tax or other deductions
or withholdings of any nature.
11.2 Grossing-up of Payments. If Borrower or any other person is required by
-----------------------
any law or regulation to make any deduction or withholding (on account of
tax or otherwise) from any payment for the account of the Lender, Borrower
shall, together with such payment, pay such additional amount as will
ensure that the Lender receives (free and clear of any tax or other
deductions or withholdings) the full amount which it would have received if
no such deduction or withholding had been required. Borrower shall
promptly forward to Lender copies of official receipts or other evidence
showing that the full amount of any such deduction or withholding has been
paid over to the relevant taxation or other authority.
Section 12. Representations and Warranties
Borrower represents and warrants to the Lender as follows:
12.1 Incorporation and Qualification. Borrower is a corporation duly organized
-------------------------------
and validly existing under the laws of Korea. Guarantor is duly organized
and validly existing under the laws of its respective jurisdiction of
organization. Borrower and the Guarantor are qualified or registered to do
business in every jurisdiction where the failure to so qualify or register
could have a material adverse effect on Borrower or the Guarantor.
12.2 Power and Authority. Borrower has full legal right, power and authority to
-------------------
carry on its present business, to own its properties and assets, to incur
the indebtedness and other obligations provided for in this Agreement, to
execute and deliver this Agreement and all other documents thereunder and
to perform and observe the terms and conditions
14
<PAGE>
thereof.
12.3 Authorization of Borrowing. Borrower has taken all appropriate and
--------------------------
necessary corporate and legal actions to authorize the execution and
delivery of this Agreement and all other documents thereunder and to
authorize the performance and observance of the terms and conditions
thereof.
12.4 Authorizations and Approvals. Borrower has obtained or effected all
----------------------------
authorizations, if any, necessary for the valid execution, delivery and
performance of this Agreement and such authorizations are in full force and
effect or, by the date on which the Notice of Drawdown is given, such
authorizations will have been obtained and be in full force and effect and
there has been no default under the conditions of any of the same.
12.5 Agreement Binding; Compliance with Law and Other Agreements. This
-----------------------------------------------------------
Agreement constitutes the legal, valid, binding and unsubordinated
obligation of Borrower enforceable in accordance with its terms. The
execution, delivery and performance of the terms of this Agreement, the
payment by Borrower of all amounts due on the dates and in the currency
provided for herein and the application of the proceeds of the Facility as
provided in Section 2.2 hereof (i) will not violate or contravene any
provision of law or regulation which is applicable to Borrower; (ii) will
not conflict with the Articles of Incorporation or by-laws (or comparable
constituent documents) of Borrower; (iii) will not conflict with or result
in the breach of any provision of, or in the imposition of any Encumbrance
under, any agreement or instrument to which Borrower is a party or by which
it or any of its properties or assets is bound; and (iv) will not
constitute a default or an event that, with the giving of notice or the
passing of time, or both, would constitute a default under any such
agreement or instrument.
12.6 No Event of Default. Borrower is not in default under any agreement or
-------------------
obligation applicable to it or its assets or revenues, the consequences of
which default could materially and adversely affect its business or
financial condition or its ability to perform its obligations under this
Agreement and no Event of Default or prospective Event of Default has
occurred.
12.7 Compliance with Law. Borrower and the Guarantor are in full compliance
-------------------
with all applicable laws, regulations and orders, whether or not having the
force of law, including without limitation, tax laws.
12.8 Ranking of the Facility. The claims of the Lender to the Senan Building
-----------------------
over which Kun-Mortgage under the Kun-Mortgage Agreements is expressed to
be created in respect of the obligations of the Borrower under this
Agreement will rank ahead of the claims of all other creditors of the
Borrower over such asset and to the extent that those assets are
insufficient to satisfy such obligations then the remaining claims of the
Lender against the Borrower under this Agreement will rank at least equally
and ratably (pari passu) in point of priority and security with the claims
of all other unsecured and non-subordinated creditors of the Borrower save
those preferred solely by any bankruptcy, insolvency, liquidation or other
similar laws of general application.
12.9 Legal Actions. All registrations, recordings or filings, if any, required
-------------
as a condition to the legality, validity or enforceability of this
Agreement or any other document to be
15
<PAGE>
executed and delivered pursuant to the terms of this Agreement have been
made by Borrower.
12.10 Financial Statements. The most recent financial statements of Borrower
--------------------
for the time being (including the profit and loss account and balance
sheet) were prepared in accordance with all applicable laws and
regulations of Korea and generally accepted accounting principles and
policies consistently applied and show a true and fair view of the
financial position of Borrower as at the end of, and the results of its
operations for, the financial period to which they relate and, as at the
end of such period Borrower did not have any significant liabilities
(contingent or otherwise) or any unrealized or anticipated losses which
are not disclosed by or reserved against in, such financial statements,
and there has been no material adverse change in the business or
financial condition of Borrower since the date of such financial
statements.
12.11 Encumbrances. No Encumbrance exists over all or any part of the property,
------------
assets or revenues of Borrower other than those disclosed in the
financial statements referred to in Section 12.10 or those notified by
Borrower to Lender on or prior to the date of this Agreement. Kun-
Mortgage Agreements create or will create first priority security
interests on Senan Building in accordance with and subject to the terms
and conditions of such Kun-Mortgage Agreements.
12.12 Litigation. No litigation, administrative proceeding or arbitration is
----------
presently pending or threatened against Borrower or the Guarantor or
their assets or revenues which, if adversely determined, could have a
material effect on the ability of Borrower or Guarantor to perform its
obligations under this Agreement.
12.13 No Misstatement. No information, exhibit or report furnished in writing
---------------
by Borrower to the Lender in connection with the negotiation of this
Agreement contained any misstatement of fact as at the date of such
exhibit or report or as at the date when such information was given which
was material in the context of this Agreement or omitted to state a fact
as at such date which in any such case would be materially adverse to the
interests of the Lender under this Agreement.
Section 13. Covenants
13.1 Financial Statements. Throughout the life of this Agreement, Borrower
--------------------
shall provide the Lender with copies of its unaudited financial
statements for the first six (6) months of each fiscal year and its
audited financial statements for each fiscal year as they are available
but in any event not later than sixty (60) days after the close of each
fiscal period covered by an unaudited financial statement and not more
than ninety (90) days after the close of each fiscal period covered by an
audited financial statement and such other information respecting the
financial condition and operations of Borrower as the Lender may from
time to time request. Each financial statement provided hereunder shall
have been prepared in accordance with generally accepted accounting
principles in Korea consistently applied, and be accompanied by a
certificate executed by the principal financial officer of Borrower
stating (i) that as of the date of such financial statement Borrower is
in full compliance with all terms and conditions hereof, including
without limitation all financial covenants, and of any document executed
pursuant hereto, and (ii) that as of such date no Event of Default or
prospective Event of Default
16
<PAGE>
has occurred and is continuing.
13.2 Taxes. Borrower shall pay and discharge all taxes, assessments and
-----
governmental charges upon them or their respective assets promptly when due
and, in any event, prior to the date on which penalties may become attached
thereto.
13.3 Representations & Warranties. Borrower shall ensure that the
----------------------------
representations and warranties contained in this Agreement remain at all
times, during the terms of this Agreement as set forth Section 20.1 of this
Agreement, true and accurate by reference to the facts and circumstances
from time to time existing.
13.4 Continuing Governmental Authorizations. Borrower undertakes to maintain in
--------------------------------------
full force and effect all governmental authorizations referred to in
Section 12.4, if any, and to obtain or effect any new or additional
governmental authorizations, as may be required or advisable in respect of
the performance by Borrower of any of the terms and conditions of this
Agreement.
13.5 Maintenance and Continuity of Business. (a) Borrower shall maintain its
--------------------------------------
corporate existences in good standing and in compliance with all applicable
laws and regulations, and Borrower shall maintain the present character of
its business.
(b) Borrower shall maintain insurance on and in relation to its
businesses, properties and assets with reputable underwriters or
insurance companies against such risks and in such amount as are
customary for businesses of a like nature in the jurisdiction in which
such properties and assets are located or in which such businesses are
conducted.
(c) Borrower shall not, except with the prior written consent of the
Lender, (i) merge or consolidate with any other corporation or (ii)
purchase or otherwise acquire all or substantially all of the assets
of any other corporation or (iii) sell, lease, transfer or otherwise
dispose of all or any material portion of its property or assets,
whether by a single transaction or by a number of transactions whether
related or not. Lender's consent shall not be unreasonably withheld
and shall be provided within 10 Banking Days from the date Borrower
provided the Lender with all reasonably necessary information
requested by the Lender so as to give such consent.
13.6 Notice. As soon as possible but in any event within seven (7) days after
------
occurrence, Borrower shall give written notice to the Lender of any Event
of Default or prospective Event of Default, or any litigation,
administrative proceeding or arbitration referred to in Section 12.12, and
of any other matter which has resulted or might result in a material
adverse change in Borrower's operations or financial condition or affect
Borrower's ability to pay, when due, any amounts due under this Agreement.
13.7 Encumbrances. Borrower shall not, except with the prior written consent of
------------
the Lender, permit any loan, debt, guarantee or other obligation
constituting indebtedness of Borrower or any other person to be secured by
any Encumbrance on the Senan Building.
13.8 Financial Covenants. The Borrower shall ensure that, at all times during
-------------------
the period starting from the first half of the Borrower's fiscal year of
2003 until the expiration of
17
<PAGE>
the term of this Agreement, (a) the ratio of EBITDA to interest expenses
(incurred in respect of the Indebtedness for Borrowed Money) shall be
equal or greater than 2.0; and (b) the ratio of Indebtedness for Borrowed
Money of the Borrower to EBITDA shall be equal or less than 4.0. The
financial ratios in (a) and (b) shall be calculated on the basis of semi-
annual unaudited financial statements and annual audited financial
statements as submitted by the Borrower pursuant to Section 13.1.;
provided, however, to the extent that no other Event of Default has
occurred and is concurrently existing, the Lender shall be entitled to
take actions under Section 14.2 only from the third anniversary of the
date of the Drawdown even though the Borrower fails to meet either of the
above financial ratios for the first half of the Borrower's fiscal year of
2003.
13.9 Accounts. During the term of this Agreement, the Borrower shall open and
--------
maintain a revenue account with the Lender and ensure that the majority of
the Borrower's servicing fees to be received in consideration for the
Borrower's provision of services to its customers after the Funding Date
are deposited into such revenue account; provided that terms received by
the Borrower from the Lender are comparable to prevailing market rates.
Further, in the event that a need to deposit any surplus cash with a
financial institution in Korea arises at any time during the term of this
Agreement, the Borrower shall deposit such cash in the deposit/savings
account established with the Lender.
