FORM OF REGISTRATION RIGHTS AGREEMENT
Annex
H
FORM OF
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the
“Agreement”) is dated as of
[ • ], 2009, by and among SearchMedia Holdings
Limited, a company with limited liability organized under the
laws of the Cayman Islands, or its successors (the
“Company” or “ID Cayman”), and
the shareholders of the Company listed on Schedule A of
this Agreement. Each of the shareholders listed on
Schedule A is sometimes referred to herein as a
“Shareholder”, and collectively as the
“Shareholders”.
RECITALS
WHEREAS, the Company has entered into an Agreement and Plan of
Merger, Conversion and Share Exchange which contemplates the
(i) merger of Ideation Acquisition Corp. into its wholly
owned Arizona subsidiary (“ID Arizona”)
pursuant to Section 253 of the General Corporate Law of the
State of Delaware and
Section 10-1104
of the Arizona Revised Statutes, (ii) the subsequent
conversion of ID Arizona into a Cayman Islands company by a
transfer of domicile pursuant to
Section 10-226
of the Arizona Revised Statutes, (iii) the registration and
continuation of ID Arizona as a Cayman Islands company pursuant
to Section 221 of the Cayman Companies Law, and
(iv) the acquisition by ID Cayman of the operations and
business of SearchMedia International Limited, a limited company
incorporated in the Cayman Islands, by way of a share exchange
(collectively, the “Business Combination”).
WHEREAS, the Company and the Shareholders desire to enter into
this Agreement in order to, among other things, reflect the
registration rights to be provided to the Shareholders in
connection with the shares of ID Cayman and warrants to purchase
shares of ID Cayman to be issued to the Shareholders in
connection with the Business Combination and the other
transactions contemplated in connection therewith.
NOW, THEREFORE, in consideration of the mutual promises and
covenants and agreements set forth herein, the Company and the
Shareholders hereby agree as follows:
AGREEMENT
| 1. | Registration Rights. |
1.1 Definitions. For
purposes of this Section 1:
(a) Adverse Disclosure. The term
“Adverse Disclosure” means public
disclosure of material non-public information, which disclosure
in the good faith judgment of the board of directors of the
Company after consultation with counsel to the Company
(i) would be required to be made in any Registration
Statement (as defined in subsection 1.1(i)) so that such
Registration Statement would not be materially misleading,
(ii) would not be required to be made at such time but for
the filing of such Registration Statement and (iii) the
Company has a bona fide business purpose for not disclosing
publicly.
(b) Business Day. The term
“Business Day” means a day, excluding a
Saturday, Sunday, legal holiday or other day on which banks are
required to be closed in the PRC, Hong Kong or New York.
(c) Demand Notice. The term
“Demand Notice” means a written notice
executed by Holders of more than 50% of the Registrable
Securities Then Outstanding (as defined in subsection 1.1(k)
below) (the “Requesting Holders”).
(d) Effective Date. The term
“Effective Date” means with respect to
any Registration Statement the earlier of (i) the one
hundred twentieth (120th) day following the Filing Date (as
defined below) or (ii) in the event the Registration
Statement receives a “full review” by the SEC, the one
hundred fiftieth (150th) day following the Filing Date or
(iii) the date which is within three Business Days after
the date on which the SEC informs the Company the (x) the
SEC will not review a Registration Statement or (y) the
Company may request the acceleration of the effectiveness of a
Registration Statement and the
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Company makes such request; provided, that, in any event
(i), (ii) or (iii), if the Effective Date falls on a
Saturday, Sunday or any other day that is a legal holiday or a
day on which the SEC is authorized or required by law or other
government action to close, the Effective Date shall be the
following Business Day.
(e) Filing Date. The term
“Filing Date” means the sixtieth
(60th)
day following the delivery date of a Demand Notice or such later
date as specified in the Demand Notice or as agreed by the
Requesting Holders; provided, that, if the Filing Date
falls on a Saturday, Sunday or any other day that is a legal
holiday or a day on which the SEC is authorized or required by
law or other government action to close, the Filing Date shall
be the following Business Day.
