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)
JUNE 28, 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 June 28, 1996, AST Research, Inc. (the "Company") announced that it will
receive $60 million from Samsung Electronics Co. Ltd. ("Samsung") that will be
used toward paying off a $90 million promissory note due to Tandy Corporation
("Tandy") related to the 1993 acquisition of Tandy's PC manufacturing
operations.
In return for the $60 million, Samsung will receive an equal value of newly-
issued shares that could bring Samsung's total ownership of shares and options
up to maximum of 49.9 percent of the Company's outstanding shares. Repayment to
Samsung in a combination of common stock of the Company and a promissory note is
provided by the terms of the Letter of Credit Agreement dated July 31, 1995
between the Company and Samsung. Any amount still owed to Samsung after
reaching the 49.9 percent limit would be paid in the form of a three-year
promissory note. The Company is also in discussions with Tandy to satisfy the
remaining balance of the promissory note with, at the Company's discretion, a
combination of cash or newly-issued shares. Payment to Tandy in a combination
of cash and the common stock of the Company is provided by the terms of the July
12, 1993 Promissory Note between the Company and Tandy, including amendments
through and including the most recent Amendment No. 4 effective August 25,
1995.
The Company also announced that it has entered into a $15 million intellectual
property assignment agreement with Samsung to transfer three families of patent
applications to Samsung. The patent applications relate to a semiconductor chip
design project of the Company that was not eventually used. Payment is due from
Samsung to the Company on this agreement 45 days from the effective date, which
is June 27, 1996.
On June 28, 1996, the Company announced that Mr. Kwang-Ho Kim, Vice Chairman,
President and Chief Executive Officer of Samsung and a board member of the
Company, has been elected as Chairman of the Board. Safi Qureshey, co-founder
and former Chairman will continue with the Company as a board member and
Chairman Emeritus.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit
Number Description
99.1 Press release issued by the Registrant on June 28, 1996,
announcing that the Company will receive $60 million
from Samsung to be used towards repayment of a $90 million
note due to Tandy. The Company also announced that it has entered
into a $15 million intellectual property assignment agreement.
99.2 Press release issued by the Registrant on June 28, 1996,
announcing that Mr. Kwang-Ho Kim, Vice Chairman,
President and Chief Executive Officer of Samsung and a
board member of the Company, has been elected as Chairman
of the Board. Safi Qureshey, co-founder and former Chairman
will continue with the Company as a board member and
Chairman Emeritus.
99.3 Intellectual Property Assignment Agreement dated June 27, 1996.
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/ JOSEPH E. NORBERG
Joseph E. Norberg
Senior Vice President, and
Chief Financial Officer
Date: June 28, 1996
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Analyst Contact: Misty Ohmart
(714) 727-7728
Media Contact: Emory Epperson
(714) 727-7958
AST ANNOUNCES $60 MILLION FROM SAMSUNG TO REPAY TANDY NOTE
Also Announces $15 Million Intellectual Property Assignment Agreement
IRVINE, Calif., June 28, 1996 -- AST Research Inc. (ASTA--NASDAQ) announced
today it will receive $60 million from Samsung Electronics that will be used to
help pay off a $90 promissory note due to Tandy Corp. related to the 1993
acquisition of Tandy Corp.'s PC manufacturing operations.
In return for the $60 million, Samsung will receive an equal value of
newly-issued shares that could bring Samsung's total ownership of shares and
options up to a maximum of 49.9 percent of AST's outstanding shares. Any amount
still owed to Samsung following achievement of the 49.9 percent limit would be
paid in the form of a three-year promissory note. AST is also in discussions
with Tandy to satisfy the remaining balance of the promissory note with, at the
company's discretion, a combination of cash or newly-issued shares.
AST also announced that it has entered into a $15 million intellectual
property assignment agreement with Samsung to transfer three families of patent
applications to Samsung. The patent applications relate to a semiconductor chip
design project that was ongoing at AST during 1994 and 1995, but which was not
eventually used by AST.
Samsung also obtained an option to acquire eight additional families of
patent applications which came from that same semiconductor chip design project.
