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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 11 )*
-----
AST RESEARCH, INC.
-------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, $.01 par value
---------------------------------------------------
(Title of Class of Securities)
001907104
-----------------------------------------
(CUSIP Number)
Thomas D. Magill, Esq.
Gibson, Dunn & Crutcher LLP
4 Park Plaza
Irvine, CA 92614
(714) 451-3855
-------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
July 11, 1996
---------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with this statement [_]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-(1)a for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
<PAGE>
----------------------- ---------------------
CUSIP NO. 001907104 SCHEDULE 13D PAGE 2 OF 5 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
(a) Samsung Electronics Co., Ltd.
(b) Samsung Electronics America, Inc.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
(a) Korea
(b) New York
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 30,789,336
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 30,789,336
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
30,789,336
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_]
12
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
13
49.5%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
This Amendment No. 11 amends and supplements the Schedule 13D dated
March 6, 1995, as amended (the "Schedule 13D") of Samsung Electronics Co., Ltd.,
a Korean corporation and its subsidiary Samsung Electronics America, Inc., a New
York corporation (collectively, "Samsung"), with respect to the Common Stock,
$.01 par value, of AST Research, Inc., a Delaware corporation (the "Company").
Unless otherwise defined herein, all capitalized terms shall have the meanings
ascribed to them in the Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Pursuant to the terms of the Letter of Credit Agreement dated as of
July 31, 1995 between Samsung and the Company (the "Agreement"), on July 11,
1996 Samsung advanced to the Company $60 million for the purpose of partially
repaying a $90 million promissory note (the "Tandy Note") due to Tandy
Corporation ("Tandy") related to the 1993 acquisition by the Company of Tandy's
personal computer manufacturing operations. Under the terms of the Agreement,
Samsung has elected to receive shares of the Company's Common Stock in full
repayment of the $60 million advance. Accordingly, on July 11, 1996, the Company
issued to Samsung 8,499,336 additional shares of Common Stock at a per share
price of $7.06 (the average per share closing price of the Common Stock for the
20 consecutive trading days ending July 10, 1996). As a result of such issuance,
and the issuance to Tandy by the Company of 4,498,594 shares of Common Stock in
repayment of the remaining $30 million balance of the Tandy Note, Samsung
beneficially owns 30,789,336 shares of Common Stock, or 49.5% of the outstanding
shares.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NO.
-----------
21 Letter of Credit Agreement dated as of July 31, 1995
3
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: July 11, 1996
SAMSUNG ELECTRONICS CO., LTD.
/s/ Heon H. Chung
----------------------------------------
Name: Heon H. Chung
Title: Executive Director
SAMSUNG ELECTRONICS AMERICA, INC.
/s/ Bo-Soon Song
----------------------------------------
Name: Bo-Soon Song
Title: Executive Director
4
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
21 Letter of Credit Agreement dated as of July 31, 1995
5
<PAGE>
EXHIBIT 21
LETTER OF CREDIT AGREEMENT
--------------------------
This Letter of Credit Agreement (this "AGREEMENT") is entered into as of
July 31, 1995 by and between Samsung Electronics Company, Ltd., a Korean
corporation (the "PURCHASER") and AST Research, Inc., a Delaware corporation
(the "COMPANY").
A. The Purchaser and the Company have entered into that certain Stock
Purchase Agreement dated as of February 27, 1995, as amended by Amendment No. 1
thereto, dated as of June 1, 1995, and Amendment No. 2 thereto, dated as of July
29, 1995 (as so amended, the "STOCK PURCHASE AGREEMENT") pursuant to which the
Purchaser is acquiring certain shares of the Company's Common Stock.
B. As a result of the transactions contemplated by the Stock Purchase
Agreement, the Purchaser will be a significant stockholder of the Company.
C. It is a condition to certain of the transactions contemplated by the
Stock Purchase Agreement and the desire of the Purchaser and the Company that
this Agreement be entered into to establish certain terms and conditions
concerning the Purchaser's providing certain credit support to the Company as
set forth herein.
D. That certain Stockholder Agreement attached as Exhibit G to the Stock
Purchase Agreement provides for the ability of the Purchaser to acquire
additional shares of the Company's Common Stock as contemplated herein, which
shares would be covered by that certain Registration Rights Agreement attached
as Exhibit F to the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, and covenants set forth in this Agreement, the
Purchaser and the Company hereby agree as follows:
ARTICLE 1
---------
DEFINITIONS
-----------
Capitalized terms used in this Agreement without definition shall have the
respective means accorded to them in the Stock Purchase Agreement. Capitalized
terms used in this Agreement and not otherwise defined herein or in the Stock
Purchase Agreement shall have the respective meanings set forth below.