(f) Holder. For purposes of this
Section 1 and Section 2 hereof, the term
“Holder” or “Holders” means
any Person or Persons owning of record Registrable Securities
(as defined in subsection 1.1(k) below) or any assignee of
record of such Registrable Securities to whom rights under this
Section 1 have been duly assigned in accordance with this
Agreement; provided, however, that for purposes of
this Agreement, a record holder of securities convertible into
such Registrable Securities shall be deemed to be the Holder of
such Registrable Securities.
(g) New Warrants. The term
“New Warrants” means (i) the warrants to
acquire Ordinary Shares to be issued to China Seed Ventures,
L.P. as a result of the Business Combination, (ii) the
warrants to acquire Ordinary Shares to be issued to Deutsche
Bank AG, Hong Kong Branch, as a result of the Business
Combination, and (iii) the warrants to acquire Ordinary
Shares to be issued to Linden Ventures II (BVI) Ltd. as a
result of the Business Combination.
(h) Ordinary Shares. The term
“Ordinary Shares” refers to the ordinary
shares, par value US$0.0001 per share, in the capital of ID
Cayman.
(i) Registration. The terms
“register,”
“registered,” and
“registration” refer to a registration
effected by preparing and filing a Registration Statement in
compliance with the Securities Act, and the declaration or
ordering of effectiveness of such Registration Statement.
(j) Registration Statement. A
“Registration Statement” is any
registration statement filed pursuant to Section 1.2 of
this Agreement.
(k) Registrable Securities. The
term “Registrable Securities” means:
(i) any and all Ordinary Shares beneficially owned by the
Shareholders as a result of the Business Combination,
(ii) any Ordinary Shares issued as (or issuable upon the
conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with
respect to, in exchange for or in replacement of, all such
Ordinary Shares described in clause (i) of this subsection
(k), (iii) any Ordinary Shares issued or issuable to the
Shareholders pursuant to the New Warrants and (iv) any
Ordinary Shares issued or issuable to a Shareholder upon the
conversion of any preferred shares of the Company issued to such
Shareholder in connection with the Business Combination;
provided, however, that Registrable Securities
shall cease to be Registrable Securities upon the earlier of
(i) when, with respect to any Holder of Registrable
Securities, in the reasonable opinion of counsel to the Company,
all Registrable Securities proposed to be sold by such Holder
may then be sold pursuant to Rule 144 without any
limitations and (ii) the date as of which all of the
Registrable Securities have been sold pursuant to a Registration
Statement, provided, further, that
“Registrable Securities” shall exclude in all cases
any Registrable Securities transferred by a Holder of
Registrable Securities or any other Person in a transaction
other than an assignment pursuant to Section 2.11.
(l) Registrable Securities Then
Outstanding. The term “Registrable
Securities Then Outstanding” means the number of
Ordinary Shares of the Company that are Registrable Securities
and are then issued and outstanding or would be outstanding
assuming full conversion of all securities, warrants or other
rights which are, directly or indirectly, convertible,
exercisable or exchangeable into or for Registrable Securities.
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(m) Rule 415. The term
“Rule 415” means Rule 415
promulgated by the SEC pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC having substantially the
same effect as such Rule.
(n) Securities Act. The term
“Securities Act” means the Securities
Act of 1933, as amended.
(o) SEC. The term “SEC”
means the United States Securities and Exchange Commission.
1.2 Demand Registration.
(a) Registration. If a Demand
Notice is delivered by the Requesting Holders, then on or prior
to the Filing Date, the Company shall use its commercially
reasonable efforts to prepare and file with the SEC a
“resale” Registration Statement providing for the
resale of all Registrable Securities for an offering to be made
on a continuous basis pursuant to Rule 415. Such
Registration Statement shall be on
Form F-3
(except if the Company is not then eligible to register the
Registrable Securities on
Form F-3,
such registration shall be on an appropriate form in accordance
herewith and the Securities Act and the rules promulgated
thereunder). The Company shall use its commercially reasonable
efforts to cause such Registration Statement to be declared
effective under the Securities Act as promptly as possible after
the filing thereof, but in any event prior to the Effective
Date, and to keep such Registration Statement continuously
effective under the Securities Act until such date as is the
earlier of (x) the date when all Registrable Securities
covered by such Registration Statement have been sold or
(y) the date on which the Registrable Securities may be
sold without any restriction pursuant to Rule 144 of the
Securities Act as determined by the counsel to the Company
pursuant to a written opinion letter, addressed to the
Company’s transfer agent to such effect (the
“Effective Period”). The Company shall request
that the effective time of any such Registration Statement be no
later than 5:00 p.m. Eastern Time on the Effective
Date.