The option is excercisable at a price to be determined in the future. AST also
obtains a perpetual license under the patent applications.
Samsung has significant business in semiconductor chip design. AST
continues to maintain a large portfolio of patents and patent applications.
The shares of AST stock are being sold or transferred in private
transactions, are not registered under the Securities Act of 1933, and will be
subject to resale restrictions until and unless subsequently registered under
the Securities Act of 1933.
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.
# # #
EXHIBIT 99.2
FOR IMMEDIATE RELEASE
Analyst Contact: Misty Ohmart
(714) 727-7728
Media Contact: Emory Epperson
(714) 727-7958
AST NAMES KWANG-HO KIM AS NEW CHAIRMAN
IRVINE, Calif., June 28, 1996 -- AST Research Inc. (ASTA--NASDAQ) announced
today that Kwang-Ho Kim, 56, Vice Chairman, President and Chief Executive
Officer of Samsung Electronics and an AST board member, has been elected as
Chairman of the Board. Safi Qureshey, co-founder and former Chairman will
continue with the company as a board member and Chairman Emeritus.
"I am pleased that our new Chairman demonstrates confidence that we are
making progress in our turnaround efforts," said Ian Diery, AST president and
chief executive officer. "A continued strong relationship with Samsung is
extremely beneficial as we continue in our efforts of being first to market with
leading edge products. Our enhanced alliance enables AST to be better
positioned to increase its U.S. and worldwide market share amid continued
pressures from both domestic and international competitors."
"The time is right for Samsung to enhance its commitment with AST in order
to help the company position itself for sustained growth," said Qureshey, who
will continue to be actively involved in technology direction, corporate liaison
and customer relations roles. "I wholeheartedly support our new board structure
and will support AST and Samsung management to achieve our mutual goals."
"The mutual decision to become an even stronger partner illustrates our
confidence in Ian Diery's leadership, AST's turnaround efforts and our long-term
relationship among AST's employees, customers, suppliers and vendors," said K.H.
Kim. "In the spirit of AST's first to market philosophy, our increased
commitment will also help AST establish a leadership role in emerging
technologies as the convergence of PC, consumer electronics and communications
products evolve."
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. 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.
# # #
INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT
THIS INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT ("AGREEMENT") is 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 has available for sale certain intellectual properties in the form of patent
applications filed in the United States and counterpart patent applications
therefor. SEC wishes to own certain of these intellectual properties, and
wishes to have the options to acquire others of the intellectual properties.
AST wishes to obtain a non-exclusive license from SEC under all of the
intellectual properties transferred to SEC. SEC is willing to pay to AST
certain specified intellectual property assignment fees for the ownership of the
intellectual properties to be sold by AST to SEC.
AGREEMENT
ARTICLE L. DEFINITIONS
1.1 The terms as used in this Agreement shall, unless the context clearly
indicates to the contrary, have the meanings set forth in this Article 1.
1.2 "EFFECTIVE DATE" means June 27, 1996.
1.3 "SUBSIDIARIES" means any corporation, company or other entity controlled
by, controlling, or under common control with, either party hereto. As
used herein, the term "control" means ownership or control, direct or
indirect, now or hereafter during the term of this Agreement, of more than
fifty percent (50%) of the outstanding shares or interest entitled to vote
for the election of directors (other than any shares or stock whose voting
rights are subject to restriction) of such corporation, company or other
entity. Any corporation, company or other entity which would at any time
be a Subsidiary of AST or SEC, as the case may be, by reason of the
foregoing shall be considered a Subsidiary for the purposes of the
Agreement only so long as such control exists. Any and all licenses and
other rights granted to Subsidiaries pursuant to this Agreement shall
automatically and immediately terminate at such time as such corporation,
company or other entity no longer satisfies the control or other
requirements set forth in this Section.
1.4 "IMMEDIATE INTELLECTUAL PROPERTIES" means the United States patent
applications entitled "Refresh Strategy for DRAMs," US patent application
number 08/527,950, filed September 14, 1995, and "Method and Apparatus for
Reducing Latency Time on an Interface by Overlapping Transmitted Packets,"
US patent application number 08/609,175 filed March 1, 1996, and "Method
and Apparatus for Enhancing Performance of a Processor," US patent
application number 08/609,357 filed March 1, 1996, and any patents that may
issue based on such applications, and the international counterpart
applications based on such applications, if any.
