AGREEMENT AND PLAN OF MERGER, CONVERSION AND SHARE EXCHANGE BY AND AMONG PANTHEON CHINA ACQUISITION CORP. PANTHEON ARIZONA CORP. CHINA CORD BLOOD SERVICES CORPORATION GOLDEN MEDITECH COMPANY LIMITED AND THE SELLING SHAREHOLDERS NAMED IN SCHEDULE I...
AGREEMENT
AND PLAN OF MERGER, CONVERSION AND SHARE
EXCHANGE
BY
AND AMONG
PANTHEON
ARIZONA CORP.
CHINA
CORD BLOOD SERVICES CORPORATION
GOLDEN
MEDITECH COMPANY LIMITED
AND
THE
SELLING SHAREHOLDERS NAMED IN SCHEDULE I HERETO
Dated
as of November 3, 2008
AGREEMENT
AND PLAN OF MERGER, CONVERSION AND SHARE EXCHANGE
AGREEMENT
AND PLAN OF MERGER, CONVERSION AND SHARE EXCHANGE, dated as of November 3,
2008
(this “Agreement”),
by
and among PANTHEON CHINA ACQUISITION CORP., a corporation incorporated in the
State of Delaware, USA (“Pantheon”),
PANTHEON ARIZONA CORP., a corporation incorporated in the State of Arizona,
USA
and a wholly-owned subsidiary of Pantheon (“Pantheon
Arizona”),
CHINA
CORD BLOOD SERVICES CORPORATION, an exempted company incorporated in the Cayman
Islands (the
“Target”),
GOLDEN MEDITECH COMPANY LIMITED, an exempted company incorporated in the Cayman
Islands (“GM”),
and
the selling shareholders of the Target named in Schedule I hereto (each a
“Selling Shareholder”
and
collectively the “Selling Shareholders”).
Each
of the Parties to this Agreement is individually referred to herein as a
“Party”
and
collectively as the “Parties.”
Capitalized terms used herein that are not otherwise defined herein shall have
the meanings ascribed to them in Annex A hereto.
BACKGROUND
Pantheon
has formed a wholly-owned subsidiary, Pantheon Arizona, solely for the purposes
of (1) the merger of Pantheon with and into Pantheon Arizona pursuant to Section
253 of the General Corporation Law of the State of Delaware (the “DGCL”),
in
which Pantheon Arizona will be the surviving corporation (the “Merger”),
(2)
the subsequent conversion of Pantheon Arizona into a Cayman Islands company
by a
transfer of domicile pursuant to Section 10-226 of the Arizona Revised Statutes
(the “ARS”),
(3)
the registration and continuation of Pantheon Arizona as a Cayman Islands
company pursuant to Section 221 of the Cayman Companies Law (the “Conversion”)
and
(4) the Share Exchange (as defined below). The Cayman Islands company will
be
named China Cord Blood Services Holdings Corporation or such other name as
approved by the Target (“Pantheon
Cayman,”
and
together with Pantheon and Pantheon Arizona, the “Pantheon
Parties”).
The
boards of directors of each of Pantheon and Pantheon Arizona have declared
this
Agreement advisable and approved the Transactions, and each of the boards of
directors of Pantheon and Pantheon Arizona has adopted resolutions approving
the
Merger and providing that (i) each share of Common Stock outstanding immediately
prior to the Merger Effective Time (as defined below) (“Pantheon
Shares”)
will
be automatically converted at the Merger Effective Time into one share of common
stock, par value US$0.001 per share, of Pantheon Arizona (“Pantheon
Arizona Shares”);
and
(ii) all Warrants, Underwriters Purchase Option and other rights to purchase
a
Pantheon Share (“Pantheon
Stock Rights,”
and
together with Pantheon Shares, “Pantheon
Securities”)
will
be exchanged at the Merger Effective Time for substantially equivalent
securities of Pantheon Arizona (“Pantheon
Arizona Stock Rights,”
and
together with Pantheon Arizona Shares, “Pantheon
Arizona Securities”).
The
board
of directors of Pantheon Arizona has approved the Conversion, upon the terms
and
subject to the conditions set forth in this Agreement, whereby upon the
Conversion Effective Time (as defined below), each outstanding Pantheon Arizona
Share will be automatically converted into one ordinary share, par value
US$0.001 per share, of Pantheon Cayman (“Pantheon
Cayman Shares”)
and
each Pantheon Arizona Stock Right will be automatically converted into
equivalent securities of Pantheon Cayman (“Pantheon
Cayman Stock Rights,”
and
together with Pantheon Cayman Shares, “Pantheon
Cayman Securities”).
1
The
Selling Shareholders are the direct owners of the number of ordinary shares
of
the Target appearing opposite their names on Schedule I hereto (all such shares
of capital stock to be exchanged under this Agreement are referred to as the
“Target
Shares”).
The
board
of directors of Pantheon Arizona has approved the acquisition of the Target
Shares from the Selling Shareholders through a share exchange transaction (the
“Share
Exchange”),
pursuant to which Pantheon Cayman will issue to each of the Selling Shareholders
a number of Pantheon Cayman Shares in exchange for the Target Shares held by
such Selling Shareholder, calculated based on an issue price of US$6.05 per
Pantheon Cayman Share, an implied valuation of US$350.0 million for the Target,
and such Selling Shareholder’s equity interest in the Target. Subject to the
Target’s future performance, Pantheon Cayman will issue to senior management up
to an aggregate of 9,000,000 Earn-Out Warrants (as defined below).
The
Merger and the Conversion require the affirmative vote of the holders of a
majority of the issued and outstanding shares of the Common Stock, and the
Share
Exchange requires the affirmative vote of the holders of a majority of the
shares of Common Stock sold in the Pantheon Public Offering voted at the
meeting, provided,
that
the Share Exchange will only proceed if holders of less than 20% of the shares
of the Common Stock sold in the Pantheon Public Offering exercise their
conversion rights (it being understood that such stockholders or shareholders,
as applicable, will be the holders of a majority of the issued and outstanding
Pantheon Arizona Shares that are entitled to vote immediately prior to the
Conversion and the holders of a majority of the issued and outstanding Pantheon
Cayman Shares that are entitled to vote immediately prior to the Share Exchange,
since the Merger, Conversion and Share Exchange shall happen as close to
simultaneously as permitted by the applicable laws).
The
Merger, the Conversion and the Share Exchange are part of the same integrated
transaction, such that none of the Merger, the Conversion or the Share Exchange
shall occur without the other.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, and intending to be
legally bound hereby, the Parties agree as follows:
ARTICLE
I
The
Merger
Section
1.1 The
Merger.
At the
Merger Effective Time (as defined in Section 1.2), Pantheon will be merged
with
and into Pantheon Arizona in accordance with Section 253 of the DGCL and this
Agreement, and the separate corporate existence of Pantheon will thereupon
cease. Pantheon Arizona (sometimes hereinafter referred to as the “Surviving
Corporation”)
will
be the surviving corporation in the Merger. The Merger will have the effects
specified in the DGCL and the ARS.
2
Section
1.2 Filing
of Certificate of Ownership and Merger; Merger Effective Time.
As soon
as practicable following the satisfaction or, to the extent permitted by
applicable Law, waiver of the conditions to the Closing set forth in Article
XIV, if this Agreement shall not have been terminated prior thereto as provided
in Section 16.1, Pantheon and Pantheon Arizona shall cause (a) a certificate
of
ownership and merger (the “Certificate
of Merger”)
meeting the requirements of Section 253 of the DGCL to be properly executed
and
filed in accordance with the applicable requirements of the DGCL, and (b)
articles of merger (the “Articles
of Merger”)
meeting the requirements of Section 10-1105 of the ARS to be properly executed
and filed in accordance with such section. The Merger shall become effective
at
the time designated in the Certificate of Merger and the Articles of Merger
as
the effective time of the Merger that the Parties shall have agreed upon and
designated (the “Merger
Effective Time”).
Notwithstanding the foregoing, the Parties shall designate a time for the Merger
Effective Time that will be the later of (A) the time of filing of the
Certificate of Merger with the Secretary of State of the State of Delaware
in
accordance with the DGCL, and (B) the time of issuance of a certificate of
merger with respect to the Articles of Merger by the Arizona Corporation
Commission in accordance with the ARS.
ARTICLE
II
Conversion
Section
2.1 The
Conversion.
The
Conversion will take place immediately after the Merger Effective Time. Subject
to the terms and conditions of this Agreement, at the Conversion Effective
Time
(as defined in Section 2.2 below), Pantheon Arizona shall convert to Pantheon
Cayman in accordance with this Agreement and shall thereupon continue its
existence, without interruption, in the organizational form of a Cayman Islands
exempted company rather than an Arizona corporation. The Conversion shall have
the effects specified in the relevant sections of the ARS and the Cayman
Companies Law. The Conversion and the Share Exchange are part of the same
integrated transaction, such that neither the Conversion nor the Share Exchange
shall occur without the other.
Section
2.2 Registration
by Way of Continuation; Conversion Effective Time.
As soon
as practicable following the satisfaction or, to the extent permitted by
applicable Law, waiver of the conditions to the Closing set forth in Article
XIV, if this Agreement shall not have been terminated prior thereto as provided
in Section 16.1, Pantheon Cayman shall register by way of continuation as an
exempted company under the Cayman Companies Law and file the relevant documents
with the Arizona Corporation Commission in accordance with the relevant sections
of the ARS. The Conversion shall become effective at the later of (1) the time
of issuance by the Cayman Islands of a certificate of registration by way of
continuation as an exempted company with respect to Pantheon Cayman, and (2)
the
time of issuance of a certificate recognizing the Conversion by the Arizona
Corporation Commission in accordance with the ARS (the “Conversion
Effective Time”).
3
ARTICLE
III
Charter
Documents, Directors and Officers of Surviving Corporation and Pantheon
Cayman
Section
3.1 Articles
of Incorporation of Surviving Corporation.
The
Articles of Incorporation of Pantheon Arizona in effect immediately prior to
the
Merger Effective Time shall be the Articles of Incorporation of the Surviving
Corporation, until duly amended in accordance with applicable Law.
Section
3.2 Bylaws
of Surviving Corporation.
The
bylaws of Pantheon Arizona in effect immediately prior to the Merger Effective
Time shall be the bylaws of the Surviving Corporation, until duly amended in
accordance with applicable Law.
Section
3.3 Directors
of Surviving Corporation.
The
directors of Pantheon immediately prior to the Merger Effective Time shall
be
the directors of the Surviving Corporation, until the earlier of their death,
resignation or removal or until their respective successors are duly elected
and
qualified, as the case may be.
Section
3.4 Officers
of Surviving Corporation.
The
officers of Pantheon immediately prior to the Merger Effective Time shall be
the
officers of the Surviving Corporation, until the earlier of their death,
resignation or removal or until their respective successors are duly elected
and
qualified, as the case may be.
Section
3.5 Memorandum
and Articles of Association of Pantheon Cayman.
The
Memorandum and Articles of Association of Pantheon Cayman shall be as set forth
in Exhibit
A
attached
hereto. The Memorandum and Articles of Association of Pantheon Cayman shall,
by
resolution of Pantheon Arizona shareholder(s) and/or directors, be effective
upon the Conversion Effective Time.
Section
3.6 Directors
of Pantheon Cayman.
The
directors of Pantheon Arizona immediately prior to the Conversion Effective
Time
shall continue as the directors of Pantheon Cayman, until the earlier of their
death, resignation or removal or until their respective successors are duly
elected and qualified, as the case may be. Notwithstanding the foregoing,
commencing on the Closing Date, the Combined Board shall be established as
provided for in Section 13.4 hereof.
Section
3.7 Officers
of Pantheon Cayman.
The
officers of Pantheon Arizona immediately prior to the Conversion Effective
Time
shall continue as the officers of Pantheon Cayman, until the earlier of their
death, resignation or removal or until their respective successors are duly
elected and qualified, as the case may be. Notwithstanding the foregoing,
commencing on the Closing Date, the officers of Pantheon Cayman shall be
appointed by the Combined Board.
