Exhibit 1.1
WIDERTHAN CO., LTD.
6,000,000 AMERICAN DEPOSITARY SHARES
REPRESENTING 6,000,000 SHARES OF COMMON STOCK
(PAR VALUE WON 500 PER SHARE)
UNDERWRITING AGREEMENT
DATED ___________, 2005
WiderThan Co., Ltd.
6,000,000 American Depositary Shares
representing an aggregate of 6,000,000 shares of Common Stock
Underwriting Agreement
______, 2005
J.P. Morgan Securities Inc.
277 Park Avenue
New York, New York 10172
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center
250 Vesey Street
New York, New York 10080
As Representatives of the
several Underwriters listed
in Schedule I hereto
Ladies and Gentlemen:
WiderThan Co., Ltd. (the "COMPANY"), a company incorporated with
limited liability in The Republic of Korea ("KOREA"), proposes to issue and sell
to the several Underwriters listed in Schedule I hereto (the "UNDERWRITERS"),
for whom you are acting as representatives (the "REPRESENTATIVES"), an aggregate
of 4,000,000 American Depositary Shares (the "INITIAL ADSs"), representing the
right to receive an aggregate of 4,000,000 shares (the "INITIAL SHARES") of the
Company's common shares, par value Won 500 per share ("COMMON STOCK") and, each
of the Selling Shareholders named in Schedule II hereto (the "SELLING
SHAREHOLDERS"), severally and not jointly, proposes to sell to the several
Underwriters an aggregate of 2,000,000 Initial ADSs, representing the right to
receive an aggregate of 2,000,000 Initial Shares. In addition, the Company also
propose to grant to the Underwriters, an option to purchase up to an additional
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900,000 American Depositary Shares (the "OPTION ADSs") representing the right to
receive an aggregate of 900,000 shares of Common Stock (the "OPTION SHARES").
The Initial ADSs and the Option ADSs are herein referred to as the "ADSs" and
the Initial Shares and the Option Shares are herein referred to as the "SHARES".
The ADSs are to be issued pursuant to a deposit agreement (the "DEPOSIT
AGREEMENT") to be dated as of ________, 2005 among the Company, JPMorgan Chase
Bank, N.A., as Depositary (the "DEPOSITARY"), and the holders from time to time
of the American Depositary Receipts (the "ADRs") issued by the Depositary and
evidencing the ADSs. Each ADS will initially represent the right to receive one
share of Common Stock deposited pursuant to the Deposit Agreement. The Shares in
respect of the ADSs to be delivered on the Initial Closing Date or the
Additional Closing Date (each as hereinafter defined) are to be deposited with
the Korea Securities Depository for the account and benefit of the Depositary
prior to the Initial Closing Date or the Additional Closing Date, as the case
may be, against issuance of ADRs evidencing such ADSs.
The Company, the Selling Shareholders and the several Underwriters
hereby confirm their agreement concerning the purchase and sale of the ADSs, as
follows:
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "COMMISSION") under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "SECURITIES ACT"), a registration statement on Form F-1 (File
No.___________) including a prospectus, relating to the Shares. Such
registration statement, as amended at the time it becomes effective, including
the information, if any, deemed pursuant to Rule 430A under the Securities Act
to be part of the registration statement at the time of its effectiveness ("RULE
430A INFORMATION"), is referred to herein as the "REGISTRATION STATEMENT"; and
as used herein, the term "PRELIMINARY PROSPECTUS" means each prospectus included
in such registration statement (and any amendments thereto) before it becomes
effective, any prospectus filed with the Commission pursuant to Rule 424(a)
under the Securities Act and the prospectus included in the Registration
Statement at the time of its effectiveness that omits Rule 430A Information, and
the term "Prospectus" means the prospectus in the form first used to confirm
sales of the Shares. If the Company has filed an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the term "REGISTRATION
STATEMENT" shall be deemed to include such Rule 462 Registration Statement.
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Registration Statement and the Prospectus. For purposes of
this Agreement, all references to the Registration Statement, any Preliminary
Prospectus, or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
2. Purchase of the ADSs by the Underwriters.
(a) The Company agrees to issue the Shares and sell Initial
ADSs to the several Underwriters as provided in this Agreement, and
each Underwriter, on the basis of the representations, warranties and
agreements set forth herein and subject to the conditions set forth
herein, agrees, severally and not jointly, to purchase from the Company
the number of Initial ADSs set forth opposite such Underwriter's name
in
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Schedule I hereto at an initial public offering price of US$ _____ per
ADS (the "OFFERING PRICE").
Each Selling Shareholder agrees, severally and not jointly, to
sell Initial ADSs to the several Underwriters as provided in this
Agreement, and each Underwriter, on the basis of the representations,
warranties and agreements set forth herein and subject to the
conditions set forth herein, agrees, severally and not jointly, to
purchase from each such Selling Shareholder, the number of Initial ADSs
set forth opposite the name of such Underwriter in Schedule I hereto,
at a purchase price of US$____ per ADS (constituting the Offering Price
less Underwriting Commission (as defined below))(the "PURCHASE PRICE").
As compensation to the Underwriters for their commitments
hereunder, the Company will pay, or cause to be paid, to the
Underwriters, at each Closing Date (as hereinafter defined), an
underwriting commission of _______ per ADS (the "Underwriting
Commission") for each of the ADSs to be purchased, at such Closing
Date, as provided in this Agreement.
In addition, the Company agrees to issue the Option Shares and
sell the Option ADSs to the several Underwriters as provided in this
Agreement, and the Underwriters, on the basis of the representations,
warranties and agreements set forth herein and subject to the
conditions set forth herein, shall have the option to purchase,
severally and not jointly, from the Company, the Option ADSs at the
Offering Price.
If any Option ADSs are to be purchased, the number of Option
ADSs to be purchased by each Underwriter shall be the number of Option
ADSs which bears the same ratio to the aggregate number of Option ADSs
being purchased as the number of Initial ADSs set forth opposite the
name of such Underwriter in Schedule I hereto (or such number increased
as set forth in Section 11 hereof) bears to the aggregate number of
Initial ADSs being purchased from the Company and the Selling
Shareholders by the several Underwriters, subject, however, to such
adjustments to eliminate any fractional ADSs as the Representatives in
their sole discretion shall make.
The Underwriters may exercise the option to purchase the
Option ADSs at any time in whole or in part from time to time on or
before the thirtieth day following the date of this Agreement, by
written notice from the Representatives to the Company. Such notice
shall set forth the aggregate number of Option ADSs as to which the
option is being exercised and the date and time when the Option ADSs
are to be delivered and paid for which may be the same date and time as
the Closing Date (as hereinafter defined) but shall not be earlier than
the Closing Date nor later than the seventh full Business Day (as
hereinafter defined) after the date of such notice (unless such time
and date are postponed in accordance with the provisions of Section 11
hereof). Any such notice shall be given at least two Business Days (as
hereinafter defined) prior to the date and time of delivery specified
therein.
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(b) The Company and the Selling Shareholders understand that
the Underwriters intend to make a public offering of the ADSs as soon
after the effectiveness of this Agreement as in the judgment of the
Representatives is advisable, and initially to offer the ADSs on the
terms set forth in the Prospectus. The Company and the Selling
Shareholders acknowledge and agree that the Underwriters may offer and
sell ADSs to or through any affiliate of an Underwriter and that any
such affiliate may offer and sell ADSs purchased by it to or through
any Underwriter.
(c) The time and date of (i) payment shall be immediately
prior to 11:00 a.m., New York City time, on ______________, 2005 (which
shall be on __________, 2005, Seoul time) and (ii) delivery shall be
immediately after 11:00 a.m., New York City time, on _______________,
2005 (which shall be on __________, 2005, Seoul time) or, in each case
of (i) and (ii), at the same time on the same or such other date, not
later than the fifth Business Day thereafter, as the Representative,
Company and the Selling Shareholders may agree upon in writing (or, in
the case of the Option ADSs, on the date and at the time specified by
the Representatives in the written notice of the Underwriters' election
to purchase such Option ADSs). The time and date of such delivery of
the Initial ADSs is referred to herein as the "INITIAL CLOSING DATE"
and the time and date for such delivery of the Option ADSs, if other
than the Closing Date, is herein referred to as the "ADDITIONAL CLOSING
DATE", and each such time and date of delivery is herein referred to as
the "CLOSING DATE".
(d) The Initial ADSs and the Option ADSs to be purchased by
each Underwriter, in such form and denominations and registered in such
names as the Representatives shall request in writing not later than
forty-eight hours prior to the Initial Closing Date or the Additional
Closing Date, as the case may be, shall be delivered by or on behalf of
the Company to the Representatives for the respective accounts of such
Underwriters, immediately following or upon payment by such
Underwriters pursuant to Section 2(c) hereof.
(e) Each of the Company and the Selling Shareholders
acknowledges and agrees that the Underwriters are acting solely in the
capacity of an arm's length contractual counterparty to the Company and
the Selling Shareholders with respect to the offering of Shares
contemplated hereby (including in connection with determining the terms
of the offering) and not as a financial advisor or a fiduciary to, or
an agent of, the Company, the Selling Shareholders, creditors,
employees or any other person. Additionally, neither the Representative
nor any other Underwriter is advising the Company, the Selling
Shareholders or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company and
the Selling Shareholders shall consult with their own advisors
concerning such matters and shall be responsible for making their own
independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no responsibility
or liability to the Company or the Selling Shareholders with respect
thereto. Any review by the Underwriters of the Company, the
transactions contemplated hereby or other matters
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relating to such transactions will be performed solely for the benefit
of the Underwriters and shall not be on behalf of the Company or the
Selling Shareholders.
3. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter and each Selling
Shareholder as of the date hereof and as of each Closing Date, as
applicable, and agrees with each Underwriter and each Selling
Shareholder, as follows:
(i) Preliminary Prospectus. No order preventing or
suspending the use of any Preliminary Prospectus has been
issued by the Commission, and each Preliminary Prospectus, at
the time of filing thereof, complied in all material respects
with the Securities Act and did not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to
any statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in any
Preliminary Prospectus.
(ii) Registration Statement and Prospectus. The
Registration Statement and any post-effective amendment
thereto has become effective under the Securities Act and no
order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto has been
issued by the Commission and no proceeding for that purpose
has been initiated or is pending or threatened by the
Commission and any request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statement
and any post-effective amendments thereto became effective and
at the Closing Date (and, if any Option Shares are purchased,
at the Additional Closing Date), the Registration Statement
and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the
Securities Act and the Securities Act Regulations and did not
and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any amendments or
supplements thereto were issued and at the Closing Date (and,
if any Option Shares are purchased, at the Additional Closing
Date), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation
and warranty with respect to any statements or omissions made
in reliance upon and in conformity with information relating
to any Underwriter
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furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in the
Registration Statement and the Prospectus and any amendment or
supplement thereto.
Each Preliminary Prospectus and the Prospectus filed
as part of the Registration Statement as originally filed or
as part of any amendment thereto complied when so filed in all
material respects with the Securities Act Regulations and each
Preliminary Prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was
identical in substance to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(iii) ADS Registration Statement. A registration
statement on Form F-6 (File No._____________) has been filed
with the Commission; such registration statement has been
declared effective by the Commission (such registration
statement, as amended at the time it became effective, being
hereinafter called the "ADS REGISTRATION STATEMENT"; no stop
order suspending the effectiveness of the ADS Registration
Statement has been issued by the Commission and no proceeding
for that purpose has been initiated or threatened by the
Commission; as of the applicable effective date of the ADS
Registration Statement and any amendment thereto, if
applicable, the ADS Registration Statement complied or will
comply in all material respects with the Securities Act, and
did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein and or necessary in order to make the
statements therein not misleading.
(iv) Financial Statements of the Company. The audited
consolidated annual financial statements, the unaudited
consolidated interim financial statements, and the related
notes thereto with respect to the Company and, to the extent
applicable, its subsidiaries included in the Registration
Statement and the Prospectus comply in all material respects
with the applicable requirements of the Securities Act and the
Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the
"EXCHANGE ACT"), as applicable, and present fairly the
financial position of the Company and, to the extent
applicable, its subsidiaries as of the dates indicated and the
results of their operations, stockholders' equity and the
changes in their cash flows of the Company and its
consolidated subsidiaries for the periods specified; such
financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") in the
United States applied on a consistent basis throughout the
periods covered thereby; the other financial information
included in the Registration Statement and the Prospectus
presents fairly the information shown thereby. The selected
financial data and the summary financial information included
in the Prospectus present fairly the information shown therein
and have been compiled on a basis consistent with that of the
financial statements included in the Registration Statement.
The pro forma financial statements and the related
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notes thereto included in the Registration Statement and the
Prospectuses present fairly the information shown therein,
have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements
and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and
circumstances referred to therein.
(v) Financial Statements of WiderThan Americas Inc.
The audited consolidated annual financial statements, the
unaudited consolidated interim financial statements, and the
related notes thereto with respect to WiderThan Americas Inc.
("WIDERTHAN AMERICAS", formerly known as Ztango, Inc.),
included in the Registration Statement and the Prospectus
comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as
applicable, and present fairly the financial position of
WiderThan Americas and, to the extent applicable, its
subsidiaries as of the dates indicated and the results of
their operations, stockholders' equity and the changes in
their cash flows of WiderThan Americas and its consolidated
subsidiaries for the periods specified; such financial
statements have been prepared in conformity with GAAP in the
United States applied on a consistent basis throughout the
periods covered thereby.