1.5 "OPTIONAL INTELLECTUAL PROPERTIES" means the United States patent
applications entitled "Memory Controller Which Executes Read and Write
Commands Out of Order," US patent application number 08/415,038 filed March
31, 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 "Glitch Free Clock-Enable Circuit," US patent
application number 08/485,477 filed June 7, 1995, and "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 "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 "High Impedance Test Mode for JTAG," US patent
application number 08/574,593 filed December 19, 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 any patents that may issue based on such applications, and the
international counterpart applications based on such applications, if any.
1.6 "INTELLECTUAL PROPERTIES" means the Immediate Intellectual Properties and
the Optional Intellectual Properties.
ARTICLE 2. SALE OF INTELLECTUAL PROPERTIES
2.1 Immediate Intellectual Properties. AST hereby assigns to SEC all rights,
title and interest in and to the Immediate Intellectual Properties.
2.2 Optional Intellectual Properties. SEC shall have the option, exercisable
at any time between July 1, 1996 and December 20, 1996, to acquire from AST
the Optional Intellectual Properties for the price which may be later
agreed upon by AST and SEC. Such option shall be exercisable by SEC
providing written notice to AST, provided that a price has been agreed to
by both SEC and AST. AST agrees to assign to SEC all rights, title and
interest in and to the Optional Intellectual Properties, if the option
previously specified in this section 2.2 is exercised by SEC, and if AST
and SEC agree to a price for such Optional Intellectual Properties. SEC
shall have no obligation to exercise the option provided in this Section
2.2. SEC and AST may later agree to price the Optional Intellectual
Properties in order to allow SEC to exercise this option in one or more
installments, or for SEC to exercise a portion of this option and reserve
some portion of this option for later potential exercise prior to December
20, 1996. This option is not transferable or assignable by SEC.
2.3 Form of Assignments and Transfers, Recordation. AST agrees to complete and
execute assignment and transfer forms for any Intellectual Properties
acquired by SEC under this Agreement as may be advantageous, and to provide
such forms to SEC for recording in the various patent and intellectual
property offices; however, the legal title for the Immediate Intellectual
Properties shall pass to SEC on the Effective Date of this Agreement, and
shall not be delayed by any delays in the process of executing, filing or
recording of such assignment and transfer forms. For international
applications under the Patent Cooperation Treaty to be transferred under
this Agreement, AST shall transfer such applications to SEC itself, or to
SEC and Samsung Electronics America, Inc. (which is incorporated in New
York), as may be designated by SEC in compliance with the applicable laws.
SEC agrees to complete and sign any documents necessary or convenient to
accept or effect the transfers under this Agreement. The recording of such
forms and the expense for the recording and filing of the assignment and
transfer forms shall be the responsibility of SEC.
2.4 Transfer of Files and Materials. AST agrees to provide, by instructions to
its outside counsel, that the originals of patent prosecution files be
transfered to SEC, or to the counsel specified by SEC, for Intellectual
Properties acquired by SEC under this Agreement. Such files transfered to
SEC pursuant to this section 2.4 shall be owned by SEC and shall be the
Confidential Information of SEC, but AST and its counsel shall be entitled
(but not required) to retain copies of such files. Should SEC determine
that materials or documents are missing from such files, it shall promptly
notify AST, and AST agrees to use reasonable efforts to locate such
materials or documents and promptly forward the same to SEC or its counsel.
2.5 Cooperation During Patent Prosecution. To the extent that AST and SEC are
prosecuting counterpart patent applications, SEC and AST shall keep each
other informed and provide each other with copies of office actions,
amendments, prior art statements, search reports and other documents
concerning such counterpart applications; and such documents shall be
considered the Confidential Information of the party supplying such
documents.