13.10 Use of Facility. Borrower shall use the proceeds of the Facility
---------------
exclusively for the purposes specified in Section 2.2.
13.11 Security Interest. Borrower shall maintain Kun-Mortgages under Kun-
-----------------
Mortgage Agreement I and Kun-Mortgage Agreement II in full force and
effect.
13.12 Insurance.
----------
(a) During the term of this Agreement, the Borrower shall (i) maintain
the Insurance Policies in full force and effect in accordance with
its obligations hereunder; (ii) provide to the Lender evidence that
all Insurance Policies are in full force and effect; (iii) perform
all of its obligations under the terms of the Insurance Policies; and
(iv) notify the Lender of any material change intended to be made by
the Borrower to any of the Insurance Polices and not to make any
material alteration to any Insurance Policies without the prior
written consent of the Lender.
(b) The Borrower shall use reasonable efforts to protect its interests
and rights in, and the Lender's interests and rights in, the
Insurance Policies and any proceeds received therefrom.
(c) The Borrower shall notify the Lender upon the occurrence of any event
that is likely to give rise to a claim under any Insurance Policies.
(d) The Borrower shall not, without the prior written consent of the
Lender, settle, compromise or abandon any claim under any of the
Insurance Policies.
(e) In the event that the Borrower fails to pay any premium when due, the
Lender,
18
<PAGE>
on behalf of the Borrower, may, but shall not be obligated to, pay
any premium or other amounts payable in respect of the Insurance
Policies or effect any insurance required to be maintained pursuant
to this Agreement or the Kun-Mortgage Agreements and the Borrower
will on demand pay to the Lender the amount of any payment made in
connection with the provisions of this Agreement, together with
interest on such amount at the Default Interest Rate for the period
beginning on the date on which the Lender made such payment up to the
date of receipt of the amount of such payment from the Borrower.
13.13 Further Documents. Borrower shall furnish the Lender with all such other
-----------------
documents and instruments and do all such other acts and things as the
Lender may require to carry out the transactions contemplated herein or in
the documents to be delivered hereunder.
Section 14. Events of Default
14.1 Events of Default. Each of the following events or occurrences shall
-----------------
constitute an Event of Default under this Agreement:
(a) Borrower fails to pay, within three (3) business days, when due any
sum payable under this Agreement when due or otherwise in accordance
with the provisions of this Agreement.
(b) Any representation, warranty or statement made or deemed to be made
by Borrower in this Agreement, Kun-Mortgage Agreements or in any
document executed hereunder or by Guarantor in the Guaranty proves to
have been incorrect or misleading in any respect considered by the
Lender to be material.
(c) Borrower or Guarantor fails duly and punctually to perform or observe
any obligation or covenant made by it in this Agreement, Kun-Mortgage
Agreements or the Guaranty or any other document executed hereunder
or thereunder and as a result thereof it might reasonably be
considered by the Lender that the ability of Borrower or Guarantor to
promptly comply with their respective obligations under this
Agreement, Kun-Mortgage Agreements or the Guaranty is materially
adversely affected thereby.
(d) Borrower or Guarantor fails to perform or observe any obligation or
covenant contained in this Agreement or the Guaranty other than as
referred to in paragraphs (a), (b) and (c) above and such failure is
not remediable or, if remediable, continues for a period of thirty
(30) days after receipt by Borrower or Guarantor of notice of such
failure from the Lender.
(e) Borrower or Guarantor fails to discharge when due any Indebtedness
for Borrowed Money or to honor any guarantee of any Indebtedness for
Borrowed Money; provided, however, that non-payment by Borrower or
Guarantor to honor any guarantee or any Indebtedness for Borrowed
Money is not the result of a bonafide dispute between parties, or
there occurs any event of default (however so described) under any
other agreement pursuant to which any other
19
<PAGE>
indebtedness or guarantee of Borrower or Guarantor is created,
secured or evidenced, if the effect of such failure or occurrence is
to cause or permit such indebtedness or guarantee to become or to be
declared due prior to its normal maturity.
(f) Any change occurs in the financial or other condition of Borrower or
Guarantor which may reasonably be considered by the Lender to
materially adversely affect the ability of Borrower or Guarantor to
comply with all or any of their respective obligations under this
Agreement, Kun-Mortgage Agreements or the Guaranty.
(g) Borrower or Guarantor becomes insolvent or commits or permits any act
of bankruptcy, which term shall include (i) the filing of a petition
in any bankruptcy, reorganization, winding-up or liquidation
proceeding or other proceeding analogous in purpose or effect, (ii)
the failure by Borrower or Guarantor to have any such petition filed
by another party discharged within thirty (30) days, (iii) the
application for or consent to the appointment of a receiver or
trustee for the bankruptcy, reorganization, winding-up or liquidation
of Borrower or Guarantor, (iv) the making by Borrower or Guarantor of
an assignment for the benefit of, or any composition or arrangement
with, its creditors, (v) the admission in writing by Borrower or
Guarantor of its inability to pay its debts, (vi) the passing of a
resolution by Borrower or Guarantor approving any reorganization,
winding-up or liquidation of Borrower or Guarantor, or of a
substantial portion of its properties or assets, (vii) the entry of
any court order or judgment confirming the bankruptcy or insolvency
of Borrower or Guarantor, or approving any reorganization, winding-up
or liquidation of Borrower or Guarantor or of a substantial portion
of its properties or assets, (viii) any creditor of Borrower,
Guarantor exercises a contractual right to assume the financial
management of Borrower or Guarantor, or (ix) Borrower or Guarantor is
unable to pay its debts, stops, suspends or threatens to stop or
suspend payment of all or a material part of (or of a particular type
of) its indebtedness, begins negotiations or takes any other step
with a view to the deferral, rescheduling or other readjustment of
all of (or all of a particular type of) its indebtedness (or of any
part which it will or might otherwise be unable to pay when due).
(h) A writ of attachment or execution or similar process is issued
against a substantial part of the assets of Borrower or Guarantor
which remains undismissed, unbonded or undischarged for a period of
thirty (30) days.
(i) Borrower or Guarantor, without the prior written consent of the
Lender, ceases its operations or sells or otherwise disposes of all
or a substantial part of its assets (whether by a single transaction
or a series of transactions), or Borrower or Guarantor decides to
cease its operations or to sell or otherwise dispose of, or any
governmental or other authority expropriates or nationalizes or
threatens to expropriate or nationalize, all or a substantial part of
its assets.
(j) This Agreement, the Guaranty or any provision hereof or thereof
ceases for any reason to be in full force and effect or is terminated
or jeopardized or becomes invalid or unenforceable or if there is any
dispute regarding the validity or
20
<PAGE>
enforceability of the same in each case in a manner which, in the
opinion of the Lender, might materially and adversely affect the
interests of the Lender hereunder, or if there is any purported
termination or repudiation of the same.
(k) Any governmental authorization granted or required in connection with
this Agreement, Kun-Mortgage Agreements or the Guaranty is terminated
or revoked or is modified in any manner unacceptable to the Lender.
(l) Any of Kun-Mortgage I and/or Kun-Mortgage II is imperiled or
jeopardized in any way or any of Kun-Mortgage Agreement I and/or Kun-
Mortgage Agreement II ceases to constitute the legal, valid and
binding obligations of the Borrower.
(m) Assignment of Insurance ceases to constitute the legal, valid and
binding obligations of the Borrower.
(n) Any material part of the Insurance Policies is or becomes void or
unenforceable for any reason and is not renewed within seven (7) days
of such Insurance Policies becoming void.
(o) Borrower, without the prior written consent of the Lender, voluntarily
or involuntarily merges or consolidates with any other entity.
(p) It becomes impossible or unlawful for Borrower or Guarantor to perform
or comply with any one or more of their respective obligations under
this Agreement, Kun-Mortgage Agreements, or the Guaranty.
(q) Any event occurs which in the reasonable opinion of the Lender does or
will prevent or materially imperil fulfillment by Borrower or
Guarantor of their respective obligations under this Agreement, Kun-
Mortgage Agreements or the Guaranty.
14.2 Consequences of Default. (a) If an Event of Default shall occur and be
-----------------------
continuing, the Lender may, at the same or different times, declare the
Loan and accrued interest payable hereunder to be, whereupon they shall
become, immediately due and payable without demand, notice or other legal
formality of any kind, all of which are expressly waived by Borrower;
provided, however, that upon the occurrence of any event described in
-------- -------
Section 14.1(g), all sums then owing by Borrower hereunder shall, without
any declaration or other action by the Lender, automatically be immediately
due and payable, and the Facility shall be immediately cancelled without
demand, notice or other legal formality of any kind, all of which are
expressly waived by Borrower.
(b) In addition to the actions permitted in paragraph (a) above, the
Lender may take any action, exercise any other right or pursue any
other remedy conferred upon it by this Agreement and/or any applicable
law or regulation or otherwise as a consequence of any Event of
Default.
14.3 No Waiver. No waiver of any Event of Default shall constitute a waiver of
---------
any other or any succeeding Event of Default except to the extent provided
in such waiver.
21
<PAGE>
Section 15. Default Interest
15.1 Non-Payment. (a) If Borrower fails to pay any sum payable under this
-----------
Agreement when due, the Borrower shall pay interest accrued on such sum
from and including the due date to the date of actual payment (as well
after as before judgment) at the then prevailing default rate published by
the Lender.
(b) The default interest contemplated under this Section 15 shall be
calculated on the basis of the actual number of days elapsed and a 365-day
year.
15.2 Other Events of Default. If an Event of Default other than that described
------------------------
in Section 13.1(a) shall occur and be continuing, Borrower shall pay to the
Lender on demand for the account of each Lender interest on the amount of
the Loan then outstanding from and including the date of such default to
and including the date the default is cured (after as well as before
judgment) at the rate which is two percent (2%) per annum above the
--- -----
Interest Rate then applicable to the Loan.
Section 16. Indemnities
16.1 General Indemnity. Borrower shall indemnify the Lender against all losses,
-----------------
liabilities, damages, costs and expenses which the Lender may incur as a
consequence of any Event of Default or any other breach by Borrower of any
of its obligations under this Agreement or otherwise in connection with
this Agreement (including any loss or expense incurred in liquidating or
redeploying funds acquired to maintain the Lender's Participation in the
Loan and any interest or fees incurred in funding any unpaid sum, but
taking into account any interest paid by Borrower in respect of such unpaid
sum under Section 15).