(vi) No Material Adverse Change. Except as set forth
in the Prospectus, since the date of the most recent audited
financial statements of the Company included in the
Prospectus, (i) there has not been any change in the capital
stock or long-term debt of the Company or any of its
subsidiaries, or any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company
on any class of capital stock, or any change, or any
development involving a prospective change, in or affecting
the business, properties, management, financial position,
stockholders' equity, results of operations or prospects of
the Company and its subsidiaries taken as a whole; (ii)
neither the Company nor any of its subsidiaries has entered
into any transaction or agreement that is material to the
Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is
material to the Company and its subsidiaries taken as a whole;
and (iii) neither the Company nor any of its subsidiaries has
sustained any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor disturbance or dispute
or any action, order or decree of any court or arbitrator or
governmental or regulatory authority, except in each case,
where such change, transaction, agreement, liability,
obligation, loss or interference would not, individually or in
the aggregate, have a material adverse effect on the
condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries taken as a whole whether or not arising in the
ordinary course of business (a "MATERIAL ADVERSE EFFECT").
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(vii) Organization of the Company. The Company has
been duly organized and is validly existing under the laws of
the Republic of Korea and has corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and
perform its obligations under this Agreement; and the Company
is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
(viii) Organization of Subsidiaries. Each subsidiary
of the Company (each a "SUBSIDIARY" and, collectively, the
"SUBSIDIARIES") has been duly organized and is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect; except as
otherwise disclosed in the Prospectus, all of the issued and
outstanding capital stock of each such Subsidiary has been
duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of any Subsidiary are
subject to the preemptive or similar rights of any
securityholder of such Subsidiary. The only subsidiaries of
the Company are the subsidiaries listed in Schedule III of
this Agreement. Other than WiderThan Americas (the "PRINCIPAL
SUBSIDIARY"), no subsidiary listed in Schedule III of this
Agreement is a subsidiary whose consolidated assets exceed 5%
of the assets of the Company and its consolidated subsidiaries
as set forth in the most recent financial statements of the
Company included in the Prospectus.
(ix) Capitalization. The Company has an authorized
capitalization as set forth in the Prospectus under the
heading "Capitalization" all the outstanding shares of capital
stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable and are not
subject to any pre-emptive or similar rights; there are no
outstanding rights (including, without limitation, pre-emptive
rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital
stock or other equity interest in the Company or the Principal
Subsidiary, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or the Principal
Subsidiary, any such convertible or exchangeable securities or
any such rights, warrants or options, except, in each case, as
set forth in the Prospectus; the capital stock of the Company
conforms in all material respects to the description thereof
contained in the Prospectus; and the
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Company owns the percentage of the capital stock of each such
subsidiary set out in Schedule III, free and clear of any
lien, charge, encumbrance, security interest, restriction on
voting or transfer or any other claim of any third party.
(x) Due Authorization. The Company has full right,
power and authority to execute and deliver this Agreement and
the Deposit Agreement (collectively, the "TRANSACTION
DOCUMENTS" and to perform its obligations hereunder and
thereunder; all action required to be taken for the due and
proper authorization, execution and delivery by it of each of
the Transaction Documents and the consummation by it of the
transactions contemplated thereby has been duly and validly
taken.
(xi) Underwriting Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(xii) Deposit Agreement. The Deposit Agreement has
been duly authorized, and when executed and delivered by the
Company, and, assuming due authorization, execution and
delivery by the Depositary, will constitute a valid and
legally binding agreement of the Company, enforceable in
accordance with its terms, except as enforceability may be
limited by (a) applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally
or by equitable principles relating to enforceability; and (b)
the effect of judicial application of foreign laws or foreign
governmental actions affecting creditors' rights. The Deposit
Agreement and the ADRs conform in all material respects to the
descriptions thereof contained in the Prospectus.
(xiii) The Shares. The Shares to be issued and sold
by the Company hereunder have been duly authorized by the
Company and, when issued and delivered against payment
therefor as provided herein, such Shares will be duly and
validly issued and will be fully paid and non-assessable and
will conform to the descriptions thereof in the Prospectus; no
holder of the Shares will be subject to personal liability by
reason of being such a holder and the issuance of the Shares
is not subject to any preemptive or similar rights.
(xiv) The ADSs. The Shares may be freely deposited by
the Company with the custodian pursuant to the Deposit
Agreement. Upon the due issuance by the Depositary of ADRs
evidencing ADSs, such ADRs will be duly and validly issued
under the Deposit Agreement and persons in whose names such
ADRs are registered will be entitled to the rights of
registered holders of ADRs specified therein and in the
Deposit Agreement; and the Deposit Agreement and ADSs will
conform in all material respects to the description thereof
contained in the Prospectus.
(xv) Absence of Transfer Restrictions. The Shares and
ADSs, when issued, are freely transferable by the Company to
or for the account of the several
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Underwriters and are freely transferable by the several
Underwriters to the initial purchasers thereof under the laws
of Korea except as described in the Prospectus.
(xvi) No Violation or Default. Neither the Company
nor its Principal Subsidiary is (i) in violation of its
articles of incorporation or other organizational documents;
(ii) in default, and no event has occurred that, with notice
or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or
instrument to which the Company or its Principal Subsidiary is
a party or by which the Company or its subsidiaries is bound
or to which any of the property or assets of the Company or
any of its Principal Subsidiary is subject; or (iii) in
violation of any law or statute or any judgment, order, rule
or regulation of any court or arbitrator or governmental or
regulatory authority having jurisdiction over the Company or
its Principal Subsidiary, except, in the case of clauses
(ii) and (iii) above, for any such default or violation that
would not, individually or in the aggregate, have a Material
Adverse Effect.
(xvii) No Conflicts. The execution, delivery and
performance by the Company of each of the Transaction
Documents, the issuance of the Shares, the deposit of the
Shares with the Depositary against issuance of the ADRs
evidencing the ADSs, the sale by the Company of the ADSs and
the consummation of the transactions contemplated by the
Transaction Documents do not and will not, (i) conflict with
or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the
creation or imposition of any tax, lien, charge or encumbrance
upon the Shares or ADSs to be sold by the Company or any
property or assets of the Company or its Principal Subsidiary
pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the
Company or its Principal Subsidiary is a party or by which the
Company or its Principal Subsidiary is bound or to which any
of the property or assets of the Company or its Principal
Subsidiary is subject, (ii) result in any violation of the
provisions of the articles of incorporation or other
organizational documents of the Company or its Principal
Subsidiary or (iii) result in the violation of any law or
statute or any judgment, order, rule or regulation of any
court or arbitrator or governmental or regulatory authority
having jurisdiction over the Company or its Principal
Subsidiary or any of their properties or assets, except, in
the case of clauses (i) and (iii) above, for any such
conflict, breach or violation that would not, individually or
in the aggregate, have a Material Adverse Effect.
(xviii) No Consents Required. Except as described in
the Prospectus, no consent, approval, authorization, order,
registration or qualification of or with any court or
arbitrator or governmental or regulatory authority is required
for the execution, delivery and performance by the Company of
each of the Transaction Documents, the issuance of the Shares,
the deposit of the Shares with the Depositary against issuance
of the ADRs evidencing the ADSs, the sale by the
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Company of the ADSs and the consummation of the transactions
contemplated by the Transaction Documents, except for (i) the
registration of the Shares and the ADSs under the Securities
Act, (ii) such consents, approvals, authorizations, orders and
registrations or qualifications as may be required under
applicable state securities laws in connection with the
purchase and distribution of the Shares and the ADSs by the
Underwriters, (iii) the filing of a report with the Ministry
of Finance and Economy of Korea ("MOFE") in connection with
the issuance of the ADSs, which has been made and is in full
force and effect and (iv) the registration of the issuance of
the Shares with the registry offices of the competent Korean
courts having jurisdiction over the Company which is required
to be made within two weeks from the issue of the Shares.
(xix) Legal Proceedings. Except as described in the
Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which
the Company or the Principal Subsidiary is or may be a party
or to which any property of the Company or the Principal
Subsidiary is or may be the subject that, individually or in
the aggregate, if determined adversely to the Company or the
Principal Subsidiary, could reasonably be expected to have a
Material Adverse Effect or materially and adversely affect the
ability of the Company to perform its obligations under the
Transaction Documents; no such investigations, actions, suits
or proceedings are threatened or, to the best knowledge of the
Company, contemplated by any governmental or regulatory
authority or threatened by others.
(xx) Accuracy of Exhibits. There are no contracts or
other documents that are required under the Securities Act to
be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus that
are not so filed or described.
(xxi) Independent Accountants with respect to the
Company. Samil PricewaterhouseCoopers, the Korean member firm
of PricewaterhouseCoopers, who audited certain financial
statements of the Company and its subsidiaries and provided a
"comfort letter" with respect to the financial data of the
Company and its subsidiaries, are independent public
accountants with respect to the Company and its consolidated
subsidiaries as required by the Securities Act.
(xxii) Independent Accountants with respect to
WiderThan Americas. PricewaterhouseCoopers LLP, who audited
certain financial statements of WiderThan Americas, are
independent public accountants with respect to WiderThan
Americas as required by the Securities Act. Deloitte & Touche
LLC, who audited certain financial statements of WiderThan
Americas and its consolidated subsidiaries, are independent
public accountants with respect to WiderThan Americas as
required by the Securities Act.
(xxiii) Title to Real and Personal Property. Except
as described in the Prospectus, each of the Company and its
Principal Subsidiary have good and
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marketable title to, or have valid rights to lease or
otherwise use, all items of real and personal property that
are material to the respective businesses of the Company and
the Principal Subsidiary, in each case free and clear of all
liens, encumbrances, claims and defects and imperfections of
title except those that do not, singly or in the aggregate,
materially interfere with the use made and proposed to be made
of such property by the Company or the Principal Subsidiary;
and all of the leases and subleases material to the business
of the Company and the Principal Subsidiary, considered as one
enterprise, and under which the Company or the Principal
Subsidiary holds properties described in the Prospectus, are
in full force and effect, and neither the Company nor the
Principal Subsidiary has any notice of any material claim of
any sort that has been asserted by anyone adverse to the
rights of the Company or the Principal Subsidiary under any of
the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or the Principal
Subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xxiv) Title to Intellectual Property. Except as
described in the Prospectus, the Company and its Principal
Subsidiary own, are licensed or possess adequate rights to use
all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses, know-how or other
intellectual property (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) (collectively,
"INTELLECTUAL PROPERTY") necessary for the conduct of their
respective businesses; and the conduct of their respective
businesses will not conflict in any material respect with any
such rights of others, and the Company and its Principal
Subsidiary have not received any notice of any claim of
infringement or conflict with any such rights of others with
respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company
or its Principal Subsidiary therein except those that (i) do
not materially interfere with the use made and proposed to be
made of such Intellectual Property by the Company and its
Principal Subsidiary or (ii) could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(xxv) No Undisclosed Relationships. Except as
described in the Prospectus, no relationship, direct or
indirect, exists between or among the Company or any of its
subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of
its subsidiaries, on the other, that is required by the
Securities Act to be described in the Registration Statement
and the Prospectus that is not so described.
(xxvi) Investment Company Act. The Company is not
and, after giving effect to the issuance of the Shares and the
offering and sale of the ADSs and the application of the
proceeds thereof as described in the Prospectus, will not be
an "investment company" within the meaning of the Investment
Company Act of
12
1940, as amended, and the rules and regulations of the
Commission thereunder (collectively, "INVESTMENT COMPANY
ACT").
(xxvii) Taxes. The Company has paid all taxes and
filed all tax returns required to be paid or filed through the
date hereof or has duly requested extensions; provided, with
respect to payment of taxes, except for such taxes, if any,
that are being contested in good faith and as to which
adequate reserves have been provided and, with respect to the
filings of returns, except insofar as the failure to file such
returns would not have a Material Adverse Effect.
(xxviii) Passive Foreign Investment Company. Based on
the composition of its income and valuation of its assets,
including goodwill, the Company does not believe it currently
is, or that it was in 2004, a Passive Foreign Investment
Company ("PFIC") within the meaning of Section 1297 of the
U.S. Internal Revenue Code of 1986, as amended, and does not
expect to become a PFIC in 2005 and in the near future.
(xxix) Licenses and Permits. The Company and the
Principal Subsidiary possess all licenses, certificates,
permits and other authorizations (collectively, "Governmental
Licenses") issued by, and have made all declarations and
filings with, the appropriate governmental or regulatory
authorities that are necessary for the ownership or lease of
their respective properties or the conduct of their respective
businesses as described in the Prospectus, except where the
failure to possess or make the same would not, individually or
in the aggregate, have a Material Adverse Effect; the Company
and the Principal Subsidiary are in compliance with the terms
and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the
aggregate, result in a Material Adverse Effect; and except as
described in the Prospectus, neither the Company nor the
Principal Subsidiary has received notice of any revocation or
modification of any such Governmental Licenses or has any
reason to believe that any such license, certificate, permit
or authorization will not be renewed in the ordinary course.