4
ARTICLE
IV
Conversion
and Exchange of Securities
Section
4.1 Conversion
of Stock in the Merger.
At the
Merger Effective Time, by virtue of the Merger and without any action on the
part of the holder of any shares:
(a) Conversion
of Pantheon Shares.
Each
share of Common Stock issued and outstanding immediately prior to the Merger
Effective Time shall be automatically converted into one validly issued, fully
paid and non-assessable Pantheon Arizona Share to be delivered by Pantheon
Arizona in accordance with Section 4.3 below.
(b) Cancellation
of Pantheon Arizona Shares Owned by Pantheon.
Each
issued and outstanding Pantheon Arizona Share that is owned by Pantheon
immediately prior to the Merger Effective Time shall automatically be cancelled
and retired and shall cease to exist, and no consideration shall be delivered
or
deliverable in exchange therefor.
(c) Pantheon
Stock Rights Become Pantheon Arizona Stock Rights.
All
Pantheon Stock Rights then outstanding shall remain outstanding and shall be
assumed by Pantheon Arizona and thereafter become Pantheon Arizona Stock Rights.
Each Pantheon Stock Right by virtue of becoming a Pantheon Arizona Stock Right
shall be exercisable upon the same terms and conditions as in effect immediately
prior to the Merger, except that upon the exercise of such Pantheon Arizona
Stock Rights, Pantheon Arizona Shares shall be issuable in lieu of Pantheon
Shares. The number of Pantheon Arizona Shares issuable upon the exercise of
a
Pantheon Arizona Stock Right immediately after the Merger Effective Time and
the
exercise price of each such Pantheon Arizona Stock Right shall be the same
number of shares and price as in effect immediately prior to the Merger
Effective Time. All Pantheon Arizona Stock Rights shall entitle the holder
thereof to purchase Pantheon Arizona Shares in accordance with the terms of
the
documents governing the Pantheon Arizona Stock Rights.
Section
4.2 Conversion
of Securities in the Conversion.
At the
Conversion Effective Time, by virtue of the Conversion and without any action
on
the part of the holder of any shares:
(a) Conversion
of Pantheon Arizona Shares.
Except
as set forth in Section 4.1(b) above, each issued and outstanding Pantheon
Arizona Share shall be automatically converted into one validly issued, fully
paid and non-assessable Pantheon Cayman Share in accordance with Section
4.3.
(b) Conversion
of Pantheon Arizona Stock Rights.
All
Pantheon Arizona Stock Rights then outstanding shall remain outstanding and
shall be assumed by Pantheon Cayman and thereafter become Pantheon Cayman Stock
Rights. Each Pantheon Arizona Stock Right by virtue of becoming a Pantheon
Cayman Stock Right shall be exercisable upon the same terms and conditions
as in
effect immediately prior to the Conversion, except that upon the exercise of
such Pantheon Cayman Stock Rights, Pantheon Cayman Shares shall be issuable
in
lieu of Pantheon Arizona Shares. The number of Pantheon Cayman Shares issuable
upon the exercise of a Pantheon Cayman Stock Right immediately after the
Conversion Effective Time and the exercise price of each such Pantheon Cayman
Stock Right shall be the same number of shares and price as in effect
immediately prior to the Conversion Effective Time. All Pantheon Cayman Stock
Rights shall entitle the holder thereof to purchase Pantheon Cayman Shares
in
accordance with the terms of the documents governing the Pantheon Cayman Stock
Rights.
5
Section
4.3 Certificates
Representing Pantheon Securities.
(a) From
and
after the Merger Effective Time, all of the certificates which immediately
prior
to that time represented outstanding Pantheon Securities (the “Certificates”)
shall
be deemed for all purposes to evidence ownership of, and to represent, the
Pantheon Arizona Securities into which the Pantheon Securities represented
by
such Certificates have been converted as herein provided. No certificates for
Pantheon Arizona Securities will be issued as a result of the Merger and no
holder of record of any Certificates shall be entitled to surrender any
Certificate for cancellation to Pantheon Arizona or its transfer agent in
exchange for a certificate representing that number of Pantheon Arizona
Securities which such holder has the right to receive pursuant to the provisions
of this Article IV. The registered owner on the books and records of Pantheon
Arizona or its transfer agent of any such Certificate shall have and be entitled
to exercise any voting and other rights with respect to and to receive any
dividend and other distributions upon the Pantheon Arizona Securities evidenced
by such Certificate as above provided.
(b) From
and
after the Conversion Effective Time, all of the outstanding Certificates shall
be deemed for all purposes to evidence ownership of, and to represent, the
Pantheon Cayman Securities into which the Pantheon Arizona Securities
represented by such Certificates have been converted as herein provided. The
holders of those Certificates representing Pantheon Cayman Shares shall be
entitled to be entered on the register of members of Pantheon Cayman as holders
of that number of Pantheon Cayman Shares represented by the Certificates. The
registered owner from time to time entered in the register of members of
Pantheon Cayman or its transfer agent shall have and be entitled to exercise
any
voting and other rights with respect to and to receive any dividend and other
distributions upon the Pantheon Cayman Securities evidenced by such Certificate
as above provided.
(c) At
or
after the Merger Effective Time, there shall be no transfers on the stock
transfer books of Pantheon of the Pantheon Securities which were outstanding
immediately prior to the Merger Effective Time. At or after the Conversion
Effective Time, there shall be no transfers on the stock transfer books of
Pantheon Arizona of the Pantheon Arizona Securities which were outstanding
immediately prior to the Conversion Effective Time. If, after the Merger
Effective Time but prior to the Conversion Effective Time, Certificates are
presented to the Surviving Corporation or its transfer agent, the presented
Certificates shall be cancelled and exchanged after the Conversion Effective
Time for certificates for Pantheon Cayman Securities deliverable in respect
thereof pursuant to this Agreement in accordance with the procedures set forth
in this Article IV. If, after the Conversion Effective Time, Certificates are
presented to Pantheon Cayman or its transfer agent, the presented Certificates
shall be cancelled and exchanged for certificates for Pantheon Cayman Securities
deliverable in respect thereof pursuant to this Agreement in accordance with
the
procedures set forth in this Article IV.
6
(d) Following
the Conversion Effective Time, each holder of record of one or more Certificates
may, but shall not be required to, surrender any Certificate for cancellation
to
Pantheon Cayman or its transfer agent, and the holder of such Certificate shall
be entitled to receive in exchange therefor a certificate representing that
number of Pantheon Cayman Securities which such holder has the right to receive
pursuant to the provisions of this Article IV and be entitled to be entered
on
the register of members of Pantheon Cayman as the holder of that number of
Pantheon Cayman Shares represented by the Certificate and the Certificate so
surrendered shall forthwith be cancelled. In the event of a transfer of
ownership of Pantheon Securities which is not registered in the transfer records
of Pantheon or a transfer of ownership of Pantheon Arizona Securities which
is
not registered in the transfer records of Pantheon Arizona, a certificate
representing the proper number of Pantheon Cayman Securities may be issued
to
such a transferee if the Certificate representing such Pantheon Securities
or
Pantheon Arizona Securities is presented to Pantheon Cayman or its transfer
agent, accompanied by all documents required to evidence and effect such
transfer and to evidence that any applicable stock transfer taxes have been
paid.
Section
4.4 Effect
of the Conversion.
At the
Conversion Effective Time, the effect of the Conversion shall be as provided
in
this Agreement and the applicable provisions of ARS and Cayman Companies Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Conversion Effective Time, all the property, rights, privileges, agreements,
powers and franchises, debts, liabilities, duties and obligations of Pantheon
Arizona shall become the property, rights, privileges, agreements, powers and
franchises, debts, liabilities, duties and obligations of Pantheon Cayman,
which
shall include the assumption by Pantheon Cayman of any and all agreements,
covenants, duties and obligations of Pantheon Arizona, as the Surviving
Corporation, set forth in this Agreement to be performed after the Closing,
and
all securities of Pantheon Cayman issued and outstanding as a result of the
Conversion under Section 4.2 hereof shall be quoted on the OTCBB, or such other
public trading market on which the Pantheon Cayman Shares may be trading at
such
time.
ARTICLE
V
Share
Exchange
Section
5.1 Share
Exchange.
The
Share Exchange will take place immediately after the Conversion Effective Time.
Upon the terms and subject to the conditions hereof, at the Closing, each
Selling Shareholder shall sell, transfer, convey, assign and deliver to Pantheon
Cayman free and clear of all Liens, all of the right, title and interest of
such
Selling Shareholder in and to the Target Shares appearing opposite the name
of
such Selling Shareholder on Schedule
I.
In
exchange for such Target Shares, Pantheon Cayman shall sell, issue and deliver
to each Selling Shareholder the number of Pantheon Cayman Shares (the
“Initial
Equity Payment”)
appearing opposite the name of such Selling Shareholder on Schedule
I.
The
Conversion and the Share Exchange are part of the same integrated transaction,
such that neither the Conversion nor the Share Exchange shall occur without
the
other.
7
Section
5.2 CSC
Employee Options.
Immediately after the Share Exchange, the terms of all stock options
(“CSC
Employee Options”)
outstanding under the Rules of the Share Option Scheme (the “CSC
Option Scheme”)
of
China Stem Cells Holdings Limited, an exempted company incorporated in the
Cayman Islands and wholly-owned subsidiary of the Target (“CSC”),
shall
be amended to become options to purchase Pantheon Cayman Shares governed by
the
Pantheon Cayman Option Scheme (as defined in Section 13.4(c) below) (such
amendment to the terms of the outstanding CSC Employee Options, the
“Amendment”).
Pursuant to the Amendment, each option to purchase one ordinary share of CSC
shall become an option to purchase 35.73314 Pantheon Cayman Shares (the
“Option
Exchange Rate”)
at an
exercise price per Pantheon Cayman Share equal to the greater of (a) the
quotient of (i) the exercise price of the CSC Employee Option for which it
is
exchanged divided by (ii) the Option Exchange Rate and (b) the par value of
the
Pantheon Cayman Shares, such that the number of Pantheon Cayman Shares
exercisable under the CSC Employee Options immediately following the Amendment
shall not be more than 3,573,314 in the aggregate, subject to rounding to avoid
fractional shares.
Section
5.3 Registration
Rights.
Upon
the completion of the Share Exchange or as soon as practicable thereafter
(including with respect to the requirements of Form S-8 with regard to the
CSC
Employee Options), Pantheon Cayman shall provide registration rights to the
Selling Shareholders (and their successors and permitted assigns) in respect
of
the Pantheon Cayman Shares to be received by them pursuant to Section 5.1,
to
the holders of CSC Employee Options (and their successors and permitted assigns)
in respect of the Pantheon Cayman Shares underlying the options described in
Section 5.2, and to the holders of Earn-Out Warrants (and their successors
and
permitted assigns) in respect of the Pantheon Cayman Shares underlying the
Earn-Out Warrants (if any) to be issued to them pursuant to Section 5.4,
provided that the Selling Shareholders (and their successors and permitted
assigns) shall be responsible for all the fees and expenses incurred by Pantheon
Cayman in connection with the registration of their respective
securities.
Section
5.4 Earn-Out
Warrants.