16.2 Currency Indemnity. Korean Won shall be the currency of account and of
------------------
payment in respect of sums payable under this Agreement. If an amount is
received in another currency, pursuant to a judgment or order in the
liquidation of Borrower or otherwise, Borrower's obligations under this
Agreement shall be discharged only to the extent that the Lender may
purchase Korean Won with such other currency in accordance with normal
banking procedures upon receipt of such amount. If the amount in Korean Won
which may be so purchased, after deducting any costs of exchange and any
other related costs, is less than the relevant sum payable under this
Agreement, Borrower shall indemnify the Lender against the shortfall. This
indemnity shall be an obligation of Borrower independent of and in addition
to its other obligations under this Agreement and shall take effect
notwithstanding any time or other concession granted to Borrower or any
judgment or order being obtained or the filing of any claim in the
liquidation, dissolution or bankruptcy (or analogous process) of Borrower.
Section 17. Assignment
17.1 Borrower. Except with the prior written consent of the Lender, Borrower
--------
shall not assign or transfer any of its rights or obligations hereunder.
22
<PAGE>
17.2 Lender. The Lender may assign or transfer all or any part of its rights,
------
benefits and obligations hereunder; provided the assignee or transferee
agrees to be bound by all of the provisions of this Agreement, including
without limitation the confidentiality provisions of Section 20.8. Borrower
shall take any and all actions the Lender may reasonably require to perfect
and complete any such assignment or transfer, including without limitation
the giving of its consent thereto. Upon any assignment or transfer by the
Lender, the assignee or transferee shall be entitled, to the extent of the
interest assigned or transferred, to the benefit of the indemnities, tax
reimbursements and rights of set-off of the Lender pursuant to the
provisions of this Agreement as fully as if it were a party hereto. The
acts of the Lender or the failure of the Lender to act hereunder shall in
all circumstances be conclusive and binding on any transferee or assignee
of the Lender's interest hereunder.
17.3 Subparticipations. The Lender may at any time grant one or more
-----------------
subparticipations in its rights and/or obligations under this Agreement but
no other party hereto shall be concerned in any way with any
subparticipation so granted.
17.4 Disclosure. The Lender may disclose to a transferee, assignee or
----------
subparticipant or potential transferee, assignee or subparticipant, such
information about Borrower as the Lender shall consider appropriate;
provided, however, if such information includes any confidential
information about the Borrower, the Lender will cause recipient(s) thereof
to sign an appropriate non-disclosure agreement.
17.5 Limitations on Assignments. The Lender agrees that it will not, assign,
--------------------------
transfer or grant a subparticipation to a party (or to its Affiliate) whose
business is in direct competition with the business of the Borrower, except
with a prior written consent of the Borrower.
Section 18. Governing Law and Jurisdiction
18.1 Governing Law. This Agreement and the rights and obligations of the
-------------
parties hereunder shall be governed by and construed in accordance with the
laws of Korea.
18.2 Jurisdiction. Borrower agrees that any legal action or proceeding arising
------------
out of or relating to this Agreement may be brought in the Seoul District
Court in Seoul, Korea and irrevocably submits to the non-exclusive
jurisdiction of such court. The foregoing, however, shall not limit the
rights of the Lender to bring any legal action or proceeding or to obtain
execution of judgment in any other jurisdiction.
Section 19. Notices
19.1 Delivery. Each notice, demand or other communication to be given or made
--------
under this Agreement shall be in writing and delivered or sent to the
relevant party at its address or fax number set out below (or such other
address or telephone number or fax number as the addressee has by five (5)
days' prior written notice specified to the other party):
To Borrower: iAsiaWorks Korea Ltd.
BoRaMae DaeKyo Building, 6th Floor, 729-21, Bongchon-Dong,
Kwanak-Gu, Seoul 151-706 Korea
23
<PAGE>
Fax No.: 822-3284-7700
Attention: Yun Ho Rhee
and to Lender: Korea First Bank, Yangjae-Dong Branch
Hae Dong Building, 1st Floor, 1362-14, Seocho-Dong,
Seocho-Gu, Seoul 137-070 Korea
Fax No.: 822-3474-6864
Attention: Yeon Soon Lee
with a copy to: Korea First Bank
100, Kongypung-Dong, chongro-Gu, Seoul 110-702 Korea
Fax No.: 822-3702-4945
Attention: Suk Jin Chung
19.2 Deemed Delivery. Any notice, demand or other communication so addressed to
---------------
the relevant party shall be deemed to have been delivered (i) if given or
made by letter, when actually delivered to the relevant address, and (ii)
if given or made by fax, when dispatched with a simultaneous confirmation
of transmission stating that the correct number of pages has been sent and
that such transmission is error free (or equivalent), provided that, if
such day is not a working day in the place to which it is sent, such
notice, demand or other communication shall be deemed delivered on the next
following working day at such place.
19.3 Language. All notices, demands or other communications hereunder and any
--------
other documents required to be delivered hereunder shall be in either (i)
the Korean language or English language or (ii) accompanied by a certified
translation into the Korean language.
Section 20. Miscellaneous
20.1 Term. The term of this Agreement shall commence on the date first set
----
forth above and shall end on the date of termination of the Facility or, if
later, upon payment in full of all principal, interest and other sums
payable by Borrower hereunder. The representations and warranties of
Borrower set forth herein shall survive the making of the Loan and the
indemnities of Borrower contained herein shall survive repayment of the
Loan.
20.2 Entire Agreement. This Agreement and the documents referred to herein
----------------
constitute the entire obligations of the parties hereto and supersede any
prior expressions of intent or understandings with respect to this
transaction.
20.3 Amendment. Any amendment or waiver of any provision of this Agreement and
---------
any waiver of any default under this Agreement shall only be effective if
made in writing and signed by or on behalf of the party against whom the
amendment or waiver is asserted. For these purposes, the written approval
of the Lender against whom an amendment or waiver is asserted is required
where that amendment or waiver relates to:
24
<PAGE>
(a) an increase of the Facility or of any Lender's Commitment or the
length of the Availability Period or the amount or currency of or the
due date for any payment of principal or interest on the Loan;
(b) a reduction in the rate or rates of interest or any fees or other
amounts payable to the Lender hereunder; or
(c) any voluntary or mandatory prepayment.
20.4 Waiver; Cumulative Rights. The failure or delay of the Lender to require
-------------------------
performance by Borrower of any provision of this Agreement shall not affect
its right to require performance of such provision nor shall any single or
partial exercise of the same preclude any further exercise thereof or the
exercise of any other right, power or remedy. Each and every right, power
and remedy granted to the Lender hereunder or by law shall be cumulative
and may be exercised in part or in whole from time to time.
20.5 Severability. If any one or more of the provisions contained in this
------------
Agreement or any document executed in connection herewith shall be invalid,
illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
20.6 Set-Off. To the extent permitted by law, the Lender may at any time set-
-------
off or apply any and all deposits by Borrower with the Lender at its head
office or at any branch, subsidiary or affiliate of its head office
(whether general or special, time or demand, matured or unmatured) in
reduction of amounts due to it hereunder; provided, however, that the
Lender shall immediately notify the Borrower of such set-off or
application.
20.7 Counterparts. This Agreement may be signed in any number of counterparts.
------------
Any single counterpart or a set of counterparts signed, in either case, by
all parties hereto shall constitute a full and original agreement for all
purposes.
20.8 Confidentiality. In handling any confidential information, Lender shall
----------------
exercise the same degree of care that it exercises with respect to its own
proprietary information of the same types to maintain the confidentiality
of any non-public information thereby received or received pursuant to this
Agreement, except that disclosure of such information may be made (i) as
required by law, regulations, rule or order, subpoena, judicial order or
similar order, (ii) as may be required in connection with the examination,
audit or similar investigation of the Lender (iii) to any actual or
potential assignee or transferee or subparticipant pursuant to Section 17.4
and (iv) as the Lender may deem appropriate in connection with the exercise
of any remedies hereunder. Confidential information hereunder shall not
include information that is in the public domain.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized signatories as of the day and year first
written above.
25
<PAGE>
BORROWER
--------
iAsiaWorks Korea Ltd.
By /s/ Nick Pianim
--------------------------------
Name: Nick Pianim
Title: Vice President of Global Business Development
LENDER
------
KOREA FIRST BANK, YANGJAE-DONG BRANCH
By /s/ signature illegible
--------------------------------
Name:
Title:
26
<PAGE>
SCHEDULE I
----------
CONDITIONS PRECEDENT DOCUMENTS
1. The Guaranty duly executed by Guarantor.
2. Certified copies of appropriate consents, licenses, approvals or
authorizations of and filings or registrations with such governmental
authorities in any jurisdiction, including Korea, as may be necessary or
advisable to authorize the borrowings under the Loan Agreement and the
execution and performance of the Loan Agreement and the Guaranty and to
permit payment in Won of all payments at the times, at the places and in
the manner provided for under the Loan Agreement and the Guaranty,
including without limitation, the approval of Borrower's designated bank in
respect of the Guaranty.
3. In relation to Borrower:
(a) certified copies of:
(i) the Articles of Incorporation;
(ii) the Commercial Registry extracts relating to Borrower;
(iii) the minutes of a meeting of the board of directors adopting
resolutions authorizing the execution, delivery and performance
of the Loan Agreement;
(iv) a power of attorney issued by the Representative Director of
the Borrower in favor of the persons authorized to sign the
documents in connection with this transaction, in the event a
person other than the Representative Director is authorized to
sigh such documents;
(v) the seal certificate for the Representative Director
participating in the meeting referred to in (iii) above; and
(vi) a copy of notice of Assignment of Insurance substantially in
the form as attached to the Assignment of Insurance given to
the insures.
(b) a certificate of the Representative Director certifying (x) the
documents referred to in paragraph 3(a) above, (y) the incumbency and
specimen signature and/or seal impression of the person authorized to
sign the documents as referred to in paragraph 3(a)(iii) above, and
(z) that the seal impressions set out beside the names of each
director listed in the minutes of the meeting referred to in paragraph
3(a)(iii) above are the respective genuine seal impressions of each
such director.
(c) An evidence (in the form of certificates of insurance) that the
Insurance Policies are in full force and effect.
(d) A full set of all registration documents necessary for filing the
application for
<PAGE>
registration of the Kun-Mortgage I and Kun-Mortgage II with the
competent Real Estate Registry Offices, in form and substance
satisfactory to the Lender and its legal counsel.
4. In relation to Guarantor:
(a) certified copies of:
(i) the Certificate of Incorporation and By-laws (or other
constitutive documents) of Guarantor;
(ii) a good standing certificate issued by the Secretary of the
State of Delaware relating to Guarantor; and
(iii) the minutes of a meeting of the board of directors of Guarantor
adopting resolutions authorizing the execution and performance
of the Guaranty and further authorizing the authority of the
person signing the Guaranty and any other documents to be
executed by Guarantor in relation thereto, and any power of
attorney issued in connection therewith.
