-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ms/iNb4ja+vgPpr6ktdYFQNC+SDbpiMlprTDlg8115rPUy8Zi4s8ULouq2o1xynG JcMHL1TPXJluv5Zxo8ByvA== /in/edgar/work/20000601/0000912057-00-027049/0000912057-00-027049.txt : 20000919 0000912057-00-027049.hdr.sgml : 20000919 ACCESSION NUMBER: 0000912057-00-027049 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000512 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELEVIDEO INC CENTRAL INDEX KEY: 0000353779 STANDARD INDUSTRIAL CLASSIFICATION: [3575 ] IRS NUMBER: 942383795 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-11552 FILM NUMBER: 647784 BUSINESS ADDRESS: STREET 1: 2345 HARRIS WAY CITY: SAN JOSE STATE: CA ZIP: 95131 BUSINESS PHONE: 4089548333 FORMER COMPANY: FORMER CONFORMED NAME: TELEVIDEO SYSTEMS INC DATE OF NAME CHANGE: 19920703 8-K 1 a8-k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): May 12, 2000 TELEVIDEO, INC. (Exact name of registrant as specified in its charter) Delaware 0-11552 94-2383795 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 2345 Harris Way, San Jose, California 95131 (Address of principal executive offices, including Zip Code) (408) 954-8333 (Registrant's telephone number, including area code) ITEM 5. OTHER EVENTS INVESTMENT IN KEYIN TELECOM CO. LTD. On May 12, 2000, TeleVideo, Inc. ("the Company") purchased an aggregate of 15,278 ordinary shares of Keyin Telecom Co. Ltd.("Keyin"). Keyin is a private company located in Seoul, Korea, which is engaged in developing powerline communications technology. The Company's investment in Keyin represents a 5.75% interest in this privately-held corporation. The cash investment of $2,522,972 will be accounted for on the cost method of accounting. The purchase price and other terms of the investment were arrived at by negotiation between the Company and Keyin, with the per share price determined by the Keyin Board of Directors in good faith based on financial and business information and other relevant factors currently known to and considered by the Keyin board members. The purchase price was paid for out of the Company's working capital. The Company has the right to participate in future sales of Keyin securities to maintain its proportionate interest in Keyin. In the event the Company wants to sell all or a portion of its shares, it has given Keyin and its controlling shareholder, who is also its President and Chief Executive Officer, a right of first refusal to purchase the shares. Keyin also agreed to keep the Company expressly advised regarding certain specified kinds of events and transactions that could materially impact Keyin's business, capital structure and financial condition. Keyin has agreed that it will not transfer its powerline communications ("PLC") technology to a third party without the prior written consent of the Company, except in the context of a strategic technology transfer agreement approved by the Keyin Board. The restrictions and promises in the agreement will terminate at such time as the Company has sold at least 70% of the shares it acquired under the agreement. The investment agreement also contemplates that TeleVideo will participate in a strategic alliance with Keyin under the terms of which TeleVideo will support Keyin in its overseas marketing and sales activities related to Keyin's PLC technology. In addition, TeleVideo and Keyin will cooperate to incorporate Keyin's PLC technology into TeleVideo's computer products, including the Tele-Client series. The parties contemplate entering into a separate sales and marketing agreement to more fully document the terms and conditions of the strategic relationship. INVESTMENT IN BIOMAX CO, LTD. On May 12, 2000, the Company purchased an aggregate of 45,000 ordinary shares of Biomax Co., Ltd. ("Biomax"). Biomax is a startup company with its principal offices located in Seoul, Korea, which is engaged in developing an herbal product to help lower cholesterol levels in humans. Its existing technology was developed by and obtained from the Korea Research Institute of Bioscience and Biotechnology. The Company's investment in Biomax represents a 15% interest in this privately-held corporation. The cash investment of $917,431 will be accounted for on the cost method of accounting. The purchase price and other terms of the investment were arrived at by negotiation between the Company and Biomax, with the per share price determined by the Biomax Board of Directors in good faith based on financial and business information and other 2 relevant factors currently known to and considered by the Biomax board members. The purchase price was paid for out of the Company's working capital. The agreement gives the Company