INVESTOR RIGHTS AGREEMENT
EXECUTION
COPY
THIS
INVESTOR RIGHTS AGREEMENT (this
“Agreement”)
is
made and entered into as of February 16, 2007,
by and
among (i) (a) China Security & Surveillance Technology, Inc., a Delaware
corporation (the “Company”),
(b)
China Safetech Holdings Limited, a wholly-owned subsidiary of the Company,
incorporated under the laws of British Virgin Islands (“Safetech”)
and
China Security & Surveillance Technology (HK) Ltd., a wholly-owned
subsidiary of Safetech, incorporated under the laws of Hong Kong (“CSST
HK”),
(c)
Golden Group Corporation (Shenzhen) Limited,
a
limited liability company organized and existing under the laws of the
People’s
Republic of China (the “PRC”)
and a
wholly-owned subsidiary of Safetech (“Golden”),
Shanghai Xxxxx Xxxx Digital Technology Co., Ltd., a limited liability company
organized and existing under the laws of the PRC and a wholly-owned subsidiary
of CSST HK (“Xxxxx
Xxxx”)
and
China Security & Surveillance Technology (PRC), Inc., a
limited
liability company organized and existing under the laws of the PRC and a
wholly-owned subsidiary of the Company (“CSST
PRC”,
and
collectively with the Company, Safetech, CSST HK, Golden and Xxxxx Xxxx, the
“Group
Companies”),
(d)
Mr. Tu Xxx Xxxx (“Mr.
Tu”),
a
resident of the City of Hangzhou in the PRC, Ms. Xx Xxx Xxx (“Xx.
Xx”),
a
resident of the City of Shenzhen in the PRC and Whitehorse Technology Limited,
a
British Virgin Islands company wholly owned by Mr. Tu and the registered owner
of Mr. Tu’s equity interest in the Company (“Whitehorse”,
and
collectively with Mr. Tu and Xx. Xx, the “Controlling
Shareholders”)
and
(ii) Citadel Equity Fund Ltd. (“Citadel”).
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings set forth in the Notes Purchase Agreement (as defined
below).
WITNESSETH:
WHEREAS,
the Company, Safetech, CSST HK, Golden, Xxxxx Xxxx, CSST PRC and Citadel have
entered into that certain Notes
Purchase
Agreement dated as of February 16, 2007 (the “Notes
Purchase
Agreement”),
pursuant to which the Company has agreed to issue to Citadel, and Citadel has
agreed to purchase from the Company, US$60,000,000 1%
Guaranteed Senior Unsecured Convertible Notes due 2012 (the
“Notes”),
which
are convertible into the Company’s common stock, par value $.0001
(the
“Common
Stock”),
which
are being issued pursuant to that certain Indenture dated as of the date hereof
by and among the
Company, the other Group Companies and The Bank of New York, as trustee (the
“Indenture”);
WHEREAS,
in consideration of Citadel entering into the
Notes
Purchase
Agreement, the Company has agreed to provide certain rights set forth in this
Agreement; and
WHEREAS,
it is a
condition to the Closing under the Notes Purchase Agreement that the parties
hereto shall have executed this Agreement.
NOW,
THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto, intending to be legally bound by this agreement, agree as
follows:
1
1. Representations
and Warranties of the Group Companies.
Each of
the Group Companies, jointly and severally, represents and warrants that:
1.1 Each
of
the Group Companies has full power and authority to make, enter into and carry
out the terms of this Agreement. This Agreement has been duly executed and
delivered by each Group Company and constitutes the legal, valid and binding
obligations of such Group Company enforceable against such Group Company in
accordance with its terms.
1.2 The
execution and delivery of this Agreement by each Group Company do not, and
the
performance of this Agreement by such Group Company will not: (i) conflict
with
or violate any law, rule, regulation, order, decree or judgment applicable
to
any Group Company or by which any Group Company or any of the properties of
any
Group Company is or may be bound or affected, or the Charter Documents of any
Group Company; (ii) result in or constitute (with or without notice or lapse
of
time) any breach of or default under any contract to which any Group Company
is
a party or by which any Group Company or any of the affiliates or properties
of
any Group Company is or may be bound or affected, or (iii) result in the
creation of any encumbrance or restriction on any of the shares of Common Stock
or equity interests in any other Group Company or properties of any Group
Company. The execution and delivery of this Agreement by each Group Company
do
not, and the performance of this Agreement by each Group Company will not,
require any consent or approval of any Person.
1.3 Each
of
the Group Companies (i) has been duly organized, is validly existing and is
in
good standing under the laws of its jurisdiction of organization, (ii) has
all
requisite power (corporate and other) 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 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, operations, earnings, assets,
liabilities or condition (financial or otherwise) of the Group Companies, taken
as a whole, (B) the ability of the Group Companies to perform their respective
obligations under any Transaction Document or (C) the validity of any of the
Transaction Documents or the consummation of any of the transactions
contemplated therein (each, a “Material
Adverse Effect”).
1.4 Except
as
set forth on Schedule
1.4
of the
Disclosure Schedule, 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 this Agreement, the Company is not a party or subject to any
agreement or understanding, and 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 Company (including, without limitation,
any
voting agreements, voting trust agreements, shareholder agreements or similar
agreements) or the voting by a director of the Company or (ii) the sale,
transfer or other disposition with respect to any security of the
Company.
2
1.5 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 state and federal
securities laws. Assuming the accuracy of Citadel’s representations in Section 8
of the Notes Purchase Agreement, the Notes will be issued in compliance with
applicable state and federal securities laws. The Notes, when issued, will
be in
the form contemplated by the Indenture. The Notes have 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
the
Notes Purchase Agreement and the Indenture, the 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. The Guarantees have been duly authorized, and, when
the Notes have been duly executed, authenticated and issued in accordance with
the provisions of the Indenture and delivered to and paid for by Citadel with
the Guarantees endorsed thereon by the Guarantors, will constitute the legal,
valid and binding obligations of each of the Guarantors entitled to the benefits
of such Indenture.