(b) a certificate of the Secretary of Guarantor certifying (i) the
documents referred to in paragraph 4(a) above and (ii) the incumbency
and specimen signature(s) of the person(s) authorized to sign the
Guaranty and any other documents to be executed by Guarantor in
relation thereto.
5. A letter from the Borrower accepting its appointment as process agent for
the Guarantor, substantially in the form of Exhibit C hereto.
6. Favorable legal opinions of (i) Korean counsel to the Borrower, and (ii) US
counsel to Guarantor, substantially in the form of Exhibits D-1 and D-2
hereto in form and substance satisfactory to the Lender.
7. A copy of purchase and sale agreement regarding the Senan Building entered
into by and between the Senan Building Owners and the Borrower.
8. Such other documents relating to any of the matters contemplated under the
Loan Agreement and the Guaranty as the Lender may request.
II-2
<PAGE>
EXHIBIT A
-------
FORM OF NOTICE OF DRAWDOWN
[date]
To: Korea First Bank
Re: KRW14,000,000,000 Loan Agreement dated October [_], 2000
----------------------------------------------------------
Dear Sirs:
We refer to the above Loan Agreement, and hereby give notice that we wish to
make a Drawdown under the Facility on [ ], 2000 in the amount of KRW[ ].
The proceeds of the Drawdown are to be used exclusively for the purposes
specified in the Loan Agreement.
We hereby irrevocably and unconditionally authorize yourselves to transfer the
proceeds of the Drawdown to the following accounts:
[details of accounts]
We hereby certify to you that as of the date of this notice:
(a) the representations and warranties set out in Section 11 of the Loan
Agreement, repeated with reference to the facts and circumstances
subsisting at the date of this notice, remain true and correct;
(b) no Event of Default or prospective Event of Default has occurred which
remains unwaived or unremedied or would result from the making of the
Drawdown; and
(c) all applicable conditions precedent specified in Section 3 of the Loan
Agreement have been met.
Terms defined in the Loan Agreement shall have the same meanings when used in
this notice.
For and on behalf of
iAsiaWorks Korea Ltd.
By /s/ Nick Pianim
----------------------------
Name: Nick Pianim
Title: Vice President of Global Business Development
<PAGE>
EXHIBIT B
---------
FORM OF GUARANTY
THIS GUARANTY is made on this 10th day of October, 2000
BY:
iAsiaWorks, Inc., a corporation organized and existing under the laws of the
State of [Delaware] with its registered head office at 2000 Alameda de las
Pulgas, Suite 125, San Mateo, California 94403 U.S.A. ("Guarantor").
IN FAVOUR OF:
(1) the Lender referred to below.
WHEREAS:
(A) By a loan agreement (the "Loan Agreement") dated [ ], 2000 and made
between (1) iAsiaWorks Korea Ltd., as borrower ("Borrower") and (2) Korea
First Bank, Yangjae-dong Branch as lender ("Lender"), the Lender have
agreed to make available to Borrower a term loan facility in an aggregate
principal amount of up to KRW14,000,000,000 (the "Facility") upon the terms
set out therein.
(B) It is a condition precedent to the Lender making the Facility available to
Borrower that Guarantor enter into this Guaranty.
NOW THIS GUARANTY WITNESSES as follows:
Section 1. Interpretation
--------------
In this Guaranty, unless the context requires otherwise:
(a) terms and expressions defined in the Loan Agreement shall have the same
meanings when used in this Guaranty; and
(b) "Secured Indebtedness" means all and any sums (whether principal, interest,
fees or otherwise) which are or at any time may become payable by Borrower
under the Loan Agreement and all other monies hereby secured.
Section 2. Guaranty
--------
2.1 In consideration of the Lender granting the Facility to Borrower, Guarantor
irrevocably and unconditionally guarantees, as primary obligor and not
merely as surety to the Lender, jointly and severally with Borrower, the
due and punctual payment of the
<PAGE>
Secured Indebtedness when and as the same shall become due and payable,
whether at stated maturity, upon acceleration, extension or otherwise,
according to the terms of the Loan Agreement.
2.2 Guarantor agrees to pay to the Lender any amount of the Secured
Indebtedness in the currency or respective currencies in which the same is
payable under the terms of the Loan Agreement at any time on demand against
the Lender's invoice accompanied by the Lender's simple certificate stating
that Borrower has failed to pay the same pursuant to the Loan Agreement,
which invoice shall be final and conclusive as to the amount owed absent
manifest error.
2.3 This Guaranty shall be a continuing guaranty and shall remain in full force
and effect until the Secured Indebtedness has been paid in full and shall
not be (or be construed as to be) discharged by any intermediate discharge
or payment of or on account of the Secured Indebtedness or any settlement
of accounts between the Lender and Borrower or anyone else.
Section 3. Indemnity
---------
Without prejudice to the guaranty contained in Section 2, Guarantor
unconditionally and irrevocably undertakes, as a separate, additional and
continuing obligation and as a primary obligor, to indemnify the Lender from
time to time on demand against all losses, liabilities, damages, costs and
expenses whatsoever arising out of any failure by Borrower to make due and
punctual payment of the Secured Indebtedness or in the due and punctual
performance and observance of all other obligations under the Loan Agreement.
This indemnity shall remain in effect notwithstanding that the guaranty under
Section 2 ceases to be valid or enforceable against Guarantor for any reason
whatsoever.
Section 4. Preservation of Rights
----------------------
4.1 The obligations of Guarantor herein contained shall be in addition to and
not in substitution for any other guaranty or security which the Lender may
now or hereafter hold in respect of the Secured Indebtedness. The Lender
may change or release any such guaranty or security and such shall have no
effect whatsoever on this Guaranty.
4.2 Neither the obligations of Guarantor hereunder nor the rights, powers and
remedies conferred upon the Lender by this Guaranty or by law shall be
discharged, impaired or otherwise affected by:
(a) the winding-up, dissolution, administration or reorganization of
Borrower or any change in its status, function, control or ownership;
(b) any of the obligations of Borrower under the Loan Agreement being or
becoming illegal, invalid or unenforceable in any respect;
(c) any variation or amendment to the terms of the Loan Agreement or any
other document referred to therein;
B-2
<PAGE>
(d) the granting of any time or indulgence to Borrower or any other
person;
(e) the invalidity or unenforceability of any obligation or liability of
Borrower under the Loan Agreement;
(f) any invalidity or irregularity in the execution of the Loan Agreement
or this Guaranty;
(g) any deficiency in the powers of Borrower to enter into or perform any
of its obligations under the Loan Agreement or any irregularity in the
exercise thereof or any lack of authority by any person purporting to
act on behalf of Borrower;
(h) any other guarantee or security which the Lender may now or hereafter
hold in respect of the Secured Indebtedness being or becoming wholly
or partly void, voidable or unenforceable;
(i) any waiver, exercise, omission to exercise, compromise, renewal or
release of any rights against Borrower or any other person or any
compromise, arrangement or settlement with any of the same;
(j) any act, omission, event or circumstance which would or may but for
this provision operate to prejudice, affect or discharge this Guaranty
or the obligations of Guarantor hereunder; or
(k) any dispute between Borrower and any person in relation to the Loan
Agreement and any amount payable thereunder.
4.3 The Lender shall not be obliged before exercising any of the rights, powers
or remedies conferred upon it under this Guaranty or by law:
(a) to make any demand of Borrower;
(b) to take any action or obtain judgement in any court against Borrower;
(c) to make or file any claim or proof in a winding-up or dissolution of
Borrower; or
(d) to enforce or seek to enforce any other security taken in respect of
the Secured Indebtedness.
4.4 Guarantor represents to and undertakes with the Lender that it has not
taken and will not take any security in respect of its liability under this
Guaranty whether from Borrower or any other person. So long as any sum
remains owing by Borrower to the Lender, Guarantor shall not exercise any
right of subrogation or any other rights of a surety or enforce any
security or other right or claim against Borrower (whether in respect of
its liability under this Guaranty or otherwise) or any other person who has
guaranteed or given any security in respect of the Secured Indebtedness or
claim in the insolvency or liquidation of Borrower or any such other person
in competition with the Lender. If Guarantor receives any payment or
benefit in breach of this Section, it shall hold the
B-3
<PAGE>
same upon trust for the Lender as a continuing security for the Secured
Indebtedness.
Section 5. Costs, Charges and Expenses
---------------------------
Guarantor shall from time to time forthwith on demand pay to or reimburse the
Lender for all costs, charges and expenses (including legal and other fees on a
full indemnity basis) incurred by the Lender in connection with the preparation
and execution of this Guaranty and in exercising any of its rights or powers
hereunder or in suing for or seeking to recover any sums due hereunder or
otherwise preserving or enforcing its rights hereunder or in defending any
claims brought against it in respect of this Guaranty or in releasing this
Guaranty upon payment of the Secured Indebtedness.
Section 6. Taxes and other Deductions
--------------------------
6.1 All sums payable by Guarantor under this Guaranty shall be paid in full
without set-off or counterclaim or any restriction or condition and free
and clear of any tax or other deductions or withholdings of any nature.
6.2 If Guarantor or any other person is required by any law or regulation to
make any deduction or withholding (on account of tax) from any payment for
the account of the Lender, Guarantor shall, together with such payment, pay
such additional amount as will ensure that the Lender receives (free and
clear of any tax) the full amount which it would have received if no such
deduction or withholding had been required. Guarantor shall promptly
forward to the Lender copies of official receipts or other evidence showing
that the full amount of any such deduction or withholding has been paid
over to the relevant taxation or other authority.
Section 7. Currency Indemnity
------------------
If an amount due to the Lender from Guarantor in one currency (the "first
currency") is received by the Lender in another currency (the "second
currency"), Guarantor's obligations in respect of such amount shall only be
discharged to the extent that the Lender may purchase the first currency with
the second currency in accordance with normal banking procedures. If the amount
of the first currency which may be so purchased (after deducting any costs of
exchange and any other related costs) is less than the amount so due, Guarantor
shall indemnify the Lender against the shortfall.
Section 8. Representations and Warranties
------------------------------
Guarantor represents and warrants to the Lender as follows:
(a) Guarantor is a corporation duly organized and validly existing under the
laws of Delaware. Guarantor is qualified or registered to do business in
every jurisdiction where the failure to so qualify or register could have a
material adverse effect on Guarantor.
B-4
<PAGE>
(b) Guarantor has full legal right, power and authority to carry on its present
business, to own its properties and assets, to incur the indebtedness and
other obligations provided for in this Guaranty, to execute and deliver
this Guaranty and all other documents hereunder and to perform and observe
the terms and conditions hereof and thereof.
