CHINA MOBILE MEDIA TECHNOLOGY INC. SECURITIES PURCHASE AGREEMENT (THE “AGREEMENT”)
EXECUTION
COPY
CHINA
MOBILE MEDIA TECHNOLOGY INC.
SECURITIES
PURCHASE AGREEMENT (THE “AGREEMENT”)
December
28, 2007
Abax
Lotus Ltd.
x/x
Xxxx
Xxxxxx Xxxxxxx (Xxxx Xxxx) Limited
Suite
6708, 67/F Two International Finance Centre
0
Xxxxxxx
Xxxxxx
Xxxxxxx,
Xxxx Xxxx SAR
Ladies
and Gentlemen:
Magical
Insight Investments Limited (the “Company”),
a
British Virgin Islands (“BVI”)
corporation,
and China Mobile Media Technology Inc. (the “Parent”), a
Nevada
corporation, hereby agree with the Purchaser (as defined below) as
follows:
1. Authorization
and Issuance of Securities.
(a)
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The
Company has authorized (i) the issuance and sale of up to RMB150,000,000
in aggregate principal amount of its Guaranteed Senior Notes due
2014 (the
“Initial
Notes”)
(ii)
at the Company’s sole election and subject to the terms and conditions
herein described, the issuance and sale to the Purchaser by the Company
of
up to RMB20,000,000 in aggregate principal amount of the Company’s
Guaranteed Senior Notes due 2014 (the “Option
Notes,”
and together with the Initial Notes, the “Notes”),
and
the Parent has authorized the issuance of warrants (each, a “Warrant”)
representing the right to purchase a certain number of the Parent’s common
stock, par value $0.001 (the “Common
Stock”),
as calculated in the Warrant Agreement (as defined
below).
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(b)
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Subject
to the terms and conditions of this Agreement, the Company will,
at the
“First Closing Date” provided for in Section
3,
issue and sell to Abax Lotus Ltd. (the “Purchaser”)
and the Purchaser will purchase from the Company, Notes in the principal
amount specified opposite the Purchaser’s name in Schedule
I,
and the Parent will issue to the Purchaser such number of Warrants
specified opposite the Purchaser’s name in Schedule
I,
for the consideration set forth herein. Subject to the terms and
conditions of this Agreement, the Company’s option to require the
Purchaser to purchase the Option Notes will expire on April 15, 2008
and
may be exercised in whole only, but not in part on one occasion at
the
discretion of the Company on or before such date only if the Financial
Trigger (as defined below) has occurred. Any such time and date of
delivery of the Notes issued pursuant to the option shall be determined
by
the Company, but shall not be later than seven (7) full business
days
after the exercise of said option, nor in any event prior to the
First
Closing Date (as defined below).
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(c)
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The
Notes are to be issued pursuant to the provisions of an indenture
(the
“Indenture”), to
be dated as of the First Closing Date (as hereinafter defined), by
and
among the Company, the Parent and The Hongkong and Shanghai Banking
Corporation Limited, as trustee (the “Trustee”),
substantially
in the form attached hereto as Exhibit
A.
The Warrants are to be issued pursuant to the provisions of a warrant
agreement (the “Warrant
Agreement”),
to be dated as of the First Closing Date (as defined below), by and
between the Parent and The Hongkong and Shanghai Banking Corporation
Limited, as the warrant agent, substantially in the form attached
hereto
as Exhibit
B.
As used herein, the term “Securities”
shall mean, collectively, the Notes, the Warrants, the Common Stock
issuable upon the exercise of the Warrants (the “Warrant
Shares”)
and the Guarantees (as defined
below).
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(d)
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Capitalized
terms used but not defined herein shall have the meanings given to
such
terms in the Indenture.
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2. Terms
of Offering.
(a)
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Pursuant
to the Indenture, the Parent shall irrevocably and unconditionally
guarantee the Notes on a senior basis, and the Company shall cause
all
future direct and indirect subsidiaries of the Company (each, a
“Subsidiary
Guarantor”,
and together with the Parent, the “Guarantors”),
but not including any direct and indirect subsidiaries of the Company
organized in the People’s Republic of China (“PRC”)
unless a change in PRC law or interpretation in PRC law permits such
guarantees without governmental approval or registration, to irrevocably
and unconditionally guarantee, on a senior basis, to the Purchaser
and to
the Trustee the payment and performance of the Company’s obligations under
the Documents (as defined below) (collectively, the “Guarantees”).
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(b)
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The
Notes and the Guarantees will be secured
by
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(i)
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a
perfected first-priority Lien on all of the equity interests of the
Company and the Subsidiary Guarantor in existence on the First Closing
Date pursuant to (A) a charge over shares among The Hongkong and
Shanghai
Banking Corporation Limited, as the collateral agent (in such capacity,
the “Collateral
Agent”),
the Parent and the Company (in the case of a charge over shares in
the
Company), (B) a charge over shares among the Collateral Agent, Star
Cluster Incorporated and Hi-Tech Wealth Holding Ltd. (in the case
of a
charge over shares in Hi-Tech Wealth Holding Ltd.), substantially
in the
form attached hereto as Exhibit
C-1, (C)
a charge over shares among the Collateral Agent, Xx. Xxxxx Xxxxxxx
and
Star Cluster Incorporated (in the case of a charge over shares in
Star
Cluster Incorporated), substantially in the form attached hereto
as
Exhibit
C-2, (each,
a “Share
Charge”),
together with the Uniform Commercial Code (“UCC”) financing
statement (the “UCC
Financing Statement”),
in the case of a charge over shares in the Company, or entry into
the
chargor’s Register of Charges maintained at its registered office (or at
the office of its registered agent) in respect of the charge over
such
chargor’s shares and an application with the Registrar of Corporate
Affairs of the BVI to register details of the charge in the Register
of
Registered Charges, in order to comply the legal requirements in
the BVI
for establishing priority of collateral security interests, in the
case of
Share Charges (other than charge over shares in the Company) created
under
this subsection (i), and
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(ii)
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subject
to the approval of the requisite Governmental Authority, a perfected
Lien
on all of the equity interests of each of Beihai Hi-Tech Wealth Technology
Development Co., Ltd. and Beijing Hi-Tech Wealth Communication Technology
Ltd., which are incorporated under the laws of the PRC (each a
“WFOE”) pursuant
to an equity pledge agreement between the Collateral Agent and the
Company, substantially in the form attached hereto as Exhibit
D
(the “Onshore
Equity Pledge Agreements,” and
together with the Share Charges, financing statements and registrations
being referred to herein as the “Security
Documents”).
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(c)
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The
Securities will be offered and sold to the Purchaser pursuant to
Regulation S under the U.S. Securities Act of 1933, as amended (the
“Act”).
Upon original issuance thereof, and until such time as the same is
no
longer required under the applicable requirements of the Act, the
Notes,
Warrants and the Warrant Shares shall bear the legends relating to
the
offer and the sale of the Notes, Warrants and the Warrant Shares
as
required by (i) Regulation S under the Act or (ii) any other
applicable laws or regulations relating to the issuance of the
Securities.
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(d)
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$10,000,000
of the net proceeds from the sale and issuance of the Securities
shall be
wired to an account designated by the collateral agent on behalf
of the
holders (“Secured
Note Holders”)
of two secured notes (“Secured
Notes”)
in the aggregate principal amount of $10,000,000 issued by the Parent
on
June 15 and August 2, 2007 to repay in full all the debt owed by
the
Parent under such Secured Notes, with the remainder deposited into
the
account of the Company jointly designated by the Company and the
Parent in
Hong Kong that is subject to co-signature authority by a representative
of
Abax Lotus Ltd. (the “Deposit
Account”)
and shall be made available to the WFOEs (as defined below) by way
of
capital contribution from the Company or a subsidiary of the Company.
The
Secured Note Holders shall issue a pay-off statement in the form
required
to discharge the pledge on Shares of the Company (the “Pay-off
Statement”).
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(e)
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The
Purchaser will be entitled to certain investor rights as set forth
in each
of the Investor Rights Agreement to be entered into by and among
the
Parent, the Purchaser and Xx. XXXXX Zhengyu, Mr. MA Qing and Xx.
XX Ming
(collectively, Xx. XXXXX, Mr. MA and Xx. XX are referred to herein
as the
“Controlling
Shareholders”) and
the other parties thereto, dated the First Closing Date, in the form
attached hereto as Exhibit E (the “Investor
Rights Agreement”),
the
Information Rights and Inspection Agreement in the form of Exhibit
F and
the Non-competition Agreement in the form of Exhibit
G.
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(f)
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The
Purchaser will be entitled to certain registration rights as set
forth in
the Equity Registration Rights Agreement to be entered into by and
among
the Parent and the Purchaser, dated the First Closing Date, in the
form
attached hereto as Exhibit H (the “Registration
Rights Agreement”).
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(g)
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This
Agreement, the Indenture, the Notes, the Guarantees, the Warrant
Agreement, the Security Documents, the Investor Rights Agreement,
Information Rights and Inspection Agreement, the Noncompetition Agreement
and the Registration Rights Agreement are, collectively, referred
to
herein as the “Documents.”
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3. Purchase,
Sale and Delivery.
(a)
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Subject
to the terms and conditions herein, the delivery of the initial Notes
with
the aggregate principal amount of RMB150,000,000 and the Warrants
to be
purchased by the Purchaser shall occur at the Hong Kong office of
Weil,
Gotshal & Xxxxxx LLP, at 4:00 p.m., Hong Kong time, on January 10,
2008 or on such other Business Day thereafter as may be agreed upon
in
writing by the Company and the Purchaser (such date referred to herein
as
the “First
Closing Date”).
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(b)
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Subject
to the terms and conditions herein, upon the occurrence of the Financial
Trigger, the Company shall have the option to require the Purchaser
to
purchase Option Notes in aggregate principal amount of RMB20,000,000
on
any Business Day as may be agreed upon in writing by the Company
and the
Purchaser but in no event later than April 15, 2008 (such date referred
to
herein as the “Second
Closing Date”,
and along with the First Closing Date, each as applicable a “Closing
Date”
and each such time, as applicable, a “Closing”).
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“Financial
Trigger”
means,
for the Parent and its Subsidiaries on a consolidated basis, that net profit
after tax for the three months ending December 31, 2007 shall be not less than
$3,000,000 (or its equivalent in RMB, calculated at the exchange rate for
conversion of US dollars into RMB quoted by the People’s Bank of China on the
last Business Day of such fiscal year).
The
calculation of “net profit after tax” for the purposes of this definition shall
be as reported in the Parent’s financial statements for the applicable period,
and shall be made in accordance with GAAP consistently applied, which shall
be
audited by the Parent’s independent public accountants in accordance with
generally accepted auditing standards, after deducting “income tax expense” and
the amount, if any, for minority interest that may arise, but without adding
any
“other comprehensive income” or any extraordinary income; provided
that
the
calculation of “net profit after tax” for the purposes of this definition shall
not include any costs or expenses incurred in connection with the transactions
contemplated by this Agreement and costs and expenses in connection with all
fundraising or financings activities of the Parent and the Company during the
applicable period, including any non-cash expense incurred at any time in
connection with the issuance of shares of Common Stock pursuant to (x) Section
8
of the Warrant Agreement or (y) the Parent’s stock option plans and employee
stock purchase plans and which have been approved by the Parent’s Board of
Directors so long as such issuances in the aggregate do not exceed five percent
(5%) of the Common Stock of the Parent issued and outstanding immediately prior
to such issuance or grants.
(c)
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Subject
to the terms and conditions herein, at the First Closing Date (or
the
Second Closing Date in the case of the Option Notes), the Company
shall
deliver to the Purchaser one or more global certificates representing
the
Initial Notes or Option Notes, as the case maybe, purchased by the
Purchaser at the First Closing Date or the Second Closing Date, as
the
case maybe, and at the First Closing Date, the Parent shall deliver
to the
Purchaser one or more global certificates representing the Warrants,
in
each case registered in such names and denominations as the Purchaser
may
request (but not less than the minimum amount required by the Indenture),
against payment by the Purchaser of the aggregate purchase price
for the
Notes and the Warrants. The aggregate purchase price shall be the
equivalent in US dollars of the principal amount of Notes to be purchased,
calculated at the exchange rate for conversion of US dollars into
RMB
quoted by the People’s Bank of China on the Business Day immediately
preceding the respective Closing Date. The aggregate purchase price
for
the Notes and Warrants shall be paid by immediately available funds
bank
wire transfer to such bank account as the Company and the Parent
shall
have theretofore jointly designated to the Purchaser. In addition,
in the
event that any or all of the Option Notes are purchased by the Purchaser,
payment of the purchase price for, and delivery of notes for, such
Option
Notes shall be made at the above-mentioned offices, or at such other
place
as shall be agreed upon by the Purchaser and the Company, on the
Second
Closing Date.
