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Delco Remy International - Korea Joint Venture Agreement
Exhibit 10.7
JOINT VENTURE AGREEMENT
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This Joint Venture Agreement (this "Agreement") is entered into as of ____________ __, 1996, by and between:
(a) Remy Korea Holdings, Inc., a corporation organized and existing
under the laws of the State of Delaware, U.S.A., with its address at 2902
Enterprise Drive, Anderson, Indiana, U.S.A. and an indirect subsidiary of
Delco Remy International, Inc. ("DR Investor") and
(b) Mr. S. C. Kim, an individual residing at 18-101, Hyosung Villa,
18-1, Banpo 4-dong, Seocho-gu, Seoul Korea ("Kim"), Seil Industrial Co.,
Ltd., a corporation organized and existing under the laws of the Republic
of Korea, with its address at 1 Lot, 52 Block, 440, Nonhyun-dong, Namdong-
gu, Incheon, Korea ("Seil"), and Mr. S. T. Lee, an individual residing at
676-35, Geoje 4-dong, Yunje-gu, Pusan, Korea ("Lee") (Kim, Seil and Lee
collectively, the "Korean Investors," and individually, a "Korean
Investor").
RECITALS
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DR Investor and each Korean Investor (collectively, the "Parties," and individually, a "Party") have mutually agreed to establish a joint venture company in Korea in accordance with the provisions of this Agreement.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the Parties agree as follows:
1. Definitions
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As used in this Agreement, the following terms shall have the following meanings, unless the context clearly requires otherwise:
1.1 The terms defined hereinabove shall have the meaning set forth therein.
1.2 "Affiliate" of any Person shall mean any Person, directly or indirectly controlling, controlled by or under common control with such Person, and includes any Person who is an officer, director or employee of such Person and any Person that is a Person that directly or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with such Person. As used in this definition, "controlling" (including, with its correlative meanings, "controlled by" and "under common control with") means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities, partnership or other ownership interests,
by contract or otherwise). With respect to any Person who is a natural person, "Affiliates" shall also include, without limitation, such Person's spouse, children, grandchildren, brothers, sisters or parents and any trust the beneficiaries of which are such Person, his or her spouse, children, grandchildren or parents.
1.3 "Agreement" shall have the meaning set forth in the Preamble.
1.4 "Articles" shall mean the Articles of Incorporation of the JVC.
1.5 "Authority" shall mean any Korean, Unites States or other national, federal, territorial, state or local governmental authority, quasi-governmental authority, instrumentality, court, commission or tribunal or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing.
1.6 "Board" shall mean the board of directors of the JVC.
1.7 "Business Purpose" shall have the meaning set forth in Section 3.1.
1.8 "DAC" shall have the meaning set forth in Section 6.1(a)(i).
1.9 "DR Investor" shall have the meaning set forth in the Preamble.
1.10 "DR Shareholder" shall have the meaning set forth in Section 8.2(a).
1.11 "DRA" shall mean Delco Remy America, Inc., a Delaware corporation and a wholly-owned subsidiary of DRI.
1.12 "DRI" shall have the meaning set forth in the Preamble.
1.13 "DRI President" shall have the meaning set forth in Section 15.2.
1.14 "First Refusal Shares" shall have the meaning set forth in Section 8.2(c).
1.15 "GM" shall mean General Motors Corporation.
1.16 "IAS" shall have the meaning set forth in Section 14.1.
1.17 "Initial Paid-In Capital" shall have the meaning set forth in Section 7.4.
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1.18 "Interested Party" shall have the meaning set forth in Section 19.9.
1.19 "Issuance" shall have the meaning set forth in Section 9.1.
1.20 "JVC" shall have the meaning set forth in Section 2.2.
1.21 "Joinder" shall have the meaning set forth in Section 8.3.
1.22 "Kim" shall have the meaning set forth in the Preamble.
1.23 "Korean Investor" or "Korean Investors" shall have the meaning set forth in the Preamble.
1.24 "Korean representative" shall have the meaning set forth in Section 19.10.
1.25 "Lee" shall have the meaning set forth in the Preamble.
1.26 "Management Investors" shall have the meaning set forth in Section 12.4.