2.6 Consent to Use of Counsel. AST has used various law firms for the filing
and prosecution of the Intellectual Properties. AST hereby consents that
SEC may use such law firms, should SEC wish, for the continued prosecution
of Intellectual Properties transferred from AST to SEC pursuant to this
Agreement. SEC shall have no obligation to use such law firms. Should SEC
determine to use such law firms, AST shall have no obligation to pay for
any fees or expenses of such law firms which were not incurred at AST's
request or direction.
ARTICLE 3. PAYMENT
3.1 Immediate 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 Immediate Intellectual Properties. The total of
the fee for the transfer and assignment of the Immediate Intelletual
Properties shall be fifteen million United States dollars (US$
15,000,000.00).
3.2 Optional Fee. SEC agrees to pay to AST an amount to be agreed upon by SEC
and AST on the date specified in Appendix A in exchange for the transfer
and assignment to SEC of the Optional Intellectual Properties, if SEC
notifies AST that it is exercising its option to acquire the Optional
Intellectual Properties in accordance with section 2.2 of this Agreement.
The total of the fee for the Optional Intellectual Properties shall be the
amount as may later be agreed upon between AST and SEC.
3.3 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 Intellectual Properties which are acquired by SEC
pursuant to this Agreement. Payment of fifteen million United States
dollars (US$ 15,000,000.00) shall be due for the Immediate Intellectual
Properties on the Effective Date, and payable within 45 days of the
Effective Date. Payment of an amount as may later be agreed upon by AST
and SEC shall be due for the Optional Intellectual Properties if and on the
date when SEC exercises its option pursuant to section 2.2 of this
Agreement, and such amount shall be payable within 45 days of the such
date.
ARTICLE 4. LICENSE
4.1 License Grant. SEC hereby grants to AST and its Subsidiaries a non-
exclusive, non-transferable, worldwide, perpetual and royalty-free license
to any Intellectual Properties acquired by SEC under this Agreement, to
develop, manufacture, have manufactured, use, modify, prepare derivative
works based upon, copy, distribute, use in public performances, lease, sell
or otherwise dispose of any article of manufacture or engage in any
activity. Nothing herein shall be construed as granting a right to
sublicense to any third party the license granted above without a prior
written consent of SEC. Any licenses granted to any Subsidiary hereunder
shall terminate at such time as such entity no longer qualifies as a
Subsidiary as defined in this Agreement. Notwithstanding any other
provision of this Agreement, the license of this section 4.1 shall survive
the termination of this Agreement, and shall extend until such time as all
rights have expired under any of the Intellectual Properties acquired by
SEC under this Agreement or because of this Agreement.
4.2 Limitations on License. Notwithstanding any other provision of this
Agreement, AST shall not have the right to grant licenses or sublicenses to
any third parties, excepting for licenses or sublicenses to AST
Subsidiaries to the extent permitted under this Agreement, and further
excepting licenses which would otherwise be implied to purchasers of AST
products for the use or resale of such products. Notwithstanding any other
provision of this Agreement, any purported or attempted grant by AST of a
license or sublicense contrary to this Agreement shall be of no force or
effect.
ARTICLE 5. WARRANTY
5.1 Warranty Disclaimer. AST provides SEC its Intellectual Properties on an
"as-is" basis only, except that AST warrants that any Intellectual
Properties acquired by SEC under this Agreement are owned by AST. Both SEC
and AST recognize that valid patents may not issue on the Intellectual
Properties transferred under this Agreement for a variety of reasons, that
prior art may invalidate patents issuing on such Intellectual Properties,
that third parties may obtain blocking patents, or that other obstacles may
occur; but SEC has evaluated such risks and taken account of such risks in
the terms of this Agreement. SEC has had a full opportunity to evaluate
all aspects of the Intellectual Properties. Licenses may have been granted
by AST to third parties under the Intellectual Properties prior to this
Agreement, and may be granted by AST to third parties for Optional
Intellectual Properties prior to the date that ownership to such Optional
Intellectual Properties is acquired by SEC under this Agreement; and the
transfer of ownership of Intellectual Properties pursuant to this
Agreeement is made subject to such licenses granted by AST.