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(d)
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The
Notes and Warrants, as the case may be, each to be represented by
one or
more global certificates in book-entry form, will be deposited on
the
Closing Date, by or on behalf of the Company and the Parent (as the
case
may be), with The Hongkong and Shanghai Banking Corporation Limited
as
common depositary for Clearstream Banking, socièté anonyme (or any
successor securities agency) (“Clearstream”)
and Euroclear Bank, S.A./N.V. (or any successor securities clearing
agency) (“Euroclear”,
together with Clearstream, the “Clearing
Facilities”),
or its designated custodian, and registered in the name of HSBC Nominees
(Hong Kong) Limited for further credit to Purchaser’s account. The Common
Stock is approved for quotation on the OTC Bulletin Board (the
“Trading
Market”).
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4. Representations
and Warranties of the Group Companies.
Each
of
the Parent and the Company jointly and severally, represents and warrants to
the
Purchaser that, except as set forth in the SEC Reports (as defined below),
the
following representations and warranties are true and correct and will, on
each
of the Closing Dates, be true and correct:
(a)
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SEC
Reports.
The Parent has filed all reports, schedules, forms, statements and
other
documents required to be filed by it under the Act and the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”)
since January 1, 2007, including pursuant to Section 13(a), 13(c)
or 15(d)
thereof (the foregoing materials from and after April 13, 2007, including
the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC
Reports”)
on a timely basis or has received a valid extension of such time
of filing
and has filed any such SEC Reports prior to the expiration of any
such
extension. As of the date of filing, in the case of SEC Reports filed
pursuant to the Exchange Act (and to the extent such SEC Report was
amended, then as of the date of filing of such amendment), and as
of the
date of effectiveness in the case of SEC Reports filed pursuant to
the Act
(and to the extent such SEC Report was amended, then as of the date
of
effectiveness of such amendment), the SEC Reports complied in all
material
respects with the requirements of the Act and the Exchange Act and
the
rules and regulations of the Securities and Exchange Commission (the
“Commission”)
promulgated thereunder, as applicable, and none of the SEC Reports,
as of
the date of filing, in the case of SEC Reports filed pursuant to
the
Exchange Act (and to the extent such SEC Report was amended, then
as to
the date of filing of such amendment), and as of the date of effectiveness
in the case of SEC Reports filed pursuant to the Act (and to the
extent
such SEC Report was amended, then as of the date of effectiveness
of such
amendment), 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 the light of the circumstances
under which they were made, not
misleading.
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(b)
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Ownership
of Shares of Subsidiaries; Affiliates.
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(A)
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The
SEC Reports disclose complete and correct lists of each individual
partnership, limited liability company, joint venture, corporation,
association, trust or any other entity or organization (collectively,
a
“Person”) in
which the Parent (i) owns, directly or indirectly, a majority of
its
capital stock or similar equity interests or (ii) otherwise maintains,
directly or indirectly, control over management, operations and
decision-making processes (each, a “Subsidiary”
and collectively, the “Subsidiaries”),
as to which Schedule
II shows,
as to each Subsidiary, the correct name thereof, the jurisdiction
of its
organization, and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Parent
and each
other Subsidiary.
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(B)
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All
of the outstanding shares of capital stock or similar equity interests
of
each Subsidiary shown in Schedule
II
as
being owned by the Parent and its Subsidiaries have been validly
issued,
are fully paid and non-assessable and are owned, directly or indirectly,
by the Parent or another Subsidiary free and clear of any Lien (other
than
Liens arising by operation of law).
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(C)
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No
Subsidiary is a party to, or otherwise subject to any legal or regulatory
restriction or any agreement (other than this Agreement, the restrictions
disclosed in Schedule
II,
and limitations imposed by corporate law statutes) restricting the
ability
of such Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to the Parent or any of its Subsidiaries
that owns outstanding shares of capital stock or similar equity interests
of such Subsidiary.
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(D)
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Schedule
II
shows the correct names of each of Parent, the Company and each of
Beihai
Hi-Tech Wealth Technology Development Co. Ltd. and Beijing Hi-Tech
Wealth
Communication Technology Ltd., which are incorporated under the laws
of
the PRC (each a “WFOE”)
(collectively, the Parent, the Company and the WFOEs being referred
to
herein as the “Group
Companies”),
the jurisdictions of their respective organization, and the percentage
of
shares of each class of their respective capital stock or similar
equity
interests outstanding owned by their respective shareholders. All
of the
outstanding shares of capital stock or similar equity interests of
the
Group Companies shown in Schedule
II
as
being owned by their respective shareholders have been validly issued,
are
fully paid and non-assessable and are owned by such shareholders
free and
clear of any Lien (other than Liens arising by operation of law and
Liens
arising under the Security
Documents).
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(E)
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Except
pursuant to the Controlling Shareholders’ respective ownership interests
in the Parent or as otherwise set forth in Schedule
II,
none of the directors or executive officers of the Group Companies
holds,
directly or indirectly, any beneficial ownership interest in any
of the
Subsidiaries.
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(F)
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Except
as set forth in Schedule
II,
the Parent does not, directly or indirectly, beneficially own or
control a
minority interest in any other company, partnership or other entity
and
has not entered into any joint venture or strategic
alliances.
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(G)
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As
of the date hereof, the Company is the only Subsidiary of the Parent
that
are not organized in the PRC.
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(c)
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Organization.
Each of the Group Companies (i) has been duly organized, is validly
existing and is in good standing (if applicable) under the laws of
its
jurisdiction of organization, (ii) has all requisite power and authority
to carry on its business and to own, lease and operate its properties
and
assets, and (iii) is duly qualified or licensed to do business and
is in
good standing (if applicable) as a foreign corporation or limited
liability company, as the case may be, authorized to do business
in each
jurisdiction in which the nature of such business or the ownership
or
leasing of such properties requires such qualification, except where
the
failure to be so qualified would not, individually or in the aggregate,
have a material adverse effect on (A) the properties, business, prospects,
operations, earnings, assets, liabilities or condition (financial
or
otherwise) of the Group Companies, taken as a whole, (B) the ability
of
any of the Group Companies to perform their respective obligations
under
any Document or (C) the validity or enforceability of any of the
Documents
or the consummation of any of the transactions contemplated therein
(each,
a “Material
Adverse Effect”).
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(d)
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Capitalization
and Voting Rights.
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(i) Capital
Stock.
The
authorized capital of the Parent consists, immediately prior to the First
Closing Date, of (i) 280,000,000 shares of Common Stock, of which 59,369,615
shares of Common Stock are issued and outstanding immediately prior to the
Closing, and (ii) 10,000,000 shares of Preferred Stock, of which 288.65 shares
of Series B Preferred Stock are issued and outstanding.
(ii) Issued
Shares.
As at
the date hereof and immediately prior to the First Closing Date, the aggregate
number of shares of Common Stock issued and which are issuable pursuant to
any
exercise, conversion, exchange, subscription or otherwise in connection with
any
warrants, options (including pursuant to the Parent’s stock option plan),
convertible securities or any agreement to sell or issue shares of Common Stock
or securities which may be exercised, converted or exchanged for shares of
Common Stock (collectively, “Fully-Diluted”)
is
74,433,366 shares. The Warrant Shares issuable upon exercise of the Warrants
have been duly reserved for issuance and will constitute 17.53% of the Parent’s
Common Stock on a Fully-Diluted basis on the First Closing Date. All of the
issued and outstanding shares of each of the Group Companies as of the Closing
are duly authorized, validly issued, fully paid and non-assessable, were issued
in accordance with the registration or qualification provisions of the Act
and
any relevant blue sky laws of the United States of America or pursuant to valid
exemptions therefrom and were issued in compliance with other applicable laws
(including, without limitation, applicable PRC laws, rules and regulations)
and
are not subject to any rescission right or put right on the part of the holder
thereof nor does any holder thereof have the right to require the Parent to
repurchase such share capital.
(iii) Voting
and Other Agreements.
There
are no outstanding (A) options, warrants or other rights to purchase from any
Group Company, (B) agreements, contracts, arrangements or other obligations
of
any Group Company to issue, or (C) other rights to convert any obligation into
or exchange any securities for, in the case of each of clauses (A) through
(C),
shares of capital stock of, or other ownership or equity interests in, any
Group
Company. Except as otherwise contemplated in the Investor Rights Agreement,
the
Parent is not a party or subject to any agreement or understanding, and, to
the
Parent’s knowledge after due inquiry, there is no agreement or understanding
with any Person that affects or relates to (i) the voting or giving of written
consents with respect to any security of the Parent (including, without
limitation, any voting agreements, voting trust agreements, shareholder
agreements or similar agreements) or the voting by a director of the Parent
or
(ii) the sale, transfer or other disposition with respect to any security of
the
Parent.
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(iv) The
Common Stock is registered pursuant to 12(g) of the Exchange Act, and the Parent
has taken no action designed to, or which to its knowledge is likely to have
the
effect of, terminating the registration of the Common Stock under the Exchange
Act, nor has the Parent received any notification that the Commission is
contemplating terminating such registration. The Parent has not, in the 12
months preceding the date hereof, received notice from the Trading Market to
the
effect that the Parent is not in compliance with the requirements of the Trading
Market. The Parent is, and expects to be, in compliance with all of the listing
requirements of the Trading Market in the foreseeable future.
(e)
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No
Registration Rights.
Except for the registration rights to be granted by the Parent under
the
Registration Rights Agreement, no holder of securities of any of
the Group
Companies is or will be entitled to have any registration rights
with
respect to such securities.
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(f)
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Authorization
and Execution.
Each of the Group Companies has all requisite corporate power and
authority to execute, deliver and perform its obligations under each
of
the Documents to which it is a party and to consummate the transactions
contemplated thereby. This Agreement has been duly authorized, executed
and delivered by the Group Companies. Each of the Documents has been
duly
authorized and when executed and delivered by the Group Companies
(to the
extent it is a party thereto) shall constitute a legal, valid and
binding
obligation of each of the Group Companies (to the extent it is a
party
thereto) enforceable against each of the Group Companies (to the
extent it
is a party thereto) in accordance with its terms, except (i) as limited
by
applicable bankruptcy, insolvency, reorganization, moratorium and
other
laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies,
and
(iii) to the extent the indemnification provisions contained in
Section
8
of
this Agreement or in the Registration Rights Agreement may be limited
by
applicable federal or state securities
laws.
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(g)
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Valid
Issuance of the Notes.
Each of the Notes, when issued, sold and delivered in accordance
with the
terms thereof and for the consideration set forth herein, will be
free of
restrictions on transfer, other than restrictions on transfer under
applicable federal or state securities laws. Assuming the accuracy
of the
Purchaser’s representations in Section 6
below, the Notes will be issued in compliance with applicable federal
and
state securities laws. The Notes, when issued, will be in the form
contemplated by the Indenture. Each of the Notes has been duly authorized
by the Company and, when executed and delivered by the Company,
authenticated by the Trustee and delivered to the Purchaser in accordance
with the terms of this Agreement and the Indenture, such Notes will
have
been duly executed, issued and delivered by the Company and will
constitute legal, valid and binding obligations of the Company, entitled
to the benefits of the Indenture and enforceable against the Company
in
accordance with their terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally. Each
Guarantee has been duly and validly authorized by each Guarantor
issuing
such Guarantee and, when the Notes have been duly executed, authenticated
and issued in accordance with the terms of the Indenture and delivered
to
and paid for by the Purchaser with the Guarantees endorsed thereon
by such
Guarantor, will constitute the legal, valid and binding obligations
of
such Guarantor entitled to the benefits of the Indenture, enforceable
against such Guarantor in accordance with its terms, except as limited
by
applicable bankruptcy, insolvency, reorganization, moratorium and
other
laws of general application affecting enforcement of creditors’ rights
generally.
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(h)
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Valid
Issuance of Warrants.
