EXHIBIT 10.13
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT made as of the 18th day of March 2002.
BETWEEN:
CELERITEK, INC., a corporation duly organized and validly
existing under the laws of California, having its principal
office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇.▇.
(hereinafter called the "Investor")
AND:
NEWGEN TELECOM CO., a corporation duly organized and validly
subsisting under the laws of the Republic of Korea, having its
principal office at 2nd Floor, ▇▇▇-▇▇▇▇▇ Building A Dong, ▇▇▇-▇
▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇
(hereinafter called the "Company")
WITNESSETH THAT
WHEREAS, the Investor is engaged in the design and manufacture of gallium
arsenide semiconductor components and gallium arsenide-based subsystems used in
the transmission of voice, video and data over wireless communication networks;
WHEREAS, the Company is engaged in the design of personal cellular handsets used
in the CDMA and GSM telecommunication systems.
WHEREAS, the Parties to this Agreement and UBE Electronics, Ltd. ("UBE") entered
into a joint venture agreement on December 20, 2001 (the "Joint Venture
Agreement") :
WHEREAS, pursuant to and subsequent to the execution of the Joint Venture
Agreement,
1) the Company issued Two Hundred Thirteen Thousand Two hundred
(213,200) new shares of Preferred Company Shares having a par value
of Five Hundred Korean won (KRW 500) per share and the price per
shares of Six Thousand Ninety-Eight Korean Won (KRW 6,098);
2) The Investor subscribed to and purchased One Hundred Six Thousand
and Six Hundred (106,600) Preferred Company Shares for an aggregate
consideration of Six Hundred Fifty Million Korean Won (KRW
650,000,000) (hereinafter referred to as "Celeritek's Purchase
Price"); and,
3) UBE subscribed to and purchased One Hundred Six Thousand and Six
Hundred (106,600) Preferred Company Shares for an aggregate
consideration of Six Hundred Fifty Million Korean Won (KRW
650,000,000) (hereinafter referred to as "UBE's Purchase Price").
WHEREAS, the Parties are now desirous of securing further foreign invested
capital for the Company, subject to the terms and conditions set forth herein
and in the Joint Venture Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the Parties hereby agree as follows:
ARTICLE 1. DEFINITIONS
1.1 In this Agreement, the following expressions shall, unless the context
otherwise requires, have the following meanings:
1.1.1 "Business" shall mean the business of the Company from time to
time in accordance with the meaning specified in the Recitals
above and in Article 3 below.
1.1.2 "Business Day" shall mean any day on which banking institutions
are open for normal business in Seoul, Korea.
1.1.3 "Class A Preferred Company Shares" shall mean the First Round
Preferred Company Shares and the Second Round Preferred Company
Shares collectively.
1.1.4 "Class B Preferred Company Shares" shall mean the Preferred
Company Shares issued by the Company to the Investor and UBE on
February 26, 2002.
1.1.5 "Common Company Shares" shall mean any common stock issued or
issuable by the Company.
1.1.6 "Company Shares" shall mean all classes of stock and securities
convertible to any class of stock, previously issued, issuable in
accordance with the Joint Venture Agreement, this Agreement, or
issued at any time in the future by the Company.
1.1.7 "Execution Date" shall mean the date first above written.
1.1.8 "First Round Investor Shares" shall mean the Preferred Company
Shares issued to the Investors in accordance with the Joint
Venture Agreement and, as regarding such Preferred Company
Shares, issuable pursuant to any stock split, dividend,
recapitalization or any other distribution except for the Class B
Preferred Company Shares.
1.1.9 "Foreign Capital Invested Company" shall mean a company,
organized and registered in Korea, in which a non-Korean national
or foreign Person has invested capital pursuant to the Foreign
Investment Promotion Act of Korea.
1.1.10 "Governmental Approval" shall mean all consents, approvals,
certificates, filings, franchises, licenses, orders, permits,
variances or similar authorizations and rights to be obtained
from or filed with any Korean Governmental Authority required or
necessary for any action of a Party in connection with those
contemplated in this Agreement.