the right to nominate one member to the Biomax Board of Directors. Dr. K. Philip Hwang, the Company's Chairman of the Board and Chief Executive Officer, was nominated and elected to the Biomax board. The Company has the right to participate in future sales of Biomax securities to maintain its proportionate interest in Biomax. In the event the Company wants to sell all or a portion of its shares, it has given Biomax and Biomax's President, who is its controlling shareholder, a right of first refusal to purchase the shares. The controlling shareholder also must obtain the Company's prior written consent in order to sell over 10% of Biomax. Biomax also agreed to discuss with the Company certain specified kinds of events and transactions that could materially impact Biomax's business, capital structure and financial condition. The agreement further prohibits Biomax from sharing its technology with third parties or assisting with research and development efforts of third parties without the prior written consent of the Company, other than in the normal course of business, and further prohibits the controlling shareholder from engaging in businesses that could compete with Biomax. The restrictions and promises in the agreement will terminate at such time as the Company has sold at least 70% of the shares it acquired under the agreement. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS The following exhibits are filed as part of this Current Report on Form 8-K: 10.1 Share Subscription Agreement, dated as of March 27, 2000, by and among TeleVideo, Inc., Biomax Co., Ltd. and Park Jin-Woo 10.2 Investment Agreement, dated as of February 15, 2000, by and between TeleVideo, Inc. and Keyin Telecom Co., Ltd. 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: June 1, 2000 TELEVIDEO, INC. By: /s/ K. Philip Hwang ------------------------------ K. Philip Hwang CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER 4 INDEX TO EXHIBITS EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 10.1 Share Subscription Agreement, dated as of March 27, 2000, by and among TeleVideo, Inc., Biomax Co., Ltd. and Park Jin-Woo 10.2 Investment Agreement, dated as of February 15, 2000, by and among TeleVideo, Inc. Keyin Telecom Co., Ltd. and Gi Won Lee EX-10.1 2 ex-10_1.txt EXHIBIT 10.1 EXHIBIT 10.1 SHARE SUBSCRIPTION AGREEMENT 2000 INVESTOR COMPANY: TELEVIDEO, INC. INVESTED COMPANY: BIOMAX CO., LTD. SHARE SUBSCRIPTION AGREEMENT This Share Subscription Agreement (hereinafter "Agreement") is signed and entered into, by and between, TeleVideo (CEO DR Philip Hwang; hereinafter "Kap") whose head office address is 2345 Harris Way, San Jose, CA 95131 U.S.A.; Biomax (hereinafter "Eul") whose head office address is 169-14 Samsung-dong Kangnam-ku, Seoul, Korea; and a large shareholder or administration controller defined below (hereinafter "Interested Party"), as of Mar 27 2000. Article 1 (Purpose) This Agreement is intended to determined the rights and duties occurred among "Kap", "Eul" and "Interested Party" in the capital-based participation of "Kap" in the capital increase implemented by "Eul". Article 2 (Interested party) 1. "Interested Party" of "Eul" in this Agreement refers to the person mentioned below of the administration controllers who are the corporations or natural persons deemed by "Kap" to have actual control right of "Eul" at the time of implementing capital increase. Name in full: Park Jin-Woo Address: 20720 4th Street, #11, saratoga, CA, 95070 U.S.A. 2. "Interested Party" defined in the paragraph 1 of this article shall approve each provision of this Agreement and provide joint guarantee for the fulfillment of the obligations of "Eul" specified in this Agreement. Article 3 (Amendment of the Articles of Incorporation etc.) "Eul" shall amend the rules concerning the administration of the company, including but not limited to the Articles of Incorporation and inner rules of "Eul", which 1 are against this Agreement, under this Agreement, in order to ensure faithful and sincere fulfillment of this Agreement. Article 4 (Conditions for share issue and subscription) "Eul" shall issue new shares as following and "Kap" shall subscribe to such new shares as following. "Eul" shall issue new shares and deliver such new shares to "Kap" after "Kap" pays for such new shares; provided, however, that such delivery may be substituted by share custody certificate under mutual agreement of the parties hereto. 