1.27 "Management Offering" shall have the meaning set forth in Section 12.4.
1.28 "Non-Selling Shareholder" shall have the meaning set forth in Section 8.2(c).
1.29 "Party" or "Parties" shall have the meaning set forth in the Recitals.
1.30 "Person" shall mean any individual, corporation, partnership, joint venture, association, trust, unincorporated organization, limited liability company or other entity or organization, including any Authority.
1.31 "Public Offering" shall have the meaning set forth in Section 9.1.
1.32 "Related Agreements" shall have the meaning set forth in Section 6.1(a).
1.33 "Right" shall have the meaning set forth in Section 9.1.
1.34 "Right Holder" shall have the meaning set forth in Section 9.1.
1.35 "Sale Notice" shall have the meaning set forth in Section 8.2(d).
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1.36 "Sell" shall have the meaning set forth in the Preamble.
1.37 "Selling Shareholder" shall have the meaning set forth in Section 8.2(c).
1.38 "Transfer" shall mean any sale, exchange, assignment, hypothecation, gift, security interest, pledge or other encumbrance, or any contract therefor, any voting trust or other arrangement or agreement with respect to the transfer of voting rights or any other beneficial interest in any of the shares of the JVC, the creation of any other claim thereto or any other transfer or disposition whatsoever, whether voluntary or involuntary, affecting the right, title, interest or possession in or to such shares.
2. Formation of the JVC; Term of the JVC.
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2.1 As soon as possible after the execution of this Agreement, the Korean Investors shall prepare and submit a report of foreign investment under the Foreign Capital Inducement Law and other related documents, and DR Investor shall render assistance and support to the Korean Investors in said preparation and submission.
2.2. Promptly upon the acceptance and approval of such report by the applicable Korean authorities, the Parties shall establish a joint venture company (the "JVC") as a joint stock company (chusik hoesa) under the laws of Korea.
2.3 The name of the JVC shall be "Hankuk Dr Jeonjang Chusik Hosea" in Korean, and, until DRI obtains the necessary consents from GM, "Remy Korea, Ltd." in English. If at any time after establishment of the JVC DRI obtains the necessary consents from GM for use of the "Delco Remy" name, the Parties agree to change the English name of the JVC to "Delco Remy Korea, Ltd."
2.4 The principal executive officers of the JVC shall be located in Kyungsangnam-do, Korea. Branches and other business offices may be established in any place inside or outside of Korea as required.
2.5 The JVC as constituted in this Agreement shall continue for ninety-nine (99) years from the date of its constitution, unless earlier dissolved or terminated pursuant to applicable law or the provisions of this Agreement.
3. Business Purpose
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3.1 The business purpose of the JVC shall be as follows (the "Business Purpose"):
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(a) to engage in the production, assembly and marketing of new and
remanufactured automotive and heavy duty starting motors and alternators
for original equipment and aftermarket customers; and
(b) to engage in any and all acts, things, businesses and
activities that are related, incidental or conductive, directly or
indirectly, to the achievement of the foregoing businesses.
4. Commercial Territory of the JVC
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4.1 The JVC shall have the right to produce, assemble and market its products and otherwise engage in business within the Republic of Korea to the extent permitted by applicable law.
4.2 The JVC shall have the right to market its products or otherwise engage in business outside the Republic of Korea after obtaining the prior approval of the Board pursuant to the provisions of Section 11.3 hereof for each location in which the JVC proposes to market its products; provided, however, it
-------- ------- is the intent of the Parties that, to the extent not prohibited by applicable law, the JVC shall not compete or otherwise be in conflict with any business of any Party and/or their respective Affiliates. Any sale by the JVC of any of its products to any Person who to the knowledge of responsible officers of the JVC is acquiring such products with a view toward distribution or resale of such products outside Korea (other than sales to Korean automobile or truck manufacturers whose vehicles may be sold outside of Korea or sales to such manufacturers of service parts for such vehicles for sale through the respective manufacturers' authorized dealers) shall be deemed to be engaging in business outside of Korea by the JVC and shall be subject to the prior approval of the Board and this Section 4.2.