1.6 The
Conversion Shares have been duly and validly authorized for issuance by the
Company, and when issued pursuant to the terms of the Indenture, 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 Transaction Documents.
1.7 Except
as
disclosed in the SEC Reports, 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 Company, threatened, that seeks to restrain,
enjoin, prevent the consummation of, or otherwise challenges any of the
Transaction Documents, any agreements relating to the Acquisitions or any of
the
transactions contemplated therein. Except as disclosed in the SEC Reports,
none
of the Group Companies is subject to any judgment, order or decree of which
the
Company has knowledge.
1.8 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 Transaction
Documents. 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.
1.9 All
Debt
(as defined in the Indenture) represented by the Notes and the Guarantees is
being incurred for proper purposes and in good faith. Based on the financial
condition of the Company as of the Closing Date after giving effect to the
receipt by the Company of the proceeds from the sale of the Notes, (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
Company 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 Company has no knowledge of any
facts or circumstances which lead it to believe that it or any other Group
Company will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date.
None of the Group Companies is, or is reasonably likely to be, in default with
respect to any Debt 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 Debt 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, Debt of the Company.
3
2. Representations
and Warranties of the Controlling Shareholders.
Each of
the Controlling Shareholders, jointly and severally, represents and warrants
that:
2.1 (i)
Whitehorse is the direct owner of record, free and clear of all Liens, of
11,000,000
shares
of Common
Stock, which constitutes 33.04% of the outstanding voting power of the Company’s
capital stock, (ii) Xx. Xx is the direct owner of record, free and clear of
all
Liens (except for the Lien already provided to a third party by Xx. Xx on
2,044,126 shares of Common Stock (the “Encumbered
Securities”)),
of
2,627,500
shares
of Common
Stock, which constitutes 7.89%
of the
outstanding voting power of the Company’s capital stock, and (iii) Mr. Tu is the
beneficial owner, free and clear of all Liens (except for the Lien on the
Encumbered Securities), of 13,627,500
shares
of Common
Stock (through the ownership by Whitehorse and Xx. Xx), which constitutes
40.93%
of the
outstanding voting power of the Company’s capital stock. Each of the Controlling
Shareholders has full power and authority to make, enter into and carry out
the
terms of this Agreement. This Agreement has been duly executed and delivered
by
each Controlling Shareholder and constitutes the legal, valid and binding
obligations of such Controlling Shareholder enforceable against such Controlling
Shareholder in accordance with its terms.
2.2 The
execution and delivery of this Agreement by each Controlling Shareholder do
not,
and the performance of this Agreement by such Controlling Shareholder will
not:
(i) conflict with or violate any law, rule, regulation, order, decree or
judgment applicable to any Controlling Shareholder or by which any Controlling
Shareholder or any of the properties of any Controlling Shareholder is or may
be
bound or affected, or the Charter Documents of Whitehorse; (ii) result in or
constitute (with or without notice or lapse of time) any breach of or default
under any contract to which any Controlling Shareholder is a party or by which
any Controlling Shareholder or any of the affiliates or properties of any
Controlling Shareholder is or may be bound or affected, or (iii) result in
the
creation of any encumbrance or restriction on any of the shares of Common Stock
or equity interests in Whitehorse or properties of any Controlling Shareholder.
The execution and delivery of this Agreement by each Controlling Shareholder
do
not, and the performance of this Agreement by each Controlling Shareholder
will
not, require any consent or approval of any Person.
4
3. Covenants
and Agreements.
Unless
the context requires otherwise, each Group Company hereby, jointly and
severally, covenants and agrees, and Mr. Tu (with respect to Sections
3.2,
3.3
and
3.4
only)
covenants and agrees to cause each Group Company to do, as follows:
3.1 Inspection.
As long
as Citadel holds Convertible Notes then outstanding (including the principal
amount of the Convertible Notes converted into Conversion Shares as if such
conversion had not taken place and to the extent such Conversion Shares are
held
by Citadel at the time of calculating such percentage), the principal amount
of
which is at least 25% of the principal amount of the Convertible Notes then
outstanding (including the principal amount of the Convertible Notes converted
into Conversion Shares as if such conversion had not taken place and to the
extent such Conversion Shares are held by Citadel at the time of calculating
such percentage) (the “Minimum
Holdings”),
each
Group Company shall permit Citadel and any authorized representative thereof,
to
visit and inspect the properties of such Group Company, including its corporate
and financial records, to examine its records and make copies thereof and to
discuss its affairs, finances and accounts with its officers, at all such
reasonable times and as
often
as may be reasonably requested upon
reasonable notice,
provided
that
such visits and inspections shall not unduly interrupt the daily operation
of
such Group Company. Citadel and its participating agents and representatives,
in
exercising its rights of inspection hereunder, agrees to maintain the
confidentiality of all financial and other confidential information of such
Group Company acquired by them. If requested by such Group Company, Citadel,
in
exercising its rights under this Section
3.1
shall
execute a confidentiality agreement with such Group Company in such reasonable
form and substance as agreed between Citadel and such Group Company.
3.2 FCPA.
Each of
the Group Companies and Mr. Tu (during the term while he serves as the Company’s
director, Chief Executive Officer or President) shall, and shall cause each
Group Company, any of the Company’s Subsidiaries and their respective management
to, (i) comply with the U.S. Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder (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) conduct each such company’s respective business
in compliance with the FCPA, and (iii) institute and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue
to
ensure, continued compliance therewith.
5
3.3 PFIC.
No
Group Company shall become a “passive foreign investment company” within the
meaning of Section 1297 of the U.S. Internal Revenue Code of 1986.
