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)
DECEMBER 26, 1996 (DECEMBER 13,1996)
AST RESEARCH, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-13941 95-3525565
(Commission File Number)(IRS Employer Identification No.)
16215 ALTON PARKWAY
IRVINE, CALIFORNIA 92718
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(714) 727-4141
NOT APPLICABLE
(Former name or former address, if changed since last report.)
ITEM 5. OTHER EVENTS
On December 13, 1996, AST Research, Inc. (the "Company") signed a Second
Additional Support Agreement with Samsung Electronics Co. Ltd. ("Samsung") to
provide certain additional financial support to the Company as consideration for
shares of non-voting preferred stock. The additional financial support includes
a guaranty of a $100 million bank line of credit starting December 13, 1996, and
a guaranty of an additional $100 million bank line of credit starting April 1,
1997, both extending through December 31, 1998. The additional financial
support is in addition to the existing Samsung guaranty of a $200 million credit
facility, provided pursuant to an Additional Support Agreement between the
Company and Samsung, dated December 21, 1995. The Second Additional Support
Agreement also includes a one-year extension of the guaranty provided under the
Additional Support Agreement, which results in all guarantees expiring on
December 31, 1998.
As consideration for the support, the Company issued Samsung 500,000 shares of
non-voting preferred stock. The shares are not subject of mandatory redemption,
but each share is redeemable at the Company's option for cash of $100.75 or
13.11 shares of the Company's common stock, beginning in 1999. The preferred
shares carry a quarterly cumulative dividend, beginning in 1999, at the annual
rate of $4.72 per share, with annual increases to the rate of $7.96 per share in
the year 2004 and thereafter.
On December 18, 1996 the Company completed the establishment of bank credit
lines totaling $100 million with three banks, which represents the initial $100
million bank credit line that is guaranteed by the Second Additional Support
Agreement. In addition, on December 24, 1996, the Company announced that it
renewed its present $200 million credit line with a consortium of nine banks.
The result is current credit facilities that provide, in the aggregate, $300
million in credit to the Company that is guaranteed by Samsung. The Company
further announced that Samsung has exercised its option to purchase a first
group of intellectual properties pursuant to the Intellectual Property
Assignment Agreement dated June 27, 1996 for a payment of $10 million. The
payment is due from Samsung to the Company 45 days from the effective date of
the agreement, which is December 17, 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit
Number Description
99.1 Press release issued by the Registrant on December 16, 1996,
announcing the Second
Additional Support Agreement, extension of the Additional Support Agreement,
and the negotiation of a $100 million line of credit that is part of the Second
Additional Support Agreement.
99.2 Second Additional Support Agreement between AST Research Inc., and
Samsung Electronics Co., Ltd. dated December 13, 1996.
99.3 Revolving line of credit agreement dated December 12, 1996 between AST
Research and ABN AMRO Bank, N.V.
99.4 Revolving line of credit agreement dated December 13, 1996 between AST
Research and Bank of America NT&SA.
99.5 Revolving line of credit agreement dated December 13, 1996 between AST
Research and Societe General.
99.6 Second Amendment to Credit Agreement dated December 13, 1996 among AST
Research, Inc., Bank of America NT & SA as agent and the other
financial institutions party hereto.
99.7 Press release issued by the Registrant on December 19, 1996,
announcing the renewal of the Company's existing $200 million
credit line and Samsung's exercise of its option to purchase
intellectual properties.
99.8 First Intellectual Property Option Exercise dated December 17, 1996
between AST Research and Samsung Electronics Company Limited.
SIGNATURES
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.
_______________________________________
(Registrant)
By
Won S. Yang
Senior Vice President
and Chief Financial Officer (Acting)
Date: December 26, 1996
ITEM 5. OTHER EVENTS
On December 13, 1996, AST Research, Inc. (the "Company") signed a Second
Additional Support Agreement with Samsung Electronics Co. Ltd. ("Samsung") to
provide certain additional financial support to the Company as consideration for
shares of non-voting preferred stock. The additional financial support includes
a guaranty of a $100 million bank line of credit starting December 13, 1996, and
a guaranty of an additional $100 million bank line of credit starting April 1,
1997, both extending through December 31, 1998. The additional financial
support is in addition to the existing Samsung guaranty of a $200 million credit
facility, provided pursuant to an Additional Support Agreement between the
Company and Samsung, dated December 21, 1995. The Second Additional Support
Agreement also includes a one-year extension of the guaranty provided under the
Additional Support Agreement, which results in all guarantees expiring on
December 31, 1998.
As consideration for the support, the Company issued Samsung 500,000 shares of
non-voting preferred stock. The shares are not subject of mandatory redemption,
but each share is redeemable at the Company's option for cash of $100.75 or
13.11 shares of the Company's common stock, beginning in 1999. The preferred
shares carry a quarterly cumulative dividend, beginning in 1999, at the annual
rate of $4.72 per share, with annual increases to the rate of $7.96 per share in
the year 2004 and thereafter.
On December 18, 1996 the Company completed the establishment of bank credit
lines totaling $100 million with three banks, which represents the initial $100
million bank credit line that is guaranteed by the Second Additional Support
Agreement. In addition, on December 24, 1996, the Company announced that it
renewed its present $200 million credit line with a consortium of nine banks.
The result is current credit facilities that provide, in the aggregate, $300
million in credit to the Company that is guaranteed by Samsung. The Company
further announced that Samsung has exercised its option to purchase a first
group of intellectual properties pursuant to the Intellectual Property
Assignment Agreement dated June 27, 1996 for a payment of $10 million. The
payment is due from Samsung to the Company 45 days from the effective date of
the agreement, which is December 17, 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit
Number Description
99.1 Press release issued by the Registrant on December 16, 1996,
announcing the Second Additional Support Agreement, extension of
the Additional Support Agreement, and the negotiation of a $100
million line of credit that is part of the Second Additional
Support Agreement.
99.2 Second Additional Support Agreement between AST Research Inc., and
Samsung Electronics Co., Ltd. dated December 13, 1996.
99.3 Revolving line of credit agreement dated December 12, 1996 between AST
Research and ABN AMRO Bank, N.V.
99.4 Revolving line of credit agreement dated December 13, 1996 between AST
Research and Bank of America NT&SA.
99.5 Revolving line of credit agreement dated December 13, 1996 between AST
Research and Societe General.
99.6 Second Amendment to Credit Agreement dated December 13, 1996 among AST
Research, Inc., Bank of America NT & SA as agent and the other
financial institutions party hereto.
99.7 Press release issued by the Registrant on December 19, 1996,
announcing the renewal of the Company's existing $200 million
credit line and Samsung's exercise of its option to purchase
intellectual properties.
99.8 First Intellectual Property Option Exercise dated December 17, 1996
between AST Research and Samsung Electronics Company Limited.
SIGNATURES
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.
_______________________________________
(Registrant)
By /s/ WON S. YANG
Won S. Yang
Senior Vice President
and Chief Financial Officer (Acting)
Date: December 26, 1996
FOR IMMEDIATE RELEASE
Media & Analyst Contact: Emory Epperson
(714) 727-7958
AST STRENGTHENS SAMSUNG RELATIONSHIP
WITH NEW $200 MILLION CREDIT GUARANTEE AGREEMENT
AND EXTENDS PREVIOUS $200 MILLION CREDIT GUARANTEE AGREEMENT
IRVINE, Calif., Dec. 16, 1996 -- AST Research Inc. (ASTA-NASDAQ) today announced
it has finalized the previously announced new $200 million, two-year bank credit
guarantee agreement with Samsung Electronics. The company also announced for
the first time that it has received a one-year extension of a previous $200
million bank credit guarantee agreement provided by Samsung, which extends it
from Dec. 31, 1997 through Dec. 31, 1998.
The result is that Samsung is providing guarantees for a total of $300
million in bank credit for AST effective Dec. 13, 1996, increasing to $400
million on April 1, 1997 and continuing at the full $400 million level through
Dec. 31, 1998.
In consideration for the support agreement, AST has granted Samsung 500,000
shares of non-voting preferred stock. The AST preferred stock is redeemable
beginning in 1999, at AST's option, for AST common stock or cash. Each share of
AST preferred stock may then be redeemed by AST for approximately 13 shares of
AST common stock or $100.75.
AST further announced that it is in the process of renewing its present
$200 million credit line with a consortium of nine banks, led by Bank of
America, with such credit line extending through late December 1997. In
addition, AST has negotiated or is in the process of negotiating separate
additional credit lines in the aggregate amount of $100 million from Bank of
America, ABN Amro N.V. and Societe Generale, effective in December 1996. The
result is current credit facilities providing, in the aggregate, $300 million in
credit to AST. Each of the credit lines is guaranteed by Samsung. Funds from
the credit lines will be used to repay the previously-announced $50 million
short-term loan from Samsung.
Samsung's ownership of AST common stock remains unchanged at approximately
46 percent. Samsung also holds a five-year option to purchase up to 4.4 million
shares of AST common stock at one-cent per share. If the option is exercised in
full, Samsung's ownership position would increase to approximately 49.6 percent.
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 company develops a broad spectrum of desktop,
mobile and server PC products that are sold in more than 100 countries
worldwide. AST systems meet a wide range of customer needs, ranging from
corporate business applications to advanced home and home office use. 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.
Information about AST and its products can be found on the World Wide Web at
http://www.ast.com.
# # #
SECOND
ADDITIONAL SUPPORT AGREEMENT
This Second Additional Support Agreement (the "Agreement") is entered
into as of December 13, 1996 by and between Samsung Electronics Co., Ltd., a
Korean corporation ("SEC"), and AST Research, Inc., a Delaware corporation
("AST"). Capitalized terms used in this Agreement and not otherwise defined
herein shall have the meanings ascribed to them in the Stock Purchase Agreement
referred to in recital A immediately below.
A. SEC and AST 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 SEC acquired certain
shares of AST's Common Stock and became a significant stockholder of AST.
B. SEC and AST entered into that certain Additional Support
Agreement dated as of December 21, 1995 pursuant to which SEC extended certain
vendor credit to AST and guaranteed bank credit lines for the benefit of AST in
the amount of $200 million (the "First Guaranties").
E. AST has requested additional support from SEC to further enhance
its business prospects and competitive position and SEC desires to provide such
support in consideration of the issuance of the Preferred Stock to SEC as herein
provided.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, and covenants set forth in this Agreement, SEC and
AST hereby agree as follows:
ARTICLE 1
ADDITIONAL GUARANTY
1.1 Additional Guaranty. In addition to the amounts guarantied by
the First Guaranties, SEC shall, as promptly as practicable after receipt of a
request from AST, execute and deliver one or more guaranties (the "Additional
Guaranty") of a line or lines of credit from one or more banks or other
financial institutions for the benefit of AST in an aggregate amount not to
exceed $200 million outstanding at any one time; provided, however, that the
obligation to provide such Additional Guaranty shall not extend beyond December
31, 1998, and provided further that the terms of such Additional Guaranty shall
not differ materially from the terms of the First Guaranties or other forms of
guaranties previously submitted to SEC by AST.
1.2 Extension of First Guaranties. Article 2.1 of the Additional
Support Agreement stating that the Guaranty provided therein shall not extend
beyond December 31, 1997 is hereby amended to instead state that the Guaranty
provided therein shall not extend beyond December 31, 1998. SEC hereby consents
to the extension until not later than December 31, 1998 of the indebtedness
guaranteed by the First Guaranties, and SEC shall execute and deliver such
consents, acknowledgments or other documents as the beneficiaries of the First
Guaranties shall reasonably request to confirm SEC's consent to such extension.
ARTICLE 2
PREFERRED STOCK
2.1 Issuance. Concurrently with delivery by SEC of the first
Additional Guaranty requested by AST, and as a condition to SEC's obligation to
execute and deliver such Additional Guaranty, AST shall issue to SEC 500,000
shares of Series A Redeemable Preferred Stock (the "Preferred Stock"), having
the rights, powers, preferences and privileges set forth on Exhibit A attached
hereto.
2.2 Conditions to Delivery of Preferred Stock. The obligation of AST
to issue and deliver the Preferred Stock to SEC is subject to the following
conditions:
(a) Such delivery would not in any material respect violate, or
otherwise cause the material violation of, any law or regulation (including any
rules or regulations of the NASDAQ National Market or any other principal stock
exchange on which the Common Stock of AST is at the time listed or quoted)
applicable to the issuance and delivery of the Preferred Stock; and
(b) There shall be no preliminary or permanent injunction or
other order by any court of competent jurisdiction preventing or prohibiting
such issuance and delivery of the Preferred Stock.
2.3 Investment Intent. SEC represents and warrants to AST that the
Preferred Stock will be acquired by SEC solely for its own account, for
investment purposes only, and with no present intention of distributing, selling
or otherwise disposing of such Preferred Stock. SEC understands that the
Preferred Stock will not have been registered under the Securities Act and that
any disposition thereof by SEC must be registered under the Securities Act or
exempt from such registration.
2.4 Sophistication. SEC represents and warrants to AST that SEC is
able to bear the economic risk of an investment in the Preferred Stock and can
afford to sustain a total loss on such investment, and has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the proposed investment and therefore has the capacity
to protect its own interests in connection with the purchase of the Preferred
Stock.
2.5 No Transfer. SEC shall not sell or otherwise transfer any shares
of the Preferred Stock except to an Affiliate of SEC which is bound by the
provisions of the Stockholder Agreement dated July 31, 1995, as subsequently
amended, between AST and SEC.
ARTICLE 3
COMPLIANCE WITH LAW
3.1 Consents. Each of the parties represents on its own behalf to the
other party that it has obtained all consents required of it under applicable
laws, rules or regulations (including, in the case of SEC, those of Korea) for
the execution, delivery and performance of its obligations under this Agreement,
that such execution, delivery and performance does not violate such laws, rules
or regulations and that this Agreement is legal, valid and binding on such party
in accordance with its terms.
ARTICLE 4
MISCELLANEOUS
4.1 Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by, construed under and enforced in accordance with, the laws of the
State of Delaware without regard to its conflict-of-laws principles. SEC and
AST 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 Delaware or the Federal courts
of the United States of America sitting in Delaware, (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 4.3. Nothing in the proceeding 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.
4.2 Expenses. Each of the parties shall pay its own expenses
incurred in connection with the negotiation and preparation of this Agreement
and the effectuation of the transactions contemplated hereby including, without
limitation, all fees and disbursements of its respective legal counsel,
advisors, and accountants.
4.3 Notices. In case of any event or circumstance giving rise to an
obligation of SEC or AST to provide notice hereunder, such notice shall be
delivered within the time specifically set forth herein or, if no such time is
specified, then as promptly as practicable after becoming aware of such event or
circumstance. Any notice required or permitted to be given under this Agreement
shall be written, and may be given by personal delivery, by cable, telecopy,
telex or telegram (with a confirmation copy mailed as follows), by Federal
Express, United Parcel Service, DHL, or other reputable commercial delivery
service, or by registered or certified mail, first-class postage prepaid, return
receipt requested. Notice shall be deemed given upon actual receipt. Mailed
notices shall be addressed as follows, but each party may change address by
written notice in accordance with this paragraph.
To AST: AST Research, Inc.
16215 Alton Parkway
Irvine, California 92718
Attention: Chief Executive Officer
with a copy to: Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Los Angeles, CA 90071-3144
Attention: Thomas C. Janson, Jr., Esq.
To SEC: Samsung Electronics Co., Ltd.
Samsung Main Building
250, 2-Ka, Taepyung-Ro, Chung-Ku
Seoul, Korea 100-742
Attention: General Legal Counsel
with a copy to: Gibson, Dunn & Crutcher
4 Park Plaza, Suite 1700
Irvine, CA 92714
Attention: Thomas D. Magill, Esq.
4.4 Waiver. Each party hereto may in its sole discretion (i) extend
the time for the performance of any of the obligations or other acts of the
other party hereunder, (ii) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document, certificate
or writing delivered pursuant hereto or (iii) waive compliance by the other
party with any of the agreements or conditions contained herein. No term or
provision hereof shall be deemed waived and no breach hereof excused unless such
waiver or consent shall be in writing and signed by the party claimed to have
waived or consented. No waiver hereunder shall apply or be construed to apply
beyond its expressly stated terms. No failure to exercise and no delay in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, and no single or partial exercise of any right, remedy, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. No failure to insist
upon strict performance of any term or provision of this Agreement, or to
exercise any right hereunder, shall be construed as a waiver or as a
relinquishment of such term, provision, or right.
