<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 31, 1995
AST RESEARCH, INC.
(Exact name of registrant as specified in charter)
Delaware 0-13941 95-3525565
(State or other (Commission (I.R.S. employer
jurisdiction of file number) identification
incorporation) No.)
AST Research, Inc.
16215 Alton Parkway
Irvine, California 92718
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (714) 727-4141
Page 1 of 174 pages
Exhibit Index is located on Page 6
<PAGE>
Item 5. Other Events.
------------
On July 31, 1995, Samsung Electronics Company, Ltd., a Korean corporation
("SECL"), and Samsung Electronics America, Inc., a New York corporation and
wholly-owned subsidiary of SECL (together with SECL, the "Purchasers"),
purchased from AST Research, Inc., a Delaware corporation (the "Registrant"), an
aggregate of 12,070,000 shares of the Registrant's Common Stock ("Common
Stock"), par value $.01 per share, pursuant to the Stock Purchase Agreement,
dated as of February 27, 1995, as amended by Amendment No. 1 thereto, dated as
of June 1, 1995, and Amendment No. 2 thereto, dated as of July 29, 1995, by and
between the Registrant and SECL. Concurrently with such purchase, SECL
consummated a tender offer and purchased from the Registrant's stockholders
5,820,000 shares of Common Stock and entered into other agreements with the
Registrant. Accordingly, as of July 31, 1995, the Purchasers owned
approximately 40% of the outstanding shares of Common Stock.
A copy of the Registrant's press release, dated July 31, 1995, relating to
the above-described transactions is attached hereto as Exhibit 99.17.
Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits.
----------------------------------
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
99.1 Component Sales Agreement, dated as of July 31, 1995, by and
between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.2 Cooperative Procurement Agreement, dated as of July 31, 1995, by
and between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.3 Marketing Cooperation Agreement, dated as of July 31, 1995, by
and between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.4 AST OEM Supply to SEC Agreement, dated as of July 31, 1995, by
and between AST Re-
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
search, Inc. and Samsung Electronics Co., Ltd.
99.5 SEC OEM Supply to AST Agreement, dated as of July 31, 1995, by
and between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.6 Joint Development and Technical Cooperation Agreement, dated as
of July 31, 1995, by and between AST Research, Inc. and Samsung
Electronics Co., Ltd.
99.7 Patent Cross License Agreement, dated as of July 31, 1995, by and
between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.8 Employee Exchange Agreement, dated as of July 31, 1995, by and
between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.9 General Terms Agreement, dated as of July 31, 1995, by and
between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.10 Stockholder Agreement, dated as of July 31, 1995, by and between
AST Research, Inc. and Samsung Electronics Co., Ltd.
99.11 Registration Agreement, dated as of July 31, 1995, by and between
AST Research, Inc. and Samsung Electronics Co., Ltd.
99.12 Letter of Credit Agreement, dated as of July 31, 1995, by and
between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.13 Letter Agreement, dated as of July 31, 1995, by and between AST
Research, Inc. and Samsung Electronics Co., Ltd.
99.14 Amendment No. 2 to Stock Purchase Agreement, dated as of July 29,
1995, by and between AST Research, Inc. and Samsung Electronics
Co., Ltd.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
99.15 Restated Certificate of Incorporation of AST Research, Inc.,
effective July 31, 1995
99.16 Amended Bylaws of AST Research, Inc., effective July 31, 1995
99.17 Press Release of AST Research, Inc. and Samsung Electronics
Company, Ltd., issued July 31, 1995
</TABLE>
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AST RESEARCH, INC.
Date: August 7, 1995 By: /s/ Bruce C. Edwards
------------------------------
Bruce C. Edwards
Executive Vice President
and Chief Financial Officer
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C>
99.1 Component Sales Agreement, dated as of July 31, 1995, by and
between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.2 Cooperative Procurement Agreement, dated as of July 31, 1995, by
and between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.3 Marketing Cooperation Agreement, dated as of July 31, 1995, by
and between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.4 AST OEM Supply to SEC Agreement, dated as of July 31, 1995, by
and between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.5 SEC OEM Supply to AST Agreement, dated as of July 31, 1995, by
and between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.6 Joint Development and Technical Cooperation Agreement, dated as
of July 31, 1995, by and between AST Research, Inc. and Samsung
Electronics Co., Ltd.
99.7 Patent Cross License Agreement, dated as of July 31, 1995, by and
between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.8 Employee Exchange Agreement, dated as of July 31, 1995, by and
between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.9 General Terms Agreement, dated as of July 31, 1995, by and
between AST Research, Inc. and Samsung Electronics Co., Ltd.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
99.10 Stockholder Agreement, dated as of July 31, 1995, by and between
AST Research, Inc. and Samsung Electronics Co., Ltd.
99.11 Registration Agreement, dated as of July 31, 1995, by and between
AST Research, Inc. and Samsung Electronics Co., Ltd.
99.12 Letter of Credit Agreement, dated as of July 31, 1995, by and
between AST Research, Inc. and Samsung Electronics Co., Ltd.
99.13 Letter Agreement, dated as of July 31, 1995, by and between AST
Research, Inc. and Samsung Electronics Co., Ltd.
99.14 Amendment No. 2 to Stock Purchase Agreement, dated as of July 29,
1995, by and between AST Research, Inc. and Samsung Electronics
Co., Ltd.
99.15 Restated Certificate of Incorporation of AST Research, Inc.,
effective July 31, 1995
99.16 Amended Bylaws of AST Research, Inc., effective July 31, 1995
99.17 Press Release of AST Research, Inc. and Samsung Electronics
Company, Ltd., issued July 31, 1995
</TABLE>
7
<PAGE>
EXHIBIT 99.1
COMPONENT SALES AGREEMENT
This Component Sales Agreement ("Agreement") is made as of July 31, 1995 by and
between Samsung Electronics Company Limited, a Korea corporation ("SEC") and AST
Research, Inc., a Delaware corporation ("AST").
PURPOSE
SEC plans to continue to develop and sell components and subassemblies for
computers including display monitors, liquid crystal display panels, CD-ROM
drives, hard disk drives, static, video and dynamic random access memory, and
other items which exist now or may be developed in the future (the "Products").
AST and SEC wish to develop an improved supplier to customer relationship, with
SEC gaining a dependable customer for large quantities of SEC Products in a cost
efficient way, and with AST gaining a dependable source for certain of SEC's
Products on favorable terms.
AGREEMENT
Article l. Products
1.1 Cooperation. In accordance with the terms and conditions of this
-----------
Agreement, AST and its Subsidiaries shall buy from SEC and its Related
Companies and SEC and its Related Companies shall sell Products to AST and
its Subsidiaries during the term of this Agreement. SEC agrees to
cooperate and facilitate the purchase by AST and its Subsidiaries under the
terms of this Agreement from the SEC Related Companies (e.g., Samsung
Electromechanics or Samsung Display Devices).
1.2 Information Exchange. AST and SEC agree to exchange information, to be
--------------------
treated as confidential information, relating to the Product needs of AST
and the ability of SEC to supply Products to AST.
Article 2. Ordering
2.1 Procedures. Unless otherwise agreed between the parties the ordering
----------
procedures in this Article 2 shall apply to Product orders by AST.
2.2 Forecasts. AST shall submit a written revolving six (6) month forecast to
---------
SEC of anticipated purchases of the Products, and shall update the forecast
monthly. This forecast shall not be a commitment of either AST or SEC, but
is necessary for the planning purposes of AST and SEC and their mutual
convenience. Unless otherwise agreed by both SEC and AST, and subject to
the provision of Article 3 of this Agreement, the immediate three (3)
month forecast shall
1
<PAGE>
be binding to the parties provided that the forecast for immediate first
month shall be firm and binding to the parties, month two (2), can be
changed up to twenty percent (20%) and month three (3) forty percent (40%).
2.3 Orders and Terms. AST and its Subsidiaries ("Ordering Entity") may submit
----------------
purchase orders directly to SEC for Product, and SEC shall supply same to
the Ordering Entity pursuant to the terms and conditions of this Agreement.
Notwithstanding the foregoing, AST and the Ordering Entity shall be
severally and/or jointly liable for payment therefor. This Agreement sets
forth the terms and conditions which shall govern the transactions between
the parties and Ordering Entities related to the Product. No term or
condition set forth in any purchase order submitted to SEC by an Ordering
Entity shall modify the terms and conditions herein. Unless otherwise
agreed to by both SEC and AST, and subject to the provisions of Article 3
of this Agreement, purchase orders pursuant to the said forecast, which
shall be considered final and binding, and shall be issued by AST to SEC
with at least sixty (60) days lead time for delivery during the term of
this Agreement. SEC agrees to bear any expedited shipping costs or other
costs required to meet any previously committed SEC delivery dates or to
recover from delays. Any such purchase orders shall constitute separate
contracts between SEC and the Ordering Entity.
Article 3. Pricing, Quantity, Terms and Conditions
SEC shall provide AST pricing, allocation, terms and conditions
which, when considered in the aggregate, are at least as favorable as those
offered by SEC to its most favored customer group. Such terms shall
include, for example but without limitation, terms for commitments to
forecast, terms for cancellation of purchase orders, payment due date
terms, credit limit terms, product return terms, duty and freight
responsibility terms, product warranties, indemnification and defense
commitments, overnight shipment cost commitments for late deliveries, non-
recurring engineering charge terms and lead time terms.
Article 4. Product Terms and Conditions
The terms and conditions applicable to AST's purchase of Products
pursuant hereto shall be in accordance with the terms and conditions
referenced in Article 3 above, but the terms and conditions of this
Agreement shall supersede such terms and conditions.
Article 5. General Terms
Neither this Agreement nor any right or obligation hereunder may
be assigned by either party without the express written
2
<PAGE>
consent of the other party in each instance. The provisions included in
the General Terms Agreement shall apply to this Agreement.
Article 6. Priority
In the event of a conflict or inconsistency between any term or
condition of this Agreement and that of the General Terms Agreement, the
terms and conditions of this Agreement shall supersede and control.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement, on the dates below indicated.
Samsung Electronics Co., Ltd. AST Research, Inc.
By: /s/ Bo-Soon Song By: /s/ Safi U. Qureshey
----------------------------- --------------------------------
Name: Bo-Soon Song Name: Safi U. Qureshey
Title: Senior Managing Director Title: Chief Executive Officer
Date: July 31, 1995 Date: July 31, 1995
3
<PAGE>
EXHIBIT 99.2
COOPERATIVE PROCUREMENT AGREEMENT
This Cooperative Procurement Agreement ("Agreement") is made as of July 31, 1995
(the "Effective Date") by and between Samsung Electronics Company Limited, a
Korea corporation ("SEC") and AST Research, Inc., a Delaware corporation
("AST").
PURPOSE
AST and SEC wish to develop more efficient relationships with their suppliers,
in order to increase the availability of components and subassemblies, and in
order to reduce the costs of the components and subassemblies purchased by each
company. Efficient relationship may be developed by combining or coordinating
joint purchases, or by purchasing on behalf of each other.
AGREEMENT
Article 1. Definitions
1.1 "Purchased Components" shall mean components, subassemblies, software and
attachments related to the multimedia business and other computer business
which are jointly or separately procured or licensed by AST and/or SEC
under the terms and conditions of this Agreement as mutually agreed between
the parties from time to time throughout the term hereof.
Article 2. Joint Procurement
2.1 Exchange of Information. To the extent permitted by applicable law, AST
-----------------------
and SEC agree to provide information to the JPC (as hereafter defined), to
be treated as Confidential Information as defined in that certain General
Terms Agreement between the parties of even date herewith (the "General
Terms Agreement"), concerning each parties purchasing needs for the
Purchased Components, and the terms for purchasing such Purchased
Components (the "Procurement Information").
2.2 Cooperation in Negotiation with Suppliers. AST and SEC agree to cooperate
-----------------------------------------
with each other through the JPC in negotiating with suppliers for the
procurement of the Purchased Components in order to obtain more favorable
pricing as a result of the combined purchasing volumes of both parties.
2.3 Ordering Procedure. AST and SEC agree to, within the limits set forth
------------------
herein, place orders for Purchased Components
1
<PAGE>
using any method mutually agreeable to the parties including, without
limitation, when reasonably possible, one of the following three methods:
(a) Joint Orders. When applicable, orders shall be submitted together
------------
by AST and SEC for Purchased Components, with deliveries to be made by
the supplier separately to the SEC destination and the AST
destination, and with SEC to pay the supplier only for the deliveries
made to SEC, and with AST to pay the supplier only for the deliveries
made to AST.
(b) Combined Orders by SEC. When applicable, orders shall be
----------------------
submitted by SEC to the supplier for the combined quantities of
Purchased Components needed by SEC and AST.
(c) Combined Orders by AST. When applicable, orders shall be
----------------------
submitted by AST to the supplier for the combined quantities of
Purchased Components needed by SEC and AST.
2.4 Pass Through of Warranties, Indemnifications. AST and SEC agree to
--------------------------------------------
cooperate with each other and if requested by one party take unilateral
action, at the requesting parties expense, in pursuing claims for warranty
coverage, indemnification and other rights against the supplier, insurer or
any freight company relating to the Purchased Components, but neither party
shall have any liability to the other for the Purchased Components except
as may be caused by the failure to perform this Agreement.
2.5 Buying Commission. Either AST or SEC, in making the purchase from a
-----------------
supplier on behalf of the other in accordance with Subsection 2.3(b) or
2.3(c), will charge a buying commission (fee) for the services performed at
a rate which will be decided upon mutual agreement between the parties.
The buying commission rate shall be based upon factors including, but not
limited to, the costs of providing the buying service, the buying
commission rate which is charged to other entities, and commission which
may be deemed (if any) by tax authorities in the absence of such a buying
commission. Such buying commission shall be invoiced and paid together
with the payment for the Purchased Component by adding such commission
thereto.
2.6 Shipment Terms. The shipment terms applicable to any Purchased Components
--------------
purchased by one party from a supplier on behalf of the other party in
accordance with Subsection 2.3(b) and 2.3(c), including, without
limitation, shipment destination, shipment method, freight insurance,
payment of duty fees and risks of loss shall be mutually agreed between the
parties and set forth in writing prior to any order commitments by either
party, provided, however, that unless
2
<PAGE>
otherwise agreed between the parties all costs and fees associated with
any such order shall be allocated pro rata in proportion to the quantities
ordered by each party.
2.7 Short Quantities. Where an order for Purchased Components is placed by one
----------------
party from a supplier on behalf of the other party in accordance with
Subsection 2.3(b) or 2.3(c) and the quantity of Purchase Components
actually received is, for any reason, less than the quantity ordered the
parties shall allocate the actual quantity received between the parties on
a pro rata basis in proportion to the quantity ordered by each party.
Article 3. Joint Procurement Committee
3.1 Committee Structure. Within thirty (30) days of the Effective Date, each
-------------------
party shall designate three (3) manager level representatives who shall
join with the three (3) manager level representatives of the other party to
form the Joint Procurement Committee (hereinafter, "JPC"), in order to
facilitate joint procurement efforts of the parties hereunder and who will
have the responsibility for the joint procurement as contemplated by this
Agreement. The manner and procedure in which JPC operates will be decided
by mutual consent of the parties. The selection, replacement and
substitution of particular members of the JPC to represent each respective
party shall be at such party's sole discretion. The members of the JPC of
one party (the "Receiving Party") shall not communicate the Procurement
Information provided by the other party to any other employee of the
Receiving Party, except to the extent that such Procurement Information is
not confidential or is required to be disclosed in order to implement the
purposes of this Agreement.
3.2 Authority and Consensus. JPC shall have the needed authority concerning
-----------------------
joint procurement hereunder (excepting that purchase orders may not be
issued by the JPC, but shall be issued by the respective purchasing
departments of AST and SEC), and all details on such joint procurement
shall be negotiated and finally decided upon by a unanimous consensus of
all members (representatives of AST and SEC) of the JPC.
3.3 Procurement Coordinators. AST and SEC shall each designate, respectively,
------------------------
one of its representatives to the JPC as its overall procurement
coordinator for the Project (the "Procurement Coordinator").
(a) Information Exchange. Each Procurement Coordinator shall
--------------------
communicate with its counterpart at the other party as often as is
necessary or desirable by telephone or facsimile in order to review
progress, track schedules, resolve problems and arrange for the
3
<PAGE>
exchange of Procurement Information necessary for the performance of
this Agreement.
(b) Duties. Each Procurement Coordinator shall:
------
(i) assume responsibility for the accuracy of the Procurement
Information supplied to the other party;
(ii) monitor the joint purchasing level for each product and
coordinate joint procurement to meet guidelines set by each
company from time-to-time, including but not limited to such
guidelines requiring (but only if required under applicable
law) that no more than twenty percent (20%) of the value of
the components are jointly procured for any final product
manufactured by AST or Samsung in the USA, or intended for
sale in the USA;
(iii) identify mutually beneficial joint procurement opportunities
within the confines of this Agreement and applicable law;
and
(iv) take action as necessary to prevent the disclosure of the
Procurement Information provided by the other party from
being disclosed to any party outside the JPC, except to the
extent that such Procurement Information is not confidential
or is required to be disclosed in order to implement the
purposes of this Agreement.
3.4 Dispute Resolution. If any dispute arises in connection with the
------------------
activities contemplated by this Agreement, the Procurement Coordinator for
each party shall attempt to resolve the dispute promptly after either
party's notice to the other of the existence of a dispute. If the
Procurement Coordinators do not resolve the dispute promptly, either
Procurement Coordinator may call a meeting of the JPC which will be held
promptly after the Procurement Coordinator's request therefore (in person
or telephonically) to attempt to resolve the dispute. If the JPC is unable
to resolve the dispute promptly after the JPC meeting to resolve the
dispute, either Procurement Coordinator may refer the dispute for
resolution by and in accordance with the procedures established by the TEC
(as defined in the General Terms Agreement).
Article 4. General Terms
The provisions included in the General Terms Agreement apply to this
Agreement. Neither AST nor SEC are required to purchase any component or
subassembly pursuant to this Joint
4
<PAGE>
Procurement Agreement and each party is free to negotiate separately from
the other party for the purchase of any component or subassembly.
Article 5. Priority
In the event of a conflict or inconsistency between any term or condition
of this Agreement and that of the General Terms Agreement, the terms and
conditions of this Agreement shall supersede and control.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement, on the dates below indicated.
Samsung Electronics Co., Ltd. AST Research, Inc.
By: /s/ Bo-Soon Song By: /s/ Safi U. Qureshey
---------------------------- -----------------------------
Name: Bo-Soon Song Name: Safi U. Qureshey
Title: Senior Managing Director Title: Chief Executive Officer
Date: July 31, 1995 Date: July 31, 1995
5
<PAGE>
EXHIBIT 99.3
MARKETING COOPERATION AGREEMENT
This Marketing Cooperation Agreement("Agreement") is made as of July 31, 1995
(the "Effective Date") by and between Samsung Electronics Company Limited, a
Korea corporation ("SEC") and AST Research, Inc., a Delaware corporation
("AST").
PURPOSE
Both SEC and AST believe that, in order to form a successful strategic alliance
that will enhance the overall competitive position of each party without
limiting the competition which may exist between them, and with respect to Non-
Competing Products (as defined herein) only, SEC and AST shall cooperate to
share expertise to jointly market currently existing and newly developed non-
competing products of each party in order to achieve maximum market penetration
for both parties, in a manner consistent with all applicable laws and
regulations (the "Marketing Cooperation Goals").
AGREEMENT
Article l. Definitions
1.1 "Non-Competing Products" shall mean existing and newly developed products
of each party in which the parties do not compete in sales in the U.S. or
in which any competition for sales outside the U.S. does not impact or
effect competition in or from the U.S. (but only if required under
applicable law).
Article 2. Marketing Organization
2.1 General. As limited under this Agreement and consistent with the Marketing
-------
Cooperation Goals and all applicable laws and regulations, the provisions
of this Article 2 shall apply.
2.2 Entity Structure. Within 30 days of the Effective Date and throughout the
----------------
term hereof, SEC and AST agree to have an entity structure for worldwide
marketing that reports directly to the General Manager of each product
group of each party, or an equivalent entity structure.
2.3 Team Members. Each party shall designate two members of their own
------------
worldwide marketing entity structure for a team which shall be wholly
responsible for the marketing cooperation activities between SEC and AST
(the "Marketing Cooperation Team").
2.4 Cooperation Coordinators. The manager of the Marketing Cooperation Team of
------------------------
each party shall be at the senior
1
<PAGE>
manager level or above (the "Marketing Cooperation Coordinator").
2.5 Marketing Cooperation Conference. A marketing conference shall be held at
--------------------------------
least once every ninety (90) days to identify marketing cooperation
opportunities (the "Marketing Cooperation Conference"). AST shall host the
first such conference within three (3) months of the Effective Date.
Thereafter, each party shall alternate hosting every other such conference
held throughout the term hereof. Such conference size, format (in person,
video conference or teleconference), topics, schedule and budget will be
decided by the TEC (as defined in that certain General Terms Agreement
between the parties of even date herewith (the "General Terms Agreement")).
At a minimum, the Marketing Cooperation Conference shall be attended by the
Marketing Cooperation Team from each party.
2.6 Cooperation Projects. The Marketing Cooperation Team shall be responsible
--------------------
for the planning and execution of the marketing cooperation projects in a
way to maximize the benefits to both SEC and AST.
Article 3. Scope of Cooperation
3.1 Cooperation Efforts. Under this Agreement and in a manner consistent with
-------------------
the Marketing Cooperation Goals and all applicable laws and regulations,
the SEC and AST shall participate in a variety of cooperative efforts to
achieve the Marketing Cooperation Goals including, without limitation, with
respect to Non-Competing Products, providing to one another full
cooperation, in good faith, to devise short and long term strategies,
identify product needs, develop product concepts that include optimum
product specifications, distribution and service in furtherance of the
Marketing Cooperation Goals.
3.2 Product Planning. As limited under this Agreement and consistent with the
----------------
Marketing Cooperation Goals and all applicable laws and regulations, the
provisions of this Article 3.2 shall apply.
(a) Information Sharing. SEC and AST agree to share (as described above
-------------------
concerning the Marketing Cooperation Conference) all the information
for product planning unless it is prohibited by the law(s) or by the
contracts or agreements with any other third party.
(b) Information Types. The information in section 3.2(a) includes current
-----------------
and future product road maps, product specifications, status updates
of the ongoing projects, and any form of technical and business
related news in the personal computer industry in accordance with the
Marketing Cooperation Goals.
2
<PAGE>
(c) Brand Names. SEC and AST each agree to allow the other to produce and
-----------
market certain personal computer products under their own brand names
with any such products and respective brand names to be mutually
agreed between the parties in writing from time to time in accordance
with the Marketing Cooperation Goals.
3.3 Distribution. As limited under this Agreement and consistent with the
------------
Marketing Cooperation Goals and all applicable laws and regulations, the
provisions of this Article 3.3 shall apply.
a) Information Exchange. AST and SEC agree to provide to each other all
--------------------
marketing information, related to, and consistent with, the Marketing
Cooperation Goals, to be treated as Confidential Information (as
defined and specified the General Terms Agreement), unless the sharing
of such information is prohibited by applicable laws and regulations
of any governmental body or by contract.
(b) Distribution in Korea. AST hereby agrees to designate and appoint SEC
---------------------
as its sole and exclusive distributor in the Republic of Korea under
terms providing for a reasonable transition period from AST's current
distribution program in Korea. In the time period prior to beginning
such transition, AST agrees to provide advance notice to SEC and
obtain the approval of SEC before making significant changes in AST's
operations in Korea, or introducing new product lines in Korea, or
making press releases in Korea, and SEC agrees to review and respond
to such notices promptly, and not to unreasonably withhold such
approval.
3.4 Promotion. As limited under this Agreement and consistent with the
---------
Marketing Cooperation Goals and all applicable laws and regulations, the
provisions of this Article 3.4 shall apply.
(a) Co-Branding. SEC and AST agree to apply co-branding strategy to
-----------
certain products, for which specifications and production and delivery
schedules shall be mutually agreed to by and in accordance with the
procedures of the TEC (as defined in the General Terms Agreement).
(b) Coordination of Promotional Activities. The Marketing Cooperation
--------------------------------------
Team shall be responsible for coordinating the planning and execution
of all the promotion activities for the products determined in
accordance with Section 3.4(a).
(c) Trade Show Participation. SEC and AST agree to cooperate in
------------------------
connection with their participation in trade shows including, without
limitation sharing
3
<PAGE>
resources and cost as necessary or desirable, as determined by both
SEC and AST, to maximize the mutual benefits of the parties. SEC
and AST shall utilize the products of each other as much as possible
for displays and product demonstrations, if such are recommended,
required, and desirable, as determined by both SEC and AST, for the
purpose of the show.
(d) Trade Show Planning. SEC and AST shall discuss and finalize the
-------------------
layout of trade show booths and displays for trade shows in which SEC
and AST are both participating, the specifications of the products,
the number of items to display, and the way they run the trade shows.
The purpose of these discussions and finalization reviews is to make
sure that complementary products of AST and SEC are utilized when
feasible in the trade show booths of AST and SEC. SEC and AST agree
not to unreasonably withhold or delay the finalization of the trade
show plans of AST or SEC.
3.5 Service. SEC and AST each agree to permit the other party to utilize their
-------
worldwide service networks in personal computer related business and the
charges for such services shall not exceed the cost of providing such
services increased by an service increment, such increment being based upon
factors including, but not limited to, the costs of arranging for such
services (added transaction costs), the increment rate which is charged to
other entities, and the increment which may be deemed (if any) by tax
authorities in the absence of such an increment. Nothing in this provision
shall require AST or SEC to devote additional capital resources to service
activities, or to expand the service network of either company, or to
reduce the level of service provided to customers of either SEC or AST. SEC
and AST agree to provide service pricing (including the increments
described above) quotations to each other on request.
3.6 Logistics. SEC and AST each agree to assist the other maximize the
---------
efficiency of the worldwide logistics of delivery and manufacturing and the
charges for such assistance shall not exceed the cost of providing such
assistance increased by an service increment, such increment being based
upon factors including, but not limited to, the costs of arranging for such
logistics (added transaction costs), the increment rate which is charged to
other entities, and the increment which may be deemed (if any) by tax
authorities in the absence of such an increment. Nothing in this provision
shall require AST or SEC to devote additional capital resources to
logistics activities, or to expand the logistics support network of either
company, or to reduce the level of logistics support provided to customers
of either SEC or AST. SEC and AST agree to provide
4
<PAGE>
logistics support pricing (including the increments described above)
quotations to each other on request.
Article 5. General Terms
The provisions included in the General Terms Agreement shall apply to this
Agreement as if fully set forth herein, including without limitation, the
Confidentiality provisions set forth in the General Terms Agreement which
shall apply to all information provided by one party to the other under
this Agreement.
Article 6. Priority
In the event of a conflict or inconsistency between any term or condition
of this Agreement and that of the General Terms Agreement, the terms and
conditions of this Agreement shall supersede and control.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement, on the dates below indicated.
Samsung Electronics Co., Ltd. AST Research, Inc.
By: /s/ Bo-Soon Song By: /s/ Safi U. Qureshey
--------------------------- -------------------------------
Name: Bo-Soon Song Name: Safi U. Qureshey
Title: Senior Managing Director Title: Chief Executive Officer
Date: July 31, 1995 Date: July 31, 1995
5
<PAGE>
EXHIBIT 99.4
AST OEM SUPPLY TO SEC AGREEMENT
This AST OEM Supply to SEC Agreement ("Agreement") is made as of July 31, 1995
(the "Effective Date") by and between Samsung Electronics Company Limited, a
Korea corporation ("SEC") and AST Research, Inc., a Delaware corporation
("AST").
PURPOSE
SEC wishes to obtain high quality personal computer products which meet the
demands of the marketplace on terms that are competitive and profitable. AST
wishes to continue to develop and manufacture personal computer products
profitably, and to benefit from the economies of scale by increased
manufacturing.
AGREEMENT
Article 1. Definitions
1.1 "Products" shall mean customized personal computers and attachments, parts
and accessories thereof manufactured and/or sold by AST. The
specifications and other details on Products shall be as are agreed to by
both AST and SEC.
1.2 "Intellectual Property Rights" shall mean patents, patents applications and
utility models, copyrights, mask work rights, trade secrets, or any other
intellectual property rights, which are or will be owned by either party
before or during the term of this Agreement throughout the world, which are
necessary or required to the reasonable practice or exercise of any rights
granted or activities to be performed under this Agreement, and which the
party has or will obtain the right to grant licenses hereunder to the other
party without any payment to third parties.
1.3 "Technical Information" shall mean the information, data and materials
owned by AST, SEC or by AST and SEC jointly, including, without limitation,
any and all technologies, inventions, discoveries, know-how, designs,
drawings and other proprietary information which are necessary in
connection with design, development and manufacture of the Products.
Article 2. Product Manufacturing
2.1 Product Plans. To the extent permitted by applicable law, the parties
-------------
shall have responsibilities regarding the
1
<PAGE>
manufacturing of the Products as agreed upon in writing by both of the
parties prior to the commencement of any Product manufacturing tasks
(the "Product Plan"). The parties will carry out their responsibilities
within the time frames set forth in such Product Plan.
2.2 Product Specifications. AST and SEC shall both approve the product
----------------------
specifications described in Article 1.1 hereof. AST may change the
specifications of the Product, provided that reasonable advance written
notification is given to SEC, and that such changes to the specification do
not change the form, fit and functional performance of the Product. In
addition, AST may change the specifications of the Product even if such
form, fit and functional performance is changed, provided that the advance
written consent of SEC is obtained, such consent not to be unreasonably
withheld.
2.3 Non-Recurring Engineering Charges. SEC shall pay Non-Recurring Engineering
---------------------------------
charges incurred by AST in connection with the development of the Product,
provided that the amount of such Non-Recurring Engineering charges are
included in the written Product Plan or otherwise approved in advance in
writing by SEC, and provided that any increases to such Non-Recurring
Engineering charges are approved in advance by SEC.
2.4 Right of First Refusal. AST shall have a right of first refusal to develop
----------------------
(under appropriate separate terms) or manufacture any Products for SEC
following the Effective Date hereof, subject to the terms of this
Agreement. When SEC determines to seek an outside source of supply for
Products, SEC shall provide information to AST concerning such Products
when and to the extent that such information is provided to other potential
outside sources. AST shall, at its option, provide a quotation to SEC for
the development or manufacturing of such Products. Prior to entering into
any agreement with a third party to provide SEC with such Products, SEC
shall provide written notice to SEC of the terms and conditions of the
proposed arrangement in sufficient detail to enable AST to evaluate the
same (the "Contemplated Transaction"). To exercise its right of first
refusal, AST shall advise SEC of its intent to exercise its right of first
refusal, in writing, at any time within the fourteen (14) business days
following AST's receipt of such notice (the "Exercise Period"). If AST
wishes to exercise its right of first refusal, AST shall provide a written
quotation to SEC for the Products with all terms, conditions,
specifications, quality requirements, prices, allocations, and other
provisions at least as favorable as were offered to SEC in the Contemplated
Transaction. If AST notifies SEC that it does not wish to exercise its
right of first refusal or fails to respond to SEC in writing within the
Exercise Period (the "OEM Project Rejection") then SEC shall be free to
enter into the Contemplated Transaction on
2
<PAGE>
the same terms and conditions as offered to AST; provided, however,
that if the Contemplated Transaction is not entered into in writing
between SEC and a third party within six (6) months of the OEM Project
Rejection then AST's right of first refusal shall be revived with
respect to the OEM product and technology related to the Contemplated
Transaction and SEC shall offer the OEM product and technology
related to the Contemplated Transaction to AST in accordance herewith prior
to entering into any arrangement related to such OEM product or technology
with any third party.
Article 3. Technology Sharing
In recognition of the advanced development nature of technology
contemplated by the development of the Products, it is anticipated that AST
and SEC will find it mutually beneficial to establish a close working
relationship to exchange Technical Information to achieve the objectives of
this Agreement. Toward this end, the parties hereby agree to, within the
confines of applicable law, provide each other with sufficient Technical
Information to accomplish the purposes of each Product Plan adopted
pursuant to this Agreement. Any and all such Technical Information
exchanged pursuant to this Agreement shall be treated as Confidential
Information in accordance with the terms and conditions of that certain
General Terms Agreement between the parties of even date herewith.
Article 4. Proprietary Rights
4.1 Separately Owned Rights. Any Technical Information which is developed or
-----------------------
conceived independently by each party hereunder and Intellectual Property
Rights therefor shall remain the property of such developing party.
4.2 Jointly Owned Rights. Any Technical Information which is developed or
--------------------
conceived jointly by both parties hereunder and Intellectual Property
Rights therefor shall be the joint property of both parties. Each party
shall have a right to grant to its Subsidiaries the licenses under jointly
owned Technical Information and Intellectual Property Rights therefor
without obtaining a prior consent of and accounting for any compensation to
the other party. The party who wishes to grant to any third party any
licenses under the jointly-owned Technical Information and any Intellectual
Property Rights therefor shall obtain a prior written approval of the other
party. Notwithstanding any other provision hereof, the parties agree that
any Technical Information or Intellectual Property Rights related to any
3
<PAGE>
development by AST in connection with the development of the Product to
satisfy the specifications provided by SEC, shall constitute an independent
invention or creation of AST and SEC shall not make any claim as a joint
developer or joint owner based upon SEC providing such specifications to
AST.
4.3 Protections for Jointly Owned Rights. Both parties shall from time to time
------------------------------------
discuss whether patent or copyright applications should be filed on, or
other forms of intellectual property protection sought for, the jointly-
owned Intellectual Property Rights, the party who will file and pay for
such patent application and the country(ies) in which the same is to be
filed. If one party believes that a particular type of intellectual
property protection should be sought for a particular portion of the
jointly owned Intellectual Property Rights (the "Initiating Party") but the
parties can not agree, within a reasonable amount of time, as to whether
that particular type of intellectual property protection should be sought
for that particular jointly owned Intellectual Property Rights, then the
Initiating Party shall be permitted to pursue such intellectual property
protection for its sole ownership, if advance written notice of such filing
is provided to the other party, and the other party shall cooperate (at the
expense of the Initiating Party) in all ways reasonably requested by the
Initiating Party provided that the Initiating Party shall bear the expense
of obtaining such intellectual property protection, and the other party
shall have a non-exclusive world-wide fully paid up license to such
intellectual property protection.
4.4 Grant of License. SEC hereby grants to AST and its Subsidiaries a non-
----------------
exclusive, non-transferable, worldwide, perpetual and royalty-free license
to use Technical Information supplied by SEC and under the Intellectual
Property Rights therefor, subject to the terms of this Agreement, to: (a)
develop, manufacture, have manufactured, use, and copy for the purpose of
supplying Products to SEC; and (b) manufacture, use, copy, modify, sell,
lease or otherwise dispose of any goods which are differentiated from the
Products, subject to the terms and conditions of this Agreement.
4.5 Licenses to Subsidiaries. Any license or other right granted to any
------------------------
Subsidiary hereunder shall immediately terminate at such time as such
entity no longer satisfies the definition of Subsidiary as that term is
defined in that certain General Terms Agreement between the parties of even
date herewith.
4.6 Limitations on License. Notwithstanding any other provision of this
----------------------
Agreement, for those patent rights licensed or sublicensed to AST from SEC
under this Agreement, AST shall not have the right to grant licenses or
sublicenses to any
4
<PAGE>
third parties, excepting for licenses or sublicenses to AST Subsidiaries
to the extent permitted under this Agreement, and further excepting
licenses which would otherwise be implied to purchasers of AST products
for the use or resale of such products. Notwithstanding any other
provision of this Agreement, for those patent rights licensed or
sublicensed to SEC from AST under this Agreement, SEC shall not have the
right to grant licenses or sublicenses to any third parties, excepting for
licenses or sublicenses to SEC Subsidiaries to the extent permitted under
this Agreement, and further excepting licenses which would otherwise be
implied to purchasers of AST products for the use or resale of such
products. Notwithstanding any other provision of this Agreement, any
purported or attempted grant by AST or SEC of a license or sublicense
contrary to this Agreement shall be of no force or effect.
Article 5. Ordering
5.1 Forecasts. SEC shall submit a written revolving six (6) month forecast to
---------
AST of anticipated purchases of the Products, and shall update the forecast
monthly. The last three (3) months of this forecast shall not be a
commitment of either AST or SEC, but is necessary for the planning purposes
of AST and SEC and for the convenience of each. Unless otherwise agreed to
by both SEC and AST, the immediately preceding three (3) months forecast
shall be binding to the parties, provided that the forecast for the
immediate first month shall be binding to the parties, month two (2), can
be changed up to twenty percent (20%) and month three (3) forty percent
(40%).
5.2 Orders and Terms. SEC and its Subsidiaries ("Ordering Entity") may submit
----------------
purchase orders directly to AST for Product, and AST shall supply same to
the Ordering Entity pursuant to the terms and conditions of this Agreement.
Notwithstanding the foregoing, SEC and the Ordering Entity shall be
severally and/or jointly liable for payment therefor. This Agreement sets
forth the terms and conditions which shall govern the transactions between
the parties and Ordering Entities related to the Product. No term or
condition set forth in any purchase order submitted to AST by an Ordering
Entity shall modify the terms and conditions herein. Unless otherwise
agreed to by SEC and AST, purchase orders pursuant to the said forecast,
which shall be considered final and binding, shall be issued by SEC to AST
with at least sixty (60) days lead time for delivery during the term of
this Agreement. AST agrees to bear any expedited shipping costs or other
costs required to meet any previously committed AST delivery dates. Any
such purchase orders shall constitute separate contracts between AST and
the ordering entity.
5
<PAGE>
Article 6. Price
The prices for Products shall be set by mutual agreement between
SEC and AST. Unless otherwise agreed to by both SEC and AST, such prices
shall be valid for three (3) months and thereafter shall be subject to
change according to a mutually agreed upon price revision arrangement which
arrangement shall take into account fluctuations in excess of five percent
(5%) in the exchange rate between the U.S. Dollar and the Korean Won and
other factors.
Article 7. Payment
Unless otherwise agreed upon in writing between the parties
hereto, discussions shall be held between AST and SEC concerning an
acceptable open account credit limit for SEC's purchases of Products under
this Agreement, and failing the mutual agreement as to such credit limit,
prior to the shipment of Product by AST, SEC shall arrange an irrevocable
letter of credit in favor of AST to be issued by a bank acceptable to AST
and, if so requested by AST, to be confirmed by a Korean foreign exchange
bank in such U.S. dollars and in such amount sufficient to cover the sales
prices.
Article 8. Infringement
Unless otherwise agreed upon in writing between the parties
hereto, AST is not responsible for any infringement with regard to patent
rights, utility model rights, trademark, commercial design or copyrights in
any country with respect to the Product; provided, however, that AST shall
be responsible for the infringement of any intellectual property rights of
third parties with respect to any processes employed by AST in the
manufacture of the Product.
Article 9. Subcontracting
AST agrees to obtain SEC's written approval before subcontracting
this Agreement or any substantial portion thereof, however, this limitation
shall not apply to the purchase of standard commercial supplies or raw
material.
6
<PAGE>
Article 10. Effect of Termination
If this Agreement is terminated as provided in Article 3 of the
General Terms Agreement, SEC may require AST to transfer title and deliver
to SEC any Product and semifinished products and materials, parts,
drawings, and information subject to SEC's payment to AST for any incurred
cost or expense therefrom, as AST has specifically produced or specifically
acquired for the performance of such part of this Agreement. Any and all
licenses granted pursuant to this Agreement shall terminate upon such date
as this Agreement terminates or expires regardless of the cause.
Article 11. Warranty
11.1 General Warranty. AST warrants to SEC that the Products will conform to
----------------
the specifications provided by SEC and under normal use and maintenance,
the Products will be free from defects in workmanship or materials for a
period of 39 months from delivery. AST shall deliver to SEC an additional
number of parts equivalent to 1% of each product purchased to replace the
anticipated quantity of defective products. These parts will be delivered
free of charge along with each shipment of Products purchased by SEC. The
additional number of parts provided for in this Article 11.1 shall be the
sole and exclusive remedy for breach of the warranty of this Article 11.1.
11.2 Excessive Failures. AST further warrants that the Products shall be free
------------------
from an Excessive Failure Rate (as hereinafter defined). As used in this
Section, an Excessive Failure Rate shall mean whenever during any ninety
(90) day period more than thirty percent (30%) of a shipment lot of
Products contain a defect in material and workmanship which defect is due
to the same cause (an "Excessive Failure Rate"). If an Excessive Failure
Rate is proven to exist, AST will, at no charge to SEC at AST's option, (a)
repair or replace the affected Products in SEC and SEC's customer's
inventory, or (b) at no charge to SEC, provide parts, special tools and
documentation for SEC to repair or replace the affected Products in the
affected shipment.
11.3 DOA Warranty. Under Dead-On-Arrival (DOA) conditions, AST agrees to
------------
supply repair parts and to provide personnel at SEC designated locations or
at major AST customer sites to repair the DOA products which have major
functional failures provided that the DOA rate exceeds five percent (5%)
for lot sizes of 200 or more. AST agrees to perform failure analysis for
the defective units and to report corrective action to be taken to prevent
reoccurrence to SEC engineers
7
<PAGE>
within fifteen (15) working days after notification by SEC. If repairs
cannot be made within such fifteen (15) days period, SEC reserves the
right to reject DOA products and to return them to AST for credit only.
11.4 Disclaimer. NO OTHER WARRANTIES ARE GIVEN WHETHER EXPRESS OR IMPLIED,
----------
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR USE.
Article 12. General Terms
The provisions included in the General Terms Agreement shall
apply to this Agreement.
Article 13. Priority
In the event of a conflict or inconsistency between any term or
condition of this Agreement and that of the General Terms Agreement, the
terms and conditions of this Agreement shall supersede and control. The
terms and conditions of this Agreement shall be superseded and controlled
by terms of any Product Plan signed by both parties hereto.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement, on the dates below indicated.
Samsung Electronics Co., Ltd. AST Research, Inc.
By: /s/ Bo-Soon Song By: /s/ Safi U. Qureshey
--------------------------- ------------------------------
Name: Bo-Soon Song Name: Safi U. Qureshey
Title: Senior Managing Director Title: Chief Executive Officer
Date: July 31, 1995 Date: July 31, 1995
8
<PAGE>
EXHIBIT 99.5
SEC OEM SUPPLY TO AST AGREEMENT
This SEC OEM Supply to AST Agreement ("Agreement") is made as of July 31, 1995
(the "Effective Date") by and between Samsung Electronics Company Limited, a
Korea corporation ("SEC") and AST Research, Inc., a Delaware corporation
("AST").
PURPOSE
AST wishes to obtain high quality personal computer products which meet the
demands of the marketplace on terms that are competitive and profitable. SEC
wishes to continue to develop and manufacture personal computer products
profitably, and to benefit from the economies of scale by increased
manufacturing.
AGREEMENT
Article 1. Definitions
1.1 "Products" shall mean customized personal computers and attachments, parts
and accessories thereof manufactured and/or sold by SEC. The
specifications and other details on Products shall be as are agreed to by
both AST and SEC.
1.2 "Intellectual Property Rights" shall mean patents, patents applications and
utility models, copyrights, mask work rights, trade secrets, or any other
intellectual property rights, which are or will be owned by either party
before or during the term of this Agreement throughout the world, which are
necessary or required to the reasonable practice or exercise of any rights
granted or activities to be performed under this Agreement, and which the
party has or will obtain the right to grant licenses hereunder to the other
party without any payment to third parties.
1.3 "Technical Information" shall mean the information, data and materials
owned by AST, SEC or by AST and SEC jointly, including, without limitation,
any and all technologies, inventions, discoveries, know-how, designs,
drawings and other proprietary information which are necessary in
connection with design, development and manufacture of the Products.
Article 2. Product Manufacturing
2.1 Product Plans. To the extent permitted by applicable law, the parties
-------------
shall have responsibilities regarding the
1
<PAGE>
manufacturing of the Products as agreed upon in writing by both of the
parties prior to the commencement of any Product manufacturing tasks (the
"Product Plan"). The parties will carry out their responsibilities
within the time frames set forth in such Product Plan.
2.2 Product Specifications. AST and SEC shall both approve the product
----------------------
specifications described in Article 1.1 hereof. SEC may change the
specifications of the Product, provided that reasonable advance written
notification is given to AST, and that such changes to the specification do
not change the form, fit and functional performance of the Product. In
addition, SEC may change the specifications of the Product even if such
form, fit and functional performance is changed, provided that the advance
written consent of AST is obtained, such consent not to be unreasonably
withheld.
2.3 Non-Recurring Engineering Charges. AST shall pay Non-Recurring Engineering
---------------------------------
charges incurred by SEC in connection with the development of the Product,
provided that the amount of such Non-Recurring Engineering charges are
included in the written Product Plan or otherwise approved in advance in
writing by AST, and provided that any increases to such Non-Recurring
Engineering charges are approved in advance by AST.
2.4 Right of First Refusal. SEC shall have a right of first refusal to develop
----------------------
(under appropriate separate terms) or manufacture any Products for AST
following the Effective Date hereof, subject to the terms of this
Agreement. When AST determines to seek an outside source of supply for
Products, AST shall provide information to SEC concerning such Products
when and to the extent that such information is provided to other potential
outside sources. SEC shall, at its option, provide a quotation to AST for
the development or manufacturing of such Products. Prior to entering into
any agreement with a third party to provide AST with such Products, AST
shall provide written notice to SEC of the terms and conditions of the
proposed arrangement in sufficient detail to enable SEC to evaluate the
same (the "Contemplated Transaction"). To exercise its right of first
refusal, SEC shall advise AST of its intent to exercise its right of first
refusal, in writing, at any time within the fourteen (14) business days
following SEC's receipt of such notice (the "Exercise Period"). If SEC
wishes to exercise its right of first refusal, SEC shall provide a written
quotation to AST for the Products with all terms, conditions,
specifications, quality requirements, prices, allocations, and other
provisions at least as favorable as were offered to AST in the Contemplated
Transaction. If SEC notifies AST that it does not wish to exercise its
right of first refusal or fails to respond to AST in writing within the
Exercise Period (the "OEM Project Rejection") then AST
2
<PAGE>
shall be free to enter into the Contemplated Transaction on the same
terms and conditions as offered to SEC; provided, however, that if the
Contemplated Transaction is not entered into in writing between AST and a
third party within six (6) months of the OEM Project Rejection then SEC's
right of first refusal shall be revived with respect to the OEM product
and technology related to the Contemplated Transaction and AST shall offer
the OEM product and technology related to the Contemplated Transaction to
SEC in accordance herewith prior to entering into any arrangement related
to such OEM product or technology with any third party.
Article 3. Technology Sharing
In recognition of the advanced development nature of technology
contemplated by the development of the Products, it is anticipated that AST
and SEC will find it mutually beneficial to establish a close working
relationship to exchange Technical Information to achieve the objectives of
this Agreement. Toward this end, the parties hereby agree to, within the
confines of applicable law, provide each other with sufficient Technical
Information to accomplish the purposes of each Product Plan adopted
pursuant to this Agreement. Any and all such Technical Information
exchanged pursuant to this Agreement shall be treated as Confidential
Information in accordance with the terms and conditions of that certain
General Terms Agreement between the parties of even date herewith.
Article 4. Proprietary Rights
4.1 Separately Owned Rights. Any Technical Information which is developed or
-----------------------
conceived independently by each party hereunder and Intellectual Property
Rights therefor shall remain the property of such developing party.
4.2 Jointly Owned Rights. Any Technical Information which is developed or
--------------------
conceived jointly by both parties hereunder and Intellectual Property
Rights therefor shall be the joint property of both parties. Each party
shall have a right to grant to its Subsidiaries the licenses under jointly
owned Technical Information and Intellectual Property Rights therefor
without obtaining a prior consent of and accounting for any compensation to
the other party. The party who wishes to grant to any third party any
licenses under the jointly-owned Technical Information and any Intellectual
Property Rights therefor shall obtain a prior written approval of the other
party. Notwithstanding any other provision hereof, the parties agree that
any Technical
3
<PAGE>
Information or Intellectual Property Rights related to any
development by SEC in connection with the development of the Product to
satisfy the specifications provided by AST, shall constitute an independent
invention or creation of SEC and AST shall not make any claim as a joint
developer or joint owner based upon AST providing such specifications to
SEC.
4.3 Protections for Jointly Owned Rights. Both parties shall from time to time
------------------------------------
discuss whether patent or copyright applications should be filed on, or
other forms of intellectual property protection sought for, the jointly-
owned Intellectual Property Rights, the party who will file and pay for
such patent application and the country(ies) in which the same is to be
filed. If one party believes that a particular type of intellectual
property protection should be sought for a particular portion of the
jointly owned Intellectual Property Rights (the "Initiating Party") but the
parties can not agree, within a reasonable amount of time, as to whether
that particular type of intellectual property protection should be sought
for that particular jointly owned Intellectual Property Rights, then the
Initiating Party shall be permitted to pursue such intellectual property
protection for its sole ownership, if advance written notice of such filing
is provided to the other party, and the other party shall cooperate (at the
expense of the Initiating Party) in all ways reasonably requested by the
Initiating Party provided that the Initiating Party shall bear the expense
of obtaining such intellectual property protection, and the other party
shall have a non-exclusive world-wide fully paid up license to such
intellectual property protection.
4.4 Grant of License. AST hereby grants to SEC and its Subsidiaries a non-
----------------
exclusive, non-transferable, worldwide, perpetual and royalty-free license
to use Technical Information supplied by AST and under the Intellectual
Property Rights therefor, subject to the terms of this Agreement, to: (a)
develop, manufacture, have manufactured, use, and copy for the purpose of
supplying Products to AST; and (b) manufacture, use, copy, modify, sell,
lease or otherwise dispose of any goods which are differentiated from the
Products, subject to the terms and conditions of this Agreement.
4.5 Licenses to Subsidiaries. Any license or other right granted to any
------------------------
Subsidiary hereunder shall immediately terminate at such time as such
entity no longer satisfies the definition of Subsidiary as that term is
defined in that certain General Terms Agreement between the parties of even
date herewith.
4.6 Limitations on License. Notwithstanding any other provision of this
----------------------
Agreement, for those patent rights licensed or sublicensed to AST from SEC
under this Agreement, AST shall
4
<PAGE>
not have the right to grant licenses or sublicenses to any third
parties, excepting for licenses or sublicenses to AST Subsidiaries
to the extent permitted under this Agreement, and further excepting
licenses which would otherwise be implied to purchasers of AST
products for the use or resale of such products. Notwithstanding any other
provision of this Agreement, for those patent rights licensed or
sublicensed to SEC from AST under this Agreement, SEC shall not have the
right to grant licenses or sublicenses to any third parties, excepting for
licenses or sublicenses to SEC Subsidiaries to the extent permitted under
this Agreement, and further excepting licenses which would otherwise be
implied to purchasers of AST products for the use or resale of such
products. Notwithstanding any other provision of this Agreement, any
purported or attempted grant by AST or SEC of a license or sublicense
contrary to this Agreement shall be of no force or effect.
Article 5. Ordering
5.1 Forecasts. AST shall submit a written revolving six (6) month forecast to
---------
SEC of anticipated purchases of the Products, and shall update the forecast
monthly. The last three (3) months of this forecast shall not be a
commitment of either AST or SEC, but is necessary for the planning purposes
of AST and SEC and for the convenience of each. Unless otherwise agreed to
by both SEC and AST, the immediately preceding three (3) months forecast
shall be binding to the parties, provided that the forecast for the
immediate first month shall be binding to the parties, month two (2), can
be changed up to twenty percent (20%) and month three (3) forty percent
(40%).
5.2 Orders and Terms. AST and its Subsidiaries ("Ordering Entity") may submit
----------------
purchase orders directly to SEC for Product, and SEC shall supply same to
the Ordering Entity pursuant to the terms and conditions of this Agreement.
Notwithstanding the foregoing, AST and the Ordering Entity shall be
severally and/or jointly liable for payment therefor. This Agreement sets
forth the terms and conditions which shall govern the transactions between
the parties and Ordering Entities related to the Product. No term or
condition set forth in any purchase order submitted to SEC by an Ordering
Entity shall modify the terms and conditions herein. Unless otherwise
agreed to by SEC and AST, purchase orders pursuant to the said forecast,
which shall be considered final and binding, shall be issued by AST to SEC
with at least sixty (60) days lead time for delivery during the term of
this Agreement. SEC agrees to bear any expedited shipping costs or other
costs required to meet any previously committed SEC delivery dates. Any
such
5
<PAGE>
purchase orders shall constitute separate contracts between SEC and
the Ordering Entity.
Article 6. Minimum Purchase
6.1 Calendar Year 1996 Minimum. At a minimum, AST guarantees to buy Product
--------------------------
from SEC during calendar year 1996 in the aggregate price amount of Two
Hundred Million Dollars US ($200,000,000), provided that the Products are
approved in advance in writing by AST as meeting AST's market needs during
calendar year 1996, and that the Products are provided with price,
allocation, terms and conditions at least as favorable as AST is able to
obtain from other suppliers or AST's own factories, and that SEC has
adequate production capacity available to devote to satisfying AST's needs
for such Products. SEC agrees to use its best efforts to provide Products
to AST in the amount of at least equal to the aggregate price amount stated
above during calendar year 1996 which meet AST's market needs during
calendar year 1996, and with price, allocation, terms and conditions which
are at least as favorable as AST is able to obtain from other suppliers or
AST's own factories.
6.2 Agreements on Subsequent Year Minimums. The minimum purchase quantity of
--------------------------------------
Products for all subsequent years during the term hereof shall be agreed
upon in writing between both the parties by the end of each year, based on
AST's annual sales growth rate by product group for the preceding calendar
year, and SEC's demonstrated and anticipated capacity to provide Products
to AST in the amount equal to such minimum purchase quantity which meet
AST's market needs, and with price, allocation, terms and conditions which
are at least as favorable as AST is able to obtain from other suppliers or
AST's own factories. Such an agreement shall become an integral part of
this Agreement.
6.3 Default Amounts of Subsequent Year Minimums. Should the parties fail to
-------------------------------------------
agree as to a minimum purchase quantity for any subsequent year, the fixed
minimum purchase quantity for the immediately preceding year shall be
applied to such subsequent year, provided that SEC has demonstrated during
such preceding year its capacity to provide Products to AST in the amount
equal to such minimum purchase quantity which meet AST's market needs, and
with price, allocation, terms and conditions which are at least as
favorable as AST is able to obtain from other suppliers or AST's own
factories.
6
<PAGE>
Article 7. Price
The prices for Products shall be set by mutual agreement between
SEC and AST. Unless otherwise agreed to by both SEC and AST, such prices
shall be valid for three (3) months and thereafter shall be subject to
change according to a mutually agreed upon price revision arrangement which
arrangement shall take into account fluctuations in excess of five percent
(5%) in the exchange rate between the U.S. Dollar and the Korean Won and
other factors.
Article 8. Payment
Unless otherwise agreed upon in writing between the parties
hereto, discussions shall be held between AST and SEC concerning an
acceptable open account credit limit for AST's purchases of Products under
this Agreement, and failing the mutual agreement as to such credit limit,
prior to the shipment of Product by SEC, AST shall arrange an irrevocable
letter of credit in favor of SEC to be issued by a bank acceptable to SEC
and, if so requested by SEC, to be confirmed by a Korean foreign exchange
bank in such U.S. dollars and in such amount sufficient to cover the sales
prices.
Article 9. Infringement
Unless otherwise agreed upon in writing between the parties
hereto, SEC is not responsible for any infringement with regard to patent
rights, utility model rights, trademark, commercial design or copyrights in
any country with respect to the Product; provided, however, that SEC shall
be responsible for the infringement of any intellectual property rights of
third parties with respect to any processes employed by SEC in the
manufacture of the Product.
Article 10. Subcontracting
SEC agrees to obtain AST's written approval before subcontracting
this Agreement or any substantial portion thereof, however, this limitation
shall not apply to the purchase of standard commercial supplies or raw
material.
7
<PAGE>
Article 11. Effect of Termination
If this Agreement is terminated as provided in Article 3 of the
General Terms Agreement, AST may require SEC to transfer title and deliver
to AST any Product and semifinished products and materials, parts,
drawings, and information subject to AST's payment to SEC for any incurred
cost or expense therefrom, as SEC has specifically produced or specifically
acquired for the performance of such part of this Agreement. Any and all
licenses granted pursuant to this Agreement shall terminate upon such date
as this Agreement terminates or expires regardless of the cause.
Article 12. Warranty
12.1 General Warranty. SEC warrants to AST that the Products will conform to
----------------
the specifications provided by AST and under normal use and maintenance,
the Products will be free from defects in workmanship or materials for a
period of 39 months from delivery. SEC shall deliver to AST an additional
number of parts equivalent to 1% of each product purchased to replace the
anticipated quantity of defective products. These parts will be delivered
free of charge along with each shipment of Products purchased by AST. The
additional number of parts provided for in this Article 12.1 shall be the
sole and exclusive remedy for breach of the warranty of this Article 12.1.
12.2 Excessive Failures. SEC further warrants that the Products shall be free
------------------
from an Excessive Failure Rate (as hereinafter defined). As used in this
Section, an Excessive Failure Rate shall mean whenever during any ninety
(90) day period more than thirty percent (30%) of a shipment lot of
Products contain a defect in material and workmanship which defect is due
to the same cause (an "Excessive Failure Rate"). If an Excessive Failure
Rate is proven to exist, SEC will, at no charge to AST at SEC's option, (a)
repair or replace the affected Products in AST and AST's customer's
inventory, or (b) at no charge to AST, provide parts, special tools and
documentation for AST to repair or replace the affected Products in the
affected shipment.
12.3 DOA Warranty. Under Dead-On-Arrival (DOA) conditions, SEC agrees to
------------
supply repair parts and to provide personnel at AST designated locations or
at major AST customer sites to repair the DOA products which have major
functional failures provided that the DOA rate exceeds five percent (5%)
for lot sizes of 200 or more. SEC agrees to perform failure analysis for
the defective units and to report corrective action to be taken to prevent
reoccurrence to AST engineers within fifteen (15) working days after
notification by AST. If repairs cannot be made within such fifteen (15)
days
8
<PAGE>
period, AST reserves the right to reject DOA products and to return
them to SEC for credit only.
12.4 Disclaimer. NO OTHER WARRANTIES ARE GIVEN WHETHER EXPRESS OR IMPLIED,
----------
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR USE.
Article 13. General Terms
The provisions included in the General Terms Agreement shall
apply to this Agreement.
Article 14. Priority
In the event of a conflict or inconsistency between any term or
condition of this Agreement and that of the General Terms Agreement, the
terms and conditions of this Agreement shall supersede and control. The
terms and conditions of this Agreement shall be superseded and controlled
by terms of any Product Plan signed by both parties hereto.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement, on the dates below indicated.
Samsung Electronics Co., Ltd. AST Research, Inc.
By: /s/ Bo-Soon Song By: /s/ Safi U. Qureshey
---------------------------- -------------------------------
Name: Bo-Soon Song Name: Safi U. Qureshey
Title: Senior Managing Director Title: Chief Executive Officer
Date: July 31, 1995 Date: July 31, 1995
9
<PAGE>
EXHIBIT 99.6
JOINT DEVELOPMENT AND TECHNICAL COOPERATION AGREEMENT
This Joint Development and Technical Cooperation Agreement ("Agreement") is made
as of July 31, 1995 by and between AST Research, Inc., a Delaware corporation
("AST"), and Samsung Electronics Company Limited, a Korean corporation ("SEC").
Purpose
In order to form a successful strategic alliance that will enhance the
competitive position of each party, AST and SEC understand and agree that they
shall share expertise in research and product development through technical
cooperation in order to develop products each party could not develop on its own
and to reduce "product time to market" and both parties expect that the
strategic alliance will be mutually beneficial for each party's competitiveness.
Agreement
Article l. Definitions
1.1 "Development Plan" shall mean the plan for the research, development,
design and manufacturing of products which cannot be independently
developed in a commercially viable manner (the "Jointly Developed
Products"). The Development Plan shall include, without limitation,
project specifications, personnel, capital equipment, material
requirements, design and implementation phases, and completion/ milestones,
as approved in writing by both SEC and AST.
1.2 "Intellectual Property Rights" shall mean patents, patents applications and
utility models, copyrights, mask work rights, trade secrets, or any other
intellectual property rights, which are or will be owned by either party
before or during the term of this Agreement anywhere throughout the world,
and which are invented, authored or otherwise come into being pursuant to
the Joint Development Projects.
1.3 "Joint Development Projects" shall mean any project undertaken by both
parties under the terms and conditions of this Agreement pursuant to a
Development Plan approved in writing by both parties.
1.4 "Technical Information" shall mean the information, data and materials,
including, without limitation, any and all technologies, inventions,
discoveries, know-how, designs, drawings and other proprietary information
which are owned
1
<PAGE>
by the parties and necessary in connection with design,
development and manufacture of the Jointly Developed Products.
Article 2. Joint Development
2.1 Joint Development Projects in General.
--------------------------------------
(a) Frequency. Beginning on the Effective Date, both parties shall make
---------
reasonable efforts to define, plan and implement at least one (1)
Joint Development Project every twelve (12) months for a period of
five (5) years in the general areas of personal computers and related
components thereto.
(b) Management. AST shall manage the development activities, and all such
----------
activities shall occur at AST's facilities, unless both parties agree
otherwise in writing.
(c) Changes. Upon the mutual written agreement of both parties, items and
-------
tasks may be modified in, added to, or deleted from the Development
Plan.
2.2 Steering Committee.
------------------
(a) Authority. Top Executive Committee as defined in the General Terms
---------
Agreement (the "TEC") shall function as a steering committee and
therefore have any authority which is needed with respect to any Joint
Development Project under this Agreement except to the extent
otherwise agreed herein or as may be agreed in a Development Plan.
(b) Negotiations. Discussion of the definition of the next-year project
------------
shall begin no later than six (6) months prior to each anniversary
date of the Effective Date. The definition of each project shall be
negotiated in best efforts, including personnel, equipment, material
and financial resources, management roles, exchange of the Technical
Information, development and implementation requirements, project
milestones and any additional provisions. These projects shall be
outlined in a fashion similar to the Development Plan first approved
in writing by both AST and SEC, and added as annual amendments to this
Agreement.
2.3 Project Coordination.
--------------------
(a) Selection of Coordinators. TEC shall appoint one (1) project manager,
-------------------------
equivalent level or higher level
2
<PAGE>
employee from each party, as the overall project coordinators for
each defined Joint Development Project (the "Project Coordinators").
(b) Communication and Progress Reports. The Project Coordinators shall
----------------------------------
communicate as often as is desirable, in person, by telephone,
electronic mail or facsimile (or by any other means) in order to
review progress, track schedules, resolve problems and arrange for the
exchange of materials necessary for the performance of this Agreement.
AST's and SEC's Project Coordinator shall also jointly prepare a
progress report to SEC and AST as often as is specified in the
Development Plan.
(c) Authority and Responsibility. Project Coordinators shall also: (i)
----------------------------
have authority to act for and on behalf of the party they represent
and to make binding technical decisions (but not financial or other
decisions) with respect to the work to be performed under this
Agreement; (ii) assume responsibility for the accuracy of the data and
information supplied; (iii) provide access to appropriate personnel
for each phase of development; and (iv) coordinate access to the
party's facilities and equipment as required.
(d) Delays. To the extent that any planned procedures or development
------
milestones are not completed on schedule, the Project Coordinators
(hereinafter defined) of the parties shall determine whether a
rescheduling of such procedures or an immediate change to milestones
is reasonably possible, or whether alternative procedures or
milestones should be implemented.
(e) Communication Routing. All communications between parties relating to
---------------------
the aforementioned modifications to the Development Plan or
rescheduling of procedures or milestones shall be routed through the
Project Coordinators before such modifications or rescheduling are
implemented.
2.4 First Year Joint Development Project ("Pentium Multimedia Note PC").
-------------------------------------------------------------------
(a) Development Plan. In the first year, beginning on the Effective Date,
----------------
both parties shall make all reasonable efforts to conduct the
research, experimentation, development and implementation work
necessary to complete the design and development of the Pentium
Multimedia Note PC, substantially in accordance with a Development
Plan to be agreed between the parties, which contains the project
specifications, deliverables by each party, milestones and/or other
details on respective responsibilities of both parties.
3
<PAGE>
(b) Team Formation. AST and SEC agree to establish a separate research
--------------
and development team under the direction of AST's Project Coordinator.
AST shall designate AST's Project Coordinator as the Pentium
Multimedia Note PC Director and make best efforts to make the
completion of the Pentium Multimedia Note PC the primary
responsibility of the AST's Project Coordinator.
(c) Project Coordinators. The Steering Committee shall appoint Project
--------------------
Coordinators for the Pentium Multimedia Note PC within 30 days of the
Effective Date.
Article 3. Supply of Technical Information
3.1 Initial Information. For the purpose of the Joint Development Projects
-------------------
under Article 3 hereof, each party shall provide to the other party with
its Technical Information owned by such party, as of the Effective Date or
such kick-off date of a new project as described in Article 2.1, to the
extent reasonably necessary for the other party to perform the activities
contemplated hereunder.
3.2 Updated Information. Each party shall provide from time to time to the
-------------------
other party with Technical Information developed by such party directly in
the course of the development work for the Joint Development Projects
hereunder.
3.3 Quality of Information. Each party shall make its best efforts to verify
----------------------
that the Technical Information provided hereunder is the same or
substantially same information and data as are used or to be used by such
party for manufacturing the Jointly Developed Products.
Article 4. Technical Support Obligations
4.1 Support Services. Each party shall provide technical support to the other
----------------
party as set forth in this Article 4, for time periods and at prices and
under other terms and conditions to be agreed by both parties in the
Development Plan. Technical support shall include the following listed
items.
(a) Telephone hot-line support shall be provided during normal days and
hours of business operation. Such support shall include consultation
concerning operation and utilization of the Jointly Developed
Products.
(b) Error-correction services shall be provided, which shall consist of
each party using its best efforts to
4
<PAGE>
correct any errors in the Jointly Developed Products such that the
Jointly Developed Products are brought into conformance with the
Development Plan.
4.2 On-Site Engineers. Each party shall dispatch a mutually agreed upon number
-----------------
of engineers for a mutually agreed upon period of time to the facilities to
the other party to assist in the Joint Development Projects. Beginning on
the Effective Date and during the term of this Agreement, each party shall
train such engineers and shall provide all required equipment for such
training free of charge and such engineers shall work at the direction of
such party, all in accordance with the Development Plan.
4.3 Expert Consulting. Should one party consider it necessary and upon written
-----------------
request, the other party shall dispatch its experts to such other party's
office or plant for rendering consulting services and technical guidance to
such other party in connection with the Development Plan. Such written
requests shall describe the number of personnel including nominated
persons, the time of dispatch and a reasonable period of stay. The
financial arrangements and other provisions for such services and guidance
shall be as agreed in each Development Plan.
4.4 Immigration Law Compliance. AST shall sponsor SEC's engineers for the
--------------------------
appropriate training or work visa, to the extent that such sponsorship is
in compliance with law, and for purposes of the Development Plan.
Article 5. Expenses
Each party shall bear its own expenses related to this Agreement,
including but not limited to all travel, living costs and any other
expenses for visit or stay by its employees, and no cost or charges shall
be assessed against the other party unless specifically agreed to in
writing, except that during SEC's stay in AST's facilities for the Joint
Development Projects, SEC may, without any payment, use all equipment which
are specified in the Development Plan for the Joint Development Projects.
The same terms shall apply concerning the use of equipment by AST at SEC's
facilities, when provided for in the Development Plan.
Article 6. Proprietary Rights
6.1 Separately Owned Rights. Any Technical Information which is developed or
-----------------------
conceived independently by each party hereunder and Intellectual Property
Rights therefor shall remain the property of such developing party.
5
<PAGE>
6.2 Jointly Owned Rights. Any Technical Information which is developed or
--------------------
conceived jointly by both parties hereunder and Intellectual Property
Rights therefor shall be the joint property of both parties. Each party
shall have a right to grant to its Subsidiaries the licenses under jointly
owned Technical Information and Intellectual Property Rights therefor
without obtaining a prior consent of and accounting for any compensation to
the other party. The party who wishes to grant to third party any licenses
under the jointly-owned Technical Information and any Intellectual Property
Rights therefor shall obtain a prior written approval of the other party.
6.3 Protections for Jointly Owned Rights. Both parties shall from time to time
------------------------------------
discuss whether patent or copyright applications should be filed on, or
other intellectual property protections obtained for, the jointly-owned
Intellectual Property Rights, the party who will file and pay for such
application and the country(ies) in which the same is to be filed. If one
party believes that a particular type of intellectual property protection
should be sought for a particular portion of the jointly owned Intellectual
Property Rights (the "Initiating Party") but the parties can not agree,
within a reasonable amount of time, as to whether that particular type of
intellectual property protection should be sought for that particular
jointly owned Intellectual Property Rights, then the Initiating Party shall
be permitted to pursue such intellectual property protection for its sole
ownership, if advance written notice of such filing is provided to the
other party, and the other party shall cooperate (at the expense of the
Initiating Party) in all ways reasonably requested by the Initiating Party
provided that the Initiating Party shall bear the expense of obtaining such
intellectual property protection, and the other party shall have a non-
exclusive world-wide fully paid up license to such intellectual property
protection.
6.4 Disclosure Of Inventions. Each party shall promptly disclose to the other
------------------------
in writing on a confidential basis all Technical Information which is
jointly invented, authored or otherwise brought into being pursuant to a
Development Plan hereunder (including derivatives or analogues of
preexisting technical information) and/or commercially useful research
products or processes jointly invented, authored or otherwise brought into
being pursuant to a Development Plan, including, but not limited to,
materials, whether patentable or unpatentable, or whether trade secrets or
whether susceptible to copyright or other forms of protection.
6.5 Proprietary Protection Cooperation. Each party will cooperate with the
----------------------------------
other in taking such actions as such party reasonably requests for the
purposes of filing and obtaining copyright registrations, patents and
other
6
<PAGE>
suitable forms of protection of the Technical Information which is jointly
invented, authored or otherwise brought into being hereunder and securing
title to such forms of protection in accordance with Article 6.3 of this
Agreement and enforcing any rights therein. Such efforts by each party
will be at the expense of the requesting party. In addition, without
limiting the foregoing, each party agrees to cooperate with the other party
to whatever extent is necessary to procure patent protection of any rights
to any Technical Information which is jointly invented, authored or
otherwise brought into being hereunder including agreeing to execute any
and all documents to give each other the full benefit of the licenses
granted herein.
6.6 Obligation to Assign. To the extent that the inventorship or any ownership
--------------------
interest of any Technical Information which is jointly invented, authored
or otherwise brought into being hereunder may exist or arise in one party
or any employee or agent thereof, each party agrees that it shall assign
any and all such individual ownership interests as necessary or desirable
to achieve joint ownership of such Technical Information which is jointly
invented, authored or otherwise brought into being hereunder.
6.7 Obligation To Obtain Rights From Researchers. The parties hereby agree
--------------------------------------------
that they will obtain assignment of, or cause the principal investigator
and all employees, agents, any other researchers who are engaged in the
research projects undertaken pursuant to this Agreement (referred to as
"Project Personnel") to assign their right, title and interest in and to
the Technical Information which is jointly invented, authored or otherwise
brought into being by both SEC and AST under a Development Plan of this
Agreement, by any such person during the course of the performance of this
Agreement as are necessary to give effect to the provisions of this
Agreement respecting ownership of the Intellectual Property Rights
hereunder. In addition, each party will obtain the agreement of all
Project Personnel to cooperate fully with either SEC or, as the case may
be, AST in pursuing legal protection for any such improvements thereto,
including, without limitation, providing assistance in filing and
presenting any patent applications or copyrights on such inventions or
improvements and, upon reasonable request, furnishing samples of any
Technical Information which is jointly invented, authored or brought into
being by both SEC and AST under a Development Plan hereunder. Both parties
represent and warrant that they are legally entitled by written agreement
to exclusive ownership of any invention of any employee or agent who will
participate in the collaborative effort under this Agreement, and that each
party has the right to and will assign such ownership interests as provided
in this Agreement free of any third-party claim. SEC and AST agree that
the use of the current patent pre-
7
<PAGE>
assignment form agreements and other terms of employment and retainer of
consultants used by SEC and AST are adequate to satisfy the obligations
of this Article 6.7.
6.8 Research Reports. Each party shall document in writing the progress and
----------------
interim and final results of their cooperative research hereunder. Summary
reports shall be prepared and exchanged between the parties at least as
often as is specified in the Development Plan. Such reports shall include,
in part, a discussion and analysis of the opinion of each party's principal
investigator of the then current status of and potential for commercial
development and marketability of any Technical Information which is jointly
invented, authored or otherwise bought into being hereunder. The complete
documentation of each party shall be made available to the other upon
request. The parties shall jointly prepare a comprehensive final report
within thirty (30) days following termination of each Development Plan.
All reports and documentation under this Section shall constitute
Confidential Information and as such shall be afforded all protections set
forth in the General Terms Agreement.
6.9 Access To Research Results. So long as the rights of either party in any
---------------------------
Technical Information which is jointly invented, authored or otherwise
brought into being hereunder continue hereunder following termination of
this Agreement, such party and its authorized representatives shall have
access to the information and results of research reflected therein at
reasonable times during normal business hours.
6.10 Regulatory Compliance. The parties agree that their conduct in performing
---------------------
their obligations under this Agreement shall conform in all material
respects to all applicable laws and regulations of the U.S. and foreign
governments (and political subdivisions thereof), including but not limited
to, the US export control laws and regulations.
6.11 Publication of Research. Neither party shall publish the results of any
-----------------------
research related in any way to any Technical Information which is jointly
invented, authored or otherwise brought into being hereunder without the
prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed, and which shall not require advance
consent for the publication of information through the marketing of Joint
Development Products or the filing of patent applications as is
contemplated under this Agreement. In the event either party is requested
to consent to such publication, the requesting party shall provide the
other party copies of a proposed manuscript prior to any submission or
publication thereof. To protect the rights of the parties to any
potentially patentable Technical Information which is jointly invented,
authored or otherwise brought into being hereunder, any contemplated
8
<PAGE>
publication or other dissemination of information containing disclosure of
any inventive subject matter shall be withheld and maintained in strict
confidence until a patent application has been filed and other appropriate
steps have been completed to protect the commercial value of any
Intellectual Property Rights resulting from the cooperative research and
development effort hereunder.
Article 7. Grant of Licenses
7.1 License Grant. Each party hereby grants to the other party and its
-------------
Subsidiaries a non-exclusive, non-transferable, worldwide, perpetual and
royalty-free license to use Technical Information supplied by such party
and under the Intellectual Property Rights therefor, subject to the terms
of this Agreement, to develop, manufacture, have manufactured, use, modify,
prepare derivative works based upon, copy, distribute, use in public
performances, lease, sell or otherwise dispose of any Jointly Developed
Products. Nothing herein shall be construed as granting a right to
sublicense to any third party the license granted above without a prior
written consent of the other party. Any licenses granted to any Subsidiary
hereunder shall terminate at such time as such entity no longer qualifies
as a Subsidiary as defined in the General Terms Agreement.
7.2 Limitations on License. Notwithstanding any other provision of this
----------------------
Agreement, for those patent rights licensed or sublicensed to AST from SEC
under this Agreement, AST shall not have the right to grant licenses or
sublicenses to any third parties, excepting for licenses or sublicenses to
AST Subsidiaries to the extent permitted under this Agreement, and further
excepting licenses which would otherwise be implied to purchasers of AST
products for the use or resale of such products. Notwithstanding any other
provision of this Agreement, for those patent rights licensed or
sublicensed to SEC from AST under this Agreement, SEC shall not have the
right to grant licenses or sublicenses to any third parties, excepting for
licenses or sublicenses to SEC Subsidiaries to the extent permitted under
this Agreement, and further excepting licenses which would otherwise be
implied to purchasers of AST products for the use or resale of such
products. Notwithstanding any other provision of this Agreement, any
purported or attempted grant by AST or SEC of a license or sublicense
contrary to this Agreement shall be of no force or effect.
9
<PAGE>
Article 8. Warranty
8.1 Warranty Disclaimer. AST and SEC each provides to the other party its
-------------------
Technical Information on an "as-is" basis only, except that the Technical
Information provided has not been illegally copied from or misappropriated
from any third party, and both SEC and AST do not warrant or represent that
the operation of the Technical Information will be uninterrupted or error
free.
8.2 Warranty Limitations. Nothing contained in this Agreement, unless
--------------------
otherwise agreed to in writing by both SEC and AST, shall be construed as:
(a) a warranty or representation that the manufacture, use, sale or other
disposal of any Jointly Developed Products by the other party under
this Agreement will be free from infringement of patents or any other
intellectual property rights (excepting to warrant that the Technical
Information supplied by a party shall not have been illegally copied
from or misappropriated from any third party) of any third party; or
(b) conferring any right to use in advertising, publicity or otherwise,
any trademark, trade name or names, or any contraction, abbreviation
or simulation thereof, of either party; or
(c) conferring by implication, estoppel or otherwise, any license or other
right except for the license expressly granted hereunder; or
(d) an obligation to furnish any technical information or know-how except
as otherwise specifically provided herein.
Article 9. Effect of Termination
In any event of termination pursuant to Article 3 of the General
Terms Agreement, (i) each party shall be entitled to retain any Jointly
Developed Products and Intellectual Property Rights contained therein which
it owned or developed to the date of such termination, provided that each
party will take all steps necessary to convey to the other joint ownership
rights in the Intellectual Property Rights for such Jointly Developed
Products, (ii) all licenses granted to the non-defaulting (if any) party
and its Subsidiaries prior to the effective date of such termination shall
continue in full force and effect, and
10
<PAGE>
(iii) all licenses granted to the defaulting (if any) party hereunder and
its Subsidiaries shall immediately terminate.
Article 10. General Terms
The provisions included in the General Terms Agreement shall
apply to this Agreement.
Article 11. Priority
In the event of a conflict or inconsistency between any term or
condition of this Agreement and that of the General Terms Agreement, the
terms and conditions of this Agreement shall supersede and control. The
terms and conditions of this Agreement shall be superseded and controlled
by terms and conditions of any Development Plan signed by both AST and SEC.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement, on the dates below indicated.
Samsung Electronics Co., Ltd. AST Research, Inc.
By: /s/ Bo-Soon Song By: /s/ Safi U. Qureshey
---------------------------- -------------------------------
Name: Bo-Soon Song Name: Safi U. Qureshey
Title: Senior Managing Director Title: Chief Executive Officer
Date: July 31, 1995 Date: July 31, 1995
11
<PAGE>
EXHIBIT 99.7
PATENT CROSS LICENSE AGREEMENT
This Patent Cross License Agreement ("Agreement") is made as of July 31, 1995 by
and between AST Research, Inc., a Delaware corporation ("AST"), and Samsung
Electronics Company Limited, a Korean corporation ("SEC").
PURPOSE
AST and SEC wish to avoid unnecessary obstacles and expense, and to enhance each
company's opportunities to make, use, sell and import products, by cross
licensing patents on a royalty free basis, to the extent and under conditions as
determined to be mutually advantageous by both AST and SEC.
Article 1. Definitions
1.1 Unless otherwise defined herein all capitalized terms shall have that
meaning ascribed to them in that certain General Terms Agreement between
the parties of even date herewith (the "General Terms Agreement").
1.2 "AST Patents" shall mean all classes or types of patents, utility models,
and applications for these classes or types of all countries of the world,
with respect to the Licensed Products, which have a first filing date prior
to the date of termination or expiration of this Agreement, which are now
owned or controlled or may hereafter during the term of this Agreement be
owned or controlled by AST or its Subsidiaries, or under which and to the
extent to which and subject to the conditions under which AST and its
Subsidiaries may have or may hereafter during the life of this Agreement
acquire the right to grant licenses or rights of the scope granted herein
without paying royalties or any other compensation to a third party (except
for payments to Subsidiaries or payments to a person for his inventions
made while employed by AST or any of its Subsidiaries).
1.3 "SEC Patents" shall mean all classes or types of patents, utility models,
and applications for these classes or types of all countries of the world,
with respect to the Licensed Products, which have a first filing date prior
to the date of termination or expiration of this Agreement, which are now
owned or controlled or may hereafter during the term of this Agreement be
owned or controlled by SEC or its Subsidiaries, or under which and to the
extent to which and subject to the conditions under which SEC and its
Subsidiaries may have or may hereafter during the life of this Agreement
acquire the right to grant licenses or rights of the scope granted herein
without paying royalties or any other compensation to a third party (except
for payments to
1
<PAGE>
Subsidiaries or payments to a person for his inventions made while
employed by SEC or any of its Subsidiaries).
1.4 "Licensed Products" shall mean the Personal Computers and the Peripheral
devices.
1.5 "Personal Computer(s)" means a system having the following elements: (i)
provision for user input; (ii) provision for output; (iii) memory for
storing at least program instructions; and (iv) at least one semiconductor
incorporating a CPU wherein said system is primarily intended for accepting
user inputs either directly or indirectly, processing data, and displaying
or output information, all under control of program instructions from
memory executed by said CPU. A Personal Computer may include all input and
output devices of the type sold therewith, including externally coupled
peripherals such as a keyboard, mouse, trackball, video display unit, and
further, all associated peripheral devices such as data storage devices,
modems, incorporated functions for LAN, TV, telephone, stereo, interactive
disk, multimedia or other functions or other peripheral devices
incorporated in the same housing as the CPU.
1.6 "Peripheral Device(s)" means a device which is not housed in a Personal
Computer when sold or disposed of and having (i) provision for input and
output of data or datum, (ii) memory storing at least program instructions,
and (iii) at least one Single Chip CPU; said Peripheral Device primarily
intended for coupling to a Personal Computer, or placement within the
housing of a Personal Computer. Examples include, but are not limited to,
keyboards, printers, modems, mass storage systems, and LAN servers.
1.7 "Technical Information" shall mean the information, data and materials,
including, without limitation, any and all technologies, inventions,
discoveries, know-how, designs, drawings and other proprietary information
which are contained in and necessary in connection with the full
utilization of AST Patents or SEC Patents.
Article 2. Mutual Releases
2.1 Release by AST. AST hereby releases, acquits and forever discharges SEC,
--------------
its Subsidiaries and their respective customers (such release of customers
being limited to Licensed Products provided by SEC or its Subsidiaries)
from any and all claims or liability for infringement or alleged
infringement of any AST Patents, which may have occurred prior to the
Effective Date to the extent a license is herein granted by AST.
2.2 Release by SEC. SEC hereby releases, acquits and forever discharges AST,
--------------
its Subsidiaries and their respective
2
<PAGE>
customers (such release of customers being limited to Licensed Products
provided by SEC or its Subsidiaries) from any and all claims or liability
for infringement or alleged infringement of any SEC Patents, which may
have occurred prior to the Effective Date to the extent a license is
herein granted by SEC.
Article 3. Grant of Licenses
3.1 License by AST. AST hereby grants to SEC and SEC's Subsidiaries a
--------------
nonexclusive, nontransferable, royalty-free and worldwide license, without
right to sublicense third parties, under AST Patents and Technical
Information to make, have made, use, sell or otherwise dispose of Licensed
Products, and to use manufacturing or testing processes covered by AST
Patents and Technical Information for making or testing Licensed Products,
during the term of this Agreement. It is expressly stipulated, however,
that SEC may exercise the "have made" right only with the written consent
from AST.
3.2 License by SEC. SEC hereby grants to AST and AST's Subsidiaries a
--------------
nonexclusive, nontransferable, royalty-free and worldwide license, without
the right to sublicense third parties, under SEC Patents and Technical
Information to make, have made, use, sell or otherwise dispose of Licensed
Products, and to use manufacturing or testing processes covered by SEC
Patents and Technical Information for making or testing Licensed Products,
during the term of this Agreement. It is expressly stipulated, however,
that AST may exercise the "have made" right only with the written consent
from SEC.
3.3 Limitation on Releases and Licenses. No release or license under any
-----------------------------------
copyrights, mask work rights, trademarks or other intellectual property
rights other than Patents of either SEC or AST or any of their Subsidiaries
is granted under this Agreement.
3.4 Changes to Subsidiaries. Any and all licenses granted to any Subsidiary
-----------------------
hereunder shall immediately terminate at such time as such entity no longer
satisfies the definition of Subsidiary as that term is defined in the
General Terms Agreement.
3.5 Third Party Disclaimer. Notwithstanding any other provision hereof, the
----------------------
parties expressly agree that the licenses granted pursuant to this
Agreement and the benefits thereof shall not be available for the benefit
any third party without the express written consent of the party granting
the license hereunder. Without limiting the generality of the foregoing,
the parties expressly agree that no rights under this Agreement shall
accrue to any third party by virtue of any cross licensing agreement or
other arrangement
3
<PAGE>
between either party hereto and any third party. However,
the purchasers of products supplied through either party shall be
licensed for such products, and the licensees of software supplied through
either party shall be licensed for such software.
3.6 Limitations on License. Notwithstanding any other provision of this
----------------------
Agreement, for those patent rights licensed or sublicensed to AST from SEC
under this Agreement, AST shall not have the right to grant licenses or
sublicenses to any third parties, excepting for licenses or sublicenses to
AST Subsidiaries to the extent permitted under this Agreement, and further
excepting licenses which would otherwise be implied to purchasers of AST
products for the use or resale of such products. Notwithstanding any other
provision of this Agreement, for those patent rights licensed or
sublicensed to SEC from AST under this Agreement, SEC shall not have the
right to grant licenses or sublicenses to any third parties, excepting for
licenses or sublicenses to SEC Subsidiaries to the extent permitted under
this Agreement, and further excepting licenses which would otherwise be
implied to purchasers of AST products for the use or resale of such
products. Notwithstanding any other provision of this Agreement, any
purported or attempted grant by AST or SEC of a license or sublicense
contrary to this Agreement shall be of no force or effect.
Article 4. Exchange of Technical Information
4.1 Initial Technical Information. Within sixty (60) days of the Effective
-----------------------------
Date and from time to time during the term of this Agreement, AST and SEC
agree to exchange the Technical Information and provide technical support
upon request by the other party.
4.2 Confidentiality. For the term of this Agreement and at all times
---------------
thereafter, following receipt of the Technical Information, the party
receiving the Technical Information (the "Receiving Party") agrees to
retain the Technical Information in confidence and treat such information
as Confidential Information under the terms and conditions applicable to
such Confidential Information as set forth in the General Terms Agreement
and not to use the Technical Information for any purpose whatsoever other
than the purpose mentioned herein. The confidentiality obligations set
forth in this Agreement shall survive the expiration or termination of this
Agreement regardless of the cause of such expiration or termination. In any
event, however, neither party shall be responsible for their disclosure or
use of Technical Information reasonably necessary for or resulting from
their distribution or sale of Licensed Products. The Receiving Party may
disclose the Technical Information to any third party for the purpose of
their exercise of have made right herein, provided that the
4
<PAGE>
Receiving Party enters into an agreement with such third party to keep
the Technical Information in confidence as provided in this Agreement.
4.3 Retention of Title. The party that discloses the Technical Information
------------------
retains all ownership rights to the Technical Information, in any form,
disclosed to the Receiving Party hereunder.
Article 5. Terms and Termination
5.1 Agreement Term. This Agreement shall become effective on the Effective
--------------
Date and this Agreement and the licenses granted pursuant hereto shall
continue in full force until July 31, 2005 unless earlier terminated as
hereinafter provided.
5.2 Termination on Breach or Other Condition. If either party commits a
----------------------------------------
material breach of this Agreement (the "Breaching Party") and does not
remedy such breach within sixty (60) days after written notice complaining
thereof is given to such party, the other non-breaching party (the "Non-
Breaching Party") shall have the right to terminate this Agreement
forthwith by giving written notice. This Agreement shall terminate on the
thirtieth (30) day after notice of termination is given by one party with
respect to the other party, for any of the following events:
(a) the filing by such other party of a petition in bankruptcy or
insolvency; or
(b) any adjudication that such other party is bankrupt or insolvent; or
(c) the filing by such other party of any legal action or document seeking
reorganization, readjustment or arrangement of its business under any law
relating to bankruptcy or insolvency; or
(d) the appointment of a receiver for all or substantially all of the
property of such other party; or
(e) the making by such other party of any assignment of whole or
substantial assets for the benefit of creditors; or
(f) more than ten percent (10%) of the other party's outstanding shares or
securities (representing the right to vote for the election of directors or
other managing authority) hereafter become owned or controlled, directly or
indirectly, by a third party.
5.3 Survival of Licenses. In the event of such termination as described in
--------------------
Article 5.2 above, the licenses granted to such Non-Breaching Party and its
Subsidiaries shall survive such
5
<PAGE>
termination and shall extend for the full term of this Agreement, but
the licenses granted to the Breaching Party and its Subsidiaries shall
terminate forthwith as of the date of such termination of this Agreement.
5.4 Expiration of Licenses and Rights. Upon expiration of this Agreement
---------------------------------
granted as provided in Article 5.1, all rights and licenses granted and
obligations undertaken hereunder shall terminate forthwith.
5.5 Renewal Agreement. Upon request of either party at least sixty (60) days
-----------------
prior to the date of expiration of this Agreement, both parties shall
negotiate in good faith the renewal of this Agreement upon reasonable terms
and conditions.
5.6 Proprietary Protection Cooperation. Each party will cooperate with the
----------------------------------
other in taking such actions as such party reasonably requests for the
purposes of filing and obtaining patents and other suitable forms of
protection for the Technical Information or patent rights of either party
included hereunder including, without limitation, obtaining patents and
other suitable forms of protection in any foreign country and enforcing or
defending any rights therein. Such efforts by each party will be at the
expense of the requesting party. Without limiting the generality of the
foregoing each parties' cooperation shall extend to the following: (a)
filing and prosecuting United States and/or foreign counterpart patent
applications covering such Technical Information or patent rights, and the
filing and prosecution of all divisionals, continuations, continuations-in-
part, reissues or reexaminations thereon; (b) defending against conflicts,
oppositions or interferences filed by third parties against such patent
applications; (c) upon and after the grant of any patents on any of such
applications, divisionals, continuations, continuations-in-part, reissues
or reexaminations, maintaining such patents in force and filing all
necessary instruments required for such purposes by the patent laws of the
particular country in which such patents were granted, (d) defending
against any claim of patent invalidity with respect to any patent covered
by this agreement.
5.7 Warranties. Both parties represent and warrant that they have the right to
----------
enter into this Agreement and that there are no outstanding agreements,
grants, licenses, encumbrances, liens, or agreements, either written or
implied, inconsistent therewith for which this Agreement or performance
thereunder would violate, breach, or cause a default.
5.8 Disclaimer. EXCEPT AS MAY BE EXPRESSLY SET FORTH HEREIN, NEITHER PARTY
----------
MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, CONCERNING THE PATENTS,
6
<PAGE>
TECHNICAL INFORMATION OR LICENSES GRANTED HEREUNDER. NEITHER
PARTY MAKES ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR USE. NEITHER PARTY MAKES
ANY REPRESENTATION THAT THE MANUFACTURE, USE AND SALE OF SYSTEMS OR
PRODUCTS INCORPORATING ITS TECHNICAL INFORMATION OR TECHNOLOGY COVERED BY
ITS PATENTS WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADE SECRET OR OTHER
PROPRIETARY RIGHT. NEITHER PARTY SHALL HAVE ANY LIABILITY WITH RESPECT TO
ITS OBLIGATION UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL,
EXEMPLARY, INCIDENTAL OR PUNITIVE DAMAGES EVEN IF IT HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
Article 6. Assignment
AST shall not assign or grant any right under AST Patents, and SEC shall
not assign or grant any right under SEC Patents, unless such assignment or
grant is made subject to the terms and conditions of this Agreement.
Neither this Agreement nor any right or license granted hereunder may be
assigned by either party without the express written consent of the other
party.
Article 7. General Terms
The provisions included in the General Terms Agreement shall apply to this
Agreement.
Article 8. Priority
In the event of a conflict or inconsistency between any term or condition
of this Agreement and that of the General Terms Agreement, the terms and
conditions of this Agreement shall supersede and control.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement, on the dates below indicated.
Samsung Electronics Co., Ltd. AST Research, Inc.
By: /s/ Bo-Soon Song By: /s/ Safi U. Qureshey
--------------------------- -----------------------------
Name: Bo-Soon Song Name: Safi U. Qureshey
Title: Senior Managing Director Title: Chief Executive Officer
Date: July 31, 1995 Date: July 31, 1995
7
<PAGE>
EXHIBIT 99.8
EMPLOYEE EXCHANGE AGREEMENT
This Employee Exchange Agreement ("Agreement") is made as of July 31, 1995 by
and between AST Research Inc., a Delaware corporation ("AST"), and Samsung
Electronics Company Limited, a Korean corporation ("SEC").
PURPOSE
AST and SEC each wishes to improve their operational effectiveness, and wishes
to strengthen their strategic alliance by a limited exchange of employees,
including certain former employees, in order to facilitate a mutual
understanding of each parties respective business and corporate culture,
facilitate cooperation in attaining the mutual goals of their strategic
alliance, and provide management advice, assistance and training to each other
in areas where each party has particular expertise with respect to the areas in
which the parties do not compete or areas which are otherwise permissible.
AGREEMENT
Article 1. Definitions
1.1 "AST Exchange Employees" means those employees or individuals from AST who
are working at SEC facilities in Korea, and who have been designated by AST
at the start of such work as being expected to continue such work for at
least one year.
1.2 "SEC Exchange Employees" means those employees or individuals from SEC who
are working at AST facilities in the US, and who have been designated by
SEC at the start of such work as being expected to continue such work for
at least one year.
1.3 "Exchange Employees" shall mean AST Exchange Employees and/or SEC Exchange
Employees.
1.4 "Requesting Party" shall mean either AST or SEC, as the case may be, that
makes a written statement which requests either: (i) the other party to
dispatch an individual to work at the Requesting Party's designated
location, or (ii) to dispatch an individual from the Requesting Party to
work at the other party's location. Such requests shall be effective only
if made in writing by an authorized officer of the Requesting Party, and
sent to the other party.
1.5 "Dispatching Party" shall mean either AST or SEC, as the case may be, that
dispatches its individuals to work at such other party's designated
location.
1
<PAGE>
1.6 "Receiving Party" shall mean either AST or SEC as the case may be, that
receives an employee to work at its designated location.
Article 2. Employee Exchange
2.1 Numbers of Employees. AST and SEC shall exchange a limited number of their
--------------------
respective employees or individuals at the request of one party and subject
to the reasonable approval of the other party for the purpose of this
Agreement.
2.2 Work Areas. SEC shall have the right to request and dispatch to AST at
----------
least one of SEC's employees to each of the business areas including
product planning, pricing, marketing, purchasing, business planning, sales,
MIS, engineering, manufacturing and corporate strategy, provided that (with
respect to any exchange of employees for any product area within which SEC
and AST may compete) appropriate safeguards can be implemented to permit
such activities in compliance with applicable law. All activities under
this Agreement shall be conducted in compliance with all applicable law as
specifically set forth in Article 15 of the General Terms Agreement between
the parties and dated concurrent herewith.
2.3 Training. Training for the Exchange Employees, at the reasonable request
--------
and expense of the Requesting Party, shall be provided by the Receiving
party through a quality training program, the details regarding such
training for each Exchanged Employee including, without limitation, the
scope and duration thereof shall be agreed to in writing between the
parties prior to the commencement of the Exchanged Employee's services at
the Receiving Party's facilities.
2.4 Details Decided by TEC. Except to the extent set forth elsewhere herein,
----------------------
all other details on employee exchange program including (i) the number of
Exchange Employees, (ii) duration of the work assignment for Exchange
Employees, and (iii) the treatment of the Exchange Employee shall be
negotiated and finally decided upon by the TEC, as defined in that certain
General Terms Agreement between the parties of even date herewith in
accordance with the procedures of the TEC set forth therein.
2.5 Receiving Party as Sole Employer. Notwithstanding any other provision
--------------------------------
hereof, the Receiving Party shall be the sole employer of the Exchange
Employee and shall be solely responsible for any and all liabilities
(excepting for the salaries, bonuses and benefits listed in Article 3 and
training expenses listed in Article 2 of this Agreement) related to the
employment of the Exchange Employee including, without limitation, any
claims for wrongful termination, discrimination, work place accident or
injury
2
<PAGE>
or related employee claims, but only to the extent that such
liabilities result from the employment by the Receiving Party of the
Exchange Employee.
Article 3. Cost and Expenses
3.1 Basic Principle. The Requesting Party shall reimburse to the Receiving
---------------
Party (or bear and pay directly if the Requesting Party is the Receiving
Party) all the cost and expenses incurred by the Exchange Employees in
connection with employee exchange program hereunder subject to the
following sub-sections in this Article 3.
3.2 Salary and Bonuses. The Receiving Party shall provide salary and bonuses
------------------
for the Exchange Employees to a level, equal to such benefits provided by
the dispatching company of such Employees to its employees and thereafter,
such benefit shall be repaid by the Requesting Party.
3.3 Fringe Benefit. Receiving Party shall provide employee benefits (medical
--------------
insurance, disability insurance, etc.) for the Exchange Employees to a
level equal to such benefits provided by such party to its own employees in
its country and thereafter, such benefit shall be repaid by the Requesting
Party.
3.4 Others. The cost and expenses incurred by the Exchange Employees
------
dispatched upon mutual requests of AST and SEC shall be subject to the
decision of the TEC.
Article 4. Confidentiality of Information
The Exchange Employees shall be subject to the same
confidentiality obligations as the other employees of the Requesting Party,
and information shall be transferred by the Exchange Employees to the
Dispatching Party only in accordance with this Agreement and the
confidentiality commitments between the parties as set forth in the General
Terms Agreement.
Article 5. Employment Transfers and Termination
SEC may at any time require, subject to prior consultation with
TEC, the transfer of any AST Exchange Employee from SEC back to AST, with
or without reason, but such required transfer right may not be used more
than twice in any year without the approval of AST or misconduct by the AST
Exchange Employee proposed to be transferred. AST may at any time require,
subject to prior consultation with TEC, the transfer of any SEC Exchange
Employee from AST back to SEC, with or without reason, but such required
transfer right may not be used more than twice in any year without the
approval of SEC or misconduct by the SEC Exchange Employee proposed to be
transferred.
3
<PAGE>
Article 6. Duties and Authority of the Exchange Employees
6.1 Duties of the Exchange Employees. The Exchange Employees shall work in a
--------------------------------
position at the factory and office locations of the company where such
Exchange Employees are dispatched or transferred, provided that such
positions and locations are selected by the mutual consent of the parties
hereto. Each Exchange Employee shall be expected to perform the duties and
discharge the responsibilities that an employee of the company where such
Exchange Employees are dispatched or transferred would have in the
position. In addition, each Exchange Employee will be given opportunities
by the Receiving Party to become familiar with local business practices and
industry methods.
6.2 Supervision of the Exchange Employees. During the time any person is a
-------------------------------------
Exchange Employee hereunder, he or she shall report to, and be subject to
the supervision of, such person as the Receiving Party shall designate and
shall be subject to the same disciplinary, compensation review and other
supervisory procedures and policies as are maintained generally by the
Receiving Party for its employees. The Receiving Party shall seek, to the
maximum extent possible, to treat Exchange Employees as similarly as
possible to its regular employees including, without limitation, full and
meaningful participation in the activities of the department to which the
Exchange Employee is assigned and the Receiving Party shall provide the
Exchange Employee with such title, authority, office/workplace facilities
(in compliance with all applicable safety regulations), secretarial
assistance and other perquisites (at the expense of the Requesting Party),
as are provided by the Receiving Party to other employees having comparable
experience, qualifications and responsibilities.
6.3 Allegiance of the Exchange Employees. During their period of employment as
------------------------------------
Exchange Employees, Exchange Employees shall act in the best interests of,
and owe their duty of allegiance to, the Receiving Party as their employer,
and shall comply with all of the work rules of the Receiving Party, and
shall comply with all instructions received from their designated
supervisor at the Receiving Party.
6.4 Logistics for the Exchange Employees. The Receiving Party shall provide
------------------------------------
assistance in coordinating the logistics of the Exchange Employee
employment with Receiving Party including, without limitation, coordination
of housing location and moving of Exchange Employee and, to the extent
necessary, obtaining the services of attorneys, and advancing fees and
other expenses necessary or desirable in order to obtain government
approval for the presence and activities of each Exchange Employee in the
country of the Receiving Party ("Transfer Coordination"). The Requesting
4
<PAGE>
Party shall reimburse to Receiving Party the fees advanced and reasonable
costs of such Transfer Coordination.
6.5 Communications With Dispatching Party. In a manner consistent with the
-------------------------------------
information sharing limitations set forth in Section 6.6 herein, each
Exchange Employee may communicate with the Dispatching Party in order to
provide business status information, and in order to obtain suggestions and
information from the Dispatching Party for use by the Receiving Party.
6.6 Information Which Shall Not Be Shared. AST, SEC, every AST Exchange
-------------------------------------
Employee and every SEC Exchange Employee shall be expected to comply with
all laws of the Republic of Korea and the United States for activities
under this Employee Agreement, including, without limitation, the
competition laws and the antitrust laws. Without limitation, AST and SEC
agree, and agree to instruct their respective employees, to not discuss or
agree on prices or sales planning under which AST and SEC competing
products will or may be sold, and to not exchange non-public information
about such prices, costs or strategy; and to not discuss customers nor
agree to allocate customers between AST and SEC for products in which AST
and SEC compete, and to not exchange non-public information about such
customers.
Article 7. General Terms
The provisions included in the General Terms Agreement shall apply to this
Agreement as if fully set forth herein.
Article 8. Priority
In the event of a conflict or inconsistency between any term or condition
of this Agreement and that of the General Terms Agreement, the terms and
conditions of this Agreement shall supersede and control.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement, on the dates below indicated.
Samsung Electronics Co., Ltd. AST Research, Inc.
By: /s/ Bo-Soon Song By: /s/ Safi U. Qureshey
--------------------------- ------------------------------
Name: Bo-Soon Song Name: Safi U. Qureshey
Title: Senior Managing Director Title: Chief Executive Officer
Date: July 31, 1995 Date: July 31, 1995
5
<PAGE>
EXHIBIT 99.9
GENERAL TERMS AGREEMENT
This General Terms Agreement is made as of July 31, 1995 (the "Effective Date")
by and between Samsung Electronics Company Limited, a Korea corporation ("SEC")
and AST Research, Inc., a Delaware corporation ("AST").
RECITALS
A. Pursuant to that certain Stock Purchase Agreement between SEC and AST dated
as of February 27, 1995 (the "Stock Purchase Agreement"), AST has
concurrently herewith sold, assigned, transferred, conveyed and delivered
to SEC certain shares.
B. As a condition to the Stock Purchase Agreement, SEC and AST entered into
that certain Strategic Alliance Agreement dated concurrent with the Stock
Purchase Agreement (the "Strategic Alliance Agreement").
C. As partial consideration for the transaction contemplated by the Stock
Purchase Agreement and pursuant to the Strategic Alliance Agreement, SEC
and AST desire to enter into written agreements relating to component
supply ("Component Supply Agreement"), cooperative procurement
("Cooperative Procurement Agreement), cooperative marketing ("Cooperative
Marketing Agreement"), OEM supply ("AST OEM Supply to SEC Agreement" and
"SEC OEM Supply to AST Agreement"), joint development and technical
cooperation ("Joint Development and Technical Cooperation Agreement"),
patent cross licenses ("Patent Cross License Agreement), and employee
exchange ("Employee Exchange Agreement") (hereinafter collectively or
separately called, "Individual Contracts") and this General Terms
Agreement.
PURPOSE
AST and SEC wish to have general terms which are a part of, and shall apply to
each of the Individual Contracts. This General Terms Agreement and all the
Individual Contracts are collectively called the "AGREEMENT".
GENERAL TERMS
Article 1. Definitions
1.1 The terms as used in the AGREEMENT shall, unless the context clearly
indicates to the contrary, have the meanings set forth in this Article 1.
1
<PAGE>
1.1 "Effective Date" shall mean July 31, 1995.
1.2 "Subsidiaries" shall mean any corporation, company or other entity
controlled by, controlling, or under common control with, either party
hereto. As used herein, the term "control" means ownership or control,
direct or indirect, now or hereafter during the term of the AGREEMENT, of
more than fifty percent (50%) of the outstanding shares or interest
entitled to vote for the election of directors (other than any shares or
stock whose voting rights are subject to restriction) of such corporation,
company or other entity. Any corporation, company or other entity which
would at any time be a Subsidiary of AST or SEC, as the case may be, by
reason of the foregoing shall be considered a Subsidiary for the purposes
of the AGREEMENT only so long as such control exists. Any and all licenses
and other rights granted to Subsidiaries pursuant to the AGREEMENT or any
Individual Contract shall automatically and immediately terminate at such
time as such corporation, company or other entity no longer satisfies the
control or other requirements set forth in this Section.
Article 2. Top Executive Committee
2.1 Designation of Members. The parties will designate a Top Executive
----------------------
Committee consisting of two or more director level or equivalent level
individuals of each of the respective parties (hereinafter, "TEC"), to
serve the purpose of the AGREEMENT. The TEC shall have all necessary
authority with respect to such AGREEMENT. All proceedings of the TEC shall
be conducted by mutual consultation and the decision made thereby shall be
by unanimous vote of all members. The appointment of members of each
respective party shall be at such party's sole discretion.
2.2 SEC Members. To the extent permitted by applicable law, SEC member(s) of
-----------
TEC shall have the right to (i) attend AST management meetings, (ii) report
to the Chief Executive Officer of AST in order to remain aware of the
status of the business, and in order to provide suggestions.
2.3 Meetings of the TEC. The TEC shall meet, as often as either party may
-------------------
reasonably request, but at least quarterly, alternating the location of
such meetings between SEC and AST offices for the purpose of reviewing the
parties' performance under the AGREEMENT, reviewing and revising
operational priorities thereunder, reviewing and revising long-term
strategic objectives and resolving disputes that arise under this AGREEMENT
that have not been resolved by the internal dispute resolution procedures
set forth in the Individual Agreements and for other matters as the
individual TEC members deem appropriate.
2
<PAGE>
2.4 TEC Information Exchange. To the extent permitted by applicable laws and
------------------------
regulations, and not prohibited by contracts with third parties, each party
shall gather and furnish to the other all information with respect to
matters at issue within the TEC which the parties believe to be appropriate
in connection with the resolution of such issues, and such information
shall be treated as Confidential Information hereunder. The TEC
representatives shall discuss the issues and negotiate in good faith in an
effort to resolve the issues without the necessity of any action any formal
proceeding relating thereto. During the course of such negotiation, all
reasonable requests made by one party to the other for information will be
honored in order that each of the parties may be fully advised as to the
details of the issue or dispute. The specific format for such discussions
will be left to the discretion of the TEC.
2.5 Notice and Appeal for Dispute Resolution. In the event that the TEC is
----------------------------------------
unable to resolve a dispute within thirty (30) days after the initial
request to resolve such dispute is received by the TEC, then either party
may submit the matter for resolution by formal arbitration as provided
under Article 10 of this AGREEMENT provided that a written notice of intent
to seek arbitration is provided to the other party thirty days in advance.
Such arbitration shall not be the only method of dispute resolution and
shall be limited to deciding if the request is for action required under
the AGREEMENT.
Article 3. Term and Termination
3.1 Term. The AGREEMENT, shall become effective and come into full force on
----
the later of the Effective Date (July 31, 1995) or the Closing, as defined
in the Stock Purchase Agreement. The AGREEMENT shall not be effective and
shall have no force prior to the Closing Date, as defined in the Stock
Purchase Agreement. The AGREEMENT shall continue in full force and effect
until July 31, 2000 with the exception of the Patent Cross License
Agreement whose term is until July 31, 2005, unless earlier terminated as
provided in the AGREEMENT. The term of the AGREEMENT or any Individual
Contract may be extended by mutual written consent of both parties.
Notwithstanding the foregoing, the General Terms Agreement shall not be
terminated unless and until all Individual Contracts are terminated and/or
expired.
3.2 Termination on Bankruptcy or Material Adverse Change. Either party may
----------------------------------------------------
terminate an Individual Contract effective immediately and without
liability upon written notice to the other party if: (i) either party
declares bankruptcy or bankruptcy proceedings are instituted involuntarily
on his
3
<PAGE>
behalf, and the voluntary or involuntary proceedings are not
dismissed within 30 days, or (ii) there is a material adverse change in the
financial condition of the other party.
3.3 Termination on Default. Except as otherwise provided elsewhere herein, if
----------------------
either party fails to perform any material obligation under an Individual
Contract, then, the non-defaulting party may terminate such Individual
Contract forthwith upon written notice to the defaulting party, unless the
breach has been cured within 45 days after a notice of such breach is
given.
3.4 Cross-Termination. Each of the Individual Contracts is independent from
-----------------
the others and termination of one agreement for any reason shall not affect
the validity of the other remaining agreements between the parties;
provided, however, that: (i) if either the Employee Exchange Agreement or
SEC OEM Supply to AST Agreement are terminated by SEC as a result of a
material breach by AST, then SEC may, at its option effective upon thirty
days written notice to AST, terminate the Component Supply Agreement, and
(ii) if the Component Supply Agreement is terminated by AST as a result of
a material breach by SEC, then AST may, at its option effective upon thirty
days written notice to SEC, terminate the Employee Exchange Agreement and
the SEC OEM Supply to AST Agreement.
3.5 Post-Termination Activities. In the event of any termination of any
---------------------------
Individual Contract the parties shall cooperate in good faith to conclude
any ongoing activities related to such Individual Contract provided,
however, that neither party shall be obligated to incur any material
expense in connection with such cooperation or otherwise take actions that
may result in a material detriment to such party.
Article 4. Survivals
Except as otherwise explicitly provided in the AGREEMENT or applicable
Individual Contract, the parties' rights and obligations which, by their
nature, would continue beyond the termination, cancellation, or expiration
of the AGREEMENT shall survive such termination, cancellation, or
expiration.
Article 5. Confidentiality
5.1 Definition. The term "Confidential Information" shall mean any information
----------
disclosed by one party (the "Disclosing
4
<PAGE>
Party") to the other party (the "Receiving Party") in connection
with performance of the AGREEMENT which is in written, graphic,
machine readable or other tangle form and is marked "Confidential",
"Proprietary" or in some other manner to indicate its confidential
nature. Confidential Information may also include orally disclosed
information, provided that such information is designated as
confidential at the time of disclosure and included in a written summary
sent by the Disclosing Party to the Receiving Party within thirty (30) days
after its oral disclosure, and which is marked in a manner to indicate its
confidential nature.
5.2 Confidentiality Obligations. Receiving Party shall keep and shall cause
---------------------------
its Subsidiaries to keep any Confidential Information, including but not
limited to the Technical Information disclosed by the Disclosing Party
hereunder or pursuant to any Individual Contract, in confidence, and shall
not disclose such Confidential Information to any third party during the
term of this Agreement or at any time thereafter. The Receiving Party
shall only permit disclosure of the Confidential Information to the
Receiving Party's employees or consultants (who are bound by written
confidentiality agreements imposing substantially the same obligations as
set forth herein) who have a need to know and shall not use the
Confidential Information for any purpose other than the purpose
contemplated by the Individual Contract in connection with which such
Confidential Information is disclosed.
5.3 Confidentiality for Have-Made Manufacturers. Each party shall cause any of
-------------------------------------------
its have-made manufacturers having access to the Confidential Information
of the other party to comply with the confidentiality obligation set forth
in Article 5 of this General Terms Agreement by entering into a
Confidentiality Agreement with such manufacturer that imposes upon the
manufacturer, confidentiality obligations substantially the same as set
forth herein.
5.4 Exceptions. The confidentiality obligations set forth in this Article 5
----------
shall not apply to any information which:
(a) is rightfully in the possession of the Receiving Party prior to
receipt from the Disclosing Party; or
(b) is publicly known through no fault of the Receiving Party; or
(c) is rightfully received by the Receiving Party from a third party
without the breach of any restriction on disclosure; or
(d) is independently developed by the Receiving Party provided that the
Receiving Party provides substantial documentation of such independent
development and
5
<PAGE>
demonstrates that such independent development was accomplished
without any reference to or based upon the Confidential
Information; or
(e) is disclosed after obtaining the prior written consent of the
Disclosing Party; or
(f) is disclosed pursuant to applicable laws, regulations or court order,
provided that the Receiving Party shall give the Disclosing Party
prompt notice of such request so that the Disclosing Party has an
opportunity to defend, limit or protect such disclosure; or
(g) is established to be in the public domain other than as a consequence
of a breach of an obligation undertaken not to disclose the
information; or
(h) is approved for release by prior written consent of the Disclosing
Party; or
(i) is disclosed to the Receiving Party by a third party having no
obligation to the Disclosing Party to keep the information on
confidence; or
(j) is made public by the Disclosing Party.
5.5 Non-Disclosure. Neither party hereto shall disclose any Confidential
--------------
Information, obtained from the other party in the course of business under
the AGREEMENT to any third party during the term of the AGREEMENT or at any
time thereafter.
Article 6. Assignment
The AGREEMENT and the licenses granted herein shall inure to the benefit of
the parties hereto and, within the limitations set forth in Article 1.2
hereof, to the Subsidiaries of the parties hereto. Neither party hereto
nor any of its Subsidiaries shall assign or transfer any rights, privileges
or obligations hereunder or thereunder without the prior written consent of
the other party hereto, except that SEC may assign the AGREEMENT to a
person or entity into which it has merged or which has otherwise succeeded
to all or substantially all of its business and assets, and which has
assumed in writing or by operation of law its obligations under the
AGREEMENT.
6
<PAGE>
Article 7. Notices
All notices required or permitted to be given hereunder shall be in writing
and shall be valid and sufficient if dispatched by registered airmail,
postage prepaid, in any post office in Korea or in the United States of
America, as the case may be, and with a copy sent by a commercial express
delivery service offering routine two-day delivery of messages between the
US and Korea (for example, currently these would include Federal Express or
DHL), and addressed as follows:
If to SEC: Samsung Electronics Co., Ltd.
Samsung Main Building, 10th Floor
250, 2-Ka, Taepyung-Ro, Chung-Ku,
Seoul, Korea 100-742
Attn: General Legal Counsel
If to AST: AST Research, Inc.
16215 Alton Parkway
Irvine, California 92718
Attn: Chief Executive Officer
With copy to: AST Research, Inc.
16215 Alton Parkway
Irvine, California 92718
Attn: General Counsel
Either party may change its address by a notice given to the other party in
the manner set forth above. Notices given as herein provided shall be
considered to have been given fourteen (14) days after the mailing thereof.
Article 8. Amendment
No oral explanation or oral information by either part hereto shall alter
the meaning or interpretation of the AGREEMENT. No modification,
alteration, addition or change in the terms hereof shall be binding on
either party unless reduced to writing and duly executed by a duly
authorized officer of the parties.
Article 9. Governing Law
The AGREEMENT and matters connected with the performance thereof shall be
construed, interpreted, applied and governed in all respects in accordance
with the laws of the State of New York, USA, without regard to its
conflicts of law principles.
7
<PAGE>
Article 10. Arbitration
10.1 Negotiation and Arbitration. All disputes arising during performance under
---------------------------
the AGREEMENT shall be settled through friendly negotiation between the
parties, including providing written notice of the dispute to the other
party in advance of submitting any dispute to arbitration or making any
filing with any judicial, administrative or regulatory authority concerning
the dispute. The parties agree, when time and circumstances reasonably
permit, that no arbitration, judicial, administrative or regulatory action
concerning a dispute between the parties will be started until after the
senior executive of each company has attempted to speak (in person, by
telephone or by videophone) to the other concerning the dispute and
attempted to resolve the dispute. In case no settlement can be reached,
the dispute shall be submitted to arbitration if both parties determine
that the subject matter of the dispute is such that arbitration will be an
efficient, effective and timely method of resolving the dispute.
10.2 Arbitration Procedures. If the dispute is submitted to arbitration, the
----------------------
dispute shall be finally settled by an arbitration tribunal which shall be
convened and conducted in accordance with the applicable rules and
procedure of arbitration of the International Chamber of Commerce adopted
in 1988. The arbitration proceeding shall be held before three (3)
arbitrators in the headquarters city of the party not initiating the claim.
Two (2) of the arbitrators shall first be appointed by the parties, one (1)
by AST and one (1) by SEC. The arbitrators so appointed shall appoint a
third arbitrator who shall be neither an ROK nor a U.S. national, and shall
act as the chairman of the arbitral tribunal. If the arbitrators appointed
by the parties fail to appoint a third arbitrator within sixty (60) days
after they have been appointed, the third arbitrator may be appointed by
the arbitration body before which the arbitration is being held. In such
event, the third arbitrator shall be neither an ROK nor a U.S. national.
The arbitration proceedings shall be conducted in English, and the law
applied shall be the same as the governing law selected in Article 9 of
this Agreement. The results of such arbitration shall be conclusive and
binding upon the parties, and shall be enforceable in any court having
jurisdiction over the parties against whom the award was rendered.
Article 11. Severability
Should any clause, sentence, or paragraph of the AGREEMENT judicially be
declared to be invalid, unenforceable, or void, such decision shall not
have the effect of invalidating or voiding the remainder of the AGREEMENT
8
<PAGE>
unless the economic equity of the parties is materially affected thereby.
Article 12. Force Majeure
In the event of acts of God, war, blockade, insurrection, mobilization or
any other actions of Government authorities, riots, civil commotion,
warlike conditions, strikes, lockout, shortage or control of power supply,
plague or other epidemics, fire, flood, tidal waves, typhoon, hurricane,
cyclone, earthquake, lightning, explosion, or any other causes beyond the
reasonable control of either party or Force Majeure, neither party shall be
liable for any default in performance of the AGREEMENT arising therefrom.
Article 13. LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGE OF ANY KIND,
(INCLUDING WITHOUT LIMITATION LOSS OF PROFIT OR DATA) WHETHER OR NOT
ADVISED OF THE POSSIBILITY OF SUCH LOSS.
Article 14. Entire Agreement
The AGREEMENT sets forth the entire agreement and understanding between the
parties as to the subject matter of the AGREEMENT and merges all prior
discussions between them, and neither of the parties shall be bound by any
modification of the AGREEMENT, other than as expressly provided in the
AGREEMENT or as duly set forth on or subsequent to the date hereof in
writing and signed by a duly authorized representative of the party to be
bound thereby.
Article 15. Compliance With Laws
Each party shall at all times and at its own expense comply in all material
respects to all applicable laws and regulations of the U.S., Korea and
other governments (and political subdivisions thereof) and any applicable
notification requirements related to the transactions contemplated by the
AGREEMENT including, without limitation, documentation and fees associated
with the Import/Export of the Products or any documentation or licenses
related to the use thereof and obtaining any governmental approvals related
to the performance of either party hereunder.
Article 16. Cooperation
Each of the parties agrees to do such further acts and to execute and
deliver such additional documents as are reasonably necessary or
appropriate to give effect to the
9
<PAGE>
transactions contemplated by the AGREEMENT and carry out the purpose
and intent of the AGREEMENT.
Article 17. Equitable Relief
The parties acknowledge and agree that any unauthorized use, transfer or
copying of the Confidential Information will cause irreparable injury to
the Disclosing Party by substantially diminishing the value of the
Disclosing Party's trade secrets and other proprietary rights contained in
the Confidential Information. Therefore, if the Receiving Party (including
its employees and consultants) attempts to use, transfer, copy, license,
assign or otherwise convey the Confidential Information in any manner
contrary to the terms of the AGREEMENT, the Disclosing Party shall, in
addition to any other remedies available to it, have the right to enjoin,
preliminary and permanently, the Receiving Party from any such act, and the
Receiving Party hereby acknowledges that other remedies are inadequate and
consents to such injunction, provided that the court being requested to
provide such remedy would otherwise find adequate grounds for such remedy.
Article 18. Choice Of Forum
Any action arising out of or related to the AGREEMENT or the transaction
herein described, whether at law or in equity, not otherwise subject to
International Arbitration under Article 10 hereof including, without
limitation, the enforcement of any award, the seeking of injunctive relief
to prevent or restrain infringement of valid intellectual property rights,
may be instituted in and litigated in the courts of the Republic of Korea
or the Courts of the United States of America. In accordance herewith, the
parties hereto submit to the jurisdiction of the courts of the Republic of
Korea and the courts of the United States of America.
Article 19. Government Contracting
If products are transferred from one party to this Agreement to another
("Products") and are used in connection with foreign or domestic government
contracting or subcontracting, including, without limitation, either
party's performance of any government contracts or subcontracts (the
"Government Contracting Party"), then the Government Contracting Party
shall ensure that: (l) the Products shall not constitute deliverables
under any government contracts or subcontracts, and (2) no government
entity shall acquire, under the terms of any government contracts or
subcontracts, or any applicable government contracting laws, rules or
regulations, any intellectual property rights of any nature in the
Products, including rights under any copyrights, patents, trade secrets, or
10
<PAGE>
other proprietary rights attendant thereto. However, either party may
supply Products to government agencies and transfer the usual rights to use
the products or prepare archival copies of software, in accordance with the
usual and conventional terms and conditions (e.g., US General Services
Administration schedule terms and conditions) used by government agencies
for the acquisition of commercially available products.
Article 20. Time Limitation On Actions
Actions however asserted under this AGREEMENT shall be commenced within one
(1) year from the date the cause of action accrues.
Article 21. Taxes/Duties/Fees
In addition to the purchase price payable for the Products under the
AGREEMENT, SEC and AST when each is the purchasing party, shall pay all
taxes (including, without limitation, sales, use, privilege, ad valorem or
excise taxes), customs duties and import/export fees of any kind
(including, without limitation, any fees for permits or licenses related to
import/export compliance) paid or now or hereafter payable, however
designated, levied or based on amounts payable to the selling party
hereunder, on the purchasing party's acquisition, use or possession of the
Products under the AGREEMENT or upon the presence of the Products at the
designated site, but exclusive of federal, state and local taxes based on
the selling party's net income. The purchasing party shall not deduct or
withhold from payments to selling party any amounts paid or payable to
third parties for taxes, customs duties or import/export fees, however
designated.
Article 22. Due Execution
Each party hereto warrants and represents to the other that the acceptance,
execution and delivery of the AGREEMENT has been duly authorized, and that
all corporate actions and other steps necessary to make the acceptance of
the AGREEMENT and all the terms hereof valid and binding obligations have
been duly taken.
Article 23. Approvals and Similar Actions
Where agreement, approval, acceptance, consent or similar action by either
party is required by any provision of the AGREEMENT, such action shall not
be unreasonably delayed or withheld, unless specifically permitted by the
AGREEMENT.
11
<PAGE>
Article 24. Rights And Remedies
Except as otherwise expressly provided herein, the rights and remedies
provided in the AGREEMENT are cumulative and not exclusive of any rights or
remedies any party could have at law or in equity or otherwise.
Article 25. Counterparts
The AGREEMENT may be executed in one or more counterparts all of which
taken together will constitute one and the same instrument.
Article 26. Headings
Headings of articles and other provisions of the AGREEMENT are for
convenience only, and do not alter the meaning of the AGREEMENT.
Article 27. Exchange Employee Inventions
The Dispatching Party shall be the sole owner of any inventions made solely
by Exchange Employees from that Dispatching Party, even if such invention
shall be made on the premises of the Receiving Party. The capitalized
terms used in this Article 27 shall have the meanings defined in the
Employee Exchange Agreement.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this General Terms Agreement, on the dates below
indicated.
Samsung Electronics Co., Ltd. AST Research, Inc.
By: /s/ Bo-Soon Song By: /s/ Safi U. Qureshey
--------------------------- ----------------------------
Name: Bo-Soon Song Name: Safi U. Qureshey
Title: Senior Managing Director Title: Chief Executive Officer
Date: July 31, 1995 Date: July 31, 1995
12
<PAGE>
EXHIBIT 99.10
STOCKHOLDER AGREEMENT
DATED AS OF JULY 31, 1995
BY AND BETWEEN
AST RESEARCH, INC.
AND
SAMSUNG ELECTRONICS CO., LTD.
<PAGE>
STOCKHOLDER AGREEMENT
This Stockholder Agreement (this "Agreement") is entered into as of July
31, 1995 by and between Samsung Electronics Co., Ltd., a Korean corporation (the
"Purchaser") and AST Research, Inc., a Delaware corporation (the "Company").
A. The Purchaser and the Company have entered into that certain Stock
Purchase Agreement dated as of February 27, 1995, as amended by Amendment No. 1
thereto dated as of June 1, 1995 and Amendment No. 2 thereto dated as of July
29, 1995 (as so amended, the "Stock Purchase Agreement") pursuant to which the
Purchaser is acquiring certain shares of the Company's Common Stock.
B. As a result of the transactions contemplated by the Stock Purchase
Agreement, the Purchaser will be a significant stockholder of the Company.
C. It is a condition to the transactions contemplated by the Stock
Purchase Agreement and the desire of the Purchaser and the Company that this
Agreement be entered into to establish certain terms and conditions concerning
the Purchaser's investment in the Company and the Company's corporate
governance.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, and covenants set forth in this Agreement, the
Purchaser and the Company hereby agree as follows:
ARTICLE 1.
DEFINITIONS
Capitalized terms used in this Agreement without definition shall have the
respective meanings accorded to them in the Stock Purchase Agreement.
Capitalized terms used in this Agreement and not otherwise defined herein or in
the Stock Purchase Agreement shall have the respective meanings set forth below.
"Acquired Entity" shall have the meaning set forth in Section 5.1.1.
-------------
"GAAP" means generally accepted accounting principles as in effect in the
USA (as such principles may change from time to time).
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (including, without limitation, expenditures under leases that, in
conformity with GAAP, are required to be accounted for as capital leases) of the
Company and its subsidiaries during such period that are required to be
capitalized in conformity with GAAP.
"Director" means a member of the Board.
1
<PAGE>
"Equity Security" means Voting Stock and any options, warrants, convertible
securities, or other rights to acquire Voting Stock but excluding the Rights and
securities issuable upon exercise of the Rights.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Independent Director" means a Director who is not (apart from such
directorship) an Affiliate, officer, employee, agent, principal stockholder,
consultant or partner of the Purchaser or the Company or any Affiliate of either
of them or of any entity that was dependent on the Purchaser or the Company or
any Affiliate of either of them for more than five percent (5%) of its revenues
or earnings in its most recent fiscal year.
"LYONs" means the Company's Liquid Yield Option Notes due December 14,
2013.
"Management Committee" shall mean the management committee of the Board
created pursuant to Section 12 of Article III of the Amended Bylaws.
"New Securities" means Voting Stock or other shares of capital stock of the
Company and any options, warrants, convertible securities, or other rights to
acquire such Voting Stock or other capital stock or securities exercisable or
convertible for such Voting Stock or other capital stock, but excluding the
Rights and securities issuable upon exercise of the Rights.
"Original Investment Shares" means the New Issue Shares and the Offer
Shares.
"Standstill Period" means the period of four years after the Closing of the
purchase and sale of the First Issuance Shares, provided that if there is a
later Closing of the purchase and sale of the Second Issuance Shares, the
Standstill Period shall continue until the date that is four years after such
later Closing.
"Tandy Note" means that certain promissory note due July 11, 1996, issued
by the Company to Tandy Corporation in the principal amount of $96,720,000 as of
the date hereof.
ARTICLE 2.
ACQUISITION OF SHARES
2.1. Standstill. Until completion of the purchase of the Original
Investment Shares, neither the Purchaser nor any of its Affiliates shall
(directly or indirectly) acquire or offer to acquire Beneficial Ownership of any
Equity Securities or interest therein except pursuant to the First Issuance, the
Second Issuance, and the Offer. After completion of the purchase of the Original
Investment Shares and prior to the end of the Standstill Period, neither the
Purchaser nor any of its Affiliates shall directly or indirectly acquire or
offer to acquire Beneficial Ownership of any Equity Securities or interest
therein except as set forth in Sections 2.1.1 through 2.1.6, and provided that
-------------- -----
the Purchaser may at any time submit a proposal to the Board for consideration
by the Board as contemplated by Section 2.1.3.
-------------
2
<PAGE>
2.1.1. Letter of Credit Draw. The Purchaser and/or its Affiliates may
---------------------
purchase Common Stock from the Company pursuant to Section 3.3 of the Letter
-----------
of Credit Agreement.
2.1.2. Open Market. The Purchaser and/or its Affiliates may purchase
-----------
Shares in the open market at prices per share at least equal to $21.10.
2.1.3. Directors' Approval. The Purchaser and/or its Affiliates may
-------------------
purchase Common Stock in any transactions approved by a majority of the
Directors not designated by the Purchaser pursuant to this Agreement.
2.1.4. Purchases to Restore Previous Purchaser Interest.
------------------------------------------------
(a) At any time and from time to time until 270 days after the
Closing, the Purchaser may purchase in the open market at any available price up
to that aggregate number of additional shares of Voting Stock which, if they had
been acquired by the Purchaser in the open market on the date of the Closing,
would have caused the Purchaser Interest immediately following the Closing to be
40.25%.
(b) If at any time or from time to time on or after the date hereof
the number of outstanding shares of Voting Stock is increased for any reason
through the issuance of additional shares, including, without limitation, upon
exercise of stock options or directors' warrants or upon conversion or exchange
of convertible securities, conversion of any LYONs for Common Stock, payment on
the Tandy Note with Common Stock, or as consideration for acquisition of any
corporation or other entity or business or division thereof, but excluding any
shares of Voting Stock issued pursuant to stock splits or stock dividends issued
or distributed proportionately on all outstanding shares of Voting Stock, then
in connection with each such issuance the Purchaser and/or its Affiliates shall
have the right, but not the obligation, to purchase in the open market at any
available price, up to such number of additional shares of Voting Stock as may
then be necessary solely as a result of such issuance to restore the Purchaser
Interest to the same percentage of the Total Voting Power as existed immediately
prior to such increase in the number of outstanding shares of Voting Stock,
provided that any shares of Voting Stock acquired by the Purchaser pursuant to
Section 2.1.4(a) shall be deemed to have been acquired at the Closing for
----------------
purposes of determining the Purchaser Interest immediately prior to such
increase in the number of outstanding shares of Voting Stock. The purchase
right set forth in this Section 2.1.4(b) shall be exercisable at any time and
-----------------
from time to time until 270 days after the Purchaser's receipt of notice of such
issuance pursuant to Section 2.3.
-----------
2.1.5. New Equity Issuance. The Purchaser and/or its Affiliates shall
-------------------
have the right, but not the obligation, to participate in certain equity
issuances pursuant to Section 2.2.
-----------
2.1.6. Third-Party Offers. From and after the Closing of the purchase
------------------
and sale of the Second Issuance Shares until such time as the Purchaser Interest
has been less than 30% for a period of at least twenty-five (25) consecutive
days, in the event any Third Party shall make an offer to acquire a 20% or
greater interest in Equity Securities, the Purchaser and/or its Affiliates shall
be permitted to make a competing offer, and acquire Equity Securities pursuant
thereto, subject to and in accordance with the following:
3
<PAGE>
(a) If (i) the Third Party offer is approved or recommended by a
majority vote of the Directors not designated by the Purchaser pursuant to this
Agreement, or (ii) there shall be in effect no Rights Agreement or the Board
shall have amended or rescinded the Rights Agreement to exclude the Third Party
from the definition of "Acquiring Person" or permit the Third Party offer to
proceed without resulting in a Distribution Date or a Triggering Event or the
Rights becoming exercisable or (iii) a court of competent jurisdiction shall
have entered an order invalidating the Rights Agreement with respect to the
Third Party offer or ordering that the Rights be rescinded or the Rights
Agreement be so amended, then the Purchaser shall have the right to make a
competing offer and to acquire Equity Securities pursuant to such competing
offer, provided that (1) the competing offer complies with Section 2.1.6(b), (2)
----------------
the competing offer is made prior to the withdrawal or termination of the Third
Party offer, and (3) if the Third Party offer is withdrawn or terminated before
the Purchaser acquires Equity Securities pursuant to the competing offer, the
Board determines in good faith that such Third Party offer was withdrawn or
terminated primarily as a result of the Purchaser's competing offer having
superior terms to or a substantially greater likelihood of success than such
Third Party offer. The Company shall not enter into any agreement with the
Third Party offeror or take any action required as a condition of the Third
Party offer unless and until the Purchaser shall have been notified in writing
by the Company of the right of the Purchaser and/or its Affiliates to submit a
competing offer hereunder, and the Purchaser and/or its Affiliates shall have
been afforded not less than ten (10) Business Days following receipt of such
notice in which to submit its competing offer for consideration by the Board.
(b) Any competing offer by the Purchaser pursuant to this Section
-------
2.1.6 shall be, as nearly as possible, for an identical amount of securities and
-----
at a price per share no lower than and on terms no less favorable than are
offered by the Third Party, provided that any such offer may be subject to any
governmental or regulatory approvals required by Korean law. In the event the
consideration offered in any Third Party offer shall consist of securities or
property other than cash, the competing offer by the Purchaser may in the
Purchaser's discretion be for cash in an amount per share not less than the fair
market value of the consideration offered by the Third Party.
2.1.7. Maximum Purchaser Ownership. Notwithstanding anything in this
---------------------------
Section 2.1 to the contrary, from the date of this Agreement until the
expiration of the Standstill Period, neither the Purchaser nor any of its
Affiliates may (directly or indirectly) acquire, or offer to acquire, Beneficial
Ownership of any Voting Stock if, after such acquisition, the Purchaser Interest
(calculated as though Beneficial Ownership of Voting Stock includes shares of
Voting Stock that the Purchaser has the right to acquire (other than pursuant to
this Agreement) as described in subsection (d)(1)(i) of Rule 13d-3 under the
Exchange Act without regard to the 60-day limit set forth therein) would exceed
49.9%, unless such acquisition or offer (together with related transactions) is
(a) made pursuant to Section 2.1.6, or (b) has been approved by a majority of
-------------
the Directors not designated by the Purchaser pursuant to this Agreement and
would result in the Purchaser and/or its Affiliates owning 100% of the Voting
Stock.
2.2. Pro-Rata Purchase Right. From and after the Closing of the purchase
and sale of the Second Issuance Shares until such time as the Purchaser Interest
has been less than 30% for a period of at least twenty-five (25) consecutive
days, the Company shall give the Purchaser at least
4
<PAGE>
twenty-five (25) (and, when possible, at least ninety-five (95)) days' prior
written notice of the issuance by the Company of any New Securities as a result
of which the Purchaser Interest would be reduced, either immediately upon
issuance of such New Securities, or upon subsequent exercise or conversion
thereof. Such notice shall set forth (a) the approximate number and type of
securities proposed to be issued and sold to persons other than the Purchaser
and/or its Affiliates and the material terms of such securities, (b) the
proposed price or range of prices at which such securities are proposed to be
sold and the terms of payment, (c) the number of such securities offered to the
Purchaser and/or its Affiliates in compliance with this Section 2.2, and (d)
-----------
the proposed date of issuance of such securities. The Purchaser may, by notice
given to the Company within fifteen (15) days after such Company notice and so
long as permitted by applicable laws and regulations, elect to purchase up to
its pro rata share of such New Securities. Such pro rata share shall be a
percentage of the proposed issuance equal to the Purchaser Interest (calculated
as though Beneficial Ownership of Voting Stock includes shares of Voting Stock
that the Purchaser has the right to acquire (other than pursuant to this
Agreement) as described in subsection (d)(1)(i) of Rule 13d-3 under the Exchange
Act without regard to the 60-day limit set forth therein) immediately prior to
such issuance. The Purchaser's pro-rata purchase shall be on the same terms as
the balance of such issuance, provided that if the sale price at which the
Company proposes to issue, deliver or sell any New Securities is to be paid with
consideration other than cash, then the purchase price at which the Purchaser
may acquire such New Securities shall be equal in value (as determined in good
faith by the Board) but payable entirely in cash. The closing of the
Purchaser's purchase of New Securities pursuant to this Section 2.2 shall occur
-----------
simultaneously with the closing of the balance of such issuance, provided that
if as of the date of the closing of the balance of such issuance the Purchaser
has not received all approvals of Governmental Authorities required in
connection with the Purchaser's participation in such issuance, then (i) the
Purchaser shall not be required to effect its purchase under this Section 2.2
-----------
until such approvals have been received, and (ii) the Company may terminate the
Purchaser's right to participate in such issuance if the Purchaser has not
effected its purchase within 120 days of receipt from the Company of written
notice of the New Issuance. If the Purchaser elects such deferral, the Company
may close the portion of the issuance other than the Purchaser's portion prior
to the closing of the issuance of the Purchaser's portion. If the terms of the
proposed issuance are materially changed from those stated in the Company's
notice to the Purchaser of such issuance, then the proposed issuance shall be
treated as a new issuance, subject again to this Section 2.2, and any election
-----------
to purchase made prior to such change may, at the sole discretion of the
Purchaser, be withdrawn.
The Purchaser's pro-rata purchase right pursuant to this Section 2.2 shall
-----------
not apply, however, to:
(i) any issuance pursuant to (a) any stock option or purchase
right or plan exclusively for one or more employees and/or directors of the
Company or any of its subsidiaries or (b) warrants issued to Directors prior to
the date hereof;;
(ii) any issuance in consideration of any part of the acquisition
by the Company or any subsidiary of any stock, assets or business;
(iii) any issuance upon conversion of the LYONs;
5
<PAGE>
(iv) any issuance pursuant to the exercise or conversion of any
New Security issued after the date hereof in a transaction in which the
Purchaser was entitled to participate pursuant to this Section 2.2; or
-----------
(v) any issuance in payment of any portion of the Tandy Note.
2.3. Notice and Subscription Procedures. In addition to the notice
required under Section 2.2, the Company shall notify the Purchaser of, and
-----------
provide the Purchaser with an accurate and complete description of, any
event that will cause the rights of the Purchaser and/or its Affiliates to
acquire or offer to acquire Equity Securities under Section 2.1 (other than
-----------
Section 2.1.2 or 2.1.5) to become exercisable. The Company shall deliver
------------- -----
such notice to the Purchaser as promptly as practicable after becoming
aware of such event, and when possible at least ninety-five (95) days prior
to the anticipated date of such event, provided that notice of issuances of
a kind described in subsection (i), (iii), or (iv) of Section 2.2, need
-----------
only be delivered within 15 days following the end of each fiscal quarter
of the Company.
2.4. Acquisitions After Standstill Period. After the Standstill Period,
this Agreement shall not restrict the acquisition or offer to acquire any Equity
Securities or interest therein by the Purchaser and/or its Affiliates; provided,
however, that the Purchaser shall not acquire or offer to acquire any Equity
Securities if, as the result of or after giving effect to such acquisition, the
Purchaser Interest (calculated as though Beneficial Ownership of Voting Stock
includes shares of Voting Stock that the Purchaser has the right to acquire
(other than pursuant to this Agreement) as described in subsection (d)(1)(i) of
Rule 13d-3 under the Exchange Act without regard to the 60-day limit set forth
therein) would exceed 66.67%, except pursuant to a cash tender offer for all
Equity Securities not owned by the Purchaser and/or its Affiliates.
ARTICLE 3.
TRANSFER OF SHARES
The Purchaser and its Affiliates shall not sell or otherwise transfer
(except to an Affiliate of the Purchaser which shall agree to be bound by this
Agreement) any Equity Securities Beneficially Owned by such persons or any
interest therein for a period of five (5) years from the Closing of the purchase
and sale of the First Issuance Shares, except as follows:
3.1. Pro-Rata Transactions. From and after the third anniversary of the
Closing of the purchase and sale of the First Issuance Shares, the Purchaser
and/or any of its Affiliates may sell any or all Equity Securities Beneficially
Owned by such persons in any transaction or transactions in which each other
holder of Equity Securities has the opportunity to sell the same percentage of
such stockholder's Equity Securities as the Purchaser and such Affiliates, at a
price and on terms no less favorable than those applicable to the sale by the
Purchaser and/or its Affiliates.
3.2. Public Offerings and Market Transactions. From and after the third
anniversary of the Closing of the purchase and sale of the First Issuance Shares
(or, in the case of Common Stock acquired from the Company pursuant to Section
3.3 of the Letter of Credit Agreement, at any time and from time to time), the
Purchaser and/or any of its Affiliates may sell any or all
6
<PAGE>
Equity Securities Beneficially Owned by such persons in one or more registered
public offerings or in market transactions if the Purchaser and/or its selling
Affiliates invoke and follow or require participating underwriters or brokers to
invoke and follow appropriate and reasonable procedures (subject to the
Company's prior approval, which shall not be unreasonably withheld) designed to
prevent the sale of such Equity Securities to any person or "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) that would, after giving effect
to its acquisition of such Equity Securities, Beneficially Own or have the right
to acquire more than ten percent (10%) of the Total Voting Power.
3.3. Directors' Approval. The Purchaser and/or any of its Affiliates may
sell any or all Equity Securities Beneficially Owned by such persons in any
transaction or transactions approved by a majority of the Directors other than
Directors designated by the Purchaser pursuant to this Agreement.
In the event the Purchaser shall sell or otherwise transfer any Equity
Securities or any interest therein to an Affiliate, then so long as any such
Equity Securities are Beneficially Owned by such Affiliate, the provisions of
this Article shall apply to any sale or transfer of the capital stock or other
equity interests of such Affiliate such that it would cease to be an Affiliate
of the Purchaser.
ARTICLE 4.
BOARD REPRESENTATION
4.1. Purchaser Designees.
4.1.1. Full Investment. At all times and from time to time after
---------------
acquisition by the Purchaser of the Original Investment Shares, subject to
Section 4.1.2, the Purchaser shall have the right to designate that number of
-------------
Directors as will result in the total number of Directors designated by the
Purchaser being one fewer than a majority of the total number of Directors then
authorized under the Company's Certificate of Incorporation. Subject to Section
-------
4.2, this Section 4.1.1 shall not limit the right of the Purchaser to nominate
--- -----
and seek the election of additional Directors after the Standstill Period.
4.1.2. Partial Investment. If (a) the Purchaser acquires the First
------------------
Issuance Shares, but does not also acquire all other Original Investment Shares,
or (b) the Purchaser acquires the Original Investment Shares but the Purchaser
Interest shall thereafter at any time have been less than thirty percent (30%)
for a period of at least twenty-five (25) consecutive days, then the Purchaser
shall from time to time have the right to designate that number of Directors as
will result in the total number of Directors designated by the Purchaser being
equal to the product (rounded to the nearest whole number) of (i) the total
number of Directors then authorized under the Company's Certificate of
Incorporation, and (ii) the Purchaser Interest at that time.
4.1.3. Purchaser Directors. Any Director designated by the Purchaser
-------------------
shall not serve as a Director if such person shall be prohibited from serving as
a Director under applicable law, including antitrust law.
7
<PAGE>
4.2. Independent Directors. At all times until such time as the Purchaser
Interest shall have been less than 30% for a period of at least twenty-five (25)
consecutive days or more than 90% for a period of at least twenty-five (25)
consecutive days, the Board shall include at least three Independent Directors.
4.3. Additional Agreements.
4.3.1. By the Company. The Company shall from time to time increase
--------------
the number of Directors constituting the Board and/or obtain resignations from
Directors (other than designees of the Purchaser and Independent Directors
required by Section 4.2) as may be required to ensure that there will at all
-----------
times be sufficient Board seats available to accommodate the full number of
Directors that the Purchaser is then entitled to designate pursuant to Section
-------
4.1. The Company shall promptly and at all times use its best efforts, and take
---
all such actions as may be appropriate or necessary for the election to the
Board of the Purchaser designees selected pursuant to Section 4.1 and the
-----------
Independent Directors required pursuant to Section 4.2. Such actions shall
-----------
include, without limitation, the solicitation of proxies for the election of
such persons at each regular or special meeting of stockholders of the Company
at which Directors are to be elected, or in any written consent solicited in
lieu of such a meeting.
4.3.2. By the Purchaser. The Purchaser and its Affiliates shall vote
----------------
their Shares at each regular or special meeting of the Company's stockholders at
which Directors are to be elected, or in any written consent solicited in lieu
of such a meeting, in favor of election to the Board, and shall otherwise use
their best efforts to cause the appointment or election to the Board, and to
maintain as Directors: (a) during the Standstill Period, such Independent
Directors and such additional Directors as shall be designated by a majority of
the Directors of the Company other than those designated by the Purchaser,
consistently with Sections 4.1 and 4.2; and (b) after the Standstill Period,
------------ ---
such Independent Directors as are required by Section 4.2 and otherwise as the
-----------
Purchaser and its Affiliates may determine in their discretion. If at any time
prior to the end of the Standstill Period the number of Directors that the
Purchaser is entitled to designate pursuant to Section 4.1 is fewer than the
-----------
number of Purchaser designees then serving on the Board, the Purchaser shall
promptly obtain resignations from such of its designees (chosen by the
Purchaser) as may be required to cause the number of Purchaser designees serving
on the Board to be equal to the number of Directors that the Purchaser is then
entitled to designate.
4.3.3. By the Purchaser and the Company. Names of all Director
--------------------------------
nominees designated by the Purchaser or by those Directors of the Company not
designated by the Purchaser shall be furnished to the Purchaser and the Company
(a) in the case of election of Directors at an annual meeting or otherwise
pursuant to a vote of the Company's stockholders, in time to be included in the
proxy materials related to such election, and (b) at least ten (10) days prior
to election or appointment of Directors by the Board.
4.4. Committees. The Purchaser shall be entitled to designate one of its
Director designees to serve on each committee of the Board (except as otherwise
provided in Section 12 of Article III of the Amended Bylaws with respect to the
Management Committee). The Purchaser shall be entitled to select any of the
Directors as alternates for each of its Director designees serving on committees
of the Board, which alternates shall be the designees of the Board for
8
<PAGE>
purposes of the Amended Bylaws and Section 141(b) of the Delaware General
Corporation Law and may replace any of the Purchaser's Director designees
serving on any committee who are absent or disqualified at any meeting of the
committee. With respect to the audit committee, any Purchaser Director designee
shall, as a condition to membership thereon, meet all requirements imposed by
the rules of any national securities exchange, or the Nasdaq National Market, on
which the Company's Shares may then be listed or quoted. With respect to the
compensation committee, any Purchaser Director designee shall, as a condition to
membership thereon, qualify as "disinterested" within the meaning of Rule 16b-3
under the Exchange Act or any similar rule then in effect.
4.5. Vacancies. If any Director or Director nominee designated by the
Purchaser pursuant to Section 4.1 shall decline to serve on, resign or be
-----------
removed from, or for any other reason be unable to serve on the Board or any
committee thereof, the vacancy resulting therefrom shall be filled in accordance
with the Company's Certificate of Incorporation and Bylaws by another person
designated by the Purchaser pursuant to Section 4.1. If any Director or Director
-----------
nominee not designated by the Purchaser pursuant to Section 4.1 shall decline to
-----------
serve on, resign or be removed from, or for any other reason be unable to serve
on the Board or any committee thereof during the Standstill Period, the vacancy
resulting therefrom shall be filled in accordance with the Company's Certificate
of Incorporation and Bylaws by a person designated by a majority of the
Directors of the Company other than those designated by the Purchaser. This
Section 4.5 shall not operate to allow the Purchaser or the Directors other than
-----------
those designated by the Purchaser to designate more Directors or committee
members than it or they would be entitled to designate hereunder but for this
Section 4.5.
-----------
4.6. Directors' Indemnification and Insurance. As long as any designees of
the Purchaser serve on the Board, (a) the Amended and Restated Certificate of
Incorporation and Bylaws of the Company shall not be amended to contain
provisions less favorable with respect to indemnification and limitation of
liability of Directors than are set forth in the Amended and Restated
Certificate and Amended Bylaws as of the date of this Agreement, or in any other
manner that would affect adversely the rights thereunder of designees of the
Purchaser serving on the Board, unless such amendment, repeal or modification
shall be required by law or the fiduciary obligations of the Board, as
determined in good faith by the Board based on the written advice of outside
counsel, and (b) such designees shall be covered by any directors' and officers'
liability insurance maintained from time to time on the same terms and subject
to the same conditions as the other members of the Board, and (c) such designees
shall be entitled to the benefit of any indemnification agreements entered into
by the Company with any of its Directors; provided, that nothing in this
Agreement shall obligate the Company to maintain any such insurance or to enter
into any such indemnification agreements.
4.7. Directors' Compensation. The Directors designated by the Purchaser,
if any, who are not officers or employees of the Purchaser and its Affiliates
shall have the right to receive all fees paid and options and other awards
granted and expenses reimbursed to non-employee Directors generally, provided
that all such fees and awards allocable to Directors who are not officers or
employees of the Purchaser and its Affiliates shall not be paid or awarded or
transferred to the Purchaser. Directors designated by the Purchaser who are
officers or employees of the Purchaser or its Affiliates shall have the right to
receive only such fees, options
9
<PAGE>
and other awards and expense reimbursements, if any, as may be granted
to employee Directors of the Company for their service as Directors, provided
that, notwithstanding Article 2 (other than Section 2.1.7), any or all such fees
--------- -------------
and awards allocable to Directors designated by the Purchaser shall, in the
Purchaser's discretion, be paid or awarded to the Purchaser.
ARTICLE 5.
APPROVAL RIGHTS
5.1. Actions by the Company. Subject to applicable laws, including
antitrust laws, at all times following acquisition by the Purchaser and/or its
Affiliates of the New Issue Shares and the Offer Shares and until the Purchaser
Interest has been less than thirty percent (30%) for a period of at least
twenty-five (25) consecutive days, the Company shall not, without the prior
written consent of the Purchaser or, in the case of Board action, the
affirmative vote or written consent of not less than a majority of the
Directors designated by the Purchaser:
5.1.1. Acquisitions. Acquire or agree to acquire, or permit any of
------------
its subsidiaries to acquire or agree to acquire, by merger, consolidation, or
acquisition of assets or stock, or otherwise, any corporation, partnership, or
other business organization or division thereof, or any other business operation
("Acquired Entity") if the total assets, or the total revenues or operating
profits of such Acquired Entity as at the end of or for the most recently
completed four fiscal quarters preceding the agreement for such acquisition
shall exceed twenty percent (20%) of the total assets, or the total revenues or
operating profits of the Company as at the end of or for such four fiscal
quarters; provided however that the Purchaser's consent shall not be required
solely as the result of this Section 5.1.1 for an acquisition in which the total
-------------
value of all consideration paid or given by the Company in such acquisition
(including without limitation the value of any funded debt or other capitalized
obligations assumed by the Company or any subsidiary of the Company) shall be
less than fifty million dollars ($50,000,000).
5.1.2. Divestitures. Sell, contribute or otherwise transfer or agree
------------
to sell, contribute or otherwise transfer, or permit any of its subsidiaries to
sell, contribute or otherwise transfer or agree to sell, contribute or otherwise
transfer, any product line or line of business of the Company or any of its
subsidiaries or any interest therein to any person other than a subsidiary of
the Company that is or, if it were a United States entity, would be, required to
be consolidated for Federal income tax purposes, if the assets, revenues or
operating profit of such product line or line of business as at the end of or
for the most recently completed four fiscal quarters preceding the agreement for
such transfer shall exceed twenty percent (20%) of the assets, revenues or
operating profits of the Company as at the end of or for such four fiscal
quarters.
5.1.3. Issuances. Authorize for issuance, issue, sell, deliver or
---------
agree or commit to issue, sell or deliver (whether through the issuance or
exercise of options, warrants, subscriptions, rights to purchase or otherwise),
in any transaction or series of related transactions, any New Securities if such
New Securities, assuming full conversion and exercise of such New Securities,
would represent an increase of ten percent (10%) or more in the Total Voting
Power represented by the Voting Stock (other than such New Securities)
outstanding immediately prior to the
10
<PAGE>
issuance of such New Securities (or for New Securities issued in a series
of related transactions, immediately prior to the first issuance in such
series).
5.1.4. Capital Expenditures. Approve any annual Capital Expenditure
--------------------
budget, or authorize or make, or permit any of its subsidiaries to authorize or
make, Capital Expenditures in excess of $15 million, in the aggregate for the
Company and all of its subsidiaries, in any fiscal year commencing with the
fiscal year beginning July 1995, except to the extent specifically provided for
in a capital budget approved by the Purchaser pursuant hereto.
5.1.5. Amendments. Amend its Certificate of Incorporation or Bylaws
----------
or change the number of authorized Directors.
5.1.6. Certain Strategic Relationships. Enter, or permit any of its
-------------------------------
subsidiaries to enter, into any joint venture, partnership, or exclusive
licensing agreement with any Third Party that (a) involves an explicit or
projected commitment of cash and/or other resources of the Company and/or of its
subsidiaries or forecasted payments to or from the Company and/or its
subsidiaries during the duration of such agreement or relationship, or the four-
year period commencing on the date of such agreement, whichever is less, in
excess of $100 million, or (b) restricts or impairs in any material respect the
ability or right of the Company or any of its subsidiaries to compete in any
line of business or product which is material to the business of the Company and
its subsidiaries, taken as a whole. Notwithstanding the generality of the
foregoing, the Purchaser's written consent shall not be required pursuant to
this Section 5.1.6 for any agreement for the procurement of central processing
-------------
units (CPUs) and licenses for the use of patents, basic input-output system
software (BIOS), disk operating system software (DOS), Windows operating system
software, and network operating system software, or other similar agreements, in
each case entered into in the ordinary course of business not substantially
inconsistent with past practice and for procurement of components to be used in
or with the Company's products, or provided to purchasers of the Company
products in or with such products.
ARTICLE 6.
CERTAIN COVENANTS
6.1. Proxy Solicitations. Prior to the end of the Standstill Period,
neither the Purchaser nor its Affiliates shall, directly or indirectly, (a)
solicit, initiate or participate in any "solicitation" of "proxies" or become a
"participant" in any "election contest" (as such terms are defined or used in
Regulation 14A under the Exchange Act, disregarding clause (iv) of Rule 14a-
1(1)(2) and including any exempt solicitation pursuant to Rule 14a-2(b)(1));
call, or in any way participate in a call for, any special meeting of
stockholders of the Company (or take any action with respect to acting by
written consent of the Company's stockholders); request, or take any action to
obtain or retain any list of holders of any securities of the Company; or
initiate or propose any stockholder proposal or participate in the making of, or
solicit stockholders for the approval of, one or more stockholder proposals; (b)
deposit any Voting Stock in a voting trust or subject them to any voting
agreement or arrangements, except as provided herein; (c) form, join or in any
way participate in a "group" (within the meaning of Section 13(d)(3) of Exchange
Act) with respect to
11
<PAGE>
any Voting Stock (or any securities the ownership of which would make the owner
thereof a Beneficial Owner of Voting Stock ); (d) except as specifically
permitted by this Agreement, otherwise act to control or influence the Company
or its management, Board of Directors, policies or affairs, including, without
limitation, (i) soliciting or proposing to effect or negotiate any form of
business combination, restructuring, recapitalization or other extraordinary
transaction involving, or any change in control of, the Company, its Affiliates
or any of their respective securities or assets (other than pursuant to the
Stock Purchase Agreement), or (ii) seeking Board representation or the removal
of any Directors or a change in the composition or size of the Board (other than
as necessary to obtain the Board representation to which it is entitled
hereunder); (e) disclose any intent, purpose, plan or proposal with respect to
this Agreement, the Company or its Affiliates or the Board, management,
policies, affairs, securities or assets of the Company or its Affiliates that is
inconsistent with this Agreement, including any intent, purpose, plan or
proposal that is conditioned on, or would require the Company or any of its
Affiliates to make any public disclosure relating to, any such intent, purpose,
plan, proposal or condition; or (f) assist, advise, encourage or act in concert
with any person with respect to, or seek to do, any of the foregoing.
Notwithstanding the generality of the foregoing, nothing herein shall (x)
prevent the Purchaser or its Affiliates from voting their respective shares, or
taking such other action as it may deem necessary or appropriate, to cause the
election as Directors of those persons the Purchaser is entitled to designate
pursuant to Section 4.1, or (y) prohibit or restrict any action taken by the
-----------
Purchaser or any of its Affiliates in connection with the exercise of the rights
of the Purchaser and its Affiliates under Section 2.1.6.
-------------
6.2. Voting. Except as otherwise set forth herein, prior to the end of the
Standstill Period, the Purchaser and its Affiliates shall vote any Voting Stock
Beneficially Owned by them in connection with any matter or proposal submitted
to a vote of the Company stockholders but not sponsored or supported by the
Board either (a) in accordance with the recommendation of a majority of the
Board, or (b) in the absence of a recommendation of a majority of the Board,
then proportionately in accordance with the votes of all stockholders of the
Company who have voted with respect to such matter or proposal. Prior to the end
of the Standstill Period, the Purchaser and its Affiliates shall be present in
person or represented by proxy at all stockholder meetings of the Company called
by the Company so that all Voting Stock of which they are the Beneficial Owner
may be counted for the purpose of determining the presence of a quorum at such
meetings.
6.3. Material Transactions. At all times that the Purchaser Interest is
less than 100%, neither the Purchaser nor any of its Affiliates shall engage in
any material transaction with the Company or any of its subsidiaries unless such
transaction has been approved by a majority of the Independent Directors or, in
the case of a series of related transactions, is in accordance with guidelines
approved by a majority of the Independent Directors. For purposes of this
Section 6.3, "material transaction" shall mean (i) any amendment to, or
termination of, this Agreement or, any of the other Transaction Documents that
have been executed and delivered and (ii) any transaction between the Company or
any of its subsidiaries and the Purchaser or any of its Affiliates, or any
transaction (other than a transaction of the type described in Section 2.1.6,
-------------
Section 2.4 or Section 6.1) between the stockholders of the Company, in their
----------- -----------
capacity as stockholders, and the Purchaser or any of its Affiliates, including,
without limitation: (a) any sale of all or substantially all of the assets of
the Company or any of its subsidiaries or any business
12
<PAGE>
division or operation of the Company or any of its subsidiaries, (b) any
issuance of Voting Stock or other securities by the Company or any of the
Company's subsidiaries, (c) any transaction or series of related transactions
involving payments, the incurrence of obligations, or transfers of property, and
(d) any merger or other business combination involving the Purchaser and/or any
of its Affiliates; provided, that "material transaction" shall not include any
--------
(i) transaction in accordance with the terms of the Transaction Documents or
(ii) other transaction or series of related transactions involving payments by
or obligations or transfer of property of the Company with an aggregate value in
any calendar or fiscal year of less than $5 million.
ARTICLE 7.
RESULTS OF OPERATIONS
Following the acquisition by the Purchaser of the Original Investment
Shares, and provided that the Purchaser Interest shall not have been less than
thirty percent (30%) for a period of at least twenty-five (25) consecutive days,
if (a) the consolidated revenues or gross profits of the Company and its
subsidiaries for the fiscal year ended July 1996 shall be less than $2.6 billion
or $430 million, respectively, (b) the consolidated revenues or gross profits of
the Company and its subsidiaries for the fiscal year ended July 1997 shall be
less than the greater of (i) $2.75 billion or $450 million, respectively, or
(ii) 85% of the amounts therefor set forth in the 1997 operating plan of the
Company approved by the Board; or (c) the consolidated net income after taxes of
the Company and its subsidiaries for either of such fiscal years shall be less
than 1% of net revenues, then the Management Committee of the Board shall
review the desirability of changes in the management of the Company and take
such action, if any, as may be determined to be advisable including without
limitation the reassignment, changes in the responsibilities, removal,
termination or replacement of any members of management. For purposes of the
foregoing, the "management" of the Company shall refer to all persons who
presently have the title of "Vice President" or higher, whether or not any such
person is an officer of the corporation, and all such persons who may perform
the functions presently performed by any of the foregoing, without regard to
title, but shall not include the Chief Executive Officer. The Management
Committee shall make any determination with respect to the termination or
reassignment of an existing member of management, or the decision to hire any
new member of management within 60 days following the availability of the
audited financial statements for the relevant year (or such longer period of
time as may be determined by a majority of the Board), and no such determination
shall be made thereafter; provided that: (a) the Management Committee shall
have such additional time as is reasonably necessary for the recruitment and
selection of any such new member of management; and (b) no action or inaction by
the Management Committee following the fiscal year ended July 1996 shall impair
its ability to act as herein authorized following the fiscal year ended July
1997. Notwithstanding the generality of the foregoing, the Management Committee
shall not be authorized to take such actions if they would violate applicable
law or if the shortfall in consolidated revenues, gross profits or net income of
the Company and its subsidiaries referred to above, shall be the direct result
of (a) fire, flood, earthquake or other act of God, any war, whether or not
declared, insurrection, hostilities, or other armed conflict, acts of civil
disorder or riot, or the disruption of national or international financial,
currency or capital markets, in each case affecting the Company or any of its
significant suppliers, or (b) a decline in the unit volume of the world market
for personal computers.
13
<PAGE>
ARTICLE 8.
MISCELLANEOUS
8.1. Termination. Article 4, Article 5 and Article 6 of this Agreement and
--------- --------- ---------
the rights and obligations of the Purchaser and the Company thereunder shall
terminate at the first time after the date hereof that the Purchaser Interest
shall have been less than fifteen percent (15%) for a period of at least ninety
(90) consecutive days.
8.2. Stock Purchase Agreement. The provisions of Article 9 of the Stock
Purchase Agreement are incorporated herein by reference and shall govern this
Agreement as though set forth in full herein and as though references in such
Article 9 to "this Agreement" were references to this Agreement.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
AST Research, Inc., Samsung Electronics Co., Ltd.,
a Delaware corporation a Korean corporation
By: /s/ Safi U. Qureshey By: /s/ Bo-Soon Song
------------------------------ -------------------------------
Name: Safi U. Qureshey Name: Bo-Soon Song
---------------------------- -----------------------------
Title: Chief Executive Officer Title: Senior Managing Director
--------------------------- ----------------------------
15
<PAGE>
EXHIBIT 99.11
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into
as of July 31, 1995 by and between Samsung Electronics Co., Ltd., a Korean
corporation (the "Investor") and AST Research, Inc., a Delaware corporation (the
"Company").
A. The Investor and the Company have entered into that certain Stock
Purchase Agreement dated as of February 27, 1995, as amended by Amendment No. 1
thereto dated as of June 1, 1995 and Amendment No. 2 thereto dated as of July
29, 1995 (as so amended, the "Stock Purchase Agreement"), pursuant to which the
Investor is acquiring certain shares of the Company's Common Stock.
B. The execution and delivery of this Agreement is a material
inducement and consideration to the Investor to enter into the Stock Purchase
Agreement and a condition to the transactions contemplated thereby.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, and covenants set forth in this Agreement, the
Investor and the Company hereby agree as follows:
ARTICLE 1
DEFINITIONS
Capitalized terms used in this Agreement without definition shall
have the respective meanings accorded to them in the Stock Purchase Agreement.
Capitalized terms used in this Agreement and not otherwise defined herein or in
the Stock Purchase Agreement shall have the respective meanings set forth below.
"Adverse Disclosure" means public disclosure of material non-public
information relating to a Significant Transaction, which disclosure (i) would,
in the good faith judgment of the Board, based as to legal matters on the
written opinion of outside counsel, be required to be made in any registration
statement filed with the Commission by the Company so that such registration
statement would not be materially misleading; (ii) would not, in the good faith
judgment of the Board, based as to legal matters on the written opinion of
outside counsel, be required to be made but for the filing of such a
registration statement; and (iii) would have a material adverse effect on the
Company's ability to complete such Significant Transaction, or the terms upon
which such Significant Transaction can be completed.
"Demand Registration" has the meaning set forth in Section 2.1.
-----------
"Register," "Registered" and "Registration" refer to a registration
effected by preparing and filing of an appropriate registration statement with
the Commission in compliance with the Securities Act.
"Registrable Shares" means (i) the New Issue Shares, (ii) the Offer
Shares, and (iii) other shares of Common Stock acquired by the Investor and/or
its Affiliates from time to time not in violation of the Stock Purchase
Agreement or the Stockholder Agreement. All Registrable Shares shall continue
to be Registrable Shares in the hands of such Affiliates of the Investor, but
shall cease to be Registrable Shares when transferred to any person other than
such an Affiliate of the Investor, or (a) when sold in a registered public
offering or in
<PAGE>
accordance with Rule 144 promulgated by the Commission under the Securities
Act, or (b) when permitted to be sold in accordance with Rule 144(k).
"Registration Expenses" means all expenses, except Selling Expenses,
incurred by the Company in complying with Articles 2 and 3, including, without
---------- -
limitation, all registration, qualification, and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, the expense of any special audits incident to or required by any
such registration, expenses of all marketing and promotional efforts reasonably
requested by the managing underwriter and the reasonable fees (not to exceed
$50,000) and reasonable disbursements of one counsel for the Investor.
"Selling Expenses" means all underwriting discounts, selling
commissions, and stock transfer taxes applicable to the sale of the Registrable
Shares.
"Significant Transaction" means a pending or imminent material
acquisition, disposition, or other business combination or divestiture or
transaction.
ARTICLE 2
DEMAND REGISTRATIONS
2.1 Request for Registration. At any time and from time to time
after 180 days following the Closing of the purchase and sale of the First
Issuance Shares, the Investor may request that the Company effect the
registration of Registrable Shares (a "Demand Registration"). Upon receipt of
such request, the Company shall use its best efforts to effect such Demand
Registration, subject to the limitations set forth in Section 2.2. The Company
-----------
may include in any Demand Registration any other shares of Common Stock
(including issued and outstanding shares of Common Stock as to which the holders
thereof have contracted with the Company for "piggyback" registration rights) so
long as the inclusion in such registration of such shares will not, in the
reasonable judgment of the managing underwriter(s), if any, interfere with the
successful marketing in accordance with the intended method of sale or other
disposition of all the Registrable Shares sought to be registered. If it is
determined as provided above that there will be such interference, the other
shares of Common Stock sought to be included shall be excluded to the extent
deemed appropriate by the managing underwriter(s).
2.2 Limitations on Demand Registrations. Subject to Section 2.4, the
-----------
Company's obligation to effect a Demand Registration requested by the Investor
pursuant to Section 2.1 shall be subject to the following limitations:
-----------
2.2.1. The Company shall not be required to effect any Demand
Registration of fewer than 2,000,000 Registrable Shares (as adjusted for any
stock splits, reverse stock splits or similar events which occur after the date
hereof).
2.2.2. The Company shall not be required to effect any Demand
Registration within 18 months of the effectiveness of a Registration by the
Investor of Registrable Shares registered pursuant to the previous Demand
Registration effected by Company.
2.2.3. The Company may defer its obligations to effect a Demand
Registration if, in the good faith judgment of the Board, filing a registration
statement with the Commission at the time a Demand Registration is requested
would require Adverse Disclosure, provided that such deferral may not extend
beyond the earlier to occur of (i) 180 days after the receipt by the Company of
the Investor's request for such Demand Registration, or (ii) the date
2
<PAGE>
that filing of a registration statement with the Commission would not require
Adverse Disclosure therein.
2.2.4. If the Investor purchases the First Issuance Shares but
not the Second Issuance Shares and the Offer Shares, the Company shall not be
required to effect more than three (3) Demand Registrations. If the Investor
purchases all of the New Issuance Shares and the Offer Shares, the Company shall
not be required to effect more than six (6) Demand Registrations.
2.3 Holdback. Subject to Section 2.4, if requested (pursuant to a
-----------
timely written notice) by the managing underwriter(s) of an underwritten
offering or the initial purchaser(s) in any offering being resold pursuant to
Rule 144A under the Securities Act of New Securities by the Company, the
Investor shall agree on the same terms applicable to officers and directors of
the Company not to effect any public sale or distribution of any of the
Registrable Shares for a period of up to 120 days following and 15 days prior to
the date of the final prospectus contained in the registration statement filed
in connection with such offering.
2.4 Minimum Sale Availability. The limitations on the Company's
obligations to effect Demand Registrations set forth in Sections 2.2.3 and the
--------------
Investor's obligation under Section 2.3 shall not be applicable to the extent
-----------
that such limitations would result in the Investor not having a period of at
least 180 consecutive days within any 18-month period during which the Investor
may sell Registrable Shares under a Registration effected pursuant to the
provisions hereof.
2.5 Selection of Underwriter. Any Demand Registration and related
offering shall be managed by the Investor as follows: subject to the reasonable
approval of the Company, the Investor shall have the power to select the
managing underwriter(s) for such offering, and shall in consultation with the
managing underwriter(s) have the power to determine the number of Registrable
Shares to be included in such registration and offering (subject to applicable
limitations set forth herein), the offering price per Registrable Share, the
underwriting discounts and commissions per Registrable Share, the timing of the
registration and related offering (subject to applicable limitations set forth
herein), counsel to the Investor, and all other administrative matters related
to the registration and related offering. The Company shall enter into an
underwriting agreement in customary form with the underwriter(s) selected by the
Investor and shall enter into such other customary agreements and take all such
other customary actions as the Investor or its underwriter(s) may reasonably
request to facilitate the disposition of the Registrable Shares.
ARTICLE 3
PIGGYBACK REGISTRATIONS
3.1 Request for Registration. At any time that the Company proposes
to register any Common Stock for sale solely for cash, either for its own
account or for the account of a stockholder or stockholders (a "Company
Registration"), the Company shall give the Investor written notice of its
intention to do so and of the intended method of sale (the "Registration
Notice") not fewer than 25 days prior to the anticipated filing date of the
registration statement effecting such Company Registration. The Investor may
request inclusion of any Registrable Shares in such Company Registration by
delivering to the Company, within 15 days after receipt of the Registration
Notice, a written notice (the "Piggyback Notice") stating the number of
Registrable Shares proposed to be included and that such shares are to be
included in any underwriting only on the same terms and conditions as the shares
of Common Stock otherwise being sold through underwriters under such
3
<PAGE>
Registration. The Company shall use its best efforts to cause all Registrable
Shares specified in the Piggyback Notice to be included in the Company
Registration and any related offering, all to the extent requisite to permit the
sale by the Investor of such Registrable Shares in accordance with the method of
sale applicable to the other shares of Common Stock included in the Company
Registration.
3.2 Limitations on Piggyback Registrations. The Company's obligation
to include Registrable Shares in the Company Registration pursuant to Section
-------
3.1 shall be subject to the following limitations:
---
3.2.1. The Company shall not be obligated to include any
Registrable Shares in a registration statement (i) filed on Form S-4 or
Form S-8 or such other similar successor forms then in effect under the
Securities Act, (ii) pursuant to which the Company is offering to exchange its
own securities, or (iii) relating to dividend reinvestment plans.
3.2.2. If the managing underwriter(s), if any, of an offering
related to the Company Registration determines in its reasonable judgment that
marketing factors require a limitation of the number of shares of Common Stock
that can be included in such offering, the managing underwriter(s) may exclude
the appropriate number of shares of Common Stock held by the stockholders of the
Company, including the Investor, from such registration. If the managing
underwriter(s) determines to exclude from such offering any Registrable Shares
that the Investor desires to include or any shares of Common Stock that other
Company stockholders with applicable registration rights desire to include, the
Investor and such other Company stockholders (except for such person or persons,
if any, upon whose demand such Registration is being made) shall share pro rata
in the portion of such offering available to them (the "Available Portion"),
with the Investor and each such other Company stockholder entitled to include in
such Company Registration and related offering a number of shares of Common
Stock equal to the product of (i) the Available Portion and (ii) a fraction, the
numerator of which is the total number of Registrable Shares (in the case of the
Investor) or shares of Common Stock entitled to inclusion in such Company
Registration and related offering (in the case of other Company stockholders
desiring inclusion), and the denominator of which is the total of the number of
Registrable Shares and shares of Common Stock entitled to inclusion in such
Company Registration and related offering owned by the Company stockholders
other than the Investor desiring inclusion.
3.3 Selection of Underwriter. Any Company Registration and related
offering shall be managed by the Company; the Company shall have the power to
select the managing underwriter(s) for such offering, and shall in consultation
with the managing underwriter(s) have the power to determine the offering price,
the underwriting discounts and commissions, the terms of the underwriting
agreement, the timing of the registration and related offering, counsel to the
Company, and all other administrative matters related to the registration and
related offering. To the extent that the Investor participates in a Company
Registration and related offering pursuant to Section 3.1, the Investor shall
-----------
enter into, and sell its Registrable Shares only pursuant to, the underwriting
arranged by the Company, and shall either commit to attend the closing of the
offering and take such other actions as may be reasonably necessary to effect
the Investor's participation in the offering and to provide any assurances
reasonably requested by the Company and the managing underwriter(s) in that
regard, or shall deliver to the Company in custody certificates representing all
Registrable Shares to be included in the registration and shall execute and
deliver to the Company a custody agreement and a power of attorney, each in form
and substance appropriate for the purpose of effecting the Investor's
participation in the Company Registration and related offering and otherwise
reasonably satisfactory to the Company. If the Investor disapproves of the
features of the Company Registration and related offering, the Investor may
elect to
4
<PAGE>
withdraw therefrom (in whole or part) by written notice to the Company
and the managing underwriter(s) delivered no later than ten (10) days prior to
the effectiveness of the applicable registration statement and the Registrable
Shares of the Investor shall thereupon be withdrawn from such registration.
3.4 Other Registration Rights. Notwithstanding anything in this
Article 3 to the contrary, the Investor shall be entitled to participate in any
---------
Company Registration and related offering upon terms at least as favorable as
those upon which any other Company stockholder is entitled to participate
therein, subject to Section 3.2.2.
--------------
ARTICLE 4
REGISTRATION PROCEDURES AND EXPENSES
4.1 Registration Procedures. If and whenever the Company is required
pursuant to this Agreement to use its best efforts to effect the registration of
any of the Registrable Shares, the Investor shall furnish in writing such
information regarding the Investor and its Affiliates, the Registrable Shares
being registered and offered, and the intended method of distribution of such
Registrable Shares as is reasonably requested by the Company for inclusion in
the registration statement relating to such offering pursuant to the Securities
Act and the rules of the Commission thereunder, and the Company shall, as
expeditiously as reasonably practicable:
4.1.1. prepare and file with the Commission a registration
statement (including a prospectus therein) with respect to such securities and
use its best efforts to cause such registration statement to become and remain
effective for such period as may be necessary to permit the successful
marketing of such securities, but not exceeding 120 days for an offering in
connection with a Demand Registration, or, with regard to an offering in
connection with a Company Registration, for the period associated with such
offering;
4.1.2. prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the Securities Act and the rules of
the Commission thereunder; and to keep such registration statement effective for
that period of time specified in Section 4.1.1;
-------------
4.1.3. furnish to the Investor such number of prospectuses and
preliminary prospectuses in conformity with the requirements of the Securities
Act, and such other documents as the Investor may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares being
sold;
4.1.4. upon written request by any underwriters of the
offering, and subject to applicable rules and guidelines, cause its certified
public accountants and attorneys, as applicable, to furnish to the Investor a
signed counterpart, addressed to the Investor and its underwriters, if any, of
(i) a letter from the independent certified public accountants of the Company
in the form customarily furnished to underwriters in firm commitment
underwritten offerings providing substantially that such accountants are
independent certified public accountants within the meaning of the Securities
Act and that in the opinion of such accountants, the financial statements and
other financial data of the Company included in the registration statement and
the prospectus, and any amendment or supplement thereto, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act, and additionally covering such other financial matters
(including information as of the date of such letter) with respect to the
registration in respect of which such letter is being given
5
<PAGE>
as the underwriters may reasonably request; and (ii) an opinion of outside
legal counsel to the Company, dated the effective date of the registration
statement, covering substantially the same matters with respect to the
registration statement and the prospectus included therein as are customarily
covered (at the time of such registration) in the opinions of issuer's counsel
delivered to the underwriters in comparable underwritten public offerings;
4.1.5 use its best efforts to register or qualify the
Registrable Shares covered by such registration statement under such securities
or blue sky laws of such jurisdictions within the United States as the Investor
or its underwriters, if any, shall reasonably request; provided, however, that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, or to take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject, or subject the Company to any tax in any such jurisdiction
where it is not then so subject;
4.1.6. cause all such Registrable Shares to be listed on each
securities exchange on which similar securities issued by the Company are then
listed;
4.1.7. provide a transfer agent and registrar for all such
Registrable Shares not later than the effective date of such registration
statement;
4.1.8. make available for inspection by the Investor and its
attorneys, and any participating underwriter, accountant or other agent
retained by the Investor and any participating underwriter in a Demand
Registration, all financial and other records, pertinent documents and
properties of the Company, and cause the Company's Affiliates (to the extent it
controls such Affiliates), employees, and agents to supply all information
reasonably requested by the Investor and any such underwriter, attorney,
accountant or agent in connection with the preparation of such registration
statement.
4.2 Expenses. The Company shall pay all Registration Expenses,
except as may be required to update any registration statement kept effective
for more than the period of time required by Section 4.1.1. The Investor shall
-------------
pay all Selling Expenses.
ARTICLE 5
INDEMNIFICATION
5.1 Indemnification by the Company. In the event of a registration
of any Registrable Shares pursuant to this Agreement, the Company shall
indemnify and hold harmless each seller of Registrable Shares, and each person,
if any, who controls such seller or underwriter within the meaning of the
Securities Act, and each officer, director, employee and advisor of each of the
foregoing (each an "Investor Indemnitee"), against any expenses, losses, claims,
damages or liabilities, joint or several, to which such Investor Indemnitee may
become subject under the Securities Act, any state securities law or otherwise,
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, insofar as such expenses, losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any registration statement under which such shares are registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, any summary prospectus used in connection with any securities being
registered, or any amendment or supplement thereto; or (ii) any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; or (iii) any violation by the
6
<PAGE>
Company of the Securities Act or rules of the Commission thereunder or any blue
sky laws or any rules promulgated thereunder, and shall reimburse each such
Indemnitee for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable
-----------------
in any such case to the extent that any such expense, loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
said preliminary prospectus or said prospectus or summary prospectus or said
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Investor or any
underwriter specifically for use in the preparation thereof; and provided,
--------
further, that if any expenses, losses, claims, damages or liabilities arise
-------
out of or are based upon an untrue statement, alleged untrue statement,
omission or alleged omission contained in any preliminary prospectus which did
not appear in the final prospectus, the Company shall not have any liability
with respect thereto to any Investor Indemnitee if any Investor Indemnitee
delivered a copy of the preliminary prospectus to the person alleging such
expenses, losses, claims, damages or liabilities and failed to deliver a copy
of the final prospectus as amended or supplemented if it has been amended or
supplemented, to such person at or prior to the written confirmation of the
sale to such person.
5.2 Indemnification by the Investor. In the event of a registration
of any Registrable Shares pursuant to this Agreement, the Investor shall
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of the Securities Act, each officer of the
Company who signs the registration statement, each director of the Company and
each underwriter and each person who controls any underwriter within the meaning
of the Securities Act (each a "Company Indemnitee"), against any and all such
expenses, losses, claims, damages or liabilities referred to in Section 5.1 if
-----------
the statement, alleged statement, omission or alleged omission in respect of
which such expense, loss, claim, damage or liability is asserted was made in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of a holder of Registrable Shares specifically for use
in connection with the preparation of such registration statement, preliminary
prospectus, prospectus, summary prospectus, amendment or supplement; provided,
---------
however, that if any expenses, losses, claims, damages or liabilities arise out
-------
of or are based upon an untrue statement, alleged untrue statement, omission or
alleged omission contained in any preliminary prospectus which did not appear in
the final prospectus, the Investor shall not have any such liability with
respect thereto to any Company Indemnitee if any Company Indemnitee delivered a
copy of the preliminary prospectus to the person alleging much expenses, losses,
claims, damages or liabilities and failed to deliver a copy of the final
prospectus, as amended or supplemented if it has been amended or supplemented,
to such person at or prior to the written confirmation of the sale to such
person.
5.3 Contribution. If the indemnification provided for in Sections
--------
5.1 or 5.2 above is unavailable to an indemnified party in respect of any
--- ---
losses, claims, damages or liabilities referred to therein, then in lieu of
indemnifying such indemnified party thereunder, the indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified parties on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party, or by the indemnified
parties, and the parties' relative
7
<PAGE>
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 5.3 were determined by pro rata allocation
----------- --- ----
or by any other method of allocation which does not take into account the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities or actions in respect thereof referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5.3, no holder
-----------
of Registrable Shares (other than a person who controls the Company within the
meaning of the Securities Act) shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable Shares
sold by it exceeds the amount of any damages which such holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentations
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
5.4 Indemnification Procedures. Promptly after receipt by an
indemnified party of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Article 5 or to the extent that it has not been prejudiced as a
---------
proximate result of such failure. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
Company, the indemnified party or parties shall have the right to select
separate counsel to assert such legal defenses (in which case the indemnifying
party shall not have the right to direct the defense of such action on behalf of
the indemnified party or parties). Upon the permitted assumption by the
indemnifying party of the defense of such action, and approval by the
indemnified party of counsel, the indemnifying party shall not be liable to such
indemnified party under this Article 5 for any legal or other expenses
---------
subsequently incurred by such indemnified party in connection with the defense
thereof (other than reasonable costs or investigation) unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence, (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time, (iii) the indemnifying party and its counsel do not actively
and vigorously pursue the defense of such action or (iv) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party.
ARTICLE 6
MISCELLANEOUS
8
<PAGE>
The provisions of Article 9 of the Stock Purchase Agreement are
incorporated herein by reference and shall govern this Agreement as though set
forth in full herein and as though references in such Article 9 to "this
Agreement" were references to this Agreement.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
AST Research, Inc., Samsung Electronics Co., Ltd.,
a Delaware corporation a Korean corporation
By: /s/ Safi U. Qureshey By: /s/ Bo-Soon Song
---------------------------- -----------------------------
Name: Safi U. Qureshey Name: Bo-Soon Song
-------------------------- ---------------------------
Title: Chief Executive Officer Title: Senior Managing Director
------------------------- --------------------------
10
<PAGE>
EXHIBIT 99.12
LETTER OF CREDIT AGREEMENT
This Letter of Credit Agreement (this "Agreement") is entered into as
of July 31, 1995 by and between Samsung Electronics Company, Ltd., a Korean
corporation (the "Purchaser") and AST Research, Inc., a Delaware corporation
(the "Company").
A. The Purchaser and the Company have entered into that certain Stock
Purchase Agreement dated as of February 27, 1995, as amended by Amendment No. 1
thereto, dated as of June 1, 1995, and Amendment No. 2 thereto, dated as of July
29, 1995 (as so amended, the "Stock Purchase Agreement") pursuant to which the
Purchaser is acquiring certain shares of the Company's Common Stock.
B. As a result of the transactions contemplated by the Stock Purchase
Agreement, the Purchaser will be a significant stockholder of the Company.
C. It is a condition to certain of the transactions contemplated by
the Stock Purchase Agreement and the desire of the Purchaser and the Company
that this Agreement be entered into to establish certain terms and conditions
concerning the Purchaser's providing certain credit support to the Company as
set forth herein.
D. That certain Stockholder Agreement attached as Exhibit G to the
Stock Purchase Agreement provides for the ability of the Purchaser to acquire
additional shares of the Company's Common Stock as contemplated herein, which
shares would be covered by that certain Registration Rights Agreement attached
as Exhibit F to the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, and covenants set forth in this Agreement, the
Purchaser and the Company hereby agree as follows:
<PAGE>
ARTICLE 1
DEFINITIONS
Capitalized terms used in this Agreement without definition shall have
the respective means accorded to them in the Stock Purchase Agreement.
Capitalized terms used in this Agreement and not otherwise defined herein or in
the Stock Purchase Agreement shall have the respective meanings set forth below.
"Advance Amount" shall have the meaning provided in Section 3.2.
"Advance Date" shall have the meaning provided in Section 3.2.
"Amount" means the Advance Amount or the Draw Amount, as applicable.
"Bank" shall have the meaning provided in Section 2.1.
"Closing Price" means the average of the closing bid and asked prices
of the Shares on the over-the-counter market on the day in question as reported
on the Nasdaq National Market; or, if the Shares are listed on the New York
Stock Exchange, the closing sales price, regular way, on the New York Stock
Exchange on such day or, in case no such sale takes place on such day, the
average of the reported closing bid and asked prices, regular way, on the New
York Stock Exchange, or, if the Shares are not listed or admitted to trading on
such Exchange, on the principal national securities exchange on which the Shares
are listed or admitted to trading; or, if not so listed or admitted for trading,
in such manner as may be reasonably determined by any New York Stock Exchange
member firm selected from time to time by the Board for that purpose.
"Current Market Price" per Share on any date of determination means
the average of the daily closing prices for the twenty (20) consecutive Trading
Dates ending on the Trading Date immediately preceding the date of determination
of the Current Market Price.
"Date" means the Advance Date or the Draw Date, as applicable.
"Draw Amount" shall have the meaning provided in Section 3.1.
2
<PAGE>
"Draw Date" means the date of a draw by Tandy pursuant to Section 2.2.
"Reimbursement Date" shall have the meaning provided in Section 3.1.
"Tandy" means Tandy Corporation, a Delaware corporation.
"Tandy Note" means that certain promissory note due July 11, 1996,
issued by the Company to Tandy in the principal amount of $96,720,000.00 as of
the date hereof.
"Trading Date" means a date on which the Nasdaq National Market or the
New York Stock Exchange (or any successor to such Exchange), as applicable, is
open for the transaction of business.
ARTICLE 2
CREDIT SUPPORT
2.1 Letter of Credit. As credit support for the Company's
obligations under the Tandy Note, but subject to Section 2.3, the Purchaser, as
applicant (and without any participation by or further obligation of the
Company), shall cause Bank of America National Trust and Savings Association
("Bank of America") or any investment graded bank permitted by the terms of the
Tandy Note or otherwise acceptable to Tandy (including, if applicable, Bank of
America, the "Bank") to issue, not later than ten (10) Business Days after the
Closing of the purchase and sale of the Second Issuance Shares, a standby letter
of credit in the form required by the Tandy Note or otherwise acceptable to
Tandy and permitting the Company to withdraw and terminate any credit support of
its own for the Tandy Note, naming Tandy as the beneficiary thereunder, in an
amount not less than the lesser of (x) $75,000,000.00 or (y) the outstanding
principal amount of the Tandy Note on such date. Not later than three (3)
Business Days prior to the expiration or termination of such standby letter of
credit or any replacement standby letter of credit complying with the terms
hereof, the Purchaser, as applicant (and without any participation by or further
obligation of the Company), shall cause the Bank to deliver a replacement
standby letter of credit in the form required by the Tandy Note, or otherwise
acceptable to Tandy, naming Tandy as the beneficiary thereunder, in an amount
not less than the lesser of (x) $75,000,000.00 or (y) the outstanding principal
amount of the Tandy Note at such time. The Company shall promptly pay to the
Bank (if requested in
3
<PAGE>
writing by the Purchaser) or reimburse the Purchaser, as applicable, for the
fees charged by the Bank in connection with the standby letters of credit issued
in accordance with this Section 2.1.
2.2 Draws Under Letter of Credit. Funds under the standby letter of
credit pursuant to Section 2.1 shall not be subject to Korean regulatory
approval (except for necessary approvals, if any, received prior to the date
hereof) and shall be available to Tandy by their draft drawn on the issuing bank
at sight, so long as accompanied by a statement dated on or before the date of
presentation and signed by a person stated to be an authorized officer of Tandy
reading as follows:
"We hereby certify that AST Research, Inc., has defaulted under
the terms of the Promissory Note dated July 12, 1993 between Tandy
Corporation and AST Research, Inc. and Tandy Corporation has exercised
the right of Acceleration pursuant to Section 8 of the Promissory
Note."
Such standby letter of credit shall provide that it will be payable on a
Business Day within three days of sight as set forth in this Section 2.2.
Except as otherwise expressly provided in this Agreement, the Purchaser shall
have no obligation to perform any obligation of the Company under the Tandy
Note.
2.3 Letter of Guarantee. Notwithstanding anything herein to the
contrary, if not later than ten (10) Business Days after the Closing of the
purchase and sale of the Second Issuance Shares, Tandy agrees to accept, in lieu
of a new bank letter of credit and without any obligation or requirement for the
Company to provide or participate in any form of credit support, the Purchaser's
guarantee of or other credit support for the Company's performance of its
obligations under the Tandy Note, then the Purchaser may, in its sole
discretion, provide to Tandy a guarantee or such other credit support in such
form as is acceptable to the Purchaser and Tandy and approved by the Company
(which approval shall not be unreasonably withheld). For purposes of this
Agreement, any payment by the Purchaser pursuant to such a guarantee or other
credit support shall be treated in the same manner as a draw by Tandy under the
standby letter of credit described in Section 2.1.
4
<PAGE>
ARTICLE 3
REIMBURSEMENT; ADVANCEMENT OF FUNDS
3.1 Reimbursement. The Company hereby promises to reimburse the
Purchaser, as provided in Section 3.3, for any draws by Tandy pursuant to
Section 2.2, on a date (the "Reimbursement Date") agreed upon by the Company and
the Purchaser, which shall be no later than ten (10) Business Days following the
receipt by the Company of a written notice setting forth the date and amount
(the "Draw Amount") of each draw by Tandy pursuant to Section 2.2.
3.2 Advances of Funds. Subject to any necessary Korean regulatory
approval, the Purchaser hereby promises to advance the Company in cash, and the
Company promises to repay the Purchaser as provided in Section 3.3, any amounts
requested by the Company, not to exceed $75,000,000.00 (less any amounts
previously drawn on the Letter of Credit in accordance with Section 2.2), solely
for prompt application in making required principal payments in respect of the
Tandy Note, on a date (the "Advance Date") agreed upon by the Company and the
Purchaser, which shall be no later than fifteen (15) Business Days following the
receipt by the Purchaser of a written notice setting forth the date and amount
(the "Advance Amount") of each required payment in respect of the Tandy Note for
which an advance is being requested under this Section 3.2. Notwithstanding the
foregoing, the obligation of the Purchaser to advance such funds shall be
conditioned on the Company having provided to the Purchaser a written agreement
reasonably satisfactory to the Purchaser that the Company has available, and
will pay to Tandy when due, all other funds, if any, necessary to pay in full
such required principal payments. The Purchaser represents and warrants to the
Company that it will use its best efforts to obtain all necessary regulatory
approvals for any such advances which may be required as set forth herein.
3.3 Repayment of Amounts. On each Date the Company shall, at the
Purchaser's election (which shall be made in writing and provided to the Company
no later than five (5) Business Days following the date of the notice required
under Section 3.1 or 3.2, as applicable), either (a) provide a promissory note
in favor of the Purchaser with a principal amount equal to the applicable
Amount, in the form of Schedule I hereto; or (b) agree to issue to the
Purchaser, within ten (10) Business Days following receipt by the Company of a
written notice setting forth such election, that number of Shares (rounded to
the nearest whole Share) having a Current Market Price as of the Date equal to
the applicable Amount (subject to the 49.9% ownership limitation contained in
Section 2.1.7
5
<PAGE>
of the Stockholder Agreement). At the election of the Purchaser, the Company
shall so repay the Purchaser using any combination of the mechanisms provided in
the preceding clauses (a) and (b), so long as the sum of the principal amount of
a loan under clause (a) and the Current Market Price of Shares under clause (b)
in no event exceed the applicable Amount. The Company represents and warrants
to the Purchaser that, assuming due execution, delivery and performance by the
Purchaser of its obligations under this Article 3, (x) each promissory note to
be provided under clause (a) will, at such time, be duly authorized and
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws, now or hereafter in effect, relating to or
affecting creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought at law or in equity), and
(y) any Shares to be issued under clause (b) will, at such time, be duly
authorized, validly issued and outstanding, fully paid and nonassessable, free
and clear of any Liens or restrictions (unless created by the Purchaser), other
than restrictions under the Stockholder Agreement or under applicable law.
ARTICLE 4
MISCELLANEOUS
4.1 Termination. This Agreement and the rights and obligations of
the Purchaser and the Company hereunder, other than under Article 4 hereof,
shall terminate on July 31, 1996.
4.2 Stock Purchase and Offer Agreement. The provisions of Article 9
(other than Section 9.2) of the Stock Purchase Agreement are incorporated herein
by reference and shall govern this Agreement as though set forth in full herein
and as though references in such Article 9 to"this Agreement" were references
to this Agreement.
4.3 Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by, construed under and enforced in accordance with, the laws of the
State of California without regard to its conflict-of-laws principles. The
Purchaser and the Company agree that (i) any legal action or proceeding arising
out of or in connection with this Agreement or the transactions contemplated
hereby shall be brought exclusively in the courts of the State of California or
the Federal courts of the United States of America sitting in California, (ii)
each irrevocably submits to the jurisdiction of each such court, and (iii) any
summons, pleading, judgment, memorandum of law, or other paper relevant to any
such
6
<PAGE>
action or proceeding shall be sufficiently served if delivered to the recipient
thereof by certified or registered mail (with return receipt) at its address set
forth in Section 9.5 of the Stock Purchase Agreement. Nothing in the preceding
sentence shall affect the right of any party to proceed in any jurisdiction for
the enforcement or execution of any judgment, decree or order made by a court
specified in said sentence.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
AST RESEARCH, INC. SAMSUNG ELECTRONICS
COMPANY, LTD.
By: /s/ Safi U. Qureshey By: /s/ Bo-Soon Song
------------------------------ ----------------------------
Name: Safi U. Qureshey Name: Bo-Soon Song
---------------------------- --------------------------
Title: Chief Executive Officer Title: Senior Managing Director
--------------------------- -------------------------
8
<PAGE>
SCHEDULE I
[FORM OF]
PROMISSORY NOTE
---------------
$_____ [insert date of applicable Draw]_________, 199__
Irvine, California
FOR VALUE RECEIVED, AST Research, Inc., a Delaware corporation
("Borrower"), hereby unconditionally promises to pay to Samsung Electronics
Company, Ltd., a Korean corporation ("Lender"), or assigns, at the address
listed in Section 7 below, or at such other place as the holder hereof may
from time to time notify Borrower in writing, the principal sum of
---------
DOLLARS ($ ), together with interest from the date hereof, on the
-------
outstanding principal amount at the rate set forth herein below. Lender has
lent to Borrower the sum of DOLLARS ($ ) on the date hereof.
--------- ---------
1. The outstanding principal amount of this Note, together with all
accrued and unpaid interest thereon, shall bear interest at the Applicable Rate
(as defined below) determined as of the day (the "Determination Date") which is
three business days before the date on which interest is next due. The
"Applicable Rate" for each interest accrual period during which this Note is
outstanding shall mean the rate, on an annualized basis, most recently
announced as of the Determination Date by Bank of America National Trust and
Savings Association as its reference rate. Interest on the outstanding principal
amount shall be payable semiannually on and of each year,
------- ---------
commencing , 199 , and shall be calculated on the basis of a 360-day
------------ -
year of twelve 30-day months. Interest will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance.
2. The principal sum of this Note, together with all accrued and
unpaid interest hereon and all other amounts due hereunder, shall be due and
payable in full on the earlier to occur of (a) [insert the date which is three
years from the date hereof] (the "Maturity Date") or (b) such time as Lender
declares the entire amount of this Note due and payable in accordance with the
provisions of Section 4 hereof.
<PAGE>
3. Principal and interest and all other amounts due hereunder
shall be payable in lawful money of the United States of America. Payments
shall be applied first to interest on past due interest, second to past due
interest, third to accrued interest, fourth to all other amounts (other
than principal) due hereunder, and fifth to principal. The undersigned may
prepay all or part of this Note at any time and from time to time without
penalty.
4. An event of default ("Event of Default") hereunder shall occur
if:
a. Borrower shall fail to pay any amount due hereunder as
and when due;
b. there shall be a default under any evidence of indebtedness
for borrowed money of Borrower or any of its subsidiaries having a principal
amount in excess of $25 million (i) resulting from the failure to pay principal
at maturity or (ii) as a result of which the maturity of such indebtedness
has been accelerated prior to its stated maturity;
c. Borrower shall admit in writing its inability to pay or
shall be unable to pay its debts as they become due, or shall apply for
a receiver, trustee or similar officer with respect to all or a substantial
part of its property or shall institute by petition, application, answer,
consent or otherwise, any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debts, dissolution, liquidation or similar proceedings relating
to Borrower under the laws of any jurisdiction; or
d. Any creditor of Borrower shall apply for a receiver, trustee
or similar officer with respect to all or a substantial part of Borrower's
property or shall institute by petition, application, answer, consent or
otherwise, any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debts, dissolution, liquidation or similar proceedings relating
to Borrower under the laws of any jurisdiction, and such petition, bankruptcy,
or other proceeding shall not be stayed, bonded or discharged within ninety
(90) days.
Upon the occurrence of any Event of Default, and at such time
as any Event of Default is continuing, the holder hereof, at its option,
may declare all sums due hereunder immediately due and payable without notice
or demand.
2
<PAGE>
5. No failure or delay on the part of the holder of this Note
or the failure to exercise any power or right under this Note shall operate
as a waiver of such power or right or preclude other or further exercise
thereof or the exercise of any other power or right. No waiver by the holder
of this Note will be effective unless and until it is in writing and signed
by the holder. No waiver of any condition or performance will operate as
a waiver of any subsequent condition or obligation. The undersigned hereby
waives diligence, presentment, demand for payment, notice of dishonor or
acceleration, protest and notice of protest, and any and all other notices
or demands in connection with delivery, acceptance, performance, default
or enforcement of this Note.
6. In the event that any action, suit or other proceeding is
instituted concerning or arising out of this Note, the prevailing party
shall recover all of such party's costs, and reasonable attorneys' fees
incurred in each and every such action, suit, or other proceeding, including
any and all appeals or petitions therefrom.
7. Notices required or permitted to be given under this Note to
any party hereto by any other party shall be in writing and shall be deemed
to have been duly delivered and given when personally delivered to the party
(including by express courier service) or sent by facsimile transmission
at the address or number set forth below, or any such other address or number
as shall be given in writing by the respective party to all other parties:
Borrower: AST Research, Inc.
16215 Alton Parkway
Irvine, CA 92718
Attention: Chief Financial Officer
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, 34th Floor
Los Angeles, CA 90071
Attn: Thomas C. Janson, Jr.
Lender: Samsung Electronics Company, Ltd.
Attn:
3
<PAGE>
with a copy to:
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, CA 90071
Attn: Andrew Bogen
8. This Note, its validity, construction and effect, shall be
governed by, construed under the enforced in accordance with, the laws of
the State of California without regard to its conflict-of-laws principles.
Borrower and lender agree that (i) any legal action or proceeding arising
out of or in connection with this Note or the transactions contemplated
hereby shall be brought exclusively in the courts of the State of California
or the Federal courts of the United States of America sitting in California,
(ii) each irrevocably submits to the jurisdiction of each such court, and
(iii) any summons, pleading, judgment, memorandum of law, or other paper
relevant to any such action or proceeding shall be sufficiently served if
delivered to the recipient thereof by certified or registered mail (with
return receipt) at its address set forth in Section 7 hereof. Nothing in
the preceding sentence shall affect the rights of any party to proceed in
any jurisdiction for the enforcement or execution of any judgment, decree
or order made by a court specified in said sentence.
9. It is the intent of Borrower and Lender in the execution of
this Note and in all transactions related hereto to comply with the usury
laws of the State of California (or the usury laws of any other state that
might be determined by a court of competent jurisdiction to be applicable
notwithstanding such choice of law, hereinafter collectively referred to
as "Usury Laws"). In the event that, for any reason, it should be determined
that the Usury Laws apply to the Loan evidenced hereby, Borrower and Lender
stipulate and agree that none of the terms and provisions contained herein
shall ever be construed to create a contact for use, forbearance or detention
of money requiring payment of interest at a rate in excess of the maximum
interest rate permitted to be charged by the Usury Laws. In such event, if
Lender shall collect monies or other property which are deemed to constitute
interest which would otherwise increase the effective interest rate on this
Note to a rate in excess of the maximum rate permitted to be charged by
the Usury Laws, all such sums or property deemed to constitute interest in
excess of such maximum rate shall, at the option of Lender, be credited
to the payment of the principal sum due hereunder.
4
<PAGE>
10. This Note shall not be assignable by Borrower. This Note shall
be assignable by Lender and shall inure to the benefit of Lender and its
successors and assigns.
5
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Note to be
duly executed and delivered as of the day and year first above written.
AST RESEARCH, INC.
By:
---------------------------
Name:
Title:
<PAGE>
EXHIBIT 99.13
July 31, 1995
AST Research, Inc.
16215 Alton Parkway
Irvine, California, 92718
Re: Closing Agreement
Gentlemen,
This is to set forth the agreement we have reached concerning the
closing of the transactions contemplated by that certain Stock Purchase
Agreement dated as of February 27, 1995, as amended (the "Stock Purchase
Agreement"), between AST Research, Inc. ("AST") and Samsung Electronics Co.,
Ltd. ("Samsung").
As the result of losses incurred by AST during the fourth quarter of
its fiscal year ended July 3, 1995, and in connection with the consummation of
the transactions contemplated by the Stock Purchase Agreement, this letter
agreement sets forth certain actions to be taken by AST after the closing of the
transactions contemplated by the Stock Purchase Agreement and shall constitute a
legally binding agreement between us. For good and valuable consideration,
receipt of which is hereby acknowledged, and as an inducement to Samsung to
complete the transactions contemplated by the Stock Purchase Agreement, we
hereby agree as follows:
1. Within ten business days of the Closing of the transactions
contemplated by the Stock Purchase Agreement, AST shall engage a nationally
recognized management consulting firm with experience in the personal computer
industry and with no prior relationship with AST or any of its affiliates,
officers or directors (the "Consultants") to perform a review of AST as
described herein (the "Review"). The Consultants shall be subject to the
approval of Samsung, which approval shall not be unreasonably withheld. The
Review shall commence as soon as practicable after the Consultants are engaged.
2. The purposes of the Review shall be to (i) develop strategies to
strengthen AST's competitive position; (ii) determine the causes of AST's
operating loss for the fiscal year ended July 3, 1995 and its failure to achieve
results consistent with its business plan; (iii) determine what factors,
including without limitation management, organizational and operational factors,
were responsible therefor; and (iv) make specific recommendations as described
in paragraph 7.
3. In order to accomplish the purposes of the Review, the Consultants
shall conduct a full management diagnostic analysis and a review of AST's
organizational structure, with specific emphasis upon the roles and
effectiveness of management and the functions and procedures of each of AST's
operating and administrative divisions and operations. This agreement shall not
limit the scope of the Review, and the Consultants shall undertake such
additional inquiries and procedures as they may deem appropriate or as the
Committee referred to in paragraph 4 may direct in order to fulfill the purposes
of the Review.
4. A committee of four persons, consisting of Safi Qureshey, two
representatives designated by Samsung, and one non-employee director of AST (the
"Committee") shall meet regularly with the Consultants in order to monitor,
supervise and direct the Review. The members of the Committee shall be
available to participate actively in the Review process. The Committee shall
define the work product to be delivered by the Consultants as a result of the
Review and may in its discretion modify the purposes and scope of the Review.
All Committee decisions shall be by majority vote.
<PAGE>
5. AST shall cause all of its employees and agents to cooperate
fully and in all respects with the Consultants, including, without limitation,
by providing to them all information they request. Samsung shall be permitted
to participate in the Review process to the extent it deems desirable, and,
subject to applicable law, shall have full access to all information requested
by the Consultants.
6. The Consultants shall be instructed to complete the Review within
30 days of its inception, or as soon thereafter as the Consultants shall
determine is practicable in light of the purposes and scope of the Review and
parties' desire that the Review be completed as quickly as possible.
7. Based upon the Review, the Consultants shall present to the
Committee specific, detailed and thorough recommendations to remedy the causes
referred to in paragraph 2, to address the management, organizational and
operational factors responsible for those causes, and to enhance employee morale
and effectiveness, with the ultimate goal of developing AST into one of the
world's top three manufacturers of personal computers.
8. The Committee shall promptly review the Consultants'
recommendations, ratify them to the extent the Committee deems appropriate,
and then pass the Consultants' recommendations to AST's Board of Directors
(the "Board"), together with the Committee's ratification decisions and any
additional recommendations or comments the Committee deems appropriate. Within
seven days of delivery to the Board of the Consultants' recommendations, the
Board shall meet to consider such Review and the Consultants' recommendations
and the Committee's action thereon and comments, and consistent with its
fiduciary duties, shall commence implementation of specific, detailed and
thorough actions to accomplish the objectives described in paragraph 7.
9. All expenses incurred in connection with the Review shall be
borne by AST.
10. The actions contemplated herein, including without limitation
Samsung's participation in the Review, the implementation of the Consultants'
recommendations, and any other actions the Board deems necessary or appropriate
to accomplish the objectives described in paragraph 7, shall not constitute a
violation of the Stockholder Agreement.
If the foregoing accurately sets forth our agreement and has been
approved by the Board, please sign in the space provided below, whereupon this
letter shall constitute our binding agreement, enforceable in accordance with
the laws of Delaware.
Sincerely yours,
Samsung Electronics Co., Ltd.
By: /s/ Bo-Soon Song
------------------------------------
Name: Bo-Soon Song
----------------------------------
Title: Senior Managing Director
---------------------------------
Agreed as set forth above:
AST Research, Inc.
By: /s/ Safi U. Qureshey
---------------------------------
Name: Safi U. Qureshey
-------------------------------
Title: Chief Executive Officer
------------------------------
2
<PAGE>
EXHIBIT 99.14
AMENDMENT NO. 2
TO
STOCK PURCHASE AGREEMENT
This Amendment No. 2 ("Amendment No. 2") to the Stock Purchase
Agreement dated as of February 27, 1995, as amended by Amendment No. 1 thereto
("Amendment No. 1") dated as of June 1, 1995 (as so amended, the "Agreement"),
is entered into as of July 29, 1995, between Samsung Electronics Co., Ltd., a
Korean corporation (the "Purchaser"), and AST Research, Inc., a Delaware
corporation (the "Company"). Capitalized terms used in this Amendment No. 2 and
not otherwise defined herein shall have the meanings set forth in the Agreement.
WHEREAS, the Purchaser and the Company desire to document certain
understandings regarding the transactions contemplated in the Agreement and the
Closing thereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the undersigned,
intending to be legally bound, hereby agree as follows:
ARTICLE 1
EXTENSION OF OUTSIDE DATE
Clause (ii) of Section 8.3 of the Agreement is hereby amended by
substituting "that date which is five Business Days following July 31, 1995" for
"July 31, 1995."
ARTICLE 2
THE CLOSING
The Closing will occur at the headquarters of the Company on July 31,
1995 or as soon thereafter as is practicable.
ARTICLE 3
CONTINGENT SHARES
3.1 Issuance of Contingent Shares Following Adverse Event. The
first two sentences of Section 2.1.2 of Amendment No. 1 are hereby amended to
read in their entirety as follows:
In the event that at any time or from time to time an action results
in an Adverse Event that requires the payment by the Company of
amounts in settlement of such action or in satisfaction of a judgment
in such action and the aggregate amounts actually so paid by the
Company including, without limitation, any amounts paid by the Company
for attorneys' fees, (all such amounts being referred to herein as
"Specified Amounts") exceeds the Excess Loss Amount, as defined below,
then the Company shall issue to the Purchaser, without the payment by
the Purchaser of any additional consideration, a number of additional
shares of Common Stock (the "Contingent Shares") determined in
accordance with Section 2.1.3. For purposes of this Amendment, the
term "Excess Loss Amount" at the time of payment of any particular
Specified Amount shall mean (a) the portion of all Specified Amounts
theretofore paid by the Company in the form of Contingent Shares
and/or Preferred Stock (as defined below) plus (b) the sum of (i) $5
million plus (ii) the aggregate of all amounts paid or to be paid to
the Company by way of reimbursement,
<PAGE>
contribution or indemnification by any insurance company or third
party in respect of all Specified Amounts.
3.2. Determination of Number of Contingent Shares. The first clause
of the first sentence of Section 2.1.3 of Amendment No. 1 is hereby amended to
read in its entirety as follows:
The number of Contingent Shares to be issued shall equal such number
of shares of Common Stock (rounded to the nearest whole share)
determined by dividing the amount by which the Specified Amounts
exceed the Excess Loss Amount by the Market Price;
ARTICLE 4
SECOND ISSUANCE SHARES
The definition of "Second Issuance Shares" in Section 1.1 of the
Agreement is hereby amended to read in its entirety as follows:
"Second Issuance Shares" means 5,630,000 shares of Common Stock,
to be newly issued and sold by the Company to the Purchaser at the
Closing pursuant to Article 2.
---------
ARTICLE 5
STOCKHOLDER AGREEMENT
The Stockholder Agreement shall be amended to read in its entirety as
set forth in Exhibit I hereto.
ARTICLE 6
LETTER OF CREDIT AGREEMENT
The Letter of Credit Agreement shall be amended to read in its
entirety as set forth in Exhibit II hereto.
ARTICLE 7
MISCELLANEOUS
7.1 Effect of Amendment No. 2. Except as set forth in this Amendment
No. 2, the provisions of the Agreement shall remain in full force and effect and
all references in the Agreement, the Investment Agreements and the Commercial
Agreements shall be deemed to refer to and mean the Agreement, as amended by
this Amendment No. 2.
7.2 Counterparts. This Amendment No. 2 may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment No. 2 as of the date first above written.
AST RESEARCH, INC. SAMSUNG ELECTRONICS CO., LTD.
By: /s/ Safi U. Qureshey By: /s/ Bo-Soon Song
---------------------------- -------------------------------
Safi U. Qureshey Bo-Soon Song
Chairman and Chief Executive Officer Senior Managing Director
2
<PAGE>
Exhibit I to
Amendment No. 2 to
Stock Purchase Agreement
STOCKHOLDER AGREEMENT
DATED AS OF JULY 31, 1995
BY AND BETWEEN
AST RESEARCH, INC.
AND
SAMSUNG ELECTRONICS CO., LTD.
<PAGE>
STOCKHOLDER AGREEMENT
This Stockholder Agreement (this "Agreement") is entered into as of July
31, 1995 by and between Samsung Electronics Co., Ltd., a Korean corporation (the
"Purchaser") and AST Research, Inc., a Delaware corporation (the "Company").
A. The Purchaser and the Company have entered into that certain Stock
Purchase Agreement dated as of February 27, 1995, as amended by Amendment No. 1
thereto dated as of June 1, 1995 and Amendment No. 2 thereto dated as of July
29, 1995 (as so amended, the "Stock Purchase Agreement") pursuant to which the
Purchaser is acquiring certain shares of the Company's Common Stock.
B. As a result of the transactions contemplated by the Stock Purchase
Agreement, the Purchaser will be a significant stockholder of the Company.
C. It is a condition to the transactions contemplated by the Stock
Purchase Agreement and the desire of the Purchaser and the Company that this
Agreement be entered into to establish certain terms and conditions concerning
the Purchaser's investment in the Company and the Company's corporate
governance.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, and covenants set forth in this Agreement, the
Purchaser and the Company hereby agree as follows:
ARTICLE 1.
DEFINITIONS
Capitalized terms used in this Agreement without definition shall have the
respective meanings accorded to them in the Stock Purchase Agreement.
Capitalized terms used in this Agreement and not otherwise defined herein or in
the Stock Purchase Agreement shall have the respective meanings set forth below.
"Acquired Entity" shall have the meaning set forth in Section 5.1.1.
-------------
"GAAP" means generally accepted accounting principles as in effect in the
USA (as such principles may change from time to time).
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (including, without limitation, expenditures under leases that, in
conformity with GAAP, are required to be accounted for as capital leases) of the
Company and its subsidiaries during such period that are required to be
capitalized in conformity with GAAP.
"Director" means a member of the Board.
1
<PAGE>
"Equity Security" means Voting Stock and any options, warrants, convertible
securities, or other rights to acquire Voting Stock but excluding the Rights and
securities issuable upon exercise of the Rights.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Independent Director" means a Director who is not (apart from such
directorship) an Affiliate, officer, employee, agent, principal stockholder,
consultant or partner of the Purchaser or the Company or any Affiliate of either
of them or of any entity that was dependent on the Purchaser or the Company or
any Affiliate of either of them for more than five percent (5%) of its revenues
or earnings in its most recent fiscal year.
"LYONs" means the Company's Liquid Yield Option Notes due December 14,
2013.
"Management Committee" shall mean the management committee of the Board
created pursuant to Section 12 of Article III of the Amended Bylaws.
"New Securities" means Voting Stock or other shares of capital stock of the
Company and any options, warrants, convertible securities, or other rights to
acquire such Voting Stock or other capital stock or securities exercisable or
convertible for such Voting Stock or other capital stock, but excluding the
Rights and securities issuable upon exercise of the Rights.
"Original Investment Shares" means the New Issue Shares and the Offer
Shares.
"Standstill Period" means the period of four years after the Closing of the
purchase and sale of the First Issuance Shares, provided that if there is a
later Closing of the purchase and sale of the Second Issuance Shares, the
Standstill Period shall continue until the date that is four years after such
later Closing.
"Tandy Note" means that certain promissory note due July 11, 1996, issued
by the Company to Tandy Corporation in the principal amount of $96,720,000 as of
the date hereof.
ARTICLE 2.
ACQUISITION OF SHARES
2.1. Standstill. Until completion of the purchase of the Original
Investment Shares, neither the Purchaser nor any of its Affiliates shall
(directly or indirectly) acquire or offer to acquire Beneficial Ownership of any
Equity Securities or interest therein except pursuant to the First Issuance, the
Second Issuance, and the Offer. After completion of the purchase of the Original
Investment Shares and prior to the end of the Standstill Period, neither the
Purchaser nor any of its Affiliates shall directly or indirectly acquire or
offer to acquire Beneficial Ownership of any Equity Securities or interest
therein except as set forth in Sections 2.1.1 through 2.1.6, and provided that
-------------- -----
the Purchaser may at any time submit a proposal to the Board for consideration
by the Board as contemplated by Section 2.1.3.
-------------
2
<PAGE>
2.1.1. Letter of Credit Draw. The Purchaser and/or its Affiliates may
---------------------
purchase Common Stock from the Company pursuant to Section 3.3 of the Letter
-----------
of Credit Agreement.
2.1.2. Open Market. The Purchaser and/or its Affiliates may purchase
-----------
Shares in the open market at prices per share at least equal to $21.10.
2.1.3. Directors' Approval. The Purchaser and/or its Affiliates may
-------------------
purchase Common Stock in any transactions approved by a majority of the
Directors not designated by the Purchaser pursuant to this Agreement.
2.1.4. Purchases to Restore Previous Purchaser Interest.
------------------------------------------------
(a) At any time and from time to time until 270 days after the
Closing, the Purchaser may purchase in the open market at any available price up
to that aggregate number of additional shares of Voting Stock which, if they had
been acquired by the Purchaser in the open market on the date of the Closing,
would have caused the Purchaser Interest immediately following the Closing to be
40.25%.
(b) If at any time or from time to time on or after the date hereof
the number of outstanding shares of Voting Stock is increased for any reason
through the issuance of additional shares, including, without limitation, upon
exercise of stock options or directors' warrants or upon conversion or exchange
of convertible securities, conversion of any LYONs for Common Stock, payment on
the Tandy Note with Common Stock, or as consideration for acquisition of any
corporation or other entity or business or division thereof, but excluding any
shares of Voting Stock issued pursuant to stock splits or stock dividends issued
or distributed proportionately on all outstanding shares of Voting Stock, then
in connection with each such issuance the Purchaser and/or its Affiliates shall
have the right, but not the obligation, to purchase in the open market at any
available price, up to such number of additional shares of Voting Stock as may
then be necessary solely as a result of such issuance to restore the Purchaser
Interest to the same percentage of the Total Voting Power as existed immediately
prior to such increase in the number of outstanding shares of Voting Stock,
provided that any shares of Voting Stock acquired by the Purchaser pursuant to
Section 2.1.4(a) shall be deemed to have been acquired at the Closing for
----------------
purposes of determining the Purchaser Interest immediately prior to such
increase in the number of outstanding shares of Voting Stock. The purchase
right set forth in this Section 2.1.4(b) shall be exercisable at any time and
-----------------
from time to time until 270 days after the Purchaser's receipt of notice of such
issuance pursuant to Section 2.3.
-----------
2.1.5. New Equity Issuance. The Purchaser and/or its Affiliates shall
-------------------
have the right, but not the obligation, to participate in certain equity
issuances pursuant to Section 2.2.
-----------
2.1.6. Third-Party Offers. From and after the Closing of the purchase
------------------
and sale of the Second Issuance Shares until such time as the Purchaser Interest
has been less than 30% for a period of at least twenty-five (25) consecutive
days, in the event any Third Party shall make an offer to acquire a 20% or
greater interest in Equity Securities, the Purchaser and/or its Affiliates shall
be permitted to make a competing offer, and acquire Equity Securities pursuant
thereto, subject to and in accordance with the following:
3
<PAGE>
(a) If (i) the Third Party offer is approved or recommended by a
majority vote of the Directors not designated by the Purchaser pursuant to this
Agreement, or (ii) there shall be in effect no Rights Agreement or the Board
shall have amended or rescinded the Rights Agreement to exclude the Third Party
from the definition of "Acquiring Person" or permit the Third Party offer to
proceed without resulting in a Distribution Date or a Triggering Event or the
Rights becoming exercisable or (iii) a court of competent jurisdiction shall
have entered an order invalidating the Rights Agreement with respect to the
Third Party offer or ordering that the Rights be rescinded or the Rights
Agreement be so amended, then the Purchaser shall have the right to make a
competing offer and to acquire Equity Securities pursuant to such competing
offer, provided that (1) the competing offer complies with Section 2.1.6(b), (2)
----------------
the competing offer is made prior to the withdrawal or termination of the Third
Party offer, and (3) if the Third Party offer is withdrawn or terminated before
the Purchaser acquires Equity Securities pursuant to the competing offer, the
Board determines in good faith that such Third Party offer was withdrawn or
terminated primarily as a result of the Purchaser's competing offer having
superior terms to or a substantially greater likelihood of success than such
Third Party offer. The Company shall not enter into any agreement with the
Third Party offeror or take any action required as a condition of the Third
Party offer unless and until the Purchaser shall have been notified in writing
by the Company of the right of the Purchaser and/or its Affiliates to submit a
competing offer hereunder, and the Purchaser and/or its Affiliates shall have
been afforded not less than ten (10) Business Days following receipt of such
notice in which to submit its competing offer for consideration by the Board.
(b) Any competing offer by the Purchaser pursuant to this Section
-------
2.1.6 shall be, as nearly as possible, for an identical amount of securities and
-----
at a price per share no lower than and on terms no less favorable than are
offered by the Third Party, provided that any such offer may be subject to any
governmental or regulatory approvals required by Korean law. In the event the
consideration offered in any Third Party offer shall consist of securities or
property other than cash, the competing offer by the Purchaser may in the
Purchaser's discretion be for cash in an amount per share not less than the fair
market value of the consideration offered by the Third Party.
2.1.7. Maximum Purchaser Ownership. Notwithstanding anything in this
---------------------------
Section 2.1 to the contrary, from the date of this Agreement until the
expiration of the Standstill Period, neither the Purchaser nor any of its
Affiliates may (directly or indirectly) acquire, or offer to acquire, Beneficial
Ownership of any Voting Stock if, after such acquisition, the Purchaser Interest
(calculated as though Beneficial Ownership of Voting Stock includes shares of
Voting Stock that the Purchaser has the right to acquire (other than pursuant to
this Agreement) as described in subsection (d)(1)(i) of Rule 13d-3 under the
Exchange Act without regard to the 60-day limit set forth therein) would exceed
49.9%, unless such acquisition or offer (together with related transactions) is
(a) made pursuant to Section 2.1.6, or (b) has been approved by a majority of
-------------
the Directors not designated by the Purchaser pursuant to this Agreement and
would result in the Purchaser and/or its Affiliates owning 100% of the Voting
Stock.
2.2. Pro-Rata Purchase Right. From and after the Closing of the purchase
and sale of the Second Issuance Shares until such time as the Purchaser Interest
has been less than 30% for a period of at least twenty-five (25) consecutive
days, the Company shall give the Purchaser at least
4
<PAGE>
twenty-five (25) (and, when possible, at least ninety-five (95)) days' prior
written notice of the issuance by the Company of any New Securities as a result
of which the Purchaser Interest would be reduced, either immediately upon
issuance of such New Securities, or upon subsequent exercise or conversion
thereof. Such notice shall set forth (a) the approximate number and type of
securities proposed to be issued and sold to persons other than the Purchaser
and/or its Affiliates and the material terms of such securities, (b) the
proposed price or range of prices at which such securities are proposed to be
sold and the terms of payment, (c) the number of such securities offered to the
Purchaser and/or its Affiliates in compliance with this Section 2.2, and (d)
-----------
the proposed date of issuance of such securities. The Purchaser may, by notice
given to the Company within fifteen (15) days after such Company notice and so
long as permitted by applicable laws and regulations, elect to purchase up to
its pro rata share of such New Securities. Such pro rata share shall be a
percentage of the proposed issuance equal to the Purchaser Interest (calculated
as though Beneficial Ownership of Voting Stock includes shares of Voting Stock
that the Purchaser has the right to acquire (other than pursuant to this
Agreement) as described in subsection (d)(1)(i) of Rule 13d-3 under the Exchange
Act without regard to the 60-day limit set forth therein) immediately prior to
such issuance. The Purchaser's pro-rata purchase shall be on the same terms as
the balance of such issuance, provided that if the sale price at which the
Company proposes to issue, deliver or sell any New Securities is to be paid with
consideration other than cash, then the purchase price at which the Purchaser
may acquire such New Securities shall be equal in value (as determined in good
faith by the Board) but payable entirely in cash. The closing of the
Purchaser's purchase of New Securities pursuant to this Section 2.2 shall occur
-----------
simultaneously with the closing of the balance of such issuance, provided that
if as of the date of the closing of the balance of such issuance the Purchaser
has not received all approvals of Governmental Authorities required in
connection with the Purchaser's participation in such issuance, then (i) the
Purchaser shall not be required to effect its purchase under this Section 2.2
-----------
until such approvals have been received, and (ii) the Company may terminate the
Purchaser's right to participate in such issuance if the Purchaser has not
effected its purchase within 120 days of receipt from the Company of written
notice of the New Issuance. If the Purchaser elects such deferral, the Company
may close the portion of the issuance other than the Purchaser's portion prior
to the closing of the issuance of the Purchaser's portion. If the terms of the
proposed issuance are materially changed from those stated in the Company's
notice to the Purchaser of such issuance, then the proposed issuance shall be
treated as a new issuance, subject again to this Section 2.2, and any election
-----------
to purchase made prior to such change may, at the sole discretion of the
Purchaser, be withdrawn.
The Purchaser's pro-rata purchase right pursuant to this Section 2.2 shall
-----------
not apply, however, to:
(i) any issuance pursuant to (a) any stock option or purchase
right or plan exclusively for one or more employees and/or directors of the
Company or any of its subsidiaries or (b) warrants issued to Directors prior to
the date hereof;;
(ii) any issuance in consideration of any part of the acquisition
by the Company or any subsidiary of any stock, assets or business;
(iii) any issuance upon conversion of the LYONs;
5
<PAGE>
(iv) any issuance pursuant to the exercise or conversion of any
New Security issued after the date hereof in a transaction in which the
Purchaser was entitled to participate pursuant to this Section 2.2; or
-----------
(v) any issuance in payment of any portion of the Tandy Note.
2.3. Notice and Subscription Procedures. In addition to the notice
required under Section 2.2, the Company shall notify the Purchaser of, and
-----------
provide the Purchaser with an accurate and complete description of, any
event that will cause the rights of the Purchaser and/or its Affiliates to
acquire or offer to acquire Equity Securities under Section 2.1 (other than
-----------
Section 2.1.2 or 2.1.5) to become exercisable. The Company shall deliver
------------- -----
such notice to the Purchaser as promptly as practicable after becoming
aware of such event, and when possible at least ninety-five (95) days prior
to the anticipated date of such event, provided that notice of issuances of
a kind described in subsection (i), (iii), or (iv) of Section 2.2, need
-----------
only be delivered within 15 days following the end of each fiscal quarter
of the Company.
2.4. Acquisitions After Standstill Period. After the Standstill Period,
this Agreement shall not restrict the acquisition or offer to acquire any Equity
Securities or interest therein by the Purchaser and/or its Affiliates; provided,
however, that the Purchaser shall not acquire or offer to acquire any Equity
Securities if, as the result of or after giving effect to such acquisition, the
Purchaser Interest (calculated as though Beneficial Ownership of Voting Stock
includes shares of Voting Stock that the Purchaser has the right to acquire
(other than pursuant to this Agreement) as described in subsection (d)(1)(i) of
Rule 13d-3 under the Exchange Act without regard to the 60-day limit set forth
therein) would exceed 66.67%, except pursuant to a cash tender offer for all
Equity Securities not owned by the Purchaser and/or its Affiliates.
ARTICLE 3.
TRANSFER OF SHARES
The Purchaser and its Affiliates shall not sell or otherwise transfer
(except to an Affiliate of the Purchaser which shall agree to be bound by this
Agreement) any Equity Securities Beneficially Owned by such persons or any
interest therein for a period of five (5) years from the Closing of the purchase
and sale of the First Issuance Shares, except as follows:
3.1. Pro-Rata Transactions. From and after the third anniversary of the
Closing of the purchase and sale of the First Issuance Shares, the Purchaser
and/or any of its Affiliates may sell any or all Equity Securities Beneficially
Owned by such persons in any transaction or transactions in which each other
holder of Equity Securities has the opportunity to sell the same percentage of
such stockholder's Equity Securities as the Purchaser and such Affiliates, at a
price and on terms no less favorable than those applicable to the sale by the
Purchaser and/or its Affiliates.
3.2. Public Offerings and Market Transactions. From and after the third
anniversary of the Closing of the purchase and sale of the First Issuance Shares
(or, in the case of Common Stock acquired from the Company pursuant to Section
3.3 of the Letter of Credit Agreement, at any time and from time to time), the
Purchaser and/or any of its Affiliates may sell any or all
6
<PAGE>
Equity Securities Beneficially Owned by such persons in one or more registered
public offerings or in market transactions if the Purchaser and/or its selling
Affiliates invoke and follow or require participating underwriters or brokers to
invoke and follow appropriate and reasonable procedures (subject to the
Company's prior approval, which shall not be unreasonably withheld) designed to
prevent the sale of such Equity Securities to any person or "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) that would, after giving effect
to its acquisition of such Equity Securities, Beneficially Own or have the right
to acquire more than ten percent (10%) of the Total Voting Power.
3.3. Directors' Approval. The Purchaser and/or any of its Affiliates may
sell any or all Equity Securities Beneficially Owned by such persons in any
transaction or transactions approved by a majority of the Directors other than
Directors designated by the Purchaser pursuant to this Agreement.
In the event the Purchaser shall sell or otherwise transfer any Equity
Securities or any interest therein to an Affiliate, then so long as any such
Equity Securities are Beneficially Owned by such Affiliate, the provisions of
this Article shall apply to any sale or transfer of the capital stock or other
equity interests of such Affiliate such that it would cease to be an Affiliate
of the Purchaser.
ARTICLE 4.
BOARD REPRESENTATION
4.1. Purchaser Designees.
4.1.1. Full Investment. At all times and from time to time after
---------------
acquisition by the Purchaser of the Original Investment Shares, subject to
Section 4.1.2, the Purchaser shall have the right to designate that number of
-------------
Directors as will result in the total number of Directors designated by the
Purchaser being one fewer than a majority of the total number of Directors then
authorized under the Company's Certificate of Incorporation. Subject to Section
-------
4.2, this Section 4.1.1 shall not limit the right of the Purchaser to nominate
--- -----
and seek the election of additional Directors after the Standstill Period.
4.1.2. Partial Investment. If (a) the Purchaser acquires the First
------------------
Issuance Shares, but does not also acquire all other Original Investment Shares,
or (b) the Purchaser acquires the Original Investment Shares but the Purchaser
Interest shall thereafter at any time have been less than thirty percent (30%)
for a period of at least twenty-five (25) consecutive days, then the Purchaser
shall from time to time have the right to designate that number of Directors as
will result in the total number of Directors designated by the Purchaser being
equal to the product (rounded to the nearest whole number) of (i) the total
number of Directors then authorized under the Company's Certificate of
Incorporation, and (ii) the Purchaser Interest at that time.
4.1.3. Purchaser Directors. Any Director designated by the Purchaser
-------------------
shall not serve as a Director if such person shall be prohibited from serving as
a Director under applicable law, including antitrust law.
7
<PAGE>
4.2. Independent Directors. At all times until such time as the Purchaser
Interest shall have been less than 30% for a period of at least twenty-five (25)
consecutive days or more than 90% for a period of at least twenty-five (25)
consecutive days, the Board shall include at least three Independent Directors.
4.3. Additional Agreements.
4.3.1. By the Company. The Company shall from time to time increase
--------------
the number of Directors constituting the Board and/or obtain resignations from
Directors (other than designees of the Purchaser and Independent Directors
required by Section 4.2) as may be required to ensure that there will at all
-----------
times be sufficient Board seats available to accommodate the full number of
Directors that the Purchaser is then entitled to designate pursuant to Section
-------
4.1. The Company shall promptly and at all times use its best efforts, and take
---
all such actions as may be appropriate or necessary for the election to the
Board of the Purchaser designees selected pursuant to Section 4.1 and the
-----------
Independent Directors required pursuant to Section 4.2. Such actions shall
-----------
include, without limitation, the solicitation of proxies for the election of
such persons at each regular or special meeting of stockholders of the Company
at which Directors are to be elected, or in any written consent solicited in
lieu of such a meeting.
4.3.2. By the Purchaser. The Purchaser and its Affiliates shall vote
----------------
their Shares at each regular or special meeting of the Company's stockholders at
which Directors are to be elected, or in any written consent solicited in lieu
of such a meeting, in favor of election to the Board, and shall otherwise use
their best efforts to cause the appointment or election to the Board, and to
maintain as Directors: (a) during the Standstill Period, such Independent
Directors and such additional Directors as shall be designated by a majority of
the Directors of the Company other than those designated by the Purchaser,
consistently with Sections 4.1 and 4.2; and (b) after the Standstill Period,
------------ ---
such Independent Directors as are required by Section 4.2 and otherwise as the
-----------
Purchaser and its Affiliates may determine in their discretion. If at any time
prior to the end of the Standstill Period the number of Directors that the
Purchaser is entitled to designate pursuant to Section 4.1 is fewer than the
-----------
number of Purchaser designees then serving on the Board, the Purchaser shall
promptly obtain resignations from such of its designees (chosen by the
Purchaser) as may be required to cause the number of Purchaser designees serving
on the Board to be equal to the number of Directors that the Purchaser is then
entitled to designate.
4.3.3. By the Purchaser and the Company. Names of all Director
--------------------------------
nominees designated by the Purchaser or by those Directors of the Company not
designated by the Purchaser shall be furnished to the Purchaser and the Company
(a) in the case of election of Directors at an annual meeting or otherwise
pursuant to a vote of the Company's stockholders, in time to be included in the
proxy materials related to such election, and (b) at least ten (10) days prior
to election or appointment of Directors by the Board.
4.4. Committees. The Purchaser shall be entitled to designate one of its
Director designees to serve on each committee of the Board (except as otherwise
provided in Section 12 of Article III of the Amended Bylaws with respect to the
Management Committee). The Purchaser shall be entitled to select any of the
Directors as alternates for each of its Director designees serving on committees
of the Board, which alternates shall be the designees of the Board for
8
<PAGE>
purposes of the Amended Bylaws and Section 141(b) of the Delaware General
Corporation Law and may replace any of the Purchaser's Director designees
serving on any committee who are absent or disqualified at any meeting of the
committee. With respect to the audit committee, any Purchaser Director designee
shall, as a condition to membership thereon, meet all requirements imposed by
the rules of any national securities exchange, or the Nasdaq National Market, on
which the Company's Shares may then be listed or quoted. With respect to the
compensation committee, any Purchaser Director designee shall, as a condition to
membership thereon, qualify as "disinterested" within the meaning of Rule 16b-3
under the Exchange Act or any similar rule then in effect.
4.5. Vacancies. If any Director or Director nominee designated by the
Purchaser pursuant to Section 4.1 shall decline to serve on, resign or be
-----------
removed from, or for any other reason be unable to serve on the Board or any
committee thereof, the vacancy resulting therefrom shall be filled in accordance
with the Company's Certificate of Incorporation and Bylaws by another person
designated by the Purchaser pursuant to Section 4.1. If any Director or Director
-----------
nominee not designated by the Purchaser pursuant to Section 4.1 shall decline to
-----------
serve on, resign or be removed from, or for any other reason be unable to serve
on the Board or any committee thereof during the Standstill Period, the vacancy
resulting therefrom shall be filled in accordance with the Company's Certificate
of Incorporation and Bylaws by a person designated by a majority of the
Directors of the Company other than those designated by the Purchaser. This
Section 4.5 shall not operate to allow the Purchaser or the Directors other than
-----------
those designated by the Purchaser to designate more Directors or committee
members than it or they would be entitled to designate hereunder but for this
Section 4.5.
-----------
4.6. Directors' Indemnification and Insurance. As long as any designees of
the Purchaser serve on the Board, (a) the Amended and Restated Certificate of
Incorporation and Bylaws of the Company shall not be amended to contain
provisions less favorable with respect to indemnification and limitation of
liability of Directors than are set forth in the Amended and Restated
Certificate and Amended Bylaws as of the date of this Agreement, or in any other
manner that would affect adversely the rights thereunder of designees of the
Purchaser serving on the Board, unless such amendment, repeal or modification
shall be required by law or the fiduciary obligations of the Board, as
determined in good faith by the Board based on the written advice of outside
counsel, and (b) such designees shall be covered by any directors' and officers'
liability insurance maintained from time to time on the same terms and subject
to the same conditions as the other members of the Board, and (c) such designees
shall be entitled to the benefit of any indemnification agreements entered into
by the Company with any of its Directors; provided, that nothing in this
Agreement shall obligate the Company to maintain any such insurance or to enter
into any such indemnification agreements.
4.7. Directors' Compensation. The Directors designated by the Purchaser,
if any, who are not officers or employees of the Purchaser and its Affiliates
shall have the right to receive all fees paid and options and other awards
granted and expenses reimbursed to non-employee Directors generally, provided
that all such fees and awards allocable to Directors who are not officers or
employees of the Purchaser and its Affiliates shall not be paid or awarded or
transferred to the Purchaser. Directors designated by the Purchaser who are
officers or employees of the Purchaser or its Affiliates shall have the right to
receive only such fees, options
9
<PAGE>
and other awards and expense reimbursements, if any, as may be granted
to employee Directors of the Company for their service as Directors, provided
that, notwithstanding Article 2 (other than Section 2.1.7), any or all such fees
--------- -------------
and awards allocable to Directors designated by the Purchaser shall, in the
Purchaser's discretion, be paid or awarded to the Purchaser.
ARTICLE 5.
APPROVAL RIGHTS
5.1. Actions by the Company. Subject to applicable laws, including
antitrust laws, at all times following acquisition by the Purchaser and/or its
Affiliates of the New Issue Shares and the Offer Shares and until the Purchaser
Interest has been less than thirty percent (30%) for a period of at least
twenty-five (25) consecutive days, the Company shall not, without the prior
written consent of the Purchaser or, in the case of Board action, the
affirmative vote or written consent of not less than a majority of the
Directors designated by the Purchaser:
5.1.1. Acquisitions. Acquire or agree to acquire, or permit any of
------------
its subsidiaries to acquire or agree to acquire, by merger, consolidation, or
acquisition of assets or stock, or otherwise, any corporation, partnership, or
other business organization or division thereof, or any other business operation
("Acquired Entity") if the total assets, or the total revenues or operating
profits of such Acquired Entity as at the end of or for the most recently
completed four fiscal quarters preceding the agreement for such acquisition
shall exceed twenty percent (20%) of the total assets, or the total revenues or
operating profits of the Company as at the end of or for such four fiscal
quarters; provided however that the Purchaser's consent shall not be required
solely as the result of this Section 5.1.1 for an acquisition in which the total
-------------
value of all consideration paid or given by the Company in such acquisition
(including without limitation the value of any funded debt or other capitalized
obligations assumed by the Company or any subsidiary of the Company) shall be
less than fifty million dollars ($50,000,000).
5.1.2. Divestitures. Sell, contribute or otherwise transfer or agree
------------
to sell, contribute or otherwise transfer, or permit any of its subsidiaries to
sell, contribute or otherwise transfer or agree to sell, contribute or otherwise
transfer, any product line or line of business of the Company or any of its
subsidiaries or any interest therein to any person other than a subsidiary of
the Company that is or, if it were a United States entity, would be, required to
be consolidated for Federal income tax purposes, if the assets, revenues or
operating profit of such product line or line of business as at the end of or
for the most recently completed four fiscal quarters preceding the agreement for
such transfer shall exceed twenty percent (20%) of the assets, revenues or
operating profits of the Company as at the end of or for such four fiscal
quarters.
5.1.3. Issuances. Authorize for issuance, issue, sell, deliver or
---------
agree or commit to issue, sell or deliver (whether through the issuance or
exercise of options, warrants, subscriptions, rights to purchase or otherwise),
in any transaction or series of related transactions, any New Securities if such
New Securities, assuming full conversion and exercise of such New Securities,
would represent an increase of ten percent (10%) or more in the Total Voting
Power represented by the Voting Stock (other than such New Securities)
outstanding immediately prior to the
10
<PAGE>
issuance of such New Securities (or for New Securities issued in a series
of related transactions, immediately prior to the first issuance in such
series).
5.1.4. Capital Expenditures. Approve any annual Capital Expenditure
--------------------
budget, or authorize or make, or permit any of its subsidiaries to authorize or
make, Capital Expenditures in excess of $15 million, in the aggregate for the
Company and all of its subsidiaries, in any fiscal year commencing with the
fiscal year beginning July 1995, except to the extent specifically provided for
in a capital budget approved by the Purchaser pursuant hereto.
5.1.5. Amendments. Amend its Certificate of Incorporation or Bylaws
----------
or change the number of authorized Directors.
5.1.6. Certain Strategic Relationships. Enter, or permit any of its
-------------------------------
subsidiaries to enter, into any joint venture, partnership, or exclusive
licensing agreement with any Third Party that (a) involves an explicit or
projected commitment of cash and/or other resources of the Company and/or of its
subsidiaries or forecasted payments to or from the Company and/or its
subsidiaries during the duration of such agreement or relationship, or the four-
year period commencing on the date of such agreement, whichever is less, in
excess of $100 million, or (b) restricts or impairs in any material respect the
ability or right of the Company or any of its subsidiaries to compete in any
line of business or product which is material to the business of the Company and
its subsidiaries, taken as a whole. Notwithstanding the generality of the
foregoing, the Purchaser's written consent shall not be required pursuant to
this Section 5.1.6 for any agreement for the procurement of central processing
-------------
units (CPUs) and licenses for the use of patents, basic input-output system
software (BIOS), disk operating system software (DOS), Windows operating system
software, and network operating system software, or other similar agreements, in
each case entered into in the ordinary course of business not substantially
inconsistent with past practice and for procurement of components to be used in
or with the Company's products, or provided to purchasers of the Company
products in or with such products.
ARTICLE 6.
CERTAIN COVENANTS
6.1. Proxy Solicitations. Prior to the end of the Standstill Period,
neither the Purchaser nor its Affiliates shall, directly or indirectly, (a)
solicit, initiate or participate in any "solicitation" of "proxies" or become a
"participant" in any "election contest" (as such terms are defined or used in
Regulation 14A under the Exchange Act, disregarding clause (iv) of Rule 14a-
1(1)(2) and including any exempt solicitation pursuant to Rule 14a-2(b)(1));
call, or in any way participate in a call for, any special meeting of
stockholders of the Company (or take any action with respect to acting by
written consent of the Company's stockholders); request, or take any action to
obtain or retain any list of holders of any securities of the Company; or
initiate or propose any stockholder proposal or participate in the making of, or
solicit stockholders for the approval of, one or more stockholder proposals; (b)
deposit any Voting Stock in a voting trust or subject them to any voting
agreement or arrangements, except as provided herein; (c) form, join or in any
way participate in a "group" (within the meaning of Section 13(d)(3) of Exchange
Act) with respect to
11
<PAGE>
any Voting Stock (or any securities the ownership of which would make the owner
thereof a Beneficial Owner of Voting Stock ); (d) except as specifically
permitted by this Agreement, otherwise act to control or influence the Company
or its management, Board of Directors, policies or affairs, including, without
limitation, (i) soliciting or proposing to effect or negotiate any form of
business combination, restructuring, recapitalization or other extraordinary
transaction involving, or any change in control of, the Company, its Affiliates
or any of their respective securities or assets (other than pursuant to the
Stock Purchase Agreement), or (ii) seeking Board representation or the removal
of any Directors or a change in the composition or size of the Board (other than
as necessary to obtain the Board representation to which it is entitled
hereunder); (e) disclose any intent, purpose, plan or proposal with respect to
this Agreement, the Company or its Affiliates or the Board, management,
policies, affairs, securities or assets of the Company or its Affiliates that is
inconsistent with this Agreement, including any intent, purpose, plan or
proposal that is conditioned on, or would require the Company or any of its
Affiliates to make any public disclosure relating to, any such intent, purpose,
plan, proposal or condition; or (f) assist, advise, encourage or act in concert
with any person with respect to, or seek to do, any of the foregoing.
Notwithstanding the generality of the foregoing, nothing herein shall (x)
prevent the Purchaser or its Affiliates from voting their respective shares, or
taking such other action as it may deem necessary or appropriate, to cause the
election as Directors of those persons the Purchaser is entitled to designate
pursuant to Section 4.1, or (y) prohibit or restrict any action taken by the
-----------
Purchaser or any of its Affiliates in connection with the exercise of the rights
of the Purchaser and its Affiliates under Section 2.1.6.
-------------
6.2. Voting. Except as otherwise set forth herein, prior to the end of the
Standstill Period, the Purchaser and its Affiliates shall vote any Voting Stock
Beneficially Owned by them in connection with any matter or proposal submitted
to a vote of the Company stockholders but not sponsored or supported by the
Board either (a) in accordance with the recommendation of a majority of the
Board, or (b) in the absence of a recommendation of a majority of the Board,
then proportionately in accordance with the votes of all stockholders of the
Company who have voted with respect to such matter or proposal. Prior to the end
of the Standstill Period, the Purchaser and its Affiliates shall be present in
person or represented by proxy at all stockholder meetings of the Company called
by the Company so that all Voting Stock of which they are the Beneficial Owner
may be counted for the purpose of determining the presence of a quorum at such
meetings.
6.3. Material Transactions. At all times that the Purchaser Interest is
less than 100%, neither the Purchaser nor any of its Affiliates shall engage in
any material transaction with the Company or any of its subsidiaries unless such
transaction has been approved by a majority of the Independent Directors or, in
the case of a series of related transactions, is in accordance with guidelines
approved by a majority of the Independent Directors. For purposes of this
Section 6.3, "material transaction" shall mean (i) any amendment to, or
termination of, this Agreement or, any of the other Transaction Documents that
have been executed and delivered and (ii) any transaction between the Company or
any of its subsidiaries and the Purchaser or any of its Affiliates, or any
transaction (other than a transaction of the type described in Section 2.1.6,
-------------
Section 2.4 or Section 6.1) between the stockholders of the Company, in their
----------- -----------
capacity as stockholders, and the Purchaser or any of its Affiliates, including,
without limitation: (a) any sale of all or substantially all of the assets of
the Company or any of its subsidiaries or any business
12
<PAGE>
division or operation of the Company or any of its subsidiaries, (b) any
issuance of Voting Stock or other securities by the Company or any of the
Company's subsidiaries, (c) any transaction or series of related transactions
involving payments, the incurrence of obligations, or transfers of property, and
(d) any merger or other business combination involving the Purchaser and/or any
of its Affiliates; provided, that "material transaction" shall not include any
--------
(i) transaction in accordance with the terms of the Transaction Documents or
(ii) other transaction or series of related transactions involving payments by
or obligations or transfer of property of the Company with an aggregate value in
any calendar or fiscal year of less than $5 million.
ARTICLE 7.
RESULTS OF OPERATIONS
Following the acquisition by the Purchaser of the Original Investment
Shares, and provided that the Purchaser Interest shall not have been less than
thirty percent (30%) for a period of at least twenty-five (25) consecutive days,
if (a) the consolidated revenues or gross profits of the Company and its
subsidiaries for the fiscal year ended July 1996 shall be less than $2.6 billion
or $430 million, respectively, (b) the consolidated revenues or gross profits of
the Company and its subsidiaries for the fiscal year ended July 1997 shall be
less than the greater of (i) $2.75 billion or $450 million, respectively, or
(ii) 85% of the amounts therefor set forth in the 1997 operating plan of the
Company approved by the Board; or (c) the consolidated net income after taxes of
the Company and its subsidiaries for either of such fiscal years shall be less
than 1% of net revenues, then the Management Committee of the Board shall
review the desirability of changes in the management of the Company and take
such action, if any, as may be determined to be advisable including without
limitation the reassignment, changes in the responsibilities, removal,
termination or replacement of any members of management. For purposes of the
foregoing, the "management" of the Company shall refer to all persons who
presently have the title of "Vice President" or higher, whether or not any such
person is an officer of the corporation, and all such persons who may perform
the functions presently performed by any of the foregoing, without regard to
title, but shall not include the Chief Executive Officer. The Management
Committee shall make any determination with respect to the termination or
reassignment of an existing member of management, or the decision to hire any
new member of management within 60 days following the availability of the
audited financial statements for the relevant year (or such longer period of
time as may be determined by a majority of the Board), and no such determination
shall be made thereafter; provided that: (a) the Management Committee shall
have such additional time as is reasonably necessary for the recruitment and
selection of any such new member of management; and (b) no action or inaction by
the Management Committee following the fiscal year ended July 1996 shall impair
its ability to act as herein authorized following the fiscal year ended July
1997. Notwithstanding the generality of the foregoing, the Management Committee
shall not be authorized to take such actions if they would violate applicable
law or if the shortfall in consolidated revenues, gross profits or net income of
the Company and its subsidiaries referred to above, shall be the direct result
of (a) fire, flood, earthquake or other act of God, any war, whether or not
declared, insurrection, hostilities, or other armed conflict, acts of civil
disorder or riot, or the disruption of national or international financial,
currency or capital markets, in each case affecting the Company or any of its
significant suppliers, or (b) a decline in the unit volume of the world market
for personal computers.
13
<PAGE>
ARTICLE 8.
MISCELLANEOUS
8.1. Termination. Article 4, Article 5 and Article 6 of this Agreement and
--------- --------- ---------
the rights and obligations of the Purchaser and the Company thereunder shall
terminate at the first time after the date hereof that the Purchaser Interest
shall have been less than fifteen percent (15%) for a period of at least ninety
(90) consecutive days.
8.2. Stock Purchase Agreement. The provisions of Article 9 of the Stock
Purchase Agreement are incorporated herein by reference and shall govern this
Agreement as though set forth in full herein and as though references in such
Article 9 to "this Agreement" were references to this Agreement.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
AST Research, Inc., Samsung Electronics Co., Ltd.,
a Delaware corporation a Korean corporation
By: By:
------------------------------ -------------------------------
Name: Name:
---------------------------- -----------------------------
Title: Title:
--------------------------- ----------------------------
15
<PAGE>
EXHIBIT 99.15
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 07/31/1995
950171073 - 2103395
RESTATED CERTIFICATE OF INCORPORATION
OF
AST RESEARCH, INC.
It is hereby certified that:
1. The present name of the corporation (hereinafter called the "Corporation")
is AST RESEARCH, INC., which is the name under which the corporation was
originally incorporated; and the date of filing the original Certificate of
Incorporation of the Corporation with the Secretary of State of the State
of Delaware is December 2, 1986.
2. This Restated Certificate of Incorporation was duly adopted pursuant to the
provisions of Sections 242 and 245 of the General Corporation Law of the
State of Delaware in the form set forth as follows:
<PAGE>
ARTICLE 1
NAME
The name of the Corporation is AST Research, Inc.
ARTICLE 2
REGISTERED OFFICE AND AGENT
The name and address of the registered office of the Corporation in
the State of Delaware is The Corporation Trust Company, 1209 Orange Street,
Wilmington, Delaware 19801, County of New Castle, Delaware. The name of the
Corporation's registered agent at that address is The Corporation Trust Company.
ARTICLE 3
PURPOSE
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware, as amended from time to time.
ARTICLE 4
AUTHORIZED CAPITAL
(a) The total number of shares of capital stock which the Corporation
has the authority to issue is 201,000,000, consisting of 200,000,000 shares of
Common Stock, $0.01 par value per share (the "Common Stock"), and 1,000,000
shares of Preferred Stock, $0.01 par value per share (the "Preferred Stock").
(b) The Board of Directors is expressly authorized by resolution or
resolutions from time to time adopted, subject to any limitations and
requirements prescribed by the General Corporation Law of the State of Delaware
2
<PAGE>
and the provisions hereof, to provide for the issuance of the shares of
Preferred Stock in one or more series and, by filing a Certificate pursuant to
the applicable law of the State of Delaware, to establish from time to time the
number of shares to be included in each series, and to fix the designations,
powers, preferences, and relative, participating, optional or other special
rights, if any, of the shares of each such series and the qualifications,
limitations and restrictions thereof, if any, with respect to such series of
Preferred Stock.
(c) Shares of any series of Preferred Stock which have been redeemed
(whether through the operation of a sinking fund or otherwise) or which, if
convertible or exchangeable, have been converted into or exchanged for shares of
stock of any other class or classes or for other securities shall have the
status of authorized and unissued shares of Preferred Stock of the same series
and may be reissued as a part of the series of which they were originally a part
or may be reclassified and reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors or as part
of any other series of Preferred Stock, all subject to the conditions and the
restrictions on issuance set forth in the resolution or resolutions adopted by
the Board of Directors providing for the issue of any series of Preferred Stock.
(d) Except as otherwise provided by the resolution or resolutions
providing for the issue of any series of Preferred Stock, after payment shall
have been made to the holders of Preferred Stock of the full amount of dividends
to which they shall be entitled pursuant to the resolution or resolutions
providing for the issue of any series of Preferred Stock, the holders of Common
Stock shall be entitled, to the exclusion of the holders of Preferred Stock of
any and all series, to receive such dividends as from time to time may be
declared by the Board of Directors.
(e) Except as otherwise provided by the resolution or resolutions
providing for the issue of any series of Preferred Stock, in the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, after payment shall have been made to the holders of Preferred
Stock of the full amounts to which they shall be entitled pursuant to the
resolution or resolutions providing for the issue of any series of Preferred
Stock, the holders of Common Stock shall be entitled, to the exclusion of the
holders of Preferred Stock of any and all series, to share, ratably according to
the number of shares of Common Stock held by them, in all remaining assets of
the Corporation available for distribution to its stockholders.
3
<PAGE>
ARTICLE 5
DIRECTORS
(a) The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors.
(b) The Board of Directors shall consist of not less than five nor
more than thirteen members. The exact number of authorized directors shall
initially be thirteen and, thereafter, shall be fixed from time to time, within
the foregoing limits, by resolution of the Board of Directors.
(c) Election of directors need not be by written ballot unless
otherwise provided in the Bylaws.
ARTICLE 6
LIMITATION OF DIRECTORS' LIABILITY
(a) The Corporation shall indemnify to the full extent authorized or
permitted by applicable law (as now or hereafter in effect) any person made, or
threatened to be made a party or witness to any action, suit or proceeding
(whether civil or criminal or otherwise) by reason of the fact that he, his
testator or intestate, is or was a director or officer of the Corporation or by
reason of the fact that such director or officer, at the request of the
Corporation, is or was serving any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, in any capacity.
Nothing contained herein shall affect any rights to indemnification to which
employees other than directors and officers may be entitled by law.
(b) No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty, provided,
however, that this limitation of liability shall not act to limit liability (i)
for any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for any act or omission not in good faith or which involves
intentional misconduct or a knowing violation of law, (iii) arising under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper benefit.
4
<PAGE>
(c) Any repeal or modification of the foregoing provisions of this
Article 6 by the stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at the time of
such repeal or modification.
ARTICLE 7
AMENDMENT OF BYLAWS
The Board of Directors of the Corporation shall have concurrent power
with the stockholders to make, alter, amend, change, add to or repeal the Bylaws
of the Corporation; provided, that the Board of Directors of the Corporation may
--------
not amend the second paragraph of Article III Section 3, Article III Section 7,
the second paragraph of Article III Section 8, Article III Section 12, Article
IV Section 4, Article VI, Article VII or Article IX Section 8 except in
accordance with Article IX Section 8 of the Bylaws.
ARTICLE 8
AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Restated Certificate of Incorporation or to
adopt new provisions, in the manner now or hereafter prescribed by the General
Corporation Law of the State of Delaware, as amended from time to time, and all
rights conferred on stockholders and directors herein are granted subject to
this reservation.
5
<PAGE>
IN WITNESS WHEREOF, AST Research, Inc. has caused this Certificate to
be signed by Safi U. Qureshey, its President, attested by Dennis R. Leibel, its
Secretary, and its corporate seal to be affixed hereto this 31st day of
July, 1995.
AST RESEARCH, INC.
By: /s/ Safi U. Qureshey
-----------------------------
Safi U. Qureshey, President
ATTEST:
By: /s/ Dennis R. Leibel
----------------------------
Dennis R. Leibel, Secretary
6
<PAGE>
EXHIBIT 99.16
BYLAWS
OF
AST RESEARCH, INC.
------------------
A Delaware Corporation
(as amended, through July 31, 1995)
-------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I. OFFICES.................................................. 1
Section 1. Registered Office................................... 1
Section 2. Other Offices....................................... 1
Section 3. Books............................................... 1
ARTICLE II. MEETINGS OF STOCKHOLDERS................................ 1
Section 1. Place of Meetings................................... 1
Section 2. Annual Meetings..................................... 1
Section 3. Special Meetings.................................... 1
Section 4. Notification of Business
to be Transacted at Meeting....................... 1
Section 5. Notice; Waiver of Notice............................ 2
Section 6. Quorum; Adjournment................................. 2
Section 7. Voting.............................................. 2
Section 8. Stockholder Action by Written Consent
Without a Meeting................................. 2
Section 9. List of Stockholders Entitled to Vote............... 3
Section 10. Stock Ledger....................................... 3
Section 11. Inspectors of Election............................. 3
Section 12. Organization....................................... 3
Section 13. Order of Business.................................. 3
ARTICLE III. DIRECTORS.............................................. 3
Section 1. Powers.............................................. 3
Section 2. Number and Election of Directors.................... 3
Section 3. Vacancies........................................... 4
Section 4. Time and Place of Meetings.......................... 4
Section 5. Annual Meeting...................................... 4
Section 6. Regular Meetings.................................... 5
Section 7. Special Meetings.................................... 5
Section 8. Quorum; Vote Required for Action; Adjournment....... 5
Section 9. Action by Written Consent........................... 6
Section 10. Telephone Meetings................................. 6
Section 11. Committees......................................... 6
Section 12. Management Committee............................... 6
Section 13. Compensation....................................... 6
Section 14. Interested Directors............................... 7
ARTICLE IV. OFFICERS................................................ 7
Section 1. Executive Officers.................................. 7
Section 2. Election; Term of Office and Remuneration........... 7
Section 3. Subordinate Officers................................ 7
Section 4. Removal............................................. 7
Section 5. Resignations........................................ 8
Section 6. Powers and Duties................................... 8
i
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE V. STOCK.................................................... 8
Section 1. Form of Certificates.................................... 8
Section 2. Signatures.............................................. 8
Section 3. Lost Certificates....................................... 8
Section 4. Transfers............................................... 8
Section 5. Registered Owners....................................... 9
ARTICLE VI. LIMITATION OF LIABILITY................................. 9
ARTICLE VII. INDEMNIFICATION........................................ 9
Section 1. Action Other Than by or in the Right of the Corporation. 9
Section 2. Action by or in the Right of the Corporation............ 9
Section 3. Determination of Right of Indemnification............... 10
Section 4. Indemnification Against Expenses of Successful Party.... 10
Section 5. Advances of Expenses.................................... 10
Section 6. Right of Agent to Indemnification upon Application;
Procedure Upon Application............................ 10
Section 7. Other Rights and Remedies............................... 11
Section 8. Insurance............................................... 11
Section 9. Indemnity Fund.......................................... 11
Section 10. Constituent Corporations............................... 11
Section 11. Other Enterprises, Fines, and
Serving at Corporation's Request..................... 11
Section 12. Indemnification of Other Persons....................... 12
Section 13. Savings Clause......................................... 12
ARTICLE VIII. RECORDS............................................... 12
Section 1. Maintenance and Inspection of Share Register............ 12
Section 2. Maintenance and Inspection of Bylaws.................... 13
ARTICLE IX. GENERAL PROVISIONS...................................... 13
Section 1. Dividends............................................... 13
Section 2. Disbursements........................................... 13
Section 3. Fiscal Year............................................. 13
Section 4. Corporate Seal.......................................... 13
Section 5. Record Date............................................. 13
Section 6. Voting of Stock Owned by the Corporation................ 13
Section 7. Construction and Definitions............................ 13
Section 8. Amendments.............................................. 13
ii
</TABLE>
<PAGE>
BYLAWS
OF
AST RESEARCH, INC.
-----------------
A Delaware Corporation
ARTICLE I
OFFICES
Section 1. Registered Office. The address of the registered office
-----------------
of the Corporation in the State of Delaware shall be 1209 Orange Street,
Wilmington, New Castle County, Delaware, 19801, and the name of its registered
agent at such address is The Corporation Trust Company.
Section 2. Other Offices. The Corporation may also have offices at
-------------
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
Section 3. Books. The books of the Corporation may be kept within or
-----
without the State of Delaware as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders shall
-----------------
be held at such place either within or without the State of Delaware and on such
date and at such time as may be designated from time to time by the Board of
Directors. If the Board of Directors shall fail to fix such place, the meetings
shall be held at the principal executive office of the Corporation.
Section 2. Annual Meetings. Annual meetings of stockholders shall be
---------------
held at a time and date designated by the Board of Directors for the purpose of
electing directors and transacting such other business as may properly be
brought before the meeting.
Section 3. Special Meetings. Special meetings of stockholders, for
----------------
any purpose or purposes, may be called by the Board of Directors, the Chairman
of the Board of Directors, the President, or the holders of shares entitled to
cast not less than a majority of the votes at such meeting. Special meetings
may not be called by any other person.
Section 4. Notification of Business to be Transacted at Meeting. To
----------------------------------------------------
be properly brought before a meeting, business must be (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors, (b) otherwise properly brought before the meeting by or
at the direction of the Board of Directors, or (c) otherwise properly brought
before the meeting by a stockholder entitled to vote at the meeting.
<PAGE>
Section 5. Notice: Waiver of Notice. Whenever stockholders are
------------------------
required or permitted to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise required by law, such notice
shall be given not less than ten nor more than 60 days before the date of the
meeting to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be given when deposited in the mail,
postage prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation. A written waiver of any such notice signed by the
person entitled thereto, whether before or after the time stated therein, shall
be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends
the meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.
Section 6. Quorum; Adjournment. Except as otherwise required by law
-------------------
or provided by the Certificate of Incorporation, the holders of a majority of
the capital stock issued and outstanding and entitled to vote thereat, present
in person or represented by proxy, shall constitute a quorum for the transaction
of business at all meetings of the stockholders. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting of the time and place of the adjourned
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. If after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder
entitled to vote at the meeting.
Section 7. Voting. Except as otherwise required by law, or provided
------
by the Certificate of Incorporation or these Bylaws, any question brought before
any meeting of stockholders shall be decided by the vote of the holders of a
majority of the stock represented and entitled to vote thereat. Unless
otherwise provided in the Certificate of Incorporation, each stockholder
represented at a meeting of stockholders shall be entitled to cast one vote for
each share of the capital stock entitled to vote thereat held by such
stockholder. Such votes may be cast in person or by proxy, but no proxy shall
be voted on or after three years from its date, unless such proxy provides for a
longer period. Elections of directors need not be by ballot unless the Chairman
of the meeting so directs or unless a stockholder demands election by ballot at
the meeting and before the voting begins.
Section 8. Stockholder Action by Written Consent Without a Meeting.
-------------------------------------------------------
Any action which may be taken at any annual or special meeting of stockholders
may be taken without a meeting and without prior notice, if a consent in
writing, setting forth the action so taken, is signed by the holders of all of
the outstanding shares of the Corporation. All such consents shall be filed
with the Secretary of the Corporation and shall be maintained in the corporate
records. Any stockholder giving a written consent, or the stockholder's proxy
holders, or a transferee of the shares or a personal representative of the
stockholder or their respective proxy holders, may revoke the consent by a
writing received by the Secretary of the Corporation before written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary.
2
<PAGE>
Section 9. List of Stockholders Entitled to Vote. The officer who
-------------------------------------
has charge of the stock ledger of the Corporation shall prepare and make, at
least ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder of the Corporation who is present.
Section 10. Stock Ledger. The stock ledger of the Corporation shall
------------
be the only evidence as to who are the stockholders entitled to examine the
stock ledger, the list required by Section 9 of this Article II or the books of
the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
Section 11. Inspectors of Election. In advance of any meeting of
----------------------
stockholders, the Board of Directors may appoint one or more persons (who shall
not be candidates for office) as inspectors of election to act at the meeting.
If inspectors are not so appointed, or if an appointed inspector fails to appear
or fails or refuses to act at a meeting, the Chairman of any meeting of
stockholders may, and on the request of any stockholder or his proxy shall,
appoint inspectors of election at the meeting. In the event of any dispute
between or among the inspectors, the determination of the majority of the
inspectors shall be binding.
Section 12. Organization. At each meeting of stockholders the
------------
Chairman of the Board of Directors, if one shall have been elected, (or in his
absence or if one shall not have been elected, the President) shall act as
chairman of the meeting. The Secretary (or in his absence or inability to act,
the person whom the Chairman of the meeting shall appoint secretary of the
meeting) shall act as secretary of the meeting and keep the minutes thereof.
Section 13. Order of Business. The order and manner of transacting
-----------------
business at all meetings of stockholders shall be determined by the Chairman of
the meeting.
ARTICLE III
DIRECTORS
Section 1. Powers. Except as otherwise required by law or provided
------
by the Certificate of Incorporation, the business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors.
Section 2. Number and Election of Directors. Directors shall be
--------------------------------
elected at each annual meeting of stockholders and each director so elected
shall hold office until his successor is duly elected and qualified, or until
his earlier death, resignation or removal. Any director may resign at any time
effective upon giving written notice to the Board of Directors, unless the
notice specifies a later time for such resignation to become effective. Unless
otherwise specified therein, the acceptance of such resignation shall not be
3
<PAGE>
necessary to make it effective. If the resignation of a director is effective
at a future time, the Board of Directors may elect a successor prior to such
effective time to take office when such resignation becomes effective.
Directors need not be stockholders.
Section 3. Vacancies. Except as otherwise set forth herein,
---------
vacancies in the Board of Directors may be filled by a majority of the remaining
directors, though less than a quorum, or by a sole remaining director, except
that a vacancy created by the removal of a director by the vote or written
consent of the stockholders may be filled only by the vote of a majority of the
shares entitled to vote represented at a duly held meeting at which a quorum is
present, or by the written consent of holders of a majority of the outstanding
shares entitled to vote. Each director so elected shall hold office until the
next annual meeting of the stockholders and until a successor has been elected
and qualified.
Reference is made to the Stockholder Agreement (the "Stockholder
Agreement") dated as of July 31, 1995 by and between the Corporation and Samsung
Electronics Co., Ltd. ("Samsung") and to Article 4 thereof. In the event of
the death, resignation or removal of a director designated by Samsung in
accordance with Section 4.1 of the Stockholder Agreement, such vacancy shall be
filled by the remaining directors only by another person designated by Samsung.
In the event of the death, resignation or removal of a director not designated
by Samsung in accordance with the Stockholder Agreement, during the Standstill
Period, as defined therein, such vacancy may be filled by the remaining
directors only by another person designated by those directors not designated by
Samsung.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in the event of the death, resignation, or removal of any director, or if
the authorized number of directors is increased, or if the stockholders fail, at
any meeting of stockholders at which any director or directors are elected, to
elect the number of directors to be voted for at that meeting.
The stockholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors, but any such election by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office expires.
Section 4. Time and Place of Meetings. The Board of Directors shall
--------------------------
hold its meetings at such place, either within or without the State of Delaware,
and at such time as may be determined from time to time by the Board of
Directors.
Section 5. Annual Meeting. The Board of Directors shall meet for the
--------------
purpose of organization, the election of officers and the transaction of other
business, as soon as practicable after each annual meeting of stockholders, on
the same day and at the same place where such annual meeting shall be held.
Notice of such meeting need not be given. In the event such annual meeting is
not so held, the annual meeting of the Board of Directors may be held at such
place, either within or without the State of Delaware, on such date and at such
time as shall be specified in a notice thereof given as hereinafter provided in
Section 7 of this Article III or in a waiver of notice thereof.
Section 6. Regular Meetings. Regular meetings of the Board of
----------------
Directors may be held at such places within or without the State of Delaware at
such date and time as
4
<PAGE>
the Board of Directors may from time to time determine and, if so determined by
the Board of Directors, notices thereof need not be given.
Section 7. Special Meetings. Special meetings of the Board of
----------------
Directors may be called by the Chairman of the Board, the President, by any Vice
President, the Secretary or by any two directors, provided that at any special
meeting called during the Standstill Period (as defined in the Stockholder
Agreement) by directors designated by Samsung, there shall not be a quorum
(including for purposes of Section 8) unless a majority of the directors present
are directors not designated by Samsung. Notice of the date, time and place of
special meetings shall be delivered personally or by telephone to each director
or sent by first class mail or telegram, charges prepaid, addressed to each
director at the director's address as it is shown on the records of the
Corporation. In case the notice is mailed, it shall be deposited in the United
States mail at least five days before the time of the holding of the meeting.
In case the notice is delivered personally or by telephone or telegram, it shall
be delivered personally or by telephone or to the telegraph company at least 48
hours before the time of the holding of the meeting. The notice need not
specify the purpose of the meeting.
Section 8. Quorum; Vote Required for Action: Adjournment. Except as
---------------------------------------------
otherwise required by law, or provided in the Certificate of Incorporation or
these Bylaws (including, without limitation, Section 7), a majority of the
directors shall constitute a quorum for the transaction of business at all
meetings of the Board of Directors and the affirmative vote of not less than a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors. If a quorum shall not be present at
any meeting of the Board of Directors, the directors present thereat may adjourn
the meeting, from time to time, without notice other than announcement at the
meeting, until a quorum shall be present. A meeting at which a quorum is
initially present may continue to transact business, notwithstanding the
withdrawal of directors, if any action taken is approved by at least a majority
of the required quorum to conduct that meeting. When a meeting is adjourned to
another time or place (whether or not a quorum is present), notice need not be
given of the adjourned meeting if the time and place thereof are announced at
the meeting at which the adjournment is taken. At the adjourned meeting, the
Board of Directors may transact any business which might have been transacted at
the original meeting.
Notwithstanding anything to the contrary herein, two-thirds (2/3) of
the directors shall be required to constitute a quorum for, and the affirmative
vote of not less than two-thirds (2/3) of all the directors shall be required to
approve, any action that would (i) amend that certain Amended and Restated
Rights Agreement between the Corporation and American Stock Transfer & Trust
Company as Successor Rights Agent dated as of January 28, 1994, as amended by
the First Amendment thereto dated as of March 1, 1995, or any new stockholder
rights plan; or (ii) adopt any new stockholder rights plan, if such amendment or
new stockholder rights plan does not contain provisions equivalent to those set
forth in such First Amendment for the benefit of Samsung.
Section 9. Action by Written Consent. Unless otherwise restricted by
-------------------------
the Certificate of Incorporation, any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
5
<PAGE>
Section 10. Telephone Meetings. Unless otherwise restricted by the
------------------
Certificate of Incorporation, members of the Board of Directors of the
Corporation, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors or such committee, as the
case may be, by conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this Section 10 shall constitute presence
in person at such meeting.
Section 11. Committees. The Board of Directors may, by resolution
----------
passed by a majority of the entire Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board of Directors may designate one or more directors as alternate members of
any such committee, who may replace any absent or disqualified member at any
meeting of the committee. Any committee, to the extent allowed by law and as
provided in the resolution establishing such committee, shall have and may
exercise all the power and authority of the Board of Directors in the management
of the business and affairs of the Corporation. Each committee shall report to
the Board of Directors when required.
Section 12. Management Committee. Reference is made to the
--------------------
Stockholder Agreement and to Article 7 thereof. The Corporation shall have a
Management Committee of the Board of Directors which shall have and may exercise
the power and authority of the Board of Directors to the extent, and under the
circumstances set forth, in said Article 7. The Management Committee shall
consist of those members of the Board of Directors designated by Samsung in
accordance with the Stockholder Agreement, the Chief Executive Officer of the
Corporation, if he shall be a director (or, if he is not then a director,
another director who is an employee of the Corporation), and up to a maximum of
four (4) directors who are not officers or employees of the Corporation. In the
event there shall be more than four directors who were not designated by Samsung
and are not officers or employees of the Corporation at a time when the
Management Committee is authorized to act in accordance with the foregoing,
those directors of the Corporation who were not designated by Samsung shall
select the four such directors who shall be members of the Management Committee
in addition to the Chief Executive Officer (or, if he is not then a director,
another director who is an employee of the Corporation) and the Directors
designated by Samsung, and unless and until such selection is made the
Management Committee shall consist solely of the directors designated by Samsung
and the Chief Executive Officer of the Corporation (or, if he is not then a
director, another director who is an employee of the Corporation).
Section 13. Compensation. The directors may be paid such
------------
compensation for their services as the Board of Directors shall from time to
time determine.
Section 14. Interested Directors. No contract or transaction between
--------------------
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or the committee thereof
which authorizes the contract or traction, or solely because his or their votes
are counted for such purpose if: (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even
6
<PAGE>
though the disinterested directors be less than a quorum; or (ii) the material
facts as to his or their relationship or interest and as to the contract or
transaction are disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically approved in good faith
by vote of the stockholders; or (iii) the contract or transaction is fair as to
the Corporation as of the time it is authorized, approved or ratified, by the
Board of Directors, a committee thereof, or the stockholders. Common or
interested directors may be counted in determining the presence of a quorum at
a meeting of the Board of Directors or of a committee which authorizes the
contract or transaction.
ARTICLE IV
OFFICERS
Section 1. Executive Officers. The executive officers of the
------------------
Corporation shall be a President, a Chief Executive Officer, a Chief Financial
Officer and a Secretary. The Secretary shall have the duty, among other things,
to record the proceedings of the meetings of stockholders and directors in a
book kept for that purpose. The Corporation may also have such other executive
officers, including one or more Vice Presidents, as the Board may in its
discretion appoint. The Board of Directors, if it so determines, may appoint a
Chairman of the Board and a Vice Chairman of the Board from among its members,
but such titles shall not confer upon such Board members executive officer
status. Any number of offices may be held by the same person.
Section 2. Election, Term of Office and Remuneration. The executive
-----------------------------------------
officers of the Corporation shall be elected annually by the Board of Directors
at the annual meeting or a regular meeting thereof. Each such officer shall
hold office at the discretion of the Board of Directors until his successor is
elected and qualified, or until his earlier death, resignation or removal. The
remuneration of all officers of the Corporation shall be fixed by the Board of
Directors. Any vacancy in any office shall be filled in such manner as the
Board of Directors shall determine.
Section 3. Subordinate Officers. In addition to the executive
--------------------
officers enumerated in Section 1 of this Article IV, the Corporation may have
one more assistant treasurers and assistant secretaries and such other
subordinate officers, agents and employees as the Board of Directors may deem
necessary, each of whom shall hold office for such period as the Board of
Directors may from time to time determine. The Board of Directors may delegate
to any executive officer the power to appoint and to remove any such subordinate
officers, agents or employees.
Section 4. Removal. Except as otherwise delegated to an executive
-------
officer with respect to subordinate officers, any officer may be removed, with
or without cause, at any time, by resolution adopted by the Board of Directors
or by the Management Committee as provided in Article III Section 12. Such
removal shall be without prejudice to the contractual rights of such officer, if
any, with the Corporation.
Section 5. Resignations. Any officer may resign at any time by
------------
giving written notice to the Board of Directors (or to a principal officer if
the Board of Directors has delegated to such principal officer the power to
appoint and to remove such officer). The resignation of any officer shall take
effect upon receipt of notice thereof or at such later time as shall be
specified in such notice; unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
7
<PAGE>
Section 6. Powers and Duties. The Board of Directors may designate
-----------------
an officer as the Chief Executive Officer. The Chief Executive Officer shall,
subject to the direction and control of the Board of Directors, be the general
manager of, and supervise and direct, the business and affairs of the
Corporation and the conduct of the officers of the Corporation. The other
officers of the Corporation shall have such powers and perform such duties
incident to each of their respective offices and such other duties as may from
time to time be conferred upon or assigned to them by the Board of Directors or
the Chief Executive Officer.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
--------------------
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chairman of the Board of Directors, the President or a
Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the number of
shares owned by him in the Corporation.
Section 2. Signatures. Any, or all, of the signatures on the
----------
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
Section 3. Lost Certificates. The Corporation may issue a new
-----------------
certificate to be issued in place of any certificate theretofore issued by the
Corporation, alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate to be lost,
stolen or destroyed. The Corporation may, in its discretion and as a condition
precedent to the issuance of such new certificate, require the owner of such
lost, stolen, or destroyed certificate, or his legal representative, to give the
Corporation a bond (or other security) sufficient to indemnify it against any
claim that may be made against the Corporation (including any expense or
liability) on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
Section 4. Transfers. Stock of the Corporation shall be transferable
---------
in the manner prescribed by law and in these Bylaws or in any agreement with the
stockholder making the transfer. Transfers of stock shall be made on the books
of the Corporation only by the person named in the certificate or by his
attorney lawfully constituted in writing and upon the surrender of the
certificate therefor, which shall be cancelled before a new certificate shall be
issued.
Section 5. Registered Owners. The Corporation shall be entitled to
-----------------
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise required by
law.
8
<PAGE>
ARTICLE VI
LIMITATION OF LIABILITY
No person shall be liable to the Corporation for any loss or damage
suffered by it on account of any action taken or omitted to be taken by him as a
director or officer of the Corporation if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation or, with respect to any criminal matter, had no reasonable cause to
believe that his conduct was unlawful.
ARTICLE VII
INDEMNIFICATION
Section 1. Action Other Than by or in the Right of the Corporation.
-------------------------------------------------------
Subject to Section 3 of this Article VII, the Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, and whether external or internal to
the Corporation, (other than a judicial action or suit brought by or in the
right of the Corporation) by reason of the fact that he is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise (all such persons being referred to hereafter
as an "Agent"), against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, that he had
reasonable cause to believe that his conduct was unlawful.
Section 2. Action by or in the Right of the Corporation. The
--------------------------------------------
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed judicial action or suit
brought by or in the right of the Corporation to procure a judgment in its favor
by reason of the fact that he is or was an Agent (as defined in Section 1)
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or other such court shall deem proper.
Section 3. Determination of Right of Indemnification. Any
-----------------------------------------
indemnification under Sections 1 or 2 (unless ordered by a court) shall be made
by the Corporation unless a
9
<PAGE>
determination is reasonably and promptly made (i) by the Board by a majority
vote of a quorum consisting of directors who are or were not parties to such
action, suit or proceeding, or (ii) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (iii) by the stockholders,
that such person acted in bad faith and in a manner that such person did not
believe to be in or not opposed to the best interests of the Corporation, or,
with respect to any criminal proceeding, that such person believed or had
reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnification Against Expenses of Successful Party.
----------------------------------------------------
Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal of
an action without prejudice or the settlement of an action without admission of
liability, in defense of any proceeding or in defense of any claim, issue or
matter therein, such Agent shall be indemnified against all expenses incurred in
connection therewith.
Section 5. Advances of Expenses. Except as limited by Section 6 of
--------------------
this Article VII, expenses incurred in defending or investigating any action,
suit, proceeding or investigation shall be paid by the Corporation in advance of
the final disposition of such matter, if the Agent shall undertake to repay such
amount in the event that it is ultimately determined, as provided herein, that
such person is not entitled to indemnification. However, no advance shall be
made by the Corporation if a determination is reasonably and promptly made by
the Board of Directors by a majority vote of a quorum of disinterested
directors, or (if such a quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs) by independent legal counsel in a
written opinion, that, based upon the facts known to the Board or counsel at the
time such determination is made, such person acted in bad faith and in a manner
that such person did not believe to be in or not opposed to the best interest of
the Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Board or independent
legal counsel reasonably determines that such person deliberately breached his
duty to the Corporation or its stockholders.
Section 6. Right of Agent to Indemnification Upon Application;
---------------------------------------------------
Procedure Upon Application. Any indemnification under Sections 2, 3, and 4, or
--------------------------
advance under Section 5 of this Article VII, shall be made promptly and in any
event within 45 days, upon the written request of the Agent, unless with respect
to applications under Sections 2, 3, or 5, a determination is reasonably and
promptly made by the Board of Directors by a majority vote of a quorum of
disinterested directors that such Agent acted in a manner set forth in such
Sections as to justify the Corporation's not indemnifying or making an advance
to the Agent. In the event no quorum of disinterested directors is obtainable,
the Board of Directors shall promptly direct that independent legal counsel
shall decide whether the Agent acted in the manner set forth in such Sections as
to justify the Corporation's not indemnifying or making an advance to the Agent.
The right to indemnification or advances as granted by this Article VII shall be
enforceable by the Agent in any court of competent jurisdiction if the Board or
independent legal counsel denies the claim, in whole or in part, or if no
disposition of such claim is made within 45 days. The Agent's expenses incurred
in connection with successfully establishing his right to indemnification, in
whole or in part, in any such proceeding shall also be indemnified by the
Corporation.
10
<PAGE>
Section 7. Other Rights and Remedies. The indemnification provided
-------------------------
by this Article VII shall not be deemed exclusive of any other rights to which
an Agent seeking indemnification may be entitled under any Bylaw, agreement,
vote of stockholders or disinterested directors, court order or otherwise, both
as to action in his official capacity and as to action in another capacity while
holding such office, since it is the policy of the Corporation that
indemnification of Agents shall be made to the fullest extent permitted by law.
The indemnification provided by this Article shall continue as to a person who
has ceased to be an Agent and shall inure to the benefit of the heirs, executors
and administrators of such a person. All rights to indemnification under this
Article shall be deemed to be provided by a contract between the Corporation and
the Agent who serves in such capacity at any time while these Bylaws and other
relevant provisions of the General Corporation Law of the State of Delaware and
other applicable law, if any, are in effect. Any repeal or modification thereof
shall not affect any rights or obligations then existing.
Section 8. Insurance. The Corporation may purchase and maintain
---------
insurance on behalf of any person who is or was an Agent against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article.
Section 9. Indemnity Fund. Upon resolution passed by the Board, the
--------------
Corporation may establish a trust or other designated account, grant a security
interest or use other means (including, without limitation, a letter of credit),
to ensure the payment of certain of its obligations arising under this Article
and/or agreements which may be entered into between the Company and its officers
and directors from time to time.
Section 10. Constituent Corporations. For the purposes of this
------------------------
Article, references to "the Corporation" include all constituent corporations
absorbed in a consolidation or merger as well as the resulting or surviving
corporation, so that any person who is or was a director or officer of such a
constituent corporation or is or was serving at the request of such constituent
corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same position under the
provisions of this Article with respect to the resulting or surviving
corporation as he would had he served such constituent corporation in the same
capacity.
Section 11. Other Enterprises, Fines, and Serving at Corporation's
------------------------------------------------------
Request. For purposes of this Article, references to "other enterprise" in
-------
Sections 1 and 10 shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as a director or officer of the Corporation which
imposes duties on, or involves services by, such director or officer with
respect to any employee benefit plan, its participants, or beneficiaries; and a
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the Corporation" as referred to in this Article.
Section 12. Indemnification of Other Persons. The provisions of this
--------------------------------
Article VII shall not be deemed to preclude the indemnification of any person
who is not an Agent (as defined in Section 1), but whom the Corporation has the
power or obligation to indemnify under the provisions of the General Corporation
Law of the State of Delaware or otherwise. The Corporation may, in its sole
discretion, indemnify an
11
<PAGE>
employee, trust or other agent as permitted by the General Corporation Law of
the State of Delaware. The Corporation shall indemnify an employee, trustee or
other agent where required by law.
Section 13. Savings Clause. If this Article or any portion thereof
--------------
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each Agent against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, and whether internal or external, including a
grand jury proceeding and an action or suit brought by or in the right of the
Corporation, to the full extent permitted by any applicable portion of this
Article that shall not have been invalidated, or by any other applicable law.
ARTICLE VIII
RECORDS
Section 1. Maintenance and Inspection of Share Register. The
--------------------------------------------
Corporation shall keep at its principal executive office, or at the office of
its transfer agent or registrar, if either be appointed and as determined by
resolution of the Board of Directors, a record of its stockholders, giving the
names and addresses of all stockholders and the number and class of shares held
by each stockholder.
A stockholder or stockholders of the Corporation holding at least 5%
in the aggregate of the outstanding voting shares of the Corporation or who hold
at least l% of such voting shares and have filed a Schedule 14B with the United
States Securities and Exchange Commission relating to the election of directors
of the Corporation may (i) inspect and copy the records of stockholders' names
and addresses and stockholdings during usual business hours on 5 days' prior
written demand on the Corporation, or (ii) obtain from the transfer agent of the
Corporation, on written demand and on the tender of such transfer agent's usual
charges for such list, a list of the stockholders' names and addresses, who are
entitled to vote for the election of directors, and their stockholdings, as of
the most recent record date for which that list has been compiled or as of a
date specified by the stockholder after the date of demand. This list shall be
made available to any such stockholder by the transfer agent on or before the
later of 5 days after the demand is received or the date specified in the demand
as the date as of which the list is to be compiled. The record of stockholders
shall also be open to inspection on the written demand of any stockholder or
holder of a voting trust certificate, at any time during usual business hours,
for a purpose reasonably related to the holder's interests as a stockholder or
as the holder of a voting trust certificate. Any inspection and copying under
this Section I may be made in person or by an agent or attorney of the
stockholder or holder of a voting trust certificate making the demand.
Section 2. Maintenance and Inspection of Bylaws. The Corporation
------------------------------------
shall keep at its principal executive office, the original or a copy of these
Bylaws, as amended, to date, which shall be open to inspection by the
stockholders at all reasonable times during office hours.
12
<PAGE>
ARTICLE IX
GENERAL PROVISIONS
Section 1. Dividends. Subject to limitations contained in the
---------
General Corporation Law of the State of Delaware and the Certificate of
Incorporation, the Board of Directors may declare and pay dividends upon the
shares of capital stock of the Corporation, which dividends may be paid either
in cash, securities of the Corporation or other property.
Section 2. Disbursements. All checks or demands for money and notes
-------------
of the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
-----------
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The Corporation shall have a corporate
--------------
seal in such form as shall be prescribed by the Board of Directors.
Section 5. Record Date. In order that the Corporation may determine
-----------
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix, in advance,
a record date, which shall not be more than 60 days nor less than ten days
before the date of such meeting, nor more than 60 days prior to any other
action. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting. Stockholders on the record date are entitled to notice and
to vote or to receive the dividend, distribution or allotment of rights or to
exercise the rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Corporation after the record date, except as
otherwise provided by agreement or by applicable law.
Section 6. Voting of Stock Owned by the Corporation. The Board of
----------------------------------------
Directors may authorize any person, on behalf of the Corporation, to attend,
vote and grant proxies to be used at any meeting of stockholders of any
corporation (except this Corporation) in which the Corporation may hold stock.
Section 7. Construction and Definitions. Unless the context requires
----------------------------
otherwise, the general provisions, rules of construction and definitions in the
General Corporation law of the State of Delaware shall govern the construction
of these Bylaws.
Section 8. Amendments. Subject to the General Corporation Law of the
----------
State of Delaware, the Certificate of Incorporation and these Bylaws, the Board
of Directors may by majority vote of those present at any meeting at which a
quorum is present amend or repeal these Bylaws, or enact other Bylaws as in
their judgment may be advisable for the regulation of the conduct of the affairs
of the Corporation. Unless otherwise restricted by the Certificate of
Incorporation, these Bylaws may be altered, amended or repealed at any annual
meeting of the stockholders (or at any special meeting thereof duly called for
that purpose) by a majority of the combined voting power of the
13
<PAGE>
then outstanding shares of capital stock of all classes and series of the
Corporation entitled to vote generally in the election of directors, voting as
a single class, provided that, in the notice of any such special meeting,
notice of such purpose shall be given.
Notwithstanding anything to the contrary herein, no amendment shall be
made to the second paragraph of Article III Section 3, Article III Section 7,
the second paragraph of Article III Section 8, Article III Section 12, Article
IV Section 4, Article VI, or Article VII hereof, or this Article IX Section 8,
except with the approval of a majority of the directors designated by Samsung in
accordance with the Stockholder Agreement (or, in the case of amendments to
Article VI or Article VII, to the extent required by law or the fiduciary
obligations of the Board of Directors as provided in Section 4.6 of the
Stockholder Agreement).
14
<PAGE>
N E W S R E L E A S E
EXHIBIT 99.17
[LOGO OF AST COMPUTER]
FOR IMMEDIATE RELEASE
Analyst Contact: Misty Ohmart
(714) 727-7728
AST ANNOUNCES COMPLETION OF SAMSUNG STRATEGIC INVESTMENT
IRVINE, Calif., July 31, 1995 -- Representing the largest international equity
investment by a Korean company in the U.S., AST Research, Inc. (ASTA-NASDAQ)
today announced the completion of the previously-announced $377.5 million
strategic investment in AST by Samsung Electronics Co., Ltd.
The agreement with Samsung results in an investment of 40.25 percent in
AST, as well as other strategic relationships, including component supply and
joint product development. Samsung now holds a total of 17.89 million shares in
AST, which includes 5.82 million shares which were acquired in a tender offer
from AST stockholders at $22 per share.
"The combined resources of AST and Samsung allow us to chart a new course
in strengthening our product offerings, technology developments and value to
customers," said Safi Qureshey, AST chairman and chief executive officer. "Now
that the investment is complete, we can begin to go forward with our strategic
alliance which will allow us to benefit from the strengths of a $14 billion
company that is a world leader in component technologies. We look forward to
working together and bringing the benefits from these efforts to the
marketplace."
The strategic alliance will cover a broad range of commercial
relationships between the parties, including expanded and improved supply of
critical components manufactured by Samsung and used by AST in the manufacture
of personal computers, joint product development, OEM arrangements and cross-
licensing of patents.
--more--
<PAGE>
AST ANNOUNCES COMPLETION OF SAMSUNG STRATEGIC INVESTMENT
2-2-2
Some advantages of the relationship already discussed with Samsung to
date include:
. Joint product design capabilities combining PC and telecommunications
technologies
. Increased DRAM and monitor supplies
. Access to other Samsung component technologies that will be phased into future
products, including an ultra-high-quality active-matrix VGA display that will
be used in the Ascentia notebook family
. Joint purchasing of components
On a strategic point, AST and Samsung will begin working together on
future product developments in order to better leverage the strengths of the two
companies and determine the best future courses of action.
"We are excited and believe this is a tremendous turning point for AST
that is only limited by our imaginations," said Y.S. Kim, Samsung corporate vice
president. "The strengths of Samsung blend well with those of AST.
Collectively, we have the potential to become one of the world's best in
delivering state-of-the-art computer products to our global customers."
Corporate Background
AST Research Inc., a member of the Fortune 500 list of America's largest
industrial and service companies, is one of the world's leading personal
computer manufacturers. The $2.367 billion company develops PC products ranging
from portable systems to superservers sold in more than 100 countries worldwide.
Corporate headquarters is located at 16215 Alton Parkway, P.O. Box 57005,
Irvine, Calif. 92619-7005. Telephone (714) 727-4141 or (800) 876-4278. Fax:
(714) 727-9355.
# # #