(b) In the event that the Company is unable to register all
of the Registrable Securities for resale under Rule 415 due
to limits imposed by the SEC’s interpretation of
Rule 415, the Company will file a Registration Statement
under the Securities Act with the SEC covering the resale by the
Holders of such lesser amount of the Registrable Securities as
the Company is able to register pursuant to the SEC’s
interpretation of Rule 415 and use its commercially
reasonable efforts to have such Registration Statement declared
effective as promptly as possible and, when permitted to do so
by the SEC, to file subsequent registration statement(s) under
the Securities Act with the SEC covering the resale of any
Registrable Securities that were omitted from previous
registration statement(s) and use its commercially reasonable
efforts to have such registration declared effective as promptly
as possible thereafter. In furtherance of the Company’s
obligations set forth in the preceding sentence, the parties
agree that in the event that any Holder shall deliver to the
Company a written notice at any time after the later of
(x) the date which is six months after the Effective Date
of the latest Registration Statement filed pursuant to
Section 1.2(a) or 1.2(b) hereof, as applicable, or
(y) the date on which all Registrable Securities registered
on all of the prior Registration Statements filed pursuant to
Section 1.2(a) and 1.2(b) hereof are sold, that the Company
shall file, within thirty (30) days following the date of
receipt of such written notice, an additional Registration
Statement registering all Registrable Securities that were
omitted from the initial Registration Statement.
(c) The Company shall pay all expenses incurred in
complying with Sections 1.2 and 1.3 hereof (other than
taxes and underwriting discounts and commissions related to the
sale of Registrable Securities), including, without limitation,
all registration and filing fees, printing, duplicating, word
processing, facsimile and delivery expenses, fees and
disbursements of counsel for the Company, reasonable fees and
disbursements of one counsel representing all Holders
participating in the Registration, “blue sky” fees and
expenses and the expense of any special audits incident to or
required by any such registration (but excluding the
compensation of regular employees of the Company which shall be
paid in any event by the Company). Notwithstanding the
foregoing, the Company shall not be required to pay the expenses
of any registration proceeding begun pursuant to this
Section 1.2 if the registration request is subsequently
withdrawn at the request of the Holders of at least 50% of the
Registrable Securities Then Outstanding to be registered.
(d) Notwithstanding anything to the contrary contained in
this Agreement, if the filing, initial effectiveness or
continued use of the Registration Statement referred to in this
Section 1.2 at any time would
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require the Company to make an Adverse Disclosure or would
require the inclusion in such Registration Statement of
financial statements that are unavailable to the Company for
reasons beyond the Company’s control, the Company may, upon
giving prompt written notice of such action to the Holders,
delay the filing or initial effectiveness of, or suspend use of,
the Registration Statement; provided, however, that the Company
shall not be permitted to do so for more than 90 consecutive
days during any 12 month period. In the event the Company
exercises its rights under the preceding sentence, the Holders
agree to suspend, immediately upon their receipt of the notice
referred to above, their use of the prospectus relating to the
Registration in connection with any sale or offer to sell
Registrable Securities. The Company shall immediately notify the
Holders upon the expiration of any period during which it
exercised its rights under this Section 1.2(d).