Pantheon Cayman shall issue and deliver up to 9,000,000 Pantheon Cayman
warrants, each warrant representing the right to purchase one Pantheon Cayman
Share at an exercise price equal to the lower of (i) US$5.00, and (ii) the
market price of a Pantheon Cayman Share on the date of the issuance of such
warrant and having an expiration date on the fifth anniversary of the issuance
date thereof (the “Earn-Out
Warrants”)
to the
senior management. The number of Earn-Out Warrants to be awarded, if any, to
individual senior management members shall be determined on a case-by-case
basis
by the compensation committee of Pantheon Cayman (or a majority of independent
directors or another committee of the board performing similar functions) at
the
time the Earn-Out Warrants are issued. The Earn-Out Warrants shall be issuable
without the payment of any additional consideration in the amounts and under
the
circumstance described below:
(a) 2,500,000
Earn-Out Warrants shall be issuable in the event the filing of the Pantheon
Cayman annual report on Form 20-F (“Form
20-F”)
for
the fiscal year ending March 31, 2009 reflects that the Target has achieved
not
less than a 30% increase in the number of New Subscribers during the fiscal
year
ending March 31, 2009 as compared to the fiscal year ending March 31,
2008;
8
(b) 3,000,000
Earn-Out Warrants shall be issuable in the event the filing of the Pantheon
Cayman Form 20-F for the fiscal year ending March 31, 2010 reflects that the
Target has achieved not less than a 30% increase in the number of New
Subscribers during the fiscal year ending March 31, 2010 as compared to the
fiscal year ending March 31, 2009;
(c) 3,500,000
Earn-Out Warrants shall be issuable in the event the filing of the Pantheon
Cayman Form 20-F for the fiscal year ending March 31, 2011 reflects that the
Target has achieved not less than a 30% increase in the number of New
Subscribers during the fiscal year ending March 31, 2011 as compared to the
fiscal year ending March 31, 2010.
ARTICLE
VI
The
Closing
Section
6.1 Closing.
The
Closing (the “Closing”)
of the
Merger, Conversion, Share Exchange and the other transactions contemplated
hereby (the “Transactions”)
shall
take place at the offices of Loeb & Loeb LLP in New York, New York
commencing at 9:00 a.m. local time on the third business day following the
satisfaction or waiver of all conditions and obligations of the Parties to
consummate the Transactions contemplated hereby (other than conditions and
obligations with respect to the actions that the respective Parties will take
at
Closing), or on such other date and at such other time as the Parties may
mutually determine (the “Closing
Date”).
Section
6.2 Deliveries
of the Parties.
At the
Closing, (i) the Warrantors (directly and/or through their nominees) shall
deliver to the Pantheon Parties the various certificates, opinions, instruments,
agreements and documents referred to in Section 14.2 below, (ii) the Pantheon
Parties shall deliver to the Warrantors, as applicable, the various
certificates, opinions, instruments, agreements and documents referred to in
Section 14.1 below, (iii) the Selling Shareholders shall deliver to the Pantheon
Parties certificates representing in the aggregate the right, title and interest
in and to all the outstanding Target Shares free and clear of all Liens, (iv)
GM
BVI shall deliver to the Pantheon Parties a copy of resolutions of the board
of
directors of GM BVI authorizing the transfer of such Target Shares owned by
it,
(v) the Target shall deliver to the Pantheon Parties a duly certified copy
of
the updated register of members of the Target reflecting the acquisition by
Pantheon Cayman of the Target Shares, and (vi) Pantheon Cayman shall deliver
to
the Selling Shareholders a duly certified copy of the register of members of
Pantheon Cayman reflecting the issuance of the Initial Equity Payment to the
Selling Shareholders.
Section
6.3 Further
Assurances.
Subject
to the terms and conditions of this Agreement, at any time or from time to
time
after the Closing, each of the Parties shall execute and deliver such other
documents and instruments, provide such materials and information and take
such
other actions as may be commercially reasonable, to the extent permitted by
law,
to fulfill its obligations under this Agreement and to effectuate and consummate
the Transactions.
9
ARTICLE
VII
Representations
and Warranties of the Selling Shareholders
Each
Selling Shareholder, severally but not jointly, represents and warrants to
the
Pantheon Parties as of the date hereof and as of the Closing as
follows:
Section
7.1 Good
Title.
Such
Selling Shareholder is the registered and beneficial owner of the Target Shares
appearing opposite its name on Schedule
I
and has
good and marketable title to the Target Shares, with the right and authority
to
sell and deliver such Target Shares. Upon delivery of any certificate or
certificates duly assigned, representing the same as herein contemplated and/or
upon registering of Pantheon Cayman as the new owner of such Target Shares
in
the share register of the Target, Pantheon Cayman will receive good title to
such Target Shares, free and clear of all Liens.
Section
7.2 Organization
and Standing.
Such
Selling Shareholder that is an entity is duly organized, validly existing and
in
good standing (or such analogous concept as shall be applicable in the relevant
jurisdiction) under the laws of its jurisdiction of incorporation or
establishment.
Section
7.3 Authority;
Execution and Delivery; Enforceability.
Such
Selling Shareholder, if an entity, has all requisite corporate power and
authority to execute and deliver this Agreement and the Transaction Documents
to
which it is a party and to consummate the Transactions contemplated hereby
and
thereby. The execution and delivery by such Selling Shareholder of this
Agreement and the consummation by them of the Transactions have been duly
authorized and no other corporate proceedings on the part of any such entities
are necessary to authorize this Agreement and the Transactions. All action,
corporate and otherwise, necessary to be taken by each such Selling Shareholder
to authorize the execution, delivery and performance of this Agreement, the
Transaction Documents and all other agreements and instruments delivered by
such
Selling Shareholder in connection with the Transactions has been duly and
validly taken. Upon the fulfillment of the conditions set forth in Section
14.1(u), this Agreement and the Transaction Documents to which any such Selling
Shareholder is a party have been duly executed and delivered by such party
and
constitute the valid, binding, and enforceable obligation of each of them,
enforceable in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws of general application now or hereafter
in
effect affecting the rights and remedies of creditors and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law
or
in equity).
Section
7.4 No
Conflicts.
The
execution and delivery of this Agreement or any of the Transaction Documents
contemplated hereby by such Selling Shareholder and the consummation of the
Transactions and compliance with the terms hereof and thereof will not conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation
or
acceleration of any obligation or to loss of a material benefit under, or result
in the creation of any Lien upon any of the assets and properties of the Target
or any of its Subsidiaries under, any provision of any Target Constituent
Instrument.
10
Section
7.5 Consents
and Approvals.
No
consent, approval, license, permit, order or authorization of, or registration,
declaration or filing with (“Selling Shareholders’
Required Approvals”),
any
third party or any Governmental Authority is required to be obtained or made
by
or with respect to such Selling Shareholder, in connection with the execution,
delivery and performance of this Agreement or the consummation of the
Transactions, except for (a) such Selling Shareholders’ Required Approvals as
may be required under applicable state securities laws and the securities laws
of any foreign country; (b) in the case of GM BVI, approval by shareholders
of
GM; and (c) such other Selling Shareholders’ Required Approvals which, if not
obtained or made, would not have a Material Adverse Effect on the Target and
would not prevent, or materially alter or delay any of the Transactions
contemplated by this Agreement.
Section
7.6 Access
to Information.
Such
Selling Shareholder has been supplied with or have had sufficient access to
all
information, including financial statements and other financial information
of
Pantheon Cayman.
Section
7.7 Intent;
Accredited Investor; Non-U.S. Person.
Such
Selling Shareholder has been advised that the offer and sale of Pantheon Cayman
Shares has not been registered under the Securities Act or any other securities
laws and, therefore, may not be resold unless they are registered under the
Securities Act and applicable securities laws or unless an exemption from such
registration requirements is available. Such Selling Shareholder has not been
formed solely for the purpose of making this investment and is purchasing the
Pantheon Cayman Shares to be acquired by it hereunder for its own account for
investment, not as a nominee or agent, and not with a view to, or for resale
in
connection with, the distribution thereof. Such Selling Shareholder represents
that it is either (a) an “accredited investor” as such term is defined in Rule
501 of Regulation D, promulgated under the Securities Act, or (b) not a “U.S.
Person” as defined in Rule 902 of Regulation S promulgated under the Securities
Act.
Section
7.8 Accuracy
of Representations.
Such
Selling Shareholder understands that the Pantheon Cayman Shares are being and
will be sold in reliance on an exemption from the registration requirements
of
federal and state securities laws, and that Pantheon Cayman is relying upon
the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of such Selling Shareholder set forth herein
in order to determine the applicability of such exemptions and the suitability
of such Selling Shareholder to purchase the Pantheon Cayman Shares. The
representations, warranties and agreements contained herein are true and correct
as of the date hereof and may be relied upon by Pantheon Cayman, and such
Selling Shareholder will notify Pantheon Cayman immediately of any material
adverse change in any such representations and warranties which may occur prior
to the Closing.
Section
7.9 Transfer
Restrictions.
All
offers and sales of the Pantheon Cayman Shares prior to the registration of
the
Pantheon Cayman Shares under the Securities Act or pursuant to an exemption
from
registration under the Securities Act shall be made only pursuant to such a
registration or such exemption from registration.
Section
7.10 Legends.
Such
Selling Shareholder agrees that the certificates representing the Pantheon
Cayman Shares shall contain a legend to the following effect:
11
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT
TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER OR AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT.
Section
7.11 Opinion.
Such
Selling Shareholder will not transfer any or all of the Pantheon Cayman Shares
absent an effective registration statement under the Securities Act and
applicable state securities law covering the disposition of such Selling
Shareholder’s Pantheon Cayman Shares, without first providing Pantheon Cayman
with an opinion of counsel (which counsel and opinion are reasonably
satisfactory to Pantheon Cayman) to the effect that such transfer will be exempt
from the registration and the prospectus delivery requirements of the Securities
Act and the registration or qualification requirements of any applicable U.S.
state securities laws.
Section
7.12 Lock-Up.
Such
Selling Shareholder irrevocably agrees with Pantheon that, during the six months
following the
Closing Date (such period, the “Restriction
Period”),
except with the written consent of Pantheon Cayman, it shall not offer, sell,
contract to sell, pledge or otherwise dispose of, or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition
due
to cash settlement or otherwise), directly or indirectly, including the filing
(or participation in the filing) of a registration statement with the SEC in
respect of, or establish or increase a put equivalent position or liquidate
or
decrease a call equivalent position within the meaning of Section 16 of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
with respect to, any Pantheon Cayman Shares, received on the Closing Date.
Beneficial ownership shall be calculated in accordance with Rule 13d-3 under
the
Exchange Act. In order to enforce this covenant, Pantheon may impose, on or
before the Closing Date, irrevocable stop-transfer instructions preventing
its
transfer agent from effecting any actions in violation of this Agreement through
the end of the Restriction Period. Such Selling Shareholder acknowledges that
the execution, delivery and performance of this Agreement is a material
inducement to Pantheon to complete the Transactions and that Pantheon and the
Target shall be entitled to specific performance of such obligations
hereunder.
12
ARTICLE
VIII
Representations
and Warranties of the Warrantors
Subject
to the exceptions set forth in the Disclosure Schedule of the Warrantors
attached hereto as Schedule
II
(the
“Target
Disclosure Schedule”),
each
of the Target and GM (each a“Warrantor”),
severally and jointly, represents and warrants to the Pantheon Parties as of
the
date hereof and as of the Closing as follows:
Section
8.1 Target
Shares.
(a) [RESERVED].
(b) Capital
Structure.
The
registered capital of the Target and the total number of shares and type of
all
authorized, issued and outstanding capital stock of the Target and all shares
of
capital stock of the Target reserved for issuance under the Target’s various
option and incentive plan, are set forth in Section 8.1(b) of the Target
Disclosure Schedule. Except as set forth in Section 8.1(b) of the Target
Disclosure Schedule: (i) no shares of capital stock or other voting securities
of the Target are issued, reserved for issuance or outstanding; (ii) all
outstanding shares of the capital stock of the Target are duly authorized,
validly issued, fully paid and nonassessable and are not subject to or issued
in
violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision
of
the Target Constituent Instruments or any Contract to which any of the
Warrantors is a party or otherwise bound; (iii) there are no bonds, debentures,
notes or other indebtedness of the Target having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote)
on
any matters on which holders of the shares of capital stock of the Target may
vote (“Voting
Target Debt”);
(iv)
there are no options, warrants, rights, convertible or exchangeable securities,
“phantom” stock rights, stock appreciation rights, stock-based performance
units, commitments, Contracts, arrangements or undertakings of any kind to
which
the Target is a party or is bound (A) obligating the Target to issue, deliver
or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other equity interests in, or any security convertible or exercisable
for or exchangeable into any capital stock of or other equity interest in,
the
Target or any Voting Target Debt, (B) obligating the Target to issue, grant,
extend or enter into any such option, warrant, call, right, security,
commitment, Contract, arrangement or undertaking or (C) giving any Person the
right to receive any economic benefit or right similar to or derived from the
economic benefits and rights occurring to holders of the capital stock of the
Target; and (v) as of the date of this Agreement, there are no outstanding
contractual obligations of the Target to repurchase, redeem or otherwise acquire
any shares of the Target capital stock.