"ADVANCE AMOUNT" shall have the meaning provided in Section 3.2.
"ADVANCE DATE" shall have the meaning provided in Section 3.2.
"AMOUNT" means the Advance Amount or the Draw Amount, as applicable.
"BANK" shall have the meaning provided in Section 2.1.
<PAGE>
"CLOSING PRICE" means the average of the closing bid and asked prices of
the Shares on the over-the-counter market on the day in question as reported on
the Nasdaq National Market; or, if the Shares are listed on the New York Stock
Exchange, the closing sales price, regular way, on the New York Stock Exchange
on such day or, in case no such sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, on the New York Stock
Exchange, or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal national securities exchange on which the Shares are
listed or admitted to trading; or, if not so listed or admitted for trading, in
such manner as may be reasonably determined by any New York Stock Exchange
member firm selected from time to time by the Board for that purpose.
"CURRENT MARKET PRICE" per Share on any date of determination means the
average of the daily closing prices for the twenty (20) consecutive Trading
Dates ending on the Trading Date immediately preceding the date of determination
of the Current Market Price.
"DATE" means the Advance Date or the Draw Date, as applicable.
"DRAW AMOUNT" shall have the meaning provided in Section 3.1.
"DRAW DATE" means the date of a draw by Tandy pursuant to Section 2.2.
"REIMBURSEMENT DATE" shall have the meaning provided in Section 3.1.
"TANDY" means Tandy Corporation, a Delaware corporation.
"TANDY NOTE" means that certain promissory note due July 11, 1996, issued
by the Company to Tandy in the principal amount of $96,720,000.00 as of the date
hereof.
"TRADING DATE" means a date on which the Nasdaq National Market or the New
York Stock Exchange (or any successor to such Exchange), as applicable is open
for the transaction of business.
ARTICLE 2
---------
CREDIT SUPPORT
--------------
2.1 LETTER OF CREDIT. As credit support for the Company's obligations
under the Tandy Note, but subject to Section 2.3, the Purchaser, as applicant
(and without any participation by or further obligation of the Company), shall
cause Bank of America National Trust and Savings Association ("BANK OF AMERICA")
or any investment graded bank permitted by the terms of the Tandy Note or
otherwise acceptable to Tandy (including, if applicable, Bank of America, the
"BANK") to issue, not later than ten (10) Business Days after the Closing of the
purchase and sale of the Second Issuance Shares, a standby letter of credit in
the form required by the Tandy Note or otherwise acceptable to Tandy and
permitting the Company to withdraw and terminate any credit support of its own
for the Tandy Note, naming Tandy as the beneficiary thereunder, in an amount not
less than the lesser of (x) $75,000,000.00 or (y) the outstanding principal
amount of the Tandy Note on such date. Not later than three (3) Business Days
prior to the expiration or termination of such standby letter of credit or any
replacement standby letter of credit complying with the terms hereof, the
Purchaser, as applicant (and without any participation by or further
2
<PAGE>
obligation of the Company), shall cause the Bank to deliver a replacement
standby letter of credit in the form required by the Tandy Note, or otherwise
acceptable to Tandy, naming Tandy as the beneficiary thereunder, in an amount
not less than the lesser of (x) $75,000,000.00 or (y) the outstanding principal
amount of the Tandy Note at such time. The Company shall promptly pay to the
Bank (if requested in writing by the Purchaser) or reimburse the Purchaser, as
applicable, for the fees charged by the Bank in connection with the standby
letters of credit issued in accordance with this Section 2.1.
2.2 DRAWS UNDER LETTER OF CREDIT. Funds under the standby letter of
credit pursuant to Section 2.1 shall not be subject to Korean regulatory
approval (except for necessary approvals, if any, received prior to the date
hereof) and shall be available to Tandy by their draft drawn on the issuing bank
at sight, so long as accompanied by a statement dated on or before the date of
presentation and signed by a person stated to be an authorized officer of Tandy
reading as follows:
"We hereby certify that AST Research, Inc., has defaulted under the terms
of the Promissory Note dated July 12, 1993 between Tandy Corporation and
AST Research, Inc. and Tandy Corporation has exercised the right of
Acceleration pursuant to Section 8 of the Promissory Note."