The Warrants, when issued in accordance with the terms thereof, will
be
free of restrictions on transfer, other than restrictions on transfer
under applicable securities laws. The Warrants, when issued, will
be in
the form contemplated by the Warrant Agreement. The Warrants have
been
duly and validly authorized for issuance by the Parent, and, when
executed
and delivered by the Parent, authenticated by the Warrant Agent and
delivered to the Purchaser, in accordance with the terms of this
Agreement
and the Warrant Agreement, the Warrants will have been duly executed,
issued and delivered by the Parent and will constitute legal, valid
and
binding obligations of the Parent, entitled to the
9 benefits
of the Warrant Agreement and the Registration Rights Agreement and
enforceable against the Parent in accordance with their
terms. |
(i)
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Valid
Authorization and Reservation of Warrant Shares.
The Warrant Shares have been duly and validly authorized and reserved
for
issuance by the Parent, and when issued pursuant to the terms of
the
Warrants and the Warrant Agreement, will be validly issued, fully
paid and
non-assessable, not subject to any preemptive or similar rights,
free from
all taxes, Liens, charges and security interests with respect to
the
issuance thereof and free of restrictions on transfer (other than
as
expressly contemplated by the
Documents).
|
(j)
|
Compliance
with Instruments.
None of the Group Companies is in violation of its respective certificate
of incorporation, articles of association, by-laws or other organizational
documents (the “Charter
Documents”). None
of the Group Companies is, nor does any condition exist (nor will
exist
with the passage of time or otherwise) that could reasonably be expected
to cause any of the Group Companies to be, (i) in violation of any
statute, rule, regulation, law or ordinance, or any judgment, decree
or
order applicable to any of the Group Companies or any of their properties
(collectively, “Applicable
Law”)
of any federal, state, PRC national, provincial, local or other
governmental authority, governmental or regulatory agency or body,
court,
arbitrator or self-regulatory organization of applicable jurisdictions,
domestic or foreign (each, a “Governmental
Authority”),
or (ii) in breach of or in default (or subject to acceleration any
Debt)
under any bond, debenture, note or other evidence of indebtedness,
indenture, mortgage, deed of trust, lease or any other agreement
or
instrument to which any of them is a party or by which any of them
or
their respective property is bound (collectively, “Applicable
Agreements”),
other than in each of clause (i) and (ii) such violations, breaches
or
defaults that are not material. All Applicable Agreements are in
full
force and effect with respect to the Group Companies and to the Parent’s
knowledge, with respect to the other parties, are the legal, valid
and
binding obligations of the parties
thereto.
|
(k)
|
No
Conflicts.
Neither the execution, delivery or performance of any of the Documents,
the issuance of any of the Securities nor the consummation of any
of the
transactions contemplated herein or therein will conflict with, violate,
constitute a breach of or a default (with the passage of time or
otherwise) under, require the consent of any person or a Governmental
Authority (other than consents already obtained which are in full
force
and effect) or result in the imposition of a Lien (other than a Lien
arising under the Security Documents and the transactions contemplated
by
this Agreement) on any assets of any of the Group Companies under
or
pursuant to (i) the Charter Documents, (ii) any Applicable Agreement,
or
(iii) any Applicable Law, other than in each of clause (ii) and (iii)
such
violations, breaches or defaults that would not, individually or
in
aggregate, have a Material Adverse Effect (or such as have been,
or at the
Closing will have been, cured). After consummation of the transactions
contemplated in the Documents, no Default or Event of Default will
exist
under the Indenture.
|
9
(l)
|
Security
Interest/Security Documents.
|
(i)
|
When
executed and delivered, the Share Charges will create valid and
enforceable security interests in favor of the Collateral Agent in
the
charged collateral (as described therein), which security interests
will
secure the repayment of the Notes and the other obligations purported
to
be secured thereby; when the UCC Financing Statement in respect of
the
Parent’s Share Charge over the Company is filed with the Secretary of
State of the State of Nevada, such security interest will be perfected
on
a first-priority basis; when pursuant to section 162 of the BVI Business
Companies Act (the “BVIBC
Act”), the
Company makes an entry in its Register of Charges maintained at its
registered office (or at the office of its registered agent) in respect
of
its charge over WFOEs’ shares that it grants in favor of the Noteholders,
and when pursuant to section 163 of the BVIBC Act, the Company makes
an
application with the Registrar of Corporate Affairs of the BVI to
register
details of the charge in the Register of Registered Charges, such
security
interest will be perfected on a first-priority basis; as of the Closing
Date, the chargors under the Share Charges will own the charged collateral
described therein free and clear of all Liens (except for Liens arising
by
operation of law and Liens arising under the Share
Charges).
|
(ii)
|
When
executed and delivered, and subject to the approval by relevant
Governmental Authority as contemplated under Section
5(m)
hereof, the Onshore Equity Pledge Agreement will create a valid and
enforceable security interest in favor of the Collateral Agent in
all the
equity interests in the WFOE, which security interest will secure
the
repayment of the Notes and the other obligations purported to be
secured
thereby. When the Onshore Equity Pledge Agreement is filed with,
and
approved by, the relevant Governmental Authority pursuant to Section
5(m) hereof,
the security interests represented thereby will be
perfected.
|
(m)
|
Governmental
Consents.
No filing with, consent, approval, authorization or order of, any
Governmental Authority is required for (i) the valid execution, delivery
and performance by any of the Group Companies of the Documents, (ii)
the
offer, sale, issuance or delivery of the Notes, the Warrants, the
Warrant
Shares or the Guarantees, or (iii) the consummation of the transactions
contemplated by the Documents, except (x) as have been obtained or
will
have been obtained on or before the Closing Date, or (y) as are described
herein to perfect security interests granted pursuant to the Security
Documents, and (z) as may be required under the Act or applicable
state
securities or “Blue Sky” laws.
|
(n)
|
Proceedings.
There is no action, claim, suit, demand, hearing, notice of violation
or
deficiency, or proceeding, domestic or foreign (collectively,
“Proceedings”),
pending or, to the knowledge of the Parent, threatened, that (i)
seeks to
restrain, enjoin, prevent the consummation of, or otherwise challenges
any
of the Documents or any of the transactions contemplated therein
or (ii)
would otherwise have or could reasonably be expected to have a Material
Adverse Effect. None of the Group Companies is subject to any judgment,
order or decree of which the Parent has knowledge and which would
have a
Material Adverse Effect.
|
10
(o)
|
Permits.
Each of the Group Companies possesses all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has
made
all declarations and filings with, all Governmental Authorities,
presently
required or necessary to own or lease, as the case may be, and to
operate
their respective properties and to carry on their respective businesses
as
now conducted (“Permits”). All
of the Permits are valid and in full force and effect. Each of the
Group
Companies has fulfilled and performed all of its respective obligations
with respect to such Permits and no event has occurred which allows,
or
after notice or lapse of time could allow, revocation or termination
thereof or result in any other material impairment of the rights
of the
holder of any such Permit. None of the Group Companies has received
actual
notice of any Proceeding relating to revocation or modification of
any
such Permit.
|
(p)
|
Title
to Property.
Each of the Group Companies has good and marketable title to all
real
property and personal property owned by it, in each case free and
clear of
any Liens as of the Closing Date, except such Liens as permitted
under the
Documents or such as would not have a Material Adverse Effect. For
the
real property not owned by any of the Group Companies and currently
used
or planned to be used for the business operations of the Group Companies,
each of such Group Companies has good and marketable title to all
leasehold estates in real and personal property being leased by it
and, in
each case free and clear of all Liens as of the Closing
Date.
|
(q)
|
Insurance.
Each of the Group Companies maintains reasonable adequate insurance
covering its material properties, operations, personnel and business,
and
is insured by insurers of recognized financial responsibility against
such
losses and risks and in such amounts as are prudent and customary
in the
businesses in which it is engaged. All policies of insurance insuring
the
Group Companies and their respective businesses, assets, employees,
officers and directors are in full force and effect. Each of the
Group
Companies is in compliance with the terms of such policies and instruments
in all material respects, and there are no claims by any of the Group
Companies under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of
rights
clause. None of the Group Companies has been refused any insurance
coverage sought or applied for, and none of the Group Companies has
any
reason to believe that it will not be able to renew its existing
insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business
at a
cost that could not, individually or in the aggregate, have a Material
Adverse Effect.
|
(r)
|
Taxes.
All Tax returns required to be filed by each of the Group Companies
have
been filed, and all such returns are true, complete and correct in
all
material respects. All material Taxes that are due from each of the
Group
Companies have been paid other than those (i) currently payable without
penalty or interest or (ii) being diligently contested in good faith
and
by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP. To the knowledge of the Parent
after
due inquiry, there are no proposed Tax assessments against any of
the
Group Companies. The accruals and reserves on the books and records
of
each of the Group Companies in respect of any Tax liability for any
Taxable period not finally determined are adequate to meet any assessments
of Tax for any such period. For purposes of this Agreement, the term
“Tax”
and
“Taxes”
shall
mean all federal, state, PRC national, provincial, local and foreign
taxes
and other assessments of a similar nature (whether imposed directly
or
through withholding), including any interest, additions to tax or
penalties applicable thereto.
|
11
(s)
|
Intellectual
Property.
|
(A)
|
Each
of the Group Companies owns, or is validly licensed under, or has
the
right to use, all patents, patent rights, licenses, inventions,
copyrights, know-how, (including any discoveries, concepts, ideas,
research and development, know- how, formulas, inventions, compositions,
manufacturing and production processes and techniques, technical
data,
procedures, designs, drawings, specifications, databases, and other
proprietary or confidential information, including customer lists,
supplier lists, pricing and cost information, and business and marketing
plans and proposals of the Group Companies), trademarks, service
marks and
trade names (collectively, “Intellectual
Property”)
necessary for the conduct of its businesses and which as of the Closing
Date, will be free and clear of all Liens, except where the failure
to
own, possess, or have the right to use such Intellectual Property
could
not reasonably be expected to have a Material Adverse Effect. To
the
Parent’s knowledge, no claims or notices of any potential claim have been
asserted by any person challenging the use of any such Intellectual
Property by any of the Group Companies or questioning the validity
or
effectiveness of the Intellectual Property or any license or agreement
related thereto, and, to the Parent’s knowledge, there are no facts which
would form a valid basis for any such claim. The use of such Intellectual
Property by any of the Group Companies does not and will not infringe
on,
violate, misappropriate or otherwise interfere or conflict with any
the
Intellectual Property rights of any other
person.
|
(B)
|
The
SEC Reports describe (i) all Registered IP owned by or licensed to
any of
the Group Companies and (ii) all other material Intellectual Property
licensed to any of the Group Companies. “Registered
IP” means
Intellectual Property that is registered, filed, or issued under
the
authority of any Governmental Authority, including all patents, registered
copyrights, registered mask works, and registered trademarks and
all
applications for any of the foregoing. All Intellectual Properties
owned
by each of the Group Companies are valid and enforceable and are
in
compliance with formal legal
requirements.
|
(C)
|
Each
of the Group Companies has taken reasonable steps and measures to
establish and preserve ownership of or right to use all Intellectual
Property material to the operation of its business. Each of the Group
Companies has taken reasonable steps to register, protect, maintain,
and
safeguard the Intellectual Property material to its business, including
any Intellectual Property that is jointly developed with any
third-parties, or any Intellectual Property for which improper or
unauthorized disclosure would impair its value or validity, and has
had
executed appropriate nondisclosure and confidentiality agreements
and made
all appropriate filings, registrations and payments of fees in connection
with the foregoing. There is no infringement or misappropriation
by any
other Person of any Intellectual Property of any of the Group Companies.
No proceedings or claims in which any of the Group Companies alleges
that
any Person is infringing upon, or otherwise violating, any Intellectual
Property of any of the Group Companies are pending, and none has
been
served, instituted or asserted by any of the Group
Companies.
|
12
(D)
|
Each
of the Group Companies owns all rights in and to any and all Intellectual
Property used or planned to be used by the Group Companies, or covering
or
embodied in any past, current or planned activity or service of the
Group
Companies, which Intellectual Property was made, developed, conceived,
created or written by any consultant retained, or any employee employed,
by the Group Companies. No former or current employee, no former
or
current consultant, and no third-party joint developer of any of
the Group
Companies has any rights in any Intellectual Property made, developed,
conceived, created or written by the aforesaid employee or consultant
during the period of his or her retention by the Group Companies
which can
be asserted against any Group
Company.
|
(E)
|
No
Intellectual Property owned by any Group Company is the subject of
any
security interest, Lien, license or other contract granting rights
therein
to any other Person, except as will be released in connection with
the
Closing. Each of the Group Companies has not (a) transferred or assigned,
(b) granted an exclusive license to or (c) provided or licensed,
any
Intellectual Property owned by the Group Companies to any Person
who is
the subject of any security interest, Lien, license or other contract
granting rights therein to any other
Person.
|
(F)
|
Neither
the execution, delivery and performance of this Agreement or other
agreements to which any of the Group Companies is a party, or the
consummation of the transactions contemplated hereby and thereby,
does not
and will not infringe on, violate, misappropriate or otherwise interfere
or conflict with any the Intellectual Property rights of any other
person.
|
(t)
|
Internal
Controls.
Each of the Group Companies maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific
authorization, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is permitted
only in
accordance with management’s general or specific authorization and (iv)
the recorded accountability for assets is compared with the existing
assets at quarterly intervals and appropriate action is taken with
respect
to any material differences.
|
(u)
|
Financial
Statements.
|
(A)
|
The
audited consolidated financial statements and related notes of the
Parent
contained in the Form 10-KSB for the year ended December 31, 2006
and the
unaudited consolidated financial statements and related notes in
the Form
10- QSB for the six months ended June 30, 2007 (collectively, the
“Financial
Statements”)
have been prepared in accordance with the applicable accounting
requirements and the rules and regulations of the Commission with
respect
thereto as in effect at the time of filing; the Financial Statements
have
been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods
involved (“GAAP”), except
as may be otherwise specified in the Financial Statements, and except
that
unaudited Financial Statements may not contain all footnotes required
by
GAAP; the Financial Statements fairly present in all material respects
the
financial condition, results of operations and cash flows of the
Parent
and its consolidated subsidiaries as of and for the dates thereof
and the
results of operations and cash flows for the periods then ended,
subject,
in the case of unaudited statements, to normal year-end audit adjustments;
all other financial, statistical, and market and industry-related
data
included in the SEC Reports are based on or derived from sources
that the
Parent reasonably believes to be reliable and
accurate.
|
13
(B)
|
Subsequent
to the date of the Parent’s audited financial statements filed for the
year ended December 31, 2006, except as disclosed therein or in any
subsequent SEC Report, (i) none of the Group Companies has incurred
any
liabilities, direct or contingent, that are material, individually
or in
the aggregate, to the Parent, or has entered into any material
transactions not in the ordinary course of business, (ii) there has
not
been any material decrease in the capital stock or any material increase
in long-term indebtedness or any material increase in short-term
indebtedness of the Group Companies, or any payment of or declaration
to
pay any dividends or any other distribution with respect to the Group
Companies, and (iii) there has not been any material adverse change
in the
properties, business, prospects, operations, earnings, assets, liabilities
or condition (financial or otherwise) of the Group Companies taken
as a
whole; excluding any changes caused by (x) the condition of the industry
of the Parent that do not disproportionately affect the Parent, (y)
the
failure of the Parent to meet its financial projections or (z) the
execution and delivery of this Agreement and consummation of the
transactions contemplated hereby (each of clauses (i), (ii) and (iii),
a
“Material
Adverse Change”). To
the knowledge of the Parent, there is no event that is reasonably
likely
to occur in the foreseeable future, which if it were to occur, could,
individually or in the aggregate, have a Material Adverse
Change.
|
(v)
|
Solvency
and Adequate Capital.
All Indebtedness represented by the Notes and the Guarantees is being
incurred for proper purposes and in good faith. Based on the financial
condition of the Parent as of the Closing Date after giving effect
to the
receipt by the Company of the proceeds from the sale of the Securities
hereunder, (i) the fair saleable value of the Group Companies’ assets
exceeds the amount that will be required to be paid on or in respect
of
the Group Companies’ existing debts and other liabilities (including
contingent liabilities) as they mature; (ii) the present fair saleable
value of the assets of the Group Companies is greater than the amount
that
will be required to pay the probable liabilities of the Group Companies
on
their respective debt as they become absolute and mature, and (iii)
the
Group Companies are able to realize upon their assets and pay their
debt
and other liabilities (including contingent obligations) as they
mature;
(iv) the Group Companies’ assets do not constitute unreasonably small
capital to carry on their respective businesses as now conducted
and as
proposed to be conducted including their respective capital needs
taking
into account the particular capital requirements of the business
conducted
by the Group Companies, and projected capital requirements and capital
availability thereof; and (v) the current cash flow of each of the
Group
Companies, together with the proceeds the Parent would receive, were
it to
liquidate all of its assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in
respect
of its liabilities when such amounts are required to be paid. None
of the
Group Companies intends to incur debts beyond its ability to pay
such
debts as they mature (taking into account the timing and amounts
of cash
to be payable on or in respect of its debt). The Parent has no knowledge
of any facts or circumstances which lead it to believe that it or
any
other Group Companies will file for reorganization or liquidation
under
the bankruptcy or reorganization laws of any jurisdiction within
one year
from the Closing Date. For the purposes of this Agreement, “Indebtedness” shall
mean (a) any liabilities for borrowed money or amounts owed in excess
of
$50,000 (other than trade accounts payable incurred in the ordinary
course
of business), (b) all guaranties, endorsements and other contingent
obligations in respect of Indebtedness of others, whether or not
the same
are or should be reflected in the Parent’s consolidated balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in
the
ordinary course of business; and (c) the present value of any lease
payments in excess of $50,000 due under leases required to be capitalized
in accordance with GAAP. None of the Group Companies is, or is reasonably
likely to be, in default with respect to any Indebtedness and no
waiver of
default is currently in effect. None of the Group Companies has agreed
or
consented to cause or permit in the future (upon the happening of
a
contingency or otherwise) any of its property, whether now owned
or
hereafter acquired, to be subject to a Lien. None of the Group Companies
is a party to, or otherwise subject to any provision contained in,
any
instrument evidencing Indebtedness of any of the Group Companies,
any
agreement relating thereto or any other agreement (including, but
not
limited to, its Charter Document) which limits the amount of, or
otherwise
imposes restrictions on the incurring of, Indebtedness of the Parent
on a
consolidated basis.
|
14
(w)
|
No
Stabilization.
None of the Group Companies has and, to each of its knowledge after
due
inquiry, no one acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in, or that
has
constituted or which might reasonably be expected to constitute,
the
stabilization or manipulation of the price of any security of any
of the
Group Companies to facilitate the sale or resale of any of the Securities,
(ii) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities, or (iii) paid or agreed
to pay to
any person any compensation for soliciting another to purchase any
other
securities of the Parent or its
Subsidiaries.
|
(x)
|
No
Sale to the U.S.
None of the Group Companies, their respective Affiliates, or any
person
acting on its or their behalf has, directly or indirectly, made offers
or
sales of any security, or solicited offers to buy, sell or offer
to sell
or otherwise negotiate in respect of, in the United States or to
any
United States citizen or resident, any security which is or would
be
integrated with the sale of the Securities in a manner or under
circumstances that would require the registration of the Securities
under
the Act.
|
15
(y)
|
No
Directed Selling Efforts.
None of the Group Companies, their respective Affiliates, or any
person
acting on its or their behalf (other than the Purchaser, its Affiliates
or
persons acting on its behalf, as to whom the Group Companies make
no
representation) has engaged in any directed selling efforts (within
the
meaning of Regulation S) with respect to the Securities; and each
of the
Parent, its Subsidiaries, their respective Affiliates and each person
acting on its or their behalf has complied with the offering restrictions
requirement of Regulation S.
|
(z)
|
No
Registration.
Assuming the accuracy of the Purchaser’s representations and warranties
set forth in Section
6
hereof, no registration under the Act of the Securities is required
for
the offer, sale and delivery of the Securities in the manner contemplated
herein or to qualify any Indenture under the Trust Indenture Act
of
1939.
|
(aa)
|
Labor
Matters.
None of the Group Companies is bound by or subject to (and none of
its
assets or properties is bound by or subject to) any written or oral,
express or implied, contract, commitment or arrangement with any
labor
union, and no labor union has requested or, to the knowledge of the
Parent, has sought to represent any of the employees, representatives
or
agents of the Group Companies. There is no strike or other labor
dispute
involving any of the Group Companies pending or threatened, which
could
have a Material Adverse Effect. There is no employment related charge,
complaint, grievance, investigation, unfair labor practice claim
or
inquiry of any kind, pending or threatened against any of the Group
Companies that could, individually or in the aggregate, have a Material
Adverse Effect.
|
(bb)
|
Brokers
and Finders.
The Parent has not engaged any broker, finder, commission agent or
other
similar person in connection with the transactions contemplated under
the
Documents, and the Parent is not under any obligation to pay any
broker’s
fee or commission in connection with such
transactions.
|
(cc)
|
Environmental
Matters.
Each of the Group Companies (i) is in compliance with any and all
applicable foreign, federal, state, PRC national, provincial, and
local
laws and regulations relating to the protection of the environment
or
hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental
Laws”),
(ii) has received and is in compliance with all permits, licenses
or other
approvals required of it under applicable Environmental Laws to conduct
its business, (iii) has not received actual notice of any actual
or
potential liability for the investigation or remediation of any disposal
or release of hazardous or toxic substances or wastes, pollutants
or
contaminants, (iv) has no knowledge of any facts which would give
rise to
any claim, public or private, of violation of Environmental Laws
emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets
or
their use, except, in each case, such as would not result in a Material
Adverse Effect; and (v) has stored no hazardous materials on real
properties now or formerly owned, leased or operated by any of them
and
has not disposed of any hazardous materials in a manner contrary
to any
Environmental Laws; except where such non-compliance with Environmental
Laws, failure to receive required permits, licenses or other approvals,
or
liability would not, individually or in the aggregate, have a Material
Adverse Effect.
|
(dd)
|
Encumbrances.
As of the Closing Date, there will be no encumbrances, foreign exchange
restrictions or contractual restrictions on the ability of any of
the
Group Companies (x) to pay dividends or make other distributions
on such
parties’ capital stock or to make loans or advances or pay any
indebtedness to, or investments in, any of the Group Companies or
(y) to
transfer any of its property or assets to any of the Group Companies,
except for such restrictions set forth in the Documents or limitations
imposed by corporate law statutes.
|
16
(ee)
|
Winding
up; Dissolution.
None of the Group Companies has taken any action nor, to the Parent’s
knowledge after due inquiry, have any steps been taken by any third
party
or legal, legislative or administrative proceedings been started
or, to
the Parent’s knowledge after due inquiry, threatened to (i) wind up,
dissolve, make dormant, or eliminate any of the Group Companies or
(ii) to
withdraw, revoke or cancel any material approvals to conduct the
business
of any of the Group Companies, if
applicable.
|
(ff)
|
Sovereign
Immunity.
Under the laws of their respective jurisdiction of incorporation
and the
PRC, none of the Group Companies nor any of their properties, assets
or
revenues are entitled to any right of immunity on the grounds of
sovereignty from any legal action, suit or proceeding, from set-off
or
counterclaim, from the jurisdiction of any court, from service of
process,
from attachment prior to or in aid of execution of judgment, or from
other
legal process or proceeding for the giving of any relief or for the
enforcement of any judgment.
|
(gg)
|
Purchaser
Liability.
No holders of any of the Notes or Warrants or Warrant Shares will
be
subject to liability in respect of any liability of the Parent or
the
Company by virtue only of the holding of any such
Securities.
|
(hh)
|
Certificate.
Each certificate signed by any officer of any of the Group Companies
and
delivered to the Purchaser shall be deemed a representation and warranty
by such company (and not individually by such officer) to the Purchaser
with respect to the matters covered
thereby.
|
(ii)
|
Foreign
Corrupt Practices Act.
None of the Group Companies, nor to the knowledge of the Parent,
any agent
or other person acting on behalf of any of the Group Companies, directly
or indirectly, (i) has used any funds or will use such funds or any
proceeds from the sale of the Securities for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign
or
domestic political activity, (ii) made any unlawful payment to foreign
or
domestic government officials or employees or to any foreign or domestic
political parties or campaigns from corporate funds, (iii) failed
to
disclose fully any contribution made by the Group Companies (or made
by
any person acting on its behalf of which the Parent is aware) which
is in
violation of law, or (iv) violated or taken any action which violates
or
would result in a violation of any provision of the Foreign Corrupt
Practices Act of 1977, as amended and the rules and regulations thereunder
(the “FCPA”).
|
(jj)
|
Related
Party Transactions.
No material transactions or relationships, direct or indirect, exists
between or among any of the Group Companies or its Subsidiaries or
any
Affiliate of the Group Companies or its subsidiaries, on the one
hand, and
any former or current director, officer, stockholder, customer or
supplier
of any of them (including his or her spouse, child, sibling, any
company
or undertaking in which he or she holds any equity interest, or any
person
related by marriage or consanguinity), on the other
hand.
|
(kk)
|
Investment
Company.
None of the Group Companies is, and as a result of the offer and
sale of
the Securities contemplated herein will not be, required to register
as an
“investment company” under, and as such term is defined in, the Investment
Company Act of 1940, as amended, in connection with or as a result
of the
offer and sale of the Securities.
|
17
(ll)
|
PFIC.
None of the Group Companies is or intends to become a “passive foreign
investment company” (a “PFIC”) within
the meaning of Section 1297 of the U.S. Internal Revenue
Code.
|
(mm)
|
OFAC.
Neither the Parent nor, to the knowledge of the Parent, any director,
officer, agent, employee, Affiliate or Person acting on behalf of
the
Parent is currently subject to any U.S. sanctions administered by
the
Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”);
and
the Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds
to
any Subsidiary, joint venture partner or other Person or entity,
for the
purpose of financing the activities of any person currently subject
to any
U.S. sanctions administered by OFAC. None of the Group Companies
does any
business with governments, entities or persons subject to any U.S.
sanctions administered by the OFAC or any enabling legislation or
executive order relating thereto, or, to the best of the knowledge
of the
Parent, any person or entity in those countries or with those persons,
or
perform contracts in support of projects in or for the benefit of
those
countries or those persons.
|
(nn)
|
Money
Laundering Laws.
The operations of each of the Group Companies are and have been conducted
at all times in compliance with the money laundering statutes of
applicable jurisdictions, the rules and regulations thereunder and
any
related or similar rules, regulations or guidelines, issued, administered
or enforced by any applicable governmental agency (collectively,
the
“Money
Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving any of the
Group
Companies with respect to the Money Laundering Laws is pending or,
to the
best knowledge of the Parent,
threatened.
|
(oo)
|
Margin
Rules.
Neither the issuance, sale and delivery of the Securities nor the
application of the proceeds thereof by the Company will violate Regulation
T, U or X of the Board of Governors of the U.S. Federal Reserve System
or
any other regulation of such Board of
Governors.
|
(pp)
|
Other
Representations and Warranties Relating to the PRC Group
Companies.
|
(A)
|
The
constitutional documents and certificates and related material contracts
of each of the WFOE and any other Group Companies (excluding the
Parent,
the Company and the Subsidiary Guarantors) (collectively, the WFOE
and
such other Group Companies established under the laws of the PRC
are
referred to herein as the “PRC
Group Companies”)
are valid and have been duly approved or registered (as applicable)
by
competent PRC Governmental
Authorities.
|
(B)
|
All
material consents, approvals, authorizations or licenses requisite
under
PRC law for the due and proper establishment and operation of each
of the
PRC Group Companies have been duly obtained from the relevant PRC
Governmental Authorities and are in full force and
effect.
|
(C)
|
All
filings and registrations with the PRC Governmental Authorities required
in respect of each of the PRC Group Companies and its operations
including, without limitation, the registrations with the Ministry
of
Commerce, the State Administration of Industry and Commerce, the
State
Administration for Foreign Exchange, tax bureau and customs authorities
have been duly completed in accordance with the relevant PRC rules
and
regulations.
|
18
(D)
|
Each
of the PRC Group Companies has complied with all relevant PRC laws
and
regulations regarding the contribution and payment of its registered
share
capital, the payment schedule of which has been approved by the relevant
PRC Government Authorities. There are no outstanding rights of, or
commitments made by the Parent or any Subsidiary to sell any equity
interest in any of the PRC Group Companies, or by any of the other
PRC
Group Companies’ shareholders to sell any equity interest in such other
PRC Group Companies.
|
(E)
|
The
PRC Group Companies are not in receipt of any letter or notice from
any
relevant PRC Governmental Authority notifying it of revocation of
any
licenses or qualifications issued to it or any subsidy granted to
it by
any PRC Governmental Authority for non-compliance with the terms
thereof
or with applicable PRC laws, or the need for compliance or remedial
actions in respect of the activities carried out by the PRC Group
Companies.
|
(F)
|
Each
of the PRC Group Companies has conducted its business activities
within
the permitted scope of business or has otherwise operated its business
in
compliance with all relevant legal requirements and with all requisite
licenses and approvals granted by competent PRC Governmental
Authorities.
|
(G)
|
As
to licenses, approvals and government grants and concessions requisite
or
useful for the conduct of any part of the PRC Group Companies’ business
which are subject to periodic renewal, the Parent has no knowledge
of any
grounds on which such requisite renewals will not be granted by the
relevant PRC Governmental
Authorities.
|
(H)
|
With
regard to employment and staff or labor, each of the PRC Group Companies
has complied with all applicable PRC laws and regulations in all
material
respects, including without limitation, laws and regulations pertaining
to
welfare funds, social benefits, medical benefits, insurance, retirement
benefits, pensions or the like.
|
(qq)
|
Full
Disclosure.
All disclosure furnished by or on behalf of the Parent to the Purchaser
regarding any of the Group Companies, their respective businesses
and the
transactions contemplated under the Documents, with respect to the
representations and warranties made herein, are true and correct
and do
not contain any untrue statement of a material fact or omit to state
any
material fact necessary in order to make the statements made therein,
in
light of the circumstances under which they were made, not misleading.
The
Parent acknowledges and agrees that the Purchaser does not make any
representations or warranties with respect to the transactions
contemplated hereby, other than those specifically set forth in
Section
6
hereof.
|
19
5. Covenants
of the Group Companies.
Each of
the Group Companies, jointly and severally, hereby agrees:
(a)
|
To
(i) advise the Purchaser promptly after obtaining knowledge (and,
if
requested by the Purchaser, confirm such advice in writing) of the
issuance by any applicable securities commission of any stop order
suspending the qualification or exemption from qualification of the
Securities for offer or sale in any jurisdiction, or the initiation
of any
proceeding for such purpose by any applicable state securities commission
or other regulatory authority, (ii) use its best efforts to prevent
the
issuance of any stop order or order suspending the qualification
or
exemption from qualification of the Securities under any applicable
state
securities or Blue Sky laws, and (iii) if at any time any applicable
state
securities commission or other regulatory authority shall issue an
order
suspending the qualification or exemption from qualification of the
Securities under any such laws, use its reasonable best efforts to
obtain
the withdrawal or lifting of such order at the earliest possible
time.
|
(b)
|
Whether
or not any of the transactions contemplated under the Documents are
consummated or this Agreement is terminated, to pay (i) all costs,
expenses, fees and taxes incident to and in connection with: (A)
the
printing, processing and distribution (including, without limitation,
word
processing and duplication costs) and delivery of, each of the Documents,
and (B) the preparation, issuance and delivery of the Securities,
(ii) all
fees and expenses of counsel, accountants and any other experts or
advisors retained by the Group Companies, (iii) all expenses in connection
with qualifying the Securities for settlement in the Clearing Facilities,
(iv) all fees and expenses (including reasonable fees and expenses
of
counsel) of the Parent in connection with approval of the Securities
for
“book-entry” transfer, (v) all fees and expenses (including any filing,
regulatory and registration fees) relating to the perfection of Liens,
and
(vi) all fees and expenses (including fees and expenses of counsel)
of the
Trustee, the Warrant Agent and the Collateral Agent. In addition,
upon the
First Closing Date, the Company will pay to the Purchaser an arrangement
fee of $2,000,000 (the “Arrangement
Fee”)
in connection with the sale and issuance of the Securities which
will be
deducted from the aggregate purchase price for Notes and Warrants
payable
by the Purchaser at such First Closing Date. No such Arrangement
Fee shall
be payable in connection with the Second Closing
Date.
|
(c)
|
To
do and perform all things and comply with all covenants and agreements
required to be done and performed or complied with under the Documents
prior to and after the Closing
Date.
|
(d)
|
Prior
to making any public disclosure or filings as may be required by
applicable law with respect to this Agreement and the transactions
contemplated hereby, to provide the Purchaser and its counsel with
the
reasonable opportunity to review and comment on such public disclosure
documents and consider in good faith any comments received from the
Purchaser or its counsel.
|
(e)
|
Use
reasonable efforts to maintain the trading of the Common Stock in
the
Trading Market.
|
(f)
|
Subject
to the requirements of applicable laws and regulations and for so
long as
the Purchaser owns any of the Securities, the Parent will furnish
to the
Purchaser copies of all reports and other communications (financial
or
otherwise) furnished by the Parent (A) to the Trustee under the Indenture
or (B) to the Warrant Agent under the Warrant Agreement, and as soon
as
reasonably available, copies of any reports or financial statements
furnished to or filed by the Parent with the Commission or any national
securities exchange on which any class of securities of the Parent
may be
listed; provided,
however, that
any such report or financial statements filed on the Commission’s XXXXX
database need not be separately
furnished.
|
20
(g)
|
During
the two-year period after the Closing Date (or such shorter period
as may
be provided for in Rule 144(k) under the Act, as the same may be
in effect
from time to time), not to, and not to permit any current or future
Subsidiaries of the Parent or any other affiliates (as defined in
Rule
144(a) under the Act) controlled by the Parent to, resell any of
the
Securities which constitute “restricted securities” under Rule 144 that
have been reacquired by the Parent, any current or future Subsidiaries
of
the Parent or any other affiliates (as defined in Rule 144(a) under
the
Act) controlled by the Parent, except pursuant to an effective
registration statement under the
Act.
|
(h)
|
To
pay all stamp, documentary and transfer taxes and other duties, if
any,
which may be imposed by any Governmental Authorities or any political
subdivision thereof or taxing authority thereof or therein with respect
to
the issuance of the Securities or the sale thereof to the
Purchaser.
|
(i)
|
The
Parent will use its reasonable best efforts not to become, and cause
its
Subsidiaries not to become, a PFIC. If the Parent determines that
it or
any of its Subsidiaries has become a PFIC, the Parent will promptly
notify
the Purchaser and provide all information requested by the Purchaser
that
is necessary for the Purchaser to make a qualified electing fund
(QEF)
election under Section 1295 of the Internal Revenue
Code.
|
(j)
|
No
Group Company shall, directly or indirectly, use the proceeds of
the sale
of the Notes, or lend, contribute or otherwise make available such
proceeds to any Subsidiary, joint venture or other Person for the
purposes
of financing the activities of any Person currently subject to any
U.S.
sanctions administered by OFAC.
|
(k)
|
Each
of the Group Companies shall conduct its operations at all times
in
compliance with the Money Laundering Laws of applicable jurisdictions,
the
rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued administered or enforced by any
applicable Governmental
Authorities.
|
(l)
|
The
Parent and the Company agree that they will not register any transfer
of
the Securities that is not (i) made in accordance with the provisions
of
Regulation S under the Act, (ii) made pursuant to registration under
the
Act, or (iii) made pursuant to an available exemption under the
Act.
|
(m)
|
The
Company shall, as soon as reasonably practicable, use its reasonable
best
efforts to (i) obtain approvals from, and complete filing procedures
with,
relevant Governmental Authorities in order to create valid and enforceable
security interests over all of the equity interests of each WFOE
pursuant
to the Onshore Equity Pledge Agreements, and (ii) procure Xx. Xxxx
Tian
Sheng (or another Person who is reasonably acceptable to Purchaser)
as
sponsor to act on behalf of the Company in making the foregoing filings
and completing such procedures which sponsor shall act at the instruction
of the Collateral Agent. If the PRC Governmental Authorities require
any
amendments, modifications or changes to the Onshore Equity Pledge
Agreements as a condition to their approval of such agreements, then
the
Company shall use its best efforts to effect such amendments,
modifications or changes to such agreements, as the case may be,
to obtain
such approvals from the relevant Governmental
Authorities.
|
21
(n)
|
The
Parent shall use its best efforts to assist the Purchaser to timely
file
the UCC Financing Statement under Article 9 of the UCC of Nevada
with the
Secretary of the State of the State of Nevada with respect to the
Parent’s
charge over shares in the Company, which initial filing shall be
completed
no later than one month from the date of the
Closing.
|
(o)
|
To
the extent that any Controlling Shareholder or Group Company is subject
to
or under the jurisdiction of Circular 75 issued by the PRC State
Administration of Foreign Exchange on October 21, 2005, including
any
amendment, implementing rules, or official interpretation thereof
or any
replacement, successor or alternative legislation having the same
subject
matter thereof (collectively “Circular
75”),
each Group Company and each Controlling Shareholder hereby covenants
to
the Purchasers and the Company that it shall fully comply, and shall
procure that each such Controlling Shareholder and/or Group Company
to
comply, in all respects with Circular 75 and any related requirement
of
law, including without limitation, the completion of any applicable
foreign exchange registration, settlement or remittance requirement
therein by March 31, 2008.
|
(p)
|
The
Company shall, contemporaneously with the First Closing and pursuant
to
section 162 of the BVIBC Act, make an entry in its Register of Charges
maintained at its registered office (or at the office of its registered
agent) in respect of the charge over WFOEs’ shares that it grants in favor
of the Noteholders, and shall as soon as practicable after Closing,
pursuant to section 163 of the BVIBC Act, make an application with
the
Registrar of Corporate Affairs of the BVI to register details of
the
charge in the Register of Registered Charges, in order to comply
the legal
requirements in the BVI for establishing priority of collateral security
interests.
|
(q)
|
The
Company will use the proceeds from the offer and sale of the Securities
in
the First Closing (the “Proceeds”)
solely for (i) set-up and general working capital expenditures for
direct
television marketing operations (but subject to the prior written
consent
of the Purchaser for expenditures exceeding $15,000, which consent
shall
not be unreasonably
22 withheld),
(ii) repayment of the Secured Notes on the First Closing Date and
(iii)
fees and expenses (including the Arrangement Fee) payable with respect
to
the issuance of the Securities (collectively, the “Permitted
Use of Proceeds”). |
(r)
|
The
proceeds from the offer and sale of the Securities will, prior to
contribution to the WFOE, be retained in the Deposit Account until
such
proceeds are to be used for the Permitted Use of
Proceeds.
|
(s)
|
The
Parent (i) shall at all times keep reserved for issuance and delivery
such
number of Warrant Shares issuable upon exercise of any Warrant and
(ii)
shall, from time to time, take all necessary steps to amend its
certificate or articles of incorporation to provide a sufficient
reserve
of Warrant Shares for issuance upon exercise of the
Warrants.
|
(t)
|
In
connection with the exercise of the Warrants, neither the Parent
nor any
Person acting on its behalf will take any action which would result
in the
Warrant Shares being issued by the Parent other than to the then
existing
holders of the Warrants exclusively, in each case where no commission
or
other remuneration is paid or given directly or indirectly for soliciting
the exchange in compliance with Section 3(a)(9) of the
Act.
|
22
(u)
|
Each
of the Group Companies undertakes that (i) it will comply with the
FCPA,
including, without limitation, not making use of the mails or any
means or
instrumentality of interstate commerce corruptly in furtherance of
an
offer, payment, promise to pay or authorization of the payment of
any
money, or other property, gift, promise to give, or authorization
of the
giving of value to any “foreign official” (as the term is defined in the
FCPA) or any foreign political party or official thereof or any candidate
for foreign political office, in contravention of the FCPA, (ii)
it will
conduct its business in compliance with the FCPA, and (iii) it will
institute and maintain policies and procedures designed to ensure,
and
which are reasonably expected to continue to ensure, continued compliance
therewith.
|
(v)
|
The
Parent covenants to timely file (or obtain extensions in respect
thereof
and file within the applicable grace period) all reports required
to be
filed by the Parent after the date hereof pursuant to the Exchange
Act. As
long as the Warrant Shares are “restricted securities” as defined in Rule
144(a)(3), if the Parent is not required to file reports pursuant
to the
Exchange Act, it will prepare and make publicly available in accordance
with Rule 144(c) (and, if the Purchaser owns any Warrant Shares,
furnish
to the Purchaser) such information as is required to sell such Warrant
Shares under Rule 144. The Parent further covenants that it will
take such
further action as any holder of the Warrant Shares may reasonably
request,
to the extent required from time to time to enable such person to
sell
such Warrant Shares, as applicable, without registration under the
Act
within the requirements of the exemption provided by Rule
144.
|
(w)
|
The
Parent shall, by 8:30 a.m. New York City time on the fourth business
day
following the date hereof, issue a Current Report on Form 8-K, disclosing
the material terms of the transactions contemplated hereby, and shall
attach the Documents that are required by the Commission’s rules and
regulations to be filed thereto. The Parent and the Purchaser shall
consult with each other in issuing any other press releases with
respect
to the transactions contemplated hereby, and neither the Parent nor
the
Purchaser shall issue any such press release or otherwise make any
such
public statement (i) without the prior consent of the Parent, with
respect
to any press release of the Purchaser, or (ii) without the prior
consent
of the Purchaser, with respect to any press release of the Parent,
in
either case of (i) and (ii), which consent shall not unreasonably
be
withheld or delayed, except if such disclosure is required by law,
in
which case the disclosing party shall promptly provide the other
party
with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Parent shall not publicly or otherwise
disclose the name of the Purchaser, or include the name of the Purchaser
in any filing with the Commission or any regulatory agency or any
securities exchange or the Trading Market, without the prior written
consent of the Purchaser, except (x) as required by federal securities
law
in connection with the filing of the Documents (including signature
pages
thereto) with the Commission and (y) to the extent such disclosure
is
required by law or Trading Market regulations, in which case the
Parent
shall provide the Purchaser with reasonable prior notice of such
disclosure permitted hereunder.
|
(x)
|
As
soon as reasonably practicable following the date hereof, but in
any event
no later than March 31, 2008, the Company shall take all necessary
actions
to consummate the transactions contemplated by that certain Binding
Term
Sheet, dated February 8, 2007, by and between the Company and Beijing
Hi-tech Wealth Investment and Development Company Limited (the
“Binding
Term Sheet”),
including without, limitation:
|
23
(A)
|
performing,
or causing one of its subsidiaries to perform, the Company’s obligations
thereunder or pursuant to the subsequent definitive agreement, if
any,
entered into by such parties with respect to the matters contemplated
in
the Binding Term Sheet (to the extent applicable, the “Binding
IP Transfer Agreement”);
|
(B)
|
paying,
or causing one of its subsidiaries to pay, the requisite purchase
price as
set forth in the Binding Term Sheet or, to the extent applicable,
the
Binding IP Transfer Agreement;
|
(C)
|
registering,
or causing one of its subsidiaries to register, the transfer of the
applicable intellectual property rights purchased pursuant to the
Binding
Term Sheet, or to the extent applicable, the Binding IP Transfer
Agreement, with the applicable governmental authorities, so as to
ensure
the proper ownership of such intellectual property rights by the
Company
and/or one of its subsidiaries;
|
6. Purchaser’s
Representations, Warranties and Agreements.
The
Purchaser represents and warrants to the Parent and the Company
that:
(a)
|
It
is not a “U.S. Person” (as defined in Rule 902 of Regulation S under the
Act) and it understands that no action has been or will be taken
in any
jurisdiction by the Parent or the Company that would permit a public
offering of the Securities in any country or jurisdiction where action
for
that purpose is required. It is not acquiring the Securities for
the
account or benefit of any U.S. persons except in accordance with
exemption
from registration requirements of the Act below or in a transaction
not
subject thereto.
|
(b)
|
It
is not acquiring the Securities with a view to any distribution thereof
that would violate the Act or the securities laws of any state of
the
United States or any other applicable
jurisdiction.
|
(c)
|
It
(A) agrees that it will not offer, sell or otherwise transfer any
of the
Securities nor, unless in compliance with the Act, engage in hedging
transactions involving such securities, on or prior to (x) the date
which
is 40 days (in the case of the Notes) or one year (in the case of
the
Warrants and the Warrant Shares) after the later of the date of the
commencement of the offering and the date of original issuance (or
of any
predecessor of any Security proposed to be transferred by the Purchaser)
and (y) such later date, if any, as may be required by applicable
law,
except (a) to the Parent or the Company, (b) pursuant to a registration
statement that has been declared effective under the Act, (c) for
so long
as any Security is eligible for resale pursuant to Rule 144A under
the
Act, to a person it reasonably believes is a “qualified institutional
buyer” as defined in Rule 144A that purchases for its own account or for
the account of another qualified institutional buyer to whom notice
is
given that the transfer is being made in reliance on Rule 144A, (d)
pursuant to offers and sales to Persons who are not “U.S. Persons” (within
the meaning of Regulation S) that occur outside the United States
within
the meaning of Regulation S or (e) pursuant to any other available
exemption from the registration requirements of the Act, and (B)
agrees
that it will give to each person to whom such Security is transferred
a
notice substantially to the effect of this
paragraph.
|
24
(d)
|
The
Purchaser acknowledges that the Securities are “restricted securities” as
defined in Rule 144 under the Act and subject to resale restrictions
during the period set forth in Rule
144.
|
(e)
|
No
form of “directed selling efforts” (as defined in Rule 902 of Regulation S
under the Act), general solicitation or general advertising in violation
of the Act has been or will be used nor will any offers by means
of any
directed selling efforts in the United States be made by the Purchaser
or
any of its representatives in connection with the offer and sale
of any of
the Notes.
|
(f)
|
The
Securities to be acquired by the Purchaser will be acquired for investment
for the Purchaser’s own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and the Purchaser
has no present intention of selling, granting any participation in,
or
otherwise distributing the same. The Purchaser does not presently
have any
contract, undertaking, agreement or arrangement with any Person,
directly
or indirectly, to sell, transfer, distribute or grant participations
to
such Person or to any third Person, with respect to any of the
Securities.
|
(g)
|
The
execution, delivery and performance by it of this Agreement and the
consummation by it of the transactions contemplated by the Documents,
including, without limitation, the purchase of the Securities: (a)
is
within its power and authority and has been duly authorized by all
necessary action; (b) does not contravene the terms of its Charter
Documents or any amendment thereof; and (c) shall not violate, constitute
a breach of or a default (with the passage of time or otherwise)
under, or
require the consent of any person or a Governmental Authority (other
than
consents already obtained which are in full force and effect) under
or
pursuant to (i) any bond, debenture, note or other evidence of
indebtedness, indenture, mortgage, deed of trust, lease or any other
agreement or instrument to which the Purchaser is a party or by which
the
Purchaser or its property is bound, or (ii) any statute, rule, regulation,
law or ordinance, or any judgment, decree or order applicable to
the
Purchaser or any of its properties, other than in each of clause
(i) and
(ii) such violations, breaches or defaults that would not, individually
or
in aggregate, have a material adverse effect on the ability of the
Purchaser to perform its obligations
hereunder.
|
(h)
|
This
Agreement and the other Documents to which it is a party have been
duly
executed and delivered by it and assuming that it is binding on and
enforceable against the Company, this Agreement constitutes the
Purchaser’s legal, valid and binding obligation enforceable against the
Purchaser in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and
other
laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability
of
specific performance, injunctive relief or other equitable
remedies.
|
(i)
|
The
Purchaser has not engaged any broker, finder, commission agent or
other
similar person in connection with the transactions contemplated under
the
Documents, and the Purchaser is not under any obligation to pay any
broker’s fee or commission in connection with such
transactions.
|
25
7. Conditions
to Purchase Securities at Closing.
(i)
The
Purchaser’s obligation to purchase the Securities under this Agreement is
subject to the satisfaction or waiver of each of the following
conditions:
(a)
|
All
the representations and warranties of each of the Group Companies
contained in this Agreement and in each of the Documents shall have
been
true and correct (disregarding all qualification and exceptions contained
therein relating to materiality or Material Adverse Effect) in all
material respects as of the date hereof and shall be true and correct
in
all material respects at the respective Closing Date. On or prior
to the
respective Closing Date, the Group Companies and each other party
to the
Documents (other than the Purchaser) shall have performed or complied
with
all of the agreements and satisfied all conditions on their respective
parts to be performed, complied with or satisfied pursuant to the
Documents to the satisfaction of the
Purchaser.
|
(b)
|
No
injunction, restraining order or order of any nature by a Governmental
Authority shall have been issued as of the respective Closing Date
that
could prevent or materially interfere with the consummation of the
transactions contemplated under the Documents; and no stop order
suspending the qualification or exemption from qualification of any
of the
Securities in any jurisdiction shall have been issued and no Proceeding
for that purpose shall have been commenced or, to the knowledge of
the
Parent after due inquiry, be pending or threatened as of the respective
Closing Date.
|
(c)
|
No
action shall have been taken and no Applicable Law shall have been
enacted, adopted or issued that could, as of the respective Closing
Date,
reasonably be expected to prevent the consummation of the transactions
contemplated under the Documents. No Proceeding shall be pending
or, to
the knowledge of the Parent after due inquiry, threatened other than
Proceedings that if adversely determined could not, individually
or in the
aggregate, adversely affect the issuance or marketability of the
Securities, or could not, individually or in the aggregate, have
a
Material Adverse Effect.
|
(d)
|
The
Parent and the Company shall have obtained any and all approvals,
consents
and waivers necessary for consummation of the transactions contemplated
by
this Agreement, including, but not limited to, all Permits,
authorizations, approvals or consents of any Governmental
Authority.
|
(e)
|
The
Purchaser shall have received on the respective Closing
Date:
|
(A)
|
certificates
dated the respective Closing Date, signed by (1) the Chief Executive
Officer and (2) the principal financial or accounting officer(s)
of each
of the Group Companies, on behalf of each of such Group Companies,
respectively, to the effect that (a) the representations and warranties
set forth in Section
4
hereof are true and correct with the same force and effect as though
expressly made at and as of such Closing Date, (b) such Group Company
has
complied with all Documents in all material respects and satisfied
all
conditions set forth in such Documents on its part to be performed
or
satisfied hereunder (to the extent it is a party to such Documents)
at or
prior to such Closing Date unless otherwise waived pursuant to the
terms
hereof, (c) at such Closing Date, since the date hereof or since
the date
of the most recent financial statements in the SEC Reports (exclusive
of
any amendment or supplement thereto after the date thereof), no event
or
events have occurred, no information has become known nor does any
condition exist that could, individually or in the aggregate, have
a
Material Adverse Effect, (d) since the date of the most recent financial
statements in the SEC Reports (exclusive of any amendment or supplement
thereto after the date thereof), none of the Group Companies has
incurred
any liabilities or obligations, direct or contingent, not in the
ordinary
course of business, that are material to the Group Companies, taken
as a
whole, or entered into any transactions not in the ordinary course
of
business that are material to the business, condition (financial
or
otherwise), results of operations, prospects or regulatory status
of the
Group Companies, taken as a whole, and there has not been any change
in
the capital stock or long-term indebtedness of any of the Group Companies
that is material to the business, condition (financial or otherwise)
or
results of operations, prospects or regulatory status of the Group
Companies, taken as a whole, and (e) the sale of any of the Securities
has
not been enjoined (temporarily or
permanently);
|
26
(B)
|
certificates
dated the Closing Date, executed by the Secretary or authorized officer
of
each of the Group Companies, certifying such matters as the Purchaser
may
reasonably request;
|
(C)
|
certificates
dated the Closing Date, executed by officers of the Parent and the
Company
certifying such matters as the Purchaser may reasonably
request;
|
(D)
|
the
opinion of Loeb & Loeb LLP, special U.S. counsel to the Parent and the
Company, dated the respective Closing Date, in the form and substance
reasonably acceptable to the
Purchaser;
|
(E)
|
the
opinion of Xxxxx & Xxxx LLP, Nevada counsel to the Parent, dated the
respective Closing Date, in the form and substance reasonably acceptable
to the Purchaser;
|
(F)
|
the
opinion of Xxxxxxx Xxxxxx Bailhache, as to matters of BVI law, dated
the
respective Closing Date, in the form and substance reasonably acceptable
to the Purchaser; and
|
(G)
|
the
opinion of King & Wood, as to matters of PRC law, dated the respective
Closing Date, in the form and substance reasonably acceptable to
the
Purchaser.
|
(f)
|
On
the First Closing Date, each of the Documents and the Pay-off Statement
shall have been executed and delivered by all parties thereto to
the
satisfaction of the Purchaser, and the Purchaser shall have received
a
fully executed original (or clearly legible facsimile copy) of each
Document.
|
(g)
|
The
Purchaser shall have received copies of all opinions, certificates,
letters and other documents delivered under or in connection with
the
transactions contemplated in the Documents that are required to be
delivered at or prior to the Closing
Date.
|
27
(h)
|
None
of the other parties to any of the Documents shall be in breach or
default
under their respective obligations
thereunder.
|
(i)
|
The
Collateral Agent shall have received on the First Closing
Date:
|
(A)
|
evidence
satisfactory to the Purchaser that any prior Liens in respect of
the
shares of the Company have been fully discharged, including the share
pledge in favor of the Secured Note
Holders;
|
(B)
|
the
certificate representing the Charged Shares (as defined in the Share
Charges), accompanied by undated stock powers duly executed in blank
by
the Chargors pursuant to the respective Share
Charges;
|
(C)
|
any
appropriately completed copies, which have been duly authorized for
filing
by the appropriate Person, of UCC Financing Statement naming the
Parent as
a debtor and the Collateral Agent as the secured party, or other
similar
instruments or documents to be filed under the UCC of all jurisdictions
as
may be necessary or desirable to perfect the security interests of
the
Collateral Agent pursuant to the
Indenture;
|
(D)
|
any
certified copies of UCC Requests for Information or Copies (Form
UCC-11),
or a similar search report certified by a party acceptable to the
Collateral Agent, dated a date reasonably near to the First Closing
Date,
listing all effective financing statements which name the Parent
(under
its present name and any previous names) as the debtor, together
with
copies of such financing statements (none of which shall cover any
collateral described in the
Indenture);
|
(E)
|
a
copy of the Register of Charges of each chargor under the Share Charge,
dated a date reasonably near to the First Closing Date, listing all
effective charges and mortgages which name the Company as the debtor,
together with copies of such charges and mortgages (none of which
shall
cover any collateral described in the
Indenture);
|
(F)
|
copies
of Register of Members of each of the pledged company under the Share
Charge, dated a date reasonably near to the First Closing Date, listing
all effective charges and mortgage as contemplated by the Security
Documents;
|
(G)
|
such
other approvals, opinions, or documents as the Collateral Agent may
reasonably request in form and substance reasonably satisfactory
to the
Collateral Agent;
|
(H)
|
the
Collateral Agent and its counsel shall be satisfied that no Lien
exists on
any of the collateral described above other than the Lien created
in favor
of the Collateral Agent, for the benefit of the Secured Parties,
pursuant
to the Indenture and the Share Charges or that is being released
in favor
of such Secured Parties on such Closing
Date;
|
(I)
|
the
Pay-off Statement.
|
28
(j)
|
All
UCC Financing Statements or other similar financing statements or
filings
required pursuant to Section
7(i)
(collectively, the “Filing
Statements”)
shall have been delivered to CT Corporation System or another similar
filing service company acceptable to the Collateral Agent (the
“Filing
Agent”).
The Filing Agent shall have acknowledged in a writing reasonably
satisfactory to the Collateral Agent and its counsel (i) the Filing
Agent’s receipt of all Filing Statements, (ii) that the Filing Statements
have either been submitted for filing in the appropriate filing offices
or
will be submitted for filing in the appropriate offices within ten
days
following the First Closing Date and (iii) that the Filing Agent
will
notify the Collateral Agent and its counsel of the results of such
submissions within 10 days following the First Closing
Date.
|
(k)
|
The
respective Boards of Directors and, to the extent legally required,
the
respective shareholders of the Group Companies shall have approved
and
authorized by all necessary corporate action (i) the execution and
delivery of the Documents, (ii) all actions to be performed or satisfied
under the Documents (including, without limitation, the reserve for
issuance of the Warrant Shares issuable upon exercise of the Warrants),
(iii) the consummation of the transactions contemplated by the Documents,
(iv) the pricing terms of the Securities and (v) all other actions
necessary in connection with the transactions contemplated by the
Documents and the offering of the Securities and shall have provided
the
Purchaser with a copy of such
authorizations.
|
(l)
|
The
Purchaser shall have completed and be satisfied with the results
of all
business, legal and financial due diligence in its sole discretion
and
absolute satisfaction, and any items requiring correction identified
by
the Purchaser shall have been corrected to the Purchaser’s
satisfaction.
|
(m)
|
Conditions
to Purchase of Option Notes.
In the event that the Company exercises its option to require the
Purchaser to purchase the Option Notes after the First Closing Date,
the
Purchaser shall receive, dated as of the Second Closing Date, the
items
referred to in Section
7(e), dated
as of the Second Closing Date, and true and correct as of such
date.
|
8. Indemnification.
(a)
|
Each
of the Parent and the Company, jointly and severally, agrees to indemnify
and hold harmless the Purchaser, each of its affiliates (including
any
person who controls the Purchaser within the meaning of Section 15
of the
Act or Section 20 of the Exchange Act) and their respective officers,
directors, partners, shareholders, counsel, employees and agents
(the
Purchaser and each such other person being referred to as an “Indemnified
Person”),
to the fullest extent lawful, from and against any losses, claims,
damages, liabilities and reasonable expenses (or actions in respect
thereof), as incurred, related to or arising out of or in connection
with:
|
(A)
|
actions
taken or omitted to be taken by any of the Group Companies or their
respective affiliates, officers, directors, employees or agents in
breach
or violation of their respective representations, warranties, covenants
and agreements set forth in this Agreement or any of the other Documents;
and
|
(B)
|
any
breach by any of the Group Companies of their respective representations,
warranties, covenants and agreements set forth in this Agreement
or in any
of the other Documents; and,
subject to the provisions hereof, will reimburse the Indemnified
Persons
for all reasonable expenses (including, without limitation, reasonable
fees and expenses of counsel) as they are incurred in connection
with
investigating, preparing, defending or settling any such action or
claim,
whether or not in connection with litigation in which any Indemnified
Person is a named party. If any of the Indemnified Persons’ personnel
appears as witnesses, are deposed or are otherwise involved in the
defense
of any action against an Indemnified Person, any of the Group Companies,
or their respective officers or directors, each of the Parent and
the
Company will reimburse the Purchaser for all reasonable expenses
incurred
by the Purchaser by reason of any of the Indemnified Persons being
involved in any such action; provided,
however, Parent
and the Company shall not be liable for indemnification hereunder
with
regard to any grossly negligent act or omission or willful misconduct
by
the Purchaser or any other Indemnified Person which results in the
unavailability to the Parent (or any of its affiliates) or to the
offering
of the Securities of the exemption from the registration requirements
of
the Act provided by Regulation S thereunder. This indemnity will
be in
addition to any liability that any of the Group Companies may otherwise
have to the Indemnified
Persons.
|
29
(b)
|
As
promptly as reasonably practical after receipt by an Indemnified
Person
under this Section
8
of
notice of the commencement of any action for which such Indemnified
Person
is entitled to indemnification under this Section
8,
such Indemnified Person will, if a claim in respect thereof is to
be made
against the indemnifying party under this Section
8,
notify the indemnifying party of the commencement thereof in writing;
but
the omission to so notify the indemnifying party (i) will not relieve
such
indemnifying party from any liability under paragraph (a) above unless
and
only to the extent it is materially prejudiced as a result thereof
and
(ii) will not, in any event, relieve the indemnifying party from
any
obligations to any Indemnified Person other than the indemnification
obligation provided in paragraph (a) above. In case any such action
is
brought against any Indemnified Person, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be
entitled
to participate therein and, to the extent that it may determine,
jointly
with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such Indemnified Person
(who
shall not, except with the written consent of such Indemnified Person,
be
counsel to the indemnifying party) at the expense of the indemnifying
party; provided,
however, that
if (i) the use of counsel chosen by the indemnifying party to represent
the Indemnified Person would present such counsel with a conflict
of
interest, (ii) the actual or potential defendants in, or are targets
of,
any such action include both the Indemnified Person and the indemnifying
party, and the Indemnified Person shall have been advised by counsel
that
there may be one or more legal defenses available to it and/or any
other
Indemnified Person that are different from or additional to those
available to the indemnifying party, or (iii) the indemnifying party
shall
not have employed counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person within a reasonable time
after
notice of the institution of such action, then, in each such case,
the
indemnifying party shall not have the right to direct the defense
of such
action on behalf of such Indemnified Person or Persons and such
Indemnified Person or Persons shall have the right to select separate
counsel (including an additional local counsel) to defend such action
on
behalf of such Indemnified Person or Persons at the reasonable expense
of
the indemnifying party. After notice from the indemnifying party
to such
Indemnified Person of its election so to assume the defense thereof
and
approval by such Indemnified Person of counsel appointed to defend
such
action, the indemnifying party will not be liable to such Indemnified
Person under this Section
8
for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such Indemnified Person in
connection with the defense thereof, unless (i) the Indemnified Person
shall have employed separate counsel in accordance with the proviso
to the
immediately preceding sentence (it being understood, however, that
in
connection with such action the indemnifying party shall not be liable
for
the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar
actions
in the same jurisdiction arising out of the same general allegations
or
circumstances, representing the Indemnified Persons who are parties
to
such action or actions) or (ii) the indemnifying party has authorized
in
writing the employment of counsel for the Indemnified Person at the
expense of the indemnifying party. After such notice from the indemnifying
party to such Indemnified Person, the indemnifying party will not
be
liable for the costs and expenses of any settlement of such action
effected by such Indemnified Person without the prior written consent
of
the indemnifying party (which consent shall not be unreasonably withheld
or delayed).
|
30
(c)
|
No
indemnifying party shall, without the prior written consent of any
Indemnified Person, effect any settlement or compromise of, or consent
to
the entry of any judgment with respect to, any pending or threatened
action, claim, suit or proceeding in respect of which the Indemnified
Person is or could have been a party, or indemnity could have been
sought
hereunder by any Indemnified Person (whether or not the Indemnified
Person
is an actual or potential party to such action or claim), unless
such
settlement (A) includes an unconditional express written release
of any
Indemnified Person in form and substance reasonably satisfactory
to such
Indemnified Person, from all losses, claims, damages or liabilities
arising out of such action, claim, suit or proceeding and (B) does
not
include any statement as to an admission of fault, culpability or
failure
to act by or on behalf of such Indemnified Person. If a claim or
action is
settled, or if there be a final judgment for the plaintiff with respect
to
any such claim or action, each indemnifying party jointly and severally
agrees, subject to the exceptions and limitations set forth above,
to
indemnify and hold harmless each Indemnified Person from and against
any
and all losses, claims, damages or liabilities (and legal and other
expenses as set forth above) incurred by reason of such settlement
or
judgment.
|
(d)
|
The
indemnity and expense reimbursement obligations set forth herein
(i) shall
be in addition to any liability the Parent or the Company may have
to any
Indemnified Person at common law or otherwise, (ii) shall remain
operative
and in full force and effect regardless of any investigation made
by or on
behalf of the Purchaser or any other Indemnified Person and (iii)
shall be
binding on any successor or assignee of any of the Parent or the
Company
and their respective successors or
assignees.
|
(e)
|
If
Parent or the Company enter into any agreement or arrangement with
respect
to, or effects, any proposed sale, exchange, dividend or other
distribution or liquidation of all or a significant portion of its
assets
in one or a series of transactions or any significant recapitalization
or
reclassification of its outstanding securities, Parent or the Company
shall provide for the assumption of their obligations under this
Agreement
by another party reasonably satisfactory to the
Purchaser.
|
9. Termination.
(a)
|
The
Purchaser may terminate this Agreement at any time prior to the Closing
Date by written notice to the Company if any of the following has
occurred:
|
(A)
|
since
the date hereof, any Material Adverse Effect or development involving
or
reasonably expected to result in a prospective Material Adverse Effect
that could, in the Purchaser’s reasonable judgment, be expected to (i)
make it impracticable or inadvisable to proceed with the purchase
of the
Securities on the terms and in the manner contemplated in this Agreement
and the Indenture, or (ii) materially impair the investment quality
of any
of the Securities;
|
31
(B)
|
the
failure of any of the Parent or the Company to satisfy any of the
conditions contained in Section
7(e)
hereof on or prior to January 10,
2008;
|
(C)
|
any
outbreak or escalation of hostilities or other national or international
calamity or crisis, including acts of terrorism, or material adverse
change or disruption in economic conditions in, or in the financial
markets of, the United States, the European Union, PRC or Hong Kong
(it
being understood that any such change or disruption shall be relative
to
such conditions and markets as in effect on the date hereof), if
the
effect of such outbreak, escalation, calamity, crisis, act or material
adverse change in the economic conditions in, or in the financial
markets
of, the United States, the European Union or Hong Kong could be expected
to make it, in the Purchaser’s reasonable judgment, impracticable to
proceed with the consummation of the transactions on the terms and
in the
manner contemplated in this Agreement or the
Indenture;
|
(D)
|
trading
in the Parent’s Common Stock shall have been suspended by the Trading
Market or the suspension or limitation of trading generally in securities
on the New York Stock Exchange, the American Stock Exchange, the
London
Stock Exchange, the Hong Kong Stock Exchange, the NASDAQ Small Cap
Market,
the NASDAQ Capital Market or the NASDAQ Global Market or any setting
of
limitations on prices for securities on any such exchange or the
NASDAQ
Capital Market or the NASDAQ Small Cap Market, the NASDAQ Global
Market;
|
(E)
|
the
enactment, publication, decree or other promulgation after the date
hereof
of any Applicable Law that could be reasonably expected to have a
Material
Adverse Effect;
|
(F)
|
the
declaration of a banking moratorium by any federal or New York state
Governmental Authority; or the taking of any action by any Governmental
Authority after the date hereof in respect of its monetary or fiscal
affairs that could reasonably be expected to have a material adverse
effect on the financial markets in the United States, European Union,
Hong
Kong or elsewhere; or
|
(G)
|
the
Other Agreement has been terminated pursuant to the terms
thereof.
|
(b)
|
The
Parent and the Company may terminate this Agreement at any time prior
to
the Closing Date by written notice to the Purchaser based upon the
Purchaser’s breach of its representations, warranties, covenants and
obligations under this Agreement.
|
10. Survival
of Representations
and Indemnities.
The
representations and warranties, covenants, indemnities and contribution and
expense reimbursement provisions and other agreements of any of the Group
Companies and the Purchaser set forth in this Agreement shall remain operative
and in full force and effect, and will survive, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf
of
the Purchaser or any of the Group Companies, and (ii) acceptance of the
Securities, and payment for them hereunder.
32
11. Substitution
of Purchaser.
The
Purchaser shall have the right to substitute any one of its Affiliates as the
purchaser of the Securities, by written notice to the Company, which notice
shall be signed by the Purchaser and such Affiliate, shall contain such
Affiliate’s agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it of the
representations set forth in Section 6. Upon receipt of such notice, wherever
the word “Purchaser” is used in this Agreement (other than in this Section 11),
such word shall be deemed to refer to such Affiliate in lieu of the original
purchaser. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to the original purchaser
all
of the Securities then held by such Affiliate, upon receipt by the Company
of
notice of such transfer, wherever the word “Purchaser” is used in this Agreement
(other than in this Section 11), such word shall no longer be deemed to refer
to
such Affiliate, but shall refer to the original purchaser, and the original
purchaser shall have all the rights of an original holder of the Securities
under this Agreement.
12. Miscellaneous.
(a)
|
Notices
given pursuant to any provision of this Agreement shall be addressed
as
follows:
|
(A) if
to the
Parent and the Company and/or the other Group Companies, to:
China
Mobile Media Technology Inc.
0xx
Xxxxx, Xxxxx C, Intell-Center
Xx.
00
Xxxxxxxxxxxx Xxxx Xxxx
Xxxxxxx
Xxxxxxxx
Xxxxxxx,
Xxxxx 100083
Attention:
Chief Financial Officer
Facsimile
No.: 86 10 8260 1927
with
a
copy to:
Loeb
& Loeb LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Fax:
x0
000 000 0000
Attn:
Xxxxxxxx Xxxxxxxx, Esq.
(B) if
to the
Purchaser, to the addresses as indicated in Schedule I:
(b)
|
Except
with respect to the material terms and conditions of the transactions
contemplated by the Documents, the Parent covenants and agrees that
neither it nor any other person acting on its behalf will provide
the
Purchaser or its agents or counsel with any information that the
Parent
believes constitutes material non-public information, unless prior
thereto
the Purchaser shall have executed a written agreement regarding the
confidentiality and use of such information. The Parent understands
and
confirms that the Purchaser shall be relying on the foregoing
representations in effecting transactions contemplated
hereunder.
|
33
(c)
|
This
Agreement has been and is made solely for the benefit of and shall
be
binding upon each of the Group Companies and the Purchaser and, to
the
extent provided in Section
8 hereof,
the controlling persons and their respective agents, employees, officers,
directors, partners, counsel, and shareholders expressly referred
to in
Section
8, and
their respective heirs, executors, administrators, successors and
assigns,
all as and to the extent provided in this Agreement, and no other
person
shall acquire or have any right under or by virtue of this
Agreement.
|
(d)
|
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS
OF THE STATE OF NEW YORK.
|
(e)
|
All
disputes arising out of or in connection with this Agreement shall
be
finally settled under the Rules of Arbitration of the International
Chamber of Commerce by three arbitrators appointed as follows: one
arbitrator shall be appointed by the Purchaser, one arbitrator shall
be
appointed by the Company, and the third arbitrator shall be appointed
jointly by the two arbitrators appointed by the parties. The place
of
arbitration shall be in Hong Kong. The arbitration shall be conducted
in
English. The arbitration awards shall be final and binding upon the
parties.
|
(f)
|
No
failure to exercise, and no course of dealing with respect to, and
no
delay in exercising, any right, power or remedy hereunder shall operate
as
a waiver thereof; nor shall any single or partial exercise of any
right,
power or remedy hereunder preclude any other or further exercise
thereof
or the exercise of any other right, power or
remedy.
|
(g)
|
This
Agreement may be signed in various counterparts which together shall
constitute one and the same
instrument.
|
(h)
|
The
headings in this Agreement are for convenience of reference only
and shall
not limit or otherwise affect the meaning of any provision of this
Agreement.
|
(i)
|
If
any term, provision, covenant or restriction of this Agreement is
held by
a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants
and
restrictions set forth herein shall remain in full force and effect
and
shall in no way be affected, impaired or invalidated, in each case,
to the
extent permitted by applicable law, and the parties hereto shall
use their
best efforts to find and employ an alternative means to achieve the
same
or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed
the
remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void
or
unenforceable, to the extent permitted by applicable
law.
|
(j)
|
This
Agreement may be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may be given;
provided
that
the same are in writing and signed by all of the signatories
hereto.
|
[signature
page follows]
34
EXECUTION
COPY
Please
confirm that the foregoing correctly sets forth the agreement among Parent,
the
Company and the Purchaser.
Very
truly yours,
|
||
CHINA
MOBILE MEDIA TECHNOLOGY INC.
|
||
|
|
|
By: | ||
Name:
Title:
|
MAGICAL
INSIGHT INVESTMENTS LIMITED
|
||
|
|
|
By: | ||
Name:
Title:
|
[SIGNATURE
PAGE TO PURCHASE AGREEMENT]
Accepted
and Agreed to:
ABAX
LOTUS LTD.
|
|||
By: | |||
Name:
Title:
Authorized Signatory
|
[SIGNATURE
PAGE TO PURCHASE AGREEMENT]
SCHEDULE
I
Schedule
of Purchasers
I. Closing
of the Sale and Issuance of Notes and Warrants
First
Closing Date: January
10, 2008
Name
and Address
|
Principal
Amount of Notes
|
Number
of Warrants
|
|||||
Abax
Lotus Ltd.
|
RMB150,000,000
|
12,000,000
|
|||||
x/x
Xxxx Xxxxxx Xxxxxxx
|
|||||||
(Xxxx
Xxxx)
|
|||||||
Suite
6708, 67/F Two
|
|||||||
Limited
International Finance Centre
|
|||||||
0
Xxxxxxx Xxxxxx
|
|||||||
Xxxxxxx,
Xxxx Xxxx SAR
|
|||||||
Fax:
x000 00000000
|
Second
Closing Date:
Name
and Address
|
Principal
Amount of Notes
|
Number
of Warrants
|
|||||
Abax
Lotus Ltd.
|
RMB20,000,000
|
None
|
|||||
x/x
Xxxx Xxxxxx Xxxxxxx
|
|||||||
(Xxxx
Xxxx)
|
|||||||
Suite
6708, 67/F Two
|
|||||||
Limited
International Finance Centre
|
|||||||
0
Xxxxxxx Xxxxxx
|
|||||||
Xxxxxxx,
Xxxx Xxxx SAR
|
|||||||
Fax:
x000 00000000
|
SCHEDULE
II
To
be
provided
List
of Exhibits
Exhibit
A.
|
Form
of Indenture
|
Exhibit
B.
|
Form
of Warrant Agreement
|
Exhibit
C.
|
Form
of Share Charge
|
Exhibit
C-1.
|
Form
of Share Charge Over Shares in Hi-Tech Wealth Holding
Ltd.
|
Exhibit
C-2.
|
Form
of Share Charge Over Shares in Star Cluster
Incorporated
|
Exhibit
D.
|
Form
of Onshore Equity Pledge Agreement
|
Exhibit
E.
|
Form
of Investor Rights Agreement
|
Exhibit
F.
|
Form
of Information Rights and Inspection Agreement
|
Exhibit
G.
|
Form
of Non-Competition Agreement
|
Exhibit
H.
|
Form
of Registration Rights
Agreement
|