Exhibit 2.2
Asset Sale Agreement
By and Between
iAsiaWorks Korea Ltd.
and
DACOM Corporation
ASSET SALE AGREEMENT
This Asset Sale Agreement ("Agreement") is made this 19th day of September 2001,
by and between:
PARTIES
iAsiaWorks Korea Ltd., a company incorporated under the laws of Republic of
Korea and having its registered office at ▇▇▇▇-▇/▇ ▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇-▇▇,
▇▇▇▇▇, ▇▇▇▇▇ ("IAWK")
DACOM Corporation, a company incorporated under the laws of the Republic of
Korea and having its registered office at 706-1Yeoksam-dong, Kangnam-gu,
Seoul Korea ("DACOM")
RECITALS
WHEREAS, IAWK owns the Assets (as defined below).
WHEREAS, IAWK desires to sell and DACOM desires to acquire the Assets.
NOW, THEREFORE, IAWK has agreed to sell and DACOM has agreed to purchase the
Assets on the terms and conditions of this Agreement.
OPERATIVE PROVISIONS
1. INTERPRETATION
1.1 Definitions
The following definitions apply in this Agreement.
"Assets" means the following assets:
(a) the benefit of the Customer Contracts;
(b) the Related Contracts; and
(c) the Equipment.
"Completion" means the completion of the sale and purchase of the Assets in
accordance with the terms of this Agreement.
"Completion Date" means October 6, 2001 or earlier, if the parties agree.
"Confidential Information" means all trade secrets and all financial,
marketing and technical information, ideas, concepts, technology, processes
and knowledge which is confidential or of a sensitive nature owned or used
at any time by IAWK in connection with the Business other than that which
is in the public domain.
"Contracts" means the Customer Contracts and Related Contracts.
"Customer Contracts" means the agreements, arrangements, understandings and
orders entered into, made or accepted by IAWK in respect of the customers
listed in Exhibit A of the Schedule.
"Deposit" means the deposit of KRW 600,000,000 ("Six Hundred Million") made
to IAWK on September 05, 2001 pursuant to the Letter Agreement.
"Deductions" mean the sum of the outstanding penalty for DACOM 45Mbps
leased line payable to DACOM, (which shall not exceed KRW 265,000,000), all
the outstanding payables to DACOM to be calculated in accordance with the
relevant contracts made between IAWK and DACOM.
"Equipment" means equipment owned or leased (to the extent agreed by
lessor) by IAWK in the Business and listed in Item 1 of the Schedule and
includes billing, network management and other systems required to support
the customer base, network backbone routers and switches, and customer
premise routers; but specifically excludes power and environmental
equipment and facilities.
"Letter Agreement" means the Letter Agreement made between IAWK and DACOM
on September 05, 2001, pursuant to which the deposit of KRW 600,000,000
("Six Hundred Million") has been made to IAWK.
"Loss or Claim" means, in relation to any person, a damage, loss, cost,
expense or liability incurred by the person or a claim, demand, action,
proceeding or judgment made against the person, however arising and whether
present or future, fixed or unascertained, actual or contingent.
"Purchase Price" means KRW 3,000,000,000, as adjusted in accordance with
Clause 3.1 herein.
"Related Contracts" means contracts related to the Assets and listed in
Item 2 of the Schedule
1.2 Rules for interpreting this Agreement
Headings are for convenience only, and should not be used in interpreting
the meaning or input of each section of this Agreement. The word
"agreement" includes an undertaking or other binding arrangement or
understanding,
2. PURCHASE OF THE ASSETS
2.1 Sale and purchase
IAWK shall sell to DACOM and DACOM shall purchase from IAWK the Assets for
the Purchase Price pursuant to the terms and conditions of this Agreement.
2.2 Title, property and risk
The title to, property in and risk of the Asset:
(a) until Completion, remains solely with IAWK; and
(b) passes to DACOM on and from Completion.