(c) Guarantor has taken all appropriate and necessary corporate and legal
action to authorize the execution and delivery of this Guaranty and all
other documents hereunder and to authorize the performance and observance
of the terms and conditions hereof and thereof.
(d) Guarantor has obtained or effected all authorizations necessary for the
valid execution, delivery and performance of this Guaranty and such
authorizations are in full force and effect or, by the date on which the
Notice of Drawdown is given, such authorizations will have been obtained
and be in full force and effect and there has been no default under the
conditions of any of the same.
(e) This Guaranty constitutes the legal, valid and binding obligations of
Guarantor enforceable in accordance with its terms. The execution, delivery
and performance of the terms of this Guaranty or the payment by Guarantor
of all amounts due on the dates and in the currency provided for herein (i)
will not violate or contravene any provision of law or regulation which is
applicable to Guarantor; (ii) will not conflict with the Articles of
Incorporation or By-laws (or comparable constituent documents) of
Guarantor; (iii) will not conflict with or result in the breach of any
provision of, or in the imposition of any Encumbrance under, any agreement
or instrument to which Guarantor is a party or by which it or any of its
properties or assets is bound; and (iv) will not constitute a default or an
event that, with the giving of notice or the passing of time, or both,
would constitute a default under any such agreement or instrument.
(f) Guarantor is not in default under any agreement or obligation applicable to
it or its assets or revenues, the consequences of which default could
materially and adversely affect its business or financial condition or its
ability to perform its obligations under this Guaranty and no Event of
Default or prospective Event of Default has occurred.
(g) Guarantor is in full compliance with all applicable laws, regulations and
orders, whether or not having the force of law, including without
limitation, tax laws.
(h) This Guaranty is the direct, unconditional and general obligation of
Guarantor. Guarantor's obligations hereunder rank and will rank at least
pari passu in priority of payment and in all other respects with all other
---- -----
unsecured indebtedness of Guarantor except for those preferred by operation
of law.
(i) All registrations, recordings or filings required as a condition to the
legality, validity or enforceability of this Guaranty or any other document
to be executed and delivered pursuant to the terms of this Guaranty have
been made by Guarantor.
(j) The most recent audited financial statements of Guarantor for the time
being (including the income statement, cash flow statement and balance
sheet) were prepared in accordance with all applicable laws and regulations
of U.S.A and generally accepted accounting principles and policies
consistently applied and show a true and fair view of
B-5
<PAGE>
the financial position of Guarantor as at the end of, and the results of
its operations for, the financial period to which they relate and, as at
the end of such period Guarantor did not have any significant liabilities
(contingent or otherwise) or any unrealized or anticipated losses which are
not disclosed by or reserved against in, such financial statements, and
there has been no material adverse change in the business or financial
condition of Guarantor since the date of such financial statements.
(k) As of the date of this Guaranty, no Encumbrance exists over all or any part
of the property, assets or revenues of Guarantor other than those disclosed
in the financial statements referred to in Section 8(j), except as set
forth in Schedule 1 attached hereto.
(l) No litigation, administrative proceeding or arbitration is presently
pending or threatened against Guarantor or its assets or revenues which, if
adversely determined, could have a material effect on the ability of
Guarantor to perform its obligations under this Guaranty.
(m) Guarantor is generally subject to civil and commercial law and to legal
proceedings and neither Guarantor nor any of its assets or revenues is
entitled to claim immunity or privilege (sovereign or otherwise) from any
set-off, judgment, execution, attachment or other legal process.
Section 9. Covenants
---------
Guarantor undertakes and agrees with the Lender as follows:
(a) Throughout the life of this Guaranty, Guarantor shall provide the Lender
with copies of its unaudited financial statements for the first six (6)
months of each fiscal year and its audited financial statements for each
fiscal year as they are available but in any event not later than sixty
(60) days after the close of each fiscal period covered by an unaudited
financial statement and not more than ninety (90) days after the close of
each fiscal period covered by an audited financial statement and such other
information respecting the financial condition and operations of Guarantor
as the Lender may from time to time reasonably request as soon as
practicable (but in the case of the Guarantor's annual report to
stockholders within 90 days after the end of each fiscal year of the
Guarantor, and in the case of the Guarantor's quarterly reports to
stockholders within 60 days after the end of such fiscal quarter of the
Guarantor): (i) at the end of each fiscal year, one copy of its annual
report to stockholders (the "Annual Report", which Annual Report shall
contain financial statements audited in accordance with generally accepted
accounting principles in the U.S.A., consistently applied) and, if not
included in the Annual Report, its annual report on Form 10-K, or (ii) at
the end of each fiscal quarter (not including the quarter which also marks
the end of the Guarantor's fiscal year), one copy of its quarterly report
on Form 10-Q . Upon the filing and delivery to Lender of each of either an
Annual Report or a quarterly report on Form 10-Q (each a "Report" and
collectively, the "Reports"), as applicable, the Guarantor shall provide
Lender a certificate executed by the principal financial officer of
Guarantor stating (i) that as of the date of such financial statement
Guarantor is in full compliance with all terms and conditions hereof,
including without limitation all financial covenants, and of any document
executed pursuant hereto, and (ii) that as of such date no Event of Default
or prospective Event of Default has occurred and is continuing. Each
financial statement provided hereunder shall have been prepared in
accordance with generally accepted accounting principles in U.S.A.
B-6
<PAGE>
consistently applied.
(b) Guarantor shall pay and discharge all taxes, assessments and governmental
charges upon it or its assets promptly when due and, in any event, prior to
the date on which penalties may become attached thereto, except to the
extent that such taxes, assessments and governmental charges are subject to
a bona fide dispute.
(c) Guarantor shall ensure that the representations and warranties set forth in
Sections 8(a)-(j), (l) and (m) in this Guaranty remain at all times true
and accurate by reference to the facts and circumstances from time to time
existing.
(d) Guarantor undertakes to obtain or effect any governmental authorizations as
may be required or advisable in respect of the performance by Guarantor or
Borrower of any of the terms and conditions of this Guaranty or, as the
case may be, the Loan Agreement.
(e) Guarantor shall maintain its corporate existence in compliance with all
applicable laws and regulations, and Guarantor shall maintain the present
character of its business.
(f) Guarantor shall maintain insurance on and in relation to its businesses,
properties and assets with reputable underwriters or insurance companies
against such risks and in such amount as are customary for businesses of a
like nature in the jurisdiction in which such properties and assets are
located or in which such businesses are conducted.
(g) Guarantor shall notify the Lender in advance if Guarantor merges or
consolidates with any other corporation and provide the Lender with such
information as the Lender may request in connection with such merger or
consolidation.
(h) As soon as possible but in any event within seven (7) days after
occurrence, Guarantor shall give written notice to the Lender of any Event
of Default or prospective Event of Default, or any litigation,
administrative proceeding or arbitration referred to in Section 8(l), and
of any other matter which has resulted or might result in a material
adverse change in Guarantor's operations or financial condition or affect
Guarantor's ability to pay, when due, any amounts due under this Guaranty.
(i) Guarantor shall furnish the Lender with all such other documents and
instruments and do all such other acts and things as the Lender may
reasonably require to carry out the transactions contemplated herein or in
the documents to be delivered hereunder.
Section 10. Assignment
----------
10.1 Guarantor shall not assign or transfer any of its rights or obligations
hereunder.
10.2 The Lender may at any time assign, transfer or grant subparticipations in
all or any part of the rights, benefits and obligations under the Loan
Agreement and this Guaranty pursuant to the terms of Section 17 of the Loan
Agreement, provided that such assignee or transferee agrees to be bound by
all of the provisions of this Guaranty, and Guarantor hereby irrevocably
consents to, and agrees to be bound by, such assignment or transfer.
B-7
<PAGE>
The Lender may make disclosures in accordance with, and Guarantor shall do
such acts and things as provided in, Section 17 of the Loan Agreement but
as if references to Borrower were references to Guarantor.
Section 11. Governing Law and Jurisdiction
------------------------------
11.1 This Guaranty shall be governed by and construed in accordance with the
laws of Korea.
11.2 Guarantor agrees that any legal action or proceeding arising out of or
relating to this Guaranty may be brought in the Seoul District Court in
Seoul, Korea and irrevocably submits to the non-exclusive jurisdiction of
such court. The foregoing, however, shall not limit the rights of the
Lender to bring any legal action or proceeding or to obtain execution of
judgment in any other jurisdiction. Guarantor irrevocably appoints
iAsiaWorks Korea Ltd. of [ ],Seoul, Korea as its agent to accept on its
behalf service of any and all process or other documents which may be
served in any action or proceedings in any Korean courts. If for any
reason the agent named above (or its successor) no longer serves as agent
of Guarantor for this purpose, Guarantor shall promptly appoint a successor
agent satisfactory to the Lender and notify the Lender thereof, provided
that until the Lender receives such notification, it shall be entitled to
treat the agent named above (or its said successor) as the agent of the
Guarantor for the purposes of this Section. Borrower agrees that any such
legal process shall be sufficiently served on it if delivered to such agent
for service at its address for the time being in Korea whether or not such
agent gives notice thereof to the Guarantor. Guarantor hereby irrevocably
and unconditionally authorizes such agent as well as the Lender to file
with any of such courts, in the name of Guarantor, a report regarding the
appointment by Borrower of its agent for service of process in Korea.
Section 12. Notices
-------
12.1 Each notice, demand or other communication to be given or made to Guarantor
under this Guaranty shall be in writing and delivered at its address or
telephone number or fax number set out below (or such other address or
telephone number or fax number as Guarantor has by five (5) days' prior
written notice specified to the Lender):
To Guarantor:
2000 Alameda de las Pulgas, Suite 125, San Mateo,
California 94403 U.S.A.
Fax No.: 650 524 1799
Attention: Sandhya Nath and Andrew Gidney
12.2 Any notice, demand or other communication so addressed shall be deemed to
have been delivered (i) if given or made by letter, when actually delivered
to the relevant address, and (ii) if given or made by fax, when dispatched
with a simultaneous confirmation of transmission stating that the correct
number of pages has been sent and that such transmission is error free (or
equivalent).
12.3 Any notice, demand or other communication from Guarantor to the Lender
shall be
B-8
<PAGE>
given or made in accordance with Section 19 of the Loan Agreement.
Section 13. Miscellaneous
-------------
13.1 To the extent permitted by law, the Lender may at any time set off or apply
any and all deposits by Guarantor with the Lender at its head office or at
any branch, subsidiary or affiliate of its head office (whether general or
special, time or demand, matured or unmatured) in reduction of amounts due
to it hereunder; provided, however, that the Lender shall immediately
notify the Guarantor of such set-off or application.