13
Section
8.2 Organization
and Standing.
Each of
the Target and its Subsidiaries is duly organized, validly existing and in
good
standing (or such analogous concept as shall be applicable in the relevant
jurisdiction) under the laws of its jurisdiction of incorporation. Each of
the
Target and its Subsidiaries is duly qualified to do business in each of the
jurisdictions in which property owned, leased or operated by it or the nature
of
the business which it conducts requires qualification, except where the failure
to so qualify would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect. Each of the Target and its
Subsidiaries has all requisite power and authority to own, lease and operate
its
assets and properties and to carry on its business as now being conducted and,
subject to necessary approvals of the relevant Governmental Authorities, as
presently contemplated to be conducted. The Target has delivered to Pantheon
true and complete copies of the Target Constituent Instruments.
Section
8.3 Authority;
Execution and Delivery; Enforceability.
The
Target has all requisite corporate power and authority to execute and deliver
this Agreement and the Transaction Documents to which it is a party and to
consummate the Transactions contemplated hereby and thereby. The execution
and
delivery by the Target of this Agreement and the consummation by it of the
Transactions have been duly authorized and approved by the board of directors
of
the Target and no other corporate proceedings on the part of it are necessary
to
authorize this Agreement and the Transactions. All action, corporate and
otherwise, necessary to be taken by the Target to authorize the execution,
delivery and performance of this Agreement, the Transaction Documents and all
other agreements and instruments delivered the Target in connection with the
Transactions has been duly and validly taken. Each of this Agreement and the
Transaction Documents to which the Target is a party has been duly executed
and
delivered by it and constitutes the valid, binding, and enforceable obligation
of it, enforceable in accordance with its terms, except as enforceability may
be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws of general application now or hereafter
in
effect affecting the rights and remedies of creditors and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law
or
in equity).
Section
8.4 Subsidiaries.
Section
8.4 of the Target Disclosure Schedule lists, as of the date hereof, all
Subsidiaries of the Target and indicates as to each the type of entity, its
jurisdiction of organization and, its stockholders or other equity holders.
Except as set forth in Section 8.4 of the Target Disclosure Schedule, the Target
does not directly or indirectly own any other equity or similar interest in,
or
any interest convertible or exchangeable or exercisable for, any equity or
similar interest in, any corporation, partnership, joint venture or other
business association or entity. Except as set forth in Section 8.4 of the Target
Disclosure Schedule, the Target is the direct or indirect owner of all
outstanding shares of capital stock of its Subsidiaries, and all such shares
are
duly authorized, validly issued, fully paid and nonassessable and are owned
by
the Target free and clear of all Liens, charges, claims or encumbrances or
rights of others. There are no outstanding subscriptions, options, warrants,
puts, calls, rights, exchangeable or convertible securities or other commitments
or agreements of any character relating to the issued or unissued capital stock
or other securities of any Subsidiaries of the Target or otherwise obligating
any Subsidiaries of the Target to issue, transfer, sell, purchase, redeem or
otherwise acquire any such securities.
14
Section
8.5 No
Conflicts.
The
execution and delivery of this Agreement or any of the Transaction Documents
contemplated hereby by the Target and the consummation of the Transactions
and
compliance with the terms hereof and thereof will not, (a) conflict with, or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or result
in the creation of any Lien upon any of the assets and properties of the Target
and its Subsidiaries under, any provision of: (i) any Target Constituent
Instrument; or (ii) any Material Contract to which the Target or any of its
Subsidiaries is a party or to or by which it (or any of its assets and
properties) is subject or bound; (b) subject to the filings and other matters
referred to in Section 8.6, conflict with any material Judgment or Law
applicable to the Target and its Subsidiaries, or their respective properties
or
assets, (c) result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any Permit applicable to the Target or its Subsidiaries; (d)
terminate or modify, or give any third party the right to terminate or modify,
the provisions or terms of any Contract to which the Target or any of its
Subsidiaries is a party; (e) cause the Target or any of its Subsidiaries to
become subject to, or to become liable for the payment of, any Tax; or (f)
cause
any of the assets owned by the Target or any of its Subsidiaries to be
reassessed or revalued by any Governmental Authority, except, in the case of
clauses (a)(ii), (b), (c), (d), (e) and (f) above, any such items that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect on the Target.
Section
8.6 Consents
and Approvals.
Except
as set forth in Section 8.6 of the Target Disclosure Schedule, no consent,
approval, license, permit, order or authorization of, or registration,
declaration or filing with (each, a “Consent”),
or
permit from any third party or any Governmental Authority is required to be
obtained or made by or with respect to any Warrantor, in connection with the
execution, delivery and performance of this Agreement or the consummation of
the
Transactions, except for (a) such Consents as may be required under applicable
state securities laws and the securities laws of any foreign country; and (b)
such other Consents which, if not obtained or made, would not have a Material
Adverse Effect on the Target and would not prevent, or materially alter or
delay, any of the Transactions contemplated by this Agreement.
Section
8.7 Financial
Statements.
(a) On
or
before December 31, 2008, the Target shall deliver to Pantheon its audited
consolidated financial statements for the fiscal years ended March 31, 2006,
2007 and 2008 (collectively, the “Target
Financial Statements”)
prepared in accordance with U.S. GAAP applied on a consistent basis throughout
the periods indicated. The Target Financial Statements shall fairly present
in
all material respects the financial condition and operating results, change
in
stockholders’ equity and cash flow of the Target, as of the dates, and for the
periods, indicated therein, and are accompanied by an unqualified opinion of
an
internationally recognized and U.S. registered independent public accounting
firm reasonably acceptable to Pantheon and qualified to practice before the
Public Company Accounting Oversight Board. The Target does not have any material
liabilities or obligations, contingent or otherwise, other than
(a) liabilities incurred in the ordinary course of business subsequent to
March 31, 2008, and (b) obligations under contracts and commitments
incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected in the Target Financial
Statements, which, in both cases, individually or in the aggregate, would not
be
reasonably expected to result in a Material Adverse Effect on the
Target.
15
(b) The
Target does not have any Off-balance Sheet Arrangements except arrangements
that
do not and would not reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Effect to the Target.
(c) To
the
extent that the Balance Sheet included in the Target Financial Statements (the
“Target
Balance Sheet”)
reflects any outstanding loans to or from any stockholders of the Target, all
such loans have been repaid or forgiven, as applicable, and are no longer
outstanding as of the date hereof.
Section
8.8 Internal
Accounting Controls.
The
Target has implemented and maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (a) transactions are executed
in
accordance with management’s general or specific authorizations, (b)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to
maintain asset accountability, (c) access to assets is permitted only in
accordance with management’s general or specific authorization, and (d) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Officers of the Target have established disclosure controls and
procedures for the Target and designed such disclosure controls and procedures
to ensure that material information relating to the Target is made known to
the
officers by others within those entities. Officers of the Target have evaluated
the effectiveness of the controls and procedures of the Target. Since March
31,
2008, there have been no significant changes in the internal controls of the
Target or, to the Knowledge of the Warrantors, in other factors that could
significantly affect the internal controls of the Target.
Section
8.9 [RESERVED].
Section
8.10 Absence
of Certain Changes or Events.
Except
as disclosed in the Target Financial Statements, from March 31, 2008 to the
date
of this Agreement, the Target and its Subsidiaries have conducted their
respective businesses only in the ordinary course, and during such period there
has not been:
(a) any
change in the assets, liabilities, financial condition or operating results
of
the Target or any of its Subsidiaries, except changes in the ordinary course
of
business that have not caused, in the aggregate, a Material Adverse Effect
on
the Target;
(b) any
damage, destruction or loss to, or any material interruption in the use of,
any
of the assets of the Target or any of its Subsidiaries (whether or not covered
by insurance) that has had or could reasonably be expected to have a Material
Adverse Effect on the Target;
(c) any
waiver or compromise by the Target or any of its Subsidiaries of a valuable
right or of a material debt owed to it;
16
(d) any
satisfaction or discharge of any Lien, claim, or encumbrance or payment of
any
obligation by the Target or any of its Subsidiaries, except in the ordinary
course of business and the satisfaction or discharge of which would not have
a
Material Adverse Effect on the Target;
(e) any
material change to a material Contract by which the Target or any of its
Subsidiaries or any of their respective assets is bound or subject;
(f) any
mortgage, pledge, transfer of a security interest in, or Lien, created by the
Target or any of its Subsidiaries, with respect to any of their respective
material properties or assets, except Liens for taxes not yet due or payable
and
Liens that arise in the ordinary course of business and do not materially impair
such entity’s ownership or use of such property or assets;
(g) any
loans
or guarantees made by the Target or any of its Subsidiaries to or for the
benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(h) any
alteration of the method of accounting, accounting practice or the identity
of
auditors of the Target or any of its Subsidiaries;
(i) any
declaration, accrual, set aside or payment of dividend or any other distribution
of cash or other property in respect of any shares of capital stock of the
Target or any of its Subsidiaries or any purchase, redemption or agreements
to
purchase or redeem by the Target or any of its Subsidiaries of any shares of
capital stock or other securities;
(j) any
sale,
issuance or grant, or authorization of the issuance of equity securities of
the
Target or any of its Subsidiaries , except pursuant to existing stock option
plans of the Target or any of its Subsidiaries ;
(k) any
amendment to any Target Constituent Instruments, any merger, consolidation,
share exchange, business combination, recapitalization, reclassification of
shares, stock split, reverse stock split or similar transaction involving the
Target or any of its Subsidiaries ;
(l) any
creation of any Subsidiary of the Target or acquisition by the Target or any
of
its Subsidiaries of any equity interest or other interest in any other
Person;
(m) any
material Tax election by the Target or any of its Subsidiaries ;
(n) any
commencement or settlement of any Actions (as defined below) by the Target
or
any of its Subsidiaries; or
(o) any
negotiations, arrangement or commitment by the Target or any of its Subsidiaries
to do any of the things described in this Section 8.10.
17
Section
8.11 No
Undisclosed Liabilities.
Neither
the Target nor any of its Subsidiaries has any material obligations or
liabilities of any nature (matured or unmatured, fixed or contingent, including
any obligations to issue capital stock or other securities of the Target) due
after the date hereof, other than (a) those set forth or adequately provided
for
in the Target Balance Sheet, (b) those incurred in the ordinary course of
business and not required to be set forth in the Target Balance Sheet under
U.S.
GAAP, (c) those incurred in the ordinary course of business since the Target
Balance Sheet date and not reasonably likely to result in a Material Adverse
Effect to the Target, and (d) those incurred in connection with the execution
of
this Agreement.
Section
8.12 Litigation.
To the
Knowledge of the Warrantors, there is no private or governmental action, suit,
inquiry, notice of violation, claim, arbitration, audit, proceeding (including
any partial proceeding such as a deposition) or investigation (“Action”)
pending or threatened in writing against or affecting the Target, any of its
officers or directors (in their capacities as such), any of its Subsidiaries
or
any of their properties, before or by any Governmental Authority which (a)
adversely affects or challenges the legality, validity or enforceability of
any
of this Agreement or (b) could, if there were an unfavorable decision,
individually or in the aggregate, have or reasonably be expected to result
in a
Material Adverse Effect on the Target. To the Knowledge of the Warrantors,
there
is no Judgment imposed upon the Target, any of its officers or directors (in
their capacities as such), any of its Subsidiaries or any of their respective
properties, that would prevent, enjoin, alter or materially delay any of the
Transactions contemplated by this Agreement, or that would reasonably be
expected to have a Material Adverse Effect on the Target. To the Knowledge
of
the Warrantors, neither the Target, any of its Subsidiaries nor any director
or
officer thereof (in his or her capacity as such), is or has been the subject
of
any Action involving a claim or violation of or liability under the securities
laws of any Governmental Authority or a claim of breach of fiduciary
duty.