1. The kinds and total number of existing issued shares: ordinary shares 100,000 2. Par value: 5,000 won 3. New shares to be issued a. Kinds and number: registered ordinary shares 200,000 (1,000,000,000 won) b. Total number of new shares to be offered to "Kap": 45,000 (rights offering: 17,647 shares, non-consideration: 27,353 shares) c. Issue price per share: 5,000 won d. Subscription price per share: 22,222 won e. Date of payment for share price: April 27, 2000 f. Place for paying for share price: Hanvit Bank (Samsung Station Branch) Transaction bank of the head office of Biomax, Seoul Article 5 (Offering preferential right) If the company of "Eul" implements capital increase, "Eul" shall give "Kap" the opportunity of participating in the preferential right of share offering corresponding to the portion of the shares owned by "Kap". If "Kap" notifies "Eul" of the abandonment of participating in such preferential right, "Eul" may make a decision on such offering at its own will. Article 6 (Prohibition of technology transfer and assignment, and prohibition of having two businesses at the same time) 1. The parties hereto shall neither provide a part or whole of the technologies owned by "Eul" for any third party nor direct or assist any R&D activities for 2 such a purpose, without prior written consent from "Kap", unless it is needed by normal business activities of "Eul", after this Agreement is signed and entered into. "Interested Party" shall not run any business belonged to the same product business run by "Eul", engage in any competing product business and have any interests in such product businesses. Provided, however, that this provision shall be deemed exceptional if this Agreement terminates under the provisions specified in the article 15. 2. "Eul" and "Interested Party" shall not invest in, participate in managing, or engage in any business that has same business purposes as "Eul" or competes with "Eul", without prior consent from "Kap". Article 7 (Appointment of directors) 1. "Eul" and "Interested Party" shall appoint one person nominated by "Kap" to the director of the company of "Eul", if requested by "Kap". 2. The director nominated by "Kap" and appointed as such shall be non-standing director. Such director shall not guarantee any debts of "Eul". Article 8 (Discussions) "Eul" shall discuss each item of this paragraph expected to have large effects on the management performance of "Eul" and notify the results quickly to "Kap". - Discussion items for general shareholders' meeting and board of directors. - Amendment of the Articles of Incorporation, change in authorized equity capital or paid-in equity capital, stock split and treatment of surplus. - Matters related to the change in the shares and ownership of Interested Party. - Sale, lease, substitution and disposal by other method, of owned assets other than ordinary business activities. - Guarantee for investment and loan for third party, which can deteriorate debt-equity ratio - Stoppage or abandonment of a part or whole of business - Borrowings higher than 300 million won from financial institutions 3 - Borrowings from any other party than financial institutions - Change of outer accounting audit corporation - Other matters giving important impact on the management of invested business 2. If damage or loss in incurred to "Kap" by non-fulfillment or delayed fulfillment of the prior discussions specified in the paragraph 1 of this article, "Eul" and "Interested Party" shall compensate for such damage or loss on a joint basis. 3. If "Interested Party" intends to sell off to any third party a part (over 10% of total issued shares) or whole of the shares owned by "Interested Party" after this agreement is made, "Interested Party" shall obtain prior written consent from "Kap". 4. If the documents or electronic files submitted by "Eul" and "Interested Party" are found by "Kap" to have important falsification while "Kap" considers this investment, "Eul" and "Interested Party" shall indemnify "Kap" for such falsifications under the paragraphs 2 and 3 of the article 12. Article 9 (Report and presentation of materials) 1. "Eul" shall report or present to "Kap" following matters or related materials, if requested by "Kap". 