1.3 Piggyback Registrations.
(a) If at any time during the Effective Period there is not
an effective registration statement covering all the Registrable
Securities and the Company shall determine to file a
registration statement under the Securities Act for purposes of
effecting a public offering of securities of the Company
(including, but not limited to, registration statements relating
to secondary offerings of securities of the Company, but
excluding registration statements relating to (i) any
employee benefit plan or (ii) a corporate reorganization,
merger or acquisition), then the Company shall notify all
Holders in writing at least thirty (30) calendar days prior
to such filing and will afford each such Holder an opportunity
to include in such registration statement all or any part of the
Registrable Securities then held by such Holder. Each Holder
desiring to include in any such registration statement all or
any part of the Registrable Securities held by such Holder
shall, within twenty (20) calendar days after receipt of
the above-described notice from the Company, so notify the
Company in writing, and in such notice shall inform the Company
of the number of Registrable Securities such Holder wishes to
include in such registration statement. If a Holder decides not
to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include its
Registrable Securities in any subsequent registration statement
or registration statements as may be filed by the Company with
respect to offerings of its securities, all upon the terms and
conditions set forth herein.
(b) If a registration statement under which the Company
gives notice under this Section 1.3 is for an underwritten
offering, then the Company shall so advise the Holders of
Registrable Securities. In such event, the right of any such
Holder to include its Registrable Securities in a registration
pursuant to this Section 1.3 shall be conditioned upon such
Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein. All Holders
proposing to distribute their Registrable Securities through
such underwriting shall enter into an underwriting agreement in
customary form with the managing underwriter or underwriter(s)
selected by the Company for such underwriting. Notwithstanding
any other provision of this Agreement, if the managing
underwriter(s) determine(s) in good faith that marketing factors
require a limitation of the number of shares to be underwritten,
then the managing underwriter(s) may exclude shares (including
Registrable Securities) from the registration and the
underwriting, and the number of shares that may be included in
the registration and the underwriting shall be allocated,
(i) with respect to a registration statement initiated by
the Company for its own account, first, to the Company,
second, to the Holders of securities who have obtained
piggy-back registration rights prior to or at the date of this
Agreement, if any, including the Registrable Securities, as to
which registration has been requested pursuant to written
contractual piggy-back registration rights (pro rata in
accordance with the number of securities which each such Person
has actually requested to be included in such registration,
regardless of the number of securities with respect to which
such Persons have the right to request such inclusion), and
third, to holders of other securities of the Company,
provided that the number of shares of Registrable Securities to
be included in such underwriting and registration shall not be
reduced unless all shares that are not Registrable Securities
and are held by any person who is an employee, officer or
director of the Company or any subsidiary of the Company are
first entirely excluded from the underwriting and registration;
and (ii) with respect to a registration statement initiated
by the Company for the account of third parties exercising
demand registration rights, first, to such third parties,
and second, to each of the Holders requesting inclusion
of their Registrable Securities in such registration statement
on a pro rata basis based on the total number of Registrable
Securities then held by each such Holder. If any Holder
disapproves of the
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terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the
underwriter, delivered at least ten (10) Business Days
prior to the Effective Date of the registration statement. Any
Registrable Securities excluded or withdrawn from such
underwriting shall be excluded and withdrawn from the
registration.
(c) With respect to a Registration Statement initiated by
the Company for its own account, the Company shall have the
right to terminate or withdraw such Registration anytime prior
to the effectiveness of the Registration Statement, whether or
not any Holder has elected to participate therein.
(d) With respect to a registration statement initiated by
the Company for the account of third parties exercising demand
registration rights, if the filing, initial effectiveness or
continued use of the Registration Statement referred to in this
Section 1.3 at any time would require the Company to make
an Adverse Disclosure or would require the inclusion in such
Registration Statement of financial statements that are
unavailable to the Company for reasons beyond the Company’s
control, the Company may, upon giving prompt written notice of
such action to the Holders, delay the filing or initial
effectiveness of, or suspend use of, the Registration Statement,
provided that such delay shall be subject to the
restrictions pursuant to the registration rights agreement
between the Company and such third parties. In the event the
Company exercises its rights under the preceding sentence, the
Holders agree to suspend, immediately upon their receipt of the
notice referred to above, their use of the prospectus relating
to the Registration in connection with any sale or offer to sell
Registrable Securities. The Company shall immediately notify the
Holders upon the expiration of any period during which it
exercised its rights under this Section 1.3(d).