(xxx) No Labor Disputes. No labor dispute with the
employees of the Company or its Principal Subsidiary exists
or, to the knowledge of the Company, is imminent, which, in
either case, would result in a Material Adverse Effect.
(xxxi) Accounting Controls. The Company and its
subsidiaries maintain systems of internal accounting controls
sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles in the United States and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets
is compared
13
with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxxii) Material Weaknesses. Except as described in
the Prospectus, since the end of the Company's most recent
audited fiscal year, there has been (i) no material weakness
in the Company's internal control over financial reporting
(whether or not remediated) and (ii) no change in the
Company's internal control over financial reporting that has
materially and adversely affected, or is reasonably likely to
materially and adversely affect, the Company's internal
control over financial reporting.
(xxxiii) No Broker's Fees. Neither the Company nor
any of its subsidiaries is a party to any contract, agreement
or understanding with any person (other than this Agreement)
that would give rise to a valid claim against the Company or
any Underwriter for a brokerage commission, finder's fee or
like payment in connection with the offering and sale of the
ADSs.
(xxxiv) No Registration Rights. Except as described
in the Prospectus, no person has the right to require the
Company to register any securities for sale under the
Securities Act by reason of the filing of the Registration
Statement with the Commission or the issuance of the Shares or
the sale of the ADSs.
(xxxv) Absence of Manipulation. The Company has not
taken, and will not take, directly or indirectly, any action
which is designed to or which has constituted or which would
be expected to cause or result in any stabilization or
manipulation of the price of the Shares or the ADSs in
violation of the Exchange Act or the applicable Korean laws.
(xxxvi) Statistical and Market Data. Nothing has come
to the attention of the Company that has caused the Company to
believe that the statistical and market-related data included
in the Prospectus is not based on or derived from sources that
are reliable and accurate in all material respects.
(xxxvii) Arm's-Length Transactions. Except as
described in the Prospectus, none of the Company or any of its
subsidiaries is engaged in any material transactions with its
directors, officers, management, shareholders, or any other
person, including persons formerly holding such positions, on
terms that are not available from other parties on an
arm's-length basis.
(xxxviii) No Unlawful Payments. None of the Company,
any of the Company's subsidiaries or, to the best of the
Company's knowledge, any director, officer, agent, employee or
other person associated with, or acting on behalf of, the
Company or any of the Company's subsidiaries has (A) used any
corporate funds for any unlawful contribution, gift,
entertainment of unlawful expense relating to political
activity, (B) made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from
corporate funds, (C) violated
14
any provision of the U.S. Foreign Corrupt Practices Act or any
similar law or regulation of any other jurisdiction, or (D)
paid any bribe, rebate, pay-off, influence payment, kick-back
or other unlawful payment.
(xxxix) Critical Accounting Policies. The section
entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Critical Accounting
Policies" in the Prospectus accurately and fully describes (i)
accounting policies that the Company believes to be the most
important in the portrayal of the Company's financial
condition and results of operations and which require
management's most difficult, subjective or complex judgments
(henceforth referred to as "CRITICAL ACCOUNTING POLICIES");
(ii) uncertainties affecting the application of Critical
Accounting Policies; and (iii) an explanation of the
likelihood that materially different amounts would be reported
under different conditions or using different assumptions.
(xl) Liquidity and Capital Resources. The section
entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital
Resources" in the Prospectus accurately and fully describes:
(i) all material trends, demands, commitments, events,
uncertainties and risks, and the potential effects thereof,
that the Company believes would materially affect liquidity
and are reasonably likely to occur, and (ii) neither the
Company nor any of its subsidiaries is engaged in any
transactions with, or have any obligations to, its
unconsolidated entities (if any) that are contractually
limited to narrow activities that facilitate the transfer of
or access to assets by the Company or such subsidiary,
including, without limitation, structured finance entities and
special purpose entities, or otherwise engage in, or have any
obligations under, any off-balance sheet transactions or
arrangements. As used herein, the phrase "reasonably likely"
refers to a disclosure threshold lower than more likely than
not.
(xli) Trends in Financial Condition. The description
set forth in the section of the Prospectus titled
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" presents fairly and accurately the
factors management of the Company believe have in the past and
will in the future affect the financial condition and results
of operations of the Company and its subsidiaries.
(b) Representations and Warranties by the Selling
Shareholders. Each Selling Shareholder severally and not jointly
represents and warrants to each Underwriter and the Company as of the
date hereof and as of each Closing Date, and agrees with each
Underwriter, as follows:
(i) Accurate Disclosure. Such Selling Shareholder has
provided for inclusion in the Prospectus (A) the name and
address of such Selling Shareholder, (B) the number of Shares
underlying ADSs that such Selling Shareholder is selling, and
(C) other information relating to such Selling Shareholder
included in
15
the section entitled "Principal and Selling Shareholders" in
the Prospectus as furnished in writing to the Company
(collectively, the "SELLING SHAREHOLDER INFORMATION") and
represents that such Selling Shareholder Information does not
include any untrue statement of a material fact or omits to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(ii) Authorization of this Agreement. This Agreement
has been duly authorized, executed and delivered by or on
behalf of such Selling Shareholder.
(iii) Authorization of Power of Attorney and Custody
Agreement. The Power of Attorney and Custody Agreement, in the
form heretofore furnished to the Representatives (the "POWER
OF ATTORNEY AND CUSTODY AGREEMENT", has been duly authorized,
executed and delivered by such Selling Shareholder and is the
valid and binding agreement of such Selling Shareholder.
(iv) Non-contravention. The execution and delivery of
this Agreement and the Power of Attorney and Custody Agreement
and the sale and delivery of the ADSs to be sold by such
Selling Shareholder and the consummation of the transactions
contemplated herein and compliance by such Selling Shareholder
with its obligations hereunder do not and will not, whether
with or without the giving of notice or passage of time or
both, (i) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any tax,
lien, charge or encumbrance upon the Shares or ADSs to be sold
by such Selling Shareholder or any property or assets of such
Selling Shareholder pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to
which such Selling Shareholder is a party or by which such
Selling Shareholder is bound or to which any of the property
or assets of such Selling Shareholder is subject, (ii) result
in any violation of the provisions of the articles of
incorporation or other organizational documents of such
Selling Shareholder or (iii) result in the violation of any
law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory
authority having jurisdiction over such Selling Shareholder or
any of their properties or assets, except in the case of
clauses (i) and (iii) above, for any such conflict, breach,
violation, default, tax, lien, charge or encumbrance that
would not, individually or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of such
Selling Shareholder.
(v) Valid Title. Such Selling Shareholder is the sole
owner of the Shares to be sold by it and has the full right,
power and authority to sell, assign, transfer and deliver such
Shares in the form of ADSs pursuant to this Agreement; such
Selling Shareholder has, and immediately prior to each Closing
Date, as applicable, will have, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or
claims; and upon the sale and delivery to the Underwriters of
such ADSs and payment therefor, pursuant to this Agreement,
16
good and valid title to such ADSs, free and clear of all
liens, encumbrances, equities or claims, will be freely
transferable by the Selling Shareholder to the Underwriters.
(vi) Absence of Manipulation. Such Selling
Shareholder has not taken, and will not take, directly or
indirectly, any action which is designed to or which has
constituted or which would be expected to cause or result in
stabilization or manipulation of the price of the Shares or
the ADSs in violation of the Exchange Act or the applicable
Korean laws.
(vii) No Consents Required. No filing with, or
consent, approval, authorization, order, registration,
qualification or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or
required for the execution and delivery by such Selling
Shareholder of this Agreement, the Power of Attorney and
Custody Agreement, the performance by such Selling Shareholder
of its obligations hereunder or in the Power of Attorney and
Custody Agreement, or in connection with the sale and delivery
of the ADSs by such Selling Shareholder hereunder or the
consummation of the transactions contemplated by this
Agreement, except for (i) the report to the MOFE, which has
been filed, and (ii) such consents, approvals, authorizations,
orders and registrations or qualifications as may be required
under the Securities Act, applicable state securities laws or
applicable Korean laws in connection with the purchase and
distribution of the Shares and the ADSs by the Underwriters.
(viii) No Association with NASD. Neither such Selling
Shareholder nor any of its affiliates directly, or indirectly
through one or more intermediaries, controls, or is controlled
by, or is under common control with, or is a person associated
with (within the meaning of Article I (dd) of the By-laws of
the National Association of Securities Dealers, Inc.), any
member firm of the National Association of Securities Dealers,
Inc., except in the case of General Atlantic Partners 64, L.P.
and GAP Coinvestment Partners II, L.P.
(c) Officer's Certificates. Any certificate signed by any
officer of the Company or any of its subsidiaries delivered to the
Representatives or the Selling Shareholders or to their respective
counsel shall be deemed a representation and warranty by the Company to
each Underwriter and each Selling Shareholder as to the matters covered
thereby; and any certificate signed by or on behalf of the Selling
Shareholders as such and delivered to the Representatives or to counsel
for the Underwriters pursuant to the terms of this Agreement shall be
deemed a representation and warranty by such Selling Shareholder to
each Underwriter as to the matters covered thereby.
4. Further Agreements.
(a) The Company covenants and agrees with each Underwriter that:
17
(i) Effectiveness of the Registration Statement. The Company
will use its reasonable best efforts to cause the Registration
Statement and the ADS Registration Statement to become effective at the
earliest possible time and, if required, will file the final Prospectus
with the Commission within the time periods specified by Rule 424(b)
and Rule 430A under the Securities Act and the Company will furnish
copies of the Prospectus to the Underwriters in New York City prior to
10:00 A.M., New York City time, on the business day next succeeding the
date of this Agreement in such quantities as the Representatives may
reasonably request.
(ii) Delivery of Copies. The Company will deliver, without
charge, (i) to the Representatives copies of each of the Registration
Statement and the ADS Registration Statement as originally filed and
each amendment thereto, in each case including all exhibits and
consents filed therewith, and copies of all consents and certificates
of experts and (ii) to each Underwriter (A) a conformed copy of each of
the Registration Statement and the ADS Registration Statement as
originally filed and each amendment thereto (without exhibits) and (B)
during the Prospectus Delivery Period (as defined below), as many
copies of the Prospectus (including all amendments and supplements
thereto) as the Representatives may reasonably request. As used herein,
the term "Prospectus Delivery Period" means such period of time after
the first date of the public offering of the ADSs as in the opinion of
counsel for the Underwriters a prospectus is required by law to be
delivered in connection with sales of the ADSs by any Underwriter or
dealer. The copies of the Registration Statement and the Prospectus and
each amendment and supplement thereto furnished to the Underwriters
will be identical in substance to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(iii) Amendments or Supplements. Before filing any amendment
or supplement to the Registration Statement, the ADS Registration
Statement or the Prospectus, the Company will furnish to the
Representatives and counsel for the Underwriters a copy of the proposed
amendment or supplement for review and will not file any such proposed
amendment or supplement to which the Representatives reasonably
objects.
(iv) Notice to the Representatives. The Company will advise
the Representatives promptly, and confirm such advice in writing, (i)
when the Registration Statement and the ADS Registration Statement has
become effective; (ii) when any amendment to the Registration Statement
or the ADS Registration Statement has been filed or becomes effective;
(iii) when any supplement to the Prospectus or any amendment to the
Prospectus has been filed; (iv) of any request by the Commission for
any amendment to the Registration Statement or the ADS Registration
Statement or any amendment or supplement to the Prospectus or the
receipt of any comments from the Commission relating to the
Registration Statement or the ADS Registration Statement or any other
request by the
18
Commission for any additional information; (v) of the issuance by the
Commission of any order suspending the effectiveness of the
Registration Statement or the ADS Registration Statement or preventing
or suspending the use of any Preliminary Prospectus or the Prospectus
or the initiation or threatening of any proceeding for that purpose;
(vi) of the occurrence of any event within the Prospectus Delivery
Period as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Prospectus
is delivered to a purchaser, not misleading; and (vii) of the receipt
by the Company of any notice with respect to any suspension of the
qualification of the Shares or the ADSs for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and the Company will use its best efforts to prevent the
issuance of any such order suspending the effectiveness of the
Registration Statement or the ADS Registration Statement, preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification of the Shares or the ADSs and, if any
such order is issued, will obtain as soon as possible the withdrawal
thereof.
(v) Ongoing Compliance of the Prospectus. If during the
Prospectus Delivery Period (i) any event shall occur or condition shall
exist as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser,
not misleading or (ii) it is necessary to amend or supplement the
Prospectus to comply with law, the Company will immediately notify the
Underwriters thereof and forthwith prepare and, subject to paragraph
(iii) above, file with the Commission and furnish to the Underwriters
in such quantities as the Representatives may reasonably request and to
such dealers as the Representatives may designate, such amendments or
supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances existing when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will
comply with law.
(vi) Blue Sky Compliance. The Company will use its best
efforts to qualify the Shares and the ADSs for offer and sale under the
securities of such jurisdictions as the Representatives shall
reasonably request and will continue such qualifications in effect so
long as required for distribution of the ADSs.
(vii) Earning Statement. The Company will make generally
available to its security holders and the Representatives as soon as
practicable an earning statement that satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering a period of at least
19
twelve months beginning with the first fiscal quarter of the Company
occurring after the "effective date" (as defined in Rule 158) of the
Registration Statement.
