SERIES B
CONVERTIBLE PREFERRED SHARES
PURCHASE
AGREEMENT
Dated as
of February 18, 2008
between
YUCAIPA
GLOBAL PARTNERSHIP FUND L.P.
and
XINHUA
FINANCE MEDIA LTD.
TABLE OF
CONTENTS
|
ARTICLE
I DEFINITIONS AND INTERPRETATION
|
3
|
|
|
|
|
|
Section
1.1
|
Definitions
|
4
|
|
Section
1.2
|
Interpretation.
|
4
|
|
|
|
|
|
ARTICLE
II PURCHASE AND SALE OF SHARES
|
4
|
|
|
|
|
|
Section
2.1
|
Purchase
and Sale of Shares
|
4
|
|
Section
2.2
|
The
Closing
|
4
|
|
Section
2.3
|
Investor
Deliveries at the Closing
|
4
|
|
Section
2.4
|
Company
Deliveries at the Closing
|
5
|
|
|
|
|
|
ARTICLE
III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
5
|
|
|
|
|
|
Section
3.1
|
Organization.
|
5
|
|
Section
3.2
|
Capitalization.
|
6
|
|
Section
3.3
|
Authorization;
Execution and Enforceability.
|
7
|
|
Section
3.4
|
Subsidiaries
and Joint Ventures.
|
7
|
|
Section
3.5
|
No
Conflicts; Consents and Approvals.
|
8
|
|
Section
3.6
|
SEC
Reports; Financial Statements.
|
8
|
|
Section
3.7
|
Absence
of Certain Changes.
|
9
|
|
Section
3.8
|
No
Undisclosed Liabilities.
|
9
|
|
Section
3.9
|
Litigation.
|
10
|
|
Section
3.10
|
Licenses.
|
10
|
|
Section
3.11
|
Intellectual
Property Rights.
|
10
|
|
Section
3.12
|
Exchange
Listing.
|
11
|
|
Section
3.13
|
Tax
Matters.
|
11
|
|
Section
3.14
|
Tangible
Assets.
|
11
|
|
Section
3.15
|
Leases
and Contracts.
|
11
|
|
Section
3.16
|
Employees.
|
12
|
|
Section
3.17
|
Compliance
with Law.
|
12
|
|
Section
3.18
|
Related
Party Transactions.
|
12
|
|
Section
3.19
|
Investment
Company
|
13
|
|
Section
3.20
|
Corrupt
Practices; USA Patriot Act, OFAC.
|
13
|
|
Section
3.21
|
Validity
of the Shares.
|
13
|
|
Section
3.22
|
Registration,
Information and Special Voting Rights.
|
13
|
|
Section
3.23
|
Securities
Law Compliance.
|
13
|
|
Section
3.24
|
Brokers.
|
14
|
|
|
|
|
|
ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
|
14
|
|
|
|
|
|
Section
4.1
|
Organization,
Standing and Power.
|
14
|
|
Section
4.2
|
Authorization;
Execution and Investor.
|
14
|
|
Section
4.3
|
No
Conflict; Consents and Approvals.
|
14
|
|
Section
4.4
|
Purchase
Entirely for Own Account.
|
15
|
|
Section
4.5
|
Investment
Experience.
|
15
|
|
Section
4.6
|
Restricted
Securities.
|
15
|
|
Section
4.7
|
Legends.
|
15
|
|
Section
4.8
|
Accredited
Investor.
|
16
|
|
Section
4.9
|
No
General Solicitation.
|
16
|
|
Section
4.10
|
Brokers.
|
16
|
|
|
|
|
|
ARTICLE
V COVENANTS
|
16
|
|
|
|
|
|
Section
5.1
|
Access
to Information.
|
16
|
|
Section
5.2
|
Pre-Closing
Actions Affecting the Common Shares.
|
18
|
|
Section
5.3
|
Listing.
|
18
|
|
Section
5.4
|
Preserve
Accuracy of Representations and Warranties; Fulfillment of Conditions;
Notification of Certain Matters.
|
18
|
|
Section
5.5
|
Contractual
Consents and Governmental Approvals.
|
19
|
|
Section
5.6
|
Issuance
of ADS Shares
|
19
|
|
Section
5.7
|
Investor
Pre-Emptive Rights.
|
19
|
|
Section
5.8
|
Filing
of Resale Shelf Registration Statement.
|
21
|
|
|
|
|
|
ARTICLE
VI CONDITIONS
|
29
|
|
|
|
|
|
Section
6.1
|
Conditions
to the Company’s Obligations.
|
29
|
|
Section
6.2
|
Conditions
to the Investor’s Obligations.
|
30
|
|
|
|
|
|
ARTICLE
VII INDEMNIFICATION
|
31
|
|
|
|
|
|
Section
7.1
|
Survival.
|
31
|
|
Section
7.2
|
Indemnification.
|
32
|
|
Section
7.3
|
Damages
Threshold and Cap.
|
32
|
|
Section
7.4
|
Indemnification
Procedures.
|
32
|
|
Section
7.5
|
Third-Party
Claims.
|
32
|
|
Section
7.6
|
Tax
Treatment of Indemnity Payments.
|
33
|
|
Section
7.7
|
Exclusivity.
|
33
|
|
Section
7.8
|
Certain
Damages.
|
33
|
|
|
|
|
|
ARTICLE
VIII FURTHER AGREEMENTS; TRANSFER RESTRICTIONS
|
33
|
|
|
|
|
|
Section
8.1
|
Public
Announcements.
|
33
|
|
Section
8.2
|
Fees
and Expenses.
|
34
|
|
Section
8.3
|
Limitation
on Short Sales
|
34
|
|
Section
8.4
|
Restrictions
on Transfers of Series B Preferred Shares.
|
34
|
|
|
|
|
|
ARTICLE
IX GENERAL
|
35
|
|
|
|
|
|
Section
9.1
|
Termination
|
35
|
|
Section
9.2
|
Notices.
|
35
|
|
Section
9.3
|
Complete
Agreement; No Third-Party Beneficiaries.
|
36
|
|
Section
9.4
|
GOVERNING
LAW.
|
37
|
|
Section
9.5
|
No
Assignment.
|
37
|
|
Section
9.6
|
Counterparts.
|
37
|
|
Section
9.7
|
Remedies;
Waiver.
|
37
|
|
Section
9.8
|
Severability.
|
38
|
|
Section
9.9
|
Amendment;
Waiver.
|
38
|
|
Section
9.10
|
Arbitration.
|
38
|
|
Exhibit
A
|
Definitions
|
|
Exhibit
B
|
Form
of Authorizing Resolution
|
|
Exhibit
C-1
|
Form
of Legal Opinion of Conyers Dill Pearman
|
|
Exhibit
C-2
|
Form
of Legal Opinion of Latham & Watkins LLP
|
|
Exhibit
D
|
Form
of Registration Rights Agreement
|
|
Exhibit
E
|
Form
of Shareholders’ Agreement
|
|
Exhibit
F
|
Form
of Consent to Issuance of Series C Preferred
Shares
|
SERIES
B CONVERTIBLE PREFERRED SHARES
PURCHASE
AGREEMENT
THIS
SERIES B CONVERTIBLE PREFERRED SHARES PURCHASE AGREEMENT, dated as of February
18, 2008, is by and between YUCAIPA GLOBAL PARTNERSHIP FUND L.P., an exempted
limited partnership organized under the laws of the Cayman Islands (the “
Investor
”), and
XINHUA FINANCE MEDIA LIMITED, a company organized under the laws of the Cayman
Islands (the “
Company
” and together
with the Investor, the “
Parties
”).
W I T N E S S E T
H
:
WHEREAS,
the Company intends to create a new class of convertible preferred shares
designated as Series B Convertible Preferred Shares (the “
Series B Preferred
Shares
”) through the adoption by the Board of Directors of the Company of
an authorizing resolution in the form attached as
Exhibit B
hereto (the
“
Authorizing
Resolution
”); and
WHEREAS,
the Company wishes to issue and sell to the Investor, and the Investor wishes to
purchase from the Company, 300,000 Series B Preferred Shares (the “
Shares
”) upon the
terms and subject to the conditions set forth herein and in the Transaction
Documents;
NOW,
THEREFORE, in consideration of the foregoing and the mutual representations,
warranties, covenants and agreements herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
ARTICLE
I
DEFINITIONS
AND INTERPRETATION
Section
1.1
Definitions
.
The
capitalized terms that are defined in
Exhibit A
are used
herein with the meanings set forth therein.
Section
1.2
Interpretation
.
(a)
Headings
. The
headings to the Articles, Sections and Subsections of this Agreement or any
Exhibit to this Agreement are inserted for convenience of reference only and
shall not affect the meaning or interpretation of this Agreement.
(b)
Usage
. In
this Agreement, unless the context requires otherwise: (i) the
singular number includes the plural number and vice versa; (ii)
reference to any gender includes each other gender; (iii)
Exhibit A
to this
Agreement is hereby incorporated into, and shall be deemed to be a part of, this
Agreement; (iv) the terms “hereunder”, “hereof”, “hereto” and words of similar
import shall be deemed references to this Agreement as a whole and not to any
particular section or other provision hereof; (v) the words “include”,
“includes” and “including” shall be deemed to be followed by the words “without
limitation”; and (vi) a reference to any Article, Section, Subsection or Exhibit
shall be deemed to refer to the corresponding Article, Section, Subsection, or
Exhibit of this Agreement.
ARTICLE
II
PURCHASE
AND SALE OF SHARES
Section
2.1
Purchase and Sale of
Shares
.
At the
Closing, the Company shall issue and sell to the Investor, and the Investor
shall purchase from the Company, the Shares on the terms and subject to the
conditions set forth herein, free and clear of any Liens. At the
Closing, the Investor shall pay the Company, as consideration for the Shares, an
aggregate purchase price of US$30,000,000 (the “
Purchase Price
”) less
the Expense Reimbursement referred to in Section 8.2 below (the amount of the
Purchase Price remaining after the deduction of such Expense Reimbursement being
sometimes hereinafter referred to as the “
Net Purchase
Price
”).
Section
2.2
The
Closing
.
Subject
to the fulfillment of the conditions set forth in Article VI, the issuance,
purchase and sale of the Shares and the consummation of the other Transactions
(the “Closing”) shall take place in the offices of Latham & Watkins LLP,
41st Floor, One Exchange Square, 8 Connaught Place, Central, Hong Kong on
February 27, 2008, or at such other time and place as the Company and the
Investor may agree (the date on which the Closing actually takes place being
sometimes referred to herein as the “Closing Date”). At the Closing,
the Investor and the Company shall make certain deliveries, as specified in
Sections 2.3 and 2.4, respectively, and all such deliveries, regardless of
chronological sequence, shall be deemed to occur contemporaneously and
simultaneously on the occurrence of the last delivery and none of such
deliveries shall be effective until the last of the same has
occurred.
Section
2.3
Investor Deliveries at the
Closing
.
At the
Closing, the Investor shall deliver to the Company:
(a) the
Net Purchase Price by wire transfer of same-day funds to a bank account
designated in writing by the Company at least two Business Days prior to the
Closing;
(b) a
counterpart of the Registration Rights Agreement, duly executed by the
Investor;
(c) a
counterpart of the Shareholders Agreement, duly executed by the Investor;
and
(d) each
of the opinions, certificates and documents required to be delivered by the
Investor at the Closing pursuant to Section 6.1.
Section
2.4
Company Deliveries at the
Closing
.
At the
Closing, the Company shall deliver to the Investor:
(a) a
certificate representing the Shares registered in the name of the
Investor;
(b) a
counterpart of the Registration Rights Agreement, duly executed by the
Company;
(c) a
counterpart of the Shareholders Agreement, duly executed by the Company and XFL;
and
(d) each
of the opinions, certificates and documents required to be delivered by the
Company at the Closing pursuant to Section 6.2.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company hereby represents and warrants to the Investor as of the date of this
Agreement and as of the Closing Date, as follows:
Section
3.1
Organization
.
The
Company: (a) is an exempted company limited by shares duly organized,
validly existing and in good standing under the laws of the Cayman Islands; (b)
has all requisite corporate power and authority to carry on its business as now
conducted; (c) is duly qualified, licensed and in good standing under the laws
of each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, except where the failure to
do so would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect; and (d) has the corporate power and authority to
execute, deliver and perform its obligations under each of the Transaction
Documents to which it is a party. The Company is not in default under
or in violation of any provision of its Memorandum of
Association
or Articles of Association, and no such defaults or violations have occurred in
the past which would reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect.
Section
3.2
Capitalization
.
(a) As
of the date hereof, the authorized capital of the Company consists of
143,822,874 Class A Common Shares, 50,054,619 Class B Common Shares and
806,122,507 shares not yet designated as to class or series (the “
Undesignated
Shares
”). As of the date hereof, of the Class A Common Shares
currently authorized: 90,061,269 shares are currently outstanding, 19,530,205
shares are reserved for issuance under the Share Option and Share Grant Plan and
the remainder are unissued and not reserved for issuance for any
purpose. Of the Class B Common Shares, 50,054,618 are currently
outstanding and the remainder are unissued and not reserved for issuance for any
purpose. None of the Series B Preferred Shares have been issued or
have been reserved for any purpose other than for issuance pursuant to this
Agreement.
(b) Section
3.2(b) of the Disclosure Schedule sets forth a list of all Employee Share
Options currently outstanding as of the date hereof.
Except for such
Employee Share Options or as otherwise set forth in Section 3.2(b) of the
Disclosure Schedule: (i) there are no outstanding Convertible Securities or
Share Purchase Rights or any share appreciation rights, performance share awards
or other employee incentive awards the value of which is determined by reference
to the value of the Class A Common Shares, Class B Common Shares or ADS Shares,
(ii) the Company is not a party to any other agreements or commitments
obligating the Company to issue, sell, repurchase, redeem or otherwise acquire
any Capital Shares, Convertible Securities or Share Purchase Rights; and (iii)
to the knowledge of the Company, no other Person is a party to or otherwise
bound by any agreements, trusts, proxies, instruments or other commitments
relating to the voting, purchase, sale or other disposition of any Capital
Shares, Convertible Securities or Share Purchase Rights held by such
Person. Neither the issuance of the Shares as contemplated herein,
the issuance of any PIK Dividend Shares nor the issuance of any Conversion
Shares will cause the number of Common Shares issuable pursuant to the Employee
Share Options or any other outstanding Convertible Securities or Share Purchase
Rights to increase as a result of any antidilution provisions relating
thereto.
(c) There
are no authorized or outstanding bonds, debentures, notes or other obligations
of the Company, the holders of which have the right to vote with the holders of
Common Shares on any matter.
(d) Except
as disclosed in the SEC Reports or Section 3.2(d) of the Disclosure Schedule,
the Company does not have in effect any dividend reinvestment plans or employee
share purchase plans.
(e) All
outstanding Capital Shares have been duly authorized and validly issued and are
fully-paid and nonassessable and have been issued without violation of any
preemptive rights of any Person. All outstanding Employee Share
Options have been issued without violation of any preemptive rights of any
Person, and all Class A Common Shares issued upon exercise thereof will have
been, upon such issuance, duly authorized and validly issued
without
violation of any preemptive rights of any Person and will be fully-paid and
nonassessable.
(f) Upon
the due issuance by the Depositary to the Investor of ADRs evidencing the ADS
Shares against the deposit of Class A Common Shares in accordance with the
provisions of the Deposit Agreement, such ADRs will be duly and validly issued
under the Deposit Agreement and the Investor will be entitled to the rights of a
registered holder of ADRs evidencing the ADS Shares specified therein and in the
Deposit Agreement. The Deposit Agreement is in full force and effect,
has been duly authorized, executed and delivered by the Company and, to the
knowledge of the Company, the Depositary, and constitutes a valid and legally
binding obligation of the Company and, to the knowledge of the Company, the
Depositary, enforceable against the Company and (to the knowledge of the
Company) the Depositary in accordance with its terms. The Company has
not breached any of its material obligations under the Deposit Agreement, and,
to the knowledge of the Company, the Depositary has not breached any of its
material obligations under the Deposit Agreement. The Company has not
received any notice of resignation or termination from the
Depositary.
Section
3.3
Authorization; Execution and
Enforceability
.
(a) The
Company has all requisite corporate power and authority to execute, deliver and
perform each Transaction Document to which it is a party and to consummate each
of the Transactions. Other than the Authorizing Resolution, the
execution, delivery and performance of each Transaction Document to which the
Company is a party and the consummation of each of the Transactions has been
duly authorized by the Board and no further corporate action on the part of the
Company (including any action by the shareholders of the Company) is required in
connection therewith.
(b) This
Agreement has been duly executed and delivered by the Company and constitutes,
and, upon execution and delivery thereof as contemplated herein, each other
Transaction Document to which the Company is a party will have been duly
executed and delivered by the Company and will constitute, a legal, valid and
binding obligation of the Company enforceable against it in accordance with its
terms, subject to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium, restructuring or similar laws affecting creditors’
rights and remedies generally and general equitable principles (regardless of
whether enforceability is considered a proceeding in equity or at law) (“
Enforceability
Exceptions
”).
Section
3.4
Subsidiaries and Joint
Ventures
.
(a) All
material Subsidiaries of the Company are described in the SEC Reports or in
Section 3.4(a) of the Disclosure Schedule. Except as disclosed in the
SEC Reports or in such Section 3.4(a) of the Disclosure Schedule: (i) all of the
outstanding shares or registered capital or other equity capital in each of such
Subsidiaries are duly authorized, validly issued, fully paid and nonassessable;
(ii) all of the outstanding shares or registered capital of, or other ownership
interest in each of such Subsidiaries are owned by the Company or a wholly-owned
Subsidiary of the Company, free and clear of any Liens; and (iii) there are no
outstanding
subscriptions,
rights, convertible securities or other agreements or commitments obligating the
Company or any such Subsidiary to issue, transfer or sell any securities of any
such Subsidiary.
(b) Except
as described in the SEC Reports or in Section 3.4(b) of the Disclosure Schedule,
neither the Company nor any of its Subsidiaries owns, of record or beneficially,
any material direct or indirect equity or other interest in any other
Entity.
Section
3.5
No Conflicts; Consents and
Approvals
.
(a) The
execution, delivery or performance by the Company of the Transaction Documents
to which it is a party and the consummation of the Transactions will not (a)
conflict with or violate any provision of the Memorandum of Association or
Articles of Association of the Company or any Organizational Document of any of
its Subsidiaries; (b) result in a breach of, constitute (with or without due
notice or lapse of time or both) a default under, result in the acceleration of,
create in any Person any right to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under, any Contractual Obligation or any
Law applicable to the Company or any of its Subsidiaries or any of their
respective properties and assets; (c) result in the imposition of any Lien upon
any properties or assets of the Company or any of its Subsidiaries, (d) result
in the Company being required to redeem, repurchase or otherwise acquire any
outstanding equity or debt interests, securities or obligations of the Company
or any of its Subsidiaries or any options or other rights exercisable for any of
same or (e) cause the accelerated vesting of any Employee Share Options or other
employee benefits or result in any obligations on the part of the Company or any
of its Subsidiaries to pay any additional severance benefits upon the
termination of the employment of any employee thereof, except in the case of (b)
or (c), to the extent it does not or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) Except
as set forth in Section 3.5(b) of the Disclosure Schedule, the Company is not
required to obtain any consent, authorization or approval of, or make any
filing, notification or registration with, any Governmental Authority or any
self regulatory organization in order for the Company to execute, deliver and
perform any Transaction Document to which it is a party or to consummate any of
the Transactions (“
Company
Approvals
”).
(c) Except
as set forth in Section 3.5(c) of the Disclosure Schedule, no Contractual
Consents are required to be obtained under any Contractual Obligation applicable
to the Company or any of its Subsidiaries in connection with the execution,
delivery or performance by the Company of any Transaction Document to which it
is a party or the consummation of any of the Transactions (“
Company Contractual
Consents
”).
Section
3.6
SEC Reports; Financial
Statements
.
(a) From
January 1, 2007, the Company has timely filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the Exchange Act (all the foregoing filed prior
to the date hereof and all exhibits included or incorporated by reference
therein and financial statements and schedules thereto and documents included or
incorporated by reference therein being sometimes hereinafter collectively
referred to as the “
SEC
Reports
”). As of their
respective
filing dates, the SEC Reports complied in all material respects with the
requirements of the Exchange Act applicable to the SEC Reports (as amended or
supplemented), and none of the SEC Reports, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(b) As
of their respective dates, except as set forth therein or in the notes thereto,
the financial statements contained in the SEC Reports and the related notes (the
“
Financial
Statements
”) complied as to form in all material respects with all
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. The Financial Statements: (i) were
prepared in accordance with accounting principles generally accepted in the
United States (“
GAAP
”), consistently
applied during the periods involved (except (x) as may be otherwise indicated in
the notes thereto or (y) in the case of unaudited interim statements, to the
extent that they may not include footnotes or may be condensed or summary
statements), (ii) fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments) and (iii) are in all material respects in
accordance with the books of account and records of the Company and its
consolidated subsidiaries (except as may be otherwise noted
therein).