5. Articles of Incorporation of the JVC
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5.1 The Articles shall be in conformity with the terms and conditions of this Agreement. If any discrepancy is found between this Agreement and the Articles, the Parties shall promptly amend the Articles to make them consistent with this Agreement.
6. Conditions Subsequent to Execution of Agreement
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6.1 The following actions shall be taken and events shall occur on or prior to the ninetieth (90th) day following execution of this Agreement by all of the parties hereto:
(a) The following related agreements (the "Related Agreements") shall be entered into by the following parties:
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(i) An asset purchase agreement between Daewoo Automotive
Components, Ltd. ("DAC") as seller and the JVC as purchaser for the
sale and purchase of certain machinery, equipment and other assets
necessary for the JVC's business and the licensing by DAC to the JVC of
specified technology, in such form as shall be agreed among DR
Investor, the Korean Representative and the parties thereto; and
(ii) A trademark and trade name license agreement between DRA
and DRI as licensor and the JVC as licensee for the license of certain
trademark(s) and trade name(s) necessary for the JVC's business,
substantially in the form of Exhibit A hereto; provided DRA and DRI
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have obtained the consent of GM to enter into such trademark and
tradename license agreement.
(b) The applicable Parties shall receive or shall have received the
government approvals referred to in Section 2 hereof; provided, however,
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that if such approvals have been properly requested and have not been
received within the 90-day period referred to above, such 90-day period
shall automatically be extended for an additional 90 days; and
(c) The Parties shall complete or shall have completed the initial
capitalization of the JVC pursuant to Section 7 hereof.
7. Capital and Shares
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7.1 Any shares issued by the JVC shall be common stock of one class, in registered non-bearer form evidenced by share certificates, and shall be fully paid and nonassessable.
7.2 No additional shares of the JVC, whether common or preferred, shall be authorized or issued, including without limitation, the issuance of shares pursuant to the Management Offering, except upon the prior approval of the Board pursuant to the provisions of Section 11.3 hereof.
7.3 The authorized capital of the JVC shall be eight billion Korean won (W8,000,000,000), divided into one million six hundred thousand (1,600,000) shares of common stock with a par value of five thousand Korean won (W5,000) per share.
7.4 The paid-in capital of the JVC at the time of incorporation shall be two billion Korean won (W2,000,000,000), divided into four hundred thousand (400,000) shares of common stock with a par value of five thousand Korean won (W5,000) per share (the "Initial Paid-In Capital").
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7.5 The Parties shall initially subscribe for the Initial Paid-in Capital and shall initially hold the common shares in the JVC as follows:
(a) DR Investor: fifty percent (50%) of the total issued and
outstanding shares of stock; and
(b) Korean Investors: fifty percent (50%) of the total issued and
outstanding shares of stock, to be divided as follows:
(i) Kim: twenty-nine percent (29%) of the total issued and
outstanding shares of stock;
(ii) Seil: eleven percent (11%) of the total issued and
outstanding shares of stock; and
(iii) Lee: ten percent (10%) of the total issued and
outstanding shares of stock.
7.6 The Parties shall make their respective capital contributions for the Initial Paid-in Capital in cash.
8. Transfer of Shares
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8.1 Except as provided in Section 8.2, no Party may Transfer its shares in the JVC; provided, however, that (i) DR Investor or any Affiliate of DR
-------- ------- Investor shall be permitted to Transfer its shares in the JVC to any Affiliate of DR Investor and (ii) any Korean Investor shall be permitted to Transfer its shares in the JVC to any other Korean Investor, in each case, without the prior written consent of the other Parties hereto; and provided, further, that, with
-------- ------- respect to any Transfer permitted by this Section 8.1, (x) all required governmental approvals shall have been obtained prior to such Transfer and (y) the transferee shall agree in writing to comply with and be bound and governed by the provisions of this Agreement and to assume all obligations of the transferor hereunder.
8.2 (a) If DR Investor or any of its Affiliates (the "DR Shareholder") receives a bona fide offer which it wishes to accept for the purchase by a third party of all or any part of its shares in the JVC (other than to DR Investor or one or more of its Affiliates), such DR Shareholder may not Transfer such shares without first offering to sell such shares to the Korean Investors pursuant to the provisions of Section 8.2(d) hereof.