1.1.11 "Governmental Authority" shall mean any national, regional,
provincial, local, municipal or other political subdivision
thereof, administrative, regulatory, judicial, legislative,
executive, police or taxing governmental authority of any nature,
including any ministry, agency, bureau, or entity, official, or
court having jurisdiction.
1.1.12 "Law" shall mean any law, rule, regulation, order, ordinance,
code, injunction, judgment or decree, or other similar judicial
or Governmental Authority pronouncements having compulsive legal
effect.
1.1.13 "Person" shall mean an individual or a corporation, association,
partnership, limited liability company, joint venture, joint
stock company, organization, business trust or any other entity
or organization, including governmental entities or
organizations.
1.1.14 "Preferred Company Shares" shall mean any preferred class of
voting stock or securities issued or issuable by the Company that
have any preferential rights over Common Company Shares.
1.1.15 "Second Round Investor Shares" shall mean the Preferred Company
Shares issuable to the Investor in accordance with this Agreement
and, as regarding such Preferred Company Shares, issuable
pursuant to any stock split, dividend, recapitalization or any
other distribution except for the Class B Preferred Company
Shares.
1.2 Unless the context otherwise requires, words importing the singular
shall include the plural and vice versa, the headings in this Agreement
have been inserted for convenience of reference only and shall not be
used in construing or interpreting this Agreement, and references to
"Korea" shall mean the Republic of Korea.
ARTICLE 2. PURPOSE
The purpose of this Agreement is to agree upon the terms and conditions under
which the Company shall receive further capital fund from the Investor with a
view to pursuing the Business.
ARTICLE 3. THE BUSINESS
The Business of the Company shall be as described and set out in Article 3 of
the Joint Venture Agreement.
ARTICLE 4. RESPONSIBILITIES OF EACH PARTY
4.1 Prior to the Execution Date or simultaneously therewith, the Company
shall arrange a report to be filed, on behalf of the Investor with a
designated foreign exchange bank in Korea of the Investor's foreign
investment in accordance with the Foreign Investment Promotion Act. The
Investors shall provide reasonable assistance to the Company in
connection with such filing, or any other related requirement, upon the
Company's reasonable request.
4.2 The Company shall have the responsibility for obtaining all other
Governmental Approvals from time to time and arising out of, or in
connection with, the implementation of the Products, the Business and
this Venture in the form and substance mutually agreed upon by both
Parties.
4.3 Each Party will jointly and individually use their respective
commercially reasonable endeavors to ensure that the Company shall
comply with Law and continue to maintain and hold all such necessary
license(s), approval(s) or permit(s) of any and all relevant
Governmental Authorities.
4.4 The Company shall promptly notify the Investor in writing of any
registrations or filings required to obtain copyright, trademark, or
patents, in their respective names in Korea. The Company shall use
commercially reasonable endeavors to assist the Investor in completing
such filings or registrations or in obtaining such Government Approvals.
4.5 Each Party shall forthwith, in writing, inform the other Party upon it
coming to its attention that an obligation pursuant to this Article 4
has been satisfied or has been refused or rejected by a competent
Governmental Authority.
ARTICLE 5. CAPITAL SUBSCRIPTION
5.1 The Company shall cause to be issued and the Investor shall subscribe to
and purchase Five Hundred Twenty-Two Thousand and Six Hundred (522,600)
new shares of Preferred Company Shares having a par value of Five
Hundred Korean Won (KRW 500) per share (the "Second Round Investor
Shares") and at price per share of Four Thousand Nine Hundred and
Seventy-Five point One Two Korean Won (KRW 4,975.12), "Original Issue
Price" for an aggregate consideration of Two Billion Five Hundred
Ninety-Nine Million Nine Hundred Ninety-Seven Thousand Seven Hundred and
Twelve Korean Won (KRW 2,599,997,712) (the "Investor's Purchase Price").
5.1.1 Simultaneously with the execution of this Agreement, the Company
shall immediately transfer title to Five Hundred Twenty-Two
Thousand and Six Hundred (522,600) shares of the Second Round
Investor Shares to the Investor, and in exchange thereof, the
Investor shall pay (by wire transfer to an account designated by
the Company) Investor's Purchase Price within ten (10) Business
Days from the Execution Date.