Section
3.7
Absence of Certain
Changes
.
Except as
disclosed in the SEC Reports or in Section 3.7 of the Disclosure Schedule, since
September 30, 2007, (a) there has not been any Material Adverse Effect or any
changes, events or developments that would reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect, and (b) the Company and
its Subsidiaries, taken as a whole, have conducted their respective businesses
only in the ordinary course and in conformity with past practice.
Section
3.8
No Undisclosed
Liabilities
.
Except as
disclosed in the SEC Reports or in Section 3.8 of the Disclosure Schedule,
neither the Company nor any of its Subsidiaries has any material liability
(whether known or unknown, whether absolute or contingent, whether liquidated or
unliquidated, whether due or to become due), except for the following: (a)
liabilities reflected in or reserved for in the Recent Balance Sheet, (b)
liabilities that have arisen since the date of the Recent Balance Sheet in the
ordinary course of the businesses of the Company and its Subsidiaries consistent
with past practice that would have been required under GAAP to be reflected in
the Recent Balance Sheet had such liabilities existed as of the date of the
Recent Balance Sheet, (c) liabilities that would not be required under GAAP to
be reflected in an audited consolidated balance sheet of the Company and its
consolidated subsidiaries and that are not in the aggregate material and (d)
liabilities incurred in connection with the Transactions.
Section
3.9
Litigation
.
Except as
disclosed in the SEC Reports or in Section 3.9 of the Disclosure Schedule, there
is no Action or Proceeding to which the Company or any of its Subsidiaries or
any of their respective officers, directors or employees is a party (either as a
plaintiff or defendant) pending or, to the knowledge of the Company, threatened
before any Governmental Authority (i) that challenges the validity or propriety
of any of the Transactions or (ii) if determined adversely to the Company or any
of its Subsidiaries or any such officer, director or employee would reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect. Except as disclosed in the SEC Reports or as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, there has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation by any Governmental Authority
involving the Company or any of its Subsidiaries or any officer, director,
employee thereof. Except as disclosed in the SEC Reports, no order,
judgment or decree of any Governmental Authority has been issued in any Action
or Proceeding to which the Company or any of its Subsidiaries is or was a party
or, to the knowledge of the Company, in any other Action or Proceeding except as
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
Section
3.10
Licenses
.
Except as
disclosed in the SEC Reports or in Section 3.10 of the Disclosure Schedule and
except as would not be reasonably expected to have a Material Adverse Effect,
all material Licenses required to be obtained by the Company or any of its
Subsidiaries in all relevant jurisdictions in order to own their respective
assets and to operate their respective businesses have been duly obtained in
accordance with all applicable Laws. None of such Licenses has been
terminated and, in respect of any such Licenses that is subject to renewal, the
Company has not received any notice that such renewal will not be timely granted
by the relevant Government Authorities. The Company and each of its
Subsidiaries are in compliance with the terms of such Licenses, except where the
failure to so comply does not or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Neither
the execution, delivery or performance by the Company of any Transaction
Document to which it is a party nor the consummation of any of the Transactions
will result in a breach of, or constitute a default under, any such
License. Except as disclosed in Section 3.10 of the Disclosure
Schedule, neither the Company nor any of its Subsidiaries is, or has received
any notice that it is, or has at any time been, in default (or with the giving
of notice or lapse of time or both, would be in default) under any such
License.
Section
3.11
Intellectual Property
Rights
.
Except as would not reasonably be
expected to have a Material Adverse Effect, the Company and the Subsidiaries own
or possess, or will be able to obtain on reasonable terms, licenses or
sufficient rights to use all patents, patent applications, patent rights,
inventions, know-how, trade secrets, trademarks, trademark applications, service
marks, service names, trade names and copyrights necessary to enable them to
conduct their businesses as currently conducted (“
Intellectual
Property
”). Neither the Company nor any of the Subsidiaries
has infringed the intellectual property rights of third parties, and no third
party, to the knowledge of
the
Company, is infringing the Intellectual Property of the Company, in each case,
where such infringement would reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect. There is no
material claim or proceeding pending or, to the knowledge of the Company,
threatened that challenges the right of the Company or any of the Subsidiaries
with respect to any of the Intellectual Property.
Section
3.12
Exchange
Listing
.
The ADS
Shares are listed on the NASDAQ Global Market and, to the knowledge of the
Company, there are no proceedings to revoke or suspend such
listing. The Company is in compliance with the requirements of the
NASDAQ Global Market for continued listing of the ADS Shares thereon and any
other applicable NASDAQ Global Market listing and maintenance
requirements. Trading in the ADS Shares has not been suspended by the
SEC or the NASDAQ Global Market.
Section
3.13
Tax
Matters
.
Except as disclosed in the SEC Reports
or in Section 3.13 of the Disclosure Schedule or except as would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect: (i) the Company and each of its Subsidiaries have filed all material Tax
Returns required to be filed by them; (ii) all such material Tax Returns are
true, correct and complete in all material respects; (iii) all material Taxes
due and owed by the Company and its Subsidiaries (whether or not shown on any
Tax Return) have been paid; (iv) neither the Company nor any of its Subsidiaries
currently is the beneficiary of any extension of time within which to file any
material Tax Return; (v) no claim has ever been made by a Governmental Authority
in a jurisdiction where the Company or any of its Subsidiaries does not file Tax
Returns that the Company or any such Subsidy is or may be subject to taxation by
that jurisdiction; (vi) there are no Liens on any of the assets or properties of
the Company or any of its Subsidiaries that arose in connection with
any failure (or alleged failure) to pay any Tax; and (vii) neither the Company
nor any of its Subsidiaries has waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency.
Section
3.14
Tangible
Assets
.
Except as
disclosed in the SEC Reports or in Section 3.14 of the Disclosure Schedule or
except as would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect, the Company and each of its Subsidiaries have
good and marketable title to, or have valid rights to lease or otherwise use,
all items of real and tangible personal property that are material to their
respective businesses, free and clear of all Liens other than Liens (i) that do
not materially interfere with the use of such property or (ii) would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
Section
3.15
Leases and
Contracts
.
Except as disclosed in the SEC Reports
or in Section 3.15 of the Disclosure Schedule, neither the Company nor any or
its Subsidiaries is a party to or bound by any material Company
Contract. Except as disclosed in the SEC Reports or in such Section
3.15 or except as
would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect: (i) each Company Contract is in full force and effect; (ii) the
Company and its Subsidiaries have satisfied in full or provided for all of their
liabilities and obligations under each such Company Contract requiring
performance prior to the date hereof in all material respects, and are not in
default under any of them, nor, to the knowledge of the Company, does any
condition exist that with notice or lapse of time or both would constitute such
a default; (iii) to the knowledge of the Company, no other party to any such
Company Contract is in default thereunder, nor does any condition exist that
with notice or lapse of time or both would constitute such a default; and (iv)
no approval or consent of any Person is needed for each such Company Contract to
continue to be in full force and effect following the consummation of the
Transactions.
Section
3.16
Employees
.
Except as
disclosed in the SEC Reports or in Section 3.16 of the Disclosure Schedule or
except as would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect: to the knowledge of the Company, no officer or
key employee of the Company or any of its Subsidiaries, or any group of
employees whose continued employment is material to the operations of the
Company or any of its Subsidiaries, intends to terminate their employment with
the Company and there are no material controversies between the Company and any
of its officers or key employees.
Section
3.17
Compliance with
Law
.
Except as
disclosed in the SEC Reports or in Section 3.17 of the Disclosure Schedule or
except as would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect, the Company and each of its Subsidiaries and the
conduct and operation of their respective businesses are and have been, since
January 1, 2007, in material compliance with (a) each Law that affects or
relates to this Agreement or the Transaction Documents or any of the
Transactions or (b) each Law that is applicable to the Company or its
Subsidiaries or their respective businesses, including any environmental and
securities Laws and Laws relating to employment practices.
Section
3.18
Related Party
Transactions
.
Except as
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, all Company Contracts, and any other material
relationships, between the Company or any Subsidiary (each, a “
Company Party
”), on
the one hand, and any Related Person of a Company Party, on the other hand, and
all obligations owed by a Company Party to any Related Person of the Company
Party (other than obligations owed by one Company Party to another), are
disclosed in the SEC Reports or in Section 3.18 of the Disclosure
Schedule.
Section
3.19
Investment
Company
The
Company is not, and after giving effect to the Transactions will not be, an
“investment company” as such term is defined in the Investment Company Act of
1940, as amended.
Section
3.20
Corrupt Practices; USA
Patriot Act, OFAC
.
Neither
the Company nor any Subsidiary, nor to the knowledge of the Company any
director, officer, employee, agent or other Person acting on behalf of the
Company or any Subsidiary has, in the course of his or its actions for, or on
behalf of the Company or any of its Subsidiaries (i) used any corporate funds
for any unlawful contribution gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employees from
corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended, or (iv) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee. The Company
and each of its Subsidiaries is in compliance in all material respects with the
USA Patriot Act (Title III of Pub.L. 107-56 (signed into law October 26,
2001)). None of the Company or its Subsidiaries (i) is a Sanctioned
Person, (ii) has more than 10% of its assets in Sanctioned Entities, or (iii)
derives more than 10% of its operating income from investments in, or
transactions with Sanctioned Persons or Sanctioned Entities. The
proceeds hereunder will not be used and have not been used to fund any
operations in, finance any investments or activities in, or make any payments
to, a Sanctioned Person or a Sanctioned Entity.
Section
3.21
Validity of the
Shares
.
(a) Upon
the issuance to the Investor in accordance with the Transaction Documents, the
Shares, and any PIK Dividend Shares, will have been duly authorized and validly
issued without violation of the preemptive rights of any Person and will be
fully-paid and nonassessable, free and clear of any Liens.
(b) Any
Conversion Shares issued upon conversion of any of the Shares or PIK Dividend
Shares, upon the issuance thereof, will have been duly authorized and validly
issued without violation of the preemptive rights of any Person and will be
fully-paid and nonassessable, free and clear of any Liens.
Section
3.22
Registration, Information
and Special Voting Rights
.
Except as
disclosed in the SEC Reports or in Section 3.22 of the Disclosure Schedule and
except as provided in the Shareholders Agreement and the Registration Rights
Agreement, the Company has not granted or agreed to grant any registration
rights, information rights or special voting rights to any Person.
Section
3.23
Securities Law
Compliance
.
Assuming
the accuracy of the Investor’s representations and warranties contained in
Article IV, the offer, sale and issuance of the Shares hereunder, the issuance
of any PIK
Dividend
Shares and the issuance of any Conversion Shares upon the conversion thereof is
and will be in compliance with Section 4(2) of the Securities Act and is exempt
from the registration and prospectus delivery requirements of the Securities Act
and all applicable state and foreign securities laws. Neither the
Company nor any agent of the Company has offered the Shares by any form of
general solicitation or general advertising, including any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio or any seminar or meeting
whose attendees have been invited by any general solicitation or general
advertising.
Section
3.24
Brokers
.
No
broker, investment banker or other Person is entitled to any broker’s, finder’s
or other similar fee or commission in connection with the execution and delivery
of this Agreement or any of the other Transaction Documents or the consummation
of any of the Transactions based upon arrangements made by or on behalf of the
Company.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE INVESTOR
The
Investor hereby represents and warrants to the Company as of the date of this
Agreement and as of the Closing Date as follows:
Section
4.1
Organization, Standing and
Power
.
The
Investor is an exempted limited partnership duly organized, validly
existing and in good standing under the laws of the Cayman
Islands. The Investor has the necessary power and authority to
execute, deliver and perform each Transaction Document to which it is a
party.
Section
4.2
Authorization; Execution and
Investor
.
The
execution, delivery and performance by the Investor of each Transaction Document
to which it is a party have been duly and validly authorized by all necessary
limited liability company action on the part of the Investor and do not require
any further authorization or consent of the members of the
Investor. This Agreement has been duly executed and delivered by the
Investor, and each other Transaction Document to which the Investor is a party,
when executed and delivered as contemplated herein, will have been duly executed
and delivered by the Investor, and this Agreement constitutes, and each of such
other Transaction Documents upon execution and delivery thereof by the Investor
will constitute, the legal, valid and binding obligations of the Investor,
enforceable against the Investor in accordance with their respective terms,
subject to the Enforceability Exceptions.
Section
4.3
No Conflict; Consents and
Approvals
.
(a) Neither
the execution, delivery or performance by the Investor of any Transaction
Document to which it is a party, nor the consummation by the Investor of any of
the Transactions will (i) conflict with or violate any provision of any
Organizational Document of the Investor or (ii) result in a breach of,
constitute (with or without due notice or lapse of time or
both) a
default under, result in the acceleration of, create in any Person any right to
accelerate, terminate, modify or cancel, or require any notice, consent or
waiver under, any Contractual Obligation or any Law applicable to the Investor
or any of its properties or assets other than a breach, default, acceleration,
right, notice, consent or waiver that is not material.
(b) The
Investor is not required to obtain any consent, authorization or approval of, or
make any filing or registration with, any Governmental Authority in order for
the Investor to execute, deliver and perform each Transaction Document to which
it is a party and to consummate the Transactions.
Section
4.4
Purchase Entirely for Own
Account
.
The
Shares and any PIK Dividend Shares and Conversion Shares to be acquired by the
Investor hereunder will be acquired for investment for the Investor’s own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the Securities Act, and the
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same in violation of the Securities
Act. The Investor does not have any agreement or understanding,
whether or not legally binding, direct or indirect, with any other Person to
sell or otherwise distribute the Shares.
Section
4.5
Investment
Experience
.
The
Investor acknowledges that it can bear the economic risk and complete loss of
its investment in the Shares and has such knowledge and experience in financial
or business matters that it is capable of evaluating the merits and risks of the
investment contemplated hereby. The Investor understands that the
purchase of the Shares involves substantial risk.
Section
4.6
Restricted
Securities
.
The
Investor understands that the Shares and any PIK Dividend Shares or Conversion
Shares issued to the Investor will be characterized as “restricted securities”
under the United States federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under such laws and applicable regulations such securities may be resold
without registration under the Securities Act only in certain limited
circumstances. The Investor understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Shares or the fairness or
suitability of the investment in the Shares.
Section
4.7
Legends
.
The
Investor understands that, except as provided below and until such time as the
resale thereof has been registered under the Securities Act, certificates
evidencing the Shares and any PIK Dividend Shares and Conversion Shares issued
to the Investor shall bear the following legends:
(a) “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY
NOT BE SOLD, TRANSFERRED,
ASSIGNED,
PLEDGED, OFFERED FOR SALE, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR AN OPINION FROM COUNSEL IN A FORM ACCEPTABLE TO THE COMPANY AND ITS
LEGAL COUNSEL STATING THAT SUCH REGISTRATION IS NOT REQUIRED.”
(b) If
required under the securities laws of any U.S. state or foreign country in
connection with the issuance or sale of the Shares and any PIK Dividend Shares
and Conversion Shares issued to the Investor, any legends required in order to
comply with such laws.
Section
4.8
Accredited
Investor
.
The
Investor is an “accredited investor” as defined in Rule 501(a) of Regulation D,
as amended, under the Securities Act. The Investor’s principal place
of business is in California.
Section
4.9
No General
Solicitation
.
The
Investor did not learn of the opportunity to purchase the Shares by means of any
form of general or public solicitation or general advertising, or publicly
disseminated advertisements or sales literature, including (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media, or broadcast over television or radio, or
(ii) any seminar or meeting to which the Investor was invited by any of the
foregoing means of communications.
Section
4.10
Brokers
.
Except as
heretofore been disclosed to the Company by the Investor, no broker, investment
banker or other Person is entitled to any broker’s, finder’s or other similar
fee or commission in connection with the execution an delivery of this Agreement
or the Registration Rights Agreement or the consummation of any of the
Transactions based upon arrangements made by or on behalf of the Investor, and
the Investor shall indemnify and hold the Company harmless against any claim for
any such fee or commission based on any such arrangements.
ARTICLE
V
COVENANTS
Section
5.1
Access to
Information
.
(a)
In
General
. From the date hereof until the Closing Date, the
Company shall at all times afford the officers, employees and authorized
representatives of the Investor (including independent public accountants and
attorneys) reasonable access during normal business hours to the offices,
properties, employees and business and financial records (including computer
files, retrieval programs and similar documentation) of the Company and its
Subsidiaries, all to the extent reasonably requested by the
Investor. The Investor agrees that any such investigation shall be
conducted in such a manner as not to interfere unreasonably with the operations
of the Company and its Subsidiaries.
(b)
Financial Reports Where
Public Filings not Available
. If the Company at any time
ceases to timely file periodic reports pursuant to Section 13 of the Exchange
Act, so long as the Investor and its Affiliates and Affiliated Funds continue to
hold at least 5% of the Adjusted Outstanding Common Shares, the Company shall
deliver to the Investor each of the following:
|
|
(i)
|
As
soon as available, and in any event within sixty (60) days after the end
of each of the first three quarters of each fiscal year, unaudited interim
consolidated balance sheets of the Company and its Subsidiaries as at the
end of such quarter and the related consolidated statements of income,
cash flow, shareholders equity and changes in financial position of the
Company and its Subsidiaries as at the end of and for such quarter,
setting forth in each case in comparative form the corresponding figures
for and as at the end of the corresponding quarter of the preceding fiscal
year, all in reasonable detail and prepared in accordance with GAAP
consistently applied (subject to year end adjustments and the absence of
footnotes);
|
|
|
(ii)
|
Within
one hundred and twenty (120) days after the end of each fiscal year of the
Company, consolidated balance sheets of the Company and its Subsidiaries
as at the end of such year and the related consolidated statements of
income, shareholders’ equity and changes in financial position of the
Company and its Subsidiaries for such fiscal year, setting forth in each
case in comparative form the consolidated figures for the previous fiscal
year, all in reasonable detail and accompanied by a report thereon of
independent public accountants of recognized national standing selected by
the Company; and
|
|
|
(iii)
|
Promptly
upon their becoming available, copies of all financial statements,
reports, notices and proxy statements sent or made available by the
Company to the holders of any class of its securities generally or by any
Subsidiary of the Company to the holders of any class of its securities
generally.
|
(c)
Other
Information
. So long as the Investor and its Affiliates and
Affiliated Funds continue to hold at least 5% of the Adjusted Outstanding Common
Shares, the Company shall furnish to the Investor with reasonable promptness
such other information relating to the Company and its Subsidiaries as the
Investor may from time to time reasonably request;
provided
that the
Company shall not be obligated to furnish any information which (i) the Board of
Directors of the Company believes could compromise any attorney-client privilege
or (ii) may cause the Company to breach a confidentiality obligation by which it
is bound.
(d)
Confidentiality
Obligations
. The Investor hereby acknowledges that any
confidential information of the Company made available to the Investor pursuant
to this Section 5.1 will be subject to the Confidentiality
Agreement.
Section
5.2
Pre-Closing Actions
Affecting the Common Shares
.
Between the date of this Agreement and
the Closing Date, the Company shall not: (i) pay any dividends or make any
distributions on its Common Shares other than (A) regular cash dividends or
distributions paid out of retained earnings and (B) distributions permitted
pursuant to clause (v) or below, (ii) subdivide or reclassify its outstanding
Common Shares into a greater number of shares, (iii) consolidate or reclassify
its outstanding Common Shares into a smaller number of shares; (iv) other than
in an “Exempt Issuance”, issue any “New Securities” for a consideration per
share less than the initial “Conversion Price” (with the terms in quotations
having the meanings specified in the Authorizing Resolution), (v) other than in
such an “Exempt Issuance”, distribute to all holders of its Common Shares any
share capital of the Company or evidences of Indebtedness or rights, options or
warrants to subscribe for or purchase any of its securities or (vi) effect any
transaction referred to in Section 4.8 of the Authorizing
Resolution.
Section
5.3
Listing
.
Neither
the Company nor any of its Subsidiaries shall take any action which would be
reasonably expected to result in the delisting or suspension of the ADS Shares
on the NASDAQ Global Market and shall use commercially reasonable efforts to
maintain the listing of the ADS Shares on the NASDAQ Global Market, including
without limitation, exhausting all available remedies, appeal reviews and other
similar mechanisms and procedures provided for under the rules and regulations
of the NASDAQ Global Market to permit such continued listing of the ADS
Shares.
Section
5.4
Preserve Accuracy of
Representations and Warranties; Fulfillment of Conditions; Notification of
Certain Matters
.
(a) The
Company and the Investor shall each refrain from taking any action which would
render any representation or warranty contained in Article III or IV inaccurate
in any material respect as of the Closing Date. Each Party shall
promptly notify the other of (i) any event or matter that would reasonably be
expected to cause any of its representations or warranties to be untrue in any
material respect or (ii) any Action or Proceeding that shall be instituted or
threatened against such Party to restrain, prohibit or otherwise challenge the
legality of any of the Transactions.