(b) If any Korean Investor receives a bona fide offer which it wishes to accept for the purchase by a third party of all or any part of its shares in the JVC (other than to any other Korean Investor), such Korean Investor may not Transfer such shares
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without first offering to sell such shares to DR Investor pursuant to the provisions of Section 8.2(d) hereof.
(c) Any DR Shareholder or any of the Korean Investors, as the case may be, as the selling shareholder shall be referred to herein as the "Selling Shareholder". DR Investor, when any Korean Investor is a Selling Shareholder, or the Korean Investors (as represented by the Korean Representative), when any DR Shareholder is a Selling Shareholder is a Selling Shareholder, shall be referred to herein as the "Non-Selling Shareholder". Any shares of the JVC subject to the provisions of this Section 8.2 shall hereinafter be referred to as "First Refusal Shares".
(d) Not less than 30 days prior to the intended sale date of the First Refusal Shares to the third party, the Selling Shareholder shall deliver written notice (a "Sale Notice") to the Non-Selling Shareholder describing in reasonable detail the number of First Refusal Shares being offered, the name of the third party offeree, the purchase price proposed to be paid by such third party for the First Refusal Shares, the type of consideration to be paid and all other material terms of the proposed Transfer. Upon receipt of the Sale Notice, the Non-Selling Shareholder shall have the right and option to purchase all or any portion of the First Refusal Shares being offered at the price and on the terms of the proposed Transfer set forth in the Sale Notice. Within 25 days of the receipt of the Sale Notice, the Non-Selling Shareholder shall notify the Selling Shareholder whether or not it wishes to purchase any or all of the offered First Refusal Shares. If the Non-Selling Shareholder elects to purchase any of the offered First Refusal Shares, the closing of the purchase and sale of such First Refusal Shares shall be held at the place and on the date established by the Non-Selling Shareholder in its notice to the Selling Shareholder in response to the Sale Notice, which in no event shall be less than 30 nor more than 90 days from the date of the Sale Notice unless the Non-Selling Shareholder or the Selling Shareholder, as the case may be, needs to obtain approvals from any Authority, in which case such closing may be delayed until no later than five (5) business days after the receipt by the applicable party of the necessary approvals. In the event the terms proposed in the Sale Notice shall include consideration other than cash, the Non-Selling Shareholder may, at its option, substitute cash equal to the fair market value of such other property. In such event, the fair market value of such other property shall be determined by mutual agreement of the Selling and Non-Selling Shareholder.
In the event that the Non-Selling Shareholder does not elect to purchase all of the offered First Refusal Shares, the Selling Shareholder may, subject to the other provisions of this Agreement, Transfer the remaining offered First Refusal Shares to the third party offeree specified in the Sale Notice, at a price no less than the price specified in the Sale Notice and no other terms
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no more favorable to the transferee(s) thereof than specified in the Sale Notice, during the 120-day period immediately following the last date on which the Non-Selling Shareholder could have elected to purchase the offered First Refusal Shares. Any such First Refusal Shares not Transferred within such 120-day period will be subject to the provisions of this Section 8.2 upon subsequent Transfer.
8.3 Prior to any Transfer of First Refusal Shares, each third party transferee must agree in writing (a "Joinder") to comply with and be bound and governed by the provisions of this Agreement and to assume all obligations of the Selling Shareholder hereunder and such transferee must file such Joinder with the JVC and the Non-Selling Shareholder at least two (2) business days prior to the effective date of such Transfer. Any attempt to Transfer any First Refusal Shares not in compliance with this Section 8.3 will be null and void.
8.4 If any sale, assignment or Transfer of shares under this Section 8 is subject to the validation or approval of the Korean or other applicable Authorities, such sale, assignment or Transfer shall not become effective until such validation or approval has been obtained in form and substance acceptable to both DR Investor and the Korean Representative. When such validation or approval is required, the periods of time prescribed above shall be extended to take into account the time required to obtain such validation or approval.