IAWK is entitled to the revenue, profits and receivables until the
Completion Date, and must bear and pay in the proper time all outgoings and
payables relating to the Assets, incurred in the ordinary course, until the
Completion Date. For the avoidance of the doubt, any billing under the
Customer Contract and Related Contracts shall be made by IAWK for the
period immediately prior to the Completion Date and by DACOM for the period
commencing from the Completion Date.
3. PURCHASE PRICE
3.1 DACOM shall pay to IAWK the remainder of the Purchase Price on the
Completion Date. The remainder of the Purchase Price shall be the net
amount of the Purchase Price, less the Deposit and the Deductions payable
to DACOM. The payment of the Purchase Price shall be in the form of a bank
check or via wire transfer to an account designated by IAWK.
3.2 Upon the execution of this Agreement, IAWK and DACOM shall jointly inspect
and verify the existence and operability of the Assets to be delivered on
the Completion Date, which inspection and verification shall be carried
out, at the latest, three (3) days prior to the expected Completion Date.
3.3 Upon the execution of this Agreement and until the Completion or
termination of this Agreement, IAWK shall not solicit, accept, discuss,
pursue or otherwise involve itself in the sale of, or in the creation of
any mortgage, lien, pledge encumbrance or lease on, any of the Assets,
without prior written consent of DACOM.
4. IAWK'S OBLIGATIONS
4.1 Delivery by IAWK
On the Completion Date, IAWK must assign, transfer, convey and deliver to
DACOM, free and clear of any claims, liens, leases, restrictions or other
encumbrances:
(a) the Equipment in an "as is" state together with any relevant title
documents held by IAWK, by delivery at the respective places where
they are located;
(b) the Customer Contracts; and
(c) the Related Contracts
IAWK shall deliver to DACOM on or before the Completion Date all of the
following, except waived by DACOM:
a) all Assets physically deliverable by means to be agreed between the
parties; and
b) certified copy of the minutes for an extraordinary shareholders
meeting of IAWK approving the consummation of transactions prescribed
in this Agreement.
4.2 Indemnity
From the Completion Date, IAWK:
(a) shall be responsible for any Loss, Claim arising out of the Assets or
this Agreement which occur prior to the Completion Date; and
(b) shall indemnify DACOM against any Loss, Claim arising out the Assets
or this Agreement which occurs prior to the Completion Date.
5. PAYMENT OF VALUE ADDED TAX OR OTHER TAXES
If any VAT is imposed on any supply by IAWK to DACOM under this Agreement,
then DACOM must pay to IAWK the amount imposed at the same time as, and in
addition to, the amount DACOM is required to pay IAWK for the supply in
question.
6. CONTRACTS
6.1 Assignment
IAWK shall assign and transfer to DACOM all the right, title, obligations
and interest of IAWK in or arising out of each of the Contracts and the
rights of IAWK under each of the Contracts with effect on and from the
Completion Date. Similarly DACOM agrees to assume and receive from IAWK all
the right, title, obligations and interest of IAWK in or arising out of
each of the Contracts with effect on and from the Completion Date.
DACOM's obligations
From the Completion Date, DACOM:
(a) shall be entitled to the benefit of, and all payments under, each
Customer Contract (other than any payments which relate to a period
prior to the date of this Agreement);
(b) shall assume all of the obligations of IAWK under the Contracts, the
benefit of which is duly assigned to DACOM under this Agreement and
shall fulfil and perform all of IAWK's obligations under each such
Contract;
(c) shall be responsible for any Loss or Claim of, concerning or relating,
directly or indirectly, to the Assets, arising after the Completion
Date; and
(d) shall indemnify IAWK against any Loss or Claim of, concerning or
relating, directly or indirectly, to the Assets, arising after
Completion Date, including any Claim or Loss arising the as a
result of any breach, non-performance or non-observance of any
terms and conditions of the Contracts by DACOM after the
Completion Date.