Such standby letter of credit shall provide that it will be payable on a
Business Day within three days of sight as set forth in this Section 2.2. Except
as otherwise expressly provided in this Agreement, the Purchaser shall have no
obligation to perform any obligation of the Company under the Tandy Note.
2.3 LETTER OF GUARANTEE. Notwithstanding anything herein to the contrary,
if not later than ten (10) Business Days after the Closing of the purchase and
sale of the Second Issuance Shares, Tandy agrees to accept, in lieu of a new
bank letter of credit and without any obligation or requirement for the Company
to provide or participate in any form of credit support, the Purchaser's
guarantee of or other credit support for the Company's performance of its
obligations under the Tandy Note, then the Purchaser may, in its sole
discretion, provide to Tandy a guarantee or such other credit support in such
form as is acceptable to the Purchaser and Tandy and approved by the Company
(which approval shall not be unreasonably withheld). For purposes of this
Agreement, any payment by the Purchaser pursuant to such a guarantee or other
credit support shall be treated in the same manner as a draw by Tandy under the
standby letter of credit described in Section 2.1.
ARTICLE 3
---------
REIMBURSEMENT; ADVANCEMENT OF FUNDS
-----------------------------------
3.1 REIMBURSEMENT. The Company hereby promises to reimburse the
Purchaser, as provided in Section 3.3, for any draws by Tandy pursuant to
Section 2.2, on a date (the "REIMBURSEMENT DATE") agreed upon by the Company and
the Purchaser, which shall be no later than ten (10) Business Days following the
receipt by the Company of a written notice setting forth the date and amount
(the "DRAW AMOUNT") of each draw by Tandy pursuant to Section 2.2.
3
<PAGE>
3.2 ADVANCES OF FUNDS. Subject to any necessary Korean regulatory
approval, the Purchaser hereby promises to advance the Company in cash, and the
Company promises to repay the Purchaser as provided in Section 3.3, any amounts
requested by the Company, not to exceed $75,000,000.00 (less any amounts
previously drawn on the Letter of Credit in accordance with Section 2.2), solely
for prompt application in making required principal payments in respect of the
Tandy Note, on a date (the "ADVANCE DATE") agreed upon by the Company and the
Purchaser, which shall be no later than fifteen (15) Business Days following the
receipt by the Purchaser of a written notice setting forth the date and amount
(the "ADVANCE AMOUNT") of each required payment in respect of the Tandy Note for
which an advance is being requested under this Section 3.2. Notwithstanding the
foregoing, the obligation of the Purchaser to advance such funds shall be
conditioned on the Company having provided to the Purchaser a written agreement
reasonably satisfactory to the Purchaser that the Company has available, and
will pay to Tandy when due, all other funds, if any, necessary to pay in full
such required principal payments. The Purchaser represents and warrants to the
Company that it will use its best efforts to obtain all necessary regulatory
approvals for any such advances which may be required as set forth herein.
3.3 REPAYMENT OF AMOUNTS. On each Date the Company shall, at the
Purchaser's election (which shall be made in writing and provided to the Company
no later than five (5) Business Days following the date of the notice required
under Section 3.1 or 3.2, as applicable), either (a) provide a promissory note
in favor of the Purchaser with a principal amount equal to the applicable
Amount, in the form of Schedule I hereto; or (b) agree to issue to the
Purchaser, within ten (10) Business Days following receipt by the Company of a
written notice setting forth such election, that number of Shares (rounded to
the nearest whole Share) having a Current Market Price as of the Date equal to
the applicable Amount (subject to the 49.9% ownership limitation contained in
Section 2.1.7 of the Stockholder Agreement). At the election of the Purchaser,
the Company shall so repay the Purchaser using any combination of the mechanisms
provided in the preceding clauses (a) and (b), so long as the sum of the
principal amount of a loan under clause (a) and the Current Market Price of
Shares under clause (b) in no event exceed the applicable Amount. The Company
represents and warrants to the Purchaser that, assuming due execution, delivery
and performance by the Purchaser of its obligations under this Article 3, (x)
each promissory note to be provided under clause (a) will, at such time, be duly
authorized and enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws, now or hereafter in effect,
relating to or affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought at law or in
equity), and (y) any Shares to be issued under clause (b) will, at such time, be
duly authorized, validly issued and outstanding, fully paid and nonassessable,
free and clear of any Liens or restrictions (unless created by the Purchaser),
other than restrictions under the Stockholder Agreement or under applicable law.