(viii) Restriction on Sale of Securities. During a period of
180 days from the date of the Prospectus, the Company will not, without
the prior written consent of the Representatives, (i) directly or
indirectly, offer, sell, contract to sell, announce the intention to
sell, issue, pledge, lend, grant any option, right or warrant for the
sale of, or otherwise dispose of or transfer (each, collectively, a
"SALE"), any shares of the Company's Common Stock, or any depositary
shares representing such Common Stock, or any securities convertible
into or exchangeable or exercisable for Common Stock, or any depositary
shares representing such Common Stock, whether now owned or hereafter
acquired by the Company or with respect to which the Company has or
hereafter acquires the power of disposition, or file, or cause to be
filed, any registration statement under the Securities Act of 1933, as
amended, with respect to any of the foregoing (collectively, the
"LOCK-UP SECURITIES") or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequences of ownership of the
Lock-Up Securities, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise. The foregoing restriction shall not
apply to (A) any Sale or Transfer of the Lock-Up Securities pursuant to
this Agreement, (B) issuance of Common Stock upon the exercise of
employee stock options existing on the date hereof, (C) issuance of
Common Stock upon the conversion of the Company's preferred shares
outstanding as of the date hereof, (D) in connection with any
acquisition of a company where Lock-Up Securities so disposed of are
transferred to one or more persons or entities in exchange for the
shares or assets of the company being acquired, or (E) to any strategic
or financial investor in the Company's capital stock; provided that in
the cases of (B), (C), (D) and (E), any holder of Lock-up Securities
who acquired such Lock-up Securities pursuant to the exceptions set
forth under (B), (C), (D) and (E), as applicable, shall agree to be
bound in writing by the terms of the restrictions in this Agreement
with respect to the Lock-Up Securities during the remainder of the
aforesaid 180-day period. The foregoing restriction is expressly agreed
to preclude the Company from engaging in any hedging or other
transaction which is designed to or which reasonably could be expected
to lead to or result in a sale or disposition of the Lock-up
Securities, even if such Lock-up Securities would be disposed of by
someone other than the Company. Such prohibited hedging or other
transactions would include, without limitation, any short sale or any
purchase, sale or grant of any right (including without limitation any
put or call option) with respect to any of the Lock-up Securities or
with respect to any security that includes, relates to, or derives any
significant part of its value from such securities. Notwithstanding any
provision herein to the contrary, however, if (1) during the last 17
days of the 180-day lock-up period, the Company issues an earnings
release or material news or a material event relating to the Company
occurs; or (2) prior to the expiration of the 180-day lock-up period,
the Company
20
announces that it will release earnings results or becomes aware that
material news or a material event will occur during the 16-day period
beginning on the last day of the 180-day lock-up period, the
restrictions imposed by this provision shall continue to apply until
the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material
event, as applicable, unless the Representatives waive, in writing,
such extension. The Company hereby acknowledges and agrees that written
notice of any extension of the 180-day lock-up period pursuant to the
previous sentence will be delivered by the Representatives to the
Company as further set forth in this Agreement and that any such notice
properly delivered will be deemed to have been given to, and received
by, the Company.
(ix) Use of Proceeds. The Company will apply the net proceeds
from the sale of the ADSs as described in the Prospectus under the
heading "Use of Proceeds".
(x) Exchange Listing. The Company will use its best efforts to
list for quotation the ADSs on the National Association of Securities
Dealers Automated Quotations National Market (the "NASDAQ NATIONAL
MARKET".)
(xi) The Depositary. The Company will cooperate in procuring
from the Depositary on the Initial Closing Date and the Additional
Closing Date, if applicable, certificates satisfactory to the
Representatives evidencing the deposit of the Shares with the custodian
in accordance with the Deposit Agreement being so deposited against
issuance of ADRs evidencing the ADSs to be delivered, and the
execution, countersignature (if applicable), issuance and delivery of
ADRs evidencing such ADSs pursuant to the Deposit Agreement.
(xii) Announcements. Between the date hereof and the Initial
Closing Date (both dates inclusive), the Company will not, without the
prior approval of the Representatives (such approval not to be
unreasonably withheld), make any official announcement (other than any
notices or filings required to be submitted to or filed with Korea
Exchange (the "KRX") or the Korean authorities, including the Financial
Supervisory Commission and the Ministry of Finance and Economy,
pursuant to Korean laws and regulations) which would have an adverse
effect on the marketability of the ADSs.
(xiii) Investment Company Act. The Company will take such
steps as shall be necessary to ensure that, prior to the expiration of
two years after the Closing Date, it shall not be or become an
"investment company" as defined in the Investment Company Act.
(xiv) Payment of Underwriting Commissions. The Company will
pay or cause to be paid all Underwriting Commissions to the
Representatives no later than the second business day following the
Initial Closing Date or the Additional Closing Date, as the case may be
(each, a "COMMISSIONS PAYMENT DATE"). The
21
Company hereby agrees that if any Underwriting Commission is not paid
by the end of the applicable Commissions Payment Date, any past due
amount shall bear interest for the period beginning from and including
the date on which such payment was due, to but excluding the date on
which the payment is made at a rate per annum equal to 5 % plus LIBOR,
which together with the past due amount shall be paid to the
Representatives on the date on which the past due amount is paid,
provided, however, that no interest shall accrue for any period in
which a payment delay is solely caused by factors beyond the control of
the Company, including delays caused by any governmental or other
regulatory authorities.
(xv) Stamp Duty and Other Transaction Taxes. The Company will
indemnify and hold harmless the Underwriters against any stamp duty or
other issue, transaction, value-added (VAT) or similar tax, fund or
duty (including court fees), including any interest and penalties
payable in Korea which are or may be required to be paid in or in
connection with, the creation, allotment, issuance, offer, sale and
distribution of the Shares or the ADSs and the execution and delivery
of the Transaction Documents.
(b) Each of the Selling Shareholders severally and not jointly agrees
with each Underwriter that:
(i) Restriction on Sale of Securities. During a period of 180
days from the date of this Agreement, such Selling Shareholder will
not, without the prior written consent of the Representatives, directly
or indirectly, (i) effect a Sale of any Lock-Up Securities, or (ii)
enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequences of ownership (each, collectively, a "Transfer") of the
Lock-Up Securities, whether any such transaction described in clauses
(i) or (ii) above is to be settled by delivery of Common Stock, or
other securities, in cash or otherwise. The foregoing restriction shall
not apply to (A) any Sale or Transfer of the Lock-Up Securities
pursuant to this Agreement, (B) the conversion of the Company's
preferred stock outstanding as of the date hereof into Common Stock,
(C) any exercise of stock options existing on the date hereof, (D) any
Sale or Transfer of Lock-Up Securities to the partners of a Selling
Shareholder, if the Selling Shareholder is a partnership or to the
members of the Selling Shareholder, if the Selling Shareholder is a
limited liability company, and (E) any Sale or Transfer of Lock-Up
Securities to a family member, family partnership or trust, any
Transfer upon the death of a family member to his or her executors,
legatees or beneficiaries or a bona fide gift, provided that, in the
cases of (B), (C), (D), and (E) above, any such transferee shall agree
to be bound in writing by the terms of the restrictions in this
Agreement with respect to the Lock-Up Securities during the remainder
of the aforesaid 180-day period. The foregoing restriction is expressly
agreed to preclude the Selling Shareholders from engaging in any
hedging or other transaction which is designed to or which reasonably
could be expected to lead to or result in a sale or disposition of the
Lock-up Securities, even if such Lock-up
22
Securities would be disposed of by someone other than the Selling
Shareholders. Such prohibited hedging or other transactions would
include, without limitation, any short sale or any purchase, sale or
grant of any right (including without limitation any put or call
option) with respect to any Lock-up Securities or with respect to any
security that includes, relates to, or derives any significant part of
its value from such securities. Notwithstanding the foregoing, if (1)
during the last 17 days of the 180 day lock up period, the Company
issues an earnings release or material news or a material event
relating to the Company occurs; or (2) prior to the expiration of the
180 day lock up period, the Company announces that it will release
earnings results or becomes aware that material news or a material
event will occur during the 16 day period beginning on the last day of
the 180 day lock up period, the restrictions imposed by this provision
shall continue to apply until the expiration of the 18 day period
beginning on the issuance of the earnings release or the occurrence of
the material news or material event, as applicable, unless the
Representatives waive, in writing, such extension. Such Selling
Shareholder hereby acknowledges and agrees that written notice of any
extension of the 180 day lock up period pursuant to the previous
sentence will be delivered by the Representatives to the Company as
further set forth in this Agreement and that any such notice properly
delivered will be deemed to have been given to, and received by, such
Selling Shareholder.
(ii) Notification of Changes. Such Selling Shareholder will
advise the Representatives promptly, and if requested by the
Representatives, will confirm such advice in writing, within the
Prospectus Delivery Period, of any new material information relating to
the Company not disclosed in the Prospectus which comes to the
attention of such Selling Shareholder.
(iii) Stamp Duty and Other Transaction Taxes. Such Selling
Shareholder will (severally and not jointly with respect to the other
Selling Shareholders) indemnify and hold harmless the Underwriters
against any stamp duty or other issue, transaction, value-added (VAT)
or similar tax, fund or duty (including court fees), including any
interest and penalties payable in Korea which are or may be required to
be paid in or in connection with the offer, sale and distribution of
the ADSs to be sold by such Selling Shareholder (or the related Shares)
and the execution and delivery of this Agreement.
5. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Initial ADSs on the Initial Closing Date or the
Option ADSs on the Additional Closing Date, as the case may be, as provided
herein is subject to the performance by each of the Company and the Selling
Shareholders of its covenants and other obligations hereunder and to the
following additional conditions:
(a) Registration Compliance; No Stop Order. The Registration Statement
and the ADS Registration Statement (or if a post-effective amendment to the
Registration Statement or the ADS Registration Statement is required to be
filed under the Securities Act, such post-effective amendment) shall each
have become effective, and the
23
Representatives shall have received notice thereof, not later than 5:00
P.M., New York City time, on the date hereof; no order suspending the
effectiveness of the Registration Statement or the ADS Registration
Statement shall be in effect, and no proceeding for such purpose shall be
pending before or threatened by the Commission; the Prospectus shall have
been timely filed with the Commission under the Securities Act and in
accordance with Section 4(a) hereof; and all requests by the Commission for
additional information shall have been complied with to the reasonable
satisfaction of the Representatives.
(b) Representations and Warranties. The representations and warranties
of the Company and the Selling Shareholders contained herein shall be true
and correct on the date hereof and on and as of the Initial Closing Date or
the Additional Closing Date, as the case may be; and the statements of the
Company, the Selling Shareholders and their respective officers, made in
any certificates delivered pursuant to this Agreement shall be true and
correct on and as of the Initial Closing Date or the Additional Closing
Date, as the case may be.
(c) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement, no event or condition of a type described in
Section 3(a)(vi) hereof shall have occurred or shall exist, which event or
condition is not described in the Prospectus (excluding any amendment or
supplement thereto) and the effect of which in the sole judgment of the
Representatives, after consultation with the Company to the extent
practicable, makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the ADSs on the Initial Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated by this Agreement and the Prospectus.
(d) Officer's Certificate. The Representatives shall have received on
and as of the Initial Closing Date or the Additional Closing Date, as the
case may be, a certificate of the chief executive officer, chief financial
officer or chief accounting officer of the Company (i) confirming that such
officers have carefully reviewed the Registration Statement and the
Prospectus and, to the best knowledge of such officers, the representation
set forth in Section 3(a)(ii) hereof is true and correct, (ii) confirming
that the representations and warranties of the Company, other than the
representation set out in Section 3(a)(ii) in this Agreement, are true and
correct and that the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or
prior to such Initial Closing Date or such Additional Closing Date, as the
case may be, and (iii) to the effect set forth in paragraphs (a) and (c)
above.
(e) Certificate of Selling Shareholders. The Representatives shall
have received on and as of the Initial Closing Date or the Additional
Closing Date, as the case may, be, a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, to the effect that (i) the
representations and warranties of such Selling Shareholder contained in
Section 3(b) hereof are true and correct in all respect with the same force
and effect as though expressly made at and as of each Closing Date, as the
case may be, and (ii) each Selling Shareholder has complied in all material
respects with all agreements and all
24
conditions on its part to be performed under this Agreement at or prior to
each Closing Date, as the case may be.
(f) Comfort Letters. On the date of this Agreement and on the Initial
Closing Date or the Additional Closing Date, as the case may be, Samil
PricewaterhouseCoopers, the Korean member firm of PricewaterhouseCoopers,
shall have furnished to the Representatives, at the request of the Company,
letters, dated the respective dates of delivery thereof and addressed to
the Underwriters, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type
customarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus; provided, that
the letter delivered on the Initial Closing Date or the Additional Closing
Date, as the case may be, shall use a "cut-off" date no more than three
business days prior to such Initial Closing Date or such Additional Closing
Date, as the case may be.
(g) Opinion of U.S. Counsel for the Company. Simpson Thacher &
Bartlett LLP, United States counsel for the Company, shall have furnished
to the Representatives, at the request of the Company, their written
opinion, dated the Initial Closing Date or the Additional Closing Date, as
the case may be, and addressed to the Underwriters, in form and substance
reasonably satisfactory to the Representatives, to the effect set forth in
ANNEX A-1 hereto.