8.5 No Party shall pledge, hypothecate or otherwise use as collateral, or for any other purpose, the shares of the JVC.
8.6 In the event the shares owned by any Party shall be subject to sale or Transfer by reason of bankruptcy or insolvency proceedings, whether voluntary or involuntary, or distraint, levy or other involuntary Transfer, then the provisions of Section 8.2 through 8.5 shall apply as though such Party were a "Selling Shareholder" thereunder and as though DR Investor and its Affiliates (in the case of a Transfer by a Korean Investor) and the Korean Investors (in the case of a Transfer by DR Investor) were the "Non-Selling Shareholder" thereunder, except as provided below. If the nature of the event giving rise to the involuntary Transfer is such that no readily determinable consideration is to be paid for the Transfer of the shares, the price to be paid by the Non-Selling Shareholder shall be the initial price paid for such shares by the Selling Shareholder. At the closing of a purchase by the Non-Selling Shareholder of the shares to be Transferred, the Selling Shareholder shall deliver the certificates evidencing the number of shares to be purchased by the Non-Selling Shareholder, together with stock powers endorsed in blank or duly executed instruments of transfer, and any other documents that are necessary to Transfer to the Non-Selling Shareholder good title to such of
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the shares to be Transferred, free and clear of all pledges,security interests, liens and charges of whatever nature, and concurrently with such delivery, the Non-Selling Shareholder shall deliver to the Selling Shareholder the full amount of the purchase price for the shares in cash by certified or bank cashier's check.
8.7 The certificates representing the shares of the JVC owned by DR Investor, each Korean Investor and their respective transferees, including certificates issued upon any voluntary or involuntary Transfer of such shares, will bear the following legend, as well as any other legends required under any applicable law:
THESE SECURITIES ARE SUBJECT TO THE TERMS AND CONDITIONS OF A JOINT
VENTURE AGREEMENT DATED AS OF _________,1996 BY AND AMONG THE
SHAREHOLDERS OF THE COMPANY NAMED THEREIN. A COPY OF SUCH AGREEMENT
IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. THE SALE,
TRANSFER OR OTHER DISPOSITION OF SUCH SECURITIES IS SUBJECT TO THE
TERMS (INCLUDING CERTAIN RESTRICTIONS ON TRANSFERABILITY) OF SUCH
AGREEMENT AND SUCH SECURITIES ARE TRANSFERRABLE ONLY UPON PROOF OF
COMPLIANCE THEREWITH. ANY ATTEMPT AT TRANSFER OF THESE SECURITIES
OTHER THAN IN COMPLIANCE WITH SUCH AGREEMENT WILL BE NULL AND VOID.
9. Preemptive Rights
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9.1 In addition to obtaining Board approval for an Issuance, the JVC shall not permit an Issuance unless, prior to such Issuance, (1) the JVC notifies each Korean Investor and DR Investor (each a "Right Holder") in writing of the Issuance, (2) the JVC grants each Right Holder the right (the"Right") to subscribe for and purchase at the same price, and on such other terms and conditions as are proposed in the Issuance, a portion of such securities equal to the product of (a) the number of securities proposed to be issued in the Issuance multiplied by (b) a fraction, the numerator of which is the total number of common shares of the JVC held by such Right Holder (in the case of DR Investor, the total number of common shares held by DR Investor and its Affiliates) prior to the Issuance and the denominator of which is the total number of issued and outstanding common shares of the JVC held by all shareholders of the JVC prior to the Issuance and (3) DR Investor or the JVC, as the case may be, first obtains all approvals from any Authority necessary for DR Investor and/or its Affiliates to participate in such Issuance. The Right may be exercised by any Right Holder (or in the case of DR Investor, by DR Investor or any its Affiliates) by written notice to the JVC,
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received by the JVC at any time prior to the closing of the Issuance, and the closing of the purchase and sale pursuant to the exercise of the Right shall occur simultaneously with the closing of the Issuance. Notwithstanding the foregoing, in the event DR Investor is unable, as a result of the operation of any law, rule or regulation then in force, to exercise the Right on terms at least as favorable as other participants in the Issuance, then DR Investor may designate a Person who is not so prohibited to exercise its Right in place of DR Investor. For purposes of this Agreement, an "Issuance" shall mean any issuance by the JVC of additional shares of capital stock of the JVC or the issuance of any other securities of the JVC convertible into, exercisable for or exchangeable for shares of capital stock of the JVC except for the issuance of common shares of the JVC pursuant to Section 7 of this Agreement or pursuant to the terms of the Management Offering or pursuant to any registered public offering of any shares of the JVC after which such shares are listed for trading on the principal Korean stock exchange (a "Public Offering").