ARTICLE 4
---------
MISCELLANEOUS
-------------
4.1 TERMINATION. This Agreement and the rights and obligations of the
Purchaser and the Company hereunder, other than under Article 4 hereof, shall
terminate on July 31, 1996.
4
<PAGE>
4.2 STOCK PURCHASE AND OFFER AGREEMENT. The provisions of Article 9
(other than Section 9.2) of the Stock Purchase Agreement are incorporated herein
by reference and shall govern this Agreement as though set forth in full herein
and as though references in such Article 9 to "this Agreement" were references
to this Agreement.
4.3 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
governed by, construed under and enforced in accordance with, the laws of the
State of California without regard to its conflict-of-laws principles. The
Purchaser and the Company agree that (i) any legal action or proceeding arising
out of or in connection with this Agreement or the transactions contemplated
hereby shall be brought exclusively in the courts of the State of California or
the Federal courts of the United States of America sitting in California, (ii)
each irrevocably submits to the jurisdiction of each such court, and (iii) any
summons, pleading, judgment, memorandum of law, or other paper relevant to any
such action or proceeding shall be sufficiently served if delivered to the
recipient thereof by certified or registered mail (with return receipt) at its
address set forth in Section 9.5 of the Stock Purchase Agreement. Nothing in the
preceding sentence shall affect the right of any party to proceed in any
jurisdiction for the enforcement or execution of any judgment, decree or order
made by a court specified in said sentence.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
AST RESEARCH, INC. SAMSUNG ELECTRONICS
COMPANY, LTD
By: /s/ Safi U. Qureshey By: /s/ Bo-Soon Song
------------------------------- --------------------------------
Name: Safi U. Qureshey Name: Bo-Soon Song
Title: Chief Executive Officer Title: Senior Managing Director
6
<PAGE>
SCHEDULE 1
[FORM OF]
---------
PROMISSORY NOTE
---------------
$_________ [insert date of applicable Draw]_______________, 199_
Irvine, California
FOR VALUE RECEIVED, AST Research, Inc., a Delaware corporation
("BORROWER"), hereby unconditionally promises to pay to Samsung Electronics
Company, Ltd., a Korean corporation ("LENDER"), or assigns, at the address
listed in Section 7 below, or at such other place as the holder hereof may from
time to time notify Borrower in writing, the principal sum of __________________
DOLLARS ($________), together with interest from the date hereof, on the
outstanding principal amount at the rate set forth herein below. Lender has lent
to Borrower the sum of _____________________ DOLLARS ($________) on the date
hereof.
1. The outstanding principal amount of this Note, together with all
accrued and unpaid interest thereon, shall bear interest at the Applicable Rate
(as defined below) determined as of the day (the "Determination Date") which is
three business days before the date on which interest is next due. The
"Applicable Rate" for each interest accrual period during which this Note is
outstanding shall mean the rate, on an annualized basis, most recently announced
as of the Determination Date by Bank of America National Trust and Savings
Association as its reference rate. Interest on the outstanding principal amount
shall be payable semiannually on ___________ and ___________ of each year,
commencing ___________, 199_, and shall be calculated on the basis of a 360-day
year of twelve 30-day months. Interest will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance.
2. The principal sum of this Note, together with all accrued and unpaid
interest hereon and all other amounts due hereunder, shall be due and payable in
full on the earlier to occur of (a) [insert the date which is three years from
the date hereof] (the "Maturity Date") or (b) such time as Lender declares the
entire amount of this Note due and payable in accordance with the provisions of
Section 4 hereof.
3. Principal and interest and all other amounts due hereunder shall be
payable in lawful money of the United States of America. Payments shall be
applied first to interest on past due interest, second to past due interest,
third to accrued interest, fourth to all other amounts (other than principal)
due hereunder, and fifth to principal. The undersigned may prepay all or part of
this Note at any time and from time to time without penalty.