4.5 SEC Subsidiaries; Successors, Assignment, and Parties in
Interest. This Agreement and the rights hereunder may not be assigned by SEC or
AST without the prior written consent of the other party, which may be given or
withheld in the other party's discretion, except that SEC may (i) exercise any
or all rights and/or fulfill any or all obligations under this Agreement in
conjunction with or through one or more wholly owned subsidiaries of SEC; and/or
(ii) assign this Agreement to an Affiliate or Affiliates of SEC; provided that
SEC shall remain liable for all of its obligations under this Agreement not
fully performed by its subsidiaries or assignees. This Agreement shall be
binding upon and inure solely to the benefit of SEC and AST and their respective
successors and permitted assigns, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
4.6 Entire Agreement. This Agreement constitutes the entire
agreement between SEC and AST with respect to the subject matter hereof and the
transactions contemplated hereby and supersedes all prior or contemporaneous,
written or oral agreements or understandings with respect thereto (including
without limitation all term sheets). The parties acknowledge that their
agreements hereunder were not procured through representations or agreements not
set forth herein or therein.
4.7 Amendment. This Agreement may be amended only by a written
instrument executed and delivered by a duly authorized officer of SEC and a duly
authorized officer of AST.
4.8 Cumulation of Remedies. All remedies available to any party for
breach or non-performance of this Agreement are cumulative and not exclusive of
any rights, remedies, powers or privileges provided by law, and may be exercised
concurrently or separately, and the exercise of any one remedy shall not be
deemed an election of such remedy to the exclusion of other remedies.
4.9 Fair Construction. This Agreement shall be deemed the joint work
product of SEC and AST without regard to the identity of the draftsperson, and
any rule of construction that a document shall be interpreted or construed
against the drafting party shall not be applicable.
4.10 Counterparts. This Agreement 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 Agreement as of the date first above written.
AST RESEARCH, INC., SAMSUNG ELECTRONICS CO., LTD.,
a Delaware corporation a Korean corporation
By: /s/ RANDALL G. WICK By: /s/ HYEON GON KIM
Name: Randall G. Wick Name: Hyeon Gon Kim
Title: Assistant Secretary Title: Executive Vice President
CERTIFICATE OF DESIGNATIONS
OF THE
SERIES A REDEEMABLE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
OF
AST RESEARCH, INC.
______________
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
______________
The undersigned DOES HEREBY CERTIFY that the following resolution was duly
adopted by the Board of Directors of AST Research, Inc., a Delaware Corporation
(the "CORPORATION"), at a meeting duly convened and held on December 12, 1996,
at which a quorum was present and acting throughout:
RESOLVED, that pursuant to the authority expressly granted to and vested in
the Board of Directors of the Corporation (the "BOARD OF DIRECTORS") by
Article 4(b) of the Restated Certificate of Incorporation of the Corporation
dated July 31, 1995 (the "CERTIFICATE OF INCORPORATION"), the Board of Directors
hereby authorizes and approves the creation and issuance of a new series of
Preferred Stock of the Corporation upon the terms and conditions set forth in
these resolutions, which fix the powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations and restrictions of the shares of such new series, in addition to
those set forth in the Certificate of Incorporation, as follows:
1. SERIES A PREFERRED STOCK. The new series of Preferred Stock of the
Corporation authorized hereby shall be designated the Series A Redeemable
Preferred Stock (the "SERIES A PREFERRED STOCK"), and shall consist of Five
Hundred Thousand (500,000) shares, par value $.01 per share; provided, however,
that the Board of Directors, or, to the extent permitted by applicable law, a
duly authorized committee thereof, may decrease (but not increase) the number of
authorized shares in such series subsequent to the date of original issuance of
shares in such series (the "ORIGINAL ISSUANCE DATE"), but not below the number
of shares of such series then outstanding. The Series A Preferred Stock is
issuable solely in whole shares that shall entitle the holder thereof to
exercise the voting rights, to participate in the distributions and to have the
benefit of all other rights of holders of Series A Preferred Stock as set forth
herein and in the Certificate of Incorporation. For purposes of this
Certificate of Designations, the terms "PREFERRED STOCK" and "COMMON STOCK"
shall have the meanings ascribed to them in the Certificate of Incorporation in
effect as of the Original Issuance Date.
2. DIVIDENDS.
(A) PAYMENT OF DIVIDENDS. No dividends or other distributions shall
accrue or be payable on or in respect of the Series A Preferred Stock prior to
January 1, 1999 (the "COMMENCEMENT DATE"). Dividends shall commence accruing on
the Series A Preferred Stock on the Commencement Date, and unless and until all
of the Series A Preferred Stock has been exchanged or redeemed by the
Corporation pursuant to Section 5 or Section 6, the holders of Series A
Preferred Stock shall be entitled to receive cash dividends, out of any funds
legally available therefor, prior and in preference to any declaration or
payment of any dividend (other than a dividend payable in Common Stock of the
Corporation) on the Common Stock and to any declaration or payment of any
dividend on any other series of Preferred Stock of the Corporation ranking, as
to dividends and distributions, junior to the Series A Preferred Stock (other
than dividends payable in Common Stock or Preferred Stock ranking, as to
dividends and distributions, junior to the Series A Preferred Stock), at the
respective annual rates per share of Series A Preferred Stock set forth below
(as adjusted for any stock dividends, combinations or splits with respect to
such shares), payable quarterly on the last day of March, June, September, and
December each year commencing on March 31, 1999:
Calendar Year Annual Dividend
1999 $4.72
2000 5.36
2001 6.00
2002 6.64
2003 7.32
2004 7.96
and
thereafter
Such dividends shall accrue on each share and accrue from day to day,
whether or not earned or declared, and shall be cumulative so that if such
dividends with respect to any previous quarterly dividend period at said rate
per share per annum shall not have been paid on or declared and set apart for
all shares of Series A Preferred Stock at the time outstanding, the deficiency
shall be fully paid on or declared and set apart for such shares before the
Corporation makes any distribution (as such term is hereinafter defined) to the
holders of Common Stock or any other series of Preferred Stock ranking, as to
dividends and distributions, junior to the Series A Preferred Stock. The term
"DISTRIBUTION" as used in this Section 2(a) shall mean the transfer of cash or
property without consideration, whether by way of dividend or otherwise (except
a dividend in shares of the Corporation that are junior to the Series A
Preferred Stock as to dividends and distributions and except as contemplated by
this Certificate of Designations) to the holders of shares of capital stock of
the Corporation, in such holders' capacity as such, or the purchase or
redemption of shares of the Corporation for cash or property (except for the
repurchase of Common Stock from employees, directors, consultants and advisers
pursuant to the terms of stock purchase agreements under which such shares are
issued), including any such transfer, purchase or redemption by a subsidiary of
the Corporation. The time of any distribution by way of dividend shall be the
date of declaration thereof and the time of any distribution by purchase or
redemption of shares shall be the day cash or property is transferred by the
Corporation, whether or not pursuant to a contract of an earlier date; provided
that, where a negotiable debt security is issued in exchange for shares, the
time of the distribution is the date when the Corporation acquires the shares in
such exchange.
(B) PRIORITY AS TO DIVIDENDS. No dividends shall be declared or paid
or set apart for payment on Common Stock or on Preferred Stock of any series
ranking, as to dividends and distributions, junior to the Series A Preferred
Stock, unless at the time of such declaration or payment or setting apart for
payment all dividends to which holders of Series A Preferred Stock are entitled
pursuant to Section 2(a) have been or contemporaneously are declared and paid
(or declared and a sum sufficient for the payment thereof set apart for such
payment).
3. LIQUIDATION PREFERENCE.
(A) SERIES A LIQUIDATION PREFERENCE. In the event of any Liquidation
Event (as defined below), either voluntary or involuntary, the holders of Series
A Preferred Stock shall be entitled to receive by reason of their ownership
thereof, prior and in preference to any distribution of any of the assets of the
Corporation to the holders of Common Stock, or to any other series of Preferred
Stock that may be issued by the Corporation from time to time ranking, as to
liquidation, junior to the Series A Preferred Stock, an amount per share in cash
equal to the sum of (i) $65.00 for each outstanding share of Series A Preferred
Stock, as adjusted for any stock dividends, combinations or splits with respect
to such share plus (ii) an amount equal to all accrued but unpaid dividends
(whether or not declared) on each such share (the "Liquidation Preference").
(B) INSUFFICIENT FUNDS. If, in connection with any Liquidation
Event, the Corporation's cash funds legally available for distribution to the
holders of the Series A Preferred Stock and any shares of the Corporation's
Preferred Stock ranking on a parity with the Series A Preferred Stock as to
liquidation are not sufficient to pay the full Series A Preferred Stock
liquidation preference in cash, then any deficiency in the cash payment of the
Series A Preferred Stock liquidation preference may be paid in non-cash assets
of the Corporation legally available for distribution to the holders of Series A
Preferred Stock. If the cash and non-cash assets legally available for
distribution to the holders of the Series A Preferred Stock shall be
insufficient to permit the full payment to such holders of the full Series A
Preferred Stock liquidation preference, then any cash and non-cash assets of the
Corporation legally available for distribution shall be distributed ratably
among the holders of the Series A Preferred Stock in proportion to the number of
such shares owned by each such holder. In connection with the distribution of
any non-cash assets in payment of the Series A Preferred Stock liquidation
preference, the non-cash assets will be valued at their fair market value, as
determined by independent appraisal by an appraiser selected in good faith by
the Board of Directors.
(C) LIQUIDATION EVENT. For purposes of Section 3, a "LIQUIDATION
EVENT" shall mean any liquidation, dissolution, or winding up of the
Corporation. Neither a consolidation or merger of the Corporation with or into
another Corporation, nor a merger of any other Corporation with or into the
Corporation, nor the sale of all or substantially all of the Corporation's
property or business (other than in connection with a winding up of its
business) will be considered a Liquidation Event for purposes of this
Certificate of Designations.
4. NO VOTING RIGHTS. The holders of Series A Preferred Stock will not
have any voting rights except such rights as from time to time are required by
the Delaware General Corporation Law. Any shares of Series A Preferred Stock
held by the Corporation or any subsidiary of the Corporation shall not have
voting rights hereunder and shall not be counted in determining the presence of
a quorum or in calculating any percentage of shares under this Section 4.
5. EXCHANGE BY CORPORATION.
(A) EXCHANGE RATIO AND DIVIDENDS. At any time, and from time to
time, on or after the Commencement Date, the Corporation may, at the sole option
of the Independent Directors (as defined in Section 5(f)), exchange (an
"EXCHANGE"), in whole or in part, each share of the Series A Preferred Stock for
thirteen and eleven hundredths (13.11) fully paid and nonassessable shares of
the Corporation's Common Stock (the "EXCHANGE RATIO"). At the time of any
Exchange, the Corporation shall pay in cash all accrued but unpaid dividends
(whether or not declared) on such exchanged shares to and as of the Exchange
Date (as defined in Section 5(c)) to the exchanging holders thereof.
(B) PRO RATA EXCHANGE. In the event of any Exchange of only a part
of the then outstanding Series A Preferred Stock, the Corporation shall effect
such Exchange pro rata among the outstanding shares of Series A Preferred Stock
according to the number of shares then held by each holder thereof.
(C) MECHANICS OF EXCHANGE. In the event of any Exchange pursuant to
this Section 5, at least twenty (20) but no more than sixty (60) days prior to
the date fixed by the Independent Directors (an "EXCHANGE DATE"), written notice
shall be mailed, first class postage prepaid, to each holder of record (at the
close of business on the business day next preceding the day on which notice is
mailed) of the Series A Preferred Stock to be exchanged, at the address last
shown on the records of the Corporation for such holder or given in writing by
the holder to the Corporation for the purpose of notice, notifying such holder
of the Exchange to be effected, specifying the number of shares of Series A
Preferred Stock to be exchanged by such holder, the Exchange Date, the number of
shares of Common Stock to be received by the holder in such Exchange, the amount
of cash for any fractional share and for all accrued but unpaid dividends to be
paid to the holder, and calling upon such holder to surrender to the Corporation
at its principal executive office or the office of its transfer agent, such
holder's certificate or certificates representing the shares of Series A
Preferred Stock to be exchanged (the "EXCHANGE NOTICE"). On or after the
Exchange Date, each holder of Series A Preferred Stock to be exchanged shall
surrender to the Corporation the certificate or certificates representing such
shares, in the manner and at the place designated in the Exchange Notice, and
each surrendered certificate shall be canceled. In the event less than all the
shares represented by any such Series A Preferred Stock certificate are
exchanged, a new certificate shall be issued representing the unexchanged
shares.
The Corporation shall, as soon as practicable after each Exchange,
issue and deliver to the exchanging holder of Series A Preferred Stock or to the
nominee or nominees of such holder, a certificate or certificates for the number
of shares of Common Stock to which such holder shall be entitled as aforesaid.
Such exchange shall be deemed to have been made immediately upon the opening of
business on the Exchange Date, and the person or persons entitled to receive the
shares of Common Stock issuable upon such exchange shall be treated for all
purposes as the record holder or holders of such shares of Common Stock
immediately upon the opening of business on such Exchange Date. From and after
the opening of business on the Exchange Date, unless there shall have been a
failure by the Corporation to effectuate an Exchange, all rights of the holders
of such exchanged shares as holders of Series A Preferred Stock (except the
right to receive the appropriate number of shares of Common Stock and cash for
any fractional share and for accrued but unpaid dividends in exchange for the
surrender of their certificate or certificates), shall cease with respect to
such shares of Series A Preferred Stock, and such shares shall not thereafter be
transferred on the books of the Corporation or be deemed to be outstanding for
any purposes whatsoever.
(D) NO FRACTIONAL SHARES. No fractional share of Common Stock shall
be issued upon any Exchange of Series A Preferred Stock pursuant to the
provisions of this Section 5. In lieu of any fractional share to which a holder
of Series A Preferred Stock would otherwise be entitled, the Corporation shall
pay in cash the Fair Market Value (as defined below) of any such fractional
share of Common Stock. The "FAIR MARKET VALUE" of a fraction of a share of
Common Stock shall be an amount equal to the same fraction of the closing price
of the Common Stock on the last trading day prior to the Exchange Date on the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation System (the "NMS"), or such other national securities
exchange or quotation system as such Common Stock is then listed or, if not so
listed or quoted, the average of the closing bid and asked prices on such
trading date. The determination of the fractional share for which a cash
payment will be made shall be determined on the basis of the total number of
shares of the Series A Preferred Stock the holder is at the time required to
exchange into Common Stock and the number of shares of Common Stock issuable
upon such aggregate Exchange.
(E) TRANSFER TAXES. The Corporation shall pay any and all United
States issue or other taxes that may be payable in respect of any issue or
delivery of shares of Common Stock upon exchange of the Series A Preferred
Stock. The Corporation shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue or delivery of
Common Stock (or other securities or assets) in a name other than that in which
the shares of Series A Preferred Stock so exchanged were registered, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of such tax or has established, to
the satisfaction of the Corporation, that such tax has been paid.
(F) INDEPENDENT DIRECTOR. For purposes of this Certificate of
Designations, "INDEPENDENT DIRECTOR" means each director of the Corporation who
is not currently (i) a holder of Series A Preferred Stock nor (ii) apart from
such directorship, an affiliate, officer, director, employee, agent, principal
stockholder, consultant or partner of any holder of Series A Preferred Stock or
the Corporation or any affiliate of either of them or of any entity that was
dependent on a holder of Series A Preferred Stock or the Corporation or any
affiliate of either of them for more than five percent (5%) of its revenues or
earnings in its most recent fiscal year, and who was not at any time in the past
an affiliate, officer, employee, director, principal stockholder or partner of a
holder of Series A Preferred Stock or the Corporation or any affiliate of either
of them, and does not have, in the good faith judgment of the then existing
Independent Directors, any other direct or indirect interest in or relationship
with a holder of Series A Preferred Stock or the Corporation or any of their
respective affiliates so as to be reasonably likely to cause such person to have
any interest in any transaction with a holder of Series A Preferred Stock or the
Corporation or any of their respective affiliates.
(G) EXCHANGE RATIO AND SHARE ADJUSTMENTS.