1.1 Annual report a. Business plans and estimated financial statements of next FY. b. Account closing financial statements (audited by CPA) and business performance report 1.2 Semi-yearly report a. Semi-yearly financial statements b. Progression of business or project 1.3 Occasional report a. Major changes in property - Investment in the companies related with the business 4 - Disposal of major fixed assets - Acquisition or disposal of important rights - Large damages by calamity b. Changes in the shareholders' list c. Change of important business plan d. When issued bills/checks are dishonored or transactions with bank is suspended e. When a part or whole of operating activities is suspended f. When corporation liquidation procedure start is applied for under laws or liquidation procedure starts g. When a litigation is brought that can give important impacts to "Eul" h. When "Eul" is under sanctions from government agencies due to violation of laws and regulations i. Other matters deemed by "Kap" to be important for management of "Eul" 2. The materials specified in the paragraph of this article shall be prepared in such a good faith and submitted to "Kap" within the period designated by "Kap". Article 10 (Accounting and business audit) "Eul" shall prepare financial statements for audit by authorized accounting corporation in each account closing. Provided, however, that "Kap" may designated accounting corporation by discussion with "Eul" if it is deemed necessary. Article 11 (Duties of IPO) "Eul" shall ensure that the shares of "Eul" will be listed on the stock exchange (including KSE, KOSDAQ, Third Market, NYSE, NASDAQ etc.) within the second half of 2003 by discussion with "Kap"; provided, however, that if "Kap" agrees to the delay in listing such shares or it is difficult to list such shares, it may be deemed as exceptional. Article 12 (Period of recovering investment) 5 "Kap" may dispose the shares of "Eul" owned by "Kap" to recover the investment under the provisions of article 11. Provided, however, that if it comes under each of the following items, "Kap" may dispose the shares of "Eul" owned by "Kap" regardless of article 12. 1. If the shares of "Eul" are listed on the stock exchange; 2. If the shares of "Eul" has qualifications for listing on the stock exchange; 3. If "Eul" and "Interested Party" do not fulfill this Agreement; 4. If the documents submitted by "Eul" and "Interested Party" to "Kap" are found to be false; 5. If audit report of "Eul" by CPA is disclaim report; 6. If the assets of "EUL" are used or flowed out for other purposes than business purposes. Article 13 (Disposal of shares) 1. Privileged right to buy shares 1.1 If "Kap" intends to sell off the shares of "Eul" owned by "Kap", "Kap" shall give "Eul" and "Interested Party" privileged right to buy such shares. 1.2 "Eul" and "Interested Party" shall exercise such privileged right within two weeks from the date of notification by "Kap" of such privileged right to buy such shares. Such privileged right may not be exercised without paying for such shares. 1.3 If "Eul" and "Interested Party" do not exercise such privileged right, "Kap" may dispose such shares to any third party. 1.4 "Eul" and "Interested Party" shall discuss with "Kap" in advance in order to dispose their owned shares to a third party. If "Eul" and "Interested Party" disposes such shares in violation of such prior discussions, "Kap" may have the right to buy the remaining shares owned by "Interested Party" within the equity ratio of "Kap" at the same price 1.5 In case of the paragraph 1.3, all rights and duties hereunder of "Kap" for "Eul" and "Interested Party" shall be transferred to the third party acquired such shares. 6 2. Duty of buying shares 2.1 "Kap" may terminate this Agreement if "Eul" comes under each of following items. "Eul" and "Interested Party" shall indemnify "Kap" for the damages incurred to "Kap" by non-fulfillment of this Agreement or may request "Eul" and "Interested Party" to buy the shares owned by "Kap". In this case, "Eul" and "Interested Party" shall buy the shares requested by "Kap" to be bought on a joint basis. 2.1.1 If "Eul" violates the duties specified in the article 8 Duties of accounting and business audit. 2.1.2 If "Eul" defaults the duties specified in the article 11 Duties of IPO 2.2 In case of paragraph 2.1, "Eul" and "Interested Party" shall buy the shares of "Eul" within one month from the notification by "Kap" of buy request. 2.3 The share trading price under paragraph 2.2 shall be with annual interest rate 8% from the date when "Kap" did equity investment in "Eul" to the date when "Eul" buys the equity owned by "Kap". 2.4 If "Eul" and "interested Party" do not fulfill the obligations of buying shares under paragraphs 2.2 and 2.3 of this article, it shall be deemed that share trading contract is concluded by and between "Kap" and "Eul" and "Interested Party" at the time when one month elapses from the date of the notification by "Kap" to "Eul" and "Interested Party" of requesting to buy such shares. In this case, "Eul" and "Interested Party" shall pay to "Kap" for such shares without any delay. 3. If "Kap" and "Eul" or "Interested Party" concludes separate contract in relation to trading such shares, such separate contract shall govern. 