5.2 In the event of a share transfer or new issue of Company Shares
subsequent to the subscriptions contemplated by this Agreement, the
transferee or subscriber shall, as a condition precedent to such
transfer or subscription, deliver a written undertaking to the Parties
hereto, in form and substance acceptable to them, to the effect that the
transferee or subscriber shall observe and be bound by all provisions of
this Agreement and any agreements related hereto as if such transferee
or a subscriber were a Party hereto and/or thereto.
5.3 The Parties shall not pledge, sell, transfer, or otherwise encumber or
dispose of all or any Company Shares without the prior written consent
of the other Party and unless in accordance with Section 17.1 below;
provided, however, that the Investor may transfer its Company Shares to
its affiliates or subsidiaries or any other third party which controls
the Investor, or is under common control with the Investor, without the
requirement to obtain such consent of the Company hereto.
ARTICLE 6. RIGHTS OF THE INVESTOR
6.1 The Second Round Investor Shares shall have full voting rights pursuant
to this Agreement and the Company's articles of incorporation, and shall
be evidenced by share certificates in non-bearer form delivered to the
Investor by the Company.
6.2 Dividends. The Investor shall be entitled to receive dividends on the
Second Round Investor Shares, out of any assets legally available
therefore, prior and in preference to any declaration or payment of any
dividend (payable other than in Common Company Shares or other
securities and rights convertible into or entitling the holder thereof
to receive, directly or indirectly, additional shares of the Common
Company Shares) on the Common Company Shares or any other Company
Preferred Shares, but together with and in pari passu with the holders
of the First Round Investor Shares and Class B Preferred Company Shares,
on a pro rata basis, at the rate of Five Hundred Korean Won (KRW 500 per
share per annum (as adjusted to take into account any stock splits,
stock dividends, recapitalizations or the like) or, if greater (as
determined on a per annum basis and on an as converted basis), an amount
equal to that paid on any other outstanding Company Shares, payable
when, as, and if declared by the Board. Such dividends shall be
cumulative.
6.3 Liquidation Preference.
6.3.1 In the event of any liquidation, dissolution or winding up of the
Company, either voluntary or involuntary, the holders of the
Second Round Investor Shares shall each be entitled to receive,
prior and in preference to any distribution of any of the assets
of the Company to the holders of Common Company Shares or other
Preferred Company Shares by reason of their ownership thereof, an
amount per share equal to the sum of Four Thousand Nine Hundred
Seventy-Five point One Two Korean Won (KRW 4,975.12) for each
outstanding Second Round Investor Share, plus declared but unpaid
dividends on such share (subject to adjustment of such fixed
Korean Won amount for any stock splits, stock dividends,
combinations, recapitalizations or the like), but together with
and in pari passu with the holders of the First Round Investor
Shares as provided in Article 6.3.1 of the Joint Venture
Agreement. If upon the occurrence of such event, the assets and
funds thus distributed to the holders of the Class A Preferred
Company Shares shall be insufficient to permit the payment to
such holders of the full aforesaid preferential amounts, then the
entire assets and funds of the Company legally available for
distribution shall be distributed ratably among the holders of
the Class A Preferred Company Shares as follows (For purposes of
this Article 6, a merger, acquisition or sale of substantially
all of the assets of the Company shall be considered
liquidation):
6.3.1.1. Any declared, but unpaid dividend shall be paid to each
holders of the Class A Preferred Company Shares on a
pro rata basis until each holder of such Preferred A
Company Shares has received an aggregate of Five
Hundred Korean Won (KRW500) per one Class A Preferred
Company Share. If there are remaining assets available
in the Company for further distribution after
distribution of the dividend in accordance with this
Section 6.3.1.1. (the "Available Fund"), they are
distributed in accordance with Section 6.3.1.2.
6.3.1.2. 1) the distribution in respect of a First Round
Investor Share shall be equal to the sum of Celeritek's
Purchase Price and UBE's Purchase Price divided by the
sum of Celeritek' Purchase Price, UBE's Purchase Price
and the Investor's Purchase Price, the result of such
division multiplied by the amount of the Available Fund
and the result of such multiplication divided by the
number of the First Round Investor Shares.