(I) SUBDIVISION, COMBINATION OR RECLASSIFICATION. In the event
that the Corporation at any time or from time to time after the Original
Issuance Date shall declare or pay, without consideration, any dividend on the
Common Stock payable in Common Stock or in any right to acquire Common Stock for
no consideration, or shall effect a subdivision of the outstanding Common Stock
into a greater number of shares of Common Stock (by stock split,
reclassification or otherwise than by payment of a dividend in Common Stock or
in any right to acquire Common Stock), or in the event the outstanding shares of
Common Stock shall be combined or consolidated, by reclassification, reverse
stock split or otherwise, into a lesser number of shares of Common Stock, then
the Exchange Ratio in effect immediately prior to such event shall, concurrently
with the effectiveness of such event, be proportionately decreased or increased,
as appropriate. In the event that the Corporation shall declare or pay, without
consideration, any dividend on the Common Stock payable in any right to acquire
Common Stock for no consideration, then the Corporation shall be deemed to have
made a dividend payable in Common Stock in an amount of shares equal to the
maximum number of shares issuable upon exercise of such rights to acquire Common
Stock.
(II) NO MINOR ADJUSTMENTS TO EXCHANGE RATIO. No adjustment of
the Exchange Ratio shall be made pursuant to this Section 5(g) in an amount less
than one hundredth (0.01) of a share. Adjustment amounts under one hundredth
(0.01) of a share shall be carried forward and taken into account in any
subsequent adjustment calculations.
(III) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of
each adjustment or readjustment of the Exchange Ratio pursuant to this Section
5(g), the Corporation, at its expense, shall within a reasonable time compute
such adjustment or readjustment in accordance with the terms hereof and prepare
and furnish to each holder of Series A Preferred Stock a certificate setting
forth (A) such adjustment or readjustment showing in detail the facts upon which
such adjustment or readjustment is based, (B) the Exchange Ratio at the time in
effect, and (C) the number of shares of Common Stock and the amount, if any, of
other property which at the time would be received upon the exchange of a share
of Series A Preferred Stock.
(H) DISTRIBUTIONS. In the event the Corporation shall declare a
distribution payable in securities of other persons, in evidences of
indebtedness issued by the Corporation or other persons or in assets (excluding
cash dividends) or in rights not referred to in Section 5(g)(i), then, in each
such case for the purpose of this Section 5(h), the holders of Series A
Preferred Stock shall be entitled to a proportionate share of any such
distribution as though they were the holders of the number of shares of Common
Stock of the Corporation into which their shares of Series A Preferred Stock are
exchangeable pursuant to Section 5 as of the record date fixed for the
determination of the holders of Common Stock of the Corporation entitled to
receive such a distribution.
(I) RECAPITALIZATIONS. If at any time or from time to time there
shall be a recapitalization of the Common Stock (other than a subdivision,
combination or reclassification as set forth in Section 5(g)(i)), provision
shall be made so that the holders of Series A Preferred Stock shall thereafter
be entitled to receive, upon exchange of their Series A Preferred Stock, the
number of shares of stock or other securities or property of the Corporation, or
otherwise, to which a holder of Series A Preferred Stock would have been
entitled in such recapitalization if such holder's shares had been exchanged
into Common Stock immediately prior to such recapitalization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 5 with respect to the rights of the holders of Series A Preferred
Stock after the recapitalization to the end that the provisions of this Section
5 (including adjustment of the Exchange Ratio, if applicable, then in effect and
the number of shares receivable upon exchange of Series A Preferred Stock) shall
be applicable after that event as nearly equivalent as may be practicable.
6. REDEMPTION BY CORPORATION. At any time, and from time to time, on or
after the Commencement Date, the Corporation may, at the option of the
Independent Directors, redeem for cash, in whole or in part, the Series A
Preferred Stock (a "REDEMPTION"), as follows:
(A) REDEMPTION PRICE. The redemption price per share for the Series
A Preferred Stock shall be one hundred dollars and seventy five cents ($100.75)
(the "REDEMPTION PRICE"). At the time of any Redemption, the Corporation shall
pay in cash all accrued but unpaid dividends (whether or not declared) on such
redeemed shares to and as of the Redemption Date (as defined in Section 6(c)) to
the redeeming holders thereof.
(B) PRO RATA REDEMPTION. In the event of any Redemption of only a
part of the then outstanding Series A Preferred Stock, the Corporation shall
effect such Redemption pro rata among the outstanding shares of Series A
Preferred Stock according to the number of shares then held by each holder
thereof.
(C) MECHANICS OF REDEMPTION. In the event of any Redemption pursuant
to this Section 6, at least twenty (20) but no more than sixty (60) days prior
to the date fixed by the Independent Directors for such Redemption of Series A
Preferred Stock (a "REDEMPTION DATE"), written notice shall be mailed, first
class postage prepaid, to each holder of record (at the close of business on the
business day next preceding the day on which notice is mailed) of the Series A
Preferred Stock to be redeemed, at the address last shown on the records of the
Corporation for such holder or given in writing by the holder to the Corporation
for the purpose of notice, notifying such holder of the Redemption to be
effected, specifying the number of shares of Series A Preferred Stock to be
redeemed, the Redemption Date, the Redemption Price, and calling upon such
holder to surrender to the Corporation at its principal executive office or the
office of its transfer agent, such holder's certificate or certificates
representing the shares of Series A Preferred Stock to be redeemed (the
"REDEMPTION NOTICE"). On or after the Redemption Date, each holder of Series A
Preferred Stock to be redeemed shall surrender the certificate or certificates
representing such shares, in the manner and at the place designated in the
Redemption Notice, and each surrendered certificate shall be canceled. Not less
than three (3) days prior to the Redemption Date, the Corporation shall deposit,
from funds legally available therefor, the Redemption Price for the shares
designated for redemption with a bank or trust Corporation having aggregate
capital and surplus in excess of $20,000,000 as a trust fund for the benefit of
the holder of the shares designated for Redemption. At such time, the
Corporation shall also deposit irrevocable instruction and authority to such
bank or trust Corporation to pay, on or after the Redemption Date, the deposited
Redemption Price of the Series A Preferred Stock to the holder thereof upon
surrender of its certificate(s).
If funds are available on the Redemption Date, then whether or not the
share certificates are surrendered for payment of the Redemption Price, the
shares shall no longer be outstanding and the holder thereof shall cease to be a
shareholder of the Corporation with respect to the shares redeemed on and after
the Redemption Date and shall be entitled only to receive the Redemption Price
without interest upon surrender of the share certificate. If less than all the
shares represented by one share certificate are to be redeemed, the Corporation
shall issue a new share certificate for the shares not redeemed.
7. NO IMPAIRMENT. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this Certificate of Designations.
8. RESTRICTIONS AND LIMITATIONS. Without the vote or written consent of
the holders of at least eighty percent (80%) of the then outstanding shares of
Series A Preferred Stock, the Corporation shall not amend its Certificate of
Incorporation (including this Certificate of Designations) or its Bylaws if such
amendment would adversely affect any of the rights, preferences or privileges
provided for therein or herein for the benefit of the shares of Series A
Preferred Stock.
9. STATUS OF ACQUIRED STOCK. Shares of Series A Preferred Stock acquired
by the Corporation by reason of exchange or otherwise will be restored to the
status of authorized but unissued shares of Preferred Stock, without designation
as to series, and may be issued, but not as shares of Series A Preferred Stock.
10. NO CONVERSION, EXCHANGE OR REDEMPTION BY HOLDERS. Shares of Series A
Preferred Stock shall not be subject to conversion, exchange or redemption at
the option of the holder thereof.
11. SEVERABILITY OF PROVISIONS. Whenever possible, each provision hereof
shall be interpreted in a manner as to be effective and valid under applicable
law, but if any provision hereof is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to he extent of such
prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions hereof.
IN WITNESS WHEREOF, this Certificate of Designations is executed and
acknowledged by the undersigned on behalf of the Corporation on this 13th day of
December, 1996.
AST RESEARCH, INC.
By: /s/ RANDALL G.WICK
Name: Randall G. Wick
Title: Assistant Secretary
PROMISSORY NOTE
December 12,1996
U.S. $30,000,000
Los Angeles, California
For Value Received, AST Research, Inc. (the "Borrower"), a
corporation duly organized and validly existing under the
laws of Delaware, hereby promises to pay to the order of ABN
AMRO Bank, N.V. (the "Bank"), at the office of the Bank
located at 500 Park Avenue, New York, New York, 10022 (or at
such other place of payment designated by the holder hereof
to the Borrower), on Demand, the principal sum of:
Thirty Million Dollars($30,000,000)
or if less, the unpaid principal amount of all loans (the
"Loans") made by the Bank to the Borrower at its request, in
lawful money of The United States of America.
The Borrower hereby further promises to pay to the order of
the Bank, at the place of payment, interest on the unpaid
principal amount of all Loans evidenced hereby from the date
thereof until the maturity thereof, at either (i)*the Prime
Rate (as hereinafter defined) from time to time in effect or
(ii)*the rate per annum from time to time offered by the Bank
to the Borrower prior to each Loan, such rate to remain fixed
for the relevant Interest Period as hereinafter defined.
"Interest Period" shall mean successive one-month, two-month,
three-month or six-month periods (as selected from time to
time by the Borrower by irrevocable notice (in writing or by
telephone confirmed via telecopy) given to the Bank not less
than three Business Days prior to the first day of each
respective Interest Period) commencing on the date of the
Loan; provided that: (i) each such one-month, two-month,
three-month or six-month period occurring after the initial
such period shall commence on the day on which the next
preceding period expires; and (ii) if for any reason the
Borrower shall fail to timely select a period, then it shall
be deemed to have selected a one-month period. Interest
shall be payable on the last Business Day of each Interest
Period as to offered rate loans, commencing on the first such
date to occur after the date hereof, and interest as to Prime
Rate loans shall be payable quarterly. Interest as to all
loans shall be payable at maturity and after maturity on
demand, and on the date of any payment hereon on the amount
paid. The Borrower hereby further promises to pay to the
order of the Bank, on demand, at the place of payment,
interest on the unpaid principal amount hereof after
maturity, at the rate per annum equal to the higher
(redetermined daily) of (i) one per cent (1%) per annum in
excess of the interest rate in effect just prior to maturity,
or (ii) the sum of one percent (1%) and the Prime Rate of the
Bank from time to time in effect. "Prime Rate" shall mean
the rate of interest equal to the higher (redetermined daily)
of (i) the per annum rate of interest announced by the Bank
from time to time at its principal office in New York City as
its prime rate for U.S. dollar loans (with any change in such
Prime Rate to become effective as and when such prime rate
change shall become effective) or (ii) the per annum rate of
interest at which overnight federal funds are from time to
time offered to the Bank by any bank in the interbank market
plus one half of one per cent (.50%) per annum. Interest
will be calculated on the basis of the actual number of days
elapsed over a year of 360 days. "Business Day" shall mean
any day other than a Saturday, a Sunday and, as to Prime Rate
loans, a day on which banks in New York and Los Angeles are
required or permitted by law to close and as to offered rate
loans, a day on which banks in London, New York and
Los*Angeles are required or permitted by law to close.
The Bank shall record on its books or records or on the
schedule to this Promissory Note which is a part hereof, the
interest rate, principal amount and date of each Loan made
hereunder, the Interest Period applicable thereto and all
payments of principal and interest made thereon; provided
that prior to the transfer of this Note all such information
shall be recorded on the schedule attached to this Promissory
Note. The record thereof, whether shown on such books or
records or on the schedule to this Promissory Note, shall be
conclusive and binding upon the Borrower, absent manifest
error; provided, however, the failure of the Bank to record
any of the foregoing shall not limit or otherwise affect the
obligation of the Borrower to repay all Loans made hereunder,
together with all accrued interest thereon and all other
amounts payable hereunder.
All payments due hereunder shall be made by the Borrower to
the holder hereof no later than 2:30 p.m. local time at the
place of payment, in lawful money of the United States of
America and in funds immediately available and freely
transferable at the place of payment, free and clear of, and
without deduction for, any present or future taxes, levies,
offsets, counterclaims or deductions of any nature whatsoever
("Deductions"). Payments received after such local time
shall be deemed received by the holder hereof on the next
succeeding Business Day at such place of payment. In the
event that the Borrower is compelled for any reason to make
any Deductions, it shall pay to the holder hereof such
amounts (after giving effect to all Deductions on all
additional payments to be made hereunder) as will result in
the receipt by the holder hereof of the amount such holder
would have received had no such Deductions been required to
be made. If any payment shall fall due hereunder on a day
that is not a Business Day for the holder hereof at the place
of payment, payment shall be made on the next succeeding
Business Day at such place of Payment and interest thereon
shall be payable for such extended time, provided, however,
that if such succeeding Business Day shall fall into a new
calendar month payment shall be made on the Preceding
Business Day.
The Borrower may prepay any Loan evidenced hereby, without
premium or penalty, only on the last Business Day of any
Interest Period with respect to such Loan after giving three
Business Days' (as to offered rate loans) and 11:00 a.m. Los
Angeles time same Business Day (as to Prime Rate loans) prior
written notice (which shall be irrevocable) of its
determination to repay. Otherwise any Loan evidenced by this
Promissory Note may not be prepaid in whole or in part
without the prior written consent of the holder hereof.
If, for any reason (including by reason of a demand for
payment by the Bank or any holder hereof), any Loan evidenced
by this Promissory Note is paid prior to the last Business
Day of any Interest Period, the Borrower agrees to indemnify
the holder hereof against any loss (including any loss on
redeployment of the funds repaid or any loss in respect of
the breakage of any swap or other hedging or funding
arrangement), cost or expense incurred by the holder as a
result of such repayment. The Borrower also hereby agrees to
indemnify the holder hereof against any loss, cost or expense
incurred by such holder as a result of any default or delay
by the Borrower in making any payment required hereby,
including without limitation, all court cost, reasonable
attorney's fees and other costs of collection. No delay on
the part of the holder hereof in exercising any of its
options, powers or rights, or partial or single exercise
thereof shall constitute a waiver thereof. The options,
powers and rights of the holder hereof specified herein are
in addition to those otherwise created.
If any present or future law, treaty, rule or regulation or
guideline or in the interpretation thereof by any
governmental authority or any central bank or other fiscal,
monetary or other authority having jurisdiction over the Bank
or its lending office (whether or not having the force of
law) shall (a) impose, modify or deem applicable any
assessment, reserve, special deposit or similar requirement
against assets held by, or deposits in or for the account of
or loans by, or any other acquisition of funds or
disbursements by, the Bank (b) subject the Bank, the Loan
evidenced hereby or this Promissory Note to any tax, duty,
charge, stamp tax or fee or change the basis of taxation of
payments to the Bank of principal or interest due from the
Borrower to the Bank hereunder (other than a change in the
taxation of the overall net income of the Bank) or (c) impose
on the Bank any other condition regarding the Loans evidenced
hereby, this Promissory Note or the Bank's funding thereof
and the Bank shall determine (which determination shall be
conclusive, absent manifest error) that the result of the
foregoing is to increase the cost to the Bank of making or
maintaining the Loan evidenced hereby or to reduce the amount
of principal or interest received by the Bank hereunder, then
the Borrower shall pay to the Bank, on demand, such
additional amounts as the Bank shall, from time to time,
determine are sufficient to compensate and indemnify it for
such increased cost or reduced amount.
This Promissory Note shall be governed by and construed in
accordance with the laws of the State of Illinois, without
giving effect to choice of law or conflicts of laws
principles.
AST Research, Inc.
By /s/ Won S. Yang
Its: Senior Vice President, Finance and Acting Chief
Financial Officer
ABN AMRO Bank N.V. December
10, 1996
GUARANTEE
Dear Sirs:
In consideration of the granting by you of a Revolving Credit
Facility (the "Facility") for USD*30,000,000.00 (US Thirty
Million Dollars) to AST Research, Inc., we, Samsung
Electronics Co., Ltd., a company incorporated in the Republic
of Korea, hereby irrevocably and unconditionally guarantee to
you on your first demand, as primary obligor and not merely
as surety, the due and punctual payment of all sums due to
you under the Facility including, without prejudice to the
generality of the foregoing, principal, interest (including
interest on overdue amounts) and costs (the "Indebtedness").
We hereby waive any presentation, demand, protest or notice
of any kind whether judicial or extra judicial. We further
agree that you are at liberty to vary or release securities,
to grant time, indulgence or renewals to AST Research, Inc.
or vary the terms or conditions of the Facility, without
prejudicing or affecting your rights against us under this
guarantee. We agree that we shall not be entitled to prove
in the liquidation of AST Research, Inc. in competition with
you or to have the benefit of any securities you may hold
until the whole of your claim in respect of the Indebtedness
is satisfied.