10. Shareholders
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10.1 The Board shall decide the time and place for convening all meetings of the shareholders of the JVC. Written notice of all meetings of the shareholders of the JVC shall be given to each shareholder of record of the JVC entitled to vote at the meeting, at least thirty (30) days prior to the day named for the meeting, unless a greater period of notice is required by law in a particular case.
10.2 The presence of shareholders representing more than seventy percent (70%) of the total number of shares issued and outstanding shall constitute a quorum at all meetings of the shareholders, and no meeting of shareholders shall be validly convened or constituted unless a quorum is present at such meeting.
10.3 Except as otherwise provided in Section 10.4, or unless otherwise provided by applicable law, resolutions of the shareholders at any meeting of shareholders shall be adopted by an affirmative vote of more than two-thirds of the shares represented and entitled to vote at such meeting at which a quorum is present.
10.4 Notwithstanding the foregoing, the following actions shall not be taken by the JVC unless authorized by a resolution of the shareholders of the JVC by the affirmative vote of at least seventy percent (70%) of the issued and outstanding shares of the JVC:
(a) amendment to the Articles, including without limitation any
modification of the business purpose (as defined in the Articles), any
change in the number of persons
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comprising the Board or any modification of the notice, quorum or voting
requirements;
(b) increase or reduction in the authorized or issued share capital
of the JVC;
(c) restructuring, termination, dissolution or liquidation of the
JVC or its merger into or consolidation or amalgamation with any other
company or the sale of all or substantially all of the assets of the JVC;
(d) transfer or pledge of all or a substantial part of the assets
or undertakings of the JVC or the acquisition by the JVC of all or a
substantial part of the assets or undertakings or capital stock of any
other person or entity;
(e) compensation of any of the directors of the JVC; and
(f) any other matters the adoption of which requires a special
resolution at a meeting of shareholders under the Korean Commercial Code.
10.5 Voting Arrangements
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(a) Each of the Parties agrees that it shall take, at any time and
from time to time, all action necessary (including voting the shares of the
JVC owned by him, her or it, calling special meetings of stockholders and
executing and delivering written consents) to ensure that the Board is
composed at all time of six (6) persons as follows: three (3) directors who
shall be nominated by DR Investor (including the vice president of the JVC
as provided in Section 12.2) and three (3) directors who shall be nominated
by the Korean Representative (including the president of the JVC as
provided in Section 12.1).
(b) Each of DR Investor and the Korean Representative, as the case
may be, may request that any director nominated by it be removed (with or
without cause) by written notice to the other party, and, in any such
event, DR Investor and each Korean Investor shall promptly consent in
writing or vote or cause to be voted all shares of the JVC now or hereafter
owned or controlled by him, her or it for the removal of such person as a
director. In the event any person ceases to be a director, such person
shall also cease to be a member of any committee of the Board.
(c) In the event that a vacancy is created on the Board at any time
by the death, disability, retirement, resignation or removal (with or
without cause) of a director nominated by DR Investor or the Korean
Representative, as the case may be, or if otherwise there shall exist or
occur any vacancy on the Board in a directorship subject to nomination by
DR Investor or the Korean
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Representative, as the case may be, such vacancy shall not be filled by the remaining members of the Board but DR Investor and each Korean Investor hereby agrees promptly to consent in writing or vote or cause to be voted all shares of the JVC now or hereafter owned or controlled by him, her or it to elect that individual nominated to fill such vacancy and serve as a director, as shall be nominated by DR Investor or the Korean Representative, as the case may be.