Section
8.13 [RESERVED].
Section
8.14 Licenses,
Permits, Etc.
The
Target and its Subsidiaries possess or will possess prior to the Closing all
Material Permits. Such Material Permits are described or set forth on
Section 8.14 of the Target Disclosure Schedule. True, complete and correct
copies of the Material Permits issued to the Target and its Subsidiaries have
previously been delivered to Pantheon. All such Material Permits are in full
force and effect. Unless otherwise stipulated herein, the Target, its
Subsidiaries and each of their respective officers, directors, employees,
representatives and agents have complied with all terms of such Material
Permits, except where instances of such noncompliance, individually or in the
aggregate, have not had and would not reasonably be expected to have, a Material
Adverse Effect on the Target, and they will take any and all actions reasonably
necessary to ensure that all such Material Permits remain in full force and
effect and that the terms of such Material Permits are not violated through
the
Closing Date. To the Knowledge of the Warrantors, neither the Target nor any
of
its Subsidiaries is in default under any of such Material Permits and no event
has occurred and no condition exists which, with the giving of notice or the
passage of time, or both, would constitute a default thereunder. Neither the
execution and delivery of this Agreement, the Transaction Documents or any
of
the other documents contemplated hereby or thereby nor the consummation of
the
Transactions or compliance by the Target and its Subsidiaries with any of the
provisions hereof or thereof will result in any suspension, revocation,
impairment, forfeiture or nonrenewal of any Material Permit applicable to the
business of the Target and its Subsidiaries.
18
Section
8.15 Title
to Properties.
(a) Real
Property.
Section 8.15(a) of the Target Disclosure Schedule contains an accurate and
complete list and description of (i) all real properties with respect to
which the Target directly or indirectly holds valid land use rights as well
as
any other real estate that is in the possession of or leased by the Target
and
its Subsidiaries and the improvements (including buildings and other structures)
located on such real estate (collectively, the “Real
Property”),
and
(ii) any lease under which any such Real Property is possessed (the
“Real
Estate Leases”).
Neither the Target nor any of its Subsidiaries is in default under any of the
Real Estate Leases, except where such defaults, individually or in the
aggregate, have not had and would not be reasonably expected to have, a Material
Adverse Effect on the Target, and the officers of the Target are not aware
of
any default by any of the lessors thereunder.
(b) Tangible
Personal Property.
The
Target and its Subsidiaries are in possession of and have good title to, or
have
valid leasehold interests in or valid contractual rights to use all material
tangible personal property used in the conduct of their business, including
the
tangible personal property reflected in the Target Financial Statements and
material tangible personal property acquired since March 31, 2008 (collectively,
the “Tangible
Personal Property”).
All
Tangible Personal Property is free and clear of all Liens, other than Permitted
Liens, and is in good order and condition, ordinary wear and tear excepted,
and
its use complies in all material respects with all applicable Laws. Neither
Target nor any of its Subsidiaries has granted any lease, sublease, tenancy
or
license of any portion of the Tangible Personal Property.
(c) Accounts
Receivable.
The
accounts receivable of the Target and each of its Subsidiaries reflected on
the
Target Financial Statements and created after March 31, 2008 but prior to the
Closing Date are bona fide accounts receivable created in the ordinary course
of
business.
Section
8.16 Intellectual
Property.
The
Target and its Subsidiaries own or are validly licensing or otherwise have
the
right to use any patents, trademarks, trade names, service marks, domain names,
copyrights, and any applications therefore, trade secrets, computer software
programs, and tangible or intangible proprietary information or material which
are material to the conduct of their business taken as a whole (the
“Intellectual
Property Rights”).
No
claims are pending or, to the Knowledge of the Warrantors, threatened that
the
Target or any of its Subsidiaries is infringing or otherwise adversely affecting
the rights of any Person with regard to any Intellectual Property Right. To
the
Knowledge of the Warrantors, no Person is infringing the rights of the Target
or
any of its Subsidiaries with respect to any Intellectual Property
Right.
19
Section
8.17 Taxes.
(a) The
Target and its Subsidiaries have timely filed, or have caused to be timely
filed
on their behalf, all Tax Returns that are or were required to be filed by or
with respect to any of them, either separately or as a member of group of
corporations, pursuant to applicable Legal Requirements. All Tax Returns filed
by (or that include on a consolidated basis) the Target and its Subsidiaries
were (and, as to a Tax Return not filed as of the date hereof, will be) in
all
respects true, complete and accurate. To the Knowledge of the Warrantors, there
are no unpaid Taxes claimed to be due by any Governmental Authority in charge
of
taxation of any jurisdiction, nor any claim for additional Taxes for any period
for which Tax Returns have been filed, and none of their officers or directors,
or the Selling Shareholders, or any of their officers or directors (if an
entity), know of any basis for any such claim.
(b) Neither
the Target nor any of its Subsidiaries has received any notice that any
Governmental Authority will audit or examine (except for any general audits
or
examinations routinely performed by such Governmental Authorities), seek
information with respect to, or make material claims or assessments with respect
to any Taxes for any period since January 1, 2002.
(c) The
Target Financial Statements reflect an adequate reserve for all Taxes known
to
be payable by the Target and its Subsidiaries (in addition to any reserve for
deferred Taxes to reflect timing differences between book and Tax items) for
all
taxable periods and portions thereof through the date of such financial
statements. None of the Target or its Subsidiaries is a party to or bound by
any
Tax indemnity, Tax sharing or similar agreement and the Target and its
Subsidiaries currently have no material liability and will not have any material
liabilities for any Taxes of any other Person under any agreement or by the
operation of any Law. No deficiency with respect to any Taxes has been proposed,
asserted or assessed against the Target or its Subsidiaries, and no requests
for
waivers of the time to assess any such Taxes are pending.
(d) Neither
the Target nor any of its Subsidiaries has requested any extension of time
within which to file any Tax Return, which Tax Return has not since been filed.
Neither the Target nor any of its Subsidiaries has executed any outstanding
waivers or comparable consents regarding the application of the statute of
limitations with respect to any Taxes or Tax Returns. No power of attorney
currently in force has been granted by the Target or any of its Subsidiaries
concerning any Taxes or Tax Return.
(e) [RESERVED].
(f) Neither
the Target nor any of its Subsidiaries (i) is currently engaged in the conduct
of a trade or business within the United States; (ii) is a corporation or
other entity organized or incorporated in the United States; and (iii) owns
or
has ever owned any United States real property interests described in
Section 897 of the Code.
20
Section
8.18 Employment
Matters.
(a) Benefit
Plan.
Except
as set forth in Section 8.18(a) of the Target Disclosure Schedule, neither
the
Target nor any of its Subsidiaries maintains any collective bargaining agreement
or any bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding (whether or not legally
binding) providing benefits to any current or former employee, officer or
director of the Target or any such Subsidiary (collectively, the “Target
Benefit Plans”).
Neither the execution and delivery of this Agreement nor the consummation of
the
Transactions will (either alone or in conjunction with any other event) result
in, cause the accelerated vesting or delivery of, or increase the amount or
value of, any payment or benefit to any employee of the Target or any such
Subsidiary. The consummation of the Transactions will not trigger any severance
or termination agreements or arrangements between the Target or any of its
Subsidiaries and any of their respective current or former employees, officers
or directors, nor does the Target have any general severance plan or policy.
Since March 31, 2008, there has not been any adoption or amendment in any
material respect by the Target or any of its Subsidiaries of any Target Benefit
Plan.
(b) Labor
Matters.
Except
for disputes, agreements and other matters that, individually or in the
aggregate, do not have or are not expected to have a Material Adverse Effect,
(a) there are no collective bargaining or other labor union agreements to which
the Target or any of its Subsidiaries is a party or by which it is bound; (b)
no
labor dispute exists or, to the Knowledge of the Warrantors, is imminent with
respect to the employees of the Target or any of its Subsidiaries; (c)
there is no strike, work stoppage or other labor dispute involving the Target
or
any of its Subsidiaries pending or, to the Knowledge of the Warrantors,
threatened; (d) no complaint, charge or Actions by or before any
Governmental Authority brought by or on behalf of any employee, prospective
employee, former employee, retiree, labor organization or other representative
of its employees is pending or, to the Knowledge of the Warrantors, threatened
against the Target or any of its Subsidiaries; (e) no grievance is pending
or, to the Knowledge of the Warrantors, threatened against the Target or any
of
its Subsidiaries; and (f) neither the Target nor any of its Subsidiaries is
a
party to, or otherwise bound by, any consent decree with, or citation by, any
Governmental Authorities relating to employees or employment
practices.
(c) Executive
Officers.
Except
as set forth in Section 8.18(c) of the Target Disclosure Schedule and other
than
any resignations required by The Rules Governing the Listing of Securities
on
the Growth Enterprise Market of the
HKSE
(the
“HKSE
Listing Rules”),
no
executive officer of the Target or any of its Subsidiaries has notified such
entity in writing that such officer intends to leave the Target or any such
Subsidiary or otherwise terminate such officer’s employment with the Target or
such Subsidiary in connection with the consummation of the Transactions or
within 60 days following the Closing Date.
Section
8.19 Transactions
with Affiliates and Employees.
Except
as disclosed in the Target Financial Statements or in Section 8.19 of the Target
Disclosure Schedule, none of the officers, directors or employees of the Target
and the Warrantors is presently a party, directly or indirectly, to any
transaction with the Target or any of its Subsidiaries (other than for services
as employees, officers and directors), including any Contract providing for
the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
officer, director or employee or, to the Knowledge of the Warrantors, any entity
in which any such officer, director, or employee has a substantial interest
or
is an officer, director, trustee or partner.
21
Section
8.20 Insurance.
The
Target has made available to Pantheon, prior to the date of this Agreement,
true
and correct copies of all contracts of insurance or indemnification, as amended
and supplemented to which the Target or any of its Subsidiaries is a party.
All
such insurance policies are in full force and effect, all premiums due thereon
have been paid and, to the Knowledge of the Warrantors, the Target and any
such
Subsidiary has complied with the provisions of such policies. Neither the Target
nor any such Subsidiary has been advised of any defense to coverage in
connection with any claim to coverage asserted or noticed by the Target or
any
such Subsidiary under or in connection with any of their extant insurance
policies. The Target and its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts
as
are prudent and customary in the businesses in which they are engaged and in
the
geographic areas where any of which engages in such businesses. The Warrantors
have no reason to believe that the Target and its Subsidiaries will not be
able
to renew their existing insurance coverage as and when such coverage expires
or
to obtain similar coverage from similar insurers as may be necessary to continue
their business on terms consistent with market for the Target’s or any of its
Subsidiaries’ respective lines of business.
Section
8.21 Material
Contracts.
(a) The
Target is not in violation of or in default under (nor does there exist any
condition which upon the passage of time or the giving of notice would cause
such a violation of or default under) any Material Contract to which it or
any
such Subsidiary is a party or by which they or any of their respective
properties or assets is bound, except for violations or defaults that would
not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect on the Target; and, to the Knowledge of the Warrantors, no other
Person has violated or breached, or committed any default under, any Material
Contract, except for violations, breaches and defaults that, individually or
in
the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect on the Target.