5.2 Warranty Limitations. Nothing contained in this Agreement, unless
otherwise agreed to in writing by both SEC and AST, shall be construed as:
(a) a warranty or representation that the manufacture, use, sale or other
disposal of any articles of manufacture by the other party under this
Agreement will be free from infringement of patents or any other
intellectual property rights of any third party; or
(b) conferring any right to use in advertising, publicity or otherwise,
any trademark, trade name or names, or any contraction, abbreviation
or simulation thereof, of either party; or
(c) conferring by implication, estoppel or otherwise, any license or other
right except for the license expressly granted hereunder; or
(d) an obligation to furnish any technical information or know-how except
as otherwise specifically provided herein.
ARTICLE 6. EFFECT OF TERMINATION
In any event of termination pursuant to this Agreement, (i) SEC shall be
entitled to retain any Intellectual Properties which it acquired to the
date of such termination, (ii) all licenses and options granted to the non-
defaulting (if any) party and its Subsidiaries prior to the effective date
of such termination shall continue in full force and effect, and (iii) all
licenses and options granted to the defaulting (if any) party hereunder and
its Subsidiaries shall immediately terminate.
ARTICLE 7. TERM AND TERMINATION
7.1 Term. This Agreement shall become effective and come into full force on
the Effective Date. The Agreement shall not be effective and shall have no
force prior to the Effective Date. This Agreement shall continue in full
force and effect until July 31, 2000, unless earlier terminated as provided
in this Agreement. The term of the Agreement may be extended by mutual
written consent of both parties.
7.2 Termination on Bankruptcy or Material Adverse Change. Either party may
terminate this Agreement effective immediately and without liability upon
written notice to the other party if: (i) either party declares bankruptcy
or bankruptcy proceedings are instituted involuntarily on his behalf, and
the voluntary or involuntary proceedings are not dismissed within 30 days,
or (ii) there is a material adverse change in the financial condition of
the other party.
7.3 Termination on Default. Except as otherwise provided elsewhere herein, if
either party fails to perform any material obligation under this Agreement,
then, the non-defaulting party may terminate this Agreement forthwith upon
written notice to the defaulting party, unless the breach has been cured
within 45 days after a notice of such breach is given.
7.4 Post-Termination Activities. In the event of any termination of this
Agreement, the parties shall cooperate in good faith to conclude any
ongoing activities related to this Agreement provided, however, that
neither party shall be obligated to incur any material expense in
connection with such cooperation or otherwise take actions that may result
in a material detriment to such party.
ARTICLE 8. SURVIVALS
Except as otherwise explicitly provided in this Agreement, the parties'
rights and obligations which, by their nature, would continue beyond the
termination, cancellation, or expiration of this Agreement shall survive
such termination, cancellation, or expiration.
ARTICLE 9. CONFIDENTIALITY
9.1 Definition. The term "Confidential Information" shall mean any information
disclosed by one party (the "Disclosing Party") to the other party (the
"Receiving Party") in connection with performance of this Agreement which
is in written, graphic, machine readable or other tangle form and is marked
"Confidential", "Proprietary" or in some other manner to indicate its
confidential nature. Confidential Information may also include orally
disclosed information, provided that such information is designated as
confidential at the time of disclosure and included in a written summary
sent by the Disclosing Party to the Receiving Party within thirty (30) days
after its oral disclosure, and which is marked in a manner to indicate its
confidential nature.
9.2 Confidentiality Obligations. Receiving Party shall keep and shall cause
its Subsidiaries to keep any Confidential Information, including but not
limited to the Technical Information disclosed by the Disclosing Party
hereunder, in confidence, and shall not disclose such Confidential
Information to any third party during the term of this Agreement or at any
time thereafter. The Receiving Party shall only permit disclosure of the
Confidential Information to the Receiving Party's employees or consultants
(who are bound by written confidentiality agreements imposing substantially
the same obligations as set forth herein) who have a need to know and shall
not use the Confidential Information for any purpose other than the purpose
contemplated by this Agreement in connection with which such Confidential
Information is disclosed. The Receiving Party agrees to obtain any
necessary consents from third parties before Confidential Information is
disclosed from the Disclosing Party to the Receiving Party under this
Agreement.