(h) Opinion of Counsel for the Selling Shareholders. Counsel for each
of the Selling Shareholders, shall have furnished to the Representatives,
at the request of the Company, their written opinion, dated the Initial
Closing Date or the Additional Closing Date, as the case may be, and
addressed to the Underwriters, in form and substance reasonably
satisfactory to the Representatives, to the effect set forth in ANNEX A-2
hereto.
(i) Opinion of Korean Counsel for the Company and the Selling
Shareholders. Shin & Kim, Korean counsel for the Company and the Selling
Shareholders, shall have furnished to the Representatives, at the request
of the Company, their written opinion, dated the Initial Closing Date or
the Additional Closing Date, as the case may be, and addressed to the
Underwriters, in form and substance reasonably satisfactory to the
Representatives, to the effect set forth in ANNEX B hereto.
(j) Opinion of U.S. Counsel for the Underwriters. The Representatives
shall have received on and as of the Initial Closing Date or the Additional
Closing Date, as the case may be, an opinion of Davis Polk & Wardwell,
United States counsel for the Underwriters, with respect to such matters as
the Representatives may reasonably request, and such counsel shall have
received such documents and information as they may reasonably request to
enable them to pass upon such matters.
(k) Opinion of Korean Counsel for the Underwriters. The
Representatives shall have received on and as of the Closing Date or the
Additional Closing Date, as the case may be, an opinion of Kim & Chang,
Korean counsel for the Underwriters, with
25
respect to such matters as the Representatives may reasonably request, and
such counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(l) Opinion of Counsel for the Depositary. Ziegler, Ziegler &
Associates, LLP, United States counsel for the Depositary, shall have
furnished to the Representatives, at the request of the Depositary, their
written opinion, dated the Initial Closing Date or the Additional Closing
Date, as the case may be, and addressed to the Underwriters, in form and
substance reasonably satisfactory to the Representatives, to the effect set
forth in ANNEX C hereto.
(m) Opinion of General Counsel of the Company. The Representatives
shall have received on and as of the Closing Date or the Additional Closing
Date, as the case may be, an opinion of Dan Nemo, General Counsel of the
Company, addressed to the Underwriters, in form and substance reasonably
satisfactory to the Representatives, to the effect set forth in ANNEX D
hereto.
(n) No Legal Impediment to Issuance. No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted
or issued by any federal, state or foreign governmental or regulatory
authority, including the Financial Supervisory Commission and other Korean
authorities, that would, as of the Initial Closing Date or the Additional
Closing Date, as the case may be, prevent the issuance of the Shares, the
deposit of such Shares with the Depositary against issuance of the ADRs
evidencing the ADSs or the sale of such ADSs; and no injunction or order of
any federal, state or foreign court shall have been issued that would, as
of the Initial Closing Date or the Additional Closing Date, as the case may
be, prevent the issuance of the Shares, the deposit of such Shares with the
Depositary against issuance of the ADRs evidencing the ADSs or the sale of
such ADSs.
(o) Exchange Listing. The ADSs to be delivered on the Initial Closing
Date or Additional Closing Date, as the case may be, shall have been
approved for listing on the Nasdaq National Market, subject to official
notice of issuance.
(p) Lock-up Agreements. The "lock-up" agreements, each substantially
in the form of EXHIBIT A hereto signed by each person listed on Schedule IV
hereto, delivered to the Representatives on or before the date hereof,
shall be in full force and effect on the Initial Closing Date or Additional
Closing Date, as the case may be.
(q) Additional Documents. On or prior to the Initial Closing Date or
the Additional Closing Date, as the case may be, the Company shall have
furnished to the Representatives such further certificates and documents as
the Representatives may reasonably request.
(r) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
26
(s) Deposit Agreement. The Deposit Agreement shall be in full force
and effect.
(t) Depositary's Certificate. The Depositary shall have furnished or
caused to be furnished to the Underwriters a certificate, satisfactory to
the Representatives, of one of its authorized officers with respect to the
execution and delivery of the ADRs evidencing the ADSs pursuant to the
Deposit Agreement and such other matters related thereto as the
Underwriters reasonably request.
(u) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
ADSs on the Additional Closing Date which is after the Initial Closing
Date, the obligations of the several Underwriters to purchase the relevant
Option ADSs, may be terminated by the Representatives by notice to the
Company and the Selling Shareholders at any time at or prior to each such
Closing Date, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 12
and except that Sections 3, 6, 7 and 8 shall survive any such termination
and remain in full force and effect.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
6. Indemnification.
(a) Indemnification of Underwriters and Selling Shareholders by the
Company. The Company agrees to indemnify and hold harmless each Underwriter, its
affiliates, as such term is defined in Rule 501(b) under the Securities Act
(each, an "AFFILIATE"), its selling agents, each Selling Shareholder, their
respective affiliates, and each person, if any, who controls any Underwriter or
any Selling Shareholder within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim and damage, as
incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information, or the
ADS Registration Statement or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim and damage, as
incurred, to the extent of the aggregate amount paid in settlement of
any litigation, or any
27
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company and the
Selling Shareholders;
(iii) against any and all expense whatsoever (including the
fees and disbursements of counsel chosen by the Representatives)
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission (i)
regarding a Selling Shareholder which consists of Selling Shareholder
Information or (ii) made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); and
provided, further, that with respect to any untrue statement or alleged untrue
statement in or omission or alleged omission from any preliminary prospectus
this indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such loss,
liability, claim, damage or expense purchased the ADSs concerned, to the extent
that a prospectus relating to such ADSs was required to be delivered by such
Underwriter under the Securities Act in connection with such purchase and any
such loss, liability claim, damage or expense of such Underwriter results from
the fact that there was not sent or given to such person, at or prior to the
written confirmation of the sale of such ADSs to such person, a copy of the
Prospectus if the Company had previously furnished copies thereof in sufficient
quantities to such Underwriter.
(b) Indemnification of the Underwriters and the Company by the Selling
Shareholders. Each Selling Shareholder hereunder agrees, severally and not
jointly, to indemnify and hold harmless each Underwriter, its Affiliates,
its selling agents and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and the Company, its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) which consists of Selling Shareholder
Information furnished in
28
writing to the Company by such Selling Shareholder; provided, however,
that, the liability of such Selling Shareholder pursuant to this subsection
(b) shall not exceed the amount of total net proceeds (before deducting
expenses but after deducting underwriting commissions and discounts)
received by such Selling Shareholder from the sale of the ADSs pursuant to
this Agreement; and provided, further, that with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission
from any preliminary prospectus this indemnity agreement contained in this
subsection (b) shall not inure to the benefit of any Underwriter from whom
the person asserting any such loss, liability, claim, damage or expense
purchased the ADSs concerned, to the extent that a prospectus relating to
such ADSs was required to be delivered by such Underwriter under the
Securities Act in connection with such purchase and any such loss,
liability claim, damage or expense of such Underwriter results from the
fact that there was not sent or given to such person, at or prior to the
written confirmation of the sale of such ADSs to such person, a copy of the
Prospectus if the Company had previously furnished copies thereof in
sufficient quantities to such Underwriter.
(c) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and each Selling Shareholder against any and all loss,
liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto), including
the Rule 430A Information, or any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by such Underwriter
through the Representatives expressly for use in the Registration Statement
(or any amendment thereto) or such preliminary prospectus or the Prospectus
(or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof
and in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. If any such
proceeding shall be brought or asserted against an indemnified party and if
the indemnified party shall have notified the indemnifying party thereof,
the indemnifying party shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others
entitled to indemnification pursuant to this Section 6 that the
indemnifying party may designate in such proceeding and shall pay the fees
and expenses of such counsel related to such proceeding, as incurred. In
any such proceeding, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
29
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the contrary; (ii) the
indemnifying party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party; (iii) the indemnified
party shall have reasonably concluded that there may be legal defenses
available to it that are different from or in addition to those available
to the indemnifying party; or (iv) the named parties in any such proceeding
(including any impleaded parties) include both the indemnifying party and
the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of more than
one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances. Any such separate
firm for any Underwriter and its Affiliates shall be designated in writing
by the Representatives, any such separate firm for the Company, any of its
respective affiliates, directors or officers and any control persons of the
Company shall be designated in writing by the Company, and any such
separate firm for any Selling Shareholder or its respective affiliates,
directors or officer and any control persons shall be designated in writing
by such Selling Shareholder. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent
to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever in respect of which indemnification
or contribution could be sought under this Section 6 or Section 7 hereof
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) effected without its written consent if
(i) such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least 45 days
prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
30
(f) Other Agreements with Respect to Indemnification. The
provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to indemnification.
7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, each
Selling Shareholder, and the Underwriters, as the case may be, from the offering
of the ADSs pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, each Selling Shareholder and
the Underwriters, as the case may be, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, each Selling Shareholder
and the Underwriters, as the case may be, in connection with the offering of the
ADSs pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the ADSs pursuant to
this Agreement (before deducting expenses but after deducting underwriting
discounts and commissions) received by the Company and such Selling Shareholder
and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth on the cover of the Prospectus bear to
the aggregate initial public offering price of the ADSs as set forth on the
cover of the Prospectus.
The relative fault of the Company, each Selling Shareholder and the
Underwriters, as the case may be, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company, such Selling Shareholder or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters or the Selling
Shareholders were respectively treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate amount paid or
payable by such indemnified party as a result of losses, liabilities, claims,
damages and expenses referred to above in this Section 7 shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
31
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
underwriting discounts and commissions received by such Underwriter with respect
to the offering of the ADSs exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Selling
Shareholder shall be required to contribute any amount in excess of the amount
by which the total net proceeds (before deducting expenses but after deducting
underwriting commissions and discounts) received by such Selling Shareholder
from the sale of the ADSs, pursuant to this Agreement exceeds the amount of any
damages which such Selling Shareholder has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter or a Selling Shareholder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each Underwriter's affiliates
and selling agents and each Selling Shareholder's affiliates shall have the same
rights to contribution as such Underwriter or Selling Shareholder, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial ADSs set forth opposite their respective names in
Schedule I hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or the
Selling Shareholders submitted pursuant hereto, shall remain operative and in
full force and effect regardless of (i) any investigation made by or on behalf
of any Underwriter or its Affiliates or selling agents, any person controlling
any Underwriter, its officers or directors or any person controlling the Company
or any person controlling any Selling Shareholder and (ii) delivery of and
payment for the ADSs.
9. Effectiveness of Agreement. This Agreement shall become effective
upon the later of (i) the execution and delivery hereof by the parties hereto
and (ii) receipt by the Company and the Representatives of notice of the
effectiveness of both the Registration Statement and the ADS Registration
Statement (or, if applicable, any post-effective amendment thereto).
10. Termination of Agreement.
32
(a) Termination; General. The Representatives may terminate
this Agreement, by notice to the Company and the Selling Shareholders,
at any time at or prior to the Initial Closing Date (i) if there has
occurred any material adverse change in the financial markets in the
United States, United Kingdom or Korea, any outbreak of hostilities
involving the United States, United Kingdom or Korea or material
escalation thereof or other calamity or crisis or any change or
development involving a prospective material adverse change in national
or international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the sole judgment of
the Representatives, after consultation with the Company to the extent
practicable, impracticable or inadvisable to market the ADSs or to
enforce contracts for the sale of the ADSs, or (ii) if trading in any
securities issued or guaranteed by the Company has been suspended or
materially limited by the Commission or any exchange or in any
over-the-counter market, or if trading generally on the New York Stock
Exchange, the Nasdaq National Market or the KRX, has been suspended or
materially limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental
authority (other than as a result of the maximum and minimum trading
price system of the KRX, or (iii) a material disruption has occurred in
commercial banking in Korea or in the United States or the securities
settlement or clearance services in the United States, or (iv) if a
general moratorium on commercial banking has been declared by either
Federal, New York or the Korean authorities.
(b) Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party
to any other party except as provided in Section 12 hereof, and
provided further that Sections 3, 6, 7 and 8 shall survive such
termination and remain in full force and effect.
11. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at the Initial Closing Date or the Additional Closing
Date, as the case may be, to purchase the ADSs which it or they are obligated to
purchase under this Agreement (the "DEFAULTED ADSS", the Representatives shall
have the right, within 36 hours thereafter, to make arrangements for one or more
of the non defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted ADSs in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representatives shall
not have completed such arrangements within such 36 hour period, then the
Company shall be entitled to a further period of 36 hours within which to
procure other persons satisfactory to the non-defaulting Underwriters to
purchase such ADSs on such terms. If, after giving effect to any arrangements
for the purchase of the ADSs of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriters and the Company as provided herein, then:
(i) if the number of Defaulted ADSs does not exceed
10% of the number of Securities to be purchased on such date,
each of the non defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof
in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations
33
of all non defaulting Underwriters, or
(ii) if the number of Defaulted ADSs exceeds 10% of
the number of Securities to be purchased on such date, this
Agreement or, with respect to any Additional Closing Date
which occurs after the Initial Closing, the obligation of the
Underwriters to purchase and of the Company to sell the Option
ADSs to be purchased and sold on such Additional Closing Date
shall terminate without liability on the part of any non
defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of the Additional Closing Date which is after
the Initial Closing, which does not result in a termination of the obligation of
the Underwriters to purchase and the Company to sell the relevant Option ADSs,
as the case may be, either (i) the Representatives or (ii) the Company and any
Selling Shareholder shall have the right to postpone the Initial Closing Date or
the Additional Closing Date, as the case may be, for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectus or in any other documents or arrangements. As used herein, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section 11.