We further represent, warrant and agree that we have full
power and authority to execute and deliver this guarantee and
that the liability assumed by us hereunder constitutes a
legally and binding obligation enforceable in accordance with
its terms, payable in lawful currency of the United States of
America at your principal office in New York City in freely
transferable and immediately available funds and free and
clear and without deduction for or on account of any present
or future taxes, charges or deductions of any kind
whatsoever.
This guarantee shall be governed by the internal laws of the
State of New York. This guarantee shall be a continuing
security and shall remain in full force and binding until
such time as all sums due and payable have been irrevocably
paid in full and this guarantee has been released by you.
Samsung Electronics Co., Ltd.
By /s/ KWANG HO KIM
Its Vice Chairman
ADVANCE ACCOUNT AGREEMENT
TO Bank of America
We hereby authorize you to open on the books of a Bank of America unit of
your choice, an account or accounts in our name to be designated "Advance
Accounts" or such other designation as you may see fit to give such account or
accounts, and to charge to such account or accounts all drafts drawn on you by
us and all advances of every kind and nature and in any convertable currency
which you may make to us or which you may make for or on our behalf upon our
direction. The maximum amount of such advances at any time shall be as you and
we agree upon in writing from time to time. Upon prior written notice, the
domicile of this loan may be changed from time to time at the Bank's discretion.
In consideration of such advances as you may have made or may hereafter
make, we agree immediately upon your demand to repay you the total amount of any
and all such advances which you may have made, together with interest thereon at
the rate of * percent ( * %) per annum, unless a different rate of
interest has been or may be agreed upon in writing between you and us; until
such payment to you, you may retain all drafts and other instruments or papers
evidencing charges to said account.
It is understood that you reserve the right to terminate these arrangements
at any time. We will at your written request execute and deliver to you a
promissory note in that same currency for the then balance in the Advance
Account, payable on demand, and bearing interest as aforesaid; also, in the
event that in connection with advances made under said Advance Account you
deliver, or cause to be delivered, goods or documents into our possession, we
will upon your request grant to you a security interest in such goods or
documents, or upon your request execute and deliver to you trust receipts
therefor.
Very truly yours,
Date December 13, 1996 By /s/ Won S. Yang
Senior Vice President, Finance and Acting
Chief Financial Officer, AST Research Inc.
* As mutually agreed from time to time.
ADVANCE ACCOUNT AGREEMENT
TO Bank of America
We hereby authorize you to open on your books an account or accounts in our
name to be designated "Advance Accounts" or such other designation as you may
see fit to give such account or accounts all drafts drawn on you by us and all
advances of every kind and nature which you may make to us or which you may make
for or on our behalf upon or direction. The maximum amount of such advances at
any time shall be as you and we agree upon from time to time.
In consideration of such advances as you may have made or may hereafter
make, we agree immediately upon your demand to repay to you the total amount of
any and all such advances which you may have made, together with interest
thereon at the rate of * percent ( * %) per annum, unless a different rate
of interest has been or may be agreed upon between you and us; until such
payment to you, you may retain all drafts and other instruments or papers
evidencing charges to said account.
It is understood that you reserve the right to terminate these arrangements at
any time. We will at our request execute and deliver to you a promissory note
for the then balance in the Advance Account, payable on demand, and bearing
interest as aforesaid; also, in the event that in connection with advances made
under said Advance Account you deliver, or cause to be delivered, goods or
documents into our possession, we will upon your request grant to you a security
interest in such goods or other documents, or upon your request execute and
deliver to you trust receipts therefor.
Very truly yours,
Date December 13, 1996 By /s/ Won S. Yang
Senior Vice President, Finance and Acting
Chief Financial Officer, AST Research Inc.
* As mutually agreed from time to time.
December 16, 1996
AST Research, Inc.
16215 Alton Parkway
Irvine, CA 92718
Ladies and Gentlemen:
It is a pleasure for us to confirm to you that, pursuant to the terms and
conditions of this Agreement, we are placing at your disposal an uncommitted
revolving credit facility in the amount of Fifty Million United States Dollars
(U.S. $50,000,000). The Facility shall be available until the earlier of (a)
the termination of this Facility pursuant to Section 9 hereof and (b) the date
designated by you or us in a seven day advance written notice to the other party
as the termination date of this Facility (the "Termination Date"); provided
however that as long as no Event of Default exists, all amounts outstanding
shall be payable upon the maturity thereof.
1. DEFINITIONS
(a) Defined terms: As used in this Agreement, the following terms
have the respective meanings assigned thereto:
"Agreement" means this letter agreement and all schedules and
exhibits attached hereto, as they may be amended, supplemented or otherwise
modified from time to time.
"Borrowings" means any amounts outstanding under the Facility,
whether in respect of Domestic Dollar Borrowings, or Eurodollar Borrowings.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which commercial banks in New York, New York are not authorized or
obligated by law to close.
"Dollars" or "$" means the lawful currency of the United States
of America.
"Domestic Dollar Borrowings" means any borrowings under the
Facility made pursuant to Section 4.1 of this Agreement.
"Environmental Laws" means Federal, state, local or foreign laws
or regulations concerning the handling, release, disposal or discharge of
materials into the environment and the protection or clean-up of the
environment.
"Eurodollar Borrowings" means any borrowings under the Facility
made pursuant to Section 4.2 of this Agreement.
"Event of Default" means any event specified in Section 9 of this
Agreement.
"Facility" means the credit available to you, pursuant to the
terms set forth in this Agreement for Borrowings.
"Federal Bankruptcy Laws" means the Bankruptcy Reform Act of
1978, as amended by the Bankruptcy Amendments and Federal Judgeship Act of 1984,
and all the Rules of Bankruptcy Procedure, as any or all of the foregoing may
hereafter be amended, supplemented or otherwise modified.
"Federal Funds Rate" means the rate for overnight Federal Funds,
as published by the Federal Reserve Bank of New York.
"Guarantor" means Samsung Electronics Company, Ltd.
"Guarantee" means a duly executed guarantee in the form and
substance satisfactory to the Bank.
"Interest Period" shall have the meaning attributed to it in
Section 4.2(a) of this Agreement, subject to the Interest Period Conventions.
"Interest Period Conventions" means the following:
(a) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next succeeding
Business Day, provided that if any Interest Period in respect of a Eurodollar
Borrowing would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day; and
(b) any Interest Period in respect of a Eurodollar Borrowing
which begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a calendar month.
"Loan Documents" shall have the meaning attributed to it in
Section 6(a) of this Agreement.
"Note" shall have the meaning attributed to it in Section 3 of
this Agreement.
"Prime Rate" means the rate of interest announced by us from time
to time as our Prime Rate. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged by us to any
customer. If the Federal Funds Rate is greater than the Prime Rate for any day,
then the Prime Rate for each such day shall be deemed to equal one and one-half
percent (1-1/2%) in excess of the Federal Funds Rate for each such day.
(b) Accounting Terms: All accounting terms (whether or not
capitalized) used but not defined in this Agreement shall be construed in
accordance with generally accepted accounting principles in the United States.
2. AMOUNT AND AVAILABILITY
We agree, on the terms and conditions of this Agreement, that we may
make Borrowings, pursuant to this Facility, from time to time in the manner
hereinafter specified, provided that the sum of (i) the aggregate principal
amount of all Borrowings shall not exceed $50,000,000. This Facility shall be
available until the Termination Date.
3. EVIDENCE OF INDEBTEDNESS
The outstanding amount of all Domestic Dollar Borrowings and
Eurodollar Borrowings shall be evidenced by your promissory note in the form of
Exhibit A attached to this Agreement (as the same may be amended, supplemented
or modified from time to time, the "Note") and/or by entries in our records in
accordance with our usual banking practice. You hereby authorize us to make
notations of all relevant Borrowings and repayments on the schedule attached to
the Note. Such notations, if made, shall be presumed correct unless the
contrary is established.
4. THE FACILITY
4.1 DOMESTIC DOLLAR BORROWINGS
(a) Availability: The Facility may be available for Domestic Dollar
Borrowings in an aggregate principal amount up to the lesser of (i) $50,000,000
and (ii) the unused portion of the Facility.
(b) Operating Procedure: Each Domestic Dollar Borrowing shall be
made on notice given to us in writing, or by telephone to be confirmed promptly
thereafter in writing, no later than 12:00 noon (New York City time) on the day
of the proposed Domestic Dollar Borrowing specifying the amount of such Domestic
Dollar Borrowing.
(c) Interest: Each Domestic Dollar Borrowing shall bear interest at
a rate per annum which is equal to the Prime Rate. Interest on each Domestic
Dollar Borrowing shall be payable on the last day of each month, commencing in
the month during which such Domestic Dollar Borrowing is made. All calculations
of interest shall be made pursuant to Section 11(b)(ii) of this Agreement.
(d) Repayment: All Domestic Dollar Borrowings shall be repayable on
the Termination Date and, at the Bank's option on or before December 31 or June
30 of any given year.
4.2 EURODOLLAR BORROWINGS
(a) Availability: The Facility may be available for Eurodollar
Borrowings in an aggregate principal amount up to the lesser of (i) $50,000,000
and (ii) the unused portion of the Facility. Eurodollar Borrowings shall be
available for periods, at your option, of one day to six months (each such
period shall be referred to as an "Interest Period"), provided that the Bank can
obtain matching deposits in the interbank Eurodollar market for the same
Interest Period. The availability of such deposit is to be determined by us in
good faith in our sole discretion.
(b) Operating Procedure: Each Eurodollar Borrowing shall be made on
notice given to us in writing, or by telephone to be confirmed promptly
thereafter in writing, no later than 12:00 noon (New York City time) on the
Business Day of the proposed Eurodollar Borrowing, specifying (i) the requested
date of such Eurodollar Borrowing; (ii) the Interest Period for the Eurodollar
Borrowing; and (iii) the amount of such Eurodollar Borrowing. If any requested
Interest Period will extend beyond December 31 or June 30 of any year it shall
be in the Bank's discretion as to whether to grant such request.
(c) Interest: Upon our receipt of the notice specified in paragraph
(b) above, we shall quote you the interest rate which shall be equal to forty
(40) basis points in excess of the interbank Eurodollar market rate quoted to us
for deposits of a corresponding amount and duration, which rate shall apply to
the Eurodollar Borrowing requested. If accepted by you, such rate shall be in
effect for the entire Interest Period selected. Interest on Eurodollar
Borrowings shall be payable on the last day of each Interest Period (subject to
the Interest Period Conventions). All calculations of interest shall be made
pursuant to Section 11(b)(ii) of this Agreement.
(d) Repayment: You shall have the option either to repay an
outstanding Eurodollar Borrowing on the last day of an Interest Period
applicable thereto or, with our consent, to continue such Eurodollar Borrowing
for another Interest Period, provided that you notify us in writing, or by
telephone to be confirmed promptly thereafter in writing, not later than two
Business Days prior to the last day of such Interest Period, whether you shall
repay such Eurodollar Borrowing or continue it for another Interest Period and,
if you elect to continue such Eurodollar Borrowing, the duration of the Interest
Period selected. The giving of such notice shall be irrevocable and binding on
you and shall commit you to accept the interest rate established in accordance
with Section 4.2(c) of this Agreement. In the event that we do not receive such
notice within the time specified above, the applicable Eurodollar Borrowing
shall automatically be converted into a Domestic Dollar Borrowing which shall
accrue interest in accordance with Section 5 hereof.
(e) Voluntary Prepayment: You may prepay any Eurodollar Borrowing,
in whole or in part, from time to time without premium or penalty upon not less
than two Business Days' notice to us. Any such prepayment shall be accompanied
by accrued but unpaid interest on the principal amount so prepaid. In the event
that you make any repayment or prepayment in respect of any Eurodollar Borrowing
other than on the last day of an Interest Period relative to the amount being so
repaid or prepaid, you shall forthwith on demand from us pay to us such
additional amount as necessary to compensate us for any loss or expense
sustained or incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by us in order to fund such Eurodollar Borrowing then
being repaid or prepaid.
(f) Mandatory Prepayment: In the event that any change in any
applicable law or regulation or in the interpretation thereof by any
governmental authority shall make it unlawful for us to make or maintain any
Eurodollar Borrowing, you shall, upon notice to such effect from us, repay to us
within thirty (30) days the aggregate unpaid principal amount of all Eurodollar
Borrowings, together with accrued interest thereon. You shall also pay to us
all costs incurred by us in connection with such prepayment and compensate us
for any loss suffered by us by reason of such prepayment not being made on the
last day of an Interest Period.
(g) Reserve Requirements: If at any time during the term of this
Agreement, any reserve, special deposit or similar requirement against our
assets, deposits with us or for our account, or credit extended by us, shall be
imposed on us, or we shall be subject to any tax, duty or other charge with
respect to Eurodollar Borrowings, then at our sole discretion the interest rate
applicable to each Eurodollar Borrowing will be subject to upward adjustment to
compensate us for the cost (as determined by us) of complying with the
foregoing. In the event of such adjustment, you shall have the right to prepay
the aggregate unpaid principal amount of all Eurodollar Borrowings, together
with accrued interest thereon. You shall pay to us all costs incurred in
connection with such prepayment and compensate us for any loss suffered by
reason of such prepayment not being made on the last day of an Interest Period.
(h) Inability to Determine Interest Rate: In the event that we shall
have determined (which determination shall be conclusive and binding upon you)
that by reason of circumstances affecting the interbank Eurodollar market,
adequate and reasonable means do not exist for ascertaining the interest rate
with respect to Eurodollar Borrowings for any Interest Period, we shall
forthwith give you notice of such determination, and no further Eurodollar
Borrowings shall be made until we shall have withdrawn such notice. You may
continue to borrow under the Facility at a rate to be agreed upon by both
parties.
4.3 LETTERS OF CREDIT/ACCEPTANCES
This Facility may be available for Standby Letters of Credit,
Documentary Letters of Credit and Acceptances based on the Bank's standard
documentation and on commercially reasonably terms.
5. INTEREST AFTER DUE DATE
Interest on all Borrowings which are outstanding after their due date
(whether at their stated maturity, by acceleration or otherwise) shall be
immediately payable without demand at a rate equal to two percent (2%) per annum
in excess of the Prime Rate, which interest shall accrue and be calculated in
accordance with the terms of this Agreement
6. CONDITIONS PRECEDENT
The availability of the Facility is subject to the condition that, on
or prior to the date of this Agreement, there shall have been delivered to us,
in form and substance satisfactory to us and our counsel:
(a) Loan Documents: This Agreement, the Note and all other
instruments, agreements and documents required under this Agreement
(collectively, the "Loan Documents"), duly executed by your authorized officers;
(b) Certificate of Incorporation and By-Laws: A copy of your
certificate of incorporation, certified by the Secretary of State of the State
of your incorporation, and of your by-laws, certified by your Secretary or
Assistant Secretary;
(c) Good Standing Certificate: A good standing certificate for you,
certified by the Secretary of State of the State of your incorporation, dated no
earlier than thirty (30) days prior to the date hereof;
(d) Corporate Resolutions: A copy of a resolution or resolutions
adopted by your Board of Directors, in form and substance satisfactory to us,
certified by your Secretary or Assistant Secretary as being in full force and
effect, authorizing the Borrowings provided for in this Agreement and the
execution, delivery and performance of the Loan Documents;
(e) Certificate of Incumbency: A certificate, signed by your
Secretary or Assistant Secretary, as to the incumbency of the person or persons
authorized on your behalf to execute and deliver the Loan Documents and to give
any notice of any Borrowing requested hereunder; and
(f) Opinion of Counsel: A favorable opinion addressed to us by your
counsel (who shall be satisfactory to us), substantially in the form of Exhibit
B attached to this Agreement.
(g) Guaranty: The duly executed Guaranty in the form of Exhibit C
attached to this Agreement;
(h) Corporate Resolutions of Guarantor: A copy of a resolution or
resolutions adopted by the Guarantor's Board of Directors, in form and substance
satisfactory to us, certified by its Secretary or Assistant Secretary as being
in full force and effect, authorizing the issuance of the Guarantee; and
(i) Certificate of Incumbency of Guarantor: A certificate, signed by
the Guarantor's Secretary or Assistant Secretary, as to the incumbency of the
person or persons authorized on its behalf to execute and deliver the Guarantee.