9.3 Confidentiality for Have-Made Manufacturers. Each party shall cause any of
its have-made manufacturers having access to the Confidential Information
of the other party to comply with the confidentiality obligation set forth
in this Article 9 by entering into a Confidentiality Agreement with such
manufacturer that imposes upon the manufacturer, confidentiality
obligations substantially the same as set forth herein.
9.4 Exceptions. The confidentiality obligations set forth in this Article 9
shall not apply to any information which:
(a) is rightfully in the possession of the Receiving Party prior to
receipt from the Disclosing Party; or
(b) is publicly known through no fault of the Receiving Party; or
(c) is rightfully received by the Receiving Party from a third party
without the breach of any restriction on disclosure; or
(d) is independently developed by the Receiving Party provided that the
Receiving Party provides substantial documentation of such independent
development and demonstrates that such independent development was
accomplished without any reference to or based upon the Confidential
Information; or
(e) is disclosed after obtaining the prior written consent of the
Disclosing Party; or
(f) is disclosed pursuant to applicable laws, regulations or court order,
provided that the Receiving Party shall give the Disclosing Party
prompt notice of such request so that the Disclosing Party has an
opportunity to defend, limit or protect such disclosure; or
(g) is established to be in the public domain other than as a consequence
of a breach of an obligation undertaken not to disclose the
information; or
(h) is approved for release by prior written consent of the Disclosing
Party; or
(i) is disclosed to the Receiving Party by a third party having no
obligation to the Disclosing Party to keep the information on
confidence; or
(j) is made public by the Disclosing Party.
9.5 Non-Disclosure. Neither party hereto shall disclose any Confidential
Information, obtained from the other party in the course of business under
this Agreement to any third party during the term of this Agreement or at
any time thereafter.
ARTICLE 10. ASSIGNMENT
The Agreement and the licenses granted herein shall inure to the benefit of
the parties hereto and, within the limitations set forth in Articles 1.3,
4.1 and 4.2 hereof, to the Subsidiaries of the parties hereto. Neither
party hereto nor any of its Subsidiaries shall assign or transfer any
rights, privileges or obligations hereunder or thereunder without the prior
written consent of the other party hereto, except that SEC may assign this
Agreement to a person or entity into which it has merged or which has
otherwise succeeded to all or substantially all of its business and assets,
and which has assumed in writing or by operation of law its obligations
under this Agreement.
ARTICLE 11. NOTICES
All notices required or permitted to be given hereunder shall be in writing
and shall be valid and sufficient if dispatched by registered airmail,
postage prepaid, in any post office in Korea or in the United States, as
the case may be, and with a copy sent by a commercial express delivery
service offering routine two-day delivery of messages between the United
States and Korea (for example, currently these would include Federal
Express or DHL), and addressed as follows:
If to SEC: Samsung Electronics Co., Ltd.
16th Fl., Joon-ang Daily News Bldg.
7 Soonhwa-dong, Choong-ku
C. P. O. Box 2775
Seoul, Korea
Attn: Kurt Jun
If to AST: AST Research, Inc.
16215 Alton Parkway
Irvine, California 92718
USA
Attn: President
With copy to: AST Research, Inc.
16215 Alton Parkway
Irvine, California 92718
Attn: General Counsel
Either party may change its address by a notice given to the other party in
the manner set forth above. Notices given as herein provided shall be
considered to have been given fourteen (14) days after the mailing thereof.
ARTICLE 12. AMENDMENT
No oral explanation or oral information by either part hereto shall alter
the meaning or interpretation of the Agreement. No modification,
alteration, addition or change in the terms hereof shall be binding on
either party unless reduced to writing and duly executed by a duly
authorized officer of the parties.
ARTICLE 13. GOVERNING LAW
This Agreement and matters connected with the performance thereof shall be
construed, interpreted, applied and governed in all respects in accordance
with the laws of the State of New York, USA, without regard to its
conflicts of law principles.