11. Board of Directors
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11.1 Meetings of the Board may be called in the manner prescribed in the Articles; provided, however, that notice of each meeting of the Board shall be
-------- ------- given to each director and statutory auditor of the JVC, at least thirty (30) days prior to the day named for the meeting, unless a greater period of notice is required by law in a particular case; and provided, further, that in
-------- ------- exceptional cases, subject to applicable law, the foregoing thirty (30) day notice period may be shortened to seven (7) days if prior consent (and confirmation of attendance at such meeting) is obtained from at least four (4) directors of the JVC. The Board shall appoint a person who will serve as the chairman of the meetings of the shareholders and of the meetings of the Board. If the chairman is unable to attend such meetings, the directors present shall elect a chairman among themselves to preside over such meeting.
11.2 The presence of four (4) directors shall constitute a quorum at all meetings of the Board, and no meeting of the Board shall be validly convened or constituted unless a quorum is present at such meeting. Except as otherwise provided in Section 11.3, or unless otherwise provided by applicable law, all actions taken and resolutions adopted at a meeting of the Board at which a quorum is present shall be taken or adopted by the affirmative vote of a majority of the directors present at such meeting.
11.3 Notwithstanding the foregoing, the following actions and resolutions shall not be taken or adopted unless authorized by the affirmative vote of four (4) of the six (6) incumbent directors:
(a) purchase, sale or lease of real property;
(b) the purchase, disposition or license of any material patents,
trademarks, technology, brand names or any other material intellectual
property;
(c) approval of the JVC's financial budgets and annual accounts and
operating plan;
(d) any variation of or addition to the Business Purpose beyond
that stated in Section 3.1 hereof;
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(e) any issuance of capital stock of the JVC, notes, debentures or
any warrants, options, coupons or other instruments which enable or entitle
the holder thereof to obtain capital stock, notes, debentures or other
securities of the JVC or any increase or reduction in, or restructuring
(including changing any voting rights) of, the capital stock of the JVC, or
any calls on capital stock, notes, debentures or other securities of the
JVC;
(f) the formation of any direct or indirect subsidiary of the JVC;
(g) any transaction between the JVC and any of the Korean Investors
or DR Investor or any of their respective Affiliates;
(h) determination and submission of application for public
hearing;
(i) any Public Offering of any shares of the JVC;
(j) review of financial statements to be submitted to the
shareholders meeting for approval;
(k) any one or more capital investments in the aggregate in excess
of five hundred thousand U.S. dollars (US$500,000);
(l) declaration or payment of dividends or other distributions,
subject to approval by the shareholders;
(m) obtaining any line of credit or other facility for borrowing
money for long-term, medium-term or short-term borrowing by the JVC in
excess of two hundred million Korean wons (W200,000,000) individually or
ten billion Korean wons (W10,000,000,000) in the aggregate, including off
balance sheet financing, or the granting, placing of, or permitting to
sheet financing, or the granting, placing of, or permitting to exist, any
mortgage or other lien or encumbrance on any asset of the JVC or on the
capital stock of the JVC;
(n) any guaranty of the obligations of any third party, including
financial, performance or technical guarantees;
(o) any additional debt or equity contributions by the then
current shareholders of the JVC;
(p) entering into joint ventures or other agreements which are
material to the JVC;
(q) instituting a legal or arbitral action or similar action or
proceedings which is material to the JVC unless such
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action relates to the provisions of this Agreement or any of the Related
Agreements;
(r) restructuring, termination, dissolution or liquidation of the
JVC or its merger into or consolidation or amalgamation with any other
company or the sale of all or substantially all of the assets of the JVC;
(s) any marketing, distribution or sale by the JVC of its products,
or any other business activity proposed to be conducted, outside of Korea,
and
(t) the Management Offering.
12. Officers
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12.1 The Korean Representative shall appoint the representative director of the JVC. The representative director shall also serve as the president of the JVC. Subject to supervision and control of the shareholders and the Board, the president shall have general charge, control and supervision of the day-to-day operations of the JVC and shall act for the benefit of the JVC and its shareholders in accordance with the law, this Agreement, the Articles and sound business policies.
12.2 DR Investor shall appoint the vice president of the JVC. The vice president of the JVC shall also serve as a director of the JVC.
12.3 The president and the vice president will nominate an officer who will be in charge of the general administration (which includes finance, general affairs, personnel and operation) and an officer who will be in charge of technology and production (these two officers together w...
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