1.4 Obligations of the
Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement,
the Company shall, subject to Section 1.2(d) and
Sections 1.3(c) and 1.3(d), as expeditiously as
commercially reasonably possible:
(a) prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its
commercially reasonable efforts to cause such registration
statement to become effective, and keep such registration
statement effective until the end of the Effective Period;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus
used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by
such registration statement;
(c) furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by them that
are included in such registration;
(d) use its commercially reasonable efforts to register and
qualify the securities covered by such registration statement
under such other securities laws of such jurisdictions as shall
be reasonably requested by the Holders, provided that the
Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general
consent to service of process in any such jurisdictions;
(e) in the event of any underwritten public offering, enter
into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing
underwriter(s) of such offering (it being understood and agreed
that, as a condition to the Company’s obligations under
this clause (e), each Holder participating in such underwriting
shall also enter into and perform its obligations under such an
agreement);
(f) make commercially reasonable efforts to notify (at
least one Business Day in advance) each Holder of Registrable
Securities covered by such registration statement at any time
when a prospectus relating thereto is required to be delivered
under the Securities Act of the happening of any event as a
result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or
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necessary to make the statements therein not misleading in the
light of the circumstances then existing, and the Company will
use commercially reasonable efforts to amend or supplement such
prospectus in order to cause such prospectus not to include any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the
circumstances then existing;
(g) furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such
Registrable Securities are delivered to the underwriters for
sale, if such securities are being sold through underwriters,
or, if such securities are not being sold through underwriters,
on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of
such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest
of the Holders of Registrable Securities Then Outstanding
requesting registration, addressed to the underwriters, if any,
and to the Holders requesting registration of Registrable
Securities and (ii) a “comfort” letter dated as
of such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an
underwritten public offering and reasonably satisfactory to a
majority in interest of the Holders of Registrable Securities
Then Outstanding requesting registration, addressed to the
underwriters, if any, and to the Holders requesting registration
of Registrable Securities;
(h) the Company may require each selling Holder to furnish
to the Company information regarding such Holder and the
distribution of such Registrable Securities as is required by
law to be disclosed in any registration statement, prospectus,
or any amendment or supplement thereto, and the Company may
exclude from such registration the Registrable Securities of any
such Holder who unreasonably fails to furnish such information
within a reasonable time after receiving such request; and
(i) use its commercially reasonable efforts to list such
Registrable Securities on each securities exchange on which the
Ordinary Shares (including American depositary shares
representing the Ordinary Shares) are then listed.
1.5 Furnish Information. It shall
be a condition precedent to the obligations of the Company to
take any action pursuant to Sections 1.2 or 1.3 hereof that
the selling Holders shall furnish to the Company such
information regarding themselves, the Registrable Securities
held by them and the intended method of disposition of such
securities as shall be reasonably required to timely effect the
registration of their Registrable Securities.
1.6 Review by Counsel. In
connection with the preparation and filing of each Registration
Statement registering Registrable Securities under the
Securities Act, each Holder of Registrable Securities and
counsel for such Holder shall be permitted to review such
Registration Statement, each prospectus included therein or
filed with the SEC, and each amendment thereof or supplement
thereto a reasonable period of time (but not less than 5
Business Days) prior to their filing with the SEC.
1.7 Delay of Registration. No
Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the
result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.8 Indemnification. In the event
any Registrable Securities are included in a registration
statement under Sections 1.2 or 1.3 hereof:
(a) By the Company. Except as
prohibited by law, the Company will indemnify and hold harmless
each Holder, the partners, officers and directors of each
Holder, any underwriter (as defined in the Securities Act) for
such Holder and each Person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the
Securities Exchange Act of 1934, as amended, (the
“Exchange Act”), against all losses, claims,
damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses,
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claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements,
omissions or violations (collectively a
“Violation”):
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement,
including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto;
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to
make the statements therein not misleading; or
(iii) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act, any federal or state
securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any federal or state
securities law in connection with the offering covered by such
registration statement; and the Company will reimburse each such
Holder, partner, officer or director, underwriter or controlling
Person for any legal or other expenses reasonably incurred by
them in connection with defending any such loss, claim, damage,
liability or action; provided, however, that the
indemnity agreement contained in this subsection 1.8(a) shall
not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action
to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such
registration by such Holder, partner, officer, director,
underwriter or controlling Person of such Holder.