2) the distribution in respect of a Second Round
Investor Shares shall be equal to the Investor's
Purchase Price divided by the sum of Celeritek's
Purchase Price, UBE' Purchase Price and the Investor's
Purchase Price, the result of such division multiplied
by the amount of the Available Fund and the result of
such multiplication divided by the number of the Second
Round Investor Shares.
6.3.2 Upon the completion of the distribution required by Section 6.3.1
above, the remaining assets of the Company available for
distribution to its shareholders shall be distributed among the
all of the holders of Preferred Company Shares and Common Company
Shares, pro rata, based on the number of shares of Common Company
Shares held by each shareholders (assuming full conversion of all
such Preferred Company Shares to Common Company Shares) (as
adjusted for any stock splits, stock dividends, recapitalizations
or the like).
6.4 The Second Round Investor Shares shall not be redeemable.
6.5 Conversion. The Investor shall have the following conversion rights (the
"Conversion Rights"):
6.5.1 Right to Convert. Each Second Round Investor Share shall be
convertible, at the option of the respective holding Investor, at
any time after the date of issuance of such share, into such
number of fully paid and nonassessable Common Company Shares as
is determined by dividing the Original Issue Price by the
conversion price applicable to such share, as determined in good
faith by the Board, in effect on the date the certificate is
surrendered for conversion; provided, however, that such
conversion price shall never be greater than the Original Issue
Price. The initial conversion price per share for a Second Round
Investor Share shall be the Original Issue Price. Conversion
price shall be subject to adjustment which shall be effected upon
the Board's approval if and to the extent necessary to make a
dilution in economic value of the Second Round Investor Shares
which may result from stock split, stock dividend.
6.5.2 Automatic Conversion. The Second Round Investor Shares shall
automatically be converted into Common Company Shares immediately
upon the earlier of (i) the Company's sale of its Common Company
Shares in a firm commitment underwritten public offering pursuant
to a registration statement or equivalent thereof filed in
accordance with Korean Law or (ii) the date specified by written
consent or agreement of the holders of a majority of the then
outstanding Class A Preferred Company Shares.
6.5.3 Mechanics of Conversion. Before the Investor is entitled to
convert any Second Round Investor Shares into Common Company
Shares, the Investor shall surrender its share certificates, duly
endorsed to the Company, and shall give written notice to the
Company of the election. The Company shall, as soon as
practicable thereafter, issue and deliver a certificate or
certificates for the number of Common Company Shares to which
such investor is entitled.
6.5.4 Recapitalizations. If at any time or from time to time there
shall be a recapitalization of the Common Company Shares, the
Investor along with other holders of Preferred Company Shares
shall thereafter be entitled to receive upon conversion of
Preferred Company Shares the number of shares or other securities
or property of the Company to which a holder of Common Company
Shares deliverable upon conversion would have been entitled on
such recapitalization.
6.5.5 No Fractional Shares. No fractional shares shall be issued upon
the conversion of any Second Round Investor Share. In lieu of any
fractional shares to which the Investor would otherwise be
entitled, the Company shall pay cash equal to such fraction
multiplied by the then applicable conversion price.
6.5.6 Reservation of Stock Issuable Upon Conversion. The Company shall
at all times reserve and keep available out of its authorized but
unissued Common Company Shares, solely for the purpose of
effecting the conversion of the Class A Preferred Company Shares
and Class B Preferred Company Shares, such number of its Common
Company Shares as shall from time to time be sufficient to effect
the conversion of all outstanding Second Round Investor Shares.
6.6 Right of First Refusal. The Investor shall have the following rights of
first refusal:
6.6.1 Subject to applicable Law and the Company's articles of
incorporation, the Investor shall have rights of first refusal
with respect to any new issuance of Company Shares in the same
ratio as their respective shareholding ratios at the time of such
new issuance. In the event that the Company wishes to undertake a
new issuance of Company Shares, the Company shall first give each
Investor prior written notice of its intention that describes the
type of new Company Shares and the price, terms and conditions
upon which the Company proposes to issue the same. The Investor
shall have fifteen (15) Business Days from the day of receiving
such notice to provide written notice back to the Company of its
intent to purchase up to its pro rata share of such new Company
Shares.