12. Payment of Expenses; Taxes. The Company, the Underwriters and the
Selling Shareholders shall pay such fees, expenses and taxes incurred in
connection with the transactions contemplated herein in accordance with the
provisions of a side letter agreement dated the date hereof among such parties
relating to the payment of such fees and expenses.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and any controlling persons
referred to in Section 6 hereof. Nothing in this Agreement is intended or shall
be construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
No purchaser of ADSs from any Underwriter shall be deemed to be a successor
merely by reason of such purchase.
14. Certain Defined Terms. For purposes of this Agreement, (a) except
where otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act; and (b) the term "business" day
means any day other than a day on which banks are permitted or required to be
closed in New York City or Seoul, Korea; and (c) the term "LIBOR" means, for
U.S. dollar deposits for a period of six (6) months, or such other period to be
determined by the Representatives and the Company if such rate is not available,
that appears on the screen display designated as "Page 3750" on the Telerate
Service (or such other screen display or service as may replace it for the
purpose of displaying British Bankers' Association LIBOR rates for U.S. dollar
deposits in the London interbank market) at or about 11:00 a.m. London time on
the Closing Date or the Additional Closing Date, as the case may be.
34
15. Miscellaneous.
(a) Authority of the Representatives. Any action by the
Underwriters hereunder may be taken by the Representatives on behalf of
the Underwriters, and any such action taken by the Representatives
shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if
mailed or transmitted and confirmed by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
(fax: (+1) 212 [ ]); Attention: Equity Capital Markets. Notices to the
Company shall be given to it at:
WiderThan Co., Ltd.
17F K1 REIT Building
463 Chungjeong-ro 3-ga
Seoul, Korea 120-709
Attention: Don Rim
fax: 822-2014-5004
with a copy to:
WiderThan Americas, Inc.
11 West 42nd Street, 11th Floor
New York, New York 10036 U.S.A.
Attention: Dan Nemo
fax: 1-212-391-6668
Notices to the Selling Shareholders shall be given to the following
persons:
Nokia Venture Partners II, L.P.
545 Middlefield Road
Suite 210
Menlo Park, CA 94025 U.S.A.
Attention: David Jaques
Chief Financial Officer
fax: 1-650-462-7252
i-Hatch Ventures, L.P.
599 Broadway
8th Floor
New York, New York 10021 U.S.A.
Attention: Andrew Sutton
fax: 1-212-208-2505
35
with a copy to
Holland & Knight LLP
195 Broadway
New York, New York 10007 U.S.A.
Attention: Neal N. Beaton
fax: 1-212-341-7103
General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, CT 06830 U.S.A.
Attention: David A. Rosenstein
fax: 1-203-622-8818
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
Attention: Raphael M. Russo
fax: (212) 757-3990
Dan Nemo (as Attorney-in-fact of certain
Selling Shareholders)
WiderThan Americas, Inc.
11 West 42nd Street, 11th Floor
New York, New York 10036 U.S.A.
fax: 1-212-391-6668
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts
(which may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which
together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any
provision of this Agreement, nor any consent or approval to any
departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.
(f) Jurisdiction and Venue; Agent for Service. To the fullest
extent permitted by applicable law, each of the Company and the Selling
Shareholders irrevocably (i) agrees that any legal suit, action or
proceeding arising out of or based upon this
36
Agreement or the transactions contemplated hereby may be instituted in
any state or federal court located in the Borough of Manhattan, The
City of New York (each, a "New York Court"), (ii) waives, to the
fullest extent it may effectively do so, any objection which it may now
or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the non-exclusive jurisdiction of such courts in any
such suit, action or proceeding. The Company and each Selling
Shareholder that is not domiciled in the U.S.A. has irrevocably
designated and appointed WiderThan Americas, Inc. at 11 West 42nd
Street, 11th Floor, New York, New York 10036, as its authorized agent
(the "Authorized Agent") upon whom process may be served in any such
suit, action or proceeding in any New York Court and expressly consents
to the non-exclusive jurisdiction of any such court in respect of any
such suit, action or proceeding and waives, to the fullest extent
permitted by applicable law, any other requirements of, or objections
to, personal jurisdiction with respect thereto. The Company represents
and warrants that the Authorized Agent has agreed to act as such agent
for service of process and agrees to take any and all action, including
the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as
aforesaid; provided that if for any reason the Authorized Agent named
above ceases to act as Authorized Agent hereunder for the Company, the
Company will appoint another person acceptable to the Representatives
in the Borough of Manhattan, The City of New York and the State of New
York, as Authorized Agent. Service of process upon the Authorized Agent
and written notice of such service to the Company shall be deemed, in
every respect, effective service of process on the Company.
(g) Judgment Currency. In respect of any judgment or order
against the Company or a Selling Shareholder given or made for any
amount due hereunder that is expressed and paid in a currency (the
"JUDGMENT CURRENCY") other than United States dollars, to the fullest
extent permitted by applicable law, the Company and such Selling
Shareholder, severally and not jointly, will indemnify each Underwriter
against any loss incurred by such Underwriter as a result of any
variation as between (i) the rate of exchange at which the United
States dollar amount is converted into the judgment currency for the
purpose of such judgment or order and (ii) the rate of exchange at
which an Underwriter is able to purchase United States dollars with the
amount of the judgment currency actually received by such Underwriter.
The foregoing indemnity shall constitute a separate and independent
several obligation of the Company and any Selling Shareholder subject
to such judgment or order and shall continue in full force and effect
notwithstanding any judgment or order as aforesaid. The term "rate of
exchange" shall include any premiums and costs of exchange payable in
connection with the purchase of, or conversion into, United States
dollars.
(h) Headings. The headings herein are included for convenience
of reference only and are not intended to be part of, or to affect the
meaning or interpretation of, this Agreement.
37
If the foregoing is in accordance with your understanding, please
indicate your acceptance of this Agreement by signing in the space provided
below.
Very truly yours,
WIDERTHAN CO., LTD.
By:
-------------------------------------
Name:
Title:
NOKIA VENTURE PARTNERS II, L.P. NVP AFFILIATES FUND II, L.P.
By: By:
--------------------------- ---------------------------
Name: Name:
Title: Title:
I-HATCH VENTURES, L.P. I-HATCH ADVISORS, L.P.
By: By:
--------------------------- ---------------------------
Name: Name:
Title: Title:
I-HATCH WTC HOLDINGS, LLC ZT HOLDINGS, LLC
By: By:
--------------------------- ---------------------------
Name: Name:
Title: Title:
GENERAL ATLANTIC GAP COINVESTMENT
PARTNERS 64, L.P. PARTNERS II, L.P.
By: By:
--------------------------- ---------------------------
Name: Name:
Title: Title:
SELLING SHAREHOLDERS
By:
---------------------------
Name:
Title: Attorney-in-fact, acting on behalf
of the Selling Shareholders who
executed Powers of Attorney
38
Accepted: _______, 2005
J.P. MORGAN SECURITIES INC.
By:
-------------------------------------
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By:
-------------------------------------
Name:
Title:
For themselves and on behalf of the several
Underwriters listed in Schedule I hereto.
39
SCHEDULE I
<Table>
<Caption>
NUMBER OF INITIAL ADSs NUMBER OF INITIAL
U.S. UNDERWRITERS TO BE PURCHASED FROM ADSs TO BE PURCHASED
----------------- THE COMPANY FROM THE SELLING
SHAREHOLDERS
J.P. Morgan Securities Inc. ...........................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ...........................
Lehman Brothers Inc. ..................................
Total..................................................
====================== ====================
</Table>
<Table>
<Caption>
NUMBER OF INITIAL ADSs NUMBER OF INITIAL
INTERNATIONAL UNDERWRITERS TO BE PURCHASED FROM ADSs TO BE PURCHASED
-------------------------- THE COMPANY FROM THE SELLING
SHAREHOLDERS
J.P. Morgan Securities Ltd. ...........................
Merrill Lynch International ...........................
Lehman Brothers International (Europe) ................
Total..................................................
====================== ====================
</Table>
40
SCHEDULE II
LIST OF SELLING SHAREHOLDERS
<Table>
<Caption>
NUMBER OF COMMON SHARES
SELLING SHAREHOLDERS TO BE SOLD IN THE FORM OF ADSs
- ----------------------------------------------------------------- ----------------------------------------------------
Melody Share Corporation 876,167
Tae Won Chey 171,638
Nokia Venture Partners/Blue Run Ventures 445,835
i-Hatch 336,326
General Atlantic Partners 102,521
Mark Caron 20,401
A. Douglas Henderson Revocable Trust 48
Dan Oakley 22
David Warmflash 3,770
Glenn Dorsey 344
Harto Family Partners, L.P. 1,833
James M. Lyon 48
Joel-Andre Ornstein 533
K&A Trust 1,833
Lyon, Stubb & Tompkins, Inc. 48
Maureen C. Tompkins 163
Michael Miller 5,607
Mount Washington Associates, L.L.C. 18
Parande, S.A. 8,570
Ted Nierenberg 17
The Washington Dinner Club, LLC 23,296
Vairam Alagappan 337
Dan Nemo 625
- ----------------------------------------------------------------- ----------------------------------------------------
TOTAL 2,000,000
- ----------------------------------------------------------------- ----------------------------------------------------
</Table>
41
SCHEDULE III
SUBSIDIARIES
Company Percentage
Name of Subsidiary Jurisdiction of Organization Ownership
- ----------------------------- ---------------------------- ------------------
PT WiderThan Indonesia Indonesia 100%
WiderThan UK Ltd. United Kingdom 100%
WiderThan Americas, Inc Delaware 100%
</Table>
42
SCHEDULE IV
LIST OF PERSONS TO DELIVER A LOCK-UP LETTER
IN THE FORM SET FORTH IN EXHIBIT A HERETO
[TO BE PROVIDED BY COMPANY]
43
ANNEX A-I
Form of Opinion of U.S. Counsel for the Company
(i) The Deposit Agreement has been duly executed and delivered by the
Company in accordance with the laws of the State of New York and,
assuming that the Deposit Agreement constitutes a valid and legally
binding agreement of the Depositary, constitutes a valid and legally
binding agreement of the Company enforceable in accordance with its
terms.
(ii) Assuming the due authorization, execution, issuance and delivery by the
Depositary of ADRs evidencing the ADSs against the deposit of the
Shares in accordance with the provisions of the Deposit Agreement and
payment therefor in accordance with the Underwriting Agreement, such
ADSs will be duly and validly issued and persons in whose names such
ADRs are registered will be entitled to the benefits specified therein
and in the Deposit Agreement.
(iii) The Underwriting Agreement has been duly executed and delivered by the
Company in accordance with the laws of the State of New York.
(iv) The ADSs, the ADRs and the Deposit Agreement conform, in all material
respect, to the description thereof contained in the Prospectus under
the caption "Description of American Depositary Shares."
(v) Based upon the foregoing, and subject to the qualifications,
assumptions and limitations herein, and in the Registration Statement,
we hereby confirm our opinion set forth in the Registration Statement
under the caption "Taxation -- U.S. federal income tax considerations."
(vi) [The deposit of the Shares and the issuance of the ADRs pursuant to the
Deposit Agreement, the issuance and sale of the ADSs pursuant to the
Underwriting Agreement, the performance by the Company of its
obligations under the Underwriting Agreement, and the performance by
the Company of its obligations under the Deposit Agreement will not
result in any violation of any U.S. federal or New York state statute
or any rule or regulation known to us and applicable to the Company, or
any order issued pursuant to any U.S. federal or New York state statute
by any U.S. federal or New York state governmental agency or body.]
(vii) [No consent, approval, authorization, order, registration or
qualification of or with any U.S. federal or New York governmental
agency or body is required for the deposit of the Shares and the
issuance of the ADRs pursuant to the Deposit Agreement, the issuance
and sale of the ADSs pursuant to the Underwriting Agreement, the
performance by the Company of its obligations under the Underwriting
Agreement and
Annex A-1-1
the Deposit Agreement, except such as have been obtained and made under
the Securities Act of 1933 (the "ACT") and such as may be required
under state securities laws. ]
(viii) The Registration Statements and the ADS Registration Statement have
been declared effective under the Act and, to our knowledge, no stop
order suspending the effectiveness of the Registration Statements or
the ADS Registration Statement has been issued or threatened by the
Commission.
(ix) Under the laws of the State of New York relating to personal
jurisdiction, the Company has, pursuant to Section 15 of the
Underwriting Agreement and Section [ ] of the Deposit Agreement,
validly and irrevocably submitted to the personal jurisdiction of any
state or federal court located in the Borough of Manhattan, The City of
New York, New York (each a "New York Court" in any action arising out
of or relating to the Underwriting Agreement or the Deposit Agreement
or the transactions contemplated hereby or thereby, has validly and
irrevocably waived any objection to the venue of a proceeding in any
such court, and has validly and irrevocably appointed WiderThan
Americas Inc. at 11 42nd Street, 11th Floor, New York, New York 10036
as its authorized agent for the purpose described in Section 15 of the
Underwriting Agreement and Section [ ] of the Deposit Agreement; and
service of process effected on such agent in the manner set forth in
Section 15 of the Underwriting Agreement and Section [ ] of the Deposit
Agreement will be effective to confer valid personal jurisdiction over
the Company.
