Document:

exv4w1

 

Exhibit 4.1

Memorandum of Understanding

This Memorandum of Understanding (MOU) was signed between the below parties on February 6,
2006.

	(A)	 	

	 	(i)	 	Celrun Inc. (referred as “Celrun” hereafter) whose headquarters is located at 1 Ho
2nd Fl. 1412-8 Yong-Bong Dong, Buk Gu, Gwangju
	 
	 	(ii)	 	Kim Young-min (referred as “Kim Young-min” hereafter) whose address is 108-901
Moonjung Ramian Apt. 1 1-12 Moon-Jong Dong, Songpa Gu, Seoul
	 
	 	 	 	(together with Celrun, referred as “Celrun party” hereafter)

	(B)	 	hanarotelecom Inc. (referred as “purchaser” or “Hanaro Telecom” hereafter) whose
headquarters is located at 17-7 Yeoido Dong, Youngdeongpo Gu, Seoul
	 
	(C)	 	Celrun TV Inc. (referred as “the Company” or “Celrun TV” hereafter) whose headquarters is
located at 3rd Fl. Shindo Bldg. 10 Garak Dong, Songpa Gu, Seoul

Celrun, Hanaro Telecom and Kim Yong-min, the CEO and shareholder of Celrun TV, agree and shall
carry out the following concerning transfer of part of Celrun TV stocks and new Celrun TV stock
issues in the future.

Article 1 [Purpose]

	A.	 	The parties of this MOU shall sign a “contract” (referred to the “Contract” concerning
transfer of Celrun TV stock and accompanying business cooperation contract between Hanaro
Telecom and Celrun) after negotiating and agreeing on the terms and conditions of the stock
transfer and new issuances by Celrun TV, business objectives of Hanaro Telecom and other
specific cooperation details.
	 
	B.	 	This MOU is signed to agree on the basic matters before concluding the Contract mentioned
above. Other than matters that the parties agree to change, this MOU shall be the basis of the
Contract.

Article 2 [Issued Stocks and Transfer of Stocks]

	A.	 	Pursuant to the Contract, Celrun party shall transfer (or guarantee the transfer of) to
Hanaro Telecom the following type and amount of stocks:

 

 

	 	1)	 	issuer: Celrun TV Inc.
	 
	 	2)	 	the total number of issued stocks: 1,200,000 shares
	 
	 	3)	 	type of stock: registered common stock (par value per share: 5,000 KRW)
	 
	 	4)	 	amount of stock transfer: 780,000 shares (representing 65%)

	 	a)	 	640,000 Celrun TV shares owned by sellers (appendix 1 (ii) or (xxxiv)
shareholders of “Celrun TV Shareholder List”) other than Celrun
	 
	 	b)	 	140,000 Celrun TV shares owned by Celrun

	B.	 	Under Paragraph A, the purchase price of the stocks that will be acquired is 5.5 billion KRW,
and Celrun party shall guarantee the transfer of the stocks to Hanaro Telecom in the above
Paragraph A.
	 
	C.	 	Celrun party, under the amount of transfer stocks in Paragraph A, must arrange to have each
shareholder transfer Celrun TV stocks to Hanaro Telecom by the Contract signing date. If a
shareholder cannot transfer its stocks, Celrun shall instead transfer the Celrun TV stocks it
owns excluding the ones in b) of 4) in Paragraph A. or must persuade the shareholder, and any
incremental costs in this process must be covered by Celrun.
	 
	D.	 	Celrun party, on behalf of the seller, must guarantee the seller’s stock transfer and shall
be jointly liable for damages if the transfer is not fulfilled.

Article 3 [Payment of Stock Purchase Price]

	A.	 	Celrun shall write a contract containing the number and purchase price of to-be-transferred
common stocks defined in Paragraph A of Article 2 for each relevant shareholder, receive
signature on each contract from relevant shareholder and submit them to Hanaro Telecom before
the Contract signing date.
	 
	B.	 	Hanro Telecom shall receive execution of contracts stated in Paragraph A from all
shareholders related to stock transfer, and make payment for stocks transferred according to
the purchase price and payment method under the Contract if the number of Celrun TV stocks and
equity ratio to be owned by Hanaro Telecom meet conditions defined in Paragraph A of Article
2.
	 
	C.	 	Each shareholder to transfer stocks shall transfer the title to Hanaro Telecom and Celrun
shall guarantee such transfer. After the completion of each transfer of title, Hanaro Telecom,
under Paragraph B above, shall make payment for stocks transferred to each shareholder based
on the Contract.