(b) By Selling Holders. Each
selling Holder will (severally and not jointly) indemnify and
hold harmless the Company, to the full extent permitted by law,
each of its directors, each of its officers who have signed the
registration statement, each Person, if any, who controls the
Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such
registration statement or any of such other Holder’s
partners, directors or officers or any Person who controls such
Holder within the meaning of the Securities Act or the Exchange
Act, against all losses, claims, damages or liabilities (joint
or several) to which the Company or any such director, officer,
controlling Person, underwriter or such other Holder, partner or
director, officer or controlling Person of such other Holder may
become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent
(and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished by
such Holder under an instrument duly executed by such Holder and
stated to be expressly for use in connection with such
registration; and each such Holder will reimburse any legal or
other expenses reasonably incurred by the Company or any such
director, officer, controlling Person, underwriter or other
Holder, partner, officer, director or controlling Person of such
other Holder in connection with defending any such loss, claim,
damage, liability or action; provided, however,
that the indemnity agreement contained in this subsection 1.8(b)
shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is
effected without the consent of the Holder, which consent shall
not be unreasonably withheld; and provided further, that the
total amounts payable in indemnity by a Holder under this
Section 1.8(b) in respect of any Violation shall not exceed
the net proceeds received by such Holder in the registered
offering out of which such Violation arises.
(c) Notice. Promptly after receipt
by an indemnified party under this Section 1.8 of notice of
the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this
Section 1.8, deliver to the indemnifying party a written
notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnifying party, if representation
of such indemnified
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party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential conflict of interests
between such indemnified party and any other party represented
by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable
time of the commencement of any such action, if prejudicial to
its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party
under this Section 1.8.
(d) Contribution. If the
indemnification provided for in this Section 1.8 is held by
a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any losses, claims, damages or
liabilities referred to herein, the indemnifying party, in lieu
of indemnifying such indemnified party thereunder, shall to the
extent permitted by applicable law contribute to the amount paid
or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection
with the Violation(s) that resulted in such loss, claim, damage
or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and
of the indemnified party shall be determined by a court of law
by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or
omission; provided, that in no event shall any contribution by a
Holder hereunder exceed the net proceeds from the offering
received by such Holder.
(e) Survival. The obligations of
the Company and Holders under this Section 1.8 shall
survive the completion of any offering of Registrable Securities
in a registration statement, and otherwise.
1.9 Rule 144 Reporting. With
a view to making available the benefits of certain rules and
regulations of the SEC which may at any time permit the sale of
the Registrable Securities to the public without registration,
after such time as a public market exists for the Ordinary
Shares, the Company agrees to use its commercially reasonable
efforts to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144 under the
Securities Act, at all times after the effective date of the
first registration under the Securities Act filed by the Company
for an offering of its securities to the general public;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act
and the Exchange Act (at any time after it has become subject to
such reporting requirements); and
(c) as long as a Holder owns Registrable Securities, to
furnish to the Holder forthwith upon request a written statement
by the Company as to its compliance with the reporting
requirements of said Rule 144 (at any time after ninety
(90) days after the effective date of the first
registration statement filed by the Company for an offering of
its securities to the general public), and of the Securities Act
and the Exchange Act (at any time after it has become subject to
the reporting requirements of the Exchange Act), a copy of the
most recent periodic report of the Company and such other
reports and documents of the Company as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC
allowing a Holder to sell any such securities without
registration (at any time after the Company has become subject
to the reporting requirements of the Exchange Act).