4. An event of default ("EVENT OF DEFAULT") hereunder shall occur if:
a. Borrower shall fail to pay any amount due hereunder as and when
due:
b. there shall be a default under any evidence of indebtedness for
borrowed money of Borrower or any of its subsidiaries having a principal amount
in excess of $25 million
<PAGE>
(i) resulting from the failure to pay principal at maturity or (ii) as a result
of which the maturity of such indebtedness has been accelerated prior to its
stated maturity;
c. Borrower shall admit in writing its inability to pay or shall be
unable to pay its debts as they become due, or shall apply for a receiver,
trustee or similar officer with respect to all or a substantial part of its
property or shall institute by petition, application, answer, consent or
otherwise, any bankruptcy, insolvency, reorganization, arrangement, readjustment
of debts, dissolution, liquidation or similar proceedings relating to Borrower
under the laws of any jurisdiction; or
d. Any creditor of Borrower shall apply for a receiver, trustee or
similar officer with respect to all or a substantial part of Borrower's property
or shall institute by petition, application, answer, consent or otherwise, any
bankruptcy, insolvency, reorganization, arrangement, readjustment of debts,
dissolution, liquidation or similar proceedings relating to Borrower under the
laws of any jurisdiction, and such petition, bankruptcy, or other proceeding
shall not be stayed, bonded or discharged within ninety (90) days.
Upon the occurrence of any Event of Default, and at such time as any Event
of Default is continuing, the holder hereof, at its option, may declare all sums
due hereunder immediately due and payable without notice or demand.
5. No failure or delay on the part of the holder of this Note or the
failure to exercise any power or right under this Note shall operate as a waiver
of such power or right or preclude other or further exercise thereof or the
exercise of any other power or right. No waiver by the holder of this Note will
be effective unless and until it is in writing and signed by such holder. No
waiver of any condition or performance will operate as a waiver of any
subsequent condition or obligation. The undersigned hereby waives diligence,
presentment, demand for payment, notice of dishonor or acceleration, protest and
notice of protest, and any and all other notices or demands in connection with
delivery, acceptance, performance, default or enforcement of this Note.
6. In the event that any action, suit or other proceeding is instituted
concerning or arising out of this Note, the prevailing party shall recover all
of such party's costs, and reasonable attorneys' fees incurred in each and every
such action, suit, or other proceeding, including any and all appeals or
petitions therefrom.
7. Notices required or permitted to be given under this Note to any party
hereto by any other party shall be in writing and shall be deemed to have been
duly delivered and given when personally delivered to the party (including by
express courier service) or sent by facsimile transmission at the address or
number set forth below, or any such other address or number as shall be given in
writing by the respective party to all other parties:
Borrower: AST Research, Inc.
16215 Alton Parkway
Irvine, CA 92718
Attention: Chief Financial Officer
8
<PAGE>
with a copy to: Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, 34th Floor
Los Angeles, CA 90071
Attn: Thomas C. Janson, Jr.
Lender: Samsung Electronics Company, Ltd.
------------------------------------
------------------------------------
Attn:
with a copy to: Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, CA 90071
Attn: Andrew Bogen
8. This Note, its validity, construction and effect, shall be governed
by, construed under and enforced in accordance with, the laws of the State of
California without regard to its conflict-of-laws principles. Borrower and
Lender agree that (i) any legal action or proceeding arising out of or in
connection with this Note or the transactions contemplated hereby shall be
brought exclusively in the courts of the State of California or the Federal
courts of the United States of America sitting in California, (ii) each
irrevocably submits to the jurisdiction of each such court, and (iii) any
summons, pleading judgment, memorandum of law, or other paper relevant to any
such action or proceeding shall be sufficiently served if delivered to the
recipient thereof by certified or registered mail (with return receipt) at its
address set forth in Section 7 hereof. Nothing in the preceding sentence shall
affect the 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.
9. It is the intent of Borrower and Lender in the execution of this Note
and in all transactions related hereto to comply with the usury laws of the
State of California (or the usury laws of any other state that might be
determined by a court of competent jurisdiction to be applicable notwithstanding
such choice of law, hereinafter collectively referred to as "Usury Laws"). In
the event that, for any reason, it should be determined that the Usury Laws
apply to the Loan evidenced hereby, Borrower and Lender stipulate and agree that
none of the terms and provisions contained herein shall ever be construed to
create a contract for use, forbearance or detention of money requiring payment
of interest at a rate in excess of the maximum interest rate permitted to be
charged by the Usury Laws. In such event, if Lender shall collect monies or
other property which are deemed to constitute interest which would otherwise
increase the effective interest rate on this Note to a rate in excess of the
maximum rate permitted to be charged by the Usury Laws, all such sums or
property deemed to constitute interest in excess of such maximum rate shall, at
the option of Lender, be credited to the payment of the principal sum due
hereunder.
10. This Note shall not be assignable by Borrower. This Note shall be
assignable by Lender and shall inure to the benefit of Lender and its successors
and assigns.
9
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Note to be duly
executed and delivered as of the day and year first above written.
AST RESEARCH, INC.
By:
-----------------------------------
Name:
Title:
10