7 Article 14 (Assignment of rights and duties) "Eul" and "Interested Party" shall not assign a part or whole of the duties and rights hereunder to any third party without prior written consent from "Kap". Any assignment without prior written consent from "Kap" shall be deemed invalid. Article 15 (Amendment) The parties hereto may amend, modify, revise or change this Agreement only by written agreement by the parties hereto. Article 16 (Termination) 1. If either party hereto violates any provision specified herein and received written final notification thereabout from other parties, and if such violations are not corrected within 30 days from the occurrence date thereof, such other party may terminate this agreement and have a right to claim to such violating party for indemnification for damages incurred by such violations. 2. This Agreement shall be effective till "Kap" recovers its whole investment. However, if the shares of "Eul" are listed on the stock exchange or "Kap" sells off over 70% of such shares acquired under this Agreement, this Agreement shall be terminated automatically without separate actions. Provided, however, that if "Kap" has another tender offer claim right due to investment, it may be deemed as exceptional. Article 17 (Duties of guarantee) "Eul" and "Interested Party" shall guarantee this Agreement on a joint basis. Article 18 (Status of "Kap") Each party composing "Kap" for this Agreement may fulfill this Agreement individually for "Eul" and "Interested Party". Article 18 (Public notarization expense and other expenses) 8 This Agreement shall be signed by each party hereto, and notarized by public notary if requested by "Kap". Public notarization expense and other expenses incurred by this Agreement shall be borne by "Kap" and "Eul". Article 20 (Dispute) Each party hereto shall not bear the responsibilities for the provisions hereof not fulfilled due to Force Majeur, which includes fire, explosion, Act of God, war, government actions, and other similar reasons beyond the control of each party hereto. Article 21 (Effective date) This Agreement shall be effective as of the date of signature and seal by the parties hereto. Article 22 (Specially agreed matters) "Eul" shall implement rights issue within 20 days after the investment by "Kap" under this "Agreement", in order to ensure that the paid-in capital of "Eul" become higher than 1.5 billion won (1,500,000,000 won). IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and signed by their duly authorized representatives in three copies as of the day and year first above written, each party retaining one original thereof. May 1, 2000 "Kap": TeleVideo (CEO, Philip Hwang) /s/ KPH 2345 Harris Way, San Jose, CA 95131 U.S.A. "Eul": BIOMAX (President, Park Jin-Woo) /s/ Park Jin-Woo 169-14 Samsung-dong Kanngnam-ku Seoul "Interested Party": Park Jin-Woo /s/ Park Jin-Woo 2070 4th Street, #11 Saratoga, CA 9570 U.S.A. 9 EX-10.2 3 ex-10_2.txt EXHIBIT 10.2 EXHIBIT 10.2 INVESTMENT AGREEMENT This investment agreement is entered as of February 15, 2000 by and between TeleVideo, Inc. (hereinafter referred to as TeleVideo) with its principal place of business located at 2345 HARRIS WAY, SAN JOSE, CA 95131 U.S.A. and Keyin Telecom Co., Ltd. With its principal place of business located at 8F. Chungjin B/D, 475-22 Bangbae 2-dong, Seocho-ku, Seoul, Korea (hereinafter referred to as "Keyin") This agreement is made based upon the MOU on investment signed January 25, 2000. ARTICLE 1. OBJECTIVES This agreement is to define the rights and obligations of TeleVideo, Keyin and Interest Party subject to TeleVideo's investment in Keyin's capital raise based upon Foreign Investment Promotion Law. ARTICLE 2. INTEREST PARTY 1. Definition: Subject to this Agreement, "Interest Party" of Keyin means a corporation or a person which or who as TeleVideo acknowledges owns the actual managerial rights of Keyin at the time of Keyin's capital raise, and named as below: Name: Gi Won Lee Address: Samho Garden APT. #1-107, 30-2 Banpo-dong, Seocho-ku, Seoul, Korea 2. "Interest Party" as defined in Article 2-1, agrees to be bound by each article of this Agreement and accepts the joint liability on guarantee for Keyin's performance of any provisions in this Agreement. ARTICLE 3. (CHANGE OF COMPANY ARTICLE AND OTHERS) For Keyin's performance of obligation with due diligence subject to this Agreement, Keyin shall change its Articles of association and other business operational policies to be agreed to the terms of this Agreement if they are against this agreement. ARTICLE 4. (ISSUANCE OF STOCK AND CONDITION OF RECEIPT) Keyin issues new stocks and TeleVideo receives them according to the following provisions. After TeleVideo transfers the fund, Keyin issues and provides new stocks to TeleVideo. However, it could be replaced by the certificate of Stock ownership based upon the mutual agreement among parties. 