3.4 OFAC.
Neither
any Group Company nor, to the knowledge of any Group Company, any director,
officer, agent, employee, Affiliate or Person acting on behalf of any Group
Company is currently subject to any U.S. sanctions administered by the Office
of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”);
and
no Group Company shall, and Mr. Tu (during the term while he serves as the
Company’s director, Chief Executive Officer or President) shall cause each Group
Company not to, 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 partner or other Person or entity, towards any sales
or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other
country sanctioned by OFAC or for the purpose of financing the activities of
any
Person currently subject to any U.S. sanctions administered by
OFAC.
3.5 Money
Laundering Laws.
Each of
the Group Companies shall, and Mr. Tu (during the term while he serves as the
Company’s director, Chief Executive Officer or President) shall cause each Group
Company to, conduct its operations 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.
3.6 Potential
Acquisitions.
Subject
to Citadel entering into a confidentiality agreement with the Company on terms
reasonably acceptable to Citadel and the Company, the Company shall notify
Citadel of any plan of all or a material portion of the acquisition of assets
or
securities of another Person if such Person’s assets or operations are primarily
in the PRC, including the Acquisition (each such acquisition, a “Potential
Acquisition”),
and
provide Citadel with all material documents pertaining to each Potential
Acquisition, including but not limited to, any and all agreements, memorandums
of understanding, term sheets or letters of intent, whether in draft or executed
form, together with any and all applications, forms or similar documents
(including exhibits, schedules and annexures thereto) prepared for the purpose
of filing or registrations with, or obtaining consents, approvals,
authorizations, licenses or orders of, any Governmental Authority under all
Applicable Laws (the “Acquisition
Documents”)
and
all other material documents reasonably requested by Citadel, reasonably in
advance of the consummation of such Potential Acquisition, for Citadel and
its
counsels to review, and provide comments and suggestions on, the legal structure
contemplated by the Acquisition Documents. Citadel shall provide any such
comments to the Company as promptly as possible and, in any event, no later
than
three (3) business days from the receipt of all Acquisition Documents provided
that the Acquisition Documents are timely delivered by the Company to Citadel.
The Company covenants that it shall reflect, and cause to be reflected, in
such
Acquisition Documents and the legal structure contemplated thereby, any comments
and suggestions provided by Citadel and its counsels, that, in the opinion
of
such counsel, are required or necessary to comply with all Applicable Laws
and
all conditions and requirements under any filings, registrations, consents,
approvals, authorizations, licenses or orders of any Governmental Authority
relating to such Potential Acquisition; provided,
that,
for
the avoidance of doubt, the Company shall, at all times, comply with all
Applicable Laws and all conditions and requirements under any filings,
registrations, consents, approvals, authorizations, licenses or orders of any
Governmental Authority relating to any Potential Acquisition. All legal fees
incurred by Citadel in connection with such review and comment shall be borne
by
Citadel.
6
3.7 Trading
Restrictions.
Each of
the Company, the Controlling Shareholders, Citadel and their respective
Affiliates shall not directly or indirectly transact, or induce or procure
any
other Person to transact, any purchase or sale in any shares of Common Stock
during the forty-five (45) Trading Days preceding the determination of any
Trading Reference VWAP.
In
this
Agreement,
“Trading
Day”
means
(x) if the applicable security is quoted on the Nasdaq National Market, a day
on
which trades may be made thereon, (y) if the applicable security is listed
or
admitted for trading on the American Stock Exchange, New York Stock Exchange
or
another national securities exchange, a day on which the American Stock
Exchange, New York Stock Exchange or another national securities exchange is
open for business, or (z) if the applicable security is not so listed, admitted
for trading or quoted, any day other than a Saturday or Sunday or a day on
which
banking institutions in the State of New York are authorized or obligated by
law
or executive order to close;
“Trading
Market”
means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the Nasdaq Capital Market, the American
Stock Exchange, the New York Stock Exchange, the Nasdaq Global Market, the
Nasdaq Global Select Market or the OTC Bulletin Board;
“Trading
Reference VWAP”
means,
as of February 16 or August 16 of each year, the simple arithmetic average
of
the VWAPs as shown on Bloomberg for the forty-five Trading Days preceding such
February 16 or August 16, as the case may be, as proportionally adjusted for
any
subdivision, consolidation, reclassification or similar event of the shares
of
Common Stock (“Shares”);
provided
that if
the actual Trading Reference VWAP be less than $9.00, the Trading Reference
VWAP
shall be deemed to be exactly $9.00; and
“VWAP”
means,
for any date, the price determined by the first of the following clauses that
applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
the daily volume weighted average price of the Common Stock for such date (or
the nearest preceding date) on the Trading Market on which the Common Stock
is
then listed or quoted for trading as reported by Bloomberg Financial L.P.
through its “Volume at Price” functions (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time); (b) if the OTC Bulletin
Board is not a Trading Market, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin Board;
or (c) if the Common Stock is not then quoted for trading on the OTC Bulletin
Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency succeeding
to
its functions of reporting prices), the average of the highest closing bid
price
and lowest closing ask price of any of the market makers for such security
as
reported, and in each of the foregoing clauses ignoring any block trade (which
for purposes of this definition means any transfer of more than 100,000 shares).
If the VWAP cannot be calculated for such security on such date on any of the
foregoing bases, the VWAP
of such
security on such date shall be the fair market value as mutually determined
by
the Company and the holders of the Notes of at least a majority in aggregate
principal amount of the Notes then outstanding.
7
3.8 New
Issuances or Sales to Third Parties.
The
Company shall not issue or sell any Common Stock or securities or options
exercisable, exchangeable or convertible into Common Stock to a purchaser that
is not an Affiliate of Citadel or the Company, if the issuance or sale price
of
such securities (as appropriately adjusted taking into account applicable
exercise or conversion prices) is not greater than (i) 90% of the closing price
of the Common Stock on the Trading Market as of the date of closing of such
issuance or sale or (ii) the simple
arithmetic average of the closing prices of the Common Stock on
the
Trading Market for
the
twenty Trading Days preceding the date of closing of such issuance or sale.