6.2 Notification to customers
At any time within two (2) weeks after the Completion Date, IAWK and DACOM shall
jointly advise customers of the sale of the Assets to DACOM in a form agreed by
IAWK and DACOM.
7. COVENANT OF IAWK
7.1 IAWK covenants that it shall conduct the leased line business,
including operation of the network operations center, only in its
ordinary course, consistent with its past practices, between the
execution of this Agreement and the Completion Date.
7.2 IAWK agrees and confirms that except otherwise prescribed in this
Agreement, DACOM shall not be obligated to assign and assume any
contracts of IAWK and IAWK shall be solely responsible for the disposal
of such contracts which will not be assigned to and assumed by DACOM.
8. IAWK EMPLOYEES
IAWK agrees and confirms that none of its employees will be transferred
to and employed by DACOM. Provided, however, that notwithstanding the
foregoing, DACOM may recruit and employee any of IAWK's employee(s)
through its normal recruitment procedure.
9. COMPLETION
9.1 Time and place of Completion
Completion will occur at 9.00am on the Completion Date at IAWK's
Boramae Node or at such other place as agreed by the parties.
9.2 Conditions Precedent to Completion
The consummation of Completion shall be subject to the satisfaction of
following conditions, except waved by the relevant party;
(a) procurement of its board and/or shareholders' resolution approving
this Agreement;
(b) the procurement of any necessary government consent and approval,
if any.
10. DEBTORS
10.1 Debtors
(a) DACOM acknowledges that all monies received by DACOM in relation to
debtors of IAWK or receivables of IAWK (invoiced prior to the
Completion Date) (the "IAWK Collections") after the Completion Date
are the property of IAWK and shall be paid to IAWK within seven (7)
days of receipt by DACOM. DACOM shall be responsible for providing
IAWK a full accounting every thirty (30) days, for the one hundred
eighty (180) days following the Completion Date, of the IAWK
Collections by DACOM.
(b) IAWK acknowledges that all monies received by IAWK after the
Completion Date in relation to provision of services by DACOM after
the Completion Date are the property of DACOM and any such monies
received by IAWK must be forwarded to DACOM within seven (7) days of
receipt by IAWK.
(c) IAWK also acknowledge that all advances received by IAWK before the
Completion Date in relation to provision of services by DACOM after
the Completion Date are the property of DACOM, and any such monies
received by IAWK must be forwarded to DACOM within seven (7) days
from the Completion Date.
11. WARRANTIES
11.1 IAWK warranties
In consideration for DACOM agreeing to enter into this Agreement (on
the terms and conditions in this Agreement), IAWK warrants and
represents to DACOM:
(a) (power) it has full legal capacity and power to enter into this
Agreement and to carry out the transactions that it contemplates;
(b) (corporate authority) it has taken all corporate action that is
necessary or desirable to authorise its entry into this Agreement
and its carrying out the transactions that it contemplates;
(c) (document effective) this Agreement constitutes its legal, valid and
binding obligations, enforceable against it in accordance with its
terms (except to the extent limited by equitable principles and laws
affecting creditors' rights generally), subject to any necessary
stamping or registration;
(d) (title) it holds title or transferable licence to the Assets; and
(e) (earnings figures) to the best of its knowledge, the earnings
figures provided by IAWK to DACOM in relation to the Assets are
accurate.
11.2 Express Disclaimer
The warranty in clause 11.1 is a limited warranty and it is the only
wanyarranty made by IAWK. To the extent permissible by law, IAWK
disclaims all other warranties
express or implied, including without limitation any implied warranties
of merchantability or fitness for a particular purpose or infringement
of third parties' rights. Each of the Assets is delivered to DACOM "as
is". The entire risk as to the quality of the performance of the
Equipment from the Completion Date is with DACOM and IAWK accepts no
responsibility for any malfunction of the Equipment or corruption of
any data that may occur as the direct or indirect result of such a
malfunction.