(b) The
Company and the Investor shall each use their respective reasonable best efforts
to cause each of the conditions precedent set forth in Article VI to be
satisfied as soon as practicable after the date hereof. Without
limiting the generality of the foregoing, the Company shall cause the
Authorizing Resolution to be duly adopted by the Board prior to the Upset
Date.
(c) Between
the date hereof and the Closing Date, the Company shall notify the Investor of
(i) the occurrence of any Material Adverse Effect, (ii) any Action or Proceeding
that is threatened, brought, asserted or commenced against the Company or any of
its Subsidiaries or any of their respective officers, directors or employees
which would have been required to be disclosed in the Disclosure Schedule with
respect to the representations and warranties of the Company set forth in
Section 3.9 if such Action or Proceeding had arisen prior
to the
date hereof, (iii) any notice or other communication from any third party
alleging that the consent of such third party is or may be required in
connection with the Transactions, (iv) any material default of which the Company
becomes aware under any material Company Contract or any event which, with
notice or lapse of time or both, would become such a default on or prior to the
Closing Date; and (v) any notice from any Governmental Authority in connection
with or relating to any of the Transactions.
(d) The
Company and the Investor shall cooperate fully with each other and assist each
other in defending any Action or Proceeding brought against either Party
challenging this Agreement or any of the other Transaction Documents or the
consummation of any of the Transactions, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Authority
vacated or reversed.
Section
5.5
Contractual Consents and
Governmental Approvals
.
(a) The
Company will use commercially reasonable efforts to obtain before the Closing
Date, and the Investor shall reasonably cooperate with the Company in such
efforts, the Company Contractual Consents set forth in Section 3.5(c) of the
Disclosure Schedule,
provided
that neither
the Company nor the Investor shall have any obligation to offer or pay any
consideration in order to obtain any such Company Contractual
Consents.
(b) Between
the date hereof and the Closing Date, the Company and the Investor shall use
commercially reasonable efforts, and shall cooperate with each other, in making
any required filing, registration or notification with, and in attempting to
obtain the Company Approvals set forth in Section 3.5(b) of the Disclosure
Schedule in connection with the Transactions and to otherwise satisfy the
conditions set forth in Article VI.
Section
5.6
Issuance of ADS
Shares
.
Upon the
request of the Investor at any time, and subject to applicable securities Laws
and the provisions of the Deposit Agreement, the Company shall arrange for any
Conversion Shares issued or issuable to the Investor to be deposited with the
Depositary and for corresponding ADRs to be issued in the name of the Investor,
and the Company shall pay any fees or expense reimbursements required to be paid
to the Depositary in connection therewith.
Section
5.7
Investor Pre-Emptive
Rights
.
(a) If
at any time the Company wishes to issue any Common Shares, other Capital Shares,
Convertible Securities or Share Purchase rights (collectively, “
New Securities
”) to
any Person or Persons, the Investor shall have a preemptive right to purchase
its Pro Rata Share (as defined below), of any such New
Securities. “
Pro Rata Share
” for
purposes of this preemptive right means that number of the New Securities equal
to the product of (i) a fraction, the numerator of which is the Investor's
aggregate ownership of Common Shares (calculated on an as converted and
fully-diluted basis) and the denominator of which is the number of the Company's
total issued and outstanding Common Shares (calculated on an as converted and
fully-diluted basis), multiplied by (ii) the number of New Securities to be
issued. The Company will not issue any New Securities without first
offering the Investor its preemptive right described in this Section
5.7.
(b) In
the event that the Company proposes to issue New Securities, it may give the
Investor a written notice of its intention to issue New Securities (the “
Issuance Notice
”),
describing the approximate number and type of New Securities, the terms of such
New Securities, the estimated pricing date, the estimated price range (as may be
modified in accordance with the provisions hereof, the “
Estimated Price
Range
”) and the other terms upon which the Company proposes to issue and
sell such New Securities. Any such Issuance Notice shall be delivered
to the Investor not less than ten (10) Business Days prior to the pricing (the
“
Pricing
”) of
such New Securities. If the estimated pricing date or the Estimated
Price Range shall change, the Company shall promptly notify the Investor prior
to the Pricing, provided that in the event of any change in the Estimated Price
Range, Investor shall be entitled to revoke any agreement to purchase that it
may have delivered as set forth in the following sentence. Following
receipt of an Issuance Notice as set forth in the first two sentences of this
paragraph, the Investor shall have the right, by giving written notice to the
Company at least three (3) days prior to the Pricing, to either (y) agree to
purchase up to its Pro Rata Share of such New Securities within the Estimated
Price Range and upon the general terms specified in the Issuance Notice (which
shall not exceed the Investor’s Pro Rata Share) or (z) waive its right to so
purchase up to its Pro Rata Share of such New Securities. If,
following receipt of an Issuance Notice as set forth in the first two sentences
of this paragraph, the Investor fails to agree in writing at least three days
prior to the Pricing to purchase the Investor’s full Pro Rata Share of
such offering of New Securities, then (A) except as set forth in
Section 5.7(c), the Investor shall forfeit the right hereunder to purchase that
part of its Pro Rata Share of such New Securities that it did not so agree to
purchase, and (B) the Company shall have sixty (60) calendar days
thereafter to sell the New Securities with respect to which the Investor’s
preemptive right hereunder was not exercised, at a price within or above the
Estimated Price Range and upon general terms no more favorable to the purchasers
thereof than specified in the Company’s Issuance Notice to the
Investor. In the event that the Company has not issued and sold the
New Securities within such sixty (60) calendar day period, then the Company
shall not thereafter issue or sell any New Securities without again first
offering such New Securities to the Investor pursuant to this Section
5.7.
(c) In
the event that the Company proposes to issue New Securities in a transaction in
which (i) it does not provide the Investor with the Issuance Notice
and an opportunity for the Investor to elect to purchase up to its Pro Rata
Share of such New Securities during the period described above, or (ii) it shall
have notified (or been required to notify) the Investor, less than five days
prior to the Pricing, of any acceleration in the estimated pricing date, or a
delay in the estimated pricing date of more than ten (10) days, or a reduction
of more than 10% in the Estimated Price Range (and the Investor shall not have
purchased New Securities in connection with such transaction), then no later
than five (5) days after the issuance of such New Securities, the Company shall
provide the Investor with a written notice of the issuance of such New
Securities, setting forth the price and other terms on which such New Securities
were sold, and the Investor shall have thirty (30) days from the date such
notice is effective hereof based upon the manner or method of notice, to deliver
to the Company a written notice indicating its agreement to purchase up to its
Pro Rata Share of such New Securities at the same price and on the same terms
and conditions under which such New Securities were sold in such transaction, by
giving written notice to the Company and stating therein the quantity of New
Securities to be purchased (not to exceed the Investor’s Pro Rata Share), and
upon receipt of such written notice
from the
Investor, the Company shall be required to sell such quantity of the New
Securities to the Investor.
(d) If
the Investor gives the Company notice pursuant to Section 5.7(b) or Section
5.7(c) that the Investor desires to purchase all or any of the New Securities it
is entitled to purchase (the “
Elected New
Securities
”), payment therefor shall be made by wire transfer, against
issuance of such New Securities at the executive offices of the Company, on the
date such securities are issued to the Investor. In the event that
the Issuance Notice specifies that consideration other than cash is to be paid
in connection with any issuance of New Securities, in lieu of such other
consideration, the Investor will be entitled to pay the cash equivalent of such
other consideration, as determined by an independent third-party appraiser
jointly appointed by the Company and the Investor.
(e) The
preemptive rights contained in this Section 5.7 shall not apply to any of the
following: (a) any PIK Dividend Shares, (b) any Permitted Parity Preferred
Shares or (c) any New Securities issued (i) as a share dividend to holders of
Common Shares, Series B Preferred Shares or Permitted Parity Preferred Shares or
upon any subdivision or combination of such Common Shares, Series B Preferred
Shares or Permitted Parity Preferred Shares, (ii) upon the conversion of any
Series B Preferred Shares or Permitted Parity Preferred Shares or upon the
conversion or exchange of any other Convertible Securities of the Company duly
issued on or prior to the date hereof that are convertible into or exchangeable
for Common Shares, (iii) upon the exercise of any Share Purchase Rights issued
prior to the date hereof, (iv) to employees, officers or directors of the
Company or any Subsidiary pursuant to incentive agreements, share purchase or
share option plans, share bonuses or awards, or employment or advisory related
warrants, contracts or other arrangements approved by the Board prior to or
following the date hereof or (v) in connection with any direct or indirect
acquisition by the Company of, or a merger with and into the Company of, another
Person or business approved by the Board prior to or following the date
hereof.
(f) The
Investor’s preemptive rights set forth in this Section 5.7 shall automatically
terminate if the aggregate of (x) the number of Investor Common Shares (as
defined in the Shareholders Agreement) held by the Investor and its Affiliates
and Affiliated Funds as a group and (y) any Investor Common Shares issuable upon
conversion of any Investor Preferred Shares (as defined in the Shareholders
Agreement) held by the Investor and its Affiliates and Affiliated Funds as a
group represents less than five percent (5%) of the Adjusted Outstanding Common
Shares.
Section
5.8
Filing of Resale Shelf
Registration Statement
.
(a)
Filing
. The
Company shall file with the SEC, at least sixty (60) days prior to the first
anniversary of the Closing Date, a Shelf Registration Statement covering the
resale from time to time of Registrable Securities by Registrable Securities
Holders (such Shelf Registration Statement may also from time to time cover the
resale of any Parity Registrable Securities held by Parity Registrable
Securities Holders) in accordance with the methods or distribution selected by
such holders and shall use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act as soon
as practicable after such filing.
(b)
Continued
Effectiveness
. Subject to Section 5.8(c), the Company shall
use its reasonable best efforts to have the Shelf Registration Statement
declared effective on or prior to the first anniversary of the Closing
Date. The Company shall thereafter use its reasonable best efforts to
prepare and file with the SEC such amendments and supplements to the Shelf
Registration Statement and the Prospectus as may be necessary to keep the Shelf
Registration Statement current and continuously effective in order to permit the
Prospectus forming a part thereof to be usable by the Registrable Securities
Holders for the offer and sale of Registrable Securities until the earlier of
(x) the fifth anniversary of the date hereof and (y) the date as of which such
Registrable Securities Holders no longer hold any Registrable
Securities.
(c)
Suspension of Use of Shelf
Registration Statement
. The Company may suspend the use of the
Shelf Registration Statement by the Registrable Securities Holders (and any
Parity Registrable Securities Holders) if the Company furnishes to such holders
a certificate signed by the Chief Executive Officer, Chief Financial Officer or
General Counsel of the Company (x) stating that a Potential Material Event
exists (and enclosing a copy of the written determination of the Board referred
to in the definition of Potential Material Event) or (y) stating that a
Company-initiated registration statement for an underwritten offering of Equity
Securities has become effective, in which event the Company shall have the right
to suspend such use for a period of not more than 90 calendar days after the
date of such certificate (a “
Shelf Suspension
”),
provided
that
the Company shall not exercise a Shelf Suspension more than twice in any
12-month period with at least a 60 calendar day interval between each Shelf
Suspension. In the event of any Shelf Suspension, no Registrable
Securities Holder (or Parity Registrable Securities Holder) may offer or sell
any Registrable Securities (or Parity Registrable Securities) pursuant to the
Shelf Registration Statement during the period of the applicable Shelf
Suspension.
(d)
Expenses of
Registration
. All Registration Expenses incurred in connection
with any registration, filing, qualification or compliance pursuant to this
Section 5.8 shall be borne by the Company. Unless otherwise stated,
all Selling Expenses relating to any Registrable Securities and/or Parity
Registrable Securities offered pursuant to the Shelf Registration Statement
filed pursuant to this Section 5.8 shall be borne by the applicable Selling
Holders pro rata based on the respective numbers of Registrable Securities
and/or Parity Registrable Securities registered by them.
(e)
Further Obligations of the
Company
. Whenever the Company effects the registration of any
Registrable Securities pursuant to this Section 5.8, the Company
shall:
|
|
(i)
|
Registration of
ADS
. If the Selling Holders propose to sell Registrable
Securities and/or Parity Registrable Securities in the form of ADS Shares,
the Company shall, if and to the extent necessary, register additional ADS
Shares on Form F-6, to permit the sale of such Registrable Securities
and/or Parity Registrable Securities as ADS
Shares.
|
|
|
(ii)
|
Copies of
Documents
. Furnish to each Selling Holder, without
charge, such number of conformed copies of the Shelf Registration
Statement and of any amendments and supplements thereto (in each case
including all exhibits), such number of copies of the Prospectus included
in such Shelf Registration Statement (including each preliminary
prospectus and any
|
summary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such Shelf
Registration Statement or Prospectus, and such other documents, as such Selling
Holders may reasonably request.
|
|
(iii)
|
Opinion and Comfort
Letter
. Furnish to such Selling Holders (i) an opinion
of the counsel representing the Company for purposes of such registration,
dated the effective date of such Shelf Registration Statement (or, in the
case of any underwritten public offering pursuant to the Shelf
Registration Statement, dated the date of the closing under the
underwriting agreement with respect to both the effective date of the
Shelf Registration Statement and the date of the closing under the
underwriting agreement), in form and substance as is customarily given by
counsel for the issuer to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to such Selling Holders, and
(ii) a “cold comfort” letter, dated the effective date of the Shelf
Registration Statement (and, in the case of any underwritten public
offering pursuant to the Shelf Registration Statement, dated the date of
the closing under the underwriting agreement) signed by the independent
certified public accountants who have certified the Company’s financial
statements included in such Shelf Registration Statement, in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to such Selling
Holders.
|
|
|
(iv)
|
“Blue Sky”
Qualification
. Register or qualify all Registrable
Securities and Parity Registrable Securities to be offered under such
Shelf Registration Statement under the securities or blue sky laws of such
jurisdictions as the applicable Selling Holders (or in an underwritten
offering, the managing underwriter) shall reasonably request, and do any
and all other acts and things which may be necessary or advisable to
enable such Selling Holders to consummate the disposition in such
jurisdictions of the Registrable Securities and/or Parity Registrable
Securities offered pursuant to such Shelf Registration Statement, except
that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it is not so qualified, or to subject itself to taxation in any
such jurisdiction, or to consent to general service of process in any such
jurisdiction.
|
|
|
(v)
|
Notification of
Certain Events
. As promptly as practicable after
becoming aware thereof, notify the applicable Selling Holders of the
happening of any event of which the Company has knowledge, as a result of
which the prospectus included in the Shelf Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not
|
misleading, and promptly prepare and file with the SEC a
supplement or amendment to the Shelf Registration Statement or other appropriate
filing with the SEC to correct such untrue statement or omission, and deliver a
number of copies of such supplement or amendment to such Selling Holders as such
Selling Holders may reasonably request.
|
|
(vi)
|
SEC Stop
Orders
. As promptly as practicable after becoming aware
thereof, notify the applicable Selling Holders (and, in the event of an
underwritten offering, the managing underwriters) of the issuance by the
SEC of any notice of effectiveness or any stop order or other suspension
of the effectiveness of the Shelf Registration Statement at the earliest
possible time.
|
|
|
(vii)
|
Listing
Requirements
. Use its reasonable best efforts to list
such Registrable Securities and/or Parity Registrable Securities on each
securities exchange on which the Equity Securities of the Company
(including the ADS Shares) are then listed. If the Selling
Holders propose to sell Registrable Securities and/or Parity Registrable
Securities in the form of ADS Shares, the Company shall (subject to the
Deposit Agreement) procure delivery of ADS Shares listed on such
securities exchange to the Selling Holders and, to the extent additional
ADS Shares are required to be registered on Form F-6 in order to carry out
such delivery, register such additional ADS
Shares.
|
|
|
(viii)
|
Certificate
Preparation
. Cooperate with the applicable Selling
Holders to facilitate the timely preparation and delivery of certificates
for the Registrable Securities and/or Parity Registrable Securities to be
offered pursuant to the Shelf Registration Statement and enable such
certificates for the Registrable Securities and/or Parity Registrable
Securities to be in such denominations or amounts as the case may be, as
such Selling Holders may reasonably request, and deliver, or shall cause
legal counsel selected by the Company to deliver, to the transfer agent
for the Registrable Securities (with copies to such Selling Holders) an
appropriate instruction and opinion of such counsel. If the
Selling Holders propose to sell Registrable Securities and/or Parity
Registrable Securities in the form of ADS Shares, the Company shall
cooperate with such Selling Holders to facilitate the timely delivery of
the certificates referred to above to the Depositary and shall (subject to
the Deposit Agreement) cause the Depositary to cooperate with such Selling
Holders to facilitate the timely preparation and delivery of the
depositary receipts evidencing such ADS Shares in such denominations or
amounts as the case may be, as such Selling Holders may reasonably
request.
|
|
|
(ix)
|
Underwriting
Agreement
. In the event of any underwritten public
offering pursuant to the Shelf Registration Statement, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form
|
and complying with the provisions of Section 5.8(h), with the
managing underwriter of such offering.
|
|
(x)
|
Other
Actions
. Take all other reasonable actions necessary to
expedite and facilitate disposition by the applicable Selling Holders of
the Registrable Securities and/or Parity Registrable Securities pursuant
to the Shelf Registration
Statement.
|
(f)
Information from
Holders
. It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Section 5.8 with respect to
the Registrable Securities or Parity Registrable Securities of any Selling
Holder that such Selling Holder shall furnish to the Company such information
regarding itself, the Registrable Securities or Parity Selling Securities held
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such securities.
(g)
Preparation; Reasonable
Investigation; Review by Counsel
. In connection with any
offering of Registrable Securities under the Shelf Registration Statement, each
Registrable Securities Holder, its underwriters, if any, and counsel for such
Registrable Securities Holder shall:
|
|
(i)
|
be
permitted to review such Shelf Registration Statement, each prospectus
included therein or filed with the SEC, and each amendment thereof or
supplement thereto a reasonable period of time (but not less than 3
Business Days) prior to their filing with the SEC;
and
|
|
|
(ii)
|
be
given reasonable access to the Company’s books and records and such
opportunities to discuss the business of the Company with its officers,
counsel and the independent public accountants who have certified its
financial statements as shall be necessary, in the reasonable opinion of
such Registrable Securities Holders, such underwriters, if any, or their
respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
|
(h)
Indemnification
. In
the event any Registrable Securities and/or Parity Registrable Securities are
included in the Shelf Registration Statement filed pursuant to this Section 5.8,
the following indemnification provisions shall apply.
|
|
(i)
|
Indemnification by the
Company
.
|
(1)
Indemnification
. To
the extent permitted by law, the Company shall indemnify and hold harmless the
Selling Holders, each of the employees, officers, directors, partners, members,
managers, legal counsel and agents of such Selling Holders, any underwriter (as
defined in the Securities Act) for such Selling Holders and each Person, if any,
who controls any of such Selling Holders or underwriter within the meaning of
the Securities Act or Exchange Act (collectively, the “
Holder Indemnified
Persons
”) against and hold each Holder Indemnified Person harmless from
any and all
liabilities,
obligations, losses, damages, (excluding consequential, special, indirect or
punitive damages), lawsuits, investigations, arbitrations, actions, judgments,
costs, expenses or claims, including, without limitation, reasonable attorneys’
fees and expenses incurred in investigation or defending any of the foregoing
(collectively, “
Losses
”), that the
Holder Indemnified Persons may suffer or sustain arising out of or due to any of
the following (any of the following being a “
Violation
”):
(a) any
untrue statement or alleged untrue statement of a material fact contained in
such Registration Statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements
thereto;
(b) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading;
or
(c) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law, or any
applicable securities laws or Laws of a jurisdiction outside the United
States.
(2)
Limitations on
Indemnification
. Notwithstanding the foregoing, the Company
shall not be liable for:
(a) any
amounts paid in settlement of any such Losses if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld or delayed); or
(b) any
Losses to the extent that such Losses arise out of or are based upon a Violation
which occurs in reliance upon and in strict conformity with written information
furnished by such Selling Holders expressly for use in connection with such
registration.
|
|
(ii)
|
Indemnification by the
Registrable Securities
Holders
.
|
(1)
Indemnification
. To
the extent permitted by law, each Selling Holder participating in any
registration pursuant to this Agreement shall indemnify and hold harmless the
Company, each of the Company’s employees, officers, directors, legal counsel and
other agents, any underwriter (as defined in the Securities Act) for the Company
and each Person, if any, who controls the Company or
underwriter
within the meaning of the Securities Act or Exchange Act (collectively, the
“
Company Indemnified
Persons
”), against and hold each Company Indemnified Person harmless from
any and all Losses that the Company Indemnified Persons may suffer or sustain
arising out of or due to any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in strict conformity
with written information furnished by such Selling Holder expressly for use in
connection with such registration.