1. Total number of stocks to be issued: 2,000,000 shares 2. The type and number of pre-issued stocks: Common Stock 265,600 shares (As of January 25) 3. Par value: KW 5,000/share 4. Shares to be issued upon this Agreement a. Type and number of shares: registered Common Stock 15,278 shares (KW 2,750,040,000) b. Number of new stocks given to TeleVideo: 15,278 shares (Rights offering: 15,278 shares; Non-consideration: 0 share) c. Par value of stock to be issued: KW 5,000/share d. Price of stock to be issued: KW 180,000/share e. Date of Payment for Stock Price: Within three months (90days) after the execution of this agreement f. Fund Transfer Bank Information Bank: Korea Exchange Bank Account Number: 146-22-02018-2 Account Name: Keyin Telecom Co. Ltd. ARTICLE 5. (OFFERING PREFERENTIAL RIGHT) If the company of Keyin implements capital increases, Keyin shall give TeleVideo the opportunity of participation in the preferential right of stock offering, correspond to the portion of the stocks owned by TeleVideo. If TeleVideo notifies Keyin of the abandonment participating in such preferential right, Keyin may make a decision on such offering at its own. When the board meeting of Keyin makes a decision to offering (sic) stocks to any third party for the purpose of Keyin's own interest, TeleVideo may follow the decision. ARTICLE 6. (APPOINTMENT OF TELEVIDEO) TeleVideo shall not participate in and shall not try to participate in the operations of Keyin. TeleVideo will not have any representatives on Board of Directors. ARTICLE 7. (PROHIBITION OF TECHNOLOGY TRANSFER) After this Agreement executed, Keyin shall not transfer all of powerline communication technology to a third without prior written consents from TeleVideo; except strategic technology transfer approved by Keyin's Board of Directors meeting. This Article will be waived if the Agreement is terminated based on Article 14. ARTICLE 8. (REPORTING AND INFORMATION SUBMISSION) 1. Upon request of TeleVideo, Keyin should prepare and submit the information for the following items; periodically or when required. 1.1 Annual Reporting a. Business Plan and Projected Financial Statements for next fiscal year b. Audited Financial Statement and Business Achievement Report 1.2 Immediate Reporting a. Major changes on assets - Investment on affiliates - Disposal of major Fixed Assets - Acquisition or Sale of major rights - When substantial damages are caused by disaster b. Changes in Shareholders c. Changes in major Business plan d. When Promissory Notes/Checks are dishonored, or the bank transactions are denied e. When part or whole sales activities are stopped f. When filed for Chapter 11 g. Legal dispute against Keyin with possible material effects h. If brought to justice by government or other organization due to the violation of regulation or other rules i. Other matters that TeleVideo considers important for Keyin's operation 3. Item 1 in Article 8 should be prepared with due care and submitted within the period requested by TeleVideo. ARTICLE 9. (ACCOUNTING AND AUDIT) Keyin shall prepare financial statements when each fiscal year ends, which should be audited by certified accounting firm. ARTICLE 10. (PERIOD OF RECOVERING INVESTMENT) TeleVideo shall dispose of Keyin's stocks in accordance with Article 11. However, if applicable to the below, TeleVideo can dispose them regardless Article 11. 1. When Keyin's stocks are publicly offered (KSE, KOSDAQ, or foreign stock markets, herein "Stock markets") 2. If Keyin and Interest party fail to perform the contractual obligation 3. If the documentation submitted to TeleVideo by Keyin and Interest Party is proved to be falsified. 4. When "Disclaimer of Opinion" is issued on Keyin's Financial Statements by a CPA 5. When Keyin's assets are disposed or outflowed for the purposes other than business operation. ARTICLE 11. (DISPOSAL OF STOCK) 1. Privileged right to buy stocks 1.1 If TeleVideo intends to sell off the stocks of Keyin owned by TeleVideo, it may be agreed in advance by Interest Party and Interest Party may not hold over the consent without a remarkable reason. When Interest Party agrees to TeleVideo on selling stocks, TeleVideo shall give Keyin and Interest Party privileged right to buy such stocks. 1.2 Keyin and Interest Party shall exercise such privileged right within two weeks from the date of notification by TeleVideo of such privileged right to but such stocks. Such privileged right may not be exercised without paying for such stocks. 