1.10 Termination of the Company’s
Obligations. The Company shall have no
obligations pursuant to Sections 1.2 or 1.3 with respect to
any securities that have ceased to be Registrable Securities in
accordance with this Agreement. Notwithstanding anything to the
contrary contained in this Agreement, the Company’s
obligations under Section 1.2 and 1.3 with respect to any
Registrable Securities proposed to be sold by a Holder in a
registration statement pursuant to Section 1.2 or 1.3 shall
terminate on the fifth anniversary of the closing of the
Business Combination.
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| 2. | General Provisions. |
2.1 Notices. All notices,
requests, waivers and other communications made pursuant to this
Agreement will be in writing, at the addresses set forth on the
signature pages hereto (or at such other address for a party as
shall be specified in writing to all other parties), and will be
conclusively deemed to have been duly given (i) when hand
delivered to the recipient party; (ii) upon receipt, when
sent by facsimile with written confirmation of transmission; or
(iii) the next Business Day after deposit with a national
overnight delivery service, postage prepaid, with next Business
Day delivery guaranteed. Each Person making a communication
hereunder by facsimile will promptly confirm by telephone to the
Person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto. In
addition to delivery of notice to a party, copies of such notice
shall be provided as follows:
[INSERT
ADDRESS]
2.2 Entire Agreement; Third-Party
Beneficiaries. This Agreement, together with
the Share Exchange Agreement and all other Exhibits, Annexes and
Schedules thereto (a) constitute the entire agreement, and
supersede all prior agreements and understandings, both written
and oral, among the Parties with respect to the Transactions and
(b) are not intended to confer upon any Person other than
the Parties any rights or remedies. This Agreement shall
supersede and replace the provisions of any other agreement
entered into prior to the date hereof between the Company,
SearchMedia International Limited, or any of their respective
predecessors or affiliates and any Shareholder relating to the
grant or exercise of registration rights.
2.3 Governing Law. This Agreement
shall be governed by, and construed in accordance with, the laws
of the State of New York regardless of the laws that might
otherwise govern under applicable principles of conflicts of
laws thereof.
2.4 Dispute Resolution. Any
controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be determined by
arbitration administered by the International Centre for Dispute
Resolution in accordance with its International Arbitration
Rules. The number of arbitrators shall be three. The place of
arbitration shall be Xxx Xxxx Xxxx, Xxx Xxxx, Xxxxxx Xxxxxx of
America. The language of the arbitration shall be English.
2.5 Severability. If any term or
other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule or Law, or public
policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated
by this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being
enforced, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the
end that the transactions contemplated by this Agreement are
fulfilled to the extent possible.
2.6 Successors and
Assigns. Subject to Section 2.11, the
provisions of this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and permitted assigns of
the parties hereto.
2.7 Interpretation. Unless the
express context otherwise requires:
(a) The headings contained in this Agreement are intended
solely for convenience and shall not affect the rights of the
parties to this Agreement;
(b) the words “hereof,” “herein,” and
“hereunder” and words of similar import, when used in
this Agreement, shall refer to this Agreement as a whole and not
to any particular provision of this Agreement;
(c) terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa;
(d) the terms “Dollars” and “$” mean
United States Dollars;
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(e) references herein to a specific Section, Subsection,
Schedule, Annex or Exhibit shall refer, respectively, to
Sections, Subsections, the Schedules, Annexes or Exhibits of
this Agreement;
(f) wherever the word “include,”
“includes,” or “including” is used in this
Agreement, it shall be deemed to be followed by the words
“without limitation”;
(g) references herein to any gender shall include each
other gender;
(h) references herein to any Person shall include such
Person’s heirs, executors, personal representatives,
administrators, successors and assigns; provided,
however, that nothing contained in this clause (h)
is intended to authorize any assignment or transfer not
otherwise permitted by this Agreement;
(i) references herein to a Person in a particular capacity
or capacities shall exclude such Person in any other capacity;
(j) references herein to any contract or agreement
(including this Agreement) mean such contract or agreement as
amended, supplemented or modified from time to time in
accordance with the terms thereof;
(k) references herein to any Law or any license mean such
Law or license as amended, modified, codified, reenacted,
supplemented or superseded in whole or in part, and in effect
from time to time; and
(l) references herein to any Law shall be deemed also to
refer to all rules and regulations promulgated thereunder.