11.3 DACOM warranties
In consideration for IAWK agreeing to enter into this Agreement (on the
terms and conditions in this Agreement), DACOM warrants and represents
to IAWK at the date of this Agreement:
(a) (power) it has full legal capacity and power to enter into this
Agreement and to carry out the transactions that it contemplates;
(b) (corporate authority) it has taken all corporate action that is
necessary or desirable to authorise its entry into this Agreement
and its carrying out the transactions that it contemplates; and
(c) (document effective) this Agreement constitutes its legal, valid
and binding obligations, enforceable against it in accordance with
its terms (except to the extent limited by equitable principles and
laws affecting creditors' rights generally), subject to any
necessary stamping or registration.
12. CONFIDENTIALITY AND DISCLOSURE
12.1 Confidential Information
The parties agree that:
(a) the Confidential Information, the information contained in this
Agreement and any information disclosed to or acquired by any party
to this Agreement in connection with the subject matter of this
Agreement is confidential;
(b) except as expressly stated in this Agreement, the parties must not
disclose to any person any information referred to in clause
12.1(a) or use such information for any purpose other than the
purpose contemplated by this Agreement, except:
(i) to its holding company, employees, professional advisers,
bankers, auditors, financial advisers, financiers and other
consultants on those persons undertaking to keep strictly
confidential any information disclosed to them;
(ii) to the extent necessary for the parties or their parent
companies to comply with any applicable law or requirement of
any regulatory body or government agency including any
relevant stock exchange and the Federal Securities Laws of
the USA; or
(iii) with the prior written consent of the other parties.
(c) clause 12.1(b) does not apply to any information which is generally
available to the public (other than as a result of disclosure in
breach of clause 12.1(b)).
12.2 Disclosure to public
DACOM and IAWK (and/or its parent company, iAsiaWorks, Inc., a company
existing under the laws of the state of Delaware, USA) agree that each
party has a right to review each other's stock exchange and press
releases regarding the sale of the Assets prior to the public release
of the information. No such releases shall be issued without the prior
written approval of the other party; provided, however, that approval
shall not be necessary for any disclosure or release which is required
pursuant to applicable laws (including, without limitation, the Federal
Securities Laws of the United States).
13. LIMITATION ON CLAIMS
(a) Notwithstanding any other clause in this Agreement, IAWK shall not
have any liability whatsoever under this Agreement with respect to any
consequential, indirect, special or future damages and IAWK's liability
to DACOM under this Agreement with respect to any direct damages shall
not exceed in aggregate KRW 600,000,000 (Six Hundred Million). (b) Any
claim by DACOM under this Agreement must be made within sixty (60) days
after the date of this Agreement.
14. COSTS
Each party must bear and is responsible for its own costs and expenses
(including without limitation legal costs and expenses) in connection
with the negotiation, preparation, execution, completion and carrying
into effect of this Agreement and the transactions contemplated by this
Agreement.
15. AMENDMENT AND ASSIGNMENT
15.1 Amendment
This Agreement can only be amended, supplemented, replaced or novated
by another agreement signed by the parties.
15.2 Assignment
(a) Subject to clause 15.2(b), a party may only dispose of, declare a
trust over or otherwise create an interest in its rights under this
Agreement with the consent of the other party.
(b) IAWK may assign this
Agreement or any of its rights under this Agreement to a related body
corporate.