(2)
Limitations on
Indemnification
. Notwithstanding the foregoing, no Selling
Holder shall not be liable for:
(a) indemnification
pursuant to this Agreement in excess of the aggregate net cash proceeds received
by such Selling Holder from the offering of Registrable Securities in such
registration;
(b) any
amounts paid in settlement of any such Losses if such settlement is effected
without the consent of such Selling Holder; (which consent shall not be
unreasonably withheld or delayed); or
(c) any
Losses to the extent that such Losses do not arise out of or are not based upon
a Violation which occurs in reliance upon and in strict conformity with written
information furnished by such Selling Holder expressly for use in connection
with such registration.
|
|
(iii)
|
Indemnification
Mechanics
. If there occurs an event which a Company
Indemnified Person or a Holder Indemnified Person (any such Person being
the “
Indemnitee
”)
hereto asserts is an indemnifiable event pursuant to this Section, the
Indemnitee shall promptly notify the party obligated to provide
indemnification hereunder (the “
Indemnitor
”) in
writing of such event. Delay or failure to so notify the
Indemnitor shall only relieve the Indemnitor of its obligations to the
extent, if at all, that it is actually prejudiced by reason of such delay
or failure. The Indemnitor shall have a period of 20 calendar
days in which to respond thereto. If the Indemnitor so elects,
within such 20 day period, it shall be entitled to assume the defense of
such claim (such election to be without prejudice to the right of the
Indemnitor to dispute whether such claim constitutes Losses under this
Section 5.8(i)). If the Indemnitor fails to assume the defense
of such matter within such 20 calendar day period or does not respond
within such 20 calendar day period, the Indemnitee against which such
matter has been asserted shall (upon delivering notice to such effect to
the Indemnitor) have the right to undertake, at the Indemnitor’s cost and
expense, the defense, compromise or settlement of such matter on behalf of
the
|
Indemnitee, provided that the Indemnitee shall not settle such
claim without the consent of the Indemnitor (which consent shall not be
unreasonably withheld) and provided further that the Indemnitor shall have the
right to participate (but not control) at its own expense in the defense of such
asserted claim. In any event, the Indemnitee shall have the right to
participate (but not control) at its own expense in the defense of such asserted
liability; provided, however, that the Indemnitor shall pay the expenses of such
defense if the Indemnitee is advised by counsel in writing that there are one or
more legal defenses available to the Indemnitee that are different from or
additional to those available to the Indemnitor (in which case, if the
Indemnitee notifies the Indemnitor in writing, the Indemnitor shall not have the
right to assume the defense of such asserted liability on behalf of the
Indemnitee).
|
|
(iv)
|
Contribution
. If
the indemnification provided for in this Section 5.8(h) is held by a court
of competent jurisdiction to be unavailable to an Indemnitee with respect
to any Losses, then the Indemnitor, in lieu of indemnifying such
Indemnitee hereunder, shall contribute to the amount paid or payable by
such Indemnitee as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the Indemnitor on the one
hand and of the Indemnitee on the other in connection with the Violation
that resulted in such Losses, as well as any other relevant equitable
considerations; provided, however, that in no event shall any contribution
under this Section 5.8(h)(iv) from any Selling Holder, together with the
amount of any indemnification payments made by such Selling Holder
pursuant to Section 5.8(h)(ii) above, exceed the net proceeds from the
offering received by such Selling Holder. The relative fault of
the Indemnitor and of the Indemnitee shall be determined by reference to,
among other things, whether the Violation relates to information supplied
by the Indemnitor or the Indemnitee and the parties relative intent,
knowledge, access to information, and opportunity to correct or prevent
such Violation.
|
|
|
(v)
|
No Inconsistent
Underwriting Agreements
. Notwithstanding any provision
of this Agreement to the contrary, the Selling Holders shall not be
required to enter into an underwriting agreement that contains
indemnification and contribution provisions which, in the sole discretion
of such Selling Holders, materially differ from those contained in this
Section 5.8(h).
|
|
|
(vi)
|
Registration in
Non-U.S. Jurisdictions
. In the event that the ADS Shares
cease to be listed on the Nasdaq Global Market and have not been listed on
another nationally recognized securities exchange in the United States,
but the Company has listed its Common Shares (or related depositary
shares) on any Designated Offshore Securities Market or other
internationally recognized securities exchange, then the Company shall use
its reasonable best efforts, to the extent permitted by applicable law, to
|
provide the Registrable Securities Holders with substantially the
same rights and benefits in such jurisdiction as are provided for in this
Section 5.8, and to take such steps, if any, consistent with customary market
practice at the time so that the Registrable Securities are freely transferable
in such listed market without transfer restrictions imposed by the securities or
similar laws of such jurisdiction.
ARTICLE
VI
CONDITIONS
Section
6.1
Conditions to the Company’s
Obligations
.
The
obligation of the Company to sell and issue the Shares and to consummate the
other Transactions on the Closing Date shall be subject to the fulfillment (or
waiver by the Company) at or prior to the Closing of each of the following
conditions:
(a)
No
Order
. No court or other Governmental Authority having
jurisdiction over the Company or any of its Subsidiaries or the Investor shall
have instituted, enacted, issued, promulgated, enforced or entered any Law
(whether temporary, preliminary or permanent) that is then in effect and that
(i) has the effect of making illegal or otherwise prohibiting or invalidating
consummation of any of the Transactions or any provision of any Transaction
Document or (ii) seeks to restrain, prohibit or invalidate the consummation of
the Transactions or to invalidate any provision of any Transaction
Document.
(b)
Company
Approvals
. Each Company Approval shall have been obtained or
made and shall be in full force and effect to the extent that the failure to
obtain or make such Company Approval (i) has the effect of making illegal or
otherwise prohibiting or invalidating consummation of any of the Transactions or
any provision of this Agreement or the other Transaction Documents or (ii) would
reasonably be expected, individually or together with other Company Approvals
that have not been obtained or made, to have a Material Adverse
Effect.
(c)
Performance of
Obligations
. The Investor shall have performed in all material
respects each of its respective covenants and agreements contained in this
Agreement or the other Transaction Documents and required to be performed at or
prior to the Closing.
(d)
Representations and
Warranties
. Each of the representations and warranties of the
Investor contained in this Agreement that is qualified as to materiality shall
be true and correct on and as of the Closing Date as if made on and as of such
date (other than representations and warranties which address matters only as of
a certain date, which shall be true and correct as of such certain date) and
each of the representations and warranties of the Investor that is not so
qualified shall be true and correct in all material respects on and as of the
Closing Date as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date, which shall be true
and correct in all material respects as of such certain date).
(e)
Officer’s
Certificate
. A certificate executed on behalf of the Investor
by a senior executive of the Investor, to the effect that the conditions set
forth in paragraphs (c) and (d) above have been satisfied, shall have been
delivered to the Company.
(f)
Investor
Consent
. The consent of the Investor to the authorization and
issuance of certain “Parity Shares” pursuant to Section 5.2(c) of the
Authorizing Resolution, substantially in the form attached as
Exhibit F
hereto,
shall have been duly executed by the Investor and delivered to the
Company.
Section
6.2
Conditions to the Investor’s
Obligations
.
The
obligation of the Investor to purchase the Shares and to consummate the other
Transactions on the Closing Date shall be subject to the fulfillment (or waiver
by the Investor) at or prior to the Closing of each of the following
conditions:
(a)
Adoption and Filing of
Authorizing Resolution
. The Authorizing Resolution shall have
been duly adopted by the Board, and shall be in full force and
effect.
(b)
No
Order
. No court or other Governmental Authority having
jurisdiction over the Company or any of its Subsidiaries or the Investor shall
have instituted, enacted, issued, promulgated, enforced or entered any Law
(whether temporary, preliminary or permanent) that is then in effect and that
(i) has the effect of making illegal or otherwise prohibiting or invalidating
consummation of any of the Transactions or any provision of any Transaction
Document or results or would result in a Material Adverse Effect or (ii) seeks
to restrain, prohibit or invalidate the consummation of any of the Transactions
or to invalidate any provision of any Transaction Document.
(c)
Company
Approvals
. Each Company Approval shall have been obtained or
made and shall be in full force and effect to the extent that the failure to
obtain or make such Company Approval (i) has the effect of making illegal or
otherwise prohibiting or invalidating consummation of any of the Transactions or
any provision of any Transaction Document or (ii) would reasonably be expected,
individually or together with other Company Approvals that have not been
obtained or made, to have a Material Adverse Effect.
(d)
Contractual
Consents
. Each Company Contractual Consent shall have been
obtained and shall be in full force and effect to the extent that the failure to
obtain such Company Contractual Consent would reasonably be expected,
individually or together with other Company Contractual Consents that have not
been obtained, to have a Material Adverse Effect.
(e)
Performance of
Obligations
. The Company shall have performed in all material
respects each of its respective covenants and agreements contained in this
Agreement and each other Transaction Document and required to be performed at or
prior to the Closing.
(f)
Representations and
Warranties
. Each of the representations and warranties of the
Company contained in this Agreement that is qualified as to materiality shall be
true and correct on and as of the Closing Date as if made on and as of such date
(other than representations and warranties which address matters only as of a
certain date, which shall be true and correct as of such certain date) and each
of the representations and warranties of the Company that is not so qualified
shall be true and correct in all material respects on and as of the Closing Date
as if made on and as of such date (other than representations and warranties
which address matters only as of a certain date, which shall be true and correct
in all material respects as of such certain date).
(g)
No Other Material Adverse
Effect
. Since the date of this Agreement, there shall not have
occurred any changes, events or developments that have had, or would reasonably
be expected, individually or in the aggregate, to have, a Material Adverse
Effect.
(h)
Officer’s
Certificate
. A certificate executed on behalf of the Company
by a senior executive officer of the Company to the effect that the conditions
set forth in paragraphs (c), (d), (e) and (f) above have been satisfied, shall
have been delivered to the Investor.
(i)
Opinions of Company
Counsel
. The Investor shall have received an opinion from (i)
Conyers, Dill & Pearman, special Cayman Islands counsel to the Company,
dated as of the Closing Date, substantially in the form attached as
Exhibit C-1
and (ii)
Latham & Watkins LLP, special New York counsel to the Company, dated as of
the Closing Date, substantially in the form attached as
Exhibit C-2
hereto.
(j)
Good Standing
Certificates
. The Investor shall have received a Certificate
of Good Standing for the Company dated not more than three (3) Business Days
prior to the Closing Date issued by the Registrar of Companies of the Cayman
Islands.
(k)
Company Secretary’s
Certificate
. The Investor shall have received a certificate in
a form reasonably satisfactory to the Investor from the Company Secretary or
another officer (if there is no person serving as Company Secretary) of the
Company attaching and certifying: (i) true and correct copies of the
Memorandum and Articles of Association of the Company; (ii) a true and correct
copy of the Authorizing Resolution as duly adopted by the Board and as in full
force and effect, (iii) true and correct copies of the resolutions adopted by
the Board authorizing the execution and delivery of this Agreement and each of
the other Transaction Documents to which the Company is a party, as in full
force and effect, and (iv) as to the incumbency of any officers of the Company
executing any Transaction Document.
(l)
XFL Secretary’s
Certificate
. The Investor shall have received a certificate in
a form reasonably satisfactory to the Investor from the Company Secretary or
another officer (if there is no person serving as Company Secretary) of Xinhua
Finance Limited attaching and certifying: (i) true and correct copies
of the resolutions adopted by the Board of Directors of Xinhua Finance Limited
authorizing the execution and delivery of Shareholders Agreement, as in full
force and effect, and (ii) as to the incumbency of the officer of Xinhua Finance
Limited executing the Shareholders Agreement.
ARTICLE
VII
INDEMNIFICATION
Section
7.1
Survival
.
The
respective representations, warranties, covenants and agreements of the Company
and the Investor set forth in this Agreement (except covenants and agreements
which are expressly required to be performed and are performed in full on or
prior to the Closing Date) shall survive the Closing Date and the consummation
of the Transactions until April 30, 2009, except that (i) the representations
and warranties set forth in Sections 3.1, 3.2, 3.3, 3.21 and 3.24 (collectively,
the “
Surviving
Representations
”) shall survive indefinitely and (ii) the
representations
and warranties contained in Section 3.13 shall survive until the expiration of
the applicable statute of limitations set forth in the Code or other applicable
Tax law.
Section
7.2
Indemnification.
Subject
to the limitations set forth in this Article VII, the Company shall indemnify,
defend and hold harmless the Investor, its members, managers, officers,
employees and Affiliates (collectively, the “
Investor Indemnified
Parties
”) from and against any and all losses, costs, damages,
liabilities, obligations, impositions, inspections, assessments, fines,
deficiencies and expenses (collectively, “
Damages
”) resulting
from, in connection with or arising out of (i) any inaccuracy in any
representation or warranty of the Company contained in this Agreement or in the
certificate delivered pursuant to Section 6.2(h) or (ii) any breach of or
default under any of the covenants or agreements given or made by the Company in
this Agreement;
provided
,
however
, that any
claim by any Investor Indemnified Party under clause (i) above shall be made
prior to the date on which the applicable representation and warranty expires
pursuant to Section 7.1 and that any claim by any Investor Indemnified Party
under clause (ii) above shall be made within twelve (12) months of the time
performance of such covenant or agreement is contemplated.
Section
7.3
Damages Threshold and
Cap
.
With
respect to any claim by an Investor Indemnified Party for indemnification
pursuant to clause (i) of Section 7.2, such Investor Indemnified Party may not
seek indemnification with respect to any claim for Damages until the sum of all
Damages for which all Investor Indemnified Parties are entitled to
indemnification pursuant to such clause (i) equals or exceeds US$300,000,
whereupon each Investor Indemnified Party shall be entitled to seek
indemnification with respect to all Damages incurred by
it. Notwithstanding the foregoing: (x) the maximum liability of the
Company for indemnification claims pursuant to clause (i) of Section 7.2 except
in the case of a breach of a Surviving Representation shall not exceed
US$15,000,000 and (y) the maximum liability of the Company for all
indemnification claims pursuant to clause (i) of Section 7.2 (including claims
based on breaches of Surviving Representations) shall not exceed the Net
Purchase Price.
Section
7.4
Indemnification
Procedures
.
In the
event an Investor Indemnified Party has a claim against the Company under this
Article VII, such Investor Indemnified Party shall deliver notice of such claim
(which claim shall be described with reasonable specificity in such notice) with
reasonable promptness to the Company. The failure by such Investor
Indemnified Party to so notify the Company shall not relieve the Company from
any liability which it may have to such Investor Indemnified Party under this
Article VII, except to the extent that the Company demonstrates that it has been
actually prejudiced by such failure. If the Company disputes its
liability with respect to such claim, such Investor Indemnified Party and the
Company shall proceed in good faith to negotiate a resolution of such dispute
and, if not resolved through negotiations, such dispute shall be resolved by
arbitration pursuant to Section 9.10.
Section
7.5
Third-Party
Claims
.
In the
event that an Investor Indemnified Party becomes aware of a third-party claim
which such Investor Indemnified Party believes may result in a demand for
indemnification pursuant to this Article VII, such Investor Indemnified Party
shall promptly notify the Company of such claim, and the Company shall be
entitled to assume the defense of such claim (such election to be without
prejudice to the right of the Company to dispute whether such claim constitutes
indemnifiable Damages under this Article VII);
provided
,
however
, that such
Investor Indemnified Party shall be entitled to participate, at the Investor
Indemnified Party’s sole expense, in (but not control) such defense and (ii) the
Company shall not settle such claim without the consent of such Indemnified
Party (which consent shall not be unreasonably withheld) unless such settlement
entails no payment of any kind by such Investor Indemnified Party and provides
for the complete release from all liabilities and claims of any kind of such
Investor Indemnified Party from such claim and the circumstances giving rise to
such claim;
provided
,
further
,
however
, that if the
Company does not elect to assume the defense of such claim pursuant to this
sentence, then the Company may participate, at the Company’s sole expense, in
such defense.
Section
7.6
Tax Treatment of Indemnity
Payments
.
Any
indemnity payments made hereunder by the Company to an Investor Indemnified
Party, shall be treated by the parties for all federal, state and local income
tax purposes as an adjustment to the Purchase Price paid by the Investor for the
Shares, and not as a dividend or other form of income payment from the Company
to the Investor.
Section
7.7
Exclusivity
.
Except in
the case of fraud, the indemnification provisions of this Article VII shall
be the Investor’s sole and exclusive monetary remedy with respect to any and all
claims relating to the subject matter of this Agreement and the Investor shall
not pursue or seek any other monetary remedy.
Section
7.8
Certain
Damages
.
In no
event shall the indemnification obligations under this Agreement or the term
“Damages” cover or include consequential, incidental, special, indirect or
punitive damages or lost profits suffered by an Investor Indemnified Party,
whether based on statute, contract, tort or otherwise.
ARTICLE
VIII
FURTHER
AGREEMENTS; TRANSFER RESTRICTIONS
Section
8.1
Public
Announcements
.
The
Investor and the Company shall consult with each other before issuing any press
release or otherwise making any public statements with respect to the execution
and delivery of this Agreement or the other Transaction Documents or any of the
Transactions, and shall not issue any such press release or make any such public
statement prior to reaching mutual agreement on the language of such press
release or such public statement, except as may otherwise be required by
applicable Law or stock exchange rule.
Section
8.2
Fees and
Expenses
.
(a) Except
as otherwise specified in this Section 8.2 or agreed in writing by the parties,
all costs and expenses incurred in connection with this Agreement, the other
Transaction Documents and the Transactions shall be paid by the party incurring
such cost or expense.
(b) On
the Closing Date, the Investor will be entitled to deduct US$300,000 for the
Purchase Price as a non-accountable reimbursement (the “
Expense
Reimbursement
”) for certain legal and other expenses incurred by the
Investor in connection with the Transactions.
(c) The
Company shall pay or promptly reimburse the Investor for any transfer taxes,
document Taxes, stamp duty or other similar Taxes imposed in connection with the
issuance of the Shares or any PIK Dividend Shares or Conversion Shares to the
Investor.
Section
8.3
Limitation on Short
Sales
. For
long as the Investor holds any Series B Preferred Shares, the Investor shall not
engage in any short sales of Common Shares or ADS Shares. For the
avoidance of doubt, the foregoing restriction shall cease to apply once the
Investor no longer holds Series B Preferred Shares, even if the Investor
thereafter continues to hold Common Shares.
Section
8.4
Restrictions on Transfers of
Series B Preferred Shares
.
(a)
Certain Transfers
Prohibited
. Except with the prior written consent of the
Company, the Investor may not Transfer any Series B Preferred Shares to any
Person other than an Affiliate until such time as the right to convert the
Series B Preferred Shares into A Common Shares pursuant to Section 4.1 of the
Authorizing Resolution becomes exercisable. In no event shall the
Investor Transfer any Series B Preferred Shares to a Competitor at any
time. For the avoidance of doubt, the foregoing restrictions shall
not apply to any Transfers of Common Shares held by the Investor.
(b)
Transferees to be Bound by
Certain Restrictions
. It shall be a condition to any Transfer
of Series B Preferred Shares by the Investor that the transferee agree in
writing to be bound by (i) the limitation on short sales set forth in Section
8.3 above (which shall apply so long as such transferee shall continue to hold
any Series B Preferred Shares) and (ii) the restriction on Transfers of Series B
Preferred Shares to Competitors set forth in Section 8.4(a) above.
(c)
Non-Complying Transfers Null
and Void
. Any purported Transfer of Series B Preferred Shares
in violation of this Section 8.4 shall be null and void and the Company will not
register such purported Transfer.
ARTICLE
IX
GENERAL
Section
9.1
Termination
.
This
Agreement may be terminated at any time prior to the Closing:
(a) by
mutual written consent of the Investor and the Company;
(b) by
the Investor if there has been (i) a material breach of any of the
representations or warranties of the Company set forth in this Agreement that
would give rise to the failure of the condition set forth in Section 6.2(f) or
(ii) a material breach of any of the covenants or agreements of the Company set
forth in this Agreement, which breach has not been cured within ten (10)
Business Days following receipt by the Company of notice of such breach from the
Investor;
provided
that the
Investor is not then in material breach of any representation or warranty made
by it in this Agreement.
(c) by
the Company if there has been (i) a material breach of any of the
representations or warranties of the Investor set forth in this Agreement that
would give rise to the failure of the condition set forth in Section 6.1(d) or
(ii) a material breach of any of the covenants or agreements of the Investor set
forth in this Agreement, which breach has not been cured within ten (10)
Business Days following receipt by the Investor of notice of such breach from
the Company;
provided
that the
Company is not then in material breach of any representation or warranty made by
it in this Agreement.