7. REPRESENTATIONS AND WARRANTIES
You hereby represent and warrant to us that the following statements
are true and accurate as of the date of your acceptance of this Agreement and
shall be true and accurate as of the date of any Borrowing hereunder, except as
previously communicated to, and approved by, us in writing:
(a) You are a corporation duly organized, validly existing and in
good standing under the laws of the State of your incorporation; you are fully
qualified to do business wherever the nature of your business or the ownership
or use of your property requires such qualification; and you have full power and
authority, corporate and otherwise, to enter into this Agreement, to make the
Borrowings contemplated by this Agreement and to deliver the Loan Documents;
(b) Neither the execution and delivery of this Agreement or any other
Loan Document, nor compliance with the provisions thereof will violate any law
or regulation or any order or decree of any court or governmental
instrumentality, or will conflict with, or result in the breach of, or
constitute a default under, any indenture, mortgage, deed of trust, agreement or
other instrument to which you are a party or by which you may be bound, or
result in the creation or imposition of any lien, charge or encumbrance upon,
any of your property thereunder, or violate any provision of your Certificate of
Incorporation, By-laws or any preferred stock provisions;
(c) This Agreement and the other Loan Documents constitute your valid
and legally binding obligations, enforceable against you in accordance with
their terms;
(d) There are no pending or threatened actions, suits or proceedings
before any court, arbitrator or governmental or administrative body or agency
which are reasonably likely to result in any material adverse change in your
business, operations, properties or assets or in your condition, financial or
otherwise other than have been disclosed in public filings by the Company to the
U.S. government;
(e) You are not in default under any indenture, mortgage, deed of
trust, agreement or other instrument to which you are a party which is
reasonably likely to result in any material adverse change in your business,
operations properties or assets or in your condition, financial or otherwise;
(f) You have good and marketable title to all your properties and
asset, and, except for Permitted Liens, there are no liens, mortgages, pledges,
security interest, encumbrances or charges of any kind on your properties or
assets;
(g) You have filed all tax returns which are required to be filed,
and have paid all taxes which have become due pursuant to such returns or
pursuant to any assessment received by you except for disputed assessments as
disclosed by the company in public filings with the U.S. Government;
(h) All information relative to you and your financial condition
furnished to us by you for the purpose of obtaining the Facility is true and
correct in all material respects; and
(i) You are in material compliance with all Environmental Laws; you
have not received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or compliance
with Environmental Laws, and you have no knowledge or reason to believe that any
such notice will be received or is being threatened.
(j) Your obligations under the Facility are and will continue to be
pari passu in right of repayment and otherwise with your other unsecured and
unsubordinated obligations as a borrower or a guarantor.
8. COVENANTS
During the term of the Facility and until all of your obligations and
liabilities incurred under this Agreement have been repaid in full, you shall,
unless we shall give our prior written consent otherwise:
(a) Furnish to us:
(i) within one hundred twenty (120) days after the end of each
of your fiscal years, a copy of your balance sheet as of the
end of such fiscal year and statements of income,
shareholders equity and cash flows for such fiscal year,
certified by independent public accountants of recognized
standing reasonably acceptable to us; and
(ii) such other information respecting your business, properties,
condition or operations, financial or otherwise, as we may
from time to time reasonably request;
(b) Notify us of:
(i) any material change in your business which is reasonably
likely to impair your ability to repay amounts outstanding
under the Facility;
(ii) the occurrence of any default, or any event which, with the
passage of time or the giving of notice (or both), would
result in any default, in any mortgage, indenture,
instrument or agreement (including, without limitation, this
Agreement) under which there may be issued, or by which
there may be incurred or evidenced, any of your indebtedness
for borrowed money (other than this Agreement, in an amount
equal to $5,000,000 or more); and
(iii) all pending or threatened actions, suits or proceedings
before any court, arbitrator or governmental or
administrative body or agency which is reasonably likely to
result in any material adverse change in your business,
operations, properties or assets or in your condition,
financial or otherwise;
(c) Keep at all times books of records and accounts in which full,
true and correct entries shall be made of all dealings and transactions in
relation to your business and affairs:
(d) Maintain your corporate existence and keep all property which is
required for your ongoing operations, business or condition (financial or
otherwise) in good repair, working order and condition;
(e) Pay and discharge all taxes, assessments and governmental charges
or levies imposed upon you or your income or profits, or upon any of your
property, prior to the date on which penalties attach thereto, unless you shall
contest in good faith and by proper proceedings the payment of any such tax,
assessment, charge or levy and you shall maintain adequate reserves therefor;
(f) Keep all of your properties adequately insured at all times with
responsible insurance carriers against loss or damage by fire and other hazards,
maintain adequate insurance at all times with responsible insurance carriers
against liability on account of damage to persons and property and under all
worker's compensation laws and maintain adequate insurance covering such other
risks as we may reasonably request;
(g) Allow us to visit and inspect any of your properties, have
mutually acceptable independent accountants examine your books of account and
other records and files and make copies thereof, and to discuss your business
affairs and finances with your officers and employees, at such reasonable times,
duration, intervals and notice as we shall request; and
(h) Comply with the requirements of all applicable laws, rules,
regulations and orders except where the failure to so comply would not
reasonably be expected to have a material adverse effect on your business,
operations properties or assets or your condition, financial or otherwise;
(i) Not, nor shall it permit any of its subsidiaries to, directly or
indirectly, make, create, incur, assume or suffer to exist any Lien upon or with
respect to any part of its property or assets, whether now owned or hereafter
acquired or agree to do so, other than the following ("Permitted Liens");
(A) any Lien existing on the property of the Company on the date hereof
securing indebtedness outstanding on such date;
(B) Liens for taxes, fees assessments or other governmental charges which
are not yet delinquent or remain payable without penalty, or to the
extent that there is non-payment thereof, provided that (i) no Notice
of Lien has been filed or recorded in the United States of America and
(ii) no Notice of Lien has been filed or recorded in any other
jurisdiction except such Notices of Lien which would not have a
material adverse effect on the Company;
(C) carriers', warehousemen's mechanics, landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of
business which are not delinquent or remain payable without penalty or
which are being contested in good faith and by appropriate
proceedings;
(D) Liens (other than any Lien imposed by ERISA) on the property of the
Company or any of its subsidiaries incurred, or pledges or deposits
required in connection with worker's compensation, unemployment
insurance, other social security legislation and Liens consisting of
deposits placed with insurance companies for health insurance created
in the ordinary course of business;
(E) Liens on the property of the Company or any of its Subsidiaries
securing (i) the performance of bids, trade contracts (other than for
borrowed money), leases, subleases, statutory obligations and
regulatory or other governmentally imposed obligations and (ii)
obligations on surety, appeal, performance or similar bonds, and (iii)
other obligations of a like nature incurred in the ordinary course of
business provided all such Liens in the aggregate would not have a
material adverse effect on the Company;
(F) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which in the aggregate,
are not substantial in amount, and which do not in any case materially
detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its
subsidiaries;
(G) purchase money security interest on any real or personal property
acquired or held by the Company in the ordinary course of business,
securing indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring such property or capital
lease obligations; provided that any such Lien attaches to such
property concurrently with or within 30 days after the acquisition or
refinancing thereof;
(H) Liens on property existing prior to the acquisition of such property
by the Company or its subsidiaries and not created in anticipation of
such acquisition;
(I) Extension and renewals of any Lien described in this subsection;
(J) Liens which constitute rights of set-off of customary nature or
bankers' Liens with respect to amounts on deposit, whether arising by
operation of law or by contract, in connection with working capital
facilities, operational services, lines of credit, term loans, or
other credit facilities and similar arrangements entered into with
banks in the ordinary course of business;
(K) Other Liens incidental to the conduct of the business of the Company
or any of its subsidiaries or the ownership of their property which
are incurred in the ordinary course of business (and are not security
for borrowed money); provided such Liens do not exceed $10,000,000 in
the aggregate; and
(L) Liens arising in connection with any sale of accounts receivable
provided, that the Lien doe not extend beyond the accounts receivable
so sold or discounted except to the extent reasonably required by any
purchaser of such accounts receivable.
9. EVENTS OF DEFAULT
If any of the following events (each an "Event of Default") shall
occur:
(a) If you shall default in the payment of any principal or accrued
interest on the Note or any other amount payable under any of the Loan
Documents;
(b) If you shall default in the due performance and observance of any
provision contained in this Agreement or any other Loan Document;
(c) If any representation or warranty made by you in this Agreement
or any other Loan Document, or any statement in any certificate, schedule,
financial statement, or other instrument furnished to us in accordance with the
provisions of this Agreement or any other Loan Document, shall prove to have
been untrue in any material respect when made or given;
(d) If you or the Guarantor shall default under any agreement or
instrument creating or evidencing any obligation by you or the Guarantor, direct
or contingent, for the payment of borrowed money for an amount not exceeding
$5,000,000 in your case or $20,000,000 in the case of the Guarantor;
(e) If you or the Guarantor shall:
(i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator
of all or any substantial part of your or the Guarantor's
assets or voluntarily terminate your or the Guarantor's
operations;
(ii) Admit in writing your or the Guarantor's inability to pay
your debts as they mature;
(iii) make a general assignment for the benefit of creditors;
(iv) be adjudicated bankrupt or insolvent; or
(v) file a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization or an arrangement with
creditors or to take advantage of any insolvency law or an
answer admitting the material allegations of a petition
filed against you or the Guarantor in any bankruptcy,
reorganization or insolvency proceeding; or take any action
for the purpose of effecting any of the foregoing;
(f) If an order, judgment or decree shall be entered by any court of
competent jurisdiction, approving a petition seeking your or the Guarantor's
reorganization or appointing a receiver, trustee or liquidator of all or any
substantial part of your or your Guarantor's assets or an order for relief under
the Federal Bankruptcy Laws or any similar law shall have been entered against
you or the Guarantor;
(g) If a proceeding shall be instituted in any court of competent
jurisdiction seeking your or the Guarantor's adjudication in bankruptcy,
reorganization, dissolution, winding up, liquidation, a composition or
arrangement with your or the Guarantor's creditors, a readjustment of your or
the Guarantor's debts, the appointment of a trustee, receiver, custodian,
liquidator or the like of all or any substantial part of your or the Guarantor's
assets, or other like relief under any bankruptcy or insolvency law and, if such
proceeding is being contested by you in good faith, the same shall continue
undismissed or unstayed and in effect for any period of thirty (30) consecutive
days;
(h) If there shall be entered against you or the Guarantor one or
more judgments or decrees, which judgments or decrees, to the extent not covered
by insurance, exceed, individually or in the aggregate, $5,000,000 and which
judgments or decrees have not been paid, vacated, discharged, stayed or bonded
pending appeal within thirty (30) days from the entry thereof; or
(i) If the Guaranty shall be invalid or unenforceable or if the
Guarantor has defaulted thereunder; or
(j) If Samsung Electronics Co., Ltd. shall beneficially cease to own
directly or indirectly at least 40% of your common stock.
THEN, (i) this Facility shall immediately terminate; (ii) all amounts
in respect of principal and interest and any other amounts due and payable
hereunder on Domestic Dollar Borrowings and Eurodollar Borrowings shall be
forthwith immediately due and payable without any action on our part and without
notice to you and without protest, presentment or demand, all of which are
hereby expressly waived by you.
10. CHANGES IN CAPITAL REQUIREMENTS
If after the date hereof, we shall have determined that the adoption
of any applicable law, rule or regulation regarding capital adequacy, or any
change therein or any change in the interpretation or administration thereof, by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by us with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of increasing the amount of capital that we must maintain or reducing our
rate of return on our capital as a consequence of our obligation hereunder to a
level below that which we could have achieved but for such adoption, change or
compliance (taking into consideration our policies with respect to capital
adequacy) by an amount deemed by us to be material, then from time to time,
within fifteen (15) days after demand by us, you shall pay to us such additional
amount or amounts as will compensate us for the cost of such additional capital
or reduced rate of return. We shall furnish you with a certificate as to the
amount of any such cost or reduced rate of return, which certificate, absent
manifest error, shall be final, conclusive and binding for all purposes.
11. MISCELLANEOUS
(a) No waiver; Cumulative Remedies: No failure or delay on our part,
or on the part of any other holder of the Note, in exercising any right, power
or remedy under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy
hereunder. The remedies provided in this Agreement are cumulative and not
exclusive of any remedies provided by law.
(b) Payments, Interest and Taxes:
(i) All payments of principal and interest and other amounts
payable under this Agreement and the other Loan Documents shall be
made to us at 1221 Avenue of the Americas, New York, New York 10020,
in immediately available funds.
(ii) All interest payments to be made hereunder shall be
computed for the exact number of days elapsed on the basis of a 360-
day year.
(iii) All payments under this Agreement and the other Loan
Documents shall be made without setoff or counterclaim and without
deduction for any present or future taxes, levies, imposts, charges
or withholdings (collectively, "Taxes"). If you shall be required by
law to deduct any Taxes from or in respect of any sum payable under
this Agreement or any other Loan Document, (x) the sum payable shall
be increased so that we receive an amount equal to that which we
would have received had no deduction been made and (y) you shall pay
the full amount deducted to the appropriate authority in accordance
with applicable law.
(c) Addresses for Notices, etc.: Except as provided otherwise in
this Agreement, all notices, requests, demands and other communications provided
for under this Agreement shall be in writing (including teletransmissions) and
shall be deemed delivered (i) when sent, if delivered by hand, (ii) when
teletransmitted and receipt is confirmed by telephone and or by a separate
mailed writing, or (iii) three (3) Business Days after mailing, if mailed, and
all mailed notices shall be by registered mail, postage prepaid, to the
appropriate party or parties at the address or addresses appearing on the
signature pages hereof, or, at such other address as shall be designated by such
party in written notice to the other party, complying as to delivery with the
terms of this Section 11(c).
(d) Jurisdiction: You agree to submit to the jurisdiction of all
federal and state courts located in the State of New York for any legal
proceeding arising from this Agreement or any other Loan Document and consent
that personal jurisdiction may be obtained over you by mailing a summons by
registered mail or certified mail, return receipt requested, within or without
such court's jurisdiction, or by personal service, provided a reasonable time
for appearance is allowed.
(e) Modifications: No modification or waiver of any provision in
this Agreement or any other Loan Document and no consent to any departure
therefrom shall in any event be effective unless the same shall be in writing
and signed by us and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which it was given.
(f) Maximum Interest Rate: No provision of this Agreement or any
other Loan Document shall require the payment, or permit the collection, of any
interest in excess of the highest rate permitted by applicable law.
(g) Survival of Agreements: All covenants, representations,
warranties and other agreements made in this Agreement or any other Loan
Document and any certificates delivered in connection therewith shall survive
any Borrowings under the Facility and shall continue in full force and effect so
long as any amount owing under any of the Loan Documents is outstanding and
unpaid or this Agreement remains in effect.
(h) Severability: Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall be ineffective only in such
jurisdiction to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement.
(i) Setoff: In addition to any right or remedy we may have by law,
we shall have the right, without prior notice to you, any such notice being
expressly waived by you to the extent permitted by law, on the occurrence of an
Event of Default, to set off and apply against any amounts of principal,
interest or other amounts arising hereunder, whether matured or unmatured, any
amount owing from us to you, at any time after the occurrence of an Event of
Default and such right of setoff may be exercised against any trustee in
bankruptcy, debtor-in-possession, or any other person claiming through you,
notwithstanding the fact that such right of setoff shall not have been exercised
prior to the making, filing or issuance, or service on us of, or of notice of,
any such event or proceeding.
(j) Costs and Expenses: You agree to pay to us all costs and
expenses (including reasonable attorneys' fees and disbursements) arising from
or incidental to the preparation and enforcement of any provision of this
Agreement or any other Loan Document.
(k) Successors and Assigns: This Agreement shall be binding upon and
inure to the benefit of us and you and all future holders of the Note, and their
respective successors and assigns, except that you may not assign or transfer
your rights or obligations under this Agreement without our prior written
consent.
(l) WAIVER OF JURY TRIAL: TO THE MAXIMUM EXTENT PERMITTED BY LAW,
YOU AND WE HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY ACTION,
CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO
THIS AGREEMENT, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL TO OUR
DEALINGS WITH EACH OTHER WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
(m) GOVERNING LAW: THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES.
We are pleased to offer you this Facility. If the terms and conditions
specified above are acceptable to you, please indicate your acceptance thereof
by signing and returning to us the attached copy of this Agreement, whereupon
this Agreement shall become a binding agreement between us.