Notwithstanding the foregoing, the prohibitions in the immediately preceding
sentence shall not apply to (x) issuance pursuant to the Company’s employee
stock plan or (y) in connection with the Acquisitions.
In
this
Agreement, “Acquisitions”
means
the acquisitions of Shenzhen Hongtianzhi Electronics Co., Ltd., Wuhan Higheasy
Electronic Technology Co., Changzhou Minking Electronic Co., Ltd., Shenzhen
Huiruitong Electrical Appliance Co., Ltd. and Vorx Telecommunications Co.,
Ltd.
(in Beijing).
3.9 Outstanding
Number of Common Stock.
Until
the maturity of the Notes, the Company shall not (i) have more than 60,000,000
shares of Common Stock outstanding at any time or (ii) issue any new class
of
Equity Securities of the Company, in each case without the prior written
agreement between the Company and Citadel.
In
this
Agreement, “Equity
Securities”
means,
with respect to any Person, any and all shares of Capital Stock of such Person,
securities of such Person convertible into, or exchangeable or exercisable
for,
such shares, and options, warrants or other rights to acquire such shares and
any securities that represent the right to receive the Equity
Securities.
3.10 Other
Covenants.
As long
as Citadel holds the Minimum Holdings, each Group Company hereby covenants
and
agrees as follows, unless Citadel otherwise provides prior written consent
in
its sole discretion:
(a) No
Group
Company shall change
the substantive responsibilities of Mr. Tu as a member of the management of
such
Group Company and
its
Subsidiaries, or substitute any other Person to perform the substantive
responsibilities of Mr. Tu as such member of management as they are performed
as
of the date hereof, other than in the case of incapacity of Mr. Tu.
(b) No
Group
Company or its Subsidiaries shall issue
any
securities, create any security interest or enter
into any transaction or a series of related transactions the completion of
which
will result in a Change of Control of the Company. “Change
of Control”
shall
have the meaning as defined in the Indenture.
8
(c) No
Group
Company shall amend,
alter, waive or repeal any provision of such Group Company’s or its
Subsidiaries’ certificate of incorporation, memorandum and articles of
association or any other organizational or constitutional documents of such
Group Company or its Subsidiaries, provided
that
Citadel’s consent for such amendment, alteration, waiver or repeal shall not be
unreasonably withheld.
(d) No
Group
Company
or its Subsidiaries
shall
enter into any activities which
are
not in the ordinary course of business of such Group Company or such Subsidiary,
as the case may be, and that would have a material adverse effect on the
interests of Citadel.
(e) No
Group
Company shall change the nature of operations or the business of such Group
Company and its Subsidiaries.
4. Right
of First Refusal for Future Securities Offerings.
4.1 Issuance
Notice.
As long
as Citadel holds the Minimum Holdings, subject to the terms and conditions
of
this Section
and applicable securities laws, if, following the date hereof and until December
31, 2010, the Company proposes to issue or sell any securities to a purchaser
or
purchasers that are not an Affiliate of the Company (the “Proposed
Third Party Purchaser”),
the
Company shall, (i) not less than three (3) business days prior to the
consummation of such issuance or sale in the case of a proposed public offering
of Equity Securities of the Company, and (ii) not less than fifteen (15)
business days prior to the consummation of such issuance or sale in the case
of
all other issuances and sales of securities of the Company, offer such
securities to Citadel by sending written notice (an “Issuance
Notice”)
to
Citadel, which shall state (a)
the
identity of the Proposed Third Party Purchaser, (b) a description of the
securities to be issued or sold, including detailed terms of such securities,
(c) the amount of the securities proposed to be issued to the Proposed Third
Party Purchaser (the “Offered
New Securities”);
(d)
the proposed purchase price for the Offered Securities (the “Issuance
Price”);
and
(e) the terms and conditions of such proposed sale.
The
Issuance Notice shall also certify that the Company has received a firm offer
from the Proposed Third Party Purchaser and in good faith believes a binding
agreement for the Offered New Securities is obtainable on the terms set forth
in
the Issuance Notice. The Issuance Notice shall also include a copy of any
written proposal, term sheet or letter of intent or other agreement or
understanding relating to the Offered New Securities and proof satisfactory
to
the Company that the Offered New Securities will not violate any applicable
securities laws. Upon delivery of the Issuance Notice, such offer shall be
irrevocable unless and until the rights of first refusal provided for herein
shall have been waived or shall have expired.
4.2 Option;
Exercise.
By
notification to the Company (i) within three (3) business days after the
Issuance Notice is given in the case of a proposed public offering of Equity
Securities of the Company, and (ii) within fifteen (15) business after the
Issuance Notice is given in the case of all other issuances and sales of
securities of the Company, Citadel may elect to purchase or otherwise acquire,
at the price and on the terms specified in the Issuance Notice, up to all of
the
Offered New Securities.
The
closing of any sale pursuant to this Section
4.2
shall
occur within sixty (60) days after the date on which such notification is given
by Citadel.
Citadel
shall be entitled to apportion the rights of first refusal hereby granted to
it
among itself and its Affiliates in such proportions as it deems
appropriate.
9
4.3 If
less
than all of the Offered New Securities are elected to be purchased or acquired
as provided in Section
4.2,
the
Company may, during the thirty (30) day period following the expiration of
the
3-day period as set forth in Section
4.2(i)
or the
15-day period as set forth in Section 4.2(ii) herein, as the case may be, offer
and sell the remaining unsubscribed portion of such securities to the Proposed
Third Party Purchaser in the Issuance Notice at a price not less than, and
upon
terms no more favorable to the Proposed Third Party Purchaser than, those
specified in the Issuance Notice. If the Company does not enter into an
agreement for the sale of such securities within such period, or if such
agreement is not consummated within thirty (30) days after the execution
thereof, the right of first refusal provided hereunder shall be deemed to be
revived and such securities shall not be offered to a third party unless first
reoffered to Citadel in accordance with this Section.