(d) by
either the Investor or the Company if any permanent order, decree, ruling or
other action of a court or other competent authority restraining, enjoining or
otherwise preventing the consummation of any of the Transactions shall have
become final and non-appealable;
(e) by
either the Investor or the Company if the Closing shall not have occurred on or
before March 15, 2008 (the “
Upset Date
”, as such
date may be hereafter extended by agreement of the parties), unless the failure
for the Closing to occur is the result of a material breach of this Agreement by
the Party seeking to terminate this Agreement;
In the
event of termination of this Agreement by either the Investor or the Company, as
provided in this Section 9.1, this Agreement shall forthwith become void and
there shall be no liability hereunder on the part of the Investor or the
Company, or their respective officers, directors, managers, members or
shareholders, except for Sections 8.2 and 9.1 and except that no such
termination shall relieve any Party of liability for any breach of any other
provision of this Agreement occurring prior to such termination.
Section
9.2
Notices
.
Whenever
any notice is required to be given hereunder, such notice shall be deemed given
only when such notice is in writing and is delivered by messenger or courier or,
if sent by fax, when received. All notices, requests and other
communications hereunder shall be delivered by courier or messenger or shall be
sent by facsimile to the following addresses:
|
|
(i)
|
If
to the Investor, at the following
address:
|
The
Yucaipa Global Partnership Fund L.P.
9130 W.
Sunset Boulevard
Los
Angeles, CA 90069
Fax:
+1.310.789.1791
Attn: Bob
Bermingham, General Counsel
with a copy by fax or messenger or
courier to:
Sidley
Austin LLP
787
Seventh Avenue
New York,
New York 10019
Facsimile:
(212) 839-5599
Attention: Michael
H. Yanowitch
|
|
(ii)
|
If
to the Company, at the following
address:
|
Xinhua
Finance Media Limited
Xinhua
Finance Limited
3905-09,
1 Grand Gateway
1
Hongqiao Lu, Shanghai 200030
People’s
Republic of China
Fax:
+8621.6448.4916
with a copy by fax or messenger or
courier to:
Latham
& Watkins LLP
41
st
Floor,
One Exchange Square
8
Connaught Place, Central
Hong
King
Fax:
+852.2522.7006
Attn:
David T. Zhang
or to
such other respective addresses as may be designated by notice given in
accordance with this Section 9.2. If, subsequent to the date hereof,
the Investor assigns any of its pre-emptive rights under Section 5.7 to an
Affiliate or an Affiliated Fund in accordance with this Agreement, any notice to
the Investor pursuant to this Section 9.2 shall be deemed to also have been duly
delivered to such Affiliate or Affiliated Fund.
Section
9.3
Complete Agreement; No
Third-Party Beneficiaries
.
This
Agreement, the Disclosure Schedule, the Confidentiality Agreement and the other
Transaction Documents constitute the entire agreement among the parties
pertaining to the subject matter hereof and supersede all prior agreements and
understandings of the parties in connection therewith. This
Agreement, other than Article VII, is not intended to confer upon any person
other than the Company and the Investor any rights or remedies
hereunder.
Section
9.4
GOVERNING
LAW
.
THIS
AGREEMENT SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REFERENCE TO ITS PRINCIPLES OF CONFLICTS OF LAWS THAT
WOULD APPLY THE LAW OF ANY OTHER JURISDICTION. SUBJECT TO SECTION
9.10, THE INVESTOR AND THE COMPANY HEREBY CONSENT TO THE NON-EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS
LOCATED IN THE BOROUGH OF MANHATTAN WITH RESPECT TO ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR TO DETERMINE
THE RIGHTS OF ANY PARTY HERETO.
Section
9.5
No
Assignment
.
Except as provided below, neither this
Agreement nor any rights or obligations under it are assignable by either Party
without the written consent of the other Party. After the Closing,
(a) the Investor may assign pre-emptive rights under Section 5.7 only to a
transferee that is an Affiliate or Affiliated Fund of the Investor, (b) the
Investor may only assign rights under Section 5.1(b) and (c) in connection with
a Transfer to a transferee that is not a Competitor of Series B Preferred Shares
representing (on an as-converted basis) at least 5% of the Adjusted Outstanding
Common Shares, (c) the Investor may only assign rights to register Registrable
Securities under Section 5.8 in connection with a Transfer to a transferee of
Registrable Securities representing at least 1% of the number of Common Shares
outstanding at the time of such Transfer,
provided
the Company
is furnished with a written notice of the name and address of such transferee or
assignee and the Registrable Securities with respect to which such registration
rights are being assigned, (d) it shall be a condition to any assignment of any
of the Investor’s rights hereunder that the assignee shall have agreed in
writing to be bound by the transfer restrictions and other applicable provisions
of this Agreement and (e) it shall be a further condition to any assignment of
any of the rights of the Investor set forth in Section 5.1(b) or (c) that the
assignee shall have entered into a confidentiality undertaking reasonably
satisfactory to the Company (it being agreed that any confidentiality
undertaking substantially similar to the Confidentiality Agreement shall be
satisfactory to the Company). Any permitted assignee of any rights of
the Investor under this Agreement may further assign such rights to any
transferee of any of the Series B Preferred Shares or Conversion Shares held by
such assignee to the extent that the Investor would have been permitted to
effect such an assignment.
Section
9.6
Counterparts
.
This
Agreement may be executed in one or more counterparts and by different parties
in separate counterparts. All such counterparts shall constitute one
and the same agreement and shall become effective when one or more counterparts
have been signed by each Party and delivered to the other Party.
Section
9.7
Remedies;
Waiver
.
Subject
to Section 7.7, all rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available. No failure on
the part
of any Party to exercise or delay in exercising any right hereunder shall be
deemed a waiver thereof, nor shall any single or partial exercise preclude any
further or other exercise of such or any other right. Notwithstanding
any other provision of this Agreement, it is understood and agreed that remedies
at law would be inadequate in the case of any breach of the covenants contained
in this Agreement. The Company and the Investor shall be entitled to
equitable relief, including the remedy of specific performance, with respect to
any breach or attempted breach of such covenants by the other
Party.
Section
9.8
Severability
.
Any
invalidity, illegality or unenforceability of any provision of this Agreement in
any jurisdiction shall not invalidate or render illegal or unenforceable the
remaining provisions hereof in such jurisdiction and shall not invalidate or
render illegal or unenforceable such provisions in any other
jurisdiction. The Company and the Investor shall endeavor in good
faith negotiations to replace any invalid, illegal or unenforceable provision
with a valid, legal and enforceable provision, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provision.
Section
9.9
Amendment;
Waiver
.
This
Agreement may be amended only by agreement in writing of both
parties. No waiver of any provision nor consent to any exception to
the terms of this Agreement shall be effective unless in writing and signed by
the Party to be bound and then only to the specific purpose, extent and instance
so provided.
Section
9.10
Arbitration
.
(a)
Submission of Disputes to
Dispute Resolution Procedures
. Subject to Section 9.10(e), any
dispute, controversy or claim (a “
Dispute
”) whether
based on contract, tort, statute, fraud, misrepresentation or any other legal
theory between the Company and the Investor (each a “
Disputant
” and
collectively, the “
Disputants
”) arising
from, relating to, or in connection with this Agreement, (including without
limitation any question regarding its formation, existence, validity,
termination, or the performance or breach thereof), any obligations hereunder or
the relationship of the Disputants hereunder, shall be resolved in accordance
with the procedures described in this Section 9.10.
(b)
Arbitration
. Any
Dispute shall be referred to and finally resolved and settled by mandatory,
international and binding arbitration administered by the American Arbitration
Association (the “
AAA
”), in accordance
with this Section and the AAA’s International Arbitration Rules of the
International Centre for Dispute Resolution (the “
Rules of
Arbitration
”) in effect on the date of this Agreement, which rules are
deemed to be incorporated by reference into this Section and except as they may
conflict with this Section, in which case the terms of this Section will
control. The Disputants may, by written agreement, modify the rules
governing the arbitration of any Dispute. Each Disputant is
voluntarily agreeing to submit to arbitration. Each Disputant hereby
irrevocably waives its right to commence any proceedings in any court with
respect to any matter subject to arbitration under this
Agreement. The arbitral tribunal shall consist of three arbitrators,
all three of whom shall be lawyers (a) admitted to
practice
law in the state of New York at least five years prior to the commencement of
arbitration proceedings and (b) members in good standing of the bar of the state
of New York at the time of the commencement of arbitration
proceedings. Each Disputant shall nominate one arbitrator and deliver
written notification of such nomination to the other Disputant and to the AAA
within thirty days after delivery of a request for arbitration. In
the event a Disputant fails to nominate an arbitrator or deliver notification of
such nomination to the other Disputant and to the AAA within this time period,
upon request of either Disputant, such arbitrator shall instead be appointed by
the AAA within thirty days of receiving such request in accordance with the
Rules of Arbitration. The two arbitrators appointed in accordance
with the above provisions shall nominate the third arbitrator and notify the
Disputants and the AAA in writing of such nomination within fifteen days of
their appointment. If the first two appointed arbitrators fail to
nominate a third arbitrator or notify the Disputants and the AAA of that
nomination within this time period, then, upon request of either Disputant, the
third arbitrator shall be appointed by the AAA within fifteen days of receiving
such request in accordance with the Rules of Arbitration. The third
arbitrator shall serve as Chairman of the arbitral tribunal. The
place of arbitration shall be New York, NY. The language of the
arbitration shall be English. Any issues concerning the location of
the arbitration, the extent to which any dispute is subject to arbitration, the
applicability, interpretation, or enforceability of these procedures, including
any contention that all or part of these procedures are invalid or
unenforceable, and any discovery disputes, shall be resolved by the arbitral
tribunal. No potential arbitrator may serve on the tribunal unless he
or she has agreed in writing to be bound by these procedures. The
decision of a majority of the arbitrators shall be final and binding on the
Disputants and their respective successors and assigns. The decision
shall not be subject to appeal or judicial review. The arbitral
tribunal shall determine the proportions in which the Disputants shall pay the
fees and expenses of the arbitral tribunal. The Disputants hereby
agree that, in addition to remedies provided by law, the arbitral
tribunal shall have the power to award equitable remedies (including, but not
limited to, specific performance), but shall not have the power to award
punitive or other exemplary damages. The prevailing Disputant in any
arbitration shall be awarded its reasonable attorneys’ fees and
costs.
(c)
Arbitration
Procedures
. In connection with the arbitration, the Disputants
agree that there shall be discovery in accordance with the Federal Rules of
Civil Procedure, except as modified in this paragraph. Each Disputant
will, upon the written request of the other Disputant, promptly provide the
other with copies of all documents on which the producing Disputant may rely in
support of or in opposition to any claim or defense and a report of any expert
whom the producing party may call as a witness in the arbitration
hearing. At the request of a Disputant, and upon the showing of good
cause, the arbitrators shall have the discretion to order production by the
other Disputant or by a third party of other documents relevant to any claim or
defense. Each Disputant will be entitled to depose a maximum of ten
witnesses, plus all experts designated to be witnesses at the
arbitration. The depositions shall be held within thirty (30) days of
the making of a request and shall be limited to a maximum of six hours per
deposition. All objections are reserved for the arbitration hearing,
except for objections based on privilege and proprietary or confidential
information. Additional depositions or deposition hours may be
ordered by the arbitral tribunal upon a showing of good cause. At the
arbitration hearing, the Disputants shall be permitted to present live testimony
and to call any witnesses regardless of such witnesses’ Disputant
affiliation.
(d)
Confidentiality
. All
aspects of an arbitration shall be treated as confidential and neither the
Disputants nor the arbitrators may disclose the existence, content or results of
the arbitration, except as necessary to comply with legal or regulatory
requirements. Before making any such disclosure, the disclosing party
shall give written notice to all other parties and shall afford such parties a
reasonable opportunity to protect their interests. Nothing herein
restricts the ability of a Disputant to disclose confidential information
related to an arbitration to an expert retained for purposes of that
arbitration, provided such expert is informed about the restrictions contained
herein and agrees to abide by them.
(e)
Judicial
Procedure
. A Disputant may seek conservatory or similar
interim relief in aid of arbitration, including but not limited to a preliminary
injunction or attachment in aid of the arbitration. A request for
such interim or conservatory relief by a Disputant to a court shall not be
deemed a waiver of this agreement to arbitrate. A Disputant also may
seek a judgment upon or an order for enforcement of an arbitration
award. The Disputants hereto further agree that the sending by
internationally recognized courier service with receipt acknowledged, of any
process required with respect to any judicial proceeding commenced pursuant to
this paragraph shall constitute valid and lawful service of process against
them, without the necessity for service by any other means provided by
Law.
[the
next page is the signature page]
IN
WITNESS WHEREOF, the Company and the Investor have caused this Agreement to be
executed by their respective offers thereunto duly authorized all as of the date
first written above.
|
|
XINHUA
FINANCE MEDIA LIMITED
|
|
|
|
|
|
|
|
|
By:
|
/s/ Andrew
Chang
|
|
|
|
|
Name:
Andrew Chang
|
|
|
|
|
Title:
Chief Financial Officer
|
|
|
|
|
|
|
|
|
YUCAIPA
GLOBAL PARTNERSHIP FUND L.P.
|
|
|
|
|
|
|
|
|
By:
|
YGOF
GP Ltd., its General Partner
|
|
|
|
|
|
|
|
|
By:
|
/s/
Robert P. Bermingham
|
|
|
|
|
Name:
Robert P. Bermingham
|
|
|
|
|
Title: Vice
President
|
|
|
|
|
|
|
[SIGNATURE PAGE TO YUCAIPA - XFM
PREFERRED STOCK PURCHASE AGREEMENT]
EXHIBIT
A
to
Series B
Convertible Preferred Shares
Purchase
Agreement
Defined
Terms
“
AAA
” has the meaning
set forth in Section 9.10(b).
“
Action or Proceeding
”
means any suit, action, proceeding (including any compliance, enforcement or
disciplinary proceeding), arbitration, formal or informal inquiry, inspection,
investigation or formal order of investigation of complaint.
“
Adjusted Outstanding Common
Shares
” means, as of any date, the number of Common Shares outstanding as
of such date other than Common Shares issued after the date of this Agreement
(unless such Common Shares constituted “New Securities” with respect to which
the Investor (or its assignee) had the right to exercise pre-emptive rights
pursuant to Section 5.7 of this Agreement.
“
ADRs
” means the
American Depositary Receipts evidencing the ADS Shares.
“
ADS Shares
” means the
American depository shares issued by the Depositary pursuant to the Deposit
Agreement each of which shares represents two Class A Common
Shares.
“
Affiliate
” means with
respect to any Person, any other Person that directly or indirectly, though one
or more intermediaries, controls, is controlled by, or under common control
with, the first mentioned Person. For purposes of this definition,
“control” (including with correlative meanings, the terms “controlling”,
“controlled by” and under “common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
“
Affiliated Fund
”
means any investment fund sponsored or managed by Yucaipa Companies LLC or an
Affiliate.
“
Articles of
Association
” means the Amended and Restated Articles of Association of
the Company as currently in effect.
“
Authorizing
Resolution
” has the meaning set forth in the recitals.
“
Board
” means the
Board of Directors of the Company.
“
Business Day
” means
any day other than a Saturday, Sunday or a day on which banking institutions in
the State of New York or Hong Kong are authorized by law or executive order to
close.
“
Capital Shares
” means
any shares in the capital of the Company.
“
Class A Common
Shares
” means the A Common Shares in the Company with a nominal value of
$0.001 per share.
“
Class B Common
Shares
” means the B Common Shares in the Company with a nominal value of
$0.001 per share.
“
Closing
” has the
meaning set forth in Section 2.2.
“
Closing Date
” has the
meaning set forth in Section 2.2.
“
Code
” means the U.S.
Internal Revenue Code of 1986, as amended.
“
Common Shares
” means,
collectively, the Class A Common Shares and the Class B Common
Shares.
“
Common Shares Purchase
Agreement
” means the Share Purchase Agreement dated as of September 25,
2007 among the Company, the Investor and certain shareholders of the Company
pursuant to which the Investor acquired certain A Common Shares.
“
Company
” has the
meaning set forth in the preamble.
“
Company Approvals
”
has the meaning set forth in Section 3.5(b).
“
Company Contract
”
means any indenture, mortgage, deed of trust, lease, contract, agreement,
instrument or other undertaking or legally binding arrangement (whether written
or oral) to which the Company or any Subsidiary is a party or by the Company or
any Subsidiary or any of their respective properties or assets is
bound.
“
Company Contractual
Consents
” has the meaning set forth in Section 3.5(c).
“
Company Indemnified
Persons
” has the meaning set forth in Section 5.8(h)(ii)(1).
“
Company Party
” has
the meaning set forth in Section 3.18.
“
Competitor
” means (i)
any Person that is engaged in any business or organization in any jurisdiction
in which the Company or any of its Subsidiaries sells products or provides
services which, directly or indirectly, Competes (as hereinafter defined) with
the Company or any of its Subsidiaries; and (ii) any Affiliates of a Person
described in clause (i). A business or organization shall be deemed
to “
Compete
”
with the Company or a Subsidiary of the Company if such business or organization
competes in a significant manner with the business of the Company or any of its
Subsidiaries as such business is conducted as of the date hereof or at any time
while this Agreement is in effect.
“
Confidentiality
Agreement
” means the Confidentiality Agreement dated as of August 2, 2007
between the Company and the Investor.
“
Contingent
Obligation
” shall mean as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument or arrangement (whether in writing
or otherwise) to which such Person is a party or by which it or any of such
Person's property is bound.
“
Contractual Consent
”
applicable to a specified Person in respect of a specified matter means any
consent required to be obtained by such Person from any other Person party to
any Contractual Obligation to which such first Person is a party or by which it
is bound in order for such matter to occur or exist without resulting in the
occurrence of a default or event of default or termination, the creation of any
lien, the triggering of any decrease in the rights of such first Person, any
increase in the obligations of such first Person or any other consequence
adverse to the interests of such first Person, under any provision of such
Contractual Obligation.
“
Contractual
Obligation
” means, as to any Person, any obligation arising out of any
indenture, mortgage, deed of trust, contract, agreement, insurance policy,
instrument or other undertaking to which such Person is a party or by which it
or any of its property is bound (including, without limitation, any debt
security issued by such Person).
“
Conversion Shares
”
means any Class A Common Shares issued upon conversion of any of the Shares or
PIK Dividend Shares pursuant to Article 4 of the Authorizing
Resolution.
“
Convertible
Securities
” means any securities or obligations that are convertible into
or exchangeable for Capital Shares.
“
Damages
” has the
meaning set forth in Section 7.2.
“
Deposit Agreement
”
means the Deposit Agreement among the Company, the Depositary and the holders
from time to time of the ADRs.
“
Depositary
” means The
Bank of New York, as the depositary under the Deposit Agreement.
“
Designated Offshore
Securities Market
” means a Designated Offshore Securities Market as
defined in Section 230.902(b) of Regulation S of the Securities
Act.
“
Disclosure Schedule
”
means the schedule dated the date hereof delivered by the Company to the
Investor, which schedule relates to this Agreement and is designated therein as
the Disclosure Schedule of the Company for the purposes hereof.
“
Disputant
” has the
meaning set forth in Section 9.10(a).
“
Dispute
” has the
meaning set forth in Section 9.10(a).
“
Elected New
Securities
” has the meaning set forth in Section 5.9(b).
“
Employee Share
Options
” means any share options granted pursuant to the Share Option and
Share Grant Plan.
“
Enforceability
Exceptions
” has the meaning set forth in Section 3.3(b).
“
Entity
” means any
corporation, partnership, limited liability company, joint venture, association,
partnership, business trust or other entity.
“
Equity Securities
”
means the A Common Shares, and any other Capital Shares (including the Series B
Preferred Shares and the B Common Shares), equity interest or other ownership
interest or profit participation or similar right with respect to the Company,
including, without limitation, limited liability company membership interests,
partnership interests, voting trust certificates, certificates of interest or
participation in any profit-sharing agreement or arrangement, options, warrants,
bonds, debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any instruments
commonly known as “securities” or any certificates of interest, shares or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
“
Exchange Act
” means
the Securities Exchange Act of 1934, as amended, together with the rules and
regulations promulgated thereunder.
“
Expense
Reimbursement
” has the meaning set forth in Section 8.2(b).
“
Financial Statements
”
has the meaning set forth in Section 3.6(b).
“
GAAP
” has the meaning
set forth in Section 3.6(b)
“
Governmental
Authority
” means any government or political subdivision or department
thereof, any governmental or regulatory body, commission, board, bureau, agency
or instrumentality, or any court or arbitrator or alternative dispute resolution
body, in each case whether federal, state, local, foreign or supranational, as
well as any applicable self regulatory body.
“
Holder Indemnified
Persons
” has the meaning set forth in Section 5.8(h)(i)(1).
"
Hong Kong
" means the
Special Administrative Region of Hong Kong.