(x) The Company is not and, after giving effect to the offering and sale of
the Offered Securities and the application of the proceeds thereof as
described in the Prospectus, will not be "investment company" as
defined in the Investment Company Act of 1940.
(xi) The Registration Statement, the ADS Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder; we have no reason to believe that any part of
the Registration Statement and the ADS Registration Statement, and each
amendment thereto, as of its effective date or as of the date of this
opinion, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading; or that the Prospectus
or any amendment or supplement thereto, as of its issue date or as of
the date of this opinion, contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; the descriptions in the Registration
Statements, the ADS Registration Statement and Prospectus of statutes,
legal and governmental proceedings and contracts and other documents
are accurate and fairly present the information required to be shown;
and we do not know of any legal or governmental proceedings required to
be described in the Registration Statement, the ADS Registration
Statement or the Prospectus which are not described as required or of
any contracts or documents of a character required to be described in
Annex A-1-2
the Registration Statement, the ADS Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement or
the ADS Registration Statement which are not described and filed as
required; it being understood that we express no opinion as to the
financial statements or other financial data contained in the
Registration Statement, the ADS Registration Statement or the
Prospectus.
Annex A-1-3
ANNEX A-II
Form of Opinion of International Counsel for Selling Shareholders
1. The [Company/Partnership] is duly registered under the laws of
[jurisdiction];
2. The [Company/Partnership] has the power and authority to enter into,
and to exercise its rights and perform its contemplated obligations
under the Agreements;
3. The Underwriting Agreement has been duly and validly authorized,
executed and delivered by or on behalf of each of the Selling
Shareholders;
4. The Custody Agreement and the Power of Attorney of each Selling
Shareholder have been duly authorized, executed and delivered by such
Selling Shareholder and are valid and legally binding agreements of
such Selling Shareholder;
5. The deposit of the Shares by such Selling Shareholder with the
Depositary against issuance of the ADRs evidencing the ADSs to be
delivered by such Selling Shareholder, the sale of the ADSs sold by
each of the Selling Shareholders, and the execution and delivery by
such Selling Shareholder of, and the performance by such Selling
Shareholder of its obligations under, the Underwriting Agreement, the
Power of Attorney and the Custody Agreement and the consummation of the
transaction contemplated thereby will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
[jurisdiction] governmental agency or body or any court in
[jurisdiction] having jurisdiction over the [Company/Partnership]or any
of the properties or any agreement or instrument to which the
[Company/Partnership]is a party or by which the [Company/Partnership]
is bound or to which any of the properties of the [Company/Partnership]
is subject or the charter, by-laws or other organizational documents of
such Selling Shareholder;
6. No Governmental Authorization of the [specific government] is required
for the execution, delivery and performance of the Underwriting
Agreement, the Custody Agreement and the Power of Attorney by each of
the Selling Shareholders and consummation of the transactions
contemplated thereby including the sale of the ADSs by the Selling
Shareholders or the deposit of the Ordinary Shares with the Depositary
against issuance of the ADSs evidencing the ADRs to be delivered at the
Closing Date;
7. Each of the Selling Shareholders has validly submitted to the personal
jurisdiction of any state or federal court located in the Borough of
Manhattan, The City of New York in any action arising out of or
relating to the Underwriting Agreements and the transactions
contemplated therein and has validly and effectively waived any
objection to the venue of a proceeding in any such court as provided in
Section 15
Annex A-2-1
of the Underwriting Agreement; each Selling Shareholder that is not
domiciled in the U.S. has irrevocably designated and appointed
WiderThan Americas, Inc. as its authorized agent for the purpose
described in Section 15 of the Underwriting Agreement; and service of
process in the manner set forth in Section 15 of the Underwriting
Agreement is effective to confer valid personal jurisdiction over the
Selling Shareholders;
8. Each of the Selling Shareholder is the sole owner of the Shares to be
sold by it and has the full right, power and authority to sell, assign,
transfer and deliver such Shares in the form of ADSs pursuant to this
Agreement; such Selling Shareholder has, and immediately prior to each
Closing Date, as applicable, will have, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or claims;
and upon the sale and delivery to the Underwriters of such ADSs and
payment therefor, pursuant to this Agreement, good and valid title to
such ADSs, free and clear of all liens, encumbrances, equities or
claims, will be freely transferable by the Selling Shareholder to the
Underwriters;
Annex A-1-2
ANNEX B
Form of Opinion of Korean Counsel to the Company
and the Selling Shareholders
(i) The Company and each of its Korean subsidiaries have been duly
organized and are validly existing under the laws of Korea, are duly
qualified to do business in Korea, and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in
the aggregate, have a Material Adverse Effect.
(ii) The Company has an authorized capitalization as set forth in the
Prospectus under the heading "Capitalization" all of the issued and
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable;
the capital stock of the Company conforms in all material respects to
the description thereof contained in the Prospectus; and all of the
issued and outstanding shares of capital stock or other equity
interests of each Korean subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
the Company directly owns approximately the percentage of the issued
and outstanding capital stock of each Korean subsidiary set out in
Schedule II of the Underwriting Agreement.
(iii) The stockholders of the Company have no outstanding rights (including,
without limitation, pre-emptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any
shares of capital stock or other equity interests of the Company, or
any contract, commitment, agreement, understanding or arrangement of
any kind relating to the issuance of any capital stock of the Company,
any such convertible or exchangeable securities or any such rights,
warrants or options (except for employee stock option plans existing on
the date hereof for the Company). Except as set forth in the
Registration Statement and the Prospectus, the Shares may be freely
deposited with the Korea Securities Depository for the account and
benefit of the Depositary against issuance of ADRs evidencing ADSs; the
Shares and ADSs are freely transferable by the Company to or for the
account of the several Underwriters and are freely transferable by the
several Underwriters to the initial purchasers thereof; and there are
no restrictions on subsequent transfers of the Shares or ADSs under the
laws of Korea or the Deposit Agreement.
(iv) Each of the Selling Shareholders has valid and unencumbered title to
the Shares to be sold in the form of ADSs pursuant to the Underwriting
Agreement.
(v) All dividends and other distributions declared and payable on the
shares of capital stock of the Company (including any such dividends or
distributions to be paid to the Depositary) to a non-resident of Korea
who legitimately holds such shares may under the current laws and
regulations of Korea be converted into foreign currency that may
Annex B-1
be remitted out of Korea, subject to the requirement to submit relevant
documents to the designated foreign exchange bank in Korea to verify
(x) that the amount being remitted conforms to the amount required to
be paid, and (y) whether or not any necessary approval or report
requirement, if any, has been met. There is no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation or dissolution of the Company among the Common
Shares and other outstanding shares of capital stock of the Company and
all holders (on the record date) of such Common Shares will be
entitled, on the same basis as such other outstanding shares of capital
stock of the Company, to payment of full dividends, if any such
dividends are declared.
(vi) The Company has full right, power and authority to execute and deliver
each of the Transaction Documents and to perform its obligations
thereunder; and all action required to be taken for the due and proper
authorization, execution and delivery of each of the Transaction
Documents and the consummation of the transactions contemplated thereby
have been duly and validly taken. The Underwriting Agreement has been
duly authorized, executed and delivered by the Company. The Deposit
Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(vii) Each of the Selling Shareholders has all necessary power and authority
to execute and deliver the Underwriting Agreement and perform its
obligations thereunder, and the Underwriting Agreement has been duly
authorized, executed and delivered by each of the Selling Shareholders.
(viii) As of [DATE], which was the most recent date on which the register of
the Company's shareholders was closed, each of the Selling Shareholders
(NAME OF SELLING SHAREHOLDERS) was registered as a holder of [NUMBER]
Common Shares [and [NUMBER] Common Shares, respectively,] and there was
no registration of any pledge, lien, encumbrance or any similar claim
on such shares on the registry of shareholders of the Company.
(ix) Based on the assumption that, at the time of the transfer by the
Selling Shareholders to the Custodian for the Depositary of the Shares
underlying the ADSs and the payment by the Underwriters therefor
pursuant to the Underwriting Agreement, neither the Depositary nor the
Underwriters are aware, of any adverse claims relating to the Selling
Shareholders' ownership of such Shares, the Depositary will, upon
transfer by the Selling Shareholder[s] to the Custodian for the
Depository of the Shares underlying the ADSs and payment by the
Underwriters therefor in the manner provided for in the Underwriting
Agreement, acquire good and valid title to the Shares free and clear of
any pledge, lien, encumbrance, equity or claim.
(x) To ensure the validity, enforceability or admissibility into evidence
of the Underwriting Agreement, the ADSs or the Deposit Agreement, it is
not necessary that the Underwriting Agreement, the ADSs or the Deposit
Agreement or any other
Annex B-2
document to be furnished thereunder be filed or recorded with any court
or other authority in Korea or that any tax of Korea (other than stamp
tax) or any political subdivision thereof be paid on or in respect of
any such document, provided that in order to be admissible in a Korean
court, the above referenced documents should be accompanied by a Korean
language translation thereof.
(xi) The deposit of the Shares with the Depositary against receipt of ADRs
evidencing the ADSs, the sale of the Shares and the issue of the ADSs
and the performance by the Company of its obligations under the
Underwriting Agreement, any options to purchase additional Shares
thereunder and the Deposit Agreement, the execution and delivery by the
Company of the Underwriting Agreement and the Deposit Agreement and the
consummation of the transactions therein contemplated, to the best of
our knowledge, will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
(or an event which with notice or lapse of time, or both, would
constitute a default) or give rise to any right to accelerate the
maturity or require the prepayment or require consent under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to the terms of, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is
subject; nor will such actions result in any violation of, or conflict
with, the provisions of the articles of incorporations of the Company
or any other statute, law, order, decree, rule or regulation having the
force of law of any court or governmental agency or body having
jurisdiction over the Company or any of its properties or assets.
(xii) The sale of the Shares underlying the ADSs to be sold by each of the
Selling Shareholders under the Underwriting Agreement and the
performance by such Selling Shareholder of its obligations under the
Underwriting Agreement, the execution and delivery of the Underwriting
Agreement and the consummation of the transactions by each of the
Selling Shareholders contemplated in the Underwriting Agreement, will
not result in any violation of, or conflict with the provisions of the
articles of incorporations of such Selling Shareholder or any other
statute, law, order, decree, rule or regulation having the force of law
of any court or governmental agency or body having jurisdiction over
such Selling Shareholder.
(xiii) No consent, approval, authorization or order of, or qualification with,
any governmental body or agency of Korea is required under Korean law
for the deposit of the Shares with the Depositary against receipt of
ADRs evidencing the ADSs, the issue and sale of the ADSs and the
performance by each of the Company or the Selling Shareholders of its
obligations under the Underwriting Agreement and the Deposit Agreement,
as the case may be, except for (i) the written report filed with the
Ministry of Finance and Economy of Korea which has been filed and (ii)
the registration of the issuance of the Shares with the registry
offices of the competent Korean courts having jurisdiction over the
Company which is required to be made within two weeks from the issue of
the Shares.
Annex B-3
(xiv) The statements of Korean law set forth in the Prospectus and the
Registration Statement under the captions "Risk Factors", "Business",
"Management," "Principal Shareholders", Description of Capital Stock",
"Korean Foreign Exchange Controls and Securities Regulations" and
"Enforceability of Civil Liability" are true and correct in all
material respects.
(xv) The statements set forth in the Prospectus and the Registration
Statement under the heading "Taxation--Korean Taxation" insofar as such
statements purport to summarize material Korean tax laws relating to
the ADSs, provide a complete, fair and accurate summary of the material
Korean tax consequences of an investment in the ADSs by certain
non-residents of Korea.
(xvi) The Registration Statement and the ADS Registration Statement and the
filing of the Registration Statement and the ADS Registration Statement
with the Commission have been duly authorized by and on behalf of the
Company; and each of the Registration Statement and the ADS
Registration Statement has been duly executed pursuant to such
authorization by and on behalf of the Company.
(xvii) Each Transaction Document conforms in all material respects to the
description thereof contained in the Registration Statement and the
Prospectus.
(xviii) The Company and its Korean subsidiaries own, possess or have obtained
all licenses, certificates, permits and other authorizations issued
from, and have made all declarations and filings with, the appropriate
governmental or regulatory authorities that are necessary for the
ownership or lease of their properties or the conduct of their
businesses in Korea, as described in the Registration Statement and the
Prospectus, except where the failure to possess or make the same would
not, individually or in the aggregate, have a Material Adverse Effect;
and except as described in the Registration Statement and the
Prospectus, the Company or any of its Korean subsidiaries has not
received notice of any revocation or modification of any such license,
certificate, permit or authorization or has any reason to believe that
any such license, certificate, permit or authorization will not be
renewed in the ordinary course.