5. Right
of First Refusal for Controlling Shareholder’s Transfer and Tag-Along
Right.
5.1 Securities
Notice.
As long
as Citadel holds the Minimum Holdings, subject to Section
5.8
of this
Agreement, if any of the Controlling Shareholders proposes to sell or transfer
any securities of the Company directly or indirectly held by it to a third
party
purchaser (the “Third
Party Purchaser”)
(for
the avoidance of doubt, including any sale or transfer by Mr. Tu of the Equity
Securities of Whitehorse) other than as otherwise agreed by Citadel in writing
prior to such sale or transfer, or in the case of any Exempt Transfer (as
defined in Section
5.7
below),
such Controlling Shareholder shall, within fifteen (15) business days prior
to
the consummation of such transfer or sale, offer such securities to Citadel
by
sending written notice (an “Offering
Notice”)
to
Citadel, which shall state (a) the identity of the Third Party Purchaser, (b)
the type and number of such securities proposed to be transferred (the
“Offered
Securities”),
including detailed terms of such securities (if other than Common Stock); (c)
the proposed purchase price per share for the Offered Securities (the
“Offer
Price”);
and
(d) the terms and conditions of such sale. The Offering Notice shall also
certify that such Controlling Shareholder has received a firm offer from the
Third Party Purchaser and in good faith believes a binding agreement for the
Offered Securities is obtainable on the terms set forth on the Offering Notice.
The Offering Notice shall also include a copy of any written proposal, term
sheet or letter of intent or other agreement or understanding relating to the
Offered Securities and proof satisfactory to the Company that the Offered
Securities will not violate any applicable securities laws. Upon delivery of
the
Offering Notice, such offer shall be irrevocable unless and until the rights
of
first refusal provided for herein shall have been waived or shall have expired.
5.2 Option;
Exercise.
For a
period of fifteen (15) business days after the giving of the Offering Notice
pursuant to Section
5.1
(the
“Option
Period”),
Citadel shall have the right to purchase all or any part of the Offered
Securities at a purchase price equal to the Offer Price and upon terms and
conditions no less favorable than those set forth in the Offering Notice.
Citadel may assign to any of its Affiliates all or any portion of its rights
pursuant to this Section.
5.3 The
right
of Citadel to purchase all or any part of the Offered Securities under
Section
5.2
above
shall be exercisable by delivering written notice of the exercise thereof (the
“ROFR
Exercise Notice”),
prior
to the expiration of the Option Period, to the Controlling Shareholder. Such
notice shall state the number of Offered Securities that Citadel is willing
to
purchase pursuant to this Section. The failure of Citadel to respond within
the
Option Period to the Controlling Shareholder shall be deemed to be a waiver
of
Citadel’s rights under Section
5.1
above,
provided
that
Citadel may waive its rights under Section
5.2
above
prior to the expiration of the Option Period by giving written notice to the
Controlling Shareholder that sent to Citadel the Offering Notice.
10
5.4 Closing.
The
closing of the purchases of Offered Securities subscribed for by Citadel under
Section
5.3
shall be
held at the executive office of the Company at 11:00 a.m., local time, on the
30th
day
after the giving of the ROFR Exercise Notice pursuant to Section
5.3
or at
such other time and place as the parties to the transaction may agree. At such
closing, the Controlling Shareholder that sent to Citadel the Offering Notice
shall deliver certificates representing the Offered Securities, duly endorsed
for transfer and accompanied by all requisite transfer taxes, if any, and such
Offered Securities shall be free and clear of any Liens (other than those
arising hereunder and those attributable to actions by the purchasers thereof)
and such Controlling Shareholder shall so represent and warrant, and shall
further represent and warrant that it is the sole beneficial and record owner
of
such Offered Securities. Citadel shall deliver at the closing payment in full
in
immediately available funds for the Offered Securities purchased by it or its
Affiliates. At such closing, all of the parties to the transaction shall execute
such additional documents as are otherwise necessary or
appropriate.
5.5 Sale
to a Third Party Purchaser.
Unless
Citadel elects to purchase all of the Offered Securities under Section
5.2,
the
Controlling Shareholder that sent to Citadel the Offering Notice may, subject
to
Section
5.8,
sell
the remaining Offered Securities not purchased by Citadel to the Third Party
Purchaser identified in the Offering Notice at a price not less than the Offer
Price, and on terms not more favorable than the terms set forth in the Offering
Notice; provided,
however,
that
such sale is bona fide and made pursuant to a contract entered into within
thirty (30) days after the earlier to occur of (i) the waiver by Citadel of
its
right to purchase the Offered Securities as set forth in Sections
5.1,
5.2,
5.3
and
5.4
herein
and (ii) the expiration of the Option Period (the “Contract
Date”);
and
provided
further,
that
such sale shall not be consummated unless and until (x) such Third Party
Purchaser shall represent in writing to Citadel that it is aware of the rights
of Citadel contained in this Agreement and (y) prior to the purchase by such
Third Party Purchaser of any of such Offered Securities, such Third Party
Purchaser shall become a party to this Agreement and agree to be bound by the
terms and conditions hereof that are applicable to the Controlling Shareholder.
If such sale is not consummated within thirty (30) days after the earlier to
occur of (i) the waiver by Citadel of its options to purchase the offer and
(ii)
the Contract Date for any reason, then the restrictions provided for herein
shall again become effective, and no transfer of such Offered Securities may
be
made thereafter by the Controlling Shareholder without again offering the same
to Citadel in accordance with this Section.
5.6 Tag-Along
Right.
