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LPL » Topics » Article 14. Additional Financing as Required by the JVC

This excerpt taken from the LPL 20-F filed Apr 11, 2005.

Article 14. Additional Financing as Required by the JVC

 

14.1 The JVC shall be funded, if necessary, in the order of the priorities as set forth below:

 

  (a) First, the JVC’s internally generated profits.

 

  (b) Second, commercial debts raised on the basis of the asset base and credit standing of the JVC. If it is required for the JVC to obtain financing from banks or other financial institutions, the JVC shall obtain loans without any guarantee or comfort letter from either NEG or LPL. The interest rate of any loan to be obtained by the JVC shall not exceed: (i) CD Rate (which means a final rate announced by The Korean Securities Dealers Association (or any successor of such Association) on any business day for Won-denominated negotiable certificates of deposit issued on such business day for a term of 91 days), as of the date when such loan is executed, plus 3% per annum, or (ii) if the loan is made by other currency (US Dollars or Japanese Yen), 6 month LIBOR plus, as of the date when such loan is executed, 3% per annum.

 

  (c) Third, issuance of new shares.

 

In the event that the JVC cannot raise the funds during five (5) years after the Closing Date projected in the Business Plan either (i) through internally generated

cash or (ii) through commercial debts in accordance with Article (b) above, NEG and LPL shall subscribe for new shares of the JVC in the amount of such funds in proportion to the ratio of the Parties’ respective equity ownership in the JVC at the time of the issuance of such new shares.

 

14.2 Raising funds after five (5) years or beyond the Business Plan.

 

If the JVC requires the funds after five (5) years from the Closing Date or beyond the total amounts projected in the Business Plan and the JVC cannot raise such funds by the JVC’s internally generated profits or by borrowing from banks or other financial institutions as stipulated in (b) above without any guarantee or comfort letter from NEG or LPL, the Parties shall discuss in good faith to determine how to finance such funds.

 

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