6.6.2 In the event the Investor does not exercise such Investor's
rights to purchase such new Company Shares, the Company shall
have one hundred twenty (120) days to issue or sell such new
Company Shares at a price and terms and conditions that are no
more favorable than those specified in the Company's notice to
the Investor. After the expiration of such 120-day period, the
Company shall not thereafter issue or sell such remaining new
Company shares without first offering such new Company Shares
again to the Investor in accordance with this Section 6.6.
6.7 No Impairment.The Company will not through an reorganization,
recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company
but will at all times in good faith assist in the carrying out of all
the provisions of this Article 6 and in the taking of such action as may
be necessary or appropriate in order to protect the conversion rights of
the Investor against impairment.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES
7.1 Each Party warrants and represents to the other party that (i) it is
duly organized and in good standing; (ii) it has all necessary corporate
power and authority to enter into this Agreement; (iii) it has duly
authorized this Agreement by all corporate action necessary for such
authorization; (iv) the intended this Agreement does not violate any
charter document of such Party or judicial order binding on such Party;
(v) this Agreement constitutes a valid and legally binding obligation of
each Party; and (vi) it has no outstanding commitments or obligations
which would impede its ability and right to enter into this Agreement
and/or fulfill its obligation hereunder except those which have been
disclosed in writing to the other Parties at the time of execution of
this Agreement.
7.2 As of the date of this Agreement, the Company has and will have
exclusive right, power and authority to issue and transfer the Second
Round Investor Shares to the Investor in accordance with the terms of
this Agreement.
7.3 The Second Round Investor Shares to which the Investor will subscribe
hereunder shall be free and clear of all charges, liens, encumbrances,
equities or other adverse or third Person rights, options, claims or
interests, and with all rights, benefits, and entitlements as of the
Execution Date, including the right to all dividends paid, declared or
made with respect thereof. No Company Shares have been authorized or
issued, and the Company has not become obligated to authorize or issue
(including by reclassification or otherwise), any other equity security
(including without limitation any Preferred Company Shares or other
preferred security) having any preference or priority over, or ranking
senior to, the Second Round Investor Shares with respect to any rights
set forth in this Agreement, including but not limited to rights to
dividends or other distributions and rights upon liquidation,
dissolution or winding-up.
7.4 As of the Execution Date, the paid in capital of the Company is in the
amount of One Billion Seven Hundred and Twenty Four Million Three
Hundred Thousand Korean Won (KRW 1,724,300,000), and the Company has
issued a total of Three Million Seven Hundred and Fifty Six Thousand Two
Hundred (3,756,200) Common Company Shares with a par value of Five
Hundred Korean Won (KRW 500) per share, and the Company has issued a
total of Six Hundred and Ninety Two Thousand Four Hundred (692,400)
Preferred Company Shares with a par value of Five Hundred Korean Won
(KRW 500) per share.
7.5 There is no order, injunction or decree outstanding and there is no
litigation, proceeding or governmental investigation pending or, to the
best of the Company's knowledge, threatened against or relating to the
Company, its property, businesses or assets which has, or if determined
against the Company could have, a material adverse effect on the
Company, the Company Shares, this Agreement, or the Investor's title and
right to the Second Round Investor Shares.
ARTICLE 8. CONFIDENTIALITY
Each Party and such Parties' respective employees, directors, consultants,
affiliates and subsidiaries shall ensure that any and all proprietary
information, trade secrets and all other confidential information regarding the
business, assets, customers, processes, and methods of any other Party that it
may learn in the course of negotiations for, or carrying out of, this Agreement
is treated by it in strict confidence and shall not use for any purpose other
than for this Agreement or the Venture or disclose such information, unless such
information (i) is required to be disclosed by Law or judicial order, (ii) is
required to be disclosed to give effect to this Agreement, (iii) is in good
faith independently acquired or developed, or (iv) becomes publicly known or
available other than through the fault of the Party seeking to use or disclose
such information.
ARTICLE 9. TERM
This Agreement shall continue in effect so long as any Investor holds any
Company Shares unless earlier terminated pursuant to Article 10 below.