(a) If
the Controlling Shareholder is directly or indirectly transferring Offered
Securities to a Third Party Purchaser pursuant to Section
5.5,
then
Citadel shall have the right to sell to such Third Party Purchaser that number
Shares (or Notes representing as closely as possible such number of Shares
held
by Citadel) equal to that percentage of the Offered Securities determined by
dividing (i) the total number of outstanding Shares (on an as-converted basis)
then owned, directly or indirectly, by Citadel by (ii) the sum of (x) the total
number of Shares (on an as-converted basis) then owned, directly or indirectly,
by Citadel and (y) the total number of Shares then owned, directly or
indirectly, by the Controlling Shareholder, at a price equal to (i) the Offer
Price in the case of sale of Shares (and in the event that the Offered
Securities are Equity Securities of Whitehorse, the Offer Price shall be
adjusted to reflect the equity interest in the Company represented by such
Offered Securities) (ii) or the Offer Price less the then applicable Conversion
Price in the case of the sale of the Notes (and in the event that the Offered
Securities are Equity Securities of Whitehorse, the Offer Price shall be
adjusted to reflect the equity interest in the Company represented by such
Offered Securities), in either case, in accordance with the other terms set
forth in the Offering Notice. The Controlling Shareholder and Citadel shall
effect the sale of the Offered Securities and Citadel shall sell the number
of
Offered Securities to be sold by it pursuant to this Section, and the number
of
Offered Securities to be sold to such Third Party Purchaser by the Controlling
Shareholder shall be reduced accordingly.
11
(b)
The
Controlling Shareholder shall give notice to Citadel of each proposed sale
by it
of Offered Securities which gives rise to the rights of Citadel set forth in
this Section, at least fifteen (15) business days prior to the proposed
consummation of such sale, setting forth the type and number of Offered
Securities, including detailed terms of such securities (if other than Shares),
the name and address of the proposed Third Party Purchaser, the proposed amount
and form of consideration and terms and conditions of payment offered by such
Third Party Purchaser, the percentage of Shares (or Notes representing such
Shares) that Citadel may sell to such Third Party Purchaser (determined in
accordance with Section
5.6(a)),
and a
representation that such Third Party Purchaser has been informed of the
“tag-along” rights provided for in this Section and has agreed to purchase
Offered Securities in accordance with the terms hereof. The tag-along rights
provided by this Section must be exercised by Citadel within fifteen (15)
business days following receipt of the notice required by the preceding
sentence, by delivery of a written notice to such Controlling Shareholder
indicating Citadel’s election to exercise its rights and specifying the number
of Shares or Notes (up to the maximum number of Shares or Notes owned by Citadel
required to be purchased by such Third Party Purchaser) it elects to sell (the
“Tag-along
Exercise Notice”),
provided
that
Citadel may waive its rights under this Section prior to the expiration of
such
fifteen (15) business day period by giving written notice to such Controlling
Shareholder, with a copy to the Company. The failure of Citadel to respond
within such fifteen (15) business day period shall be deemed to be a waiver
of
Citadel’s rights under this Section. If a Third Party Purchaser fails to
purchase Shares or Notes from Citadel, notwithstanding Citadel’s proper exercise
of its tag-along rights pursuant to this Section
5.6(b),
then
such Controlling Shareholder shall either contemporaneously purchase from
Citadel (i) at the Offer Price such number of Shares as the Third Party
Purchaser failed to purchase from Citadel or (ii) at the Offer Price less the
then applicable Conversion Price such number of Notes as the Third Party
Purchaser failed to purchase from Citadel, as the case may be, or if the
Controlling Shareholder does not so purchase, it shall not be permitted to
consummate the proposed sale of the Offered Securities, and any such attempted
sale shall be null and void ab
initio.
5.7 Exempt
Transfers.
The
right of first refusal and tag-along rights set forth in this Section
5
shall
not apply to (i) any transfer to a Permitted Holder (as defined in the
Indenture); provided
that
adequate documentation therefor is provided to Citadel to its satisfaction
and
that any such Permitted Holder agrees in writing to be bound by this Agreement
in place of the relevant transferor; provided,
further,
that
such transferor shall remain liable for any breach by such Permitted Holder
of
any provision hereunder,
(ii)
the sale in an unsolicited broker’s transaction pursuant to Rule 144 under the
Securities Act of 1933, as amended, or (iii) a Transfer (as defined below)
by
the Controlling Shareholders not resulting in the Controlling Shareholders,
in
the aggregate, having Transferred more than 5% of the Equity Securities of
the
Company on a fully-diluted basis held, directly or indirectly, by all
Controlling Shareholders as of the date hereof (the “Exempt
Transfers”).
12
5.8 Prohibited
Transfers.
(a)
Notwithstanding anything to the contrary contained herein, to the extent
permitted under applicable laws, the Controlling Shareholders shall not, without
the prior written consent of Citadel, directly or indirectly, transfer, sell,
assign, pledge, hypothecate, encumber, or otherwise dispose of, all or any
portion of any Common Stock or other Equity Securities of the Company (for
the
avoidance of doubt, including any Equity Securities of Whitehorse held by Mr.
Tu) or any economic interest therein (including without limitation by means
of
any participation or swap transaction or by entering into any voting trust
or
other contract, option or other arrangement or understanding with respect
thereto) (each, a “Transfer”)
through one or a series of transactions to any Person;
provided
that the
foregoing provision shall not apply to any Exempt Transfer.
For the
avoidance of doubt, the Encumbered Securities shall not be subject to this
Section
5.8.
(b) Any
attempt by any Controlling Shareholder to Transfer any Equity Securities of
the
Company or Whitehorse held (directly or indirectly) by it in violation of this
Section shall be void and each of the Company and Whitehorse hereby agrees
that
it will not effect such Transfer on its share register nor will it treat any
alleged transferee as the holder of such Equity Securities.
6. Board
Observer.
6.1 Appointment
of Board Observer.
(a)
As
long
as Citadel holds the Minimum Holdings, Citadel shall have the right to appoint
one individual (the “Board
Observer”)
who
will have the right to participate in meetings of the Board of Directors of
the
Company (the “Company
Board”)
as an
observer. The Board Observer shall be entitled to attend each meeting of the
Company Board but shall not be entitled to any management power or voting rights
at such meetings.
