EXHIBIT 10.2
INVESTMENT AGREEMENT
This investment agreement is entered as of February 15, 2000 by and between
TeleVideo, Inc. (hereinafter referred to as TeleVideo) with its principal place
of business located at 2345 HARRIS WAY, SAN JOSE, CA 95131 U.S.A. and Keyin
Telecom Co., Ltd. With its principal place of business located at 8F. Chungjin
B/D, 475-22 Bangbae 2-dong, Seocho-ku, Seoul, Korea (hereinafter referred to as
"Keyin") This agreement is made based upon the MOU on investment signed January
25, 2000.
ARTICLE 1. OBJECTIVES
This agreement is to define the rights and obligations of TeleVideo, Keyin and
Interest Party subject to TeleVideo's investment in Keyin's capital raise based
upon Foreign Investment Promotion Law.
ARTICLE 2. INTEREST PARTY
1. Definition: Subject to this Agreement, "Interest Party" of Keyin means a
corporation or a person which or who as TeleVideo acknowledges owns the
actual managerial rights of Keyin at the time of Keyin's capital raise, and
named as below:
Name: Gi Won Lee
Address: Samho Garden APT. #1-107, 30-2 Banpo-dong, Seocho-ku, Seoul, Korea
2. "Interest Party" as defined in Article 2-1, agrees to be bound by each
article of this Agreement and accepts the joint liability on guarantee for
Keyin's performance of any provisions in this Agreement.
ARTICLE 3. (CHANGE OF COMPANY ARTICLE AND OTHERS)
For Keyin's performance of obligation with due diligence subject to this
Agreement, Keyin shall change its Articles of association and other business
operational policies to be agreed to the terms of this Agreement if they are
against this agreement.
ARTICLE 4. (ISSUANCE OF STOCK AND CONDITION OF RECEIPT)
Keyin issues new stocks and TeleVideo receives them according to the following
provisions. After TeleVideo transfers the fund, Keyin issues and provides new
stocks to TeleVideo. However, it could be replaced by the certificate of Stock
ownership based upon the mutual agreement among parties.
1. Total number of stocks to be issued: 2,000,000 shares
2. The type and number of pre-issued stocks: Common Stock 265,600 shares (As
of January 25)
3. Par value: KW 5,000/share
4. Shares to be issued upon this Agreement
a. Type and number of shares: registered Common Stock 15,278 shares (KW
2,750,040,000)
b. Number of new stocks given to TeleVideo: 15,278 shares (Rights
offering: 15,278 shares; Non-consideration: 0 share)
c. Par value of stock to be issued: KW 5,000/share d. Price of stock to be
issued: KW 180,000/share
e. Date of Payment for Stock Price: Within three months (90days) after the
execution of this agreement
f. Fund Transfer Bank Information
Bank: Korea Exchange Bank
Account Number: 146-22-02018-2
Account Name: Keyin Telecom Co. Ltd.
ARTICLE 5. (OFFERING PREFERENTIAL RIGHT)
If the company of Keyin implements capital increases, Keyin shall give
TeleVideo the opportunity of participation in the preferential right of
stock offering, correspond to the portion of the stocks owned by TeleVideo.
If TeleVideo notifies Keyin of the abandonment participating in such
preferential right, Keyin may make a decision on such offering at its own.
When the board meeting of Keyin makes a decision to offering (sic) stocks
to any third party for the purpose of Keyin's own interest, TeleVideo may
follow the decision.
ARTICLE 6. (APPOINTMENT OF TELEVIDEO)
TeleVideo shall not participate in and shall not try to participate in the
operations of Keyin. TeleVideo will not have any representatives on Board
of Directors.
ARTICLE 7. (PROHIBITION OF TECHNOLOGY TRANSFER)
After this Agreement executed, Keyin shall not transfer all of powerline
communication technology to a third without prior written consents from
TeleVideo; except strategic technology transfer approved by Keyin's Board
of Directors meeting. This Article will be waived if the Agreement is
terminated based on Article 14.
ARTICLE 8. (REPORTING AND INFORMATION SUBMISSION)
1. Upon request of TeleVideo, Keyin should prepare and submit the information
for the following items; periodically or when required.
1.1 Annual Reporting
a. Business Plan and Projected Financial Statements for next fiscal
year
b. Audited Financial Statement and Business Achievement Report
1.2 Immediate Reporting
a. Major changes on assets
- Investment on affiliates
- Disposal of major Fixed Assets
- Acquisition or Sale of major rights
- When substantial damages are caused by disaster
b. Changes in Shareholders
c. Changes in major Business plan
d. When Promissory Notes/Checks are dishonored, or the bank
transactions are denied
e. When part or whole sales activities are stopped
f. When filed for Chapter 11
g. Legal dispute against Keyin with possible material effects
h. If brought to justice by government or other organization due to
the violation of regulation or other rules
i. Other matters that TeleVideo considers important for Keyin's
operation
3. Item 1 in Article 8 should be prepared with due care and submitted within
the period requested by TeleVideo.
ARTICLE 9. (ACCOUNTING AND AUDIT)
Keyin shall prepare financial statements when each fiscal year ends, which
should be audited by certified accounting firm.
ARTICLE 10. (PERIOD OF RECOVERING INVESTMENT)
TeleVideo shall dispose of Keyin's stocks in accordance with Article 11.
However, if applicable to the below, TeleVideo can dispose them regardless
Article 11.
1. When Keyin's stocks are publicly offered (KSE, KOSDAQ, or foreign stock
markets, herein "Stock markets")
2. If Keyin and Interest party fail to perform the contractual obligation
3. If the documentation submitted to TeleVideo by Keyin and Interest Party
is proved to be falsified.