(xix) The Company and its Korean subsidiaries own, are licensed or possess
adequate rights to use all Intellectual Property necessary for the
conduct of their respective businesses; and the conduct of their
respective businesses will not conflict in any material respect with
any such rights of others, and neither the Company nor any of its
Korean subsidiaries has received any notice of any claim of
infringement or conflict with any such rights of others except those
that (i) do not materially interfere with the use made and proposed to
be made of such Intellectual Property by the Company or (ii) could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(xx) The Company and its Korean subsidiaries have good and marketable title
to all real property and good and marketable title to, or have a valid
right to lease or otherwise use, all items of real and personal
property that are material to the respective businesses
Annex B-4
of the Company and its Korean subsidiaries, in each case free and clear
of all liens, encumbrances, claims, defects and imperfections of title,
except those that (i) do not materially interfere with the use made and
proposed to be made of such property by the Company or its Korean
subsidiaries or (ii) could not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
(xxi) Under the laws of Korea, each holder of ADRs evidencing ADSs issued
pursuant to the Deposit Agreement shall be entitled, subject to the
Deposit Agreement, to seek enforcement of its rights as legal owner of
the Shares underlying the ADSs through the Depositary or its nominee
registered as representative of the beneficial owners of the ADSs in a
suit, action or proceeding against the Company.
(xxii) Other than as described in the Registration Statement and the
Prospectus, no governmental approvals are currently required in Korea
in order for the Company to pay cash dividends or other distributions
declared by the Company to holders of Common Stock, including the
Depositary or its nominee, or for the conversion by the Depositary of
any cash dividends paid in Won to U.S. dollars or the repatriation
thereof out of Korea and no other withholding or other taxes under the
laws and regulations of Korea will be imposed in connection with the
declaration and payment by the Company of dividends and other
distributions in respect of shares of its capital stock.
(xxiii) Each of the Company and the Selling Shareholders would not, under the
laws of Korea, be entitled to plead, or cause to be pleaded on its
behalf, sovereign immunity with respect to any of its obligations under
the Deposit Agreement, the Underwriting Agreement, the ADSs or the
ADRs.
(xxiv) Each of the Company and the Selling Shareholders has the power, under
the laws of Korea, to submit, and has taken all necessary action
(corporate or otherwise) to submit, including, to the extent necessary
under the laws of Korea, a valid waiver of immunity, to the
jurisdiction of any New York Courts, and to appoint, and has taken all
necessary action (corporate or otherwise) to appoint, WiderThan USA as
the authorized agent of each of the Company and the Selling
Shareholders, respectively, for the purposes and to the extent
described in the Underwriting Agreement and the Deposit Agreement, as
the case may be. Under the laws of Korea, neither the Company nor the
Selling Shareholders nor any of their respective properties or assets,
whether in the United States or in Korea, is immune from any attachment
in aid of execution of, or from execution upon, any judgment of any
such court.
(xxv) The Underwriters would be permitted to commence actions or proceedings
in Korean courts of competent jurisdiction based on the Underwriting
Agreement and the Deposit Agreement and the holders of the Shares or
the ADSs would be permitted to commence proceedings in Korean courts of
competent jurisdiction over any such action or proceeding, and such
Korean courts would recognize the agreement to the choice of law
provisions set forth in the Underwriting Agreement and the Deposit
Agreement insofar as the choice of law provisions thereof are valid
under the law so chosen and the application of relevant provisions of
the law so chosen is not manifestly contrary to the
Annex B-5
public policy of Korea; provided that, in case any legal proceeding is
brought in a Korean court, the Korean court would apply (i) Korean law
bearing upon the capacity of a Korean party to enter into contracts and
(ii) the laws of Korea which should be mandatorily applied by their
nature irrespective of the governing law.
(xxvi) If any judgment of a competent court outside Korea was rendered against
the Company or the Selling Shareholders in connection with any action
arising out of or relating to the Underwriting Agreement, the Deposit
Agreement or the ADRs, as the case may be, the courts of Korea will
recognize such judgment as a valid judgment and enforce such judgment
without re-examination of the merits; provided, that (a) such judgment
was finally and conclusively given by a court having valid jurisdiction
in accordance with the international jurisdiction principles under
Korean law and applicable treaties, (b) the Company or the Selling
Shareholders was duly served with service of process (other than by
publication or similar means) in sufficient time to enable the Company
or the Selling Shareholders to prepare its defense in conformity with
applicable laws (provided that service of process by mail as
contemplated under Section [ ] of the Deposit Agreement may not be
considered duly served) or responded to the action without being served
with process, (c) recognition of such judgment is not contrary to the
public policy of Korea, and (d) judgments of the courts of Korea are
accorded reciprocal treatment under the laws of the jurisdiction which
renders such judgment.
(xxvii) Except as set forth in the Prospectus and the Registration Statement,
assuming that neither the Underwriting Agreement nor the Deposit
Agreement is executed and delivered in Korea, no stamp or other
issuance or transfer taxes or duties, and no capital gains, income,
withholding or other taxes, are payable by or on behalf of the
Underwriters to Korea or any political subdivision or taxing authority
thereof or therein (other than Korean tax payable by reason of the fact
that its income generally is subject to tax in the Korea) in connection
with (i) the deposit with the Depositary of the Common Shares against
issuance of the ADRs evidencing the ADSs, (ii) the transfer by the
Selling Shareholders of the Common Shares underlying the ADSs to be
sold by the Selling Shareholders in the manner contemplated by the
Underwriting Agreement, (iii) the sale and transfer of ADSs to the
Underwriters (except payment of selling concessions and underwriting
concessions payable to the Underwriters, as to which we express no
view) or (iv) the sale and delivery outside Korea by the Underwriters
of ADSs to the purchasers thereof in the manner contemplated in the
Underwriting Agreement and the Prospectus and the Registration
Statement, except that Korean stamp tax, nominal in amount, must be
paid if certain agreements are executed in Korea.
(xxviii) It is not necessary under the laws of Korea (i) to enable the
Underwriters, any holder of ADSs or the Depositary, or any or all of
them, to enforce their respective rights under the Underwriting
Agreement, Deposit Agreement, the ADSs or any other document to be
furnished hereunder, provided that they are not otherwise engaged in
business in Korea, or (ii) solely by reason of the execution, delivery
or consummation of any of the Underwriting Agreement, the Deposit
Agreement, the ADSs or any other documents to
Annex B-6
be furnished thereunder, that any Underwriters, any holder of ADSs or
the Depositary be licensed, qualified or entitled to carry out business
in Korea.
(xxix) No Underwriter or holder of ADSs will be deemed resident, domiciled,
carrying on business or subject to taxation in Korea solely by reason
of the execution, delivery, consummation or enforcement of the
Underwriting Agreement, the Deposit Agreement, the ADSs or any other
document to be furnished thereunder, provided that the execution,
delivery, consummation or enforcement of such document by the
Underwriters and the holder of Common Shares or ADSs takes place
outside of Korea.
(xxx) Other than as set forth in the Prospectus and the Registration
Statement, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the
Company or any of its subsidiaries is or may be a party or to which any
property of the Company or any of its subsidiaries is or may be the
subject that, individually or in the aggregate, could have a material
adverse effect on the business, properties, management, financial
position, stockholders' equity, results of operations or prospects of
the Company or on the performance by the Company of its obligations
under the Underwriting Agreement, the Deposit Agreement, and the ADSs;
and to the best of our knowledge, no such investigations, actions,
suits or proceedings are threatened or, contemplated by any
governmental or regulatory authority or threatened by others.
(xxxi) Neither the Company nor any of its subsidiaries is (i) in violation of
its articles of incorporation or by-laws or similar organizational
documents; (ii) in default, and no event has occurred that, with notice
or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject; or (iii) in violation of any law or statute or
any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority.
(xxxii) We have no reason to believe that any part of the Registration
Statement and the ADS Registration Statement, and each amendment
thereto, as of its effective date or as of the date of this opinion,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading; or that the Prospectus or any
amendment or supplement thereto, as of its issue date or as of the date
of this opinion, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; it being understood that we express no
opinion as to the financial statements or other financial data
contained in the Registration Statement, the ADS Registration Statement
or the Prospectus.
Annex B-7
ANNEX C
Form of Opinion of Counsel to the Depositary
(i) the Deposit Agreement has been duly authorized, executed and delivered
by the Depositary and constitutes a valid and legally binding
obligation of the Depositary and is enforceable against the Depositary
in accordance with its terms, except insofar as enforceability may be
limited by (a) applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws relating to or
affecting creditors' rights generally and (b) general principles of
equity (whether considered in an action at law or in equity); and
(ii) when ADRs evidencing ADSs are issued in accordance with the Deposit
Agreement against the deposit, pursuant to the terms of the Deposit
Agreement, of duly authorized, validly issued, fully paid and
nonassessable Shares of the Company, the preemptive rights, if any,
with respect to which have been validly waived or exercised, such ADRs
will be validly issued and will entitle the Holders to the rights
specified therein and in the Deposit Agreement.
Annex C-1
ANNEX D
Form of Opinion of General Counsel of the Company
(i) WiderThan Americas, Inc. is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, and has all
corporate power required to own or hold its properties and to carry on
its business as now conducted.
(ii) Except as described in the Prospectus, there are no contracts,
agreements or understandings known to me between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the U.S. Securities Act of 1933.
Annex D-1
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
____________________, 2005
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
J.P. MORGAN SECURITIES INC.
as Representatives of the several
Underwriters to be named in the
within-mentioned Underwriting Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
250 Vesey Street
4 World Financial Center
New York, New York 10080
Re: Proposed Public Offering by WiderThan Co., Ltd.
Dear Sirs:
The undersigned understands that Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc. (together,
the "Representatives") propose to enter into an Underwriting Agreement (the
"Underwriting Agreement") with WiderThan Co., Ltd., a corporation with limited
liability established under the laws of The Republic of Korea (the "Company")
and each of the Selling Shareholders named in Schedule II of the Underwriting
Agreement, providing for the public offering of shares (the "Securities") of the
Company's common stock, par value W500 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Underwriting Agreement that, during a period of
180 days from the date of the Underwriting Agreement, the undersigned will not,
without the prior written consent of the Representatives, directly or
indirectly, (i) offer, sell, contract to sell, announce the intention to sell,
issue, pledge, lend, grant any option, right or warrant for the sale of, or
otherwise dispose of or transfer (each, collectively, a "Sale"), any shares of
the Company's Common Stock, or any depositary shares representing such Common
Stock, or any securities convertible into or exchangeable or exercisable for
Common Stock, or any depositary shares representing such Common Stock, whether
now owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file, or
cause to be filed, any registration statement under the Securities Act of 1933,
as amended, with respect to any of the foregoing (collectively, the "Lock-Up
Securities") or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly,
Exhibit A-1
the economic consequences of ownership (each, collectively, a "Transfer") of the
Lock-Up Securities, whether any such transaction described in clauses (i) or
(ii) above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise. The foregoing restriction shall not apply to (A) any Sale or
Transfer of the Lock-Up Securities pursuant to the Underwriting Agreement, (B)
any conversion of the Company's preferred stock outstanding as of the date
hereof into Common Stock, (C) any exercise of stock options existing on the date
hereof, (D) any Sale or Transfer of Lock-Up Securities to the partners of the
undersigned, if the undersigned is a partnership, or to the members of the
undersigned, if the undersigned is a limited liability company, and (E) any Sale
or Transfer of Lock-Up Securities to a family member, family partnership or
trust, any Transfer upon the death of a family member to his or her executors,
legatees or beneficiaries or a bona fide gift, provided that in the cases of
(B), (C), (D) and (E) above, any such transferee shall agree to be bound in
writing by the terms of the restrictions in this Agreement with respect to the
Lock-Up Securities during the remainder of the aforesaid 180-day period. The
foregoing restriction is expressly agreed to preclude the undersigned from
engaging in any hedging or other transaction which is designed to or which
reasonably could be expected to lead to or result in a sale or disposition of
the Lock-up Securities, even if such Lock-up Securities would be disposed of by
someone other than the undersigned. Such prohibited hedging or other
transactions would include, without limitation, any short sale or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to any of the Lock-up Securities or with respect to any security
that includes, relates to, or derives any significant part of its value from
such securities.
Notwithstanding the foregoing, if:
(1) during the last 17 days of the 180-day lock-up period, the Company
issues an earnings release or material news or a material event
relating to the Company occurs; or
(2) prior to the expiration of the 180-day lock-up period, the Company
announces that it will release earnings results or becomes aware that
material news or a material event will occur during the 16-day period
beginning on the last day of the 180-day lock-up period,
the restrictions imposed by this letter shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event, as applicable,
unless the Representatives waive, in writing, such extension.
The undersigned hereby acknowledges and agrees that written notice of
any extension of the 180-day lock-up period pursuant to the previous paragraph
will be delivered by the Representatives to the Company as further set forth in
the Underwriting Agreement and that any such notice properly delivered will be
deemed to have been given to, and received by, the undersigned. The undersigned
further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this lock-up agreement during the period
from the date of this lock-up agreement to and including the 34th day following
the expiration of the initial 180-day lock-up period, it will give notice
thereof to the Company and will not consummate such transaction or take any such
action unless it has received written confirmation from the Company that the
180-day lock-up period (as may have been extended pursuant to the previous
paragraph) has expired.
Exhibit A-2
Very truly yours,
Signature:
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Print Name:
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Exhibit A-3