"
Indebtedness
" shall
mean as to any Person (a) all obligations of such Person for borrowed money
(including without limitation, reimbursement and all other obligations with
respect to surety bonds, unfunded credit commitments, letters of credit and
bankers’ acceptances, whether or not matured), (b) all indebtedness, obligations
or liability of such Person (whether or not evidenced by notes, bonds,
debentures or similar instruments) whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, or joint or several,
that should be classified as liabilities in accordance with GAAP, including
without limitation, any items so classified on a balance sheet and any
reimbursement obligations in respect of letters of credit or obligations in
respect of bankers acceptances, (c) all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts payable
and accrued commercial or trade liabilities arising in the ordinary course of
business, (d) all interest rate and currency swaps, caps, collars and similar
agreements or hedging devices under which payments are obligated to be made by
such Person, whether periodically or upon the
happening
of a contingency, (e) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person (whether or not the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), (f) all obligations of such Person under leases which have
been or should be, in accordance with GAAP, recorded as capital leases, (g) all
indebtedness secured by any Lien (other than Liens in favor of lessors under
leases) on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is non-recourse to the credit of that Person, and (h) any Contingent
Obligation of such Person incurred in respect of any Indebtedness referred to in
(a) to (g) above.
“
Indemnitee
” has the
meaning set forth in Section 5.8(h)(iii).
“
Indemnitor
” has the
meaning set forth in Section 5.8(h)(iii).
“
Intellectual
Property
” has the meaning set forth in Section 3.11.
“
Investor
” has the
meaning set forth in the Preamble.
“
Investor Common
Shares
” means (a) any A Common Shares purchased by the Investor pursuant
to the Common Shares Purchase Agreement and any A Common Shares issued or
issuable upon conversion of (i) any Series B Preferred Shares purchased by the
Investor pursuant to this Agreement or (ii) any PIK Dividend Shares issued to
the Investor (or any permitted transferee hereunder) and (b) any A Common Shares
of the Company which the Investor (or any permitted transferee hereunder) shall
be entitled to receive, or shall have received, in connection with any share
splits, share dividends or similar events with respect to the Company’s A Common
Shares.
“
Investor Indemnified
Party
” has the meaning set forth in Section 7.2.
“
Issuance Notice
” has
the meaning set forth in Section 5.9(a).
“
Law
” means any
judgment, order (whether temporary, preliminary or permanent), writ, injunction,
decree, statute, rule, regulation, notice, law or ordinance and shall also
include any regulations of any applicable self regulatory
organizations.
“
License
” means any
license, franchise, permit, privilege, immunity, approval or other authorization
required to be obtained under any applicable Law from any applicable
Governmental Authority.
“
Liens
” means security
interests, liens, claims, pledges, mortgages, options, rights of first refusal,
agreements, limitations on voting rights, charges, easements, servitudes,
encumbrances and other restrictions of any nature whatsoever.
“
Losses
” has the
meaning set forth in Section 5.8(h)(i)(1).
“
Material Adverse
Effect
” means a material adverse effect on (i) the ability of the Company
to consummate any of the Transactions or to perform any of its obligations under
any
of the
Transaction Documents or (ii) the businesses, assets (including licenses,
franchises and other intangible assets), liabilities, financial condition or
operating income of the Company and its Subsidiaries, taken as a whole, except
(a) effects or changes (including general economic and political
conditions) that do not have a materially disproportionate effect (relative to
other industry participants) on the Company and its Subsidiaries and generally
affect the industry in which the Company and its Subsidiaries operate;
(b) effects or changes relating to loss of employees, suppliers, vendors,
agents, customers or other business partners resulting primarily from the
announcement or pendency of the transactions contemplated by this Agreement; (c)
effects or changes to the extent attributable to changes in PRC Law after the
date of this Agreement and (d) any change or effect that results from any
action taken by the Company at the request of the Investor or as required by the
terms of this Agreement or the other Transaction Documents.
“
Memorandum of
Association
” means the Amended and Restated Memorandum of Association of
the Company as currently in effect.
“
Net Purchase Price
”
has the meaning set forth in Section 2.1.
“
New Securities
” has
the meaning set forth in Section 5.7(a).
“
OFAC
” means the
Office of Foreign Assets Control of the US Department of the
Treasury.
“
Organizational
Document
” means, with respect to any Entity. any certificate or articles
of incorporation, memorandum or articles of association, by-laws, partnership
agreement, limited liability agreement, operating agreement, trust agreement or
other agreement, instrument or document governing the affairs of such
Entity.
“
Parity Registrable
Securities
” means (a) any “Registrable Securities” as defined in the
Patriarch Investor Rights Agreement and (b) any A Common Shares into which any
Permitted Parity Preferred Shares are convertible, to the extent that
registration rights are granted to the holders of such shares in connection with
the issuance of such Permitted Parity Preferred Shares.
“
Patriarch
” means
Patriarch Partners Media Holdings, LLC.
“
Patriarch Investor Rights
Agreement
” means the Investor Rights Agreement dated as of March 16, 2006
among the Company, Xinhua Finance Limited and Patriarch.
“
Permitted Parity Preferred
Shares
” means any preferred shares of the Company that constitute “Parity
Shares” issued in compliance with Section 5.2(c) of the Authorizing
Resolution.
“
Person
” means any
individual, Entity, unincorporated association or Governmental
Authority.
“
PIK Dividend Shares
”
means any Series B Preferred Shares issued as payment-in-kind dividends on the
outstanding Shares or PIK Dividend Shares pursuant to Article 3 of the
Authorizing Resolution.
“
Potential Material
Event
” means either (a) the possession by the Company of material
information not ripe for disclosure in a registration statement, or (b) any
material engagement or activity by the Company which would be adversely affected
by disclosure in a registration statement at such time, in each case, which
shall be evidenced by a written good faith determination by the Board of
Directors that both disclosure of such information, engagement or activity in a
registration statement would be detrimental to the business and affairs of the
Company, and a registration statement would be materially misleading absent the
inclusion of such information, engagement or activity.
“
PRC
” means the
People’s Republic of China, but for purpose of this Agreement, does not include
Taiwan and the Special Administrative Regions of Hong Kong and
Macau.
“
Prospectus
” means the
prospectus included in any Registration Statement, all amendments and
supplements to such prospectus and all material incorporated by reference in
such prospectus.
“
Purchase Price
” has
the meaning set forth in Section 2.1.
“
Recent Balance Sheet
”
means the consolidated balance sheet of the Company and its consolidated
subsidiaries as of September 30, 2007 included in the Financial
Statements.
“
Registrable
Securities
” means any Investor Common Shares;
provided
,
however
, that
Registrable Securities shall cease to be Registrable Securities upon the earlier
of (i) when, with respect to any Registrable Securities Holder, in the
reasonable opinion of counsel to the Company, all Registrable Securities
proposed to be sold by such Registrable Securities Holder may then be sold
pursuant to Rule 144 without any volume limitations, which counsel shall be
reasonably satisfactory to such Registrable Securities Holder and (ii) the date
as of which all of the Registrable Securities have been sold pursuant to a
Registration Statement,
provided
further
, that
“Registrable Securities” shall exclude in all cases any Registrable Securities
Transferred by a Registrable Securities Holder or any other Person other than an
assignment pursuant to Section 9.5.
“
Registrable Securities
Holder
” means any Person who holds Registrable Securities who (i) is the
Investor or (ii) is a Person to whom registration rights under Section 5.8 have
been assigned pursuant to Section 9.5. For the purposes of this
Agreement, any holder of Series B Preferred Shares shall be deemed to be the
holder of any Registrable Securities issuable upon conversion of such Series B
Preferred Shares.
“
Registration
Expenses
” means all expenses incurred by the Company in connection with
the Shelf Registration Statement filed pursuant to Section 5.8, including,
without limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company, blue
sky fees and expenses, the expense of any special audits incident to or required
by any such registration and the reasonable fees and disbursements of a single
special legal counsel to represent the Selling Holders in connection
with any
offering thereunder. Registration Expenses do not include
compensation of regular employees of the Company which shall be paid in any
event by the Company, underwriting discounts and commissions and share transfer
taxes.
“
Registration
Statement
” means any registration statement of the Company filed with, or
to be filed with, the SEC under the rules and regulations promulgated under the
Securities Act, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, and all exhibits
and all material incorporated by reference in such registration
statement.
“
Registration Rights
Agreement
” means a Registration Rights Agreement dated as of the Closing
Date between the Company and the Investor substantially in the form attached
hereto as
Exhibit
D
hereto.
“
Related Person
”
means, with respect to any Person, (a) any holder or beneficial owner
(directly or indirectly) of equity securities, or rights to acquire equity
securities, representing 5% or more of the voting equity securities of such
Person (a “
5%
Shareholder
”); (b) any Affiliate of such specified Person or of any
such 5% Shareholder thereof; (c) any Person that serves as a director, officer,
partner, employee, executor or trustee (or in similar capacity) of such Person
or of any 5% Shareholder thereof, or any of their respective Affiliates;
(d) any Person with respect to which such specified Person serves as a
general partner, managing member, manager or trustee (or in a similar capacity);
and (e) any relative or spouse (or relative of such spouse) who resides
with, or is a dependent of, any Related Person described in clauses (a), (b),
(c) or (d) of this definition.
“
Rule 144
” means Rule
144 promulgated under the Securities Act, as such rule shall be in effect from
time to time.
“
Rules of Arbitration
”
has the meaning set forth in Section 9.10(b).
“
Sanctioned Entity
”
shall mean (i) the government of or an agency of the government of, (ii) an
organization directly or indirectly controlled by, or (iii) a person resident in
a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at
http://www.ustreas.gov/offices/enforcement/ofac/programs/, or as otherwise
published from time to time as such program may be applicable to such agency,
organization or person.
“
Sanctioned Person
”
shall mean a person named on the list of Specially Designated Nationals or
Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise
published from time to time.
“
SEC
” means the United
States Securities and Exchange Commission and includes any Governmental
Authority succeeding to the functions thereof.
“
SEC Reports
” has the
meaning set forth in Section 3.6(a)
“
Securities Act
” means
the Securities Act of 1933, as amended, together with the rules and regulations
promulgated thereunder.
“
Selling Expenses
”
means, in respect of an offering pursuant to the Shelf Registration Statement
filed pursuant to Section 5.8, all underwriting discounts, selling commissions
and share transfer taxes applicable to the Registrable Securities and/or Parity
Registrable Securities registered by the applicable Selling
Holders.
“
Selling Holders
”
means, in respect of an offering pursuant to the Shelf Registration Statement
filed pursuant to Section 5.8, Registrable Securities Holders and/or Parity
Registrable Securities Holders selling Registrable Securities and/or Parity
Registrable Securities pursuant to such Shelf Registration
Statement.
“
Shareholders
Agreement
” means the Shareholders Agreement dated as of the Closing Date
among the Company, the Investor and XFL substantially in the form attached
hereto as
Exhibit
E
hereto.
“
Share Option and Share Grant
Plan
” means the Company’s Share Option and Share Grant Plan.
“
Share Purchase
Rights
” means any options, warrants, awards or other rights exercisable
for the purchase or acquisition of Capital Shares or Convertible
Securities.
“
Shares
” has the
meaning set forth in the Preamble.
“
Shelf Registration
Statement
” means a Registration Statement of the Company filed with the
SEC on Form F-3 (or any successor form or other appropriate form under the
Securities Act) for an offering to be made on a continuous or delayed basis
pursuant to Rule 415 under the Securities Act (or any similar rule that may be
adopted by the SEC).
“
Shelf Suspension
” has
the meaning set forth in Section 5.8(c)(1).
“
Subsidiary
” means any
Entity of which the Company (either alone or through or together with one or
more other Subsidiaries) (x) owns, directly or indirectly, more than 50% of the
shares or other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such
Entity, (y) is a general partner, managing member, trustee or other Person
performing similar functions or (z) has control (as defined in Rule 405 under
the Securities Act).
“
Surviving
Representations
” has the meaning set forth in Section 7.1.
“
Tax Return
” means any
return, report or similar statement (including the attached schedules) required
to be filed with respect to any Tax, including, without limitation, any
information return, claim for refund, amended return or declaration of estimated
Tax.
“
Tax
” means any tax,
governmental fee or other like assessment or charge of any kind whatsoever
(including any tax imposed under Subtitle A of the Code and any net income,
alternative or add-on minimum tax, gross income, gross receipts, sale, bulk
sales, use, real
property,
personal property, ad valorem, value added, transfer, franchise, profits,
license, withholding tax on amounts paid, withholding, payroll, employment,
excise severance, stamp, capital shares, occupation, property, environmental or
windfall profits tax, premium, custom, duty or other tax or assessment),
together with any interest, penalty, addition to tax or additional amount
thereto, imposed by any Governmental Authority.
“
Taxing Authority
”
means any Governmental Authority (domestic or foreign) responsible for the
imposition of any Tax.
“
Transaction
Documents
” means this Agreement, the Authorizing Resolution, the
Registration Rights Agreement and the Shareholders Agreement.
“
Transfer
” of a
security means any sale, assignment, transfer, exchange, pledge, grant of
security interest in, hypothecation, encumbrance or other disposition or
conveyance of any interest in such security.
“
Transactions
” means
the purchase and sale of the Shares and the other transactions contemplated by
the Transaction Documents.
“
Upset Date
” has the
meaning set forth in Section 9.1(e).
"
USD
", "
Dollars
" or "
US$
" means the lawful
currency of the United States of America.
“
Violation
” has the
meaning set forth in Section 5.8(h)(i)(1).
“
XFL
” means Xinhua
Finance Limited, a company organized under the laws of the Cayman Islands, or
any successor.
EXHIBIT
B
to
Series
B Convertible Preferred Shares
Purchase
Agreement
Resolution of the Board of
Directors of Xinhua Finance Media Limited
Designating the Rights and
Restrictions of
the Series B Preferred
Shares
WHEREAS,
Article 12 of the Amended and Restated Articles of Association of Xinhua Finance
Media Limited, a Cayman Islands exempted company with limited liability (the
“
Company
”),
empowers this Board to authorize by resolution or resolutions from time to time
the issuance of one or more classes or series of preferred shares and to fix the
designations, powers, preferences and relative, participating, optional and
other rights, if any, and the qualifications, limitations and restrictions
thereof, if any, including, without limitation, the number of shares
constituting each such class or series, dividend rights, conversion rights,
redemption privileges, voting powers, full or limited or no voting powers, and
liquidation preferences, and to increase or decrease the size of any such class
or series to the extent permitted by law; and
WHEREAS,
this Board has determined that it is in the best interests of the Company to
create a new series of convertible preferred shares and to fix the designations,
powers, preferences and relative, participating, optional and other rights
thereof, and the qualifications, limitations and restrictions thereof, as set
forth below.
NOW,
THEREFORE, BE IT RESOLVED, that there is hereby established out of the
authorized and unissued share capital of the Company a series of convertible
preferred shares designated as “Series B Convertible Preferred Shares” (the
“
Series B Preferred
Shares
”). The authorized number of Series B Preferred Shares
and the preferences, limitations and relative rights and other matters
pertaining to Series B Preferred Shares are described below.
ARTICLE
1
DEFINITIONS
|
1.1
|
Terms Defined in the
Articles
.
|
Capitalized
terms used but not otherwise defined herein that are defined in the Amended and
Restated Articles of Association of the Company (the “
Articles
”) are used
herein with the meanings set forth therein.
|
1.2
|
Other Defined
Terms
.
|
Capitalized
terms that are defined in
Schedule 1
hereto are
used herein with the meanings set forth therein.
ARTICLE
2
NUMBER
AND STATED VALUE OF SHARES
|
2.1
|
Authorized Number of
Shares
.
|
The
Series B Preferred Shares shall initially consist of Three Hundred Thousand
(300,000) preferred shares. Prior to the issuance of additional
Series B Preferred Shares as PIK Dividends pursuant to Section 3.3 below, the
Board of Directors shall authorize a sufficient number of additional Series B
Preferred Shares for such purpose.
Each
Series B Preferred Share shall have a stated value (“
Stated Value
”) of
US$100.00, which amount shall be proportionately adjusted in the event of any
share split, reverse share split or other subdivision or combination of the
outstanding Series B Preferred Shares.
ARTICLE
3
DIVIDENDS
|
3.1
|
Accrual of
Dividends
.
|
Preferred
dividends (“
Dividends
”) shall
accrue during each fiscal quarter of the Company on each Series B Preferred
Share outstanding during such quarter at a rate equal to the higher of (i) eight
percent (8%) per annum of the Stated Value of such Series B Preferred Share and
(ii) to the extent that any dividends were declared during such fiscal quarter
on the Common Shares, the aggregate amount of such dividends that would have
been declared on the number of Conversion Shares into which such Series B
Preferred Share would have been converted if such Series B Preferred Share had
been fully converted into Conversion Shares pursuant to Article 4 below on the
date of declaration of such dividends, determined without taking into
consideration the limitations on conver
tibility set forth in Section 4.1 or
the
limitation on the issuance of fractional shares set forth in Section
4.3 (a “
Common
Equivalent Dividend Amount
”). In the event that any Series B
Preferred Shares were outstanding during only a portion of any such quarter, the
amount of Dividends accrued during such quarter on such Series B Preferred
Shares shall be pro rated to reflect the number of days during such quarter when
such Series B Preferred Shares were outstanding. Accrued Dividends
shall be paid in the manner provided in Section 3.3 below. All
Dividends will be cumulative.
The Board
may fix a record date for the determination of holders of the Series B Preferred
Shares entitled to receive payment of any Dividends, which record date shall not
be more than sixty (60) days nor less than ten (10) days prior to the date on
which any such Dividend is paid.
Dividends
may be paid, at the option of the Company (i) in cash, in United States Dollars,
or (ii) through the issuance to the holders of the outstanding Series B
Preferred Shares of additional fully paid and nonassessable Series B Preferred
Shares with an aggregate Stated Value equal to the Dividend to be paid with
respect to each such Series B Preferred Share (a “
PIK Dividend
”) with
no right for a holder of Series B Preferred Shares to elect to receive cash
instead;
provided
that for any
quarter with respect to which the amount of the accrued Dividend is based on the
Common Equivalent Dividend Amount, such Dividend may be paid only in United
States Dollars.
|
(a)
|
The
Series B Preferred Shares shall, with respect to dividend rights
and rights on other distributions and rights upon any
liquidation or dissolution of the Company, rank (x)
pari passu
with any
applicable Parity Shares that are outstanding from time to time and (y)
senior to the Common Shares and any other Junior Shares that are
outstanding from time to time.
|
|
(b)
|
If
all accrued Dividends on the Series B Preferred Shares and all accrued
dividends on any Parity Shares are not paid in full, or declared in full
and funds set apart for the payment thereof, any Dividends declared or
paid on the Series B Preferred Shares and any dividends declared or paid
on any applicable Parity Shares shall be paid or declared pro rata so that
in all cases the amount of Dividends paid or declared on the Series B
Preferred Shares and the amount of dividends paid or declared on such
Parity Shares shall bear to each other the same ratio as the amount of
accrued but unpaid Dividends on the Series B Preferred Shares and the
amount of accrued but unpaid dividends on such Parity Shares bear to each
other.
|
|
(c)
|
Unless
all Dividends accrued on the Series B Preferred Shares have been paid in
full, or declared in full and funds set apart for the payment thereof, no
dividends may be paid on, or funds set apart for the payment of any
dividends on, any Junior Shares unless the Majority Holders otherwise
consent in writing.
|
ARTICLE
4
CONVERSION
At any
time and from time to time after the earlier of either (i)
[insert date that is one year after
the anticipated Closing Date]
or (ii) the occurrence of any Realization
Event, without the payment of additional consideration thereof, any holder of
Series B Preferred Shares shall have the right, at its option, to convert, all
or any portion of the Series B Preferred Shares held by it into A Common Shares
(“
Conversion
Shares
”) at the then applicable conversion rate (the “
Conversion
Rate
”). For purposes hereof, the Conversion Rate at any time
shall be determined by dividing an amount (the “
Conversion Base
Amount
”) equal to the sum of (x) the Stated Value per share plus (y) the
amount of any accrued Dividends per share then remaining unpaid on each Series B
Preferred Share being converted by the then applicable Conversion Price per
share. The “
Conversion Price
”
shall initially be
equal to
the US$3.00 per share, but shall be subject to adjustment from time to time as
provided herein.
|
|
4.2
|
Mechanism of
Conversion
.
|
|
(a)
|
Conversion
shall be effected by the redemption of the Series B Preferred Shares being
converted for an amount per share equal to the applicable Conversion Base
Amount and the issuance in exchange therefor of the applicable Conversion
Shares at a price per share equal to the then applicable Conversion
Price. In order to exercise its conversion right, the holder of
the Series B Preferred Shares to be converted shall surrender the
certificate or certificates representing such shares to the Company, with
a notice of election to convert, duly completed and signed, at the
principal office of the Company. Unless the Conversion Shares
issuable upon conversion are to be issued in the same name as the name in
which the Series B Preferred Shares are registered, each share certificate
surrendered for conversion shall be accompanied by instruments of transfer
duly executed by the holder or his duly authorized
attorney.