 

 

Article 4 [Celrun TV’s New Stock Issuance]

	A.	 	Hanaro Telecom and Celrun shall agree upon the issuance of new Celrun TV stock worth 20 B KRW
by the end of March, 2006. The payment date for such new issuance shall be by the end of
March, 2006 for 10 B KRW and by the end of June, 2006 for the other 10 B KRW.
	 
	B.	 	Of the newly issued stock, Hanaro Telecom shall subscribe for 13 B KRW worth of stocks (65%)
while Celrun or the parties designated by Celrun (not more than 4 persons including Celrun
party) shall subscribe for 7 B KRW (35%) worth of them. The Celrun TV equity ratio owned by
Celrun shall not be less than 25%.
	 
	C.	 	Hanaro Telecom and Celrun party shall participate in new stock issuance according in
proportion to their shareholdings.
	 
	D.	 	If any revision of Articles of Incorporation is required for new stock issuance stated in
Paragraph B above, Hanaro Telecom and Celrun shall cooperate with each other.
	 
	E.	 	If any of Paragraph A or D is not implemented due to legal limitations or otherwise, Hanaro
Telecom and Celrun shall not be legally liable.

Article 5 [Management of Celrun TV]

	A.	 	When Celrun TV’s stock transfer to Hanaro Telecom is complete according to Article 2, Hanaro
Telecom shall have the right to appoint Celrun TV’s CEO, Chairman of the board and members of
Board of Directors (including standing directors) and statutory auditor (number of members
Hanaro Telecom can appoint shall be commensurate with its equity ratio), and Celrun shall
exercise voting rights as director and shareholder for such appointment.
	 
	B.	 	Celrun shall revise the number of directors from the current 3 — 5 to 3 — 6 in the Articles
of Incorporation before signing the Contract.
	 
	C.	 	Celrun has director appointment rights commensurate with its equity ratio as follows.

	 	1)	 	when equity ratio is 25% or more: right to appoint 2 board members
	 
	 	2)	 	when equity ratio is not less than 15% and less than 25%: right to appoint 1
board member

	D.	 	Even after signing of the Contract and completion of stocks transfer, unless the current
management of Celrun TV evidently violates law or significantly undermines business state, the
current management, including Kim Young-min, shall be allowed to continue to run the business
under the condition of Paragraph C above.

 

 

	E.	 	The current management acknowledges the importance of financial controls of Celrun TV. Hanaro
Telecom shall designate the CFO of Celrun TV after the Contract signing and stock transfer
completion.
	 
	F.	 	Hanaro Telecom, Celrun and CelrunTV shall coordinate to agree on new stock issuance if it can
reduce equity ratio under the MOU herein and the Contract (Under Article 2. A. 4), Hanaro
Telecom’s equity is ratio 65% and Celrun’s 35%).
	 
	G.	 	Hanaro Telecom and Celrun understand the importance of content provision and programming, and
help each other in forming management supporting this.
	 
	H.	 	Celrun, its affiliates and those with special relationship with Celrun shall neither be in
the industry similar to or same as the one of Celrun, nor shall they assist a third party to
enter the industry (except Celrun’s supply to third parties of set top boxes with different
specifications from those provided to Celrun TV).

Article 6 [Stock Transfer and Validity]

	A.	 	Hanaro Telecom can exercise all rights as shareholder of the transferred stocks after
completion of transfer of the stock title in the shareholder registry and of Hanaro Telecom’s
stock purchase price payment under Article 3. Celrun shall represent and warrant the valid
title of the stocks.
	 
	B.	 	Celrun shall deliver to Hanaro Telecom transfer subject matter defined in Article 2 and
various documents needed for transfer of their title from Celrun and other shareholders
concurrently with receiving purchase price payment on due payment date.

Article 7 [Preconditions for the Contract Signing]

	A.	 	Hanaro Telecom and Celrun shall make commitment to and reflect in the Contract items as
listed below:

	 	1)	 	Hanaro Telecom, to the extent law permits, shall provide only through Celrun
TV TV-portal, VOD services and IP-TV services both utilizing Internet-based TV for
five years after completion of the Contract signing and stock transfer.
	 
	 	2)	 	Hanaro Telecom shall upgrade networks, provide sales and human resources
support and make other efforts to help Celrun TV provide services stated Paragraph A.
1) above.
	 