ARTICLE 14. ARBITRATION
14.1 Negotiation and Arbitration. All disputes arising during performance under
this Agreement shall be settled through friendly negotiation between the
parties, including providing written notice of the dispute to the other
party in advance of submitting any dispute to arbitration or making any
filing with any judicial, administrative or regulatory authority concerning
the dispute. The parties agree, when time and circumstances reasonably
permit, that no arbitration, judicial, administrative or regulatory action
concerning a dispute between the parties will be started until after the
senior executive of each company has attempted to speak (in person, by
telephone or by videophone) to the other concerning the dispute and
attempted to resolve the dispute. In case no settlement can be reached,
the dispute shall be submitted to arbitration if both parties determine
that the subject matter of the dispute is such that arbitration will be an
efficient, effective and timely method of resolving the dispute.
14.2 Arbitration Procedures. If the dispute is submitted to arbitration, the
dispute shall be finally settled by an arbitration tribunal which shall be
convened and conducted in accordance with the applicable rules and
procedure of arbitration of the International Chamber of Commerce adopted
in 1988. The arbitration proceeding shall be held before three (3)
arbitrators in the headquarters city of the party not initiating the claim.
Two (2) of the arbitrators shall first be appointed by the parties, one (1)
by AST and one (1) by SEC. The arbitrators so appointed shall appoint a
third arbitrator who shall be neither an ROK nor a United States national,
and shall act as the chairman of the arbitral tribunal. If the arbitrators
appointed by the parties fail to appoint a third arbitrator within sixty
(60) days after they have been appointed, the third arbitrator may be
appointed by the arbitration body before which the arbitration is being
held. In such event, the third arbitrator shall be neither an ROK nor a
United States national. The arbitration proceedings shall be conducted in
English, and the law applied shall be the same as the governing law
selected in Article 9 of this Agreement. The results of such arbitration
shall be conclusive and binding upon the parties, and shall be enforceable
in any court having jurisdiction over the parties against whom the award
was rendered.
ARTICLE 15. SEVERABILITY
Should any clause, sentence, or paragraph of this Agreement judicially be
declared to be invalid, unenforceable, or void, such decision shall not
have the effect of invalidating or voiding the remainder of this Agreement
unless the economic equity of the parties is materially affected thereby.
ARTICLE 16. FORCE MAJEURE
In the event of acts of God, war, blockade, insurrection, mobilization or
any other actions of Government authorities, riots, civil commotion,
warlike conditions, strikes, lockout, shortage or control of power supply,
plague or other epidemics, fire, flood, tidal waves, typhoon, hurricane,
cyclone, earthquake, lightning, explosion, or any other causes beyond the
reasonable control of either party or Force Majeure, neither party shall be
liable for any default in performance of this Agreement arising therefrom.
ARTICLE 17. LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGE OF ANY KIND,
(INCLUDING WITHOUT LIMITATION LOSS OF PROFIT OR DATA) WHETHER OR NOT
ADVISED OF THE POSSIBILITY OF SUCH LOSS.
ARTICLE 18. ENTIRE AGREEMENT
This Agreement sets forth the entire agreement and understanding between
the parties as to the subject matter of this Agreement and merges all prior
discussions between them, and neither of the parties shall be bound by any
modification of this Agreement, other than as expressly provided in this
Agreement or as duly set forth on or subsequent to the date hereof in
writing and signed by a duly authorized representative of the party to be
bound thereby.
ARTICLE 19. COMPLIANCE WITH LAWS
Each party shall at all times and at its own expense comply in all material
respects to all applicable laws and regulations of the Korean, US and other
governments (and political subdivisions thereof) and any applicable
notification requirements related to the transactions contemplated by this
Agreement including, without limitation, documentation and fees associated
with the Import/Export of the Products or any documentation or licenses
related to the use thereof and obtaining any governmental approvals related
to the performance of either party hereunder.
ARTICLE 20. COOPERATION
Each of the parties agrees to do such further acts and to execute and
deliver such additional documents as are reasonably necessary or
appropriate to give effect to the transactions contemplated by this
Agreement and carry out the purpose and intent of this Agreement.