Very truly yours,
SOCIETE GENERALE,
NEW YORK BRANCH
By: /s/ DAVID THACKRAY
Name: David Thackray
Title: Vice President
Address for notices:
1221 Avenue of the Americas
New York, New York 10020
Attention: David Thackray
Telex: 428802 SOCIEGEN
Telecopier: (212) 278-7462
AGREED AND ACCEPTED
AS OF THE DATE FIRST WRITTEN ABOVE:
AST RESEARCH, INC.
By: /s/ WON SUK YANG
Name: Won Suk Yang
Title: Sr VP, Finance & CFO (acting)
Address for notices:
16215 Alton Parkway
Irvine, CA 92618
Attention: Julie Nakata
Telex: _____________________
Telecopier: (714) 727-8584
EXHIBIT A
FORM OF PROMISSORY NOTE
U.S. $50,000,000 December __, 1996
New York, New York
FOR VALUE RECEIVED, the undersigned, AST RESEARCH, INC. (the "Borrower"),
hereby unconditionally promises to pay to the order of Societe Generale, New
York Branch (the "Bank"), on the dates and in the manner specified in the
Agreement hereinafter defined, at the Bank's office located at 1221 Avenue of
the Americas, New York, New York 10020, in immediately available funds, the
principal sum of Fifty Million United States Dollars (U.S. $50,000,000) or the
unpaid principal amount of all Borrowings by the Borrower from the Bank pursuant
to the Agreement, (as defined below) whichever is less. All payments of
principal of the outstanding amounts of all Borrowings evidenced by this Note
shall be made in the manner specified in the Agreement.
The Borrower hereby further promises to pay interest in like money and
funds on the daily outstanding balance of each such Borrowing for the period
commencing on the date of each such Borrowing until repaid in full, at the rate
and in the manner specified in the Agreement.
The Bank is authorized to make notations of all Borrowings made by the
Borrower from the Bank pursuant to the Agreement and all repayments of the
outstanding principal amounts and accrued interest on such Borrowings on the
schedule attached to and made a part of this Note. Such notations, if made,
will be presumed correct unless the contrary is established.
If this Note becomes due and payable on any day other than a Business Day,
the maturity thereof shall be extended to the next succeeding Business Day and
interest shall be payable on such outstanding amount at the rate specified in
the Agreement during such extension.
This Note is the note referred to in that certain letter agreement dated
December __, l996, as hereinafter amended, supplemented or modified (the
"Agreement"), between the Borrower and the Bank, which provides for the
prepayment of this Note on certain events, the acceleration of its maturity and
other terms and conditions relating to this Note, all of which are herein
incorporated by reference.
In addition to all principal and accrued interest on this Note, the
Borrower agrees to pay (a) all costs and expenses incurred by all of the holders
of this Note in collecting this Note, whether through probate, reorganization,
bankruptcy or other proceedings; and (b) reasonable attorneys' fees when and if
this Note is placed in the hands of an attorney for collection.
Presentment, demand, protest and notices of any kind with respect to this
Note are hereby expressly waived by the Borrower
Capitalized terms used but not defined in this Note shall have the meanings
attributed to them in the Agreement.
This Note and the rights and obligations of the parties under this Note
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York, without regard to its conflicts of law principles.
AST RESEARCH, INC.
By: /s/ MARK P. DE RAAD
Name: Mark P. de Raad
Title: VP, Finance & Treasurer
By: /s/ WON SUK YANG
Name: Won Suk Yang
Title Sr VP, Finance & CFO
EXHIBIT B
FORM OF LEGAL OPINION OF BORROWER'S COUNSEL
[Date]
Societe Generale,
New York Branch
1221 Avenue of the Americas
New York, New York 10020
Ladies and Gentlemen:
We are counsel to AST Research, Inc. (the "Company") and we have been asked
to deliver this opinion in connection with the execution and delivery of a
letter agreement dated as of December __, 1996, between you and the Company,
providing for a credit facility in the amount of U.S. $50,000,000 (the "Loan
Agreement").
We have also reviewed the corporate organization and existence of the
Company and the corporate proceedings of the Company in relation to the Loan
Agreement, the Promissory Note (the Loan Agreement, the Promissory Note being
hereinafter referred to collectively as the "Loan Documents") and such other
matters as we have deemed necessary or relevant as a basis for this opinion.
Based upon the foregoing, it is our opinion that:
1. The Company is a duly organized and validly existing corporation in
good standing under the laws of the State of ______________________, with
perpetual corporate existence, and has the corporate power and authority to own
its properties and to transact the business in which it is engaged or presently
proposes to engage.
2. The Company has the corporate power to execute, deliver and carry out
the terms and provisions of the Loan Documents and the Company has duly taken or
caused to be taken all necessary corporate action (including but not limited to)
the obtaining of any consent of stockholders required by law or by the
Certificate of Incorporation or By-laws of the Company to authorize the
execution, delivery and performance of the Loan Documents.
3. Neither the execution and delivery of the Loan Documents, nor
compliance with the provisions thereof will violate any law or regulation or any
order or decree of any court or governmental instrumentality, or will conflict
with, or result in the breach of, or constitute a default under, any indenture,
mortgage, deed of trust, agreement or other instrument of which we have
knowledge to which the Company is a party or by which it might be bound, or
result in the creation or imposition of any lien, charge or encumbrance upon,
any of the property of the Company thereunder (except in your favor), or violate
any provision of the Certificate of Incorporation, By-laws or any preferred
stock provisions of the Company. In this connection, we have made a reasonable
investigation with respect to the existence of any such indenture, mortgage,
deed of trust, agreement or other instrument.
4. There are no actions, suits or proceedings pending or threatened
against or affecting the Company before any court, arbitrator or governmental or
administrative body or agency which might result in any material adverse change
in the business, operations, properties or assets or in the condition, financial
or otherwise, of the Company.
5. No action of, or filing with, any governmental or public body or
authority is required to authorize, or is otherwise required in connection with,
the execution, delivery and performance of the Loan Documents.
6. The Loan Documents have been duly executed and delivered by the
Company and constitute valid and binding obligations of the Company.
Very truly yours,
EXHIBIT C
FORM OF GUARANTEE
In consideration of loans, extensions of credit or other financial
accommodations by Societe Generale, a French bank acting through its New York
Branch, having an office at 1221 Avenue of the Americas, New York, New York
10020 (the "Bank"), to or for the account of AST Research, Inc., a corporation
organized under the laws of Delaware (the "Borrower"), Samsung Electronics,
Company, Ltd., a corporation duly organized under the laws of Korea, having its
principal offices in Korea (the "Guarantor"), hereby undertakes and agrees as
follows:
Section 1. Guarantee.
(a) The Guarantor, as primary obligor and not merely as surety, hereby
absolutely, irrevocably and unconditionally guarantees, as and for its own debt,
the due and punctual payment of all Obligations (as hereinafter defined) of the
Borrower when and as the same shall become due and payable (whether on demand,
at stated maturity, upon acceleration or otherwise).
(b) The Guarantor hereby agrees that this Guarantee is a continuing
guarantee of payment and not of collection, that it is a primary, independent
obligation of the Guarantor and that the Guarantor's obligations hereunder shall
be unconditional and irrevocable, irrespective of any invalidity, illegality or
unenforceability of, or defect in or any change in or amendment modification or
waiver of the time, manner, place of payment or any other term or condition of
any credit, financial accommodation, loan, promissory note, draft, agreement or
other document or instrument evidencing any of the Obligations, or the sale,
exchange, release, surrender, realization upon or other dealings with any
security therefor (whether now or hereafter granted to the Bank), any settlement
or compromise thereof, the absence of any action to enforce the same, any waiver
or consent by the Bank with respect to any provision thereof, the recovery of
any judgment against the Borrower or any other person, or any action to enforce
the same, or the recovery of any claim under any applicable insurance, or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor or a borrower.
(c) The Guarantor hereby waives notice of acceptance of this Guarantee,
the extension of any credit or financial accommodation, the making of any loan
or the incurrence of any other Obligation and, with respect to any Obligation
and any promissory note or other instrument or document evidencing any
Obligation, promptness, diligence, presentment, demand of payment, filing of
claims with a court in the event of bankruptcy of the Borrower or any other
person, any right to require a proceeding or the filing of a claim first against
the Borrower, any other guarantor, any other person, or any collateral security
for any of the Obligations, protest, notice of default, dishonor or nonpayment
and any other notice and all demands whatsoever.
(d) The Guarantor hereby agrees that in the event that any payment is made
by the Guarantor under this Guarantee, and is thereafter required to be
rescinded or otherwise restored or paid over to the Guarantor or any other
person (whether upon the insolvency or bankruptcy of the Borrower or the
Guarantor, or otherwise), the Guarantor's obligations hereunder shall
immediately and automatically be reinstated as though such payment has not been
made.
(e) The Guarantor further agrees that the Bank shall have no duty to
advise the Guarantor of information known to it regarding the financial
condition of the Borrower and the Guarantor hereby assumes responsibility for
keeping itself advised of the financial condition of the Borrower.
(f) As used herein the term "Obligations" shall mean all indebtedness,
obligations and liabilities of the Borrower to the Bank, or in which the Bank
has any interest, whether created directly or acquired by assignment or
otherwise, of whatsoever kind, whether now or hereafter existing or arising,
wheresoever payable, whether or not represented by a note, draft or other
evidence of indebtedness, whether arising out of loans, advances on open
account, letters of credit, overdrafts, acceptances, contracts (including,
without limitation, foreign exchange spot and forward contracts), agreements
(including, without limitation, any agreement by the Borrower to pay attorneys'
fees and costs of collection), torts or by operation of law, whether consisting
of principal, interest, fees or other charges, whether absolute or contingent,
joint or several, secured or unsecured, due or not due, direct or indirect,
liquidated or unliquidated, and whether incurred by the Borrower as principal,
surety, endorser, guarantor, accommodation party or otherwise. "Obligation" as
used in the singular herein shall mean any of the foregoing.
(g) This Guarantee shall remain in full force and effect until the
indefeasible payment in full of all of the Obligations and the obligations of
the Guarantor hereunder.
Section 2. Representations, Warranties and Agreements. The Guarantor
represents and warrants that: (a) the Guarantor is a duly authorized, validly
existing corporation in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to do business in such other jurisdictions
where required by its business, and has the necessary corporate and legal power
and authority to execute and deliver this Guarantee and to carry out the terms
and provisions hereof and has taken all necessary action to authorize the
execution, delivery and performance of same; (b) this Guarantee is a legal,
valid and binding obligation of the Guarantor enforceable in accordance with its
terms; (c) no order, consent, license, authorization or approval of, or
exemption by, or giving of notice to, or registration or filing with, or the
taking of any other action in respect of, any governmental agency or public
authority is required to authorize the execution, delivery and performance of
this Guarantee except for the approval of the Bank of Korea for the issuance,
execution, delivery and performance of the Guarantee by the Guarantor, which has
been obtained and remain in full force and effect, and the payment report to the
Guarantor's designated foreign exchange bank required for payment under the
Guarantee, which will be filed at the time of each actual payment under the
Guarantee; (d) neither the execution and delivery of this Guarantee, nor the
consummation of the transactions herein contemplated, nor compliance with the
terms and provisions thereof, will contravene any law or regulation to which the
Guarantor is subject or any franchise or permit applicable to the Guarantor or
the Guarantor's business or will conflict or be inconsistent with, or will
result in any breach of, any of the terms, covenants or provisions of, or
constitute a default under, or result in the creation or imposition of any
mortgage, pledge, lien, charge, encumbrance or security interest upon any of the
property or assets of the Guarantor pursuant to the terms of, any indenture,
mortgage, deed of trust, agreement or other instrument to which the Guarantor is
a party or by which the Guarantor may be bound; (e) the Guarantor has not
granted, created or permitted to exist any mortgage, pledge, lien, charge,
encumbrance or other security interest (collectively "Encumbrances") on any
property, assets, revenues or earnings of the Guarantor, to secure any
indebtedness of the Guarantor except those, if any, existing on the date hereof
of previously disclosed in writing to the Bank; and (f) on and as of the date
hereof the Guarantor is the record and beneficial owner of 40% of the issued and
outstanding shares of capital stock of the Borrower.
Section 3. Covenants. The Guarantor hereby covenants and agrees that so
long as any Obligations or any obligations of the Guarantor hereunder remain
outstanding, the Guarantor will not: (a) sell, transfer, dispose of or encumber
any of the shares of the Borrower presently held (whether beneficially or of
record, whether directly or indirectly) by the Guarantor and will maintain the
same percentage ownership of the Borrower as is set forth in the Section 2(f)
hereof; (b) enter into, or suffer or permit the Borrower to enter into any
merger or consolidation with any person provided that the foregoing restriction
shall not apply if the Guarantor or the Borrower shall be a continuing
corporation; or (c) sell or dispose of, or suffer or permit the Borrower to sell
or dispose of, all or a substantial part of its assets (whether in one or a
series of transactions), except: (a) dispositions of inventory, or used, worn-
out or surplus equipment, all in the ordinary course of business and other
dispositions of property (i) not necessary to the normal operations of the
Guarantor or the Borrower and (ii) which would not have a material adverse
effect on the operation or the financial condition of the Guarantor or the
Borrower or a material impairment of the ability of the Guarantor to perform its
obligations under the Guarantee or the Borrower to perform its Obligation
("Material Adverse Effect"); (b) the sale of equipment to the extent that such
equipment is exchanged for credit against the purchase price of similar
replacement equipment or the proceeds of such sale are promptly applied the
purchase price of such replacement equipment; (c) dispositions in connection
with any capital stock, equity interest, assets, obligations or other securities
of, or any interest in, any legal entity (including by merger), or any advance,
loan, extension of credit or capital contribution to, or any other investment
in, any legal entity ("Investments"), provided that full, fair and reasonable
consideration is received in return for any assets disposed of to acquire such
Investments; (d) dispositions of any Investments, provided that fair and
reasonable consideration is received in connection therewith as reasonable
determined by the guarantor or the Borrower; (e) the sale or discounting of
accounts receivable by the Guarantor or the Borrower without restriction; (f)
sale of trade-related instruments arising in foreign countries, in the ordinary
course of business, with or without recourse to the Guarantor or the Borrower to
banks or other financial service institutions, for fair value, provided that (i)
the amount of any fees, discounts and other consideration received by such banks
or other financial service institutions is normal and customary, and (ii) such
sales are customary business practices in the country where such activity takes
place; (g) the sale or discounting of accounts receivable through asset-backed
securitizations so long as fair market value is received for such accounts and
so long as there would be no Material Adverse Effect; (h) disposition of the
Guarantor's or the Borrower's headquarters building located at the respective
addresses set forth herein in a sale-leaseback transaction so long as the
Guarantor or the Borrower, as the case may be, receives fair market value for
its ownership interest in its headquarters; (i) dispositions not otherwise
permitted hereunder which are made for fair market value; provided, that at the
time of any disposition, no Event of Default shall exist or shall result from
such disposition; and (j) such other dispositions as the bank shall agree to in
its sole discretion. The Guarantor further covenants and agrees that the
Guarantor will: (a) make all payments hereunder free and clear and net of all
withholding and other taxes (except for taxes imposed on the net income of the
Bank), by whatsoever jurisdiction imposed; and (b) maintain its and the
Borrower's corporate existence and franchises.
Section 4. Subordination. The Guarantor hereby subordinates all present
and future claims, now held or hereafter acquired, against the Borrower as a
creditor or contributor of capital, or otherwise, to the prior and final payment
in full to the Bank of all Obligations. If, without reference to the provisions
of this Section 4, the Guarantor would at any time be or become entitled to
receive any payment on account of any claim against the Borrower, whether in
insolvency, bankruptcy, liquidation or reorganization proceedings, or otherwise,
the Guarantor shall and does hereby irrevocably direct that all such payments
shall be made directly to the Bank (and should the Guarantor receive any such
payment, the Guarantor shall receive such amount in trust for the Bank and shall
immediately pay over to the Bank such amount) until all Obligations of the
Borrower shall be indefensibly paid in full.
Section 5. Subrogation. The Guarantor hereby waives any claim, right or
remedy which it may now have or hereafter acquire against the Borrower that
arises from the Guarantor's obligations hereunder including, without limitation,
any right of subrogation, reimbursement, indemnity, exoneration, contribution or
participation in any claim, right or remedy of the Bank against the Borrower or
any security which the Bank now has or hereafter acquires, whether such claim,
right or remedy arises in equity, under contract, by statute, under common law
or otherwise, until all the Obligations and any other amounts owing to the Bank
shall have been indefeasibly paid in full.