|
|
(b)
|
As
promptly as practicable after the surrender by a holder of the certificate
or certificates representing the Series B Preferred Shares to be converted
(together with a duly completed and signed notice of election to convert)
and in any event within ten (10) business days after such surrender, the
Company shall issue and deliver to the Person for whose account such
certificate was surrendered, or to its nominee or nominees, a certificate
or certificates for the number of Conversion Shares or other securities
issuable upon the conversion of those shares and any fractional interest
in respect of Conversion Shares or other securities arising upon the
conversion shall be settled as provided
below.
|
|
(c)
|
Conversion
shall be deemed to have been effected immediately prior to the close of
business on the date on which the holder delivers the certificates for the
Series B Preferred Shares and the notice of election to convert to the
Company, and the Person or Persons in whose name or names any Conversion
Shares or other securities issuable upon such conversion shall be entered
in the Register of Members as the holder or holders of record of such
Conversion Shares or other securities at such time on such date and such
conversion shall be at the Conversion Price in effect at such time, unless
the Register of Members shall be closed on such date, in which event such
Person or Persons shall be entered in the Register of Members as the
holder or holders of record of such Conversion Shares or other securities
at the close of business on the next succeeding day on which such Register
of Members is open, and such conversion shall be at the Conversion Price
in effect on the date such Register of Members is open. All
Conversion Shares issuable upon conversion of the Series B Preferred
Shares will upon issuance be duly and validly issued and fully paid and
nonassessable, free of all liens and charges and not subject to any
preemptive rights. Upon any such conversion of the Series B
Preferred Shares, such shares shall no longer be deemed to be outstanding
and all rights of a holder with respect to such shares shall immediately
terminate upon the issuance of such Conversion
Shares.
|
|
|
4.3
|
No Fractional
Shares
.
|
No
fractional shares or securities representing fractional A Common Shares shall be
issued upon conversion of the Series B Preferred Shares. Any
fractional interest in A Common Shares resulting from conversion of the Series B
Preferred Shares shall be paid in cash (computed to the nearest cent) equal to
such fraction multiplied by the Fair Market Value of one A Common Share
determined pursuant to Section 9.4. If more than one certificate
representing Series B Preferred Shares shall be surrendered for conversion at
one time by the same holder, the number of full A Common Shares issuable upon
conversion thereof shall be computed on the basis of the aggregate number of the
Series B Preferred Shares represented by the certificates so surrendered that
are to be converted.
|
|
4.4
|
Adjustment of
Conversion Price
.
|
The
Conversion Price shall be subject to adjustment as follows if any of the events
listed below occur prior to the conversion of any Series B Preferred Shares
being converted pursuant to Section 4.1.
|
(a)
|
In
case the Company shall (i) subject to Section 3.4(c) above pay a dividend
or make a distribution on its Common Shares in Common Shares, (ii)
subdivide or reclassify its outstanding Common Shares into a greater
number of shares, or (iii) consolidate or reclassify its outstanding
Common Shares into a smaller number of shares, the Conversion Price in
effect immediately prior to such event shall be adjusted so that the
holder of the Series B Preferred Shares thereafter converted shall be
entitled to receive the number of A Common Shares of the Company which it
would have owned or have been entitled to receive after the happening of
such event had the Series B Preferred Shares been converted immediately
prior to the happening of such event. An adjustment made
pursuant to this paragraph shall become effective immediately after the
record date in the case of a dividend or distribution and shall become
effective on the effective date in the case of subdivision, combination or
reclassification. If any dividend or distribution is not paid
or made, the Conversion Price then in effect shall be appropriately
readjusted.
|
|
(b)
|
In
case the Company shall (i) issue Common Shares, (ii) issue rights, options
or warrants to subscribe for or purchase Common Shares, or (iii) issue or
sell other rights for Common Shares or securities (including issuances of
Series B Preferred Shares, other than in Exempt Issuances) convertible or
exchangeable into Common Shares (any of the issuances in clauses (i), (ii)
or (iii), hereinafter “
New
Securities
”), for a consideration per share less than the then
effective Conversion Price on the date the Company issues or sells such
New Securities, then in each such case the Conversion Price in effect
immediately prior to the issuance of such New Securities shall be reduced,
concurrently with the issue of such New Securities, to the price
(calculated to the nearest one-hundredth of a cent) determined in
accordance with the following
formula:
|
|
CP
2
=
CP
1
x
|
(A
+ B)
|
|
(A
+ C)
|
For
purposes of the foregoing formula, the following definitions shall apply: (1)
CP
2
shall mean the Conversion Price in effect immediately after such issue of New
Securities; (2) CP
1
shall mean
the Conversion Price in effect immediately prior to such issue of New
Securities; (3) “A” shall mean the number of Common Shares outstanding (on a
fully-diluted basis) immediately prior to such issue of New Securities; (4) “B”
shall mean the number of Common Shares (on a fully-diluted basis) that would
have been issued if such New Securities had been issued at a price per share
equal to CP
1
(determined by dividing the aggregate consideration received by the Company in
respect of such issue by CP
1
); and (5)
“C” shall mean the number of such New Securities (on a fully-diluted basis)
issued in such transaction.
The
adjustment provided for in this Section 4.4(b) shall be made successively
whenever any New Securities are issued (
provided
that no
further adjustments in the Conversion Price shall be made upon the subsequent
exercise, conversion or exchange, as applicable, of such New Securities pursuant
to the original terms of any such New Securities that are convertible into,
exchangeable for or exercisable for the purchase of Common Shares) and shall
become effective immediately, except as provided in Section 4.4(f) below, after
such issuance. If any or all of such New Securities that are
convertible into, exchangeable for or exercisable for the purchase of Common
Shares expire or terminate without having been exercised, converted or
exchanged, the Conversion Price then in effect shall be appropriately readjusted
to the Conversion Price in effect immediately prior to the issuance of such New
Securities,
subject
,
however
, to such
other adjustments as may have been made or that would have otherwise been made
under this Section 4.4(b) since the issuance of such New
Securities.
|
(c)
|
In
case the Company shall distribute to all holders of its Common Shares any
share capital of the Company (other than Common Shares) or evidences of
Indebtedness or cash or other assets (excluding regular cash dividends or
distributions paid from retained earnings of the Company and dividends or
distributions referred to in Section 4.4(a) above) or rights, options or
warrants to subscribe for or purchase any of its securities (excluding
those referred to in Section 4.4(b) above) then, in each such case, the
Conversion Price shall be adjusted so that it shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the date of the distribution by a fraction, the numerator of which
shall be the Conversion Price in effect immediately prior to the date of
the distribution less the then Fair Market Value (as determined pursuant
to Section 9.4) of the portion of the share capital, cash or assets or
evidences of Indebtedness so distributed, or of the subscription rights,
options or warrants so distributed or of such convertible or exchangeable
securities, with respect to one A Common Share, and the denominator of
which shall be the Conversion Price in effect immediately prior to the
date of the distribution. Such adjustment shall be made
whenever any such distribution is made, and shall become effective
retroactive to the record date for the determination of shareholders
entitled to receive such distribution. If any such distribution
is not made or if any or all of such rights, options or warrants expire or
terminate without having been exercised, the Conversion Price then in
effect shall be appropriately
readjusted.
|
|
(d)
|
Notwithstanding
the foregoing, the provisions of this Section 4.4 shall not apply to the
issuance of any of the following (“
Exempt
Issuances
”): (1) A Common Shares issued upon conversion of Series B
Preferred Shares; (2) Common Shares issued upon conversion or exchange of
New Securities where the Conversion Price had been adjusted concurrently
with the issue of such New Securities in accordance with the provisions of
this Section 4.4; (3) Series B Preferred Shares issued as PIK Dividends or
in connection with a subdivision or consolidation of outstanding Series B
Preferred Shares; (4) Parity Shares issued with the consent of the
Majority Holders pursuant to Section 5.2(c); (5) A Common Shares issued
upon conversion of Parity Shares; (6) Parity Shares issued as
payment-in-kind dividends or in connection with a subdivision or
consolidation of any class or series of Parity Shares; (7) Equity
Incentive Awards (and any A Common Shares issued pursuant to the exercise
of any such Employee Incentive Awards) the issuance of which has been
approved by the Board; and (8) A Common Shares issued as Permitted
Acquisition Consideration.
|
|
(e)
|
In
the event any securities of the Company (other than Series B Preferred
Shares) (collectively, the “
Subject
Securities
”), are amended or otherwise modified by operation of
their terms or otherwise (including, without limitation, by operation of
such Subject Securities’ anti-dilution provisions) in any manner
whatsoever that results in (i) the reduction of the exercise, conversion
or exchange price of such Subject Securities payable upon the exercise
for, or conversion or exchange into, Common Shares or other securities
exercisable for, or convertible or exchangeable into, Common Shares and/or
(ii) such Subject Securities becoming exercisable for, or convertible or
exchangeable into (A) more shares or a greater amount of Subject
Securities which are, in turn exercisable for, or convertible or
exchangeable into, Common Shares, or (B) more Common Shares, then such
amendment or modification shall be treated for purposes of Section 4.4(b)
above as if the Subject Securities which have been amended or modified
have been terminated and New Securities have been issued with the amended
or modified terms, the Company shall make all necessary adjustments
(including successive adjustments if required) to the Conversion Price in
accordance with Section 4.4(b) above. On the expiration or
termination of any such amended or modified Subject Securities for which
adjustment has been made pursuant to the operation of the provisions of
this Section 4.4(e) or Section 4.4(b) above, without such Subject
Securities having been exercised, converted or exchanged in full pursuant
to their terms, the Conversion Price shall be appropriately readjusted to
reverse such previous adjustment.
|
|
(f)
|
No
adjustment in the Conversion Price shall be required unless such
adjustment would require a change equal to at least one percent (1%) in
the Conversion Price;
provided
,
however
, that
any adjustments which by reason of this Section 4.4(f) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment; and
provided
,
further
, that
adjustment shall be required and made in accordance with the provisions of
this Section 4.4 (other than this Section 4.4(f)) at the time of any
conversion of any Series B Preferred Shares pursuant to Section 4.4(a)
above. All calculations shall be made to the nearest cent or to
the nearest one hundredth of a
share.
|
|
(g)
|
Whenever
the Conversion Price or the Conversion Rate is adjusted as herein
provided, the Company shall promptly prepare a notice of the adjustment
setting forth the relevant Conversion Price or the relevant Conversion
Rate that is being adjusted and the date on which the adjustment becomes
effective and shall mail the notice of such adjustment (together with a
copy of an officer’s certificate setting forth the facts requiring such
adjustment) to each holder of Series B Preferred Shares at such holder’s
last address as shown on the Register of
Members.
|
|
4.5
|
Notice of Certain
Events
.
|
In case
at any time prior to the conversion or redemption of all outstanding Series B
Preferred Shares:
|
|
(a)
|
the
Company shall authorize the granting to all the holders of Common Shares
of rights to subscribe for or purchase any shares of any class or of any
other rights; or
|
|
|
(b)
|
there
shall be any reclassification of the Common Shares of the Company other
than a subdivision or combination of its outstanding Common Shares;
or
|
|
|
(c)
|
there
shall be any capital reorganization by the Company;
or
|
|
|
(d)
|
there
shall be a consolidation or merger involving the Company or sale of all or
substantially all of the Company’s property and assets;
or
|
|
|
(e)
|
there
shall be a voluntary or involuntary dissolution, liquidation or winding up
by the Company or dividend or distribution to holders of A Common Shares;
or
|
|
|
(f)
|
any
other event which would cause an adjustment in the Conversion Price or
Conversion Rate shall occur;
|
then in
any one or more of said cases, the Company shall cause to be delivered to the
holders of the Series B Preferred Shares, at the earliest practicable time (and,
in any event, not less than fifteen (15) days before any record date or the date
set for definitive action,
provided
that if the
relevant transaction has not been publicly announced at such time the Company
may first require that each such holder execute a confidentiality agreement in
customary form), notice of the date on which the books of the Company shall
close or a record shall be taken for such dividend, distribution or subscription
rights or such reorganization, sale, consolidation, merger, dissolution,
liquidation or winding up or other transaction shall take place, as the case may
be. Such notice shall also set forth such facts as shall indicate the
effect of such action (to the extent such effect may be known at the date of
such notice) on the Conversion Price and the kind and amount of the shares and
other securities and property deliverable upon conversion of the Series B
Preferred Shares, as well as a comparison of what (if anything) the holders of
Series B Preferred Shares would be entitled to receive in connection with such
action if such holders elect not to convert their Series B Preferred
Shares. Such notice shall also specify the date, if known, as
of which
the holders of record of the Common Shares shall participate in said dividend,
distribution or subscription rights or shall be entitled to exchange their
Common Shares for securities or other property (including cash) deliverable upon
such reorganization, sale, consolidation, merger, dissolution, liquidation or
winding up or other transaction, as the case may be, and the right of the
holders of Series B Preferred Shares to convert their Series B Preferred Shares
into A Common Shares as of such date.
|
4.6
|
Reservation of A
Common Shares
.
|
|
|
(a)
|
The
Company shall at all times reserve and keep available, out of the
aggregate of its authorized but unissued A Common Shares, for the purpose
of effecting conversions of the Series B Preferred Shares, the full number
of A Common Shares issuable upon the conversion of all outstanding Series
B Preferred Shares not theretofore converted including, for purposes of
this paragraph, the number of A Common Shares which shall be issuable upon
conversion of all of the outstanding Series B Preferred Shares which shall
be computed as if, at the time of computation, all of the outstanding
shares were held by a single holder. The Company shall from
time to time, subject to the Law, the Articles and the Memorandum of
Association of the Company, increase the authorized amount of its A Common
Shares if at any time the number of A Common Shares remaining unissued
shall not be sufficient to permit the conversion of all the then
outstanding Series B Preferred
Shares.
|
|
(b)
|
Notwithstanding
any other provision of this authorizing resolution to the contrary, the
Conversion Price shall at all times be equal to or greater than the then
par value of the A Common Shares issuable upon conversion of each Series B
Preferred Share. Before taking any action which would cause an
adjustment reducing the Conversion Price below such par value, the Company
shall use its best efforts to reduce the par value of the A Common Shares
so that such adjustment can be given
effect.
|
Except
where registration is requested in a name other than the name of the registered
holder, the Company will pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of A Common Shares on
conversion of the Series B Preferred Shares pursuant hereto.
|
4.8
|
Merger, Consolidation,
Etc
.
|
In case
of any reclassification or change of outstanding A Common Shares (other than a
change in par value, or as a result of a subdivision or combination), or in case
of any consolidation of the Company with, or merger of the Company with or into,
any other entity that results in a reclassification, change, conversion,
exchange or cancellation of the outstanding A Common Shares or any sale or
transfer of all or substantially all of the assets of the Company, each holder
of the Series B Preferred Shares then outstanding shall have the right
thereafter to convert the Series B
Preferred
Shares held by such holder into the kind and amount of securities, cash and
other property which the holder would have been entitled to receive upon such
reclassification, change, consolidation, merger, sale or transfer if immediately
prior to the reclassification, change, consolidation, merger, sale or transfer
such holder had held the A Common Shares then issuable upon conversion of such
Series B Preferred Shares.
|
4.9
|
Protection of
Conversion Rights
.
|
The
Company will not through any reorganization, 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 4 and in
the taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the holders of the Series B Preferred Shares
against impairment.
|
4.10
|
Cancellation of
Converted Shares
.
|
Upon any
conversion of the Series B Preferred Shares, the shares so converted shall be
cancelled and shall not be reissued, and the Company may from time to time take
such appropriate action as may be necessary to diminish the authorized number of
Series B Preferred Shares accordingly.
ARTICLE
5
VOTING
RIGHTS
The
issued and outstanding Series B Preferred Shares shall be voted at any annual or
extraordinary general meeting of the Company upon the following
basis: the holders of any Series B Preferred Shares shall be entitled
to the number of votes equal to the number of A Common Shares into which such
Series B Preferred Shares could be converted (determined without giving effect
to the limitations on convertibility set forth in Section 4.1) at the record
date for determination of the Members entitled to vote on such matters, or, if
no such record date is established, at the date such vote is taken, such votes
to be counted together with all other shares of the Company having general
voting power and not counted separately as a class.
|
5.2
|
Matters Requiring
Approval
.
|
None of
the following actions involving the Company or any Subsidiary shall be valid
unless approved in advance by the holders of Series B Shares and/or Parity
Shares constituting a majority of the total number of Series B Shares and Parity
Shares (except for the matters set forth in clauses (b), (c) and (f), which
shall only require the prior approval of the Majority Holders):
|
|
(a)
|
Any
material change in the scope of the businesses carried on by the Company
and its Subsidiaries;
|
|
|
(b)
|
Any
amendment to the Articles or the Memorandum of Association of the Company
that adversely affects the holders of the Series B Preferred
Shares;
|
|
|
(c)
|
The
authorization or issuance of any Parity Shares or any class or series of
shares with powers, rights, preferences or privileges that are senior to
the Series B Preferred Shares;
|
|
|
(d)
|
Any
Substantial Asset Sale;
|
|
|
(e)
|
The
Company or any of its Subsidiaries entering into, modifying or terminating
any Related-Party Transaction (1) other than on commercially reasonable
arm’s length terms or (2) where the transaction value exceeds
US$5,000,000, in either case unless such action is approved by a committee
of the Board of Directors comprised of at least three “independent”
directors (within the meaning of the NASDAQ Marketplace Rules, regardless
of whether or not the Company then has a class of shares listed for
trading on a NASDAQ market);
|
|
|
(f)
|
Any
redemption or purchase (by the Company or any of its Subsidiaries) of
Parity Shares other than a Permitted Parity Share Redemption;
or
|
|
|
(g)
|
Any
redemption or purchase (by the Company or any of its Subsidiaries) of
Junior Shares other than a Permitted Common
Repurchase.
|
ARTICLE
6
REDEMPTION
The
Company shall deliver to the holders of the outstanding Series B Preferred
Shares a written notice (a “
Realization Event
Notice
”) at least twenty (20) days prior to the effective date of any
Realization Event. If so requested in writing by the Majority Holders
within five (5) days following the giving of any such Realization Event Notice,
the Company shall deliver to each holder of outstanding Series B Preferred
Shares a written notice (a “
Redemption Notice
”)
offering to redeem all Series B Preferred Shares held by such holder upon the
occurrence of such Realization Event at the Redemption Price per share specified
in Section 6.2. Any such holder may accept such offer by delivering
to the Company within ten (10) days after the giving of such Redemption Notice a
written notice of acceptance in the form reasonably prescribed by the Company
for such purpose (an “
Acceptance Notice
”,
with any Series B Preferred Shares with respect to which a valid Acceptance
Notice has been given being sometimes referred to herein as “
Redeemable
Shares
”).
The
redemption price (the “
Redemption Price
”) to
be paid by the Company for each Redeemable Share shall be equal to the greater
of (x) the sum of (i) the Stated Value and (ii) the amount of any accrued
Dividends per share remaining unpaid on each Redeemable Share as of the
Redemption Date and (y) the Common Equivalent Value of each Redeemable Share as
of the Redemption Date.
|
6.3
|
Redemption
Procedure
.
|
On the
effective date of the applicable Realization Event, or on such other date as may
be agreed to by the Company and the holders of a majority of the Redeemable
Shares (in either case, the “
Redemption Date
”),
subject to the Law and any other applicable laws, the Company shall redeem each
of the Redeemable Shares by payment to the holders of the Redemption Price
therefor in immediately available funds, subject to surrender to the Company of
the certificate(s) representing such Redeemable Shares.
|
6.4
|
Termination of
Rights
.
|
On and
after the Redemption Date, all rights of any holder of Redeemable Shares shall
cease and terminate, and such Redeemable Shares shall no longer be deemed to be
outstanding, whether or not the certificates evidencing such shares have been
received by the Company;
provided
,
however
, that, if the
Company defaults in the payment of the Redemption Price for any such Redeemable
Shares for any reason, including without limitation the lack of funds for
redemption, the rights of the holders of such Redeemable Shares shall continue
until the Company cures such default.
ARTICLE
7
LIQUIDATION,
DISSOLUTION OR WINDING UP
Upon the
occurrence of any liquidation, dissolution or winding up of the Company, the
assets of the Company available for distribution shall be distributed as
follows:
Subject
to the Law and any other applicable laws, the holders of the Series B Preferred
Shares shall be entitled to be paid the Liquidation Preference, pro rata, in
respect of each Series B Preferred Share, and the holders of any Parity Shares
shall be entitled to be paid any liquidation preferences applicable to such
Parity Shares, in each case prior to and in preference of any payments to
holders of Junior Shares. If the assets of the Company are not
sufficient to pay in full the Liquidation Preference of the Series B Preferred
Shares and any liquidation preferences of such Parity Shares, then the holders
of the Series B Preferred Shares and such Parity Shares shall share equally and
ratably in the distributions of such assets based on the Liquidation Preference
of the Series B Preferred Shares and the liquidation preferences of such Parity
Shares. Subject to the Law and applicable law, after payment has been
made to the holders of the Series B Preferred Shares and any such Parity Shares
of the full
amounts
to which they shall be entitled, all remaining assets of the Company shall be
distributed first to the holders of any Junior Shares entitled to liquidation
preferences until such liquidation preferences are paid in full and thereafter
to the holders of Common Shares pro rata based on the numbers of Common Shares
held by them.
|
7.2
|
Non-Cash
Distributions
.
|
In the
event the Company proposes to distribute assets other than cash in connection
with any liquidation, dissolution or winding up of the Company, the value of the
assets to be distributed to the holders of the Series B Preferred Shares, any
Parity Shares, any Junior Shares entitled to a liquidation preference and the
Common Shares shall be deemed to be equal to the Fair Market Value of such
assets as determined pursuant to Section 9.4.
ARTICLE
8
NOTICES
Except as
otherwise expressly provided, whenever notices or other communications are
required to be made, delivered or otherwise given to holders of the Series B
Preferred Shares, the notice or other communication shall be made in writing and
shall be by telefax, commercial express courier service or personal delivery,
addressed to the Persons shown on the books of the Company as such holders at
the addresses as they appear in the books of the Company, as of a record date or
dates determined in accordance with the Articles and applicable law, as in
effect from time to time. All such notices and communications shall
be deemed to have been duly given: when delivered by hand, if personally
delivered; when delivered by such courier, if delivered by commercial express
courier service; or if faxed, when transmission is confirmed by the sender’s fax
machine.
ARTICLE
9
MISCELLANEOUS
Except as
may otherwise be conferred or required by the Law or any other applicable laws,
the Series B Preferred Shares shall not have any designations, preferences,
limitations or relative rights other than those specifically set forth herein
(as same may be amended from time to time) and in any applicable provision of
the Articles and the Memorandum of Association of the Company.
If any
right, preference or limitation of the Series B Preferred Shares set forth
herein (as amended from time to time) is invalid, unlawful or incapable of being
enforced by reason of any rule or law or public policy, all other rights,
preferences and limitations set forth herein which can be given effect without
the invalid, unlawful or unenforceable right, preference or limitation herein
set forth shall not be deemed dependant upon any other such right, preference or
limitation unless so expressed herein.
Any
registered holder of Series B Preferred Shares shall be entitled to an
injunction or injunctions to prevent violations of the provisions of the
Articles or this authorizing resolution and to enforce specifically the terms
and provisions of the Articles and this authorizing resolution in any court of
the Cayman Islands or any countries having jurisdiction, this being in addition
to any other remedy to which such holder may be entitled at law or in
equity. Notwithstanding the foregoing, the observance of any term of
the Articles or this authorizing resolution which benefits only the holders of
the Series B Preferred Shares may be waived by the Majority Holders voting as a
separate class (either generally or in a particular instance and either
retroactively or prospectively) provided that such waiver may not be conducted
by such holders unless such waiver applies to all holders of Series B Preferred
Shares.
|
9.4
|
Determination of Fair
Market Value
.
|
Whenever
the Fair Market Value of any securities (including A Common Shares) or other
assets is required to be determined for the purpose of this authorizing
resolution, such “
Fair
Market Value
” shall be determined as follows:
|
(a)
|
Such
Fair Market Value shall in the first instance be determined by the Board
of Directors in good faith and notice of such determination shall be given
as promptly as practicable to the applicable holders of Series B Preferred
Shares. If the securities in question are not subject to
significant restrictions on free marketability and are (i) traded on one
or more securities exchanges or (ii) actively traded over-the-counter, the
determination of the Board of Directors shall be final and binding on the
Company and each holder of Series B Preferred Shares if the Board of
Directors has applied the methodology set forth in clause (i) or (ii) of
Section 9.4(c), as the case may be. If the securities in
question are subject to restrictions on free marketability and/or there is
no public market for such securities, but the determination of Fair Market
Value of such securities is in the context of an acquisition by the
Company or any Subsidiary thereof of another Person or business for equity
consideration consisting of the issuance of not more than one million
(1,000,000) A Common Shares (which number shall be adjusted to reflect any
dividends on the A Common Shares payable in A Common Shares, share splits
or other combinations or subdivisions of A Common Shares subsequent to the
date of this authorizing resolution) (the “
De Minimis
Exception
”), the determination of the Board of Directors shall be
final and binding on the Company and each holder of Series B Preferred
Shares if such determination has been made consistent with the applicable
provisions of Section 9.4(c).
|
|
(b)
|
Subject
to the De Minimis Exception, if the securities in question are subject to
significant restrictions on free marketability and/or if there is no
public market for the securities in question and if holders of Series B
Shares and/or Parity Shares constituting a majority of the total number of
Series B Shares and Parity Shares do not deliver to the Company a written
notice of objection to the determination of the Board of Directors within
ten (10) days after the giving of such notice, the Fair Market Value set
forth in such notice shall be final and binding on the Company
|
and each holder of Series B Preferred Shares and Parity
Shares. If holders of Series B Shares and/or Parity Shares
constituting a majority of the total number of Series B Shares and Parity Shares
deliver such a notice objecting to such determination within such 10-day period,
the Fair Market Value of such securities or other assets shall be determined by
an independent third-party appraiser (the “
Appraiser
”) jointly
appointed by the Company and such holders. Such valuation shall be
made in accordance with Section 9.4(c).
|
(c)
|
For
purposes of this Section 9.4, valuation shall be made as follows: For
securities (including A Common Shares) not subject to significant
restrictions on free marketability: (i) if traded on one or more
securities exchanges, the value shall be deemed to be the average of the
closing prices of the securities on the principal such exchange over the
fifteen (15) day period ending three days prior to the applicable
valuation date, or such other measurement period as the Board of Directors
may reasonably select; (ii) if actively traded over-the-counter, the value
shall be deemed to be the average of the closing bid or sale prices
(whichever are applicable) over the fifteen (15) day period ending three
(3) days prior to the applicable valuation date, or such other measurement
period as the Board of Directors may reasonably select; and (iii) if there
is no active public market for the securities in question, the value shall
be the fair market value thereof as of the applicable valuation date, as
determined by the Appraiser (or the Board of Directors, as the case) based
on such valuation principles and methods as it deems
appropriate. Notwithstanding the foregoing, in the case of a
determination of the Common Equivalent Value of Series B Preferred Shares
in connection with a redemption of such Series B Preferred Shares pursuant
to Article 6, the value of the A Common Shares determined pursuant to
clause (i) of the preceding sentence shall be based on the price of the A
Common Shares as of the applicable Redemption Date and the value of the A
Common Shares determined pursuant to clause (ii) of the preceding sentence
shall be based on the average of the bid and ask prices as of such
Redemption Date.
|
In the
case of A Common Shares, the trading value for such purpose shall be based on
the price of the related American Depositary Shares.
The
method of valuation of securities subject to any restrictions on free
marketability shall be to make an appropriate discount from the market value
determined pursuant to subparagraph (i) above to reflect the approximate fair
market value thereof, as determined by the Appraiser (or the Board of Directors,
as the case may be).
In the
case of assets other than securities, the value shall be the fair market value
thereof as determined by the Appraiser (or the Board of Directors, as the case
may be) based on such valuation principles and methods as it deems
appropriate.
Schedule
1
to
Series B
Preferred Shares Authorizing Resolution
DEFINITIONS
For the
purposes of the attached authorizing resolution, the following terms shall have
the meanings indicated below.
“
Acceptance Notice
”
shall have the meaning set forth in Section 6.1.
“
Affiliate
” shall mean
with respect to any Person, any other Person that directly or indirectly, though
one or more intermediaries, controls, is controlled by, or under common control
with, the first mentioned Person. For purposes of this definition,
“control” (including with correlative meanings, the terms “controlling”,
“controlled
by” and
under “common control with”) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
“
Appraiser
” shall have
the meaning set forth in Section 9.4(b).
“
Articles
” has the
meaning set forth in Section 1.1.
“
Associate
” shall
mean, with respect to any Person, any Entity of which such Person is a senior
officer, director or partner, any trust or estate in which such Person has a
substantial beneficial interest or as to which such Person serves as a trustee
or in a similar capacity or any spouse, children, grandchildren, parents,
parents-in-law or siblings of such Person, or a trust primarily for the benefit
of any of the foregoing.
“
Business
Day
” means any day other
than a Saturday, Sunday or a day on which banking institutions in the State of
New York or Hong Kong are required or authorized by law or executive order to
close.
”
“
Change of Control
” of
the Company shall be deemed to have occurred (i) if any Person or “group”
(within the meaning of Rule 13d-5(b)(i) under the Exchange Act), other than
Xinhua Finance Limited and its Affiliates, shall acquire, take control of
(whether by merger, consolidation, sale or otherwise, in one transaction or in a
related series of transactions) or otherwise beneficially own voting securities
of the Company (or any successor entity in a merger or consolidation involving
the Company) representing more than thirty-five percent (35%) of the total
voting power of all outstanding voting securities of the Company unless Xinhua
Finance Limited and its Affiliates then beneficially own voting securities of
the Company representing a higher percentage of the voting power of all such
outstanding voting securities of the Company (or such successor entity) or (ii)
any Person or “group”, other than Xinhua Finance Limited and its Affiliates,
shall obtain the ability to Control the Company;
provided
that any
transaction or series of transactions where Xinhua Finance Limited and its
Affiliates retain Control (whether directly or indirectly) over the Company
shall be deemed not to be a “Change of Control” of the Company or a “Realization
Event.”
“
Common Equivalent Dividend
Amount
” shall have the meaning set forth in
Section 3.1.
“
Common Equivalent
Value
” of any Series B Preferred Shares at any time shall mean the Fair
Market Value (as determined pursuant to Section 9.4) at such time of the
Conversion Shares into which such Series B Preferred Shares are then convertible
(determined without giving effect to any limitations on such convertibility set
forth in Section 4.1).
“
Common Shares
” means,
collectively, the A Common Shares and the B Common Shares.
“
Contingent
Obligation
” shall mean as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument or arrangement (whether in writing
or otherwise) to which such Person is a party or by which it or any of such
Person’s property is bound.
“
Control
” shall mean,
with respect to any Entity, the possession, directly or indirectly, of power to
direct or cause the direction of management or policies of such Entity or any of
its Subsidiaries (whether through ownership of more than 50% of the voting power
of voting securities of such Entity or any of the Subsidiaries, through the
power to appoint a majority of the members of the board of directors or similar
governing body of such Entity or any of its Subsidiaries, or through contractual
arrangements or otherwise).
“
Conversion Base
Amount
” shall have the meaning set forth in Section 4.1.
“
Conversion Price
”
shall have the meaning set forth in Section 4.1.
“
Conversion Rate
”
shall have the meaning set forth in Section 4.1.
“
Conversion Shares
”
shall have the meaning set forth in Section 4.1.
“
Dividend
” shall have
the meaning set forth in Section 3.1.
“
De Minimis Exception
”
shall have the meaning set forth in Section 9.4(a).
“
Entity
” means any
corporation, partnership, limited liability company, joint venture, association,
partnership, business trust or other entity.
“
Equity Incentive
Awards
” shall mean share options or restricted share awards granted under
the Company’s Share Option and Share Grant Plan.
“
Exchange Act
” shall
mean the U.S. Securities Exchange Act of 1934, as amended.
“
Exempt Issuances
”
shall have the meaning set forth in Section 4.4(d).
“
Fair Market Value
” of
a security or other asset shall mean the value thereof determined pursuant to
Section 9.4.
“
GAAP
” shall mean the
generally accepted accounting principles in the United States of America,
consistently applied.
“
Governmental
Authority
” means any government or political subdivision or department
thereof, any governmental or regulatory body, commission, board, bureau, agency
or instrumentality, or any court or arbitrator or alternative dispute resolution
body, in each case whether federal, state, local, foreign or supranational, as
well as any applicable self regulatory body.
“
Hong Kong
” shall mean
the Special Administrative Region of Hong Kong.
“
Indebtedness
” shall
mean as to any Person (a) all obligations of such Person for borrowed money
(including without limitation, reimbursement and all other obligations with
respect to surety bonds, unfunded credit commitments, letters of credit and
bankers’ acceptances, whether or not matured), (b) all indebtedness, obligations
or liability of such Person (whether or not evidenced by notes, bonds,
debentures or similar instruments) whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, or joint or several,
that should be classified as liabilities in accordance with GAAP, including
without limitation, any items so classified on a balance sheet and any
reimbursement obligations in respect of letters of credit or obligations in
respect of bankers acceptances, (c) all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts payable
and accrued commercial or trade liabilities arising in the ordinary course of
business, (d) all interest rate and currency swaps, caps, collars and similar
agreements or hedging devices under which payments are obligated to be made by
such Person, whether periodically or upon the happening of a contingency, (e)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (f)
all obligations of such Person under leases which have been or should be, in
accordance with GAAP, recorded as capital leases, (g) all indebtedness secured
by any Lien (other than Liens in favour of lessors under leases other than
leases included in clause (f) above) on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall have
been assumed by that Person or is non-recourse to the credit of that Person, and
(h) any Contingent Obligation of such Person incurred in respect of any
Indebtedness referred to in (a) to (g) above.
“
Junior Shares
” shall
mean the Common Shares and any other shares in the Company’s share capital that
may be authorized after the date hereof other than Parity Shares.
“
Lien
” shall mean any
mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien
(statutory or other), charge, claim, restriction or preference, priority, right
or other security interest or preferential arrangement of any kind or nature
whatsoever (excluding preferred share and equity related preferences) including,
without limitation, those created by, arising under or evidenced by any
conditional sale or other title retention agreement, or any financing lease
having substantially the same economic effect as any of the
foregoing.
“
Liquidation
Preference
” shall mean, with respect to a Series B Preferred Share at any
time, the greater of (a) the sum of (i) two hundred percent (200%) of the Stated
Value per share plus (ii) the amount of any accrued Dividends per share then
remaining unpaid on such Series B Preferred Share and (b) the amount that would
be distributed at such time in a complete liquidation of the Company to the
holder of such Series B Preferred Share as a holder of A Common Shares if all
outstanding Series B Preferred Shares had been converted into Conversion Shares
at such time pursuant to Article 4 hereof (determined without giving effect to
the limitations on convertibility set forth in Section 4.1).
“
Majority Holders
” at
any time shall mean the holders of a majority of the Series B Preferred Shares
outstanding at that time.
“
New Securities
” shall
have the meaning set forth in Section 4.4(b).
“
Parity Shares
” shall
mean any shares in the capital of the Company that rank
pari passu
with the Series B
Preferred Shares with respect to dividend rights, rights on other distributions
and/or rights upon any liquidation or dissolution of the Company (as
applicable), the authorization and issuance of which have been approved by the
Majority Holders pursuant to Section 5.2(c).
“
Permitted Acquisition
Consideration
” shall mean A Common Shares issued as consideration for the
acquisition by the Company or any Subsidiary thereof (whether by direct
purchase, share exchange, merger or otherwise) of another Person or business
that has been approved by the Board of Directors, but only to the extent that
the Fair Market Value (as determined pursuant to Section 9.4) of the interests
in such Person or such business acquired by the Company or such Subsidiary is at
least equal to the Fair Market Value (as determined pursuant to Section 9.4) of
such A Common Shares. Notwithstanding the foregoing sentence, any A
Common Shares that the Company is contractually obligated to issue pursuant to
“earnout” provisions in effect as of the date hereof relating to prior
acquisitions by the Company (or its Subsidiaries) of other Persons or businesses
shall be deemed to constitute Permitted Acquisition Consideration for the
purposes hereof, regardless of the value of such shares or the related interests
acquired by the Company (or such Subsidiaries).
“
Permitted Common
Repurchase
” shall mean (i) any repurchase by the Company of A Common
Shares or Equity Incentive Awards held by an employee of the Company or a
Subsidiary thereof in connection with the termination of the employment of such
employee where such repurchase (x) has been approved by the Board of Directors
or is required pursuant to an agreement entered into between the Company (or
such Subsidiary) and such employee that has been approved by the Board of
Directors and (y) is at a price per share that does not exceed the then current
market price per share of the A Common Shares or (ii) any repurchase of A Common
Shares (or, if applicable, American Depository Receipts representing A Common
Shares) through open market purchases pursuant to a share buy back program
approved by the Board of Directors;
provided
that no
repurchase shall be permitted pursuant to clause (ii) which would cause the
cumulative aggregate number of A Common Shares repurchased pursuant to clause
(ii) (or represented by American Depository Receipts repurchased pursuant to
clause (ii)) to exceed twenty percent (20%) of the number of Common Shares
outstanding at the time of such repurchase (determined
without
giving effect to any prior repurchases permitted pursuant to clause (ii))
reduced by the number of A Common Shares repurchased (or represented by American
Depository Receipts repurchased) prior to the date hereof pursuant to the
Company’s share buy back program announced on May 29, 2007; and
provided
,
further
, that no
repurchase shall be permitted pursuant to clause (i) or (ii) unless all accrued
Dividends on the Series B Preferred Shares (other than Dividends accrued during
the fiscal quarter during which such repurchase takes place) shall have been
paid in full, or declared in full and funds set apart for the payment
thereof.
“
Permitted Parity Share
Redemption
” shall mean a redemption of Parity Shares or a repurchase (by
the Company or a Subsidiary thereof) of Parity Shares or of A Common Shares
issued upon conversion of Parity Shares to the extent that such redemption or
repurchase is required pursuant to the terms of such Parity Shares or the terms
of any agreement pursuant to which such Parity Shares are issued, but only if
such terms have been approved the Majority Holders.
“
Person
” shall mean
any individual, Governmental Authority, Entity or unincorporated
association.
“
PIK Dividend
” shall
have the meaning set forth in Section 3.3.
“
Realization Event
”
shall mean any of the following:
|
|
(a)
|
Any
Change of Control of the Company;
|
|
|
(b)
|
Any
Substantial Asset Sale;
|
|
|
(c)
|
Any
consolidation or merger (other than a reincorporation transaction) or
acquisition or sale of voting securities of the Company resulting in the
holders of the issued and outstanding voting securities of the Company
immediately prior to such transaction beneficially owning or controlling
less than a majority of the voting securities of the continuing or
surviving entity immediately following such transaction;
or
|
|
|
(d)
|
Any
tender offer, exchange offer or repurchase offer for more than fifty
percent (50%) of the outstanding Common
Shares.
|
“
Realization Event
Notice
” shall have the meaning set forth in Section 6.1.
“
Redeemable Shares
”
shall have the meaning set forth in Section 6.1.
“
Redemption Date
”
shall have the meaning set forth in Section 6.3.
“
Redemption Notice
”
shall have the meaning set forth in Section 6.1.
“
Redemption Price
”
shall have the meaning set forth in Section 6.2.
“
Related Party
” means
(i) any shareholder of the Company or any Subsidiary of the Company (other than
the Company or another Subsidiary thereof), (ii) any Affiliate of any Person
described in clause (i) (other than the Company or any of its Subsidiaries),
(iii) any
officer,
director, employee or consultant of any Person described in clause (i) or (ii),
or (iv) or any Associate of any Person described in clause (iii).
“
Related-Party
Transaction
” shall mean any transaction, agreement or arrangement
involving the Company or any of its Subsidiaries, on the one hand, and any
Related Party, on the other hand.
“
Stated Value
” shall
have the meaning set forth in Section 2.2.
“
Subject Securities
”
shall have the meaning set forth in Section 4.4(e).
“
Subsidiary
” means
with respect to any Person, any Entity of which more than 50% of the total
voting power of shares of stock or other ownership interest entitled (without
regard to the occurrence of any contingency) to vote in the election of the
Person or Persons (whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause the direction
of the management and policies thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of the Person or a combination thereof.
“
Substantial Asset
Sale
” shall mean any disposition (whether by way of a sale, a merger or
consolidation pursuant to which any Subsidiary of the Company ceases to be a
majority-owned and controlled Subsidiary, a contribution of assets to any Entity
other than a majority-owned and controlled Subsidiary, a spin-off or split-off
involving any Subsidiary of the Company, a partial liquidating dividend or
distribution of assets or any other form of disposition) of assets of the
Company or of any of its Subsidiaries representing substantially all of the
assets of the Company and its Subsidiaries determined on a consolidated
basis.
“
USD
”, “
United States
Dollars
” “
US
Dollars
”, “
US$
” and “
cent
” shall mean the
lawful currency of the United States of America.
Register for real-time alerts, custom portfolio, and market movers
Hot Features
Premium