ARTICLE 10. TERMINATION
This Agreement may be terminated upon mutual written consent of the Parties or
immediately upon notice in writing of the occurrence of one or more of the
following events:
10.1 by the Investor, if in good faith and exercising reasonable judgment the
board of directors of the Investor determines that (i) the
responsibilities, policies and objectives of this Agreement, as well as
any related agreements, have not been undertaken by the Company in form
and substance reasonably acceptable to the Investor within ten (10)
Business Days of the Execution Date, (ii) at any time the Company is no
longer engaged in the Business, or (iii) within thirty (30) days of the
Execution Date the Company has failed to obtain all of the Governmental
Approvals required of the Venture;
10.2 by either Party, if the other Party has breached any of its obligations
under this Agreement, and if either Party not in breach hereof has
provided notification, in writing, to the breaching Party of its
obligation to remedy such breach, and the breaching Party fails to
remedy such breach to the reasonable satisfaction of either Party within
thirty (30) Business Days from the date it received such written notice;
10.3 by either Party, if the other Party shall be or becomes incapable for a
period of sixty (60) Business Days of performing any of its obligations
under this Agreement subject to the terms of Article 14;
10.4 by either Party, if (i) the other Party enters into dissolution,
liquidation, bankruptcy, reorganization or compulsory composition; (ii)
creditors of the other Party file for the other Party's dissolution,
liquidation, bankruptcy, reorganization or compulsory composition; (iii)
creditors of the other Party have taken over the Company's management;
(iv) relevant financial institutions have suspended the other Party's
clearing house privileges; or (v) any material or significant part of
the other Party's undertaking, property or assets is expropriated or
confiscated by action of any government;
10.5 by the Investor, if ▇▇▇ (Jongweon) Hong is no longer an employee of the
Company for any reason within three (3) years after the Execution Date
of the Joint Venture Agreement.
ARTICLE 11. CONSEQUENCES OF TERMINATION
11.1 Termination of this Agreement shall be without prejudice to the accrued
rights and liabilities of the Parties at the date of termination, unless
waived in writing by the mutual agreement of the Parties.
11.2 Termination of this Agreement shall be accompanied by a notice of intent
to terminate this Agreement, in writing with stated reasons, provided to
the other Party hereto.
11.3 If this Agreement is terminated for any of the reasons set forth in
Article 10, the Party providing notice of termination (the "Terminating
Party") shall, at its option, have the following rights, in addition to
any other rights to which it is entitled:
11.3.1 If an Investor is the Terminating Party, to require the Company
to purchase, pro rata in accordance with its ratio of
shareholdings in the Company, all of Investor's Company Shares at
fair market value;
11.3.2 If the Company is the Terminating Party, to require the breaching
Investor to sell all of the breaching Investor's Company shares
at fair market price to the Company or a person to be designated
by the Company
11.3.3 The Investor may cause the Company to remove investor's name or
names and/or its trademarks or other distinctive designations
from the name of and from use by the Company. If a Party opts to
request removal pursuant to this Section 11.3.3, the other
Parties shall take all steps necessary to remove the name,
trademark or trade name of or any reference to the party so
opting, including the Korean language or Korea equivalent of
such, as appropriate.
11.4 Upon termination of this Agreement for any reason, any and all
information (whether confidential or not), data or documentation in any
form whatsoever provided to the Company by the Investor regarding any of
Investor's technical know-how, patents or other intellectual property
rights, and any and all reproductions or copies thereof, shall be
immediately returned to the Investor.
11.5 Upon termination of this Agreement for any reason, any and all
information (whether confidential or not), data or documentation in any
form whatsoever provided to the Investor by Company regarding any of
Company's technical know-how, patents or other intellectual property
rights, and any and all reproductions or copies thereof, shall be
immediately returned to the Company.
11.6 In the event the Parties are unable to agree within a period of thirty
(30) Business Days upon the fair market value of any Company Shares to
be transferred, the fair market value shall be determined by an
independent public accountant to be chosen mutually by the Parties. The
determination by such accountant shall be final, conclusive, and binding
on both Parties.
11.7 Upon termination of this Agreement for any reason other than those set
forth in Article 10 above, the Parties shall have an immediate amicable
discussion with regard to the disposition of Company Shares owned by the
Investor and/or the disposition of the assets and liabilities (including
any severance obligations) of the Company. If the Parties fail to reach
an agreement regarding disposition, the dispute shall be settled in
accordance with Article 16 below.