13.2 The Lender may place and keep any monies received by virtue of this
Guaranty (whether before or after the insolvency or liquidation of
Guarantor or Borrower) to the credit of a suspense account for so long as
it may think fit in order to preserve its rights to sue or prove for the
whole amount of its claims against Guarantor, Borrower or any other person.
13.3 The failure or delay of the Lender to require performance by Guarantor of
any provision of this Guaranty shall not affect its right to require
performance of such provision nor shall any single or partial exercise of
the same preclude any further exercise thereof or the exercise of any other
right, power or remedy. Each and every right, power and remedy granted to
the Lender hereunder or by law shall be cumulative and may be exercised in
part or in whole from time to time.
13.4 If any one or more of the provisions contained in this Guaranty shall be
invalid, illegal or unenforceable in any respect under any applicable law,
the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
13.5 Any amendment or waiver of any provision of this Guaranty and any waiver of
any default under this Guaranty shall only be effective if made in writing
and signed by the Lender.
B-9
<PAGE>
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed by its
duly authorized representative as of the day and year first written above.
GUARANTOR
---------
iAsiaWorks, Inc.
By /s/ Nick Pianim
--------------------------
Name: Nick Pianim
Title: Vice President of Global Business Development
B-10
<PAGE>
EXHIBIT C
FORM OF PROCESS AGENT APPOINTMENT LETTER
October [_], 2000
iAsiaWorks Korea Ltd.,
BoRaMae DaeKyo Building, 6th Floor
729-21, Bongchon-dong, Kwanak-Gu
Seoul, Korea 151-706
Re: Guaranty for KRW 14,000,000,000 Loan Agreement Dated October [_], 2000
----------------------------------------------------------------------
We, the undersigned, hereby appoint you on the terms set out below to
receive on our behalf service of process issued out of the courts of the
Republic of Korea in respect of any legal action or proceedings arising out of
or in connection with the transaction described below.
1. Upon receipt of any such service of process addressed to us you will on our
behalf accept such service and will notify us by telex or telecopier at the
number as may from time to time be specified by us in writing to the effect
that you have accepted service of process on our behalf. Such notification
need only inform us of the name of the party issuing the proceedings, the
date upon which you accepted service of process and the date (if any) by
which action must be taken to avoid judgment being entered against us in
default of acknowledgement of service. The notification need not include
any details of the nature or substance of the claim or claims made by the
issuing party.
2. Following such notification by telex or telecopier you will confirm the
acceptance to us by letter at the address as may from time to time be
specified by us, enclosing the process documents which you have received.
In the event that, at our request, you agree to provide some details of the
nature or substance of the claim or claims made by the issuing party prior
to the receipt by us of the process documents, we agree that this shall be
without responsibility on your part and that we will have regard only to
the process documents in determining our response to the legal action or
proceedings.
3. You shall have no other duties whatsoever under the terms of this letter
save as expressly provided in the foregoing paragraph. This appointment and
its acceptance shall continue for the life of the transaction described
below.
4. Please confirm your agreement to the appointment by signing the
acknowledgement at the foot of the enclosed copy of this letter and
returning it to us. Upon receiving your acceptance of the foregoing
appointment, we will so notify the Lender by delivery to it or to its duly
appointed agent of a copy of such acceptance. Please note that we have
irrevocably authorized the Lender to file in our name a report regarding
such appointment with any court in the Republic of Korea before which a
legal action or proceeding will be or has been instituted in connection
with the Loan Agreement and/or the Guaranty described below. You are hereby
also authorized to file the same report independently.
<PAGE>
In consideration of your acceptance of this appointment, we hereby agree to
pay you on acceptance a fee of [_].
DETAILS OF TRANSACTION CONCERNED IN APPOINTMENT:
-----------------------------------------------
The Guaranty issued by iAsiaWorks, Inc. in connection with the Loan
Agreement dated October [_], 2000 made by and between iAsiaWorks Korea Ltd.
("Borrower") and Korea First Bank ("Lender"), providing for a loan (the "Loan")
to the Borrower up to an aggregate principal amount of KRW 14,000,000,000.
Please confirm your agreement to the appointment by signing the
acknowledgement at the foot of the enclosed copy of this letter and returning it
to us.
For and on behalf of
iAsiaWorks, Inc.
By /s/ Nick Pianim
----------------------------
Name: Nick Pianim
Title: Vice President of Global Business
Development
We confirm our agreement to our appointment as your agent for service of
process in accordance with the terms of your letter dated October [_], 2000
which the above is a copy.
For and on behalf of
iAsiaWorks Korea Ltd.,
By /s/ signature illegible
----------------------------
Name:
Title:
C-2
<PAGE>
EXHIBIT D-1
FORM OF LEGAL OPINION (BORROWER'S KOREAN COUNSEL)
_________, 2000
TO: KOREA FIRST BANK
Dear Sirs:
We have acted as Korean counsel to iAsiaWorks Korea Ltd. and iAsiaWorks, Inc. in
connection with (1) a loan agreement (the "Loan Agreement") dated October [_],
2000 by and between iAsiaWorks Korea Ltd. (the "Borrower"), as borrower and
Korea First Bank (the "Lender"), as lender, providing for a loan (the "Loan") in
an aggregate principal amount of up to Fourteen Billion Korean Won (KRW
14,000,000,000) and (2) a guaranty (the "Guaranty") dated October [_], 2000 of
iAsiaWorks, Inc. (the "Guarantor") guaranteeing the liabilities of the Borrower
under the Loan Agreement. Unless otherwise defined herein, capitalized terms
used herein shall have the respective meanings specified in the Loan Agreement
and the Closing Opinion.
For purposes of giving our opinion, we have examined the following documents:
(a) an executed copy of the Loan Agreement;
(b) an executed copy of the Guaranty;
(c) an executed copy of the Kun-Mortgage Agreement I;
(d) an executed copy of the Kun-Mortgage Agreement II;
(e) an executed copy of the Assignment of Insurance (collectively, with the
documents referred to in (a), (c) and (d) above, the "Agreements");
(f) an executed copy of the power of attorney;
(g) a certified copy of the Commercial Registries extracts relating to the
Borrower;
(h) a certified copy of the Articles of Incorporation of the Borrower;
(i) a certified copy of the seal certificate of the Borrower; and
(j) a certified copy of the minutes of the meting of the Board of Directors of
the Borrower adopting resolutions authorizing the execution and performance
of the Agreements.
In addition to the above, we have also examined other laws and documents that we
deemed necessary or required to allow us to provide this opinion. In so doing,
the following assumptions have been made:
(a) that all seals and signatures are genuine, all documents submitted to us as
originals are authentic, and that all documents submitted to us as copies
conform to the originals;
<PAGE>
(b) that the statements of facts made in such documents are correct, and that
no change has been made and no action has been taken up to the date of
this opinion which would undermine the accuracy of any such factual
statement set forth in any such document, making the said documents
inaccurate or misleading; and
(c) Insofar as other facts and information that are material to the opinion
expressed in this opinion letter, we have relied upon oral statements or
certificates of officers and other representatives of the Borrower.
However, please note that we have not undertaken any independent
investigation to determine the existence or absence of such facts.
DW Partners is presenting this legal opinion confined to and given on the basis
of the laws of the Republic of Korea ("Korea") as at the date hereof. We have
not investigated, and we do not express or imply opinion on, the laws of any
other jurisdiction, nor have we assumed that other such laws will affect the
opinion stated herein.
Based upon the foregoing and subject to the qualifications below, we are of the
opinion that:
1. The Borrower is a corporation duly organized and validly existing pursuant
to the laws of Korea. The Borrower has all requisite corporate power and
authority to execute and deliver, and perform its obligations under this
Agreements, and to consummate the transactions contemplated thereunder;
2. The Borrower has the power to and has been duly authorized to execute,
deliver, and perform the obligations under this Agreements, and to
consummate the transaction contemplated thereunder;
3. The execution and delivery of, and performance of its obligations under the
Agreements by the Borrower does not and will not violate its Articles of
Incorporation or by-laws, any existing law, regulation, rule or permit
applicable to the Borrower;
4. This Agreements and the Guaranty constitute legal, valid and binding
obligations of each of the Borrower and the Guarantor, as the case may be,
enforceable against each of them in accordance with the terms thereof; and
5. Neither the execution and delivery of, nor the performance of its
obligations under this Agreements by the Borrower requires any
authorization, consent or approval of, giving of notice to, registration
with or taking of any other action in respect of, any governmental
authority or agency of Korea.
This opinion is provided to you under the condition that it is limited to
matters addressed herein only and is not to be read as an opinion on any other
matter. This opinion is being provided to you in our capacity as counsel to
Borrower and hence, subject to the foregoing, it may not be used or relied upon
by any other person for any purpose whatsoever, other than in relation to
regulatory requirements or in response to a court order.
D-1-2
<PAGE>
DW PARTNERS
D-1-3
<PAGE>
EXHIBIT D-2
FORM OF LEGAL OPINION (GUARANTOR'S U.S. COUNSEL)
_________, 2000
TO: KOREA FIRST BANK
Dear Sirs:
We have acted as counsel to iAasiaWorks, Inc. (the "Guarantor") in connection
with its Guaranty dated October [_], 2000 (the "Guaranty"), which is issued
pursuant to a KRW 14,000,000,000 Loan Agreement dated October [_], 2000 by and
between iAsiaWorks Korea Ltd. (the "Borrower"), as borrower and Korea First Bank
(the "Lender"), as lender (the "Loan Agreement").
For purposes of giving our opinion, we have examined the following documents:
(a) an executed copy of the Guaranty;
(b) an executed copy of the Loan Agreement;
(c) an executed copy of power of attorney;
(d) a certified copy of the Certificate of Incorporation of the Guarantor and
all amendment thereto;
(e) a certified copy of the Bylaws of the Guarantor and all amendments thereto;
(f) a good standing certificate issued by the Secretary of the Sate of [ ]
relating to the Guarantor; and
(g) a certified copy of the minutes of the meeting of the Directors of the
Guarantor adopting resolutions authorizing the execution and performance of
the Guaranty.
In addition to the above, we have also examined other laws and documents that we
deemed necessary or required to allow us to provide this opinion. In so doing,
the following assumptions have been made:
(a) that all seals and signatures are genuine, all documents submitted to us as
originals are authentic, and that all documents submitted to us as copies
conform to the originals;
(b) that the statements of facts made in such documents are correct, and that
no change has been made and no action has been taken up to the date of this
opinion which would undermine the accuracy of any such factual statement
set forth in any such document, making the said documents inaccurate or
misleading; and
<PAGE>
(c) Insofar as other facts and information that are material to the opinion
expressed in this opinion letter, we have relied upon oral statements or
certificates of officers and other representatives of the Guarantor.