16. TERMINATION
16.1 This Agreement may be terminated at any time:
(a) by mutual written agreement duly executed by IAWK and DACOM;
(b) by IAWK if, notwithstanding the satisfaction of the pre-conditions
for the Completion as prescribed herein, DACOM fails to consummate
the Completion, for any reason whatsoever, on or before October 6,
2001;
(c) by DACOM if, notwithstanding the satisfaction of the pre-conditions
for the Completion as prescribed herein, IAWK fails to consummate
the Completion, for any reason whatsoever, on or before October 6,
2001;
(d) by IAWK if DACOM is unable to satisfy all of the Clause 9.2 as
prescribed in this Agreement, thereby resulting in the Closing Date
to occur after October 6, 2001;
(e) by DACOM if IAWK is unable to satisfy the Clauses as prescribed in
Clauses 3.3, or 9.2 of this Agreement, thereby resulting in the
Completion to occur after October 6, 2001;
(f) by DACOM if IAWK intentionally refuses to participate or proceed in
the consummation of the Completion procedures (after the
satisfaction of all its obligations hereunder and/or DACOM `s
waiver of such obligations).
(g) by IAWK if DACOM intentionally refuses to participate or proceed in
the consummation of the Completion procedures (after the
satisfaction of all its obligations hereunder and/or IAWK's waiver
of such obligations).
16.2 Effect of Termination
(a) In the event this Agreement is terminated pursuant to either 16.1
(a), (c), (e) or (f), the Deposit shall be refunded to DACOM.
(b) In the event that this Agreement is terminated pursuant to either
16.1 (b), (d) or (g) the Deposit shall not be refunded to DACOM.
17. NON-COMPETITION OBLIGATION
17.1 Subject to and upon the successful Completion, IAWK shall not,
directly or indirectly, own or operate any leased line business, which
may compete with DACOM in Korea for 12 months.
18 GENERAL
18.1 Governing law
(a) This Agreement is governed by the laws in force in the Republic of
Korea.
(b) Each party submits to the non-exclusive jurisdiction of the courts
exercising jurisdiction in Seoul, Korea, and any court that may hear
appeals from any of those courts, for any proceedings in connection with
this Agreement, and waives any right it might have to claim that those
courts are an inconvenient forum.
18.2 Giving effect to this Agreement
Each party must do anything (including execute any document), and must
ensure that its employees and agents do anything (including execute any
document), that any other party may reasonably require to give full effect
to this Agreement.
18.3 Waiver of rights
A right may only be waived in writing, signed by the party giving the
waiver, and:
(a) no other conduct of a party (including a failure to exercise, or delay
in exercising, the right) operates as a waiver of the right or otherwise
prevents the exercise of the right;
(b) a waiver of a right on one or more occasions does not operate as a
waiver of that right if it arises again; and
(c) the exercise of a right does not prevent any further exercise of that
right or of any other right.
18.4 Operation of this Agreement
(a) This Agreement contains the entire agreement between the parties about
its subject matter. Any previous understanding, agreement, representation
or warranty relating to that subject matter is replaced by this Agreement
and has no further effect.
(b) Any right that a person may have under this Agreement is in addition
to, and does not replace or limit, any other right that the person may
have.
(c) Any provision of this Agreement which is unenforceable or partly
unenforceable is, where possible, to be severed to the extent necessary to
make this Agreement enforceable, unless this would materially change the
intended effect of this Agreement.
18.5 Consents
Where this Agreement contemplates that a party may agree or consent to
something (however it is described), the party may:
(a) agree or consent, or not agree or consent, in its absolute discretion;
and
(b) agree or consent subject to conditions, unless this Agreement expressly
contemplates otherwise.
18.6 Operation of indemnities
The indemnities in this Agreement:
(a) are continuing and are not discharged by any one payment; and
(b) survive the expiry or termination of this Agreement.
18.7 Counterparts
This Agreement may be executed in counterparts.
18.8 Attorneys
Each person who executes this Agreement on behalf of a party under a power
of attorney declares that he or she is not aware of any fact or
circumstance that might affect his or her authority to do so under that
power of attorney.
EXECUTED for and on behalf of iAsiaWorks Korea Ltd.:
By /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------- ________________________________
Name ▇▇▇▇▇ ▇▇▇▇
Title Director
________________________________ ________________________________
EXECUTED by DACOM
CORPORATION:
By _____________________________ ________________________________
Name
Title
________________________________ ________________________________