11.8 In the event of termination by any Party in accordance with any
provision of this Agreement, no Party shall be liable to the other,
because of such termination, for compensation, reimbursement, or damages
on account of the loss of prospective profits or anticipated sales or on
account of expenditures, investments, or commitments in connection with
the business or goodwill of the Parties. Termination shall not, however,
relieve either Party of obligations incurred prior to the termination or
obligations under subcontracts, invoices, supply agreements, original
equipment manufacturing agreements or other similar arrangements entered
into separately by and between the Company and the Investor (including
such agreements entered into pursuant to Section 4.7 of the Joint
Venture Agreement.
ARTICLE 12. INDEMNIFICATION
Each Party agrees to indemnify, defend and hold the other Parties harmless
against any and all liabilities, losses, costs, damages, and/or expenses, which
either of them may sustain arising out of or related to a breach by such Party
of any provision of this Agreement. The Party wishing to assert its rights (the
"Indemnitee Party") set forth in this Article 12 shall notify the other Party or
Parties, as the case may be (the "Indemnitor Party") of any legal claim or legal
proceeding with respect to which such Party is asserting such right. Upon the
written request of the Indemnitee Party, the Indemnitor Party will assume the
defense of any claim, demand or action against such Indemnitee Party, and upon
request by the Indemnitee Party, will allow the Indemnitee Party to participate
in and control fully the defense thereof. Such participation will be at the
expense of the Indemnitee Party. Settlement by the Indemnitee Party, without the
Indemnitor Party's prior written consent shall release the Indemnitor Party from
the indemnity as to the claim, demand or action so settled.
ARTICLE 13. NON WAIVER, OTHER REMEDIES
13.1 Failure of a Party to insist upon the strict and punctual performance of
any provision hereof shall not constitute waiver of or estoppel against
asserting the right to require such performance, nor should a waiver or
estoppel in one case constitute a waiver or estoppel with respect to a
later breach whether of similar nature or otherwise.
13.2 Nothing in this Agreement shall prevent a Party from enforcing its
rights by such remedies as may be available in lieu of termination.
ARTICLE 14. FORCE MAJEURE
14.1 The failure or delay of a Party hereto to perform any obligation under
this Agreement solely by reason of acts of God, acts of government
(except as otherwise enumerated herein), riots, wars, strikes, lockouts,
accidents in transportation or other causes beyond its control shall not
be deemed to be a breach of this Agreement; provided, however, that the
Party so prevented from complying herewith shall continue to take all
actions within its power to comply as fully as possible herewith.
14.2 Except where the nature of the event shall prevent it from doing so, the
Party suffering such force majeure shall notify the other Party in
writing within five (5) Business Days after the occurrence of such force
majeure and shall in every instance, to the extent it is capable of
doing so, use its best efforts to remove or remedy such cause with all
reasonable dispatch.
ARTICLE 15. DISCLAIMER OF AGENCY
15.1 Nothing in this Agreement shall constitute or be deemed to constitute
the relationship of principal, representative or agent as between the
Parties.
15.2 Nothing in this Agreement or in any document referred to in it shall
constitute a partnership between the Parties, nor shall the execution,
completion and implementation of this Agreement confer on any Party (i)
the power to bind or impose any obligations
on the other Party in regards to any third Persons, or (ii) the power,
ability, or right to pledge the credit of the other Party.
ARTICLE 16. DISPUTE RESOLUTION
16.1 All dispute, controversies, or differences which may arise between the
Parties out of or in relation to or in connection with this Agreement,
or for the breach hereof, shall be finally settled by arbitration before
three (3) arbitrators under the Rules of Arbitration of the
International Chamber of Commerce in Korea. Each Party shall be entitled
to nominate one arbitrator. If dispute, controversies, or differences
arise between two of the Parties hereto, each Party shall be entitled to
nominate one arbitrator and the arbitrators so selected by the Parties
shall mutually agree upon the selection of the third arbitrator. The
arbitration proceeding shall be conducted in English. The results of
such arbitration shall be conclusive and binding upon the parties, and
shall be enforceable in any court having jurisdiction over the party
against whom the award was rendered.