	 	3)	 	Celrun, without Celrun TV approval, cannot provide other domestic

 

 

	 	 	 	companies with Celrun TV-owned head-end platform (middleware, EMS, DRM, P2P solution), set
top boxes (referred to as “STB” hereafter) etc (referred to as “Celrun TV solution”
hereafter).
	 
	 	4)	 	Celrun shall be in charge of overseas supply of Celrun TV solution and of
overseas business utilizing Celrun TV solution.
	 
	 	5)	 	When Hanaro Telecom’s broadband Internet subscriber uses services stated in
1) above, Hanaro Telecom and Celrun TV shall share ownership of the subscriber
regarding the service, and shall share subscriber information, to the extent permitted
by law, with Hanaro Telecom legally liable and responsible to the subscriber.
	 
	 	6)	 	Revenue coming from providing services in 5) above shall revert to Hanaro
Telecom.
	 
	 	7)	 	Hanaro Telecom shall carry out sales and subscriber acquisition activities
regarding services in 1) above except B2B cases.
	 
	 	8)	 	Celrun TV shall have sole ownership on other broadband internet company
subscribers using services stated in 1).
	 
	 	9)	 	Celrun TV shall be supplied with STB only by Celrun for 2 years after the
Contract signing under the condition that i) Celrun TV wants STB supply, ii) Celrun
charges the lowest price to Celrun TV among others provided with STBs with similar
specifications to Celrun TV’s and iii) Celrun meets Celrun TV’s technology
specifications and other purchase requirements. Celrun shall deliver STBs to Celrun TV
in a phased manner in accordance with subscriber acquisition trend.
	 
	 	10)	 	Celrun shall deliver to Celrun TV by the end of May in 2006 outstanding STB
volume (remaining STBs to be supplied by Celrun to Celrun TV based on commodity supply
contract signed as of September 20, 2005), and the volume of STBs by version to be
supplied shall be determined through consultation of the two parties hereto. If STBs
to be supplied are 1st version (STB specifications and features under the
contract signed by Celrun and Celrun TV before December 31, 2005), upgrade of
functionality stated in (b) or (d) of 14) below shall be implemented by the end of
May, 2006 notwithstanding the terms in the previous contract.

 

 

	 	11)	 	Celrun shall not discontinue, without consent from Celrun TV, supplying STBs
or after-sale services for head-end platform and STBs as long as Celrun TV provides
the services set forth in subparagraph 1).
	 
	 	12)	 	Unless special functions are added to STBs in the future, Celrun may increase
the unit price of STB only by the level of the average annual increase of similar
STBs. If STBs are provided by lease, Celrun shall cooperate as much as possible to
ensure that the prime rate of interest on STB lease will be offered to Celrun TV.
	 
	 	13)	 	If there are price-reducing factors (bulk purchase, a decrease in the price
of STB components, etc.) for the STBs that Celrun supplies to Celrun TV, Celrun shall
immediately lower its STB unit price.
	 
	 	14)	 	With respect to the STBs supplied by Celrun to Celrun TV, Celrun shall
complete the development of functions specified in items a through d by the end of
March 2006, and use its best efforts to complete the development of functions
specified in items e and f by the end of March 2006. Ownership on such products and
functions shall be held by Celrun TV, and relevant development expenses shall be
included in the outsourcing agreement for the development of IP STB (the “IP STB
Development for Television Service of Celrun” signed between Celrun TV and Celrun on
September 20, 2005);

	 	a)	 	embedded digital broadcasting tuner (ATSC reception)
	 
	 	b)	 	advertising scheduler
	 
	 	c)	 	Internet-based video-on-demand functionality for television set
(streaming play and multicasting support)
	 
	 	d)	 	Network-PVR
	 
	 	e)	 	MP (Multimedia Play, DivX)
	 
	 	f)	 	Karaoke

	 	15)	 	In case Internet-based IP-TV service provided via TV set will be permitted
under relevant laws, Celrun shall guarantee that the STBs supplied to Celrun TV can
provide Internet-based IP-TV service provided via TV set without a hardware upgrade
and, if an improvement of STB function is needed for the IP-TV service, bear the
expenses for the improvement.
	 
	 	16)	 	Celrun and Celrun TV shall do their utmost to explicitly stipulate, in any

 

 

	 	 	 	agreements regarding content copyright, that the subject of service shall be copyrighted
content for Internet-based service provided via TV set.