1.3 If Keyin and Interest Party do not exercise such privileged right, TeleVideo may dispose such stocks to any third party. The selling price to the third party shall be higher than the price that TeleVideo presented to Keyin and Interest Party. 1.4 In the case of paragraph 1.3, all rights and duties hereunder of TeleVideo for Keyin and Interest Party shall be transferred to the third party acquired such stocks. ARTICLE 12. (ASSIGNMENT) The rights and obligation subject to this Agreement shall not be assignable by Keyin and Interest Party in whole or in part to any third party without the prior written consent of TeleVideo. The assignment done without prior written consent of TeleVideo is not valid. ARTICLE 13. (CHANGES OF AGREEMENT) This agreement shall not be modified or changed except in writing duly executed by both parties. ARTICLE 14. (TERMINATION) 1. If either party defaults in performance of any provision of this agreement, the non-defaulting party may give written notice to the defaulting party that if the default is not cured within thirty (30) days the Agreement will be terminated. If the non-default party gives such notice and the default is not cured during the thirty (30) day period, then the non-defaulting party shall retain the rights to terminate the Agreement and to claim the damages. 2. This Agreement shall be effective as of when TeleVideo disposes of all Keyin's stocks it owns. The agreement is automatically terminated when Keyin's stock is publicly offered in the stock markets or if TeleVideo disposes more than 70% of stock purchased under this Agreement, whichever is sooner. In case TeleVideo has another claims from TeleVideo's investment, it will be regarded as an exception. ARTICLE 15. (WARRANTIES) Keyin and Interest Party shall mutually warrant the execution of this Agreement. ARTICLE 16. (APPOINTMENT OF TELEVIDEO) Each party composing TeleVideo for this agreement may fulfill this agreement individually for Keyin and Interest Party. ARTICLE 17. (NOTARIZATION AND EXPENSES) When all parties sign on the Agreement and TeleVideo requests, this Agreement should be notarized. Any cost incurred in relation with this Agreement including the notarization cost shall be shared by TeleVideo and Keyin. ARTICLE 18. (GOVERNING LAW) If there is any legal disputes subject to this Agreement, each party should try to resolve the issues with due diligence and care. The validity and performance of this Agreement shall be governed by Seoul District Court of Civil Jurisdiction. ARTICLE 19. (FORCE MAJEURE) All parties shall not be liable to each other if their respective obligations or the performance of any terms or provisions of this Agreement (other than payment obligations) is delayed or prevented by force majeure including wars, fires, floods, acts of God, statute, regulation, or without limiting the foregoing, any other causes not within its reasonable control. ARTICLE 20. (EFFECTIVENESS) This Agreement is effective immediately upon signing on the Agreement by each party. ARTICLE 21. (NOTIFICATION) All notices to be given pursuant to this Agreement shall be in writing, and shall be personally delivered or sent by registered airmail at the following addresses, and via fax. Address of TeleVideo 2345 HARRIS WAY, SAN JOSE, CA 95131 U.S.A. Address of Keyin Telecom 8F, Chungjin B/D. 475-22 Bangbae 2-dong, Seochu-ku, Seoul, Korea (zip: 137-062) Address of Interest Party Samho Garden APT #1-107, 30-2 Banpo-dong, Seocho-ku, Seoul, Korea (zip: 137-040) ARTICLE 22. STRATEGIC ALLIANCE 1. TeleVideo shall fully support Keyin for its overseas marketing and sales activities on Powerline communication technology. TeleVideo and Keyin agree on co-business development, applying Keyin's PLC technology on TeleVideo's computer products, including Tele-Client. Related to this Article, both companies are bound to make separate [Sales & Marketing Agreement] within one (1) month after the investment fund is transferred to Keyin based upon this Agreement. The terms and conditions of this Sales & Marketing Agreement will be regarded as part of this Agreement. 2. TeleVideo shall fully support Keyin for future public offering on NASDAQ. In order to execute and certify this Agreement among parties, each authorized representative from TeleVideo, Keyin and Interest Party signs on the three original copies of the Agreement, then each retains one original copy. TeleVideo Inc. Name: Kyupin Philip Hwang Position: Chairman & CEO Signature: /s/ K. Philip Hwang May 1, 2000 Keyin Telecom Co., Ltd. Name: Gi Won Lee Position: CEO & President Signature: /s/ Gi Won Lee Interest party Name: Gi Won Lee Signature /s/ Gi Won Lee -----END PRIVACY-ENHANCED MESSAGE-----