(b) Each
Material Contract is a legal, valid and binding agreement, and is in full force
and effect, and (i) neither the Target nor any of its Subsidiaries is in breach
or default of any Material Contract to which it is a party in any material
respect; (ii) to the Knowledge of the Warrantors, no event has occurred or
circumstance has existed that (with or without notice or lapse of time), will
or
would reasonably be expected to, (A) contravene, conflict with or result in
a
violation or breach of, or become a default or event of default under, any
provision of any Material Contract; (B) permit the Target or any other Person
the right to declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate or modify any Material
Contract; or (iii) neither the Target nor any of its Subsidiaries has received
written notice of any proposed cancellation, revocation or termination of any
Material Contract to which it is a party; and (iv) there are no renegotiations
of, or attempts to renegotiate, any material terms of any Material Contract.
Since March 31, 2008, neither the Target nor any of its Subsidiaries has
received any written notice regarding any actual or possible violation or breach
of, or default under, any Material Contract, except in each such case for
defaults, acceleration rights, termination rights and other rights that have
not
had and would not reasonably be expected to have a Material Adverse Effect
on
the Target.
22
Section
8.22 Compliance
with Applicable Laws.
The
Target and its Subsidiaries are in compliance with all applicable Laws,
including those relating to occupational health and safety and the environment,
except for instances of noncompliance that, individually and in the aggregate,
have not had and would not reasonably be expected to have a Material Adverse
Effect on the Target. Neither the Target nor any of its Subsidiaries has
received any written communication during the past two years from a Governmental
Authority alleging that the Target or any such Subsidiary is not in compliance
in any material respect with any applicable Law. This Section 8.22 does not
relate to matters with respect to Taxes, which are the subject of Section
8.17.
Section
8.23 Foreign
Corrupt Practices.
None of
the Warrantors, nor any of their respective Representatives, has, in the course
of its actions for, or on behalf of, the Target or any of its Subsidiaries,
directly or indirectly, (a) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (b) made any direct or indirect unlawful payment to any
Governmental Authority or any foreign or domestic government official or
employee from corporate funds; (c) violated or is in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules
and
regulations thereunder (the “FCPA”);
or
(d) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment in connection with the operations of the Target or any
such Subsidiary to any foreign or domestic government official or employee.
None
of the Warrantors, or any of their respective Representatives, has committed
any
acts or omissions which would constitute a breach of applicable criminal laws,
including but not limited to corruption laws.
Section
8.24 Money
Laundering Laws.
The
Target and its Subsidiaries have conducted their business at all times in
compliance with money laundering statutes in all applicable jurisdictions,
the
rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any Governmental Authority
(collectively, the “Money
Laundering Laws”)
and no
proceeding involving the Target with respect to the Money Laundering Laws is
pending or, to the Knowledge of the Warrantors, is threatened.
Section
8.25 Governmental
Inquiry.
Neither
the Target nor any of its Subsidiaries has received any material written
inspection report, questionnaire, inquiry, demand or request for information
from a Governmental Authority.
Section
8.26 Records.
The
books of account, minute books and shareholder records of the Target and its
Subsidiaries made available to Pantheon are complete and accurate in all
material respects, and there have been no material transactions involving the
Target or any of its Subsidiaries which are required to be set forth therein
and
which have not been so set forth.
Section
8.27 Brokers;
Schedule of Fees and Expenses.
No
broker, investment banker, financial advisor or other Person is entitled to
any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with this Agreement or the Transactions based upon arrangements
made
by or on behalf of the Target or any of its Subsidiaries.
23
Section
8.28 Vote
Required.
There
is no vote of the shareholders of Target necessary to approve this Agreement
and
the Transactions contemplated hereby.
Section
8.29 Business
Relationships.
To the
Knowledge of the Warrantors, the execution of this Agreement and Transaction
Documents and the consummation of the Transactions contemplated hereby and
thereby will not materially adversely affect the relationships of the Target
with its subscribers.
Section
8.30 OFAC.
None of
the Target, any director or officer of the Target, or, to the Knowledge of
the
Warrantors, any agent, employee, affiliate or Person acting on behalf of the
Target is currently identified on the specially designated nationals or other
blocked person list or otherwise currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”);
and
the Target has not, directly or indirectly, used any funds, or loaned,
contributed or otherwise made available such funds to any Subsidiary, joint
venture partner or other Person, in connection with 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,
or
otherwise in violation of, any U.S. sanctions administered by OFAC in the last
five (5) fiscal years.
Section
8.31 Additional
PRC Representations and Warranties.
(a) All
material consents, approvals, authorizations or licenses requisite under PRC
law
for the due and proper establishment and operation of the Target and its
Subsidiaries have been duly obtained from the relevant PRC Governmental
Authority and are in full force and effect.
(b) All
filings and registrations with the PRC Governmental Authorities required in
respect of the Target and its Subsidiaries and their respective operations
including, without limitation, the registration with and/or approval by the
Ministry of Commerce, the State Administration of Industry and Commerce, the
State Administration for Foreign Exchange, tax bureau and customs offices and
other PRC Governmental Authorities that administer foreign investment
enterprises have been duly completed in accordance with the relevant PRC rules
and regulations, except where the failure to complete such filings and
registrations does not, and would not, individually or in the aggregate, have
a
Material Adverse Effect.
(c) The
Target and its Subsidiaries have complied with all relevant PRC laws and
regulations regarding the contribution and payment of their registered share
capital, the payment schedules of which have been approved by the relevant
PRC
Governmental Authority.
(d) Neither
the Target nor any of its Subsidiaries is in receipt of any letter or notice
from any relevant PRC Governmental Authority notifying it of the revocation,
or
otherwise questioning the validity, of any licenses or qualifications issued
to
it or any subsidy granted to it by any PRC Governmental Authority for
non-compliance with the terms thereof or with applicable PRC laws, or the need
for compliance or remedial actions in respect of the activities carried out
by
the Target or any of its Subsidiaries, except where the notice or the letter
does not, and would not, individually or in the aggregate, have a Material
Adverse Effect.
24
(e) The
Target and its Subsidiaries have conducted their respective business activities
within the permitted scope of business or have otherwise operated their
respective businesses in compliance, in all material respects, with all relevant
legal requirements and with all requisite licenses and approvals granted by
competent PRC Governmental Authorities, except where such non-compliance has
not
had and would not reasonably be expected to have, resulted in a Material Adverse
Effect on the Target. As to licenses, approvals and government grants and
concessions requisite or material for the conduct of any part of the Target’s
business which is subject to periodic renewal, the Warrantors have no Knowledge
of any grounds on which such requisite renewals will not be granted by the
relevant PRC Governmental Authorities, except where such grounds does not,
and
would not, individually or in the aggregate, result in a Material Adverse
Effect.
(f) With
regard to employment and staff or labor, the Target and its Subsidiaries have
complied, in all material respects, with all applicable PRC laws and
regulations, including without limitation, laws and regulations pertaining
to
welfare funds, social benefits, medical benefits, insurance, retirement
benefits, pensions or the like.
Section
8.32 Stamp
Duty; Transfer Taxes.
No
stamp or other issuance or transfer taxes or duties and no capital gains,
income, withholding or other taxes are payable by or on behalf of the Pantheon
Parties to any Governmental Authority in Cayman Islands, Hong Kong, the PRC
or
any other applicable jurisdiction or any political subdivision or taxing
authority thereof or therein (other than on the net income of the Pantheon
Parties where the net income of the Pantheon Parties is otherwise subject to
taxation by the applicable jurisdiction) in connection with the
Transactions.
Section
8.33 Environmental
Matters.
To the
Knowledge of the Warrantors after due inquiry, each of the Target and its
Subsidiaries is, and at all times has been, in substantial compliance with,
and
has not been and is not in material violation of or subject to any material
liability under, any Environmental Law, and the Target does not have any basis
to expect, nor has the Target and its Subsidiaries, nor any other Person for
whose conduct they are or may be held to be responsible, received any written
order or notice from (a) any Governmental Authority or private citizen
acting in the public interest, or (b) the current or prior owner or
operator of any Facilities, of any actual or potential material violation by
the
Target or any of its Subsidiaries, or failure by the Target or any of its
Subsidiaries to comply with, any Environmental Law, or of any actual or
threatened material obligation by the Target or any of its Subsidiaries to
undertake or bear the cost of any liabilities under the Environmental Laws
with
respect to any of the Facilities or any other properties or assets (whether
real, personal, or mixed) in which the Target or any of its Subsidiaries has
or
has had an interest, or with respect to any property or Facility at or to which
Hazardous Materials were generated, manufactured, refined, transferred,
imported, used, or processed by the Target or any other Person for whose conduct
the Target is or may be held legally responsible, or from any such Hazardous
Materials have been transported, treated, stored, handled, transferred,
disposed, recycled, or received.
25
Section
8.34 Disclosure.
All of
the representations or warranties made by the Target herein, in the Target
Disclosure Schedule or in any certificate furnished by the Target pursuant
to
this Agreement, are true and correct, and when all such documents are read
together in their entirety, none of them contains or will contain at the Closing
Date any untrue statement of a material fact, or omits or will omit at the
Closing Date to state any material fact necessary in order to make the
statements contained herein or therein, in the light of the circumstances under
which made, not misleading.
Section
8.35 No
Additional Agreements.
The
Target does not have any agreement or understanding with Pantheon with respect
to the Transactions contemplated by this Agreement other than as specified
in
this Agreement.
ARTICLE
IX
Representations
and Warranties of Pantheon
Except
as
set forth in the Disclosure Schedule of Pantheon attached hereto as Schedule III
(the
“Pantheon
Disclosure Schedule”),
each
of the Pantheon Parties, jointly and severally, represents and warrants to
the
Warrantors and Selling Shareholders as follows:
Section
9.1 Capital
Structure.
(a) Section 9.1(a)
of the Pantheon Disclosure Schedule sets forth, as of the date hereof, the
share
capitalization of Pantheon and all the outstanding options, warrants or rights
to acquire any share capital of Pantheon. Other than those set forth in
Section 9.1(a) of the Pantheon Disclosure Schedule: (i) there are no
options, warrants or other rights outstanding which give any Person the right
to
acquire any share capital of Pantheon or to subscribe to any increase of any
share capital of Pantheon; and (ii) there are no disputes, arbitrations or
litigation proceedings involving Pantheon with respect to the share capital
of
Pantheon.
(b) Except
as
set forth in Section 9.1(b) of the Pantheon Disclosure Schedule: (i) no
shares of capital stock or other voting securities of Pantheon were issued,
reserved for issuance or outstanding and there have not been any issuances
of
capital securities or options, warrants or rights to acquire the capital
securities of Pantheon; (ii) all outstanding shares of the capital stock of
Pantheon are, and all such shares that may be issued prior to the date hereof
will be when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to or issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right or
any
similar right under any provision of the DGCL, the Pantheon Constituent
Instruments (as defined below) or any Contract to which Pantheon is a party
or
otherwise bound; and (iii) there are no outstanding contractual obligations
of
Pantheon to repurchase, redeem or otherwise acquire any shares of capital stock
of Pantheon.
26
(c) Except
as
set forth in Section 9.1(c) of the Pantheon Disclosure Schedule, as of the
date of this Agreement: (i) there are no bonds, debentures, notes or other
indebtedness of Pantheon having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
holders of Common Stock may vote (“Voting
Pantheon Debt”);
and
(ii) there are no options, warrants, rights, convertible or exchangeable
securities, “phantom” stock rights, stock appreciation rights, stock-based
performance units, commitments, Contracts, arrangements or undertakings of
any
kind to which Pantheon is a party or by which it is bound (A) obligating
Pantheon to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other equity interests in, or any security
convertible or exercisable for or exchangeable into any capital stock of or
other equity interest in, Pantheon or any Voting Pantheon Debt, or (B)
obligating Pantheon to issue, grant, extend or enter into any such option,
warrant, call, right, security, commitment, Contract, arrangement or
undertaking.
(d) Except
as
set forth in Section 9.1(d) of the Pantheon Disclosure Schedule, Pantheon
is not a party to any agreement granting any security holder of Pantheon the
right to cause Pantheon to register shares of the capital stock or other
securities of Pantheon held by such security holder under the Securities Act.