2.8 Counterparts; Facsimile
Execution. This Agreement may be executed in
one or more counterparts, all of which shall be considered one
and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and
delivered to the other parties. Facsimile execution and delivery
of this Agreement is legal, valid and binding for all purposes.
2.9 Adjustments for Stock Splits and Certain Other
Changes. Wherever in this Agreement there is
a reference to a specific number of shares of the Company, then,
upon the occurrence of any subdivision, combination or stock
dividend of such class or series of stock, the specific number
of shares so referenced in this Agreement shall automatically be
proportionally adjusted to reflect the affect on the outstanding
shares of such class or series of stock by such subdivision,
combination or stock dividend.
2.10 Aggregation of Stock. All
shares deemed to be “beneficially owned” (as such term
is defined under
Rule 13d-3
of the Exchange Act) by any entity or Person, shall be
aggregated together for the purpose of determining the
availability of any rights under this Agreement.
2.11 Assignment. Notwithstanding
anything herein to the contrary, the rights of a Shareholder or
any other Holder herein may be assigned only to (i) a party
who acquires (on an as-if converted basis) Registrable
Securities representing at least 10% of the total number of
issued and outstanding Ordinary Shares or (ii) a direct or
indirect stockholder, partner, member, beneficiary or Affiliate
(as such term is defined in the Securities Act) of a
Shareholder; provided, however, that no party may
be assigned any of the foregoing rights unless the Company is
given written notice by the assigning party at the time of such
assignment stating the name, address and tax identification
number of the assignee and identifying the securities of the
Company as to which the rights in question are being assigned;
and provided further that any such assignee (a) shall
receive such assigned rights subject to all the terms and
conditions of this Agreement, including without limitation the
provisions of this Section 2, and (b) is not a direct
or indirect competitor of the Company as determined in good
faith by the Company’s board of directors.
2.12 Amendment of Rights. Any
provision of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with
the written consent of the Company and Holders of at least 75%
of the Registrable Securities Then Outstanding; provided that
any amendment that disproportionately affects any Holder
vis-à-vis any other Holder shall require the consent of
such affected Holder. Any amendment or waiver effected in
accordance with this Section 2.11 shall be binding upon
each Holder, each permitted successor or assignee of such Holder
and the Company.
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2.13 Termination. This Agreement
shall terminate in the event the Business Combination is not
consummated or the Share Exchange Agreement is terminated.
H-11
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
SearchMedia Holdings Limited
By:
Name:
Title:
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR THE SHAREHOLDERS FOLLOWS]
SIGNATURE PAGE FOR THE SHAREHOLDERS FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
Deutsche Bank AG, Hong Kong Branch
By:
Name:
Title:
Mailing Address:
56/F Xxxxxx Kong Center
2 Queen’s Road, Central
Hong Kong
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China Seed Ventures Management Limited
as general partner for and on behalf of
China Seed Ventures, L.P.
By:
Name:
Title:
Mailing Address:
Xx.000, Xxxx.00
Xx. 000 Xxxxxxx Xxxx
Xxxxxxxx, 000000, Xxxxx
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Gentfull Investment Limited
By:
Name:
Title:
Mailing Address:
0xx Xxxxx, Xxxxxxx Xxxxxxxx
0 Xxxxxx Xxxxxx, Xxxxxxx
Xxxx Xxxx
Gavast Estates Limited
By:
Name:
Title:
Mailing Address:
0xx Xxxxx, Xxxxxxx Xxxxxxxx
0 Xxxxxx Xxxxxx, Xxxxxxx
Xxxx Xxxx
H-15
Linden Ventures II (BVI) Ltd.
By:
Name:
Title:
Mailing Address:
c/o Linden
Advisors
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx of America
H-16
SCHEDULE A
List of Shareholders
Deutsche Bank AG, Hong Kong Branch
Gentfull Investment Limited
Gavast Estates Limited
China Seed Ventures, X.X.
Xxxxxx Ventures II (BVI)
H-17