4. When "Disclaimer of Opinion" is issued on Keyin's Financial Statements
by a CPA
5. When Keyin's assets are disposed or outflowed for the purposes other
than business operation.
ARTICLE 11. (DISPOSAL OF STOCK)
1. Privileged right to buy stocks
1.1 If TeleVideo intends to sell off the stocks of Keyin owned by
TeleVideo, it may be agreed in advance by Interest Party and Interest
Party may not hold over the consent without a remarkable reason. When
Interest Party agrees to TeleVideo on selling stocks, TeleVideo shall
give Keyin and Interest Party privileged right to buy such stocks.
1.2 Keyin and Interest Party shall exercise such privileged right within
two weeks from the date of notification by TeleVideo of such privileged
right to but such stocks. Such privileged right may not be exercised
without paying for such stocks.
1.3 If Keyin and Interest Party do not exercise such privileged right,
TeleVideo may dispose such stocks to any third party. The selling price
to the third party shall be higher than the price that TeleVideo
presented to Keyin and Interest Party.
1.4 In the case of paragraph 1.3, all rights and duties hereunder of
TeleVideo for Keyin and Interest Party shall be transferred to the
third party acquired such stocks.
ARTICLE 12. (ASSIGNMENT)
The rights and obligation subject to this Agreement shall not be assignable
by Keyin and Interest Party in whole or in part to any third party without
the prior written consent of TeleVideo. The assignment done without prior
written consent of TeleVideo is not valid.
ARTICLE 13. (CHANGES OF AGREEMENT)
This agreement shall not be modified or changed except in writing duly
executed by both parties.
ARTICLE 14. (TERMINATION)
1. If either party defaults in performance of any provision of this agreement,
the non-defaulting party may give written notice to the defaulting party
that if the default is not cured within thirty (30) days the Agreement will
be terminated. If the non-default party gives such notice and the default
is not cured during the thirty (30) day period, then the non-defaulting
party shall retain the rights to terminate the Agreement and to claim the
damages.
2. This Agreement shall be effective as of when TeleVideo disposes of all
Keyin's stocks it owns. The agreement is automatically terminated when
Keyin's stock is publicly offered in the stock markets or if TeleVideo
disposes more than 70% of stock purchased under this Agreement, whichever
is sooner. In case TeleVideo has another claims from TeleVideo's
investment, it will be regarded as an exception.
ARTICLE 15. (WARRANTIES)
Keyin and Interest Party shall mutually warrant the execution of this
Agreement.
ARTICLE 16. (APPOINTMENT OF TELEVIDEO)
Each party composing TeleVideo for this agreement may fulfill this
agreement individually for Keyin and Interest Party.
ARTICLE 17. (NOTARIZATION AND EXPENSES)
When all parties sign on the Agreement and TeleVideo requests, this
Agreement should be notarized. Any cost incurred in relation with this
Agreement including the notarization cost shall be shared by TeleVideo and
Keyin.
ARTICLE 18. (GOVERNING LAW)
If there is any legal disputes subject to this Agreement, each party should
try to resolve the issues with due diligence and care. The validity and
performance of this Agreement shall be governed by Seoul District Court of
Civil Jurisdiction.
ARTICLE 19. (FORCE MAJEURE)
All parties shall not be liable to each other if their respective
obligations or the performance of any terms or provisions of this Agreement
(other than payment obligations) is delayed or prevented by force majeure
including wars, fires, floods, acts of God, statute, regulation, or without
limiting the foregoing, any other causes not within its reasonable control.
ARTICLE 20. (EFFECTIVENESS)
This Agreement is effective immediately upon signing on the Agreement by
each party.
ARTICLE 21. (NOTIFICATION)
All notices to be given pursuant to this Agreement shall be in writing, and
shall be personally delivered or sent by registered airmail at the
following addresses, and via fax.
Address of TeleVideo
2345 HARRIS WAY, SAN JOSE, CA 95131 U.S.A.
Address of Keyin Telecom
8F, Chungjin B/D. 475-22 Bangbae 2-dong, Seochu-ku, Seoul, Korea
(zip: 137-062)
Address of Interest Party
Samho Garden APT #1-107, 30-2 Banpo-dong, Seocho-ku, Seoul, Korea
(zip: 137-040)
ARTICLE 22. STRATEGIC ALLIANCE
1. TeleVideo shall fully support Keyin for its overseas marketing and
sales activities on Powerline communication technology. TeleVideo and
Keyin agree on co-business development, applying Keyin's PLC technology
on TeleVideo's computer products, including Tele-Client. Related to
this Article, both companies are bound to make separate [Sales &
Marketing Agreement] within one (1) month after the investment fund is
transferred to Keyin based upon this Agreement. The terms and
conditions of this Sales & Marketing Agreement will be regarded as part
of this Agreement.
2. TeleVideo shall fully support Keyin for future public offering on
NASDAQ.
In order to execute and certify this Agreement among parties, each authorized
representative from TeleVideo, Keyin and Interest Party signs on the three
original copies of the Agreement, then each retains one original copy.
TeleVideo Inc.
Name: Kyupin Philip Hwang
Position: Chairman & CEO
Signature: /s/ K. Philip Hwang
May 1, 2000
Keyin Telecom Co., Ltd.
Name: Gi Won Lee
Position: CEO & President
Signature: /s/ Gi Won Lee
Interest party
Name: Gi Won Lee
Signature /s/ Gi Won Lee