The stockholder list provided to the Target is a current shareholder list
generated by Pantheon’s stock transfer agent, and such list accurately reflects
all of the issued and outstanding shares of Pantheon’s capital
stock.
Section
9.2 Organization
and Standing.
Pantheon is duly organized, validly existing and in good standing under the
laws
of the State of Delaware. Pantheon is duly qualified to do business in each
of
the jurisdictions in which the property owned, leased or operated by Pantheon
or
the nature of the business which it conducts requires qualification, except
where the failure to so qualify would not reasonably be expected to have a
Material Adverse Effect on Pantheon. Pantheon has the requisite power and
authority to own, lease and operate its tangible assets and properties and
to
carry on its business as now being conducted and, subject to necessary approvals
of the relevant Governmental Authorities, as presently contemplated to be
conducted. Pantheon has delivered to the Target true and complete copies of
the
certificate of incorporation of Pantheon, as amended to the date of this
Agreement and the bylaws of Pantheon, as amended to the date of this Agreement
(the “Pantheon
Constituent Instruments”).
Section
9.3 Authority;
Execution and Delivery; Enforceability.
Pantheon has all requisite corporate power and authority to execute and deliver
this Agreement and the Transaction Documents to which it is a Party and to
consummate the Transactions. The execution and delivery by Pantheon of this
Agreement and the consummation by Pantheon of the Transactions have been duly
authorized and approved by the Pantheon Board and no other corporate proceedings
on the part of Pantheon are necessary to authorize this Agreement and the
Transactions. Other than the Shareholder Approval (as defined below), all
action, corporate and otherwise, necessary to be taken by Pantheon to authorize
the execution, delivery and performance of this Agreement, the Transaction
Documents and all other agreements and instruments delivered by Pantheon in
connection with the Transactions has been duly and validly taken. Each of this
Agreement and the Transaction Documents to which Pantheon is a Party has been
duly executed and delivered by Pantheon and constitutes the valid, binding,
and
enforceable obligation of Pantheon, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws of general
application now or hereafter in effect affecting the rights and remedies of
creditors and by general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity).
27
Section
9.4 No
Subsidiaries or Equity Interests.
Pantheon does not own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other equity interest
in any Person other than its ownership interest in Pantheon Arizona prior to
the
Merger Effective Time.
Section
9.5 No
Conflicts.
Except
as set forth in Section 9.5 of the Pantheon Disclosure Schedule, the execution
and delivery of this Agreement or any of the Transaction Documents by Pantheon
and the consummation of the Transactions and compliance with the terms hereof
and thereof will not, (a) conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
to
loss of a material benefit under, or result in the creation of any Lien (other
than a Permitted Lien) upon any of the assets and properties of Pantheon under,
any provision of: (i) any Pantheon Constituent Instrument; (ii) any
Pantheon Material Contract (as defined in Section 9.23 hereof) to which Pantheon
is a party or to or by which it (or any of its assets and properties) is subject
or bound; or (iii) any Material Permit; (b) subject to the filings and other
matters referred to in Section 9.6, conflict with any material Judgment or
Law
applicable to Pantheon, or its properties or assets; (c) result in any
suspension, revocation, impairment, forfeiture or nonrenewal of any Permit
applicable to Pantheon; (d) terminate or modify, or give any third party the
right to terminate or modify, the provisions or terms of any Contract to which
Pantheon is a party; or (e) cause any of the assets owned by Pantheon to be
reassessed or revalued by any Governmental Authority, except, in the case of
clauses (a)(ii), (a)(iii), (b), (c), (d) and (e) above, any such items that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect on Pantheon.
Section
9.6 Consents
and Approvals.
Except
as set forth in Section 9.6 of the Pantheon Disclosure Schedule, no Consent
of,
or registration, declaration or filing with, or permit from, any Governmental
Authority is required to be obtained or made by or with respect to Pantheon
in
connection with the execution, delivery and performance of this Agreement or
the
consummation of the Transactions, other than (i) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware and the filing
of
Articles of Merger with the Arizona Corporation Commission as provided in
Section 1.2; (ii) the filings in connection with the Conversion as provided
in
Section 2.2; (iii) the filing with, and clearance by the SEC of a Registration
Statement on Form S-4 containing a preliminary proxy statement/prospectus,
which
shall serve as a proxy statement pursuant to Section 14(a), Regulation 14A
and
Schedule 14A under the Exchange Act, a registration statement under the
Securities Act, and all other proxy materials for the Pantheon Stockholders
Meeting (as defined in Section 12.1(a)) (the “Proxy
Statement/Prospectus”)
and
the approval, among others, of this Agreement and the Transactions in such
Pantheon Stockholders Meeting (the “Shareholder
Approval”);
(iv)
the filing of a Form 8-K with the SEC within four (4) business days after the
execution of this Agreement and of the Closing Date; (v) any filings as required
under applicable securities laws of the United States and the securities laws
of
any foreign country; (vi) any filing required by the OTCBB; and (vii) the
procurement of such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a Material Adverse
Effect on Pantheon and would not prevent, or materially alter or delay,
consummation of any of the Transactions.
28
Section
9.7 SEC
Documents.
Pantheon has filed all reports, schedules, forms, statements and other documents
required to be filed by Pantheon with the SEC since December 14, 2006, pursuant
to Sections 13(a), 14(a) and 15(d) of the Exchange Act (the “Pantheon
SEC Documents”).
As of
its respective filing date, each Pantheon SEC Document complied in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the SEC promulgated thereunder applicable to such Pantheon SEC Document,
and
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Except to the extent that information contained in any Pantheon
SEC Document has been revised or superseded by a later filed Pantheon SEC
Document, none of the Pantheon SEC Documents contains any untrue statement
of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Pantheon included in the Pantheon SEC Documents (the
“Pantheon
Financial Statements”)
comply
as to form in all material respects with applicable accounting requirements
and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with U.S. GAAP (except, in the case of unaudited
statements, as permitted by the rules and regulations of the SEC) applied on
a
consistent basis during the periods involved (except as may be indicated in
the
notes thereto) and fairly present the consolidated financial position of
Pantheon as of the dates thereof and the consolidated results of their
operations and cash flows as at the respective dates of and for the periods
referred to in such financial statements (subject, in the case of unaudited
financial statements, to normal year-end audit adjustments and the omission
of
notes to the extent permitted by Regulation S-X of the SEC).
Section
9.8 Internal
Accounting Controls.
Pantheon maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (a) transactions are executed in accordance
with management’s general or specific authorizations, (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (c) access to assets is permitted only in accordance with
management’s general or specific authorization, and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Pantheon’s officers have established disclosure controls and procedures for
Pantheon and designed such disclosure controls and procedures to ensure that
material information relating to Pantheon is made known to the officers by
others within those entities. Pantheon’s officers have evaluated the
effectiveness of Pantheon’s controls and procedures and there is no material
weakness, significant deficiency or control deficiency, in each case as such
term is defined in Public Company Accounting Oversight Board Auditing Std.
No.
2. Since March 31, 2008, there have been no significant changes in Pantheon’s
internal controls or, to Pantheon’s Knowledge, in other factors that could
significantly affect Pantheon’s internal controls.
Section
9.9 [RESERVED].
29
Section
9.10 Absence
of Certain Changes or Events.
Except
as disclosed in Section 9.10 of the Pantheon Disclosure Schedule, from the
date
of the most recent audited financial statements included in the filed Pantheon
SEC Documents to the date of this Agreement, there has not been:
(a) any
event, situation or effect (whether or not covered by insurance) that has
resulted in, or to Pantheon’s Knowledge, is reasonably likely to result in, a
Material Adverse Effect on Pantheon;
(b) any
damage, destruction or loss to, or any material interruption in the use of,
any
of the assets of Pantheon (whether or not covered by insurance) that has had
or
could reasonably be expected to have a Material Adverse Effect on
Pantheon;
(c) any
material change to a material Contract by which Pantheon or any of its assets
is
bound or subject;
(d) any
material change in any compensation arrangement or agreement with any employee,
officer, director or stockholder;
(e) any
resignation or termination of employment of the Chief Executive Officer, Chief
Financial Officer, President or the Secretary of Pantheon;
(f) any
mortgage, pledge, transfer of a security interest in, or Lien, created by
Pantheon, with respect to any of its material properties or assets, except
for
Permitted Liens;
(g) any
loans
or guarantees made by Pantheon to or for the benefit of its officers or
directors, or any members of their immediate families, or any material loans
or
guarantees made by Pantheon to or for the benefit of any of its employees or
any
members of their immediate families, in each case, other than travel advances
and other advances made in the ordinary course of its business;
(h) any
declaration, setting aside or payment or other distribution in respect of any
of
Pantheon’s capital stock, or any direct or indirect redemption, purchase, or
other acquisition of any of such stock by Pantheon;
(i) any
alteration of Pantheon’s method of accounting or the identity of its
auditors;
(j) any
issuance of equity securities to any officer, director or affiliate, except
pursuant to existing Pantheon shares option plans; or
(k) any
negotiations, arrangement or commitment by Pantheon to take any of the actions
described in this Section 9.10.
Section
9.11 Undisclosed
Liabilities.
Except
as set forth in Section 9.11 of the Pantheon Disclosure Schedule, Pantheon
has
no liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) due after the date hereof other than those not required
to be set forth on a balance sheet of Pantheon or in the notes thereto under
U.S. GAAP. Section 9.11 of the Pantheon Disclosure Schedule sets forth all
financial and contractual obligations and liabilities (including any obligations
to issue capital stock or other securities of Pantheon) due after the date
hereof.
30
Section
9.12 Litigation.
As of
the date hereof, there is no Action which (a) adversely affects or challenges
the legality, validity or enforceability of any of this Agreement or (b) could,
if there were an unfavorable decision, individually or in the aggregate, have
or
reasonably be expected to result in a Material Adverse Effect on Pantheon.
Neither Pantheon nor any director or officer thereof (in his or her capacity
as
such) is or has been the subject of any Action involving a claim or violation
of
or liability under federal or state securities laws or a claim of breach of
fiduciary duty.
Section
9.13 Compliance
with Applicable Laws.
Except
as set forth in Section 9.13 of the Pantheon Disclosure Schedule, Pantheon
is in
compliance with all applicable Laws, including those relating to occupational
health and safety and the environment, except for instances of noncompliance
that, individually and in the aggregate, have not had and would not reasonably
be expected to have a Material Adverse Effect on Pantheon. Except as set forth
in Section 9.13 of the Pantheon Disclosure Schedule, Pantheon has not received
any written communication during the past two (2) years from a Governmental
Authority alleging that Pantheon is not in compliance in any material respect
with any applicable Law.
Section
9.14 Xxxxxxxx-Xxxxx
Act of 2002.
Pantheon is in material compliance with all provisions of the Xxxxxxxx-Xxxxx
Act
of 2002 (the “Xxxxxxxx-Xxxxx
Act”)
applicable to it as of the date hereof and as of the Closing. There has been
no
change in Pantheon’s accounting policies since inception except as described in
the notes to the Pantheon Financial Statements. Each required form, report
and
document containing financial statements that has been filed with or submitted
to the SEC since inception, was accompanied by the certifications required
to be
filed or submitted by Pantheon’s chief executive officer and chief financial
officer pursuant to the Xxxxxxxx-Xxxxx Act, and at the time of filing or
submission of each such certification, such certification was true and accurate
and materially complied with the Xxxxxxxx-Xxxxx Act and the rules and
regulations promulgated thereunder. Neither Pantheon, nor, to the Knowledge
of
Pantheon, any Representative of Pantheon, has received or otherwise had or
obtained knowledge of any complaint, allegation, assertion or claim, whether
written or oral, regarding the accounting or auditing practices, procedures,
methodologies or methods of Pantheon or its internal accounting controls,
including any complaint, allegation, assertion or claim that Pantheon has
engaged in questionable accounting or auditing practices, except for (a) any
complaint, allegation, assertion or claim as has been resolved without any
resulting change to Pantheon’s accounting or auditing practices, procedures
methodologies or methods of Pantheon or its internal accounting controls, and
(b) questions regarding such matters raised and resolved in the ordinary course
of business in connection with the preparation and review of Pantheon’s
financial statements and periodic reports. To the Knowledge of Pantheon, no
attorney representing Pantheon, whether or not employed by Pantheon, has
reported evidence of a material violation of securities laws, breach of
fiduciary duty or similar violation by Pantheon or any of its officers,
directors, employees or agents to the Pantheon Board or any committee thereof
or
to any director or officer of Pantheon. To the Knowledge of Pantheon, no
employee of Pantheon has provided or is providing information to any law
enforcement agency regarding the commission or possible commission of any crime
or the violation or possible violation of any applicable law.