However, please note that we have not undertaken any independent
investigation to determine the existence or absence of such facts.
[ ] is presenting this legal opinion confined to and given on the basis
of the federal laws of the United States of America and the laws of the State of
[ ] as at the date hereof. We have not investigated, and we do not express
or imply opinion on, the laws of any other jurisdiction, nor have we assumed
that no other such laws will affect the opinion stated herein.
Based upon the foregoing and subject to the qualifications below, we are of the
opinion that:
1. The Guarantor is a corporation duly organized and validly existing
pursuant to the laws of the State of [ ]. The Guarantor has all
requisite corporate power and authority to execute and deliver, and perform
its obligations under, the Guaranty, and to consummate the transactions
contemplated thereunder;
2. The Guarantor has the power to and has been duly authorized to execute,
deliver, and perform the obligations under the Guaranty, and to consummate
the transaction contemplated thereunder;
3. The execution and delivery of, and performance of its obligations under,
the Guaranty by the Guarantor does not and will not violate its articles of
incorporation or by-laws, any existing law, regulation, rule or permit in
the United States applicable to the Guarantor;
4. The Guaranty constitutes legal, valid and binding obligations of the
Guarantor enforceable against it in accordance with the terms thereof;
5. Neither the execution and delivery of, nor the performance of its
obligations under, the Guaranty by the Guarantor requires any
authorization, consent or approval of, giving of notice to, registration
with or taking of any other action in respect of, any governmental
authority or agency of the Unites States of America or the State of [ ];
6. It is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of the Guaranty that it or any other instrument
be filed, recorded, registered or enrolled in any court, public office or
elsewhere in the Unites Sates or that any stamp, registration or similar
tax be paid in Unites States on or in relation to the Guaranty;
7. Under the laws of the State of [ ], the choice of the laws of the
Republic of Korea as the governing law of the Guaranty is a valid choice of
law;
8. The submission by the Guarantor to the non-exclusive jurisdiction of the
courts of the Republic of Korea is, as a matter of contract law, valid,
binding and not subject to revocation. In the event that a judgment of such
courts were obtained, the same
D-2-2
<PAGE>
would be enforced by U.S. courts without a further review on the merits;
9. Payment made by the Guarantor pursuant to the Guaranty will not be subject
to any withholding on account of United States federal income tax; and
10. The Guarantor will not be able to claim sovereign immunity from legal
proceedings with respect to itself or any of its properties or assets.
This opinion is addressed to you and may be relied upon solely by you and your
counsel. It may not be used or relied upon by any other person for any purpose
whatsoever without our prior written consent.
D-2-3
<PAGE>
EXHIBIT D-3
FORM OF LEGAL OPINION (Post Closing)
_________, 2000
TO: KOREA FIRST BANK
Dear Sirs:
We have acted as Korean counsel to iAsiaWorks Korea Ltd. and iAsiaWorks, Inc. in
connection with (1) a loan agreement (the "Loan Agreement") dated October [_],
2000 by and between iAsiaWorks Korea Ltd. (the "Borrower"), as borrower and
Korea First Bank (the "Lender"), as lender, providing for a loan (the "Loan") in
an aggregate principal amount of up to Fourteen Billion Korean Won (KRW
14,000,000,000) and (2) a guaranty (the "Guaranty") dated October [_], 2000 of
iAsiaWorks, Inc. (the "Guarantor") guaranteeing the liabilities of the Borrower
under the Loan Agreement. Reference is made to our opinion dated October [_],
2000 issued in connection with the Loan Agreement (the "Closing Opinion").
Unless otherwise defined herein, capitalized terms used in this opinion shall
have the respective meanings specified in the Loan Agreement and the Closing
Opinion.
For purposes of giving our opinion, we have examined the documents listed in the
Closing Opinion and the following documents:
(a) an executed copy of the Kun-Mortgage Agreement I;
(b) an executed copy of the Kun-Mortgage Agreement II;
(c) certified copies of the real estate registries extracts relating to the
Kun-Mortgage I and Kun-Mortgage II;
(d) an executed copy of the Assignment of Insurance;
(e) an executed copy of the notice of assignment delivered to the Insurer; and
(f) an executed copy of Insurer's Letter of Undertaking.
In addition to the above, we have also examined other laws and documents that we
deemed necessary or required to allow us to provide this opinion. In so doing,
the following assumptions have been made:
(a) that all seals and signatures are genuine, all documents submitted to us as
originals are authentic, and that all documents submitted to us as copies
conform to the originals;
(b) that the statements of facts made in such documents are correct, and that
no change has been made and no action has been taken up to the date of this
opinion which would undermine the accuracy of any such factual statement
set forth in any such document, making the said documents inaccurate or
misleading; and
<PAGE>
(c) Insofar as other facts and information that are material to the opinion
expressed in this opinion letter, we have relied upon oral statements or
certificates of officers and other representatives of the Borrower.
However, we have not undertaken any independent investigation to determine
the existence or absence of such facts.
DW Partners is presenting this legal opinion confined to and given on the basis
of the laws of the Republic of Korea ("Korea") as at the date hereof. We have
not investigated, and we do not express or imply opinion on, the laws of any
other jurisdiction, nor have we assumed that other such laws will affect the
opinion stated herein.
Based upon the foregoing and subject to the qualifications below, we are of the
opinion that:
1. The Kun-Mortgage I and the Kun-Mortgage II have been duly created,
registered, recorded and perfected as security interests in the Senan
Building in favor of the Lender in accordance with the terms of the Kun-
Mortgage Agreement I, the Kun-Mortgage Agreement II and the Loan Agreement;
and
2. The Assignment of Insurance has been duly perfected in accordance with the
terms of the Assignment of Insurance and the Loan Agreement.
This opinion is provided to you under the condition that it is limited to
matters addressed herein only and is not to be read as an opinion on any other
matter. This opinion is being provided to you in our capacity as counsel to
Borrower and hence, subject to the foregoing, it may not be used or relied upon
by any other person for any purpose whatsoever, other than in relation to
regulatory requirements or in response to a court order.
DW PARTNERS
D-3-2
<PAGE>
EXHIBIT E
INSURANCE ASSIGNMENT AGREEMENT
iAsiaWorks Korea Ltd.
- BORROWER -
and
KOREA FIRST BANK, YANGJAE-DONG BRANCH
- LENDER-
October [_], 2000
<PAGE>
INSURANCE ASSIGNMENT AGREEMENT
THIS INSURANCE ASSIGNMENT AGREEMENT (the "Agreement") dated as of the [ ]th day
of October, 2000 by and between:
(1) iAsiaWorks Korea Ltd., a company organized and existing under the law of
the Republic of Korea ("Korea"), having its registered office at BoRaMae
DaeKyo Building, 6th Floor, 729-21, Bongchon-dong, Kwanak-Gu, Seoul, Korea
151-706 (the "Borrower"); and
(2) KOREA FIRST BANK, YANGJAE-DONG BRANCH (the "Lender").
WITNESSETH:
WHEREAS, by a loan agreement dated October [ ], 2000 (the "Loan Agreement") made
by and between the Borrower and the Lender, the Borrower hereby agrees, subject
to and upon the terms and conditions contained therein, to assign its rights,
titles, claims and interest to the Lender as to any and all insurance proceeds
deriving from any and all policies and contracts of insurance due and payable to
the Borrower under the Loan Agreement.
WHEREAS, for the purpose of securing any and all obligations, debts and
liabilities of the Borrower against the Lender to be incurred hereinafter, under
or with respect to the Loan Agreement, it is a condition precedent to the
Drawdown that the Borrower assign the Assigned Property (as defined in Section
3.01 below) to the Lender pursuant to the terms and conditions contained herein.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Interpretation
--------------
Words and expressions defined in the Loan Agreement shall, unless otherwise
defined herein below or the context otherwise requires, have the same meaning
when used in this Agreement. References to any agreement or documents shall be
construed as references to such agreement or document as varied, amended,
novated or supplemented from time to time. In addition, the following terms
shall have the following meanings:
1.01 "Insurances" mean all policies and contracts of insurance on the Senan
Building (hereinafter, the "Building") taken out by the Borrower or with
respect to which the Borrower is the beneficiary thereof from time to
time in accordance with the requirements of the Loan Agreement.
1.02 "Insurance Proceeds" mean all of the rights, title and interest, present
and future, of the Borrower to and in the benefit of the amounts payable
in respect of the Insurances.
1.03 "Insurer" means collectively, such insurance companies, underwriters and
insurers as the Lender shall approve with or through whom any and all
relevant Insurances in connection with the Building in Seoul shall be
taken out and kept in effect in accordance with the insurance coverage
plan approved by the Lender in accordance with the Loan
<PAGE>
Agreement.
1.04 "Secured Oblgations" shall mean all obligations, liabilities and
indebtedness of every type and nature of the Borrower form time to time
owing to the Lender under the Loan Agreement and the Kun-Mortgage
Agreements.
Section 2. Representations and Warranties
------------------------------
The Borrower hereby warrants and represents to the Lender that as of the date
hereof:
(a) the Insurances have been duly taken out and is in full force and effect;
(b) the Borrower has not defaulted on any payments of any premiums due under
the Insurances nor has breached any conditions to which coverage under the
Insurances is subject, and there is no action, suit or proceeding
threatened by or against the Borrower in connection with or arising out of
the Insurances;
(c) the Borrower has duly acquired, is the beneficial owner of and has not
heretofore sold, assigned transferred, hypothecated, charged or pledged or
otherwise encumbered nor agreed to sell, assign, transfer, hypothecate,
charge or pledge or otherwise encumber all or any part of its rights or
interests under the Insurances or any sum which is now or may at any time
hereafter become due and payable to the Borrower pursuant to the terms of
the Insurances (other than pursuant to the terms hereof);
(d) no party, other than the Lender hereunder, has exercised or otherwise
acquired any right or interest in the Insurances: and
(e) the assignments herein contained do not constitute a breach of any
applicable law nor of the obligations of the Borrower under the terms of
any agreement or other document whatsoever to which the Borrower is a
party or by the terms of which it is bound.
Section 3. Assignment of Insurances
------------------------
3.01 In consideration of the Lender entering into the Loan Agreement and in
order to secure the full and punctual payment, performance and discharge
of the Secured Obligations thereunder, the Borrower hereby assigns and
agrees to assign to the Lender all its rights, title and interest in (i)
the Insurances, including all benefits thereof, (ii) all claims, returns
of premium and other moneys and claims for money due and to become due
under the Insurances, (iii) all other rights of the Borrower under or in
respect of the Insurances, and (iv) the Insurance Proceeds (collectively,
the "Assigned Property").