Section 6. Jurisdiction.
(a) The Guarantor hereby irrevocably agrees that any suit, legal action or
proceeding with respect to this Guarantee or any suit, legal action or
proceeding to execute or otherwise enforce any judgment obtained against the
Guarantor or against the Guarantor's property may be brought in the courts of
the State of New York or of the United States of America located in New York
City or in any other jurisdiction where assets of the Guarantor may be located,
as the Bank may elect, and by execution and delivery of this Guarantee the
Guarantor irrevocably submits to the jurisdiction of such courts for the purpose
of any suit, legal action or proceeding, waives any and all objections as to
inconvenient forum and the like and consents to service of all writs, process
and summonses in any such suit, legal action or proceeding brought in such
courts by (i) such courts request for assistance to the Supreme Court of Korea
through diplomatic channels or (ii) such other means as are permitted under
Korean law.
(b) Nothing herein contained shall prevent the Bank from serving process
or commencing proceedings in any other manner or jurisdiction permitted by
applicable law.
Section 7. JURY WAIVER. THE GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY
SUIT, LEGAL ACTION OR PROCEEDING INVOLVING ANY MATTER IN ANY WAY ARISING OUT OF
OR RELATING TO THIS GUARANTEE.
Section 8. Judgment Currency. If for the purpose of obtaining or
enforcing a judgment in any court it becomes necessary to convert into any
currency (the "Judgment Currency") any amount due hereunder in any other
currency (the "Original Currency"), then conversion shall be made at the rate of
exchange prevailing on the business day (the "Determination Date") before the
day on which, and at the place at which, judgment is given. "Rate of Exchange"
shall mean the rate at which the Bank would be able to sell the Judgment
Currency for the Original Currency (including premium and costs of exchange) on
the Determination Date. If there is a change in such rate of exchange between
the Determination Date and the date of payment, the Guarantor shall pay on the
date of payment, such additional amount as is necessary to ensure that the
amount paid in the Judgment Currency is the amount then due in the Original
Currency, when converted at the prevailing rate of exchange on the date of
payment. Any additional amount due from the Guarantor hereunder shall be due as
a separate debt and shall not be affected by or merged into any judgment being
obtained for any other sums due in respect of this Guarantee. In no event,
however, shall the Guarantor be required to pay more U.S. dollars than the total
amount stated to be due in dollars, so that the Guarantor's obligations
hereunder will be effectively maintained as U.S. dollar obligations.
Section 9. Fees and Expenses. The Guarantor hereby agrees to pay all fees
(including, without limitation, attorneys' fees) and out-of-pocket expenses of
the Bank in connection with any amendment, modification, supplement or waiver of
this Guarantee and in connection with the enforcement or preservation of any of
the Bank's rights hereunder or with respect to any security therefor.
Section 10. Notices. All notices, demands or other communications
pursuant hereto shall be in writing and shall be personally delivered or sent by
first-class registered mail, postage prepaid, or by telex or telecopier. All
notices shall be deemed to have been duly given or made when received in the
case of personal delivery, seven days after deposit in the mails, in the case of
mail delivery, or when sent, in the case of telex or telecopier notice, in each
case to the respective address of the Guarantor or the Bank set forth above or
to such other address as the Guarantor or the Bank shall specify to the other
pursuant to the terms hereof and its receipt is confirmed.
Section 11. Payments. All payments made hereunder shall be payable at the
New York office of the Bank referred to herein, or such other office as the Bank
may elect, and shall be made in U.S. dollars and in immediately available funds,
free and clear of and without set-off, counterclaim withholding for any taxes or
other charges or other deduction whatsoever.
Section 12. Severability. The invalidity or unenforceability of any one
or more phrases, sentences, clauses or Sections in this Guarantee shall not
affect the validity or enforceability of the remaining portions of this
Guarantee, or any part thereof.
Section 13. No Waiver; Amendments; Remedies Cumulative. No failure or
delay on the part of the Bank in exercising any right, power or privilege
hereunder and no course of dealing between the Guarantor and the Bank shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. Any waiver,
amendment, release or modification of this Guarantee shall be in writing duly
executed by the Bank and shall be effective only in the specific instance and
for the specific purpose given. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which the
Bank would otherwise have. No notice to or demand on the Guarantor in any case
shall entitle any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Bank to any other or
further action in any circumstances without notice or demand.
Section 14. Benefit of Guarantee. This Guarantee shall be binding upon
and inure to the benefit of the successors and assigns of the Bank and the
Guarantor; the Guarantor may not assign any of its portion of its obligations
hereunder without the prior written consent of the Bank.
Section 15. Set-off. The Bank is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by the Bank to or for the
credit or the account of the Guarantor against any and all of the obligations of
the Guarantor now or hereafter existing under this Guarantee, whether or not the
Bank shall have made any demand under this Guarantee and although such
obligations may be contingent and unmatured. The Bank agrees promptly to notify
the Guarantor after any such set-off and application, provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of the Bank under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which the Bank may have.
Section 16. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO ITS CONFLICTS OF LAW PRINCIPLES.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed and delivered on this 11th day of December, 1996.
SAMSUNG ELECTRONICS, COMPANY, LTD.
By: /s/ KWANG HO KIM
Name: Kwang Ho Kim
Title: Vice Chairman
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement (the "Agreement") is
entered into as of December 17, 1996 among AST Research, Inc., a Delaware
corporation (the "Company"), the several financial institutions from time to
time party to this Agreement (collectively, the "Banks"; individually, a
"Bank"), and Bank of America National Trust and Savings Association, as agent
for the Banks (the "Agent").
WHEREAS, the Company, the Banks, and the Agent are parties to a Credit
Agreement dated as of December 20, 1995, as amended by a First Amendment thereto
dated as of February 29, 1996 (as so amended, the "Prior Agreement");
WHEREAS, the parties hereto desire to amend the Prior Agreement as set
forth herein and to restate the Prior Agreement in its entirety to read as set
forth in the Prior Agreement with the amendments specified below;
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions; References.
(a) Unless otherwise specifically defined herein, each term used
herein which is defined in the Prior Agreement shall have the meaning assigned
to such term in the Prior Agreement. The term "Notes" defined in the Prior
Agreement shall include from and after the date hereof the Notes delivered under
this Agreement.
(b) Each reference to "hereof", "hereunder", "herein" and
"hereby" and each other similar reference and each reference to "this Agreement"
and each other similar reference contained in the Prior Agreement and in the
other Loan Documents to the Prior Agreement shall from and after the date hereof
refer to the Prior Agreement as amended and restated hereby.
2. Amendments to Prior Agreement.
(a) Amendments to Article I of the Prior Agreement.
(1) The definition of "Applicable Margin" is amended in its
entirety to provide as follows:
"Applicable Margin" means:
(i) with respect to Base Rate Loans, 0%; and
(ii) with respect to Offshore Rate Loans .375%.
(2) The following definition of "Effective Date" is
inserted:
"Effective Date" has the meaning specified in
the Amended and Restated Credit Agreement dated as of
December 17, 1996 among the parties hereto.
(3) The definition of "Revolving Termination Date" is
amended in its entirety to provide as follows:
"Revolving Termination Date" means
the earlier of:
(a) December 23, 1997;
(b) 364 days after the Effective Date; and
(c) the date on which the Commitments
otherwise terminate in accordance with the provisions of
this Agreement.
(4) The definitions of "Solvent" and "Tangible Net Worth"
are deleted."
(b) Amendments to Article II of the Prior Agreement.
(1) Section 2.06 is amended by inserting the phrase "on any
Offshore Rate Loans (interest on any other type of loans being payable in
accordance with Section 2.08)" after the word "interest".
(2) Section 2.09 is amended in its entirety to provide as
follows:
2.09 Fees. (a) Arrangement, Agency Fees. The
Company shall pay an arrangement fee to the Arranger for the
Arranger's own account, and shall pay an agency fee to the
Agent for the Agent's own account, as required by the letter
agreement ("Fee Letter") between the Company and the
Arranger and Agent dated December 3, 1996.
(b) Commitment Fees. The Company shall pay to
the Agent for the account of each Bank a commitment fee on the
average daily unused portion of such Bank's Commitment, computed
on a quarterly basis in arrears on the last Business Day of each
calendar quarter based upon the daily utilization for that
quarter as calculated by the Agent, equal to .100 percent per
annum. Such commitment fee shall accrue from the Effective Date
to the Revolving Termination Date and shall be due and payable
quarterly in arrears on the last Business Day of each calendar
quarter commencing on March 31, 1997, to the Revolving
Termination Date, with the final payment to be made on the
Revolving Termination Date; provided that, in connection with any
reduction or termination of Commitments under Section 2.05, the
accrued commitment fee calculated for the period ending on such
date shall also be paid on the date of such reduction or
termination, with the following quarterly payment being
calculated on the basis of the period from such reduction or
termination date to such quarterly payment date.
(c) Amendments to Article V of the Prior Agreement.
(1) In Section 5.12(a), the phrase "5% of
the Company's Tangible Net Worth" is deleted and the phrase
"$25,000,000 or more" is inserted in lieu thereof.
(2) The text in Section 5.15 is deleted and
the phrase "Intentionally Omitted" is inserted in lieu
thereof.
(d) Amendments to Article VIII of the Prior Agreement.
(1) In Section 8.01(f), the phrase "ceases
or fails to be Solvent, or" is deleted.
(2) In Section 8.01(i), the phrase "10% of
Tangible Net Worth" is deleted and the phrase "$25,000,000"
is inserted in lieu thereof.
(e) Amendments to Schedules to the Prior Credit Agreement.
(1) Schedule 2.01 is amended by
deleting said Schedule 2.01 in its entirety and by
replacing same with the form of Schedule 2.01 attached
hereto as Annex 1.
(2) Schedule 10.02 is amended by
deleting said Schedule 10.02 in its entirety and by
replacing same with the form of Schedule 10.02 attached
hereto as Annex 2.
3. Representations and Warranties. The Company hereby represents
and warrants to the Agent and the Banks as follows:
(a) No Default or Event of Default has occurred and is
continuing.
(b) The execution, delivery and performance by the Company of
this Agreement and the Prior Agreement as amended and restated by this Agreement
have been duly authorized by all necessary corporate and other action and do not
and will not require any registration with, consent or approval of, notice to or
action by, any Person (including any Governmental Authority) in order to be
effective and enforceable. The Prior Agreement as amended and restated by this
Agreement constitutes the legal, valid and binding obligations of the Company,
enforceable against it in accordance with its respective terms, without defense,
counterclaim or offset.
(c) All representations and warranties of the Company contained
in the Prior Agreement are true and correct.
(d) The Company is entering into this Agreement on the basis of
its own investigation and for its own reasons, without reliance upon the Agent
and the Banks or any other Person.
4. Effective Date.
(a) This Agreement will become effective as of December 24, 1996
(the "Effective Date"), provided that each of the following conditions precedent
is satisfied on or before such date:
(1) The Agent has received from the Company and each of the
Banks a duly executed original (or, if elected by the Agent, an executed
facsimile copy) of this Agreement; and, if requested by any Bank, a Note
substantially in the form of Exhibit H to the Prior Agreement.
(2) The Agent has received all fees and expenses accruing
through December 23, 1996 and/or otherwise required to be paid by the Company in
connection with the Agreement, other than such fees and expenses for which the
Company has not received bills from the applicable Person or Persons.
(3) The Agent has received each of the following, in form
and substance satisfactory to it and the Banks:
(i) copies of the resolutions of the board of
directors of (A) the Company authorizing the transactions contemplated hereby
and (B) the Guarantor authorizing the transactions contemplated by the Guarantor
Acknowledgment and Consent executed by the Guarantor in the form attached hereto
as Annex 3 (the "Consent"), each certified as of the Effective Date by the
Secretary or an Assistant Secretary or other duly authorized officer of such
Person;
(ii) a copy of each of the Articles of Incorporation
and the Korean Commercial Registry extracts of the Guarantor certified by a
Representative Director of the Guarantor; and
(iii) a certificate of the Secretary or Assistant
Secretary or other duly authorized officer of each of the Company and the
Guarantor, as appropriate, certifying (A) the names and true signatures of the
officers of the Company and the Guarantor, respectively, authorized to execute,
deliver and perform, as applicable, this Agreement, and all other Loan Documents
to be delivered by it, respectively, hereunder, and (B) that the charter
documents of the Company provided to the Banks at the time of the execution and
delivery of the Prior Agreement are in full force and effect and are unchanged
from the versions of such documents provided to the Banks at the time of the
execution and delivery of the Prior Agreement.
(4) The Agent has received a duly executed copy of the
Consent.
(5) The Agent has received copies of all consents
(including, without limitation, the consent of Hanil Bank) required in
connection with the execution of this Agreement and the Consent.
(6) The Agent has received all other documents it or any
Bank may reasonably request relating to any matters relevant hereto, all in form
and substance satisfactory to the Agent and the Banks.
(b) From and after the Effective Date, the Prior Agreement is
amended as set forth herein and is restated in its entirety to read as set forth
in the Prior Agreement with the amendments specified herein. The Company
represents and warrants that its obligations under the Prior Agreement and under
the other Loan Documents are not subject to any defense, counterclaim, set-off,
right of recoupment, abatement or other claim.
5. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective successors and
assigns.
(b) This Agreement shall be governed by and construed in
accordance with the law of the State of California.
(c) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Agent of a facsimile transmitted document purportedly
bearing the signature of a Bank, the Guarantor or the Company shall bind such
Bank, the Guarantor or the Company, respectively, with the same force and effect
as the delivery of a hard copy original. Any failure by the Agent to receive
the hard copy executed original of such document shall not diminish the binding
effect of receipt of the facsimile transmitted executed original of such
document of the party whose hard copy page was not received by the Agent.
(d) Reasonably promptly after the satisfaction of the conditions
set forth in Section 4, the Agent will certify such satisfaction in writing to
the Company and the Banks; provided, however, that for purposes of determining
satisfaction of the conditions specified in Section 4, each Bank that has
executed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter either sent by
the Agent to such Bank for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Bank.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in San Francisco, California by their proper and
duly authorized officers as of the day and year first above written.
AST RESEARCH, INC.
By: /s/ WON S. YANG
Title: Senior Vice President, Acting Chief
Financial Officer
By: /s/ MARK DE RAAD
Title: Vice President, Finance and Treasurer
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION,
as Agent
By: /s/ KEVIN MCMAHON
Title:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Bank
By: /s/ KEVIN MCMAHON
Title:
ROYAL BANK OF CANADA
By: /s/ J.D. FROST
Title:
BANQUE NATIONALE DE PARIS
By: /s/ TJALLING TERPSTRA
Title:
By: /s/ C. BETTLES
Title:
NATIONSBANK OF TEXAS, N.A.
By: /s/ CATHERINE HUNTER
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
LOS ANGELES BRANCH
By: /s/ STEVEN LARSEN
Title:
By: /s/ WOLTER MEHRING
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ J.W. PARK
Title:
ABN AMRO BANK N.V.,
LOS ANGELES INTERNATIONAL
BRANCH
By: ABN AMRO NORTH AMERICA, INC., as agent
therefor
By: /s/ KENNETH BOWMAN
Title:
By: /s/ MATTHEW THOMSON
Title:
THE BANK OF NOVA SCOTIA
By: /s/ WERNER TILLINGER
Title:
BANCA COMMERCIALE ITALIANA,
LOS ANGELES FOREIGN BRANCH
By: /s/ RICHARD IWANICKI
Title:
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
Pro Rata
Bank Commitment Share
Bank of America National
Trust and Savings
Association $ 40,000,000 20.000%
Royal Bank of Canada $ 25,000,000 12.500%
Banque Nationale de Paris $ 25,000,000 12.500%
NationsBank of Texas, N.A. $ 25,000,000 12.500%
ABN AMRO Bank N.V.,
Los Angeles International Branch $ 25,000,000 12.500%
The First National Bank
of Chicago $ 10,000,000 5.000%
Commerzbank Aktiengesellschaft,
Los Angeles Branch $ 25,000,000 12.500%
Banca Commerciale Italiana,
Los Angeles Foreign Branch $ 10,000,000 5.000%
The Bank of Nova Scotia $ 15,000,000 7.500%
TOTAL $200,000,000 100.000%
SCHEDULE 10.02
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
ADDRESS FOR NOTICES:
Bank of America National Trust
and Savings Association
Agency Administration Services #5596
1455 Market Street, 13th Floor
San Francisco, California 94103
Attention: Annie Cuenco
Assistant Vice President
Telephone: (415) 436-2775
Facsimile: (415) 436-2700
AGENT'S PAYMENT OFFICE:
Bank of America National Trust
and Savings Association
Agency Management Services #5596
Attention: Agency Management Services #5596
1850 Gateway Boulevard
Concord, California 94520
For credit to account: No. 12339-15104
Ref: AST Research
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
ADDRESS FOR NOTICES (OTHER THAN BORROWING NOTICES
AND NOTICES OF CONVERSION/CONTINUATION):
Bank of America NT&SA
555 California Street, 41st Floor
Corporate Banking, High Technology
Attention: Kevin McMahon
Telephone: (415) 622-8088
Facsimile: (415) 622-4585/2514
ADDRESS FOR BORROWING NOTICES AND NOTICES OF CONVERSION/CONTINUATION):
Bank of America National Trust
and Savings Association
1850 Gateway Boulevard, Fourth Floor
Concord, California 94520
BANQUE NATIONALE DE PARIS
ADDRESS FOR NOTICES:
Banque Nationale de Paris
725 South Figueroa Street, Ste. 2090
Los Angeles, California 90017-5420
Attention: Tjalling Terpstra
Telephone: (213) 488-9120
Facsimile: (213) 488-9602
PAYMENT OFFICE:
Banque Nationale de Paris/Treasury
180 Montgomery Street
San Francisco, California 94104
Attention: Don Hart
Vice President
Telephone: (415) 956-2511
Facsimile: (415) 989-9041
ROYAL BANK OF CANADA
ADDRESS FOR NOTICES:
Royal Bank of Canada
600 Wilshire Blvd., Ste. 800
Los Angeles, California 90017
Attention: Michael Cole
Telephone: (213) 955-5328
Facsimile: (213) 955-5350
PAYMENT OFFICE:
Royal Bank of Canada
1 Financial Square, 23rd Floor
New York, New York 10005-3531
Attention: Helen John
Telephone: (212) 428-6322
Facsimile: (212) 428-2372
NATIONSBANK, N.A.
ADDRESS FOR NOTICES:
NationsBank, N.A.
901 Main Street
67th Floor
Dallas, Texas 75202
Attention: Lori Stone
Telephone: (214) 508-9419
Facsimile: (214) 508-0980
PAYMENT OFFICE:
NationsBank, N.A.
901 Main Street
Dallas, Texas 75202
Attention: Karin Puente
Telephone: (214) 508-0519
Facsimile: (214) 508-0944
ABN AMRO BANK N.V., LOS ANGELES INTERNATIONAL BRANCH
ADDRESS FOR NOTICES (OTHER THAN BORROWING NOTICES AND NOTICES OF
CONTINUATION/CONVERSION):
ABN AMRO Bank N.V., Los Angeles International Branch
300 South Grand Avenue, Suite 1115
Los Angeles, California 90071
Attention: Kenneth I. Bowman/John A. Miller
Telephone: (213) 687-2057/2072
Facsimile: (213) 687-2061
PAYMENT OFFICE AND ADDRESS FOR BORROWING NOTICES AND NOTICES OF
CONTINUATION/CONVERSION:
ABN AMRO Bank N.V., Los Angeles International Branch
300 South Grand Avenue, Suite 1115
Los Angeles, California 90071
Attention: Carol Yi
Telephone: (213) 687-2026
Facsimile: (213) 687-2085/2061
COMMERZBANK AKTIENGESELLSCHAFT, LOS ANGELES BRANCH
ADDRESS FOR NOTICES:
Commerzbank Aktiengesellschaft, Los Angeles Branch
660 Figueroa Stteet
Suite 1450
Los Angeles, CA 90017
Attention: Steve Larson
Telephone No.: (213) 623-8223
Facsimile No.: (213) 623-0039
Commerzbank Aktiengesellschaft, New York Branch
2 World Financial Center
New York, New York 10281-1050
Attention: Andreas Schwung
Telephone: (212) 266-7591
Facsimile: (212) 266-7530
PAYMENT OFFICE:
Commerzbank Aktiengesellschaft, Los Angeles Branch
660 Figueroa Stteet
Suite 1450
Los Angeles, CA 90017
Attention: Steve Larson
Commerzbank Aktiengesellschaft, New York Branch
2 World Financial Center
New York, New York 10281-1050
Attention: Andreas Schwung
Telephone: (212) 266-7591
Facsimile: (212) 266-7530
THE FIRST NATIONAL BANK OF CHICAGO
ADDRESS FOR NOTICES;
The First National Bank of Chicago
153 West 51st Street, 8th Floor
New York, New York 10019
Attention: J.W. Park
Telephone: (212) 373-1033
Facsimile: (212) 373-1458
PAYMENT OFFICE:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: Vic Perez
Telephone: (312) 732-5948
Facsimile: (312) 732-4840
THE BANK OF NOVA SCOTIA
ADDRESS FOR NOTICES:
The Bank of Nova Scotia
580 California Street
Suite 2100
San Francisco, CA 94119
Attention: Werner Tillinger
Telephone: (415) 986-1100
Facsimile: (415) 397-0791
PAYMENT OFFICE:
The Bank of Nova Scotia
600 Peachtree Street, Suite 2700
Atlanta, Georgia 30308
Attention: Michael Silveira
Telephone: (404) 877-1522
Facsimile: (404) 888-8998
BANCA COMMERCIALE ITALIANA:
ADDRESS FOR NOTICES:
Banca Commerciale Italiana,
Los Angeles Foreign Branch
555 South Flower Street
Suite 4300
Los Angeles, CA 90071
Attention: Richard Iwanicki
Telephone: (213) 624-0440
Facsimile: (213) 624-0457
PAYMENT OFFICE:
Banca Commerciale Italiana,
Los Angeles Foreign Branch
555 South Flower Street
Suite 4300
Los Angeles, CA 90071
Attention: Richard Iwanicki
Telephone: (213) 624-0440
Facsimile: (213) 624-0457
Annex 3
GUARANTOR ACKNOWLEDGMENT AND CONSENT
The undersigned, the guarantor with respect to AST Research, Inc.'s (the
"Company") obligations to the Agent and the Banks under the Credit Agreement
dated as of December 20, 1995 (as amended prior to the date hereof, the "Prior
Agreement"), hereby (a) acknowledges and consents to the execution, delivery and
performance by Company of the Amended and Restated Credit Agreement dated as of
December 17, 1996, a copy of which is attached hereto (the "Agreement"), (b)
reaffirms and agrees that the Guaranty and all other documents and agreements
executed and delivered by the undersigned to the Agent and the Banks in
connection with the Prior Agreement and the Agreement are in full force and
effect, without defense, offset or counterclaim and, (c) reaffirms and agrees
that all of the provisions of the Guaranty are applicable to, and enforceable by
the Agent and all Banks party to the Agreement against, the undersigned.
The undersigned hereby represents and warrants to the Agent and the Banks
on the date hereof and as of the Effective Date as follows:
(i) the execution, delivery and performance by the undersigned of the
Guaranty and this Guarantor Acknowledgment and Consent have been duly authorized
by all necessary corporate and other action and do not and will not require any
registration with, consent or approval or, notice to or action by , any Person
(including any Governmental Authority) in order to be effective and enforceable,
except as have been previously obtained and delivered to the Agent and the
Banks;
(ii) the Guaranty and this Guarantor Acknowledgment and Consent constitute
the legal, valid and binding obligations of the undersigned, enforceable against
it, in accordance with their respective terms, without defense, counterclaim or
offset;
(iii) all representations and warranties of the undersigned contained
in the Guaranty are true and correct; and
(iv) the undersigned is entering into this Guarantor Acknowledgment and
Consent on the basis of its own investigations, and for its own reasons, without
reliance upon the Agent, the Banks or any other Person.
(v) it has requested that the Agent and the Banks enter into the Agreement
notwithstanding that the Company may be deemed to be insolvent under applicable
law and that such insolvency may adversely affect its liability under the
Guaranty.
Capitalized terms used herein have the meanings specified in the Agreement.
SAMSUNG ELECTRONICS CO., LTD
Dated: , 1996 By: /s/ KWANG HO KIM
Title: Vice Chairman
FOR IMMEDIATE RELEASE
Media Contact: Emory Epperson
(714) 727-7958
Analyst Contact: Janine Whittington
(714) 727-7780
AST INCREASES CREDIT LINE TO $300 MILLION;
SELLS INTELLECTUAL PROPERTIES TO SAMSUNG FOR $10 MILLION
IRVINE, Calif., Dec. 26, 1996 -- AST Research Inc. (ASTA-NASDAQ) today announced
it has completed the previously-announced negotiation to increase its aggregate
credit line to $300 million, and Samsung Electronics Co. has exercised its
previously-announced option to buy a group of personal computer-related
intellectual properties from AST. Samsung Electronics has agreed to pay $10
million for the intellectual properties.
In increasing its aggregate credit lines to $300 million, AST renewed an
existing $200 million credit line with a consortium of nine banks, led by Bank
of America, and negotiated lines of credit in the aggregate amount of $100
million from Bank of America, ABN Amro N.V. and Societe Generale. The credit
lines extend through late December 1997 and are guaranteed by Samsung. Funds
from the credit lines will be used to repay the previously-announced $50
million short-term loan from Samsung.
AST has sold a total of $25 million of PC-related intellectual property to
Samsung in this year, including an June 1996 Intellectual Property Assignment
Agreement for which AST received $15 million. Similar to those previously
acquired by Samsung, the new intellectual property includes additional families
of patent applications relating to a semiconductor chip design project that was
ongoing at AST during 1994 and 1995, but was not eventually used by AST. As
with those assigned in June 1996, AST obtained a license to those patent
applications which were assigned to Samsung.
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 $2.468 billion company develops a broad spectrum of
desktop, mobile and server PC products that are sold in more than 100 countries
worldwide. AST systems meet a wide range of customer needs, ranging from
corporate business applications to advanced home and home office use. 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.
Information about AST and its products can be found on the World Wide Web at
http://www.ast.com.
# # #
FIRST INTELLECTUAL PROPERTY OPTION EXERCISE
THIS FIRST INTELLECTUAL PROPERTY OPTION EXERCISE ("FIRST OPTION EXERCISE") is
made as of December 17, 1996, and is made pursuant to the Intellectual Property
Assignment Agreement ("Agreement") which was made as of June 27, 1996 by and
between AST Research, Inc., a Delaware, USA corporation ("AST"), and Samsung
Electronics Company Limited, a Korean corporation ("SEC").
PURPOSE
AST and SEC made the prior Agreement for the sale of certain intellectual
properties in the form of patent applications filed in the United States and
counterpart international patent applications therefor. Besides transferring
ownership of certain intellectual properties from AST to SEC, the Agreement also
provided an option for the sale of optional intellectual properties, in one or
more installments, with the price to be agreed by SEC and AST. SEC wishes to
purchase a first group of the optional intellectual properties, and SEC and AST
have reached an agreement on the price. AST is to assign the first group of
optional intellectual properties to SEC, SEC is to pay the agreed price to AST,
with SEC retaining an option to purchase some or all of the remaining optional
intellectual properties which were not included in the first group of optional
intellectual properties.
AGREEMENT
ARTICLE L. DEFINITIONS
1.1 The terms as used in this First Option Exercise shall, unless the context
clearly indicates to the contrary, have the meanings set forth in this
Article 1. In addition, the definitions included in the Agreement are
incorporated by reference, as if set forth herein.
1.2 "FIRST EXERCISE EFFECTIVE DATE" means December 17, 1996.
1.3 "FIRST GROUP OF OPTIONAL INTELLECTUAL PROPERTIES" means the United States
patent applications entitled "High Impedance Test Mode for JTAG," US patent
application number 08/574,593 filed December 19, 1995, and "Queue
Management Mechanism Which Allows Entries to be Processed in Any Order," US
patent application number 08/414,948 filed March 31, 1995, and "Method and
Apparatus for Testing a Megacell in an ASIC Using JTAG," US patent
application number 08/480,483 filed June 7, 1995 (now abandoned), and
"Method and Apparatus for Testing a Megacell in an ASIC Using JTAG," US
patent application number 08/528,397 filed September 14, 1995, and "JTAG
Testing of Buses Using Plug-In Cards with JTAG Logic Mounted Thereon," US
patent application number 08/569,751 filed December 8, 1995, and "Memory
Controller Which Executes Read and Write Commands Out of Order," US patent
application number 08/415,038 filed March 31, 1995, and any patents that
may issue based on such applications, and the international counterpart
applications based on such applications, if any.
1.4 "FIRST REMAINING OPTIONAL INTELLECTUAL PROPERTIES" means the United States
patent applications entitled "Method and Apparatus for Reducing Cumulative
Time Delay in Synchronizing Transfer of Buffered Data Between Two Mutually
Asynchronous Buses," US patent application 08/483,505 filed June 7, 1995
(now abandoned), and "Method and Apparatus for Reducing Cumulative Time
Delay in Synchronizing Transfer of Buffered Data Between Two Mutually
Asynchronous Buses," US patent application 08/510,545 filed August 2, 1995,
and "JTAG Toggle Test Method," US patent application number 08/596,043
filed February 6, 1996, and "Method and Apparatus for Determining the
Status of a Shared Resource," US patent application number 08/568,149 filed
December 7, 1995, and "Glitch Free Clock-Enable Circuit," US patent
application number 08/485,477 filed June 7, 1995 which issued as US Patent
No. 5,537,062 on July 16, 1996, and "Glitch Free Clock-Enable Circuit," US
patent application number 08/679,574, filed on July 15, 1996 (continuation
of US patent application number 08/414,948), and any patents that may issue
based on such applications, and the international counterpart applications
based on such applications, if any.
ARTICLE 2. SALE OF INTELLECTUAL PROPERTIES
2.1 First Group of Optional Intellectual Properties. AST hereby assigns to SEC
all rights, title and interest in and to the First Group of Optional
Intellectual Properties. SEC and AST agree that this First Option Exercise
shall be effective as the written notice described in Section 2.2 of the
Agreement.
2.2 First Remaining Optional Intellectual Properties. SEC shall continue to
have the same option, exercisable at any time between December 17, 1996 and
December 20, 1996, to acquire from AST the First Remaining Optional
Intellectual Properties for the price which may be later agreed upon by AST
and SEC, as stated in Section 2.2 of the Agreement, but SEC shall not be
obligated to exercise its option to purchase any of the First Remaining
Optional Intellectual Properties.
ARTICLE 3. PAYMENT
3.1 First Group Fee. SEC agrees to pay to AST the amount listed in Appendix A
on the date specified in Appendix A in exchange for the transfer and
assignment to SEC of the First Group of Optional Intellectual Properties.
The total of the fee for the transfer and assignment of the First Group of
Optional Intellectual Properties shall be ten million United States dollars
(US$ 10,000,000.00).
3.2 Payment Schedule. SEC agrees to pay to AST the amounts listed in Appendix
A on the dates specified in Appendix A in exchange for the transfer and
assignment to SEC of the First Group of Optional Intellectual Properties
which are acquired by SEC pursuant to this Agreement. Payment of ten
million United States dollars (US$ 10,000,000.00) shall be due for the
First Group of Optional Intellectual Properties on the First Exercise
Effective Date, and payable within 45 days of the First Exercise Effective
Date.
ARTICLE 4. RELATIONSHIP TO THE AGREEMENT
This First Option Exercise shall not amend or cancel any of the terms or
provisions of the Agreement. The First Group of Optional Intellectual
Properties shall be deemed to be acquired by SEC under the Agreement, such
acquisition being effective on the First Exercise Effective Date.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this First Option Exercise, on the dates below
indicated.
SAMSUNG ELECTRONICS CO., LTD. AST RESEARCH, INC.
By: /s/ HYEON-GON KIM By: /s/ WON YANG
Name: Hyeon-Gon Kim Name: Won Yang
Title: Executive Vice President Title: Senior Vice President,
Acting Chief Financial
Officer
Date: Dec. 17, 1996 Date: Dec. 17, 1996
APPENDIX A: PAYMENT SCHEDULE
The payment terms shall be net 45 days from the First Exercise Effective Date.
Terms Payment
Net 45 days US $10 million for the First Group of Optional
Intellectual Properties.