31
Section
9.15 Certain
Registration Matters.
Except
as specified in Section 9.15 of the Pantheon Disclosure Schedule, and except
for
registration rights granted in connection with the Pantheon Public Offering,
Pantheon has not granted or agreed to grant to any Person any rights (including
“piggy-back” registration rights) to have any securities of Pantheon registered
with the SEC or any other Governmental Authority that have not been
satisfied.
Section
9.16 Broker’s
and Finders’ Fees.
Except
as specified in Section 9.16 of the Pantheon Disclosure Schedule, Pantheon
has
not incurred, nor will it incur, directly or indirectly, any liability for
brokerage or finders’ fees or agents’ commissions or investment bankers’ fees or
any similar charges in connection with this Agreement or any
Transaction.
Section
9.17 Minute
Books.
The
minute books of Pantheon made available to the Target contain in all material
respects a complete and accurate summary of all meetings of directors and
stockholders or actions by written consent of Pantheon since inception and
through the date of this Agreement, and reflect all transactions referred to
in
such minutes accurately in all material respects.
Section
9.18 [RESERVED].
Section
9.19 Board
Approval.
The
Pantheon Board (including any required committee or subgroup of the Pantheon
Board) has, as of the date of this Agreement, (i) adopted resolutions approving
the Merger and setting forth the terms and conditions thereof, and declared
the
advisability of and approved this Agreement and the Transactions, (ii)
determined that the Transactions are in the best interests of the stockholders
of Pantheon, and (iii) determined that the fair market value of the Target
is
equal to at least 80% of Pantheon’s net assets.
Section
9.20 Over-the-Counter
Bulletin Board Quotation.
The
Common Stock and Warrants are quoted on the OTCBB. There is no Action pending
or, to the Knowledge of Pantheon, threatened against Pantheon by FINRA with
respect to any intention by such entities to prohibit or terminate the quotation
of such securities on the OTCBB. The Common Stock and Warrants are registered
pursuant to Section 12(g) of the Exchange Act and Pantheon has taken no action
designed to, or which is likely to have the effect of, terminating the
registration of such securities under the Exchange Act nor has Pantheon received
any notification that the SEC is contemplating terminating such
registration.
Section
9.21 Trust
Fund.
Section
9.21 of the Pantheon Disclosure Schedule sets forth as of June 30, 2008 the
dollar amount (including an accrual for the earned but uncollected interest
thereon) held in the trust account established in connection with Pantheon’s
Public Offering for the benefit of its public shareholders (the “Trust
Fund”)
for
use by Pantheon in connection with a business combination as set forth in the
Pantheon Constituent Instruments. Section 9.21 of the Pantheon Disclosure
Schedule sets forth as of June 30, 2008 the dollar amount of the Trust Fund
that
represents deferred underwriting commissions which will be paid to the
underwriters of the Pantheon Public Offering at the Closing.
32
Section
9.22 Transactions
with Affiliates and Employees.
Except
as set forth in Section 9.22 of the Pantheon Disclosure Schedule, none of the
officers or directors of Pantheon and, to the Knowledge of Pantheon, none of
the
employees of Pantheon is presently a party to any transaction with Pantheon
that
is required to be disclosed under Rule 404(a) of Regulation S-K (other than
for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to
or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to
the
Knowledge of Pantheon, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
Section
9.23 Material
Contracts.
(a) Pantheon
has made available to the Target, prior to the date of this Agreement, true,
correct and complete copies of each material contract which would be considered
a material contract pursuant to Item 601(b)(10) of Regulation S-K or pursuant
to
which Pantheon receives or pays amounts in excess of US$100,000 (each a
“Pantheon
Material Contract”).
A
list of each such Pantheon Material Contract is set forth on Section 9.23 of
the
Pantheon Disclosure Schedule. As of the date of this Agreement, Pantheon is
not
in violation of or in default under (nor does there exist any condition which
upon the passage of time, the giving of notice or both would cause such a
violation of or default under) any Pantheon Material Contract to which it is
a
party or by which it or any of its properties or assets is bound, except for
violations or defaults that would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect on Pantheon;
and,
to the Knowledge of Pantheon, as of the date of this Agreement, no other Person
has violated or breached, or committed any default under, any Pantheon Material
Contract, except for violations, breaches and defaults that, individually or
in
the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect on Pantheon.
(b) Except
as
would not reasonably be expected to have a Material Adverse Effect on Pantheon,
each Pantheon Material Contract is a legal, valid and binding agreement, and
is
in full force and effect, and (i) Pantheon is not in breach or default of any
Pantheon Material Contract in any material respect; (ii) no event has occurred
or circumstance has existed that (with or without notice or lapse of time),
will
or would reasonably be expected to, (A) contravene, conflict with or result
in a
violation or breach of, or become a default or event of default under, any
provision of any Pantheon Material Contract; (B) permit Pantheon or any other
Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate or modify
any
Pantheon Material Contract; or (iii) Pantheon has not received notice of the
pending or threatened cancellation, revocation or termination of any Pantheon
Material Contract to which it is a party. Since March 31, 2008, Pantheon has
not
received any notice or other communication regarding any actual or possible
violation or breach of, or default under, any Pantheon Material Contract, except
in each such case for defaults, acceleration rights, termination rights and
other rights that have not had and would not reasonably be expected to have
a
Material Adverse Effect on Pantheon.
33
Section
9.24 Taxes.
(a) Pantheon
has timely filed, or has caused to be timely filed on its behalf, all Tax
Returns that are or were required to be filed by it, and all such Tax Returns
are true, complete and accurate, except to the extent any failure to file or
any
inaccuracies in any filed Tax Returns, individually or in the aggregate, have
not had and would not reasonably be expected to have a Material Adverse Effect
on Pantheon. There are no unpaid Taxes claimed to be due by any Governmental
Authority in charge of taxation of any jurisdiction, nor any claim for
additional Taxes for any period for which Tax Returns have been filed, except
to
the extent that any failure to pay, individually or in the aggregate, has not
had and would not reasonably be expected to have a Material Adverse Effect
on
Pantheon, and the officers of Pantheon know of no basis for any such
claim.
(b) Pantheon
has not received any notice that any Governmental Authority will audit or
examine (except for any general audits or examinations routinely performed
by
such Governmental Authorities), seek information with respect to, or make
material claims or assessments with respect to any Taxes for any period.
Pantheon has made available to the Target copies of all Tax Returns, examination
reports, and statements of deficiencies filed by, assessed against or agreed
to
by Pantheon for and during fiscal years 2006 and 2007 (since
inception).
(c) The
Pantheon Financial Statements reflect an adequate reserve for all Taxes payable
by Pantheon (in addition to any reserve for deferred Taxes to reflect timing
differences between book and Tax items) for all taxable periods and portions
thereof through the date of such financial statements. Pantheon is neither
a
party to nor is it bound by any tax indemnity, tax sharing or similar agreement
and Pantheon currently has no material liability and will not have any material
liabilities for any Taxes of any other Person under any agreement or by the
operation of any Law. No deficiency with respect to any Taxes has been proposed,
asserted or assessed against Pantheon, and no requests for waivers of the time
to assess any such Taxes are pending, except to the extent any such deficiency
or request for waiver, individually or in the aggregate, has not had and would
not reasonably be expected to have a Material Adverse Effect on
Pantheon.
Section
9.25 Foreign
Corrupt Practices.
Neither
Pantheon, nor, to Pantheon’s Knowledge, any Representative of Pantheon has, in
the course of its actions for, or on behalf of, Pantheon (a) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (b) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee
from
corporate funds; (c) violated or is in violation of any provision of the FCPA;
or (d) made any unlawful bribe, rebate, payoff, influence payment, kickback
or
other unlawful payment to any foreign or domestic government official or
employee, except, in the case of clauses (a) and (b) above, any such items
that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect on Pantheon.
Section
9.26 Money
Laundering Laws.
The
operations of Pantheon are and have been conducted at all times in compliance
with Money Laundering Laws and no proceeding involving Pantheon with respect
to
the Money Laundering Laws is pending or, to the Knowledge of the officers of
Pantheon, is threatened.
34
ARTICLE
X
Conduct
Prior To The Closing
Section
10.1 Covenants
of the Warrantors.
During
the period from the date of this Agreement and continuing until the earlier
of
the termination of this Agreement or the Closing Date, the Warrantors agree
that
the Target and its Subsidiaries shall use commercially reasonable efforts to
(except to the extent expressly contemplated by this Agreement or as consented
to in writing by the Pantheon Parties), (i) carry on their businesses in the
ordinary course in substantially the same manner as heretofore conducted, to
pay
debts and Taxes when due (subject to good faith disputes over such debts or
Taxes), to pay or perform other obligations when due, and to use all reasonable
efforts consistent with past practice and policies to preserve intact their
present business organizations, and (ii) use their commercially reasonable
efforts consistent with past practice to keep available the services of their
present executive officers and directors and use their commercially reasonable
efforts consistent with past practice to preserve their relationships with
customers, suppliers, distributors, licensors, licensees, and others having
business dealings with them, to the end that there shall not be a Material
Adverse Effect in their ongoing businesses as of the Closing Date. The
Warrantors agree to promptly notify Pantheon of any material event or occurrence
not in the ordinary course of business that would have or reasonably be expected
to have a Material Adverse Effect on the Target. Without limiting the generality
of the foregoing, during the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement or the Closing
Date, except as otherwise expressly permitted by or provided for in this
Agreement, none of the Warrantors shall do, allow, cause or permit any of the
following actions to occur with respect to the Target without the prior written
consent of Pantheon, which consent shall not be unreasonably delayed or
withheld:
(a) Charter
Documents.
Cause
or permit any amendments to any of the Target Constituent Instruments or any
other equivalent organizational documents, except for such amendments made
pursuant to a Legal Requirement or as contemplated by this
Agreement;
(b) Dividends;
Changes in Capital Stock.
Declare
or pay any dividends on or make any other distributions (whether in cash, stock
or property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of
its
capital stock;
(c) Material
Contracts.
Enter
into any new Material Contract, or violate, amend or otherwise modify or waive
any of the terms of any existing Material Contract, other than (i) in the
ordinary course of business consistent with past practice or (ii) upon prior
written consent of Pantheon;
(d) Issuance
of Securities.
Issue,
deliver or sell or authorize or propose the issuance, delivery or sale of,
or
purchase or propose the purchase of, any shares of its capital stock or
securities convertible into, or subscriptions, rights, warrants or options
to
acquire, or other agreements or commitments of any character obligating it
to
issue any such shares or other convertible securities;
35
(e) Intellectual
Property.
Transfer or license to any Person or entity any Intellectual Property Rights
other than the license of non-exclusive rights to Intellectual Property Rights
in the ordinary course of business consistent with past practice;
(f) Dispositions.
Sell,
lease, license or otherwise dispose of or encumber any of its properties or
assets which are material, individually or in the aggregate, to its business,
taken as a whole, except in the ordinary course of business consistent with
past
practice;
(g) Indebtedness.
Except
in its ordinary course of business, issue or sell any debt securities or
guarantee any debt securities of others in excess of US$3,000,000 in the
aggregate;
(h) Payment
of Obligