REDGATE MEDIA GROUP CLASS F PREFERENCE SHARES PURCHASE AGREEMENT
Exhibit 10.11.2
This Agreement is made and entered into as of May 15, 2009 (the “Effective Date”) by
and between Redgate Media Group (the “Company”), an Exempted Company incorporated in the Cayman
Islands, and UNI-ASIA LIMITED, a company incorporated under the laws of the British Virgin Islands
(the “Purchaser”).
1. PURCHASE OF SHARES. On the Effective Date and subject to the terms and conditions
of this Agreement, as security for the outstanding amounts under the Note (as defined below),
Company hereby sells to Purchaser, an aggregate of 38,040.17 shares of the Company’s Class F
Preference Shares (the “Shares”) at an aggregate purchase price of $10,000,000 (the “Purchase
Price”) or $262.88 per Share (the “Purchase Price Per Share”) for the consideration as set forth in
Section 2.1 below. As used in this Agreement, the term “Shares” refers to the Shares purchased
under this Agreement and includes all securities received (a) in substitution of the Shares, (b) as
a result of stock dividends or stock splits with respect to the Shares, and (c) in replacement of
the Shares in a merger, recapitalization, reorganization or similar corporate transaction.
2. PAYMENT OF PURCHASE PRICE; CLOSING.
2.1 Deliveries by Purchaser. Purchaser hereby delivers to the Company: (a) a duly
executed copy of this Agreement, (b) two (2) copies of a blank Stock Power and Assignment Separate
from Share Certificate in the form of Exhibit 1 attached hereto (the “Stock Powers”), both
executed by Purchaser, and (c) payment of the Purchase Price by providing (i) cash in the amount of
$3,804.01, and (ii) the benefit to the Company of making the loan to the Company referenced in the
Note Purchase Agreement which is attached hereto as Exhibit 2 (the “Note Purchase
Agreement”) and Promissory Note attached hereto as Exhibit 3 (the “Note”).
2.2 Deliveries by the Company. Simultaneous with the performance of the obligations by
Purchaser and the execution and delivery by the Purchaser to the Company of all documents, in each
case as listed in Section 2.1, the Company will issue a duly executed stock certificate evidencing
the Shares in the name of Purchaser, registered in Purchaser’s name, with such certificate to be
placed in escrow as provided in Section 7.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents and
warrants to the Company as follows.
3.1 Access to Information. Purchaser has had access to all information regarding the
Company and its present and prospective business, assets, liabilities and financial condition that
Purchaser reasonably considers important in making the decision to purchase the Shares, and
Purchaser has had ample opportunity to ask questions of the Company’s representatives concerning
such matters and this investment.
3.2 Understanding of Risks. Purchaser is fully aware of: (a) the highly speculative
nature of the investment in the Shares; (b) the financial hazards involved; (c) the lack of
liquidity of the Shares and the restrictions on transferability of the Shares (e.g., that Purchaser
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may not be able to sell or dispose of the Shares or use them as collateral for loans);
(d) the qualifications and backgrounds of the management of the Company; and (e) the tax
consequences of investment in the Shares.
3.3 Purchaser’s Qualifications. Purchaser has a preexisting personal or business
relationship with the Company and/or certain of its officers and/or directors of a nature and
duration sufficient to make Purchaser aware of the character, business acumen and general business
and financial circumstances of the Company and/or such officers and directors. By reason of
Purchaser’s business or financial experience, Purchaser is capable of evaluating the merits and
risks of this investment, has the ability to protect Purchaser’s own interests in this transaction
and is financially capable of bearing a total loss of this investment.
3.4 No General Solicitation. At no time was Purchaser presented with or solicited by
any publicly issued or circulated newspaper, mail, radio, television or other form of general
advertising or solicitation in connection with the offer, sale and purchase of the Shares.
4. MARKET STANDOFF AGREEMENT. Purchaser agrees in connection with any registration of
the Company’s securities under the Securities Act of 1933, as amended (the “1933 Act”) that, upon
the request of the Company or the underwriters managing the initial registered public offering of
the Company’s securities, Purchaser will not sell or otherwise dispose of any Shares without the
prior written consent of the Company or such underwriters, as the case may be, for such period of
time (not to exceed one hundred eighty (180) days) after the effective date of such registration
requested by such managing underwriters and subject to all restrictions as the Company or the
managing underwriters may specify for employee-shareholders generally. Purchaser further agrees to
enter into any agreement reasonably required by the underwriters to implement the foregoing. This
provision shall survive termination of this Agreement.
5. COMPANY’S REPURCHASE OPTION. The Company and its assignees shall have the option
to repurchase all of the Shares on the terms and conditions set forth in this Section (the
“Repurchase Option”) upon either a) repayment of the amounts due under the Note three years after
the initial advance under the Note (the “Maturity Date”); b) (Subject to compliance by the Company
with Section 4 of the Note) termination by the Company of the revolving line of credit (“Credit
Line”) for the Company in the principal amount of up to $5,000,000 (the “Loan Amount”) provided by
the Purchaser; provided, however, this occurs (i) prior to the Maturity Date, (ii) after all
outstanding Loan Amounts (as defined in the Note) have been paid by the Company, and (iii) in the
event that no Event of Default (as defined in the Note) shall have occurred; or c) in the event the
Purchaser elects to convert the amounts due under the Note into shares of the Company as set forth
in Section 3 of the Note.
5.1 Adjustments. The number of Shares will be proportionally adjusted to reflect any
stock dividend, stock split, reverse stock split or recapitalization of the Common Shares of the
Company occurring after the Effective Date.
5.2 Exercise of Repurchase Option Upon Repayment of Loan Amount. Upon the earlier of
the Maturity Date or the termination of the Credit Line (upon the conditions set forth in Section 5
above), and upon repayment by the Company of any or all of the
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outstanding Loan Amount, the Company
may elect to repurchase all of the Shares purchased under this Agreement for the aggregate amount
of $3,804.01 and for the additional consideration of repayment of the Loan Amount (the “Repurchase
Price”) by giving Purchaser written notice of exercise of the Repurchase Option.
5.3 Exercise of Repurchase Option Upon Conversion of the Loan Amount. If at any time
after the Effective Date, the Purchaser elects to convert the Loan Amount pursuant to the terms of
the Note, the Company may elect to repurchase all of the Shares that have been issued to the
Purchaser pursuant to this Agreement at the Repurchase Price specified herein.
5.4 Payment of Repurchase Price. The Repurchase Price will be payable, at the option
of the Company and/or its assignee(s), as the case may be, by cash, check or wire transfer.
5.5 Termination of Repurchase Option. If an Event of Default has occurred (as
described in Section 6 of the Note) and it is apparent that the Company shall not be able to
immediately pay the outstanding Loan Amount, the Company shall release the number of Shares from
escrow to Purchaser or its affiliates as described in this Section 5.5:
(a) If such Event of Default relates to the Event of Default described in Section 6.1(a) of
the Note (i.e., failure by the Company to pay when due any amount of principal or interest of the
Loan Amount and such failure remains un-remedied for five (5) days) (the “Non-Payment”) or if two
or more Events of Default have occurred and one of such Events of Default is the Non-Payment, the
Repurchase Option shall lapse with respect to all Shares; or
(b) If such Event of Default relates to the Events of Default described in Section 6.1 of the
Note other than the Non Payment, the Repurchase Option shall lapse with respect to the number of
the Shares that are equal to: (the outstanding unpaid Loan Amount (as defined in the Note) times
two (2) divided by the Purchase Price Per Share).
5.6 Anti-Dilution Adjustment for other Company Shareholders. In the event the Company,
may not by law, legally exercise its Repurchase Option, in whole or in part, due to its failure to
meet any applicable solvency requirements or the like, the Company shall, and the Purchaser agrees,
issue for no additional consideration, to each of its shareholders such number of shares of such
class of shares as held by such shareholders equal to the percentage such shareholder has been
diluted by the issuance of the Shares that could have been repurchased by the Company.
6. RIGHTS AS OWNER OF SHARES; EXECUTION OF SHAREHOLDERS AGREEMENT.
6.1 Right to Shares. Subject to the terms and conditions of this Agreement, Purchaser
will have all of the rights, preferences and privileges to the Shares, as outlined in the Company’s
Amended and Restated Memorandum and Articles of Association, from and after the
date that Purchaser delivers payment of the Purchase Price as set forth in Section 2.1 of the
Agreement until such time as the Company exercises its Repurchase Option herein, or Purchaser
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disposes of the Shares and/or transfers such Shares to the Company pursuant to the terms of this
Agreement.
6.2 Execution of Shareholders’ Agreement. Upon the lapse of the Repurchase Option and
only with respect to the Shares released from Escrow to Purchaser or its affiliates pursuant to
Section 5.5 hereto, Purchaser hereby agrees to execute and become a party to that certain
Shareholders Agreement dated September 17, 2004, as amended by and among the Company, the Purchaser
and the holders of the Company’s Common Shares and Preference Shares.
7. ESCROW. Purchaser agrees, immediately upon receipt of the share certificate(s)
evidencing the Shares, to deliver such certificate(s), together with the Stock Powers executed by
Purchaser (with the date, transferee, stock certificate number and number of Shares left blank), to
Massaleh Investments located at Chamber of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇: Bashae’r Bader Al-Omar (▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇) (the “Escrow Holder”), who is
hereby appointed to hold such certificate(s) and Stock Powers in escrow and to take all such
actions and to effectuate all such transfers and/or releases of such Shares as are in accordance
with the terms of this Agreement for a fee in the amount of THIRTY THOUSAND US DOLLARS ($30,000)
per annum (the “Escrow Fee”). The Escrow Fee shall be initially paid by the Company on the date
hereof and thereafter on subsequently anniversary of the date hereof. Escrow Holder will act
solely for the Company as its agent and not as a fiduciary. Purchaser and the Company agree that
Escrow Holder will not be liable to any party to this Agreement (or to any other party) for any
actions or omissions unless Escrow Holder is grossly negligent or intentionally fraudulent in
carrying out the duties of Escrow Holder under this Agreement. Escrow Holder may rely upon any
letter, notice or other document executed with any signature purported to be genuine and may rely
on the advice of counsel and obey any order of any court with respect to the transactions
contemplated by this Agreement. The Shares will be retained in escrow so long as the Loan Amount
remains outstanding and no Event of Default has occurred.
8. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
8.1 Legends. Purchaser understands and agrees that the Company will place the legends
set forth below or similar legends on any share certificate(s) evidencing the Shares, together with
any other legends that may be required by state or federal securities laws, or such other countries
laws, as applicable, the Company’s Amended and Restated Memorandum and Articles of Association, any
other agreement between Purchaser and the Company or any third party:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON
PUBLIC RESALE AND TRANSFER AND A MARKET STANDOFF RESTRICTION, AS SET FORTH IN A CLASS F
PREFERENCE SHARES PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF
THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.
SUCH PUBLIC
SALE AND TRANSFER RESTRICTIONS, INCLUDING THE MARKET STANDOFF RESTRICTION, ARE BINDING
ON TRANSFEREES OF THESE SHARES.
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8.2 Stop-Transfer Instructions. Purchaser agrees that, to ensure compliance with the
restrictions imposed by this Agreement, the Company may issue appropriate “stop-transfer”
instructions to its transfer agent, if any, and if the Company transfers its own securities, it may
make appropriate notations to the same effect in its own records. The Company will not be required
(a) to transfer on its books any Shares that have been sold or otherwise transferred in violation
of any of the provisions of this Agreement or (b) to treat as owner of such Shares, or to accord
the right to vote or pay dividends, to any purchaser or other transferee to whom such Shares have
been so transferred.
9. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of the Shares will
be subject to and conditioned upon compliance by the Company and Purchaser with all applicable
state and federal laws and regulations and with all applicable requirements of any stock exchange
or automated quotation system on which the Company’s Common Shares may be listed or quoted at the
time of such issuance or transfer.
10. RESERVATION OF CLASS F PREFERENCE SHARES PRIOR TO CLOSING. Company has prior to
the execution of this Agreement, reserved and obtained shareholder consent to the authorization to
issue such number of Class F Preference Shares equal to the entire Loan Amount (as defined in the
Note) and as issued pursuant to the terms of the Note Purchase Agreement by and among the Company
and the Purchaser dated as of May ___, 2009.
11. GENERAL PROVISIONS.
11.1 Notices. All notices and other communications required or permitted hereunder
shall be in writing and shall be mailed by registered or certified mail, postage prepaid, delivered
by a national overnight express service or transmitted by facsimile, telex, e-mail or other method
of simultaneous transmission, or otherwise delivered by hand or by messenger, addressed (a) if to
Purchaser, at Purchaser’s address set forth below, or at such other address as Purchaser shall have
furnished to the Company in writing, or (b) if to any other holder of the Note, at such address as
such holder shall have furnished the Company in writing, or, until such holder so furnishes an
address to the Company, then to and at the address of the last holder of the Note who has so
furnished an address to the Company, or (c) if to the Company, one copy should be sent to its
address set forth below and addressed to the attention of the President/CEO of the Company, or at
such other address as the Company shall have furnished to Purchaser. Each such notice or other
communication shall for all purposes of this Agreement be treated as effective or having been given
when delivered or transmitted, or, if sent by mail, at the earlier of its receipt or seventy-two
(72) hours after the same has been deposited in a regularly maintained receptacle for the deposit
of Hong Kong mail, addressed and mailed as aforesaid.
11.2 Term. This Agreement shall automatically terminate upon the earlier of (i) the
repayment by the Company of all outstanding amounts under the Note and its exercise of the
Repurchase Option as set forth herein, or (ii) conversion by the Purchaser of all outstanding
amounts under the Note into Class F Preference Shares.
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11.3 Further Assurances. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to carry out the
purposes and intent of this Agreement.
11.4 Titles and Headings. The titles, captions and headings of this Agreement are
included for ease of reference only and will be disregarded in interpreting or construing this
Agreement. Unless otherwise specifically stated, all references herein to “sections” and
“exhibits” will mean “sections” and “exhibits” to this Agreement.
11.5 Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York, without giving effect to that body of laws pertaining to
conflict of laws.
11.6 Assignments; Successors and Assigns. Any assignment of rights and obligations by
any other party to this Agreement requires the prior written consent of the other party. This
Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure
to the benefit of their respective successors, assigns, heirs, executors, administrators and legal
representatives.
11.7 Entire Agreement. Other than the Note Purchase Agreement and the Note, this
Agreement and the documents referred to herein constitute the entire agreement and understanding of
the parties with respect to the subject matter of this Agreement, and supersede all prior
understandings and agreements, whether oral or written, between or among the parties hereto with
respect to the specific subject matter hereof.
11.8 Amendment and Waivers. This Agreement may be amended only by a written agreement
executed by each of the parties hereto. No amendment of or waiver of, or modification of any
obligation under this Agreement will be enforceable unless set forth in a writing signed by the
party against which enforcement is sought. Any amendment effected in accordance with this section
will be binding upon all parties hereto and each of their respective successors and assigns. No
delay or failure to require performance of any provision of this Agreement shall constitute a
waiver of that provision as to that or any other instance. No waiver granted under this Agreement
as to any one provision herein shall constitute a subsequent waiver of such provision or of any
other provision herein, nor shall it constitute the waiver of any performance other than the actual
performance specifically waived.
11.9 Severability. If any provision of this Agreement is determined by any court or
arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such
provision will be enforced to the maximum extent possible given the intent of the parties hereto.
If such clause or provision cannot be so enforced, such provision shall be stricken from this
Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or
unenforceable clause or provision had (to the extent not enforceable) never been contained in this
Agreement. Notwithstanding the forgoing, if the value of this Agreement based upon the substantial
benefit of the bargain for any party is materially impaired, which determination as made by the
presiding court or arbitrator of competent jurisdiction shall be binding, then both parties agree
to substitute such provision(s) through good faith negotiations.
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11.10 Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered will be deemed an original,
and all of which together shall constitute one and the same agreement. This Agreement may be
executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed
to have the same effect as if the original signature had been delivered to the other party.
[Signature page follows]
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IN WITNESS WHEREOF, the Company has caused this Class F Preference Shares Purchase Agreement
to be executed by its duly authorized representative and Purchaser has executed this Agreement,
each as of the Effective Date.
| COMPANY | PURCHASER | |||||||||||||||
| REDGATE MEDIA GROUP | UNI-ASIA LIMITED | |||||||||||||||
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | By: | /s/ ▇▇▇▇▇ ▇▇-▇▇▇▇▇ | |||||||||||||
| Name: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Title: Chief Executive Officer |
Name: ▇▇▇▇▇ ▇▇-▇▇▇▇▇ Title: Authorized Signatory |
|||||||||||||||
Address:
|
Room 2703, 27th Floor, The Centrium ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇. ▇▇▇▇ ▇▇▇▇ | Address: | Palm Grove House P.O. Box 438 Road Town, Tortola, British Virgin Islands | |||||||||||||
On 15 May , 2009, before me, a Notary Public, personally appeared ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ , personally known to me or proved to me on the basis of satisfactory evidence to be the
person whose name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature on the instrument
the person, or the entity upon behalf of which the person acted, executed the instrument.
Witness my hand and official seal.
| /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ | ||||
| Notary Public | ||||
| [official seal] | ||||
On ___18 May ___, 2009, before me, a Notary Public, personally appeared ▇▇▇▇▇
▇▇-▇▇▇▇▇ , personally known to me or proved to me on the basis of satisfactory evidence to be
the person whose name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature on the instrument
the person, or the entity upon behalf of which the person acted, executed the instrument.
Witness my hand and official seal.
| /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇ | ||||
| Notary Public | ||||
| [official seal] | ||||
| LIST OF EXHIBITS | ||
Exhibit 1:
|
Stock Power and Assignment Separate from Stock Certificate | |
Exhibit 2:
|
Note Purchase Agreement | |
Exhibit 3:
|
Promissory Note |
EXHIBIT 1
STOCK POWER AND ASSIGNMENT
SEPARATE FROM STOCK CERTIFICATE
STOCK
POWER AND ASSIGNMENT
SEPARATE FROM CERTIFICATE
SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Class F Preference Shares Purchase Agreement
dated as of ___, 2009 (the “Agreement”), the undersigned hereby sells, assigns and
transfers unto
,
shares of the Class F Preference Shares of Redgate
Media Group, an Exempted Company incorporated in the Cayman Islands (the “Company”), standing in
the undersigned’s name on the books of the Company represented by Certificate No(s). ___ delivered
herewith, and does hereby irrevocably constitute and appoint the Secretary of the Company as the
undersigned’s attorney-in-fact, with full power of substitution, to transfer said stock on the
books of the Company. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY
EXHIBITS THERETO.
Dated:
| PURCHASER |
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| /s/ ▇▇▇▇▇ ▇▇-▇▇▇▇▇ | ||||
| (Signature) | ||||
| ▇▇▇▇▇ ▇▇-▇▇▇▇▇ |
||||
| (Please Print Name) | ||||
Instructions to Purchaser: Please do not fill in any blanks other than the
signature line. The purpose of this Stock Power and Assignment is to enable the Company and/or its
assignee(s) to acquire the Shares in accordance with Section 5 of the Agreement.
EXHIBIT 2
NOTE PURCHASE AGREEMENT
[See Exhibit 10.11.1]
EXHIBIT 3
PROMISSORY NOTE
[See Exhibit A to Exhibit 10.11.1]