ARTICLE 21. EQUITABLE RELIEF
The parties acknowledge and agree that any unauthorized use, transfer or
copying of the Confidential Information will cause irreparable injury to
the Disclosing Party by substantially diminishing the value of the
Disclosing Party's trade secrets and other proprietary rights contained in
the Confidential Information. Therefore, if the Receiving Party (including
its employees and consultants) attempts to use, transfer, copy, license,
assign or otherwise convey the Confidential Information in any manner
contrary to the terms of the Agreement, the Disclosing Party shall, in
addition to any other remedies available to it, have the right to enjoin,
preliminary and permanently, the Receiving Party from any such act, and the
Receiving Party hereby acknowledges that other remedies are inadequate and
consents to such injunction, provided that the court being requested to
provide such remedy would otherwise find adequate grounds for such remedy.
ARTICLE 22. CHOICE OF FORUM
Any action arising out of or related to this Agreement or the transaction
herein described, whether at law or in equity, not otherwise subject to
International Arbitration under Article 14 hereof including, without
limitation, the enforcement of any award, the seeking of injunctive relief
to prevent or restrain infringement of valid intellectual property rights,
may be instituted in and litigated in the courts of the Republic of Korea
or the Courts of the United States of America. In accordance herewith, the
parties hereto submit to the jurisdiction of the courts of the Republic of
Korea and the Courts of the United States of America.
ARTICLE 23. TIME LIMITATION ON ACTIONS
Actions however asserted under this Agreement shall be commenced within one
(1) year from the date the cause of action accrues.
ARTICLE 24. TAXES/DUTIES/FEES
AST shall be liable for all taxes incurred in the United States relating to
this Agreement excepting for income taxes based on SEC's net income; and
SEC shall be liable for all taxes incurred in the Republic of Korea
relating to this Agreement excepting for income taxes based on AST's net
income. For taxes other than those defined in the previous sentence which
may result from this Agreement, SEC and AST when each is the purchasing
party, shall pay all taxes (including, without limitation, sales, use,
privilege, ad valorem or excise taxes), customs duties and import/export
fees of any kind (including, without limitation, any fees for permits or
licenses related to import/export compliance) paid or now or hereafter
payable, however designated, levied or based on amounts payable to the
selling party hereunder, on the purchasing party's acquisition, use or
possession of properties under this Agreement or upon the presence of
properties at the designated site, but exclusive of federal, state and
local taxes based on the selling party's net income. The purchasing party
shall not deduct or withhold from payments to selling party any amounts
paid or payable to third parties for taxes, customs duties or import/export
fees, however designated.
ARTICLE 25. DUE EXECUTION
Each party hereto warrants and represents to the other that the acceptance,
execution and delivery of this Agreement has been duly authorized, and that
all corporate actions and other steps necessary to make the acceptance of
this Agreement and all the terms hereof valid and binding obligations have
been duly taken.
ARTICLE 26. APPROVALS AND SIMILAR ACTIONS
Where agreement, approval, acceptance, consent or similar action by either
party is required by any provision of this Agreement, such action shall not
be unreasonably delayed or withheld, unless specifically permitted by the
Agreement.
ARTICLE 27. RIGHTS AND REMEDIES
Except as otherwise expressly provided herein, the rights and remedies
provided in this Agreement are cumulative and not exclusive of any rights
or remedies any party could have at law or in equity or otherwise.
ARTICLE 28. COUNTERPARTS
This Agreement may be executed in one or more counterparts all of which
taken together will constitute one and the same instrument.
ARTICLE 29. HEADINGS
Headings of articles and other provisions of this Agreement are for
convenience only, and do not alter the meaning of this Agreement.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement, on the dates below indicated.
SAMSUNG ELECTRONICS CO., LTD. AST RESEARCH, INC.
By: /s/ HYEON-GON KIM By: /s/ IAN DIERY
Name: Hyeon-Gon Kim Name: Ian Diery
Title: Executive Vice President Title: President and CEO
Date: June 27, 1996 Date: June 27, 1996
APPENDIX A: PAYMENT SCHEDULE
The payment terms shall be net 45 days from the Effective Date, or respective
option exercise date.
Terms Payment
Net 45 days US $15 million for the Immediate Intellectual
Properties.
Net 45 days An amount to be agreed upon by SEC and AST for the
Optional Intellectual Properties, upon exercise by SEC
of the option defined in section 2.2 of the Agreement.