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<PAGE>
3.02 The Borrower hereby undertakes that upon the execution of this Agreement
and whenever any Insurances are effected or renewed or substituted, it
will promptly: (a) execute and deliver to the relevant Insurer(s) a notice
of assignment substantially in the form attached hereto as Appendix A, (b)
obtain the consent and acknowledgement of the relevant Insurer(s) thereto
and (c) take other measures as may be necessary to perfect assignment
under Korean law.
3.03 The Borrower shall at all times remain liable to perform all obligations
expressed to be assumed by it under or in respect of the Assigned
Property, and nothing contained herein and no exercise by the Lender of
any right under this Agreement shall constitute or be deemed to constitute
an assumption or acceptance by the Lender of any obligations of the
Borrower in respect of the Assigned Property.
Section 4. Covenants and Undertaking of the Borrower
-----------------------------------------
4.01 The Borrower covenants and undertakes the following with the Lender until
such time as all of the Secured Obligations under the Loan Agreement have
been paid, performed and discharged in full:
(a) to effect and maintain or cause to be effected and maintained,
subject to the commercial availability of the required coverage, the
Insurances in accordance with the terms of the Loan Agreement and
this Agreement;
(b) to procure that the interest of the Lender shall be duly endorsed
upon all cover notes, policies, certificates of entry or other
instruments of insurance issued or to be issued in connection with
the Insurances;
(c) to procure that the Insurer shall furnish to the Lender a letter of
undertaking substantially in the form of Appendix B, but in any
event, in form and substance acceptable to the Lender;
(d) not to make, do, consent or agree to any act or omission which would
or might render any such instrument of insurance invalid, void,
voidable or unenforceable or render any sum payable thereunder
repayable in whole or in part; and
(e) to promptly sign, seal, execute, acknowledge, deliver, file and
register all such additional documents, instruments, agreements,
certificates, consents and assurances and do all such other acts and
things as may be reasonably requested by the Lender from time to time
in order to perfect the security granted by this Agreement or to
establish, maintain, perfect or preserve the rights of the Lender
under this Agreement or to obtain the full benefits of this Agreement
or to enable it to exercise the rights and remedies under this
Agreement or in respect of the Assigned Property.
4.02 The Borrower shall not sell, assign, transfer, hypothecate, pledge or
otherwise encumber or agree to sell, assign, transfer, hypothecate, pledge
or otherwise encumber all or any of its rights, titles and interests in
and to the Assigned Property.
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<PAGE>
4.03 The Borrower shall make all registrations, filings and records necessary
to ensure the legality, validity, enforceability or admissibility in
evidence of this Agreement.
Section 5. Enforcement by the Lender
-------------------------
If an Event of Default under the Loan Agreement has occurred and is continuing,
the Lender shall become forthwith entitled, as and when they may see fit to put
into force and to exercise all or any of the power possessed by the Lender as
assignee of the Assigned Property.
Section 6. Continuing Security
-------------------
The security created by this Agreement shall be held by the Lender as a
continuing security for the full and punctual payment, performance and discharge
of all of the Secured Obligations and shall not be considered satisfied and
shall not be released or discharged by any intermediate payment, performance,
discharge or satisfaction of any part of the Secured Obligations and shall be a
continuing security until all of the Secured Obligations shall have been paid,
performed and discharged in full. Neither any failure by the Borrower nor any
amendment, modification, variation, supplement, novation, restatement or
replacement of all or part of the Secured Obligations shall discharge, impair,
prejudice or otherwise affect the security created by this Agreement.
Section 7. Assignment
-----------
This Agreement and the assignment of Insurances hereunder shall be binding upon
and inure to the benefit of the Lender and its successors and assigns. The
Lender may, in the ordinary course of business and in accordance with the
applicable law, at any time assign all or any part of its rights hereunder to
any party (each an "Assignee") without the consent of the Borrower, provided
that the Lender shall give at least [ ]day prior written notice to the Borrower.
The parties hereto agree that to the extent of any assignment, the Assignee
shall be deemed to have the same rights and benefits under this Agreement. The
Borrower may not assign any of its rights or obligations hereunder without the
prior written consent of the Lender.
Section 8. Further Assurance
-----------------
The Borrower agrees that at any time and from time to time upon the written
request of the Assignee, the Borrower shall promptly and duly execute and
deliver any and all such further instruments and documents and take such further
action as the Assignee may reasonably request in order to obtain the full
benefit of this Agreement and the rights and powers granted herein.
9. Miscellaneous
-------------
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<PAGE>
9.01 Notices. Any communication, demand or notice to be given hereunder shall
--------
be deemed to be duly given when delivered in writing or by mail or when
sent by facsimile as follows:
To Borrower: iAsiaWorks Korea Ltd.
BoRaMae DaeKyo Building, 6th Floor, 729-21, Bongchon-dong,
Kwanak-Gu, Seoul, Korea 151-706
Fax No.: 822-3284-7700
Attention: Yun Ho Lee
And to Lender: Korea First Bank, Yangjae-dong Branch
Fax No.:
Attention:
with a copy to: Korea First Bank
Fax No.:
Attention:
9.02 Governing Law and Jurisdiction. This Agreement and the assignment made
--------------------------------
pursuant hereto shall be governed by the laws of the Republic of Korea in
all respects, including matters of construction, validity and performance.
The Borrower hereby submits itself to the non-exclusive jurisdiction of the
Seoul District Court in Seoul, Korea for the purposes of any suit, action
or proceeding arising out of this Agreement.
9.03 Severability. If any of the provisions of this Agreement shall contravene
--------------
any law or regulation or be held invalid, this Agreement shall be construed
as if not containing those provisions, and the rights and obligations of
the parties hereto shall be construed and enforced accordingly.
9.04 Amendments, Changes and Modifications. This Agreement shall not be amended,
---------------------------------------
changed, modified, altered or revised without the prior written approval of
both the Lender and the Borrower. This Agreement shall not be amended,
changed, modified, altered or revised by an oral agreement by and between
the Lender and the Borrower.
9.05 Counterparts. This Agreement may be executed in multiple counterparts, each
--------------
of which, when executed, shall constitute an original but all of which
together shall constitute one and the same instrument.
9.06 Conflict. In the case of a conflict between the provisions of this
----------
Agreement and the provisions of the Loan Agreement, the Loan Agreement
shall prevail.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.
iAsiaWorks Korea Ltd.
By: /s/ Nick Pianim
-----------------------------
Name: Nick Pianim
Title: Vice President of Global Business Development
KOREA FIRST BANK, YANGJAE-DONG BRANCH
By: /s/ signature illegible
-----------------------------
Name:
Title:
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<PAGE>
Appendix A
----------
FORM OF NOTICE OF ASSIGNMENT
----------------------------
[date]
To: [Insurer]
Re: Senan Building in Seoul, Korea
------------------------------
We, iAsiaWorks Korea Ltd.(the "Borrower"), do hereby give notice that we have
assigned to Korea First Bank, Yangjae-dong Branch (the "Lender"), which
expressions shall include its successors, transferees and assigns, all of our
rights, title and interest (including all benefits and claims) to and in the
Insurances pursuant to the terms and conditions provided in a certain insurance
assignment agreement entered into by and between the Borrower and the Lender
dated [ ].
It is hereby agreed between the Borrower and the Lender that your company is
hereby instructed that all Insurance Proceeds shall be paid in accordance with
the following loss payable clause:
1.2 LOSS PAYABLE CLAUSE
Any claim or money of whatsoever nature and kind payable under or in
connection with the Insurance shall be paid to the Lender or to its order,
unless and until you company receives notice from the Lender that the
Lender has been served.
iAsiaWorks Korea Ltd.
By: /s/ Nick Pianim
--------------------------------
Name: Nick Pianim
Title: Vice President of Global Business Development
(fixed date stamp)
<PAGE>
Appendix B
----------
INSURER'S
LETTER OF UNDERTAKING
[date]
To: KOREA FIRST BANK, YANGJAE-DONG BRANCH
as the Lender in the Loan Agreement
Dear Sirs,
IAsiaWorks Korea Ltd. - Senan Building in Seoul (the "Building")
--------------------- ----------------------------------------
We acknowledge receipt of the Notice of Assignment dated [ ]
on and in respect of the Building, we hereby undertake and/or confirm that:
1. We have accepted your insurance coverage on the Building upon the terms and
conditions set forth in the Appendix I hereto/1/;
2. We shall cause all Insurances, and any renewals of such Insurances or any
Insurances substituted (with your consent) therefor and the benefit of the
Insurance thereunder, to be received and possessed by you as first
assignee, and we shall duly perform our obligations in accordance with the
terms of the Loss Payable Clause set forth in the Notice of Assignment, and
the said Loss Payable Clause shall be included in and/or endorsed on all
the Insurances, renewals and substitutes as aforesaid;
3. Every notice of assignment substantially in the same form of the Notice of
Assignment which we have received or will from time to time receive shall
be attached upon all Cover Notes, Insurances and Insurance Slips or
Contracts, renewals or substitutes as aforesaid; and
4. We have not received notice of any other assignment relating to the
Insurances referred to herein.
Our above undertaking are given subject to our right of set-off or
cancellation on default in payment of any premiums due under the Insurances as
aforesaid, but we undertake with you (until such time as we may receive written
notice to the contrary from you) to advise you immediately if any such premiums
are not paid to us by their due date and not to exercise our right of
cancellation without giving you fourteen (14) days' notice
_______________
/1/Appendix I will be provided by Insurer
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<PAGE>
in writing and a reasonable opportunity of paying any outstanding premiums.
Notwithstanding anything to the contrary contained in any cover Note, Contract
or Insurances or renewals or substitutes, if such defaulted premiums are paid
within such [ ] period, all damages or losses occurring during the period
from the due date of premiums to the time of payment thereof shall be covered as
if such premium were actually paid on the due date; provided, however, that in
the event that such defaulted premium shall not be paid within the aforesaid
fourteen day period, we can exercise our right of cancellation.
We further undertake (until such time as we may receive written notice to
the contrary from you) to advise you not later than [ ] days prior to the
expiry of the policies aforesaid and any renewals thereof if instruction have
not been received for such renewals or further renewal and in the event of our
receiving instructions to renew or further to renew as aforesaid to advise you
promptly of the details thereof.
Finally, we undertake to notify you immediately of any material changes
which are proposed to be made in the terms of the insurance, or if we cease to
be insurer for all purposes connected with the Insurance of the Building or of
any circumstances or event whereby the said insurance may become invalid,
voidable or otherwise unenforceable.
Yours faithfully,
/s/ signature illegible
----------------------------------
[Insurer]
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