	B.	 	Celrun shall implement, as a condition precedent to the Contract, matters specified in the
following paragraphs, prior to the date of purchase price payment as stated in Article 2 of
the Agreement:

	 	1)	 	hanarotelecom shall be able to reasonably check, prior to the payment date,
the feasibility of obtaining domestic and international patents applied for under the
name of Celrun TV.
	 
	 	2)	 	Celrun shall transfer to Celrun TV the head-end development technology and
staff needed for operating the services of Celrun TV (Celrun shall receive written
consent from the staff). The time of transfer shall be determined through
communications between the two companies. Celrun shall guarantee that the transferred
staff will not be able to return to Celrun and its affiliated companies (including
existing and new companies) for two years from the date of transfer. Celrun and Celrun
TV shall indemnify hanarotelecom against all relevant legal problems.
	 
	 	3)	 	Celrun shall guarantee that intellectual property rights on middleware, EMS,
P2P, DRM and operation know-how relating to the business of Celrun TV, ownership on
STBs for Celrun TV service and domestic and international patents (ten patents), and
other relevant intellectual property rights are exclusively held by Celrun TV, and
explicitly reflect this in relevant agreements.
	 
	 	4)	 	Celrun shall guarantee that no intellectual property rights specified in the
foregoing paragraph 3) are registered with (including those applied for) or owned
under the name of Celrun or a third party. Otherwise, Celrun shall immediately
transfer such intellectual property rights to Celrun TV without charge and bear all
related expenses.
	 
	 	5)	 	Celrun shall sell its stake in Ontown to Celrun TV at an appropriate price
after an objective evaluation of the stake.
	 
	 	6)	 	Upon executing the Contract, Celrun TV shall enact or amend, prior to the
date of signing the Contract, all relevant rules including its articles of
incorporation and regulations on the board of directors in order to form the board of
directors and manage the company in accordance with Article 5 of this MOU, and Celrun
shall exercise its voting rights for such purpose.

 

 

	C.	 	The Contract shall be executed within one month from the date of signing this MOU unless
there are reasons specified in Article 10 of this MOU.
	 
	D.	 	The Contract shall include representations, guarantees and conditions precedent customary for
this type of transaction.

Article 8 [Tax, etc]

Taxes and dues relating to the transfer and acquisition of shares shall be borne by each party.

Article 9 [Confidentiality]

	A.	 	The parties hereto may not reveal, without written agreement among the parties, the existence
and contents of this MOU, except the case when public disclosure and release of such
information is required by each party, its representative or laws.
	 
	B.	 	All information regarding this MOU shall be disclosed after agreement among the parties.
	 
	C.	 	The foregoing paragraphs shall be deemed effective after the period set in Article 11 of this
MOU.

Article 10 [Liabilities]

	A.	 	In case of failure to implement matters set forth in this MOU, hanarotelecom and Celrun shall
compensate for the loss or damage to the other party.
	 
	B.	 	With respect to the implementation of obligations under this MOU, if either party fails to
obtain licenses or approvals from government agencies under the Monopoly Regulation and Fair
Trade Act and other relevant laws, the party shall not be held liable for the loss.

Article 11 [Term of the MOU]

This MOU shall be effective for three months from the date of signing this MOU or until the date of
the Contract, whichever comes first.

Article 12 [Jurisdiction]

Any dispute arising from or in connection with this MOU between parties hereto shall be settled in
the Seoul District Court.

 

 

Article 13 [Governing Law]

Matters not specified in this MOU shall be governed by the Commercial Code and other relevant laws
of the Republic of Korea.

IN WITNESS whereof, the MOU shall be signed by the parties in duplicate, each party retaining one
copy thereof, respectively.

hanarotelecom Inc.

Asiaone Bldg., 17-7 Yeouido-dong, Youngdeungpo-gu, Seoul, Korea

Chairman of Special Management Committee: Byung-Moo Park

   (signed)          (sealed)

Young Min Kim

108-901, Samsung Munjeong-dong Raemian Apartments, 1-12 Munjeong-dong,
Songpa-gu, Seoul, Korea

(signed)          (sealed)

Celrun Co., Ltd.

1412-8 Yongbong-dong, Buk-gu, Gwangju, Korea

(Seoul branch: Celrun Bldg. 7th floor, 36 Garak-dong, Songpa-gu, Seoul, Korea)

Representative Director: Young Min Kim

(signed)          (sealed)

Celrun TV

Sindo Bldg. 3rd floor, 10 Garak-dong, Songpa-gu, Seoul, Korea

Representative Director: Young Min Kim

(signed)          (sealed)exv4w2

 

Exhibit 4.2

Business Cooperation Agreement

This Business Cooperation Agreement (“the Agreement”) entered into this 6th day of
March 2006, by and among hanarotelecom, inc.(“hanarotelecom”) whose main office is located at
Asiaone Bldg., 17-7 Yeouido-dong, Youngdeungpo-gu, Seoul, Celrun Co., Ltd. (“Celrun”) whose main
office is located at 1412-8 Yongbong-dong, Buk-gu, Gwangju and CelrunTV (“CelrunTV”) whose main
office is located at Sindo Bldg., 10 Garak-dong, Songpa-gu, Seoul (hereinafter individually
referred to as a “Party” and collectively as the “Parties”),

WITNESSETH THAT;

WHEREAS, hanarotelecom is a shareholder of CelrunTV, who owns 780,000 registered common shares with
par value of Won 5,000 each, or 65.0% of the total outstanding shares with voting rights of
CelrunTV as of the purchase date set forth in the Stock Purchase and Change of Control Agreement
(“CelrunTV Stock Purchase Agreement”) entered into this 6th day of March 2006, by and
among hanarotelecom, Celrun, CelrunTV and Young Min Kim whose address is 108-901, Samsung
Munjeong-dong Raemian Apartments, 1-12 Munjeong-dong, Songpa-gu, Seoul (“Young Min Kim”); and

WHEREAS, Celrun is a shareholder of CelrunTV, who owns 420,000 registered common shares with par
value of Won 5,000 each, or 35.0% of the total outstanding shares with voting rights of CelrunTV as
of the purchase date set forth in the CelrunTV Stock Purchase Agreement; and

WHEREAS, the Parties wish to sign the Agreement as a condition precedent to stock purchase
stipulated in subparagraph (g), paragraph 4.1, Article 4 of the CelrunTV Stock Purchase Agreement
and have agreed that mutual cooperation on TV-Portal and IP-TV services is the best way to achieve
efficient management of CelrunTV and maximize shareholder value based on the efficient management;
and

WHEREAS, Celrun and hanarotelecom shall do their utmost to develop the business of CelrunTV and
maximize profits not to undermine the profits of

 

 

CelrunTV for their own interest;

NOW, THEREFORE, the parties hereto agree as follows:

Article 1 (Provision of Services)

	1.1	 	hanarotelecom shall provide its broadband Internet subscribers with TV-Portal service,
Internet-based TV video-on-demand, or VOD, service and Internet-based IP-TV service (the
“Services”), sign the Terms of Service with the subscribers (including the case where
provisions regarding the Services are inserted into the terms and conditions regarding the
broadband Internet access service) and be subject to the rights and obligations of the Terms
of Service.
	 
	1.2	 	hanarotelecom shall not, without consent from CelrunTV, transfer the agreement with
subscribers relating to the service stated in paragraph 1.1 (the “Subscribers”) to a third
party, except where CelrunTV is merged into hanarotelecom or where hanarotelecom is merged
into a third party or engages in a transfer of business.
	 
	1.3	 	Revenues accrued from the provision of the Services as stated in paragraph 1.1 shall be
recognized as revenues of hanarotelecom.
	 
	1.4	 	To the extent permitted by relevant laws, Celrun TV may provide the Services to B2B
subscribers and broadband Internet subscribers of Internet service providers other than
hanarotelecom, sign the Terms of Service directly with the subscribers and be subject to the
rights and obligations of the Terms of Service.
	 
	1.5	 	Revenues accrued from the provision of the Services as stated in paragraph 1.4 shall be
recognized as revenues of CelrunTV.
	 
	1.6	 	In providing the Services as stated in paragraph 1.4, hanarotelecom and CelrunTV shall
cooperate as much as possible to create synergy, and, as part of such cooperation,
hanarotelecom’s distribution channels are, in principle, responsible for sales, service
activation, maintenance and repairs

 

 

	 	 	with respect to the provision of the Services stated in paragraph 1.4. However, CelrunTV may
conduct sales, service activation, maintenance and repairs on its own if necessary.

Article 2 (Exclusive Use and Provision of Services)

	2.1	 	To the extent permitted by relevant laws or regulations, hanarotelecom shall obtain the Services exclusively
from CelrunTV for five years from the date of the Agreement unless Celrun’s stake in CelrunTV
becomes less than 10%.
	 
	2.2	 	hanarotelecom shall endeavor to improve its network and provide sales and staff support for
the purpose of facilitating the provision of the Services.
	 
	2.3	 	Celrun shall not supply head-end platform (middleware, EMS, DRM, P2P solution, etc.) and
set-top box (“STB”) to which CelrunTV has the right of ownership (the “CelrunTV Solution”),
without prior approval from CelrunTV, to subscribers of the Services, either directly or
through a third party other than hanarotelecom or CelrunTV, in the territory of the Republic
of Korea; provided that Celrun may provide the CelrunTV Solution to foreign companies doing
the same or similar business to CelrunTV, and that Celrun may provide anyone with solutions
and STBs different from those supplied by CelrunTV.
	 
	2.4	 	Paragraph 2.3 shall not apply if a STB lease company is supplied with STBs from Celrun in
order to lease Celrun’s STBs to hanarotelecom or CelrunTV.
	 
	2.5	 	hanarotelecom or CelrunTV shall be supplied with STBs exclusively from Celrun for two years
from the date of the Agreement if Celrun can supply the same or similar STBs at the lowest
unit price compared to other suppliers and satisfy technological standards set by CelrunTV.
	 
	2.6	 	Celrun shall not discontinue, without the consent from hanarotelecom or CelrunTV, supplying
STBs or after-sale services for head-end platform and STBs as long as hanarotelecom or
CelrunTV provides the Services.
	 
	2.7	 	Celrun may increase the unit price of STB, with consent from 

 

 

	 	 	hanarotelecom or CelrunTV, by the level not exceeding the average annual increase in STB unit
price and shall immediately lower its STB unit price if there are price-reducing factors (bulk
purchase, a decrease in the price of STB components, etc.) for the STBs that Celrun supplies
to hanarotelecom or CelrunTV. In case hanarotelecom or CelrunTV is supplied with Celrun’s STBs
from a STB lease company, Celrun shall cooperate as much as possible to ensure the prime rate
of interest on STB lease will be offered to hanarotelecom or CelrunTV.

	2.8	 	With respect to the STBs used for the provision of the Services, Celrun shall complete the
development to produce end products with the functions specified in subparagraphs (a) through
(d) by the end of March 2006, and use its best efforts to complete the development of the
functions specified in subparagraphs (e) and (f) by the end of March 2006. Intellectual
property rights applied with regard to such products and functions shall be held by CelrunTV
and relevant development expenses shall be included in the outsourcing agreement for the
development of IP STB (“IP STB Development for Television Service of Celrun” signed between
CelrunTV and Celrun on September 20, 2005):

	 	(a)	 	embedded digital broadcasting tuner (ATSC reception)

	 
	 	(b)	 	advertising scheduler
	 
	 	(c)	 	Internet-based video-on-demand functionality for television sets (streaming play and
multicasting support)
	 
	 	(d)	 	Network-PVR function
	 
	 	(e)	 	MP (Multimedia Play, DivX)
	 
	 	(f)	 	karaoke function

Article 3 (Subscriber Information Sharing)

	3.1	 	hanarotelecom shall not transfer, without the consent from CelrunTV, subscriber-related
information to a third party; provided that this shall not be applied if the agreement with
the Subscribers is transferred in accordance with paragraph 1.2, if such information sharing
is necessary in implementing the agreement on the use of information and telecommunications
services, in calculating the fees for information and

 

 

	 	 	telecommunications services and for statistics collection, academic studies or market
analysis, if specific provisions are included in other laws and if such information is
provided under agreements with other telecommunication business operators pursuant to the
Telecommunications Business Act.
	 
	3.2	 	hanarotelecom and CelrunTV may, to the extent permitted by
relevant laws or regulations, have access to and
make use of subscriber information if either party notifies subscribers of other party or to
the extent provided in the terms and conditions regarding the use of telecommunications
services. In no event shall CelrunTV provide subscriber information to a third party without
consent from hanarotelecom.

Article 4 (Other Terms)

	4.1	 	After the date of signing this agreement, Celrun and CelrunTV shall exert their best
endeavors to explicitly stipulate, in any content licensing agreements signed with a third
party other than the Parties hereto, that the subject of service shall be broadband Internet
subscribers provided with Internet-based content services via television set.
	 
	4.2	 	In case Internet-based IP-TV service provided via TV set will be permitted under relevant
laws or regulations, Celrun shall guarantee that the STBs supplied by CelrunTV for the Services can provide
Internet-based IP-TV service provided via TV set without a hardware upgrade and, if an
improvement of STB function is needed for the IP-TV service, supply improved STBs without
additional charge.
	 
	4.3	 	Celrun shall supply, by the end of May 2006, all STB products (which were supposed to have
been supplied pursuant to a STB supply agreement between CelrunTV and Celrun dated September
20, 2005) Celrun failed to provide to CelrunTV as of December 31, 2005. The number of STBs to
be supplied for each version shall be mutually agreed upon between the two parties. For the
first version of STBs (specifications of STBs stated in agreements between CelrunTV and Celrun
prior to December 31, 2005), Celrun shall upgrade the STBs, without charge, by the end of May
2006 to

 

 

	 	 	the second version for the functions set forth in subparagraphs (b) through (d) of paragraph
3.7, Article 3 of this Agreement notwithstanding provisions in the existing agreement.

	4.4	 	Celrun shall assist CelrunTV in obtaining contents under favorable conditions from Ontown Co.,
Ltd. whose main office is located at Jeongwha Bldg., 16-15 Garak-dong, Songpa-gu, Seoul
(“Ontown”) and, upon signing this Agreement, assist CelrunTV and Ontown sign a separate
content supply agreement.
	 
	4.5	 	In case CelrunTV desires to sell to Ontown part or all of its stake in investment
partnerships stated below, Celrun shall guarantee that Ontown will be able to purchase,
without any conditions, CelrunTV’s stake in the investment partnerships for the price CelrunTV
invested in each partnership:

	 	4.5.1	 	Name: Boston Film Investment Fund

Amount of investment: Won 1,000,000,000

Date of establishment: September 23, 2005
	 
	 	4.5.2	 	Name: IMM Culture Contents Investment Fund

Amount of investment: Won 500,000,000

Date of investment certificate distribution: September 30, 2005
	 
	 	4.5.3	 	Name: Fitech-NewWave Film and Knowledge-based Service
Investment Fund I

Amount of investment: Won 500,000,000

Date of investment certificate distribution: October 25, 2005

	4.6	 	Celrun shall sell all of its stake in Ontown to CelrunTV at an appropriate price after an
objective valuation of its stake; provided that this undertaking shall be effective until
December 31, 2007.
	 
	4.7	 	In case CelrunTV issues new shares, hanarotelecom and Celrun shall, in principle, acquire new shares pro rata to the proportion of shares each company holds in CelrunTV.
	 
	4.8	 	If the articles of incorporation of CelrunTV provides that the number of

 

 

	 	 	directors shall be six or less, Celrun shall have the right to appoint directors of CelrunTV
as follows:

	 	4.8.1	 	Celrun’s stake in CelrunTV of 25% or more: appoint two directors
	 
	 	4.8.2	 	Celrun’s stake in CelrunTV between 15% and 25%: appoint one director

	4.9	 	hanarotelecom and Celrun acknowledges the importance of content supply and programming and,
accordingly, shall cooperate to form a management team to undertake the tasks appropriately.
	 
	4.10	 	Upon expiration of the term of this Agreement, Celrun and its affiliated companies may not
induce, urge or force hanarotelecom’s subscribers of the Services, or have a third party carry
out such activities, to cancel subscription for the service of hanarotelecom and subscribe to
the service of Celrun or a third party.

Article 5 (Confidentiality)

Each Party shall not, without the prior written consent of the other Party, reveal (a) the
existence, terms and contents of this Agreement, and (b) the existence and contents of any verbal
or written document, covenant, letter and exchange of ideas regarding the Agreement and shall use
its best efforts not to disclose such information directly or indirectly to any third party;
provided that each party may disclose the information if required
under relevant laws or regulations or requested
by government agencies or supervisory authorities pursuant to the authority granted under relevant
laws or regulations. Such information may also be disclosed to related companies, executives and employees and
professional advisors who carry out the tasks relating to the transactions under the Agreement to
the extent that their participation is needed.

Article 6 (Termination)

	6.1	 	If any of the following events occurs to one Party (“Imputed Party”), the other party
(“Terminating Party”) may terminate the Agreement by giving written notice to the Imputed
Party.