(b) Citadel
shall provide the Company Board with notice of the name, address and phone
number of the individual selected by Citadel to serve as the Board Observer.
Such notice shall be provided to the Company in the manner set forth in this
Agreement.
(c) The
Board
Observer’s rights pursuant to this Section
6
shall be
effective only upon the Board Observer and the Company entering into a
confidentiality agreement with terms to be mutually and reasonably agreed upon
by and between Citadel and the Company.
6.2 Notice
of Board Meetings.
The
Company shall give the Board Observer notice of any meetings of the Company
Board or any committee of the Company Board in the same manner as notice is
given to individuals who are members of the Company Board or such committee
and
shall provide the Board Observer with the same materials provided to the
individuals who are members of the Company Board or such committee; provided
that
if
the provision of such materials would waive any legal privilege, the Company
shall not be required to provide such materials to the Board
Observer.
13
6.3 Removal
and Replacement of Board Observer.
Citadel
shall have the sole and absolute right to remove an individual currently acting
as Board Observer and to replace such individual with another individual who
will act as the Board Observer. Upon any replacement of a Board Observer,
Citadel will provide the Company Board with notice of the contact information
for the replacement Board Observer in the manner set forth in Section
6.2.
7. Indemnification.
(a) In
addition to all rights and remedies available to Citadel at law or in equity,
each of the Group Companies shall jointly and severally indemnify Citadel,
and
its Affiliates, stockholders, officers, directors, employees, agents,
representatives, successors and permitted assigns (collectively, the
“Indemnified
Parties”)
and
save and hold each of them harmless against and pay on behalf of or reimburse
such party as and when incurred for any loss (including, without limitation,
diminutions in value), liability, demand, claim, action, cause of action, cost,
damage, deficiency, tax, penalty, fine or expense, whether or not arising out
of
any claims by or on behalf of any third party, including interest, penalties,
reasonable attorneys’ fees and expenses and all reasonable amounts paid in
investigation, defense or settlement of any of the foregoing (collectively,
“Losses”)
which
any such party may suffer, sustain or become subject to, as a result of, in
connection with, relating or incidental to or by virtue of:
(i) any
misrepresentation or breach of a representation or warranty on the part of
any
of the Group Companies herein;
(ii) any
nonfulfillment or breach of any covenant or agreement on the part of any of
the
Group Companies herein; or
(iii) any
action, demand, proceeding, investigation or claim by any third party
(including, without limitation, governmental agencies) against or affecting
any
Group Company and/or its Affiliates or Subsidiaries which, if successful, would
give rise to or evidence the existence of or relate to a breach of (A) any
of
the representations or warranties at the time made or (B) covenants of any
of
the Group Companies.
(b) In
addition to all rights and remedies available to Citadel at law or in equity,
each of the Controlling Shareholders shall jointly and severally indemnify
the
Indemnified Parties and save and hold each of them harmless against and pay
on
behalf of or reimburse such party as and when incurred for any Losses which
any
such party may suffer, sustain or become subject to, as a result of, in
connection with, relating or incidental to or by virtue of:
(i) any
misrepresentation or breach of a representation or warranty under Sections 2.1
and
2.2
herein
of a Controlling Shareholder; or
(ii) any
action, demand, proceeding, investigation or claim by any third party
(including, without limitation, governmental agencies) against or affecting
a
Controlling Shareholder which, if successful, would give rise to or evidence
the
existence of or relate to a breach of any such representations or warranties
at
the time made of a Controlling Shareholder.
14
(c) Notwithstanding
the foregoing, and subject to the following sentence, upon judicial
determination, which is final and no longer appealable, that the act or omission
giving rise to the indemnification hereinabove provided resulted primarily
out
of or was based primarily upon the Indemnified Party’s gross negligence, fraud
or willful misconduct (unless such action was based upon the Indemnified Party’s
reliance in good faith upon any of the representations, warranties, covenants
or
promises made by any Group Company or Controlling Shareholder herein) by the
Indemnified Party, neither any Group Company nor any Controlling Shareholder,
as
the case may be, shall be responsible for any Losses sought to be indemnified
in
connection therewith, and each of the Group Companies or the Controlling
Shareholders, as the case may be, shall be entitled to recover from the
Indemnified Party all amounts previously paid in full or partial satisfaction
of
such indemnity, together with all costs and expenses of such Group Company
or
Controlling Shareholder, as the case may be, reasonably incurred in effecting
such recovery, if any.
(d) All
indemnification rights hereunder shall survive indefinitely, regardless of
any
investigation, inquiry or examination made for or on behalf of, or any knowledge
of Citadel and/or any of the other Indemnified Parties.
(e) The
indemnity obligations that each of the Group Companies and the Controlling
Shareholders has under this Section shall be in addition to any liability that
such Group Company and the Controlling Shareholder may otherwise
have.
(f) Without
limiting the generality of the foregoing paragraphs in this Section
7,
each of
the Group Companies and Mr. Tu will, jointly and severally, agree to indemnify,
defend and hold harmless the Indemnified Parties from and against (i) any and
all losses (including without limitation, losses arising from or as a result
of
a decrease in the value of the Company or the value of the Common Stock or
the
Notes) incurred by any member of the Indemnified Parties and (ii) any and all
claims, actions or causes of action, assessments, demands, damages, judgments,
settlements, liabilities, costs and expenses (including, without limitation,
interest, penalties and attorneys’ and accounting fees and expenses) of any
nature whatsoever, asserted against or imposed upon any member of the
Indemnified Parties, in each case, by reason of or resulting from any breach
or
violation (whether such breach or violation was due to actions taken or failure
to take actions, in whole or in part, prior to or after the date hereof) of
laws, rules, regulations or orders of any governmental authority by any of
the
Group Companies, the Subsidiaries or the Controlling Shareholders.