16.2 Each Party hereto agrees to pay and discharge all reasonable costs,
attorney fees and expenses that are incurred by another Party in
enforcing the terms of this Agreement, provided that such other Party
shall prevail in such proceedings.
16.3 The validity, performance, construction, and effect of this Agreement
shall be interpreted in accordance with and governed by the substantive
Laws of the Republic of Korea, without regard to conflicts of laws
provisions.
ARTICLE 17. MISCELLANEOUS
17.1 Assignability. This Agreement and each and every covenant, term and
condition hereof shall be binding upon and effective to the benefit of
the Parties hereto and their respective successors and assignees, but
neither this Agreement nor any rights or obligations hereunder shall be
assignable directly or indirectly by any Party hereto without the prior
written consent of the other Party; provided, however, that the Investor
may transfer its Company Shares without such consent of the Company in
accordance with Section 5.3 above. Any Person who becomes a holder of
Second Round Investor Shares pursuant to this Agreement shall, as a
condition precedent to receiving such shares and exercising rights as a
shareholder of the Company, execute and become a Party to this Agreement
and shall be bound by all of its terms and conditions.
17.2 Expenses. Each Party shall bear its own attorney fees and other expenses
incurred in the preparation and execution of this Agreement, and any
other related agreement provided hereunder, and the performance of the
Parties' respective obligations hereunder, and the Parties shall hold
each other harmless for any such charges.
17.3 Modification. No amendment, change, addition or modification of the
terms set forth in this Agreement shall be effective or binding upon
either of the Parties unless reduced to writing and executed by the
respective duly authorized representatives of each Party.
17.4 Severability. In the event any term or provision of this Agreement shall
for any reason be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
term or provision of this Agreement and this Agreement shall be
interpreted and construed as if such term or provision, to the extent
unenforceable, had never been contained in this Agreement.
17.5 Notice.
17.5.1 Any notice required or permitted to be given hereunder shall be
in writing and may be given by personal service, registered
airmail, or by facsimile if confirmed on the same day in writing
by registered airmail, with postage fully prepaid to the
following addresses:
If to The Investor:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
If to the Company:
NewGen Telecom Corporation
2nd Floor, ▇▇▇ ▇▇▇▇▇ Bldg A-Dong,
▇▇▇-▇, ▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇-▇▇,
▇▇▇▇▇, ▇▇▇▇▇
17.5.2 Except as otherwise specified herein, all notices, demands, and
other communications shall be deemed to have been duly given on
the date of receipt if delivered personally or by facsimile or
fifteen (15) Business Days after the date of mailing if sent by
registered airmail.
17.5.3 All notices, demands or other communications hereunder and any
other documents required to be delivered hereunder shall be in
the English language or accompanied by a certified translation
thereof into the English language.
17.6 Counterparts. This Agreement is written in the English language and may
be executed in multiple counterparts, each of which shall be deemed an
original but all of which together shall constitute one document.
17.7 Language. The English language text of this Agreement shall prevail over
any translation thereof for purposes of interpretation and resolving
ambiguities.
17.8 Applicability of the Joint Venture Agreement. Notwithstanding Section
17.8 and any other provisions in this Agreement, nothing herein shall be
deemed to limit the validity or applicability of the Joint Venture
Agreement, and every provision thereof shall be applicable to the
parties to this Agreement, unless expressly provided otherwise in this
Agreement, and to the extent that there arises no conflict between this
Agreement and the Joint Venture Agreement. In case of conflict, this
Agreement shall prevail over the Joint Venture Agreement and be taken as
correct.
17.9 Headings. The headings contained in this Agreement are for the
convenience of the reader only and shall not in any way affect the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the authorized representatives of the Parties hereto have
caused this Agreement to be executed as of the date first above written.
Celeritek, Inc.
By /s/ KWON HOE ▇▇▇
-------------------------------
Name: Kwon Hoe ▇▇▇
Title: Legal Representative
NewGen Telecom Co.
By /s/ JONGWEON HONG
------------------------------
Name: Jongweon Hong
Title: Chief Executive Officer