 

 

	 	6.1.1	 	If the Imputed Party fails to perform the Agreement for reasons attributable to the
Imputed Party and fails to remedy or perform within 14 days after having received request
from the Terminating Party;
	 
	 	6.1.2	 	If an application for the commencement of workout, reorganization, composition or
bankruptcy proceedings or an application for preservative measures
under the Debtor Rehabilitation and Bankruptcy Act or other similar measures is filed against the Imputed Party or if a
resolution to dissolve the Imputed Party is approved;
	 
	 	6.1.3	 	If the Imputed Party suspends transactions regarding its business with banks such as
dishonor of checks or certificates issued or endorsed by the Imputed Party or if a seizure or
provisional attachment of part of material assets is imposed and the provisional attachment
continues to be effective for 30 consecutive days; and
	 
	 	6.1.4	 	If a government agency issues an order of suspension or termination of business or
operation (excluding an order of suspension of some functions such as an order to suspend
acquisition of subscribers issued by the Korea Communications Commission) against the Imputed
Party, and the order continues to be effective for 60 days.

	6.2	 	Termination of the Agreement pursuant to paragraph 6.1 shall not affect any claims for
compensation.

Article 7 (Indemnification)

Unless otherwise specified in the Agreement, if one Party (“Violating Party”) violates the
Agreement and causes any losses to the other Party, the Violating Party shall compensate for all
losses and relevant expenses (including reasonable attorneys’ fees). If a lawsuit, arbitration or
similar claim is filed by a third party against the non-Violating Party due to the violation of the
Agreement by the Violating Party, the Violating Party shall compensate for all losses and relevant
expenses (including reasonable attorneys’ fees).

 

 

Article 8 (Change in Regulation)

	8.1	 	If it becomes impossible to implement the Agreement due to amendments of the Broadcasting
Act, the Telecommunications Business Act and other relevant laws or
regulations or due to changes in the
regulations of relevant government agencies including the Korea Communications Commission and
the Ministry of Information and Communications, the Parties shall cooperate in good faith and
amend the Agreement.
	 
	8.2	 	Celrun and CelrunTV shall cooperate with hanarotelecom in all matters necessary for obtaining
a license or approval with respect to the Services, including in circumstances listed in
paragraph 8.1.

Article 9 (Effectiveness of the Agreement)

The Agreement shall terminate and no longer be effective if the Stock Purchase Agreement signed
among the Parties on March 6, 2006 is terminated or nullified for reasons attributable to one
Party.

Article 10 (General Provisions)

	10.1	 	The Agreement may not be changed or amended without written agreement among the Parties.
	 
	10.2	 	The Agreement constitutes the entire and only agreement among the Parties hereto with respect
to the subject matter hereof, and matters not provided for by the Agreement shall be
determined by separate agreements among the Parties; provided that this shall not apply to
Article 9 of the Agreement; and provided further that matters not provided for by the
Agreement may be governed by the CelrunTV Stock Purchase Agreement. The CelrunTV Stock
Purchase Agreement shall supersede the Agreement if any provisions of the Agreement are
inconsistent with or conflict with the CelrunTV Stock Purchase Agreement.
	 
	10.3	 	The Agreement or the rights and obligations under the Agreement may not be transferred to a
third party without written prior agreement of other Party.

 

 

	10.4	 	The Agreement is signed in the Republic of Korea, and shall be governed by and construed in
accordance with the laws of the Republic of Korea.
	 
	10.5	 	Seoul Central District Court shall be the competent court with regard to any dispute relating to the
Agreement, or effectiveness, interpretation, signing or execution of provisions of the
Agreement.

IN WITNESS whereof, the Agreement shall be made out in duplicate, and hanarotelecom, Celrun and
CelrunTV shall keep each of the Agreements.

hanarotelecom Inc.

Asiaone Bldg., 17-7 Yeouido-dong, Youngdeungpo-gu, Seoul, Korea

Chairman of Special Management Committee: Byung-Moo Park

 (signed) (sealed)

Celrun Co., Ltd.

1412-8 Yongbong-dong, Buk-gu, Gwangju, Korea

(Seoul branch: Celrun Bldg. 7th floor, 36 Garak-dong, Songpa-gu, Seoul, Korea)

Representative Director: Young Min Kim

(signed) (sealed)

CelrunTV

Sindo Bldg. 3rd floor, 10 Garak-dong, Songpa-gu, Seoul, Korea

Representative Director: Young Min Kim

(signed) (sealed)

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