8. Miscellaneous.
8.1 Termination.
Except
for Sections
7
and
8,
which
shall survive the termination of this Agreement, or as otherwise expressly
provided herein, this Agreement will be automatically terminated with no further
effect at such time that Citadel no longer holds the Minimum
Holdings.
15
8.2 Specific
Enforcement.
Upon a
breach by any of the Controlling Shareholders or the Group Companies of this
Agreement, in addition to any such damages as Citadel is entitled to, directly
or indirectly, by reason of said breach, Citadel shall be entitled to injunctive
relief against such Controlling Shareholder or Group Company if such relief
is
applicable and available, as a remedy at law would be inadequate and
insufficient. Nothing in this Section shall be construed as limiting Citadel’s
remedies in any way.
8.3 Notices.
Notices
given pursuant to any provision of this Agreement shall be addressed as follows:
(i) if to the any of the Group Companies or the Controlling Shareholders, to:
13/F, Shenzhen Special Zone Press Tower, Shennan Road, Futian, Shenzhen, China,
Fax: (00) 000-00000000, Attention: Mr. Tu Xxx Xxxx, with a copy to Xxxxxx Xxxx
Xxxxx Raysman & Xxxxxxx LLP, 000 0xx
Xxxxxx,
X.X., Xxxxxxxxxx, XX 00000, Fax: (0-000) 000-0000, Attention: Xx. Xxx
Xxxxxxxxxx, Esq., (ii) if to Citadel, to: c/o
000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, XXX,
Fax:
(0-000)
000 0000,
Attention: Xx.
Xxxx
X. Xxxxxx,
with a
copy to 00/X
Xxxxxx Xxxxx, 0 Xxxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx, Fax: (000) 0000 0000,
Attention: Xx. Xxxxxx Xxxx and Xx. Xxx Xxx,
and with
a copy to Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, ICBC Xxxxx 00xx Xxxxx, 0 Xxxxxx
Xxxx, Xxxxxxx, Xxxx Xxxx SAR, China, Fax: (000) 0000 0000, Attention: Xx.
Xxxxxxxx Xxxx, Esq.
All
notices, requests, consents and other communications hereunder shall be in
writing and shall be personally delivered or delivered by overnight courier
or
mailed by first-class registered or certified mail, postage prepaid, return
receipt requested, or by facsimile transmission. Every notice hereunder shall
be
deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, upon transmission by facsimile and
confirmed facsimile receipt, or two (2) days after the same shall have been
deposited with a reputable international overnight courier.
8.4 Amendments
and Waiver.
Unless
otherwise specifically stated herein, any term of this Agreement may be amended
with the written consent of the party against whom enforcement may be sought
and
the observance of any term of this Agreement may be waived (either generally
or
in a particular instance and either retroactively or prospectively) by the
Company and the Controlling Shareholders, in the case of Citadel’s obligations,
and by Citadel in the case of the obligations of any other parties hereto.
No
waivers of or exceptions to any term, condition or provision of this Agreement,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.
8.5 Entire
Agreement.
This
Agreement, together with the other Transaction Documents, embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements and understandings relating to the subject matter
hereof.
8.6 Severability.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement
to the extent permitted by law.
8.7 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
8.8 Successors
and Assigns.
Except
as otherwise provided herein, the terms and conditions of this Agreement shall
be binding upon, and inure to the benefit of, the respective representatives,
successors and assigns of the parties hereto. Unless otherwise provided herein,
Citadel
may
assign its rights hereunder to any of
its
Affiliates
(as
defined below).
For
purposes of this Agreement, an “Affiliate”
shall
refer to: (i) any Person directly or indirectly controlling, controlled by
or
under common control with another Person, (ii) any Person owning or controlling
50% or more of the outstanding voting securities of such other Person, (iii)
any
officer, director or partner of such Person, (iv)
a trust
for the benefit of such Person referred to in the foregoing clause (ii) of
this
definition.
16
8.9 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
[Signature
page(s) to follow]
17
IN
WITNESS WHEREOF, the undersigned have executed this Investor Rights Agreement
as
of the day and year written above.
GROUP
COMPANIES:
China
Security & Surveillance Technology, Inc.
By:
/s/ Tu Xxx
Xxxx
Name:
Tu
Xxx Xxxx
Title:
Chief Executive Officer
China
Safetech Holdings Limited
By:
/s/ Tu Xxx
Xxxx
Name:
Tu
Xxx Xxxx
Title:
Chief Executive Officer
China
Security & Surveillance
Technology
(HK) Ltd.
By:
/s/ Tu Xxx
Xxxx
Name:
Tu
Xxx Xxxx
Title:
Chief Executive Officer
Golden
Group Corporation (Shenzhen) Limited
By:
/s/ Tu Xxx
Xxxx
Name:
Tu
Xxx Xxxx
Title:
Chief Executive Officer
Shanghai
Xxxxx Xxxx Digital
Technology
Co., Ltd.
By:
/s/ Tu Xxx
Xxxx
Name:
Tu
Xxx Xxxx
Title:
Chief Executive Officer
China
Security & Surveillance
Technology
(PRC), Inc.
By:
/s/ Tu Xxx
Xxxx
Name:
Tu
Xxx Xxxx
Title:
Chief Executive Officer
CONTROLLING
SHAREHOLDERS:
By:
/s/ Tu Xxx
Xxxx
Mr.
Tu
Xxx Xxxx
By:
/s/ Xx Xxx
Qun
Ms.
Xx
Xxx Xxx
Xxxxxxxxxx
Technology Limited
By:
/s/ Tu Xxx
Xxxx
Name:
Tu
Xxx Xxxx
Title:
Chief Executive Officer
Accepted
and Agreed to:
CITADEL
EQUITY FUND LTD.
By:
Citadel Limited Partnership, its Portfolio Manager
By:
Citadel Investment Group, L.L.C., its General Partner
By:
/s/ Xxxxxx
Xxxx
Name:
Xxxxxx Xxxx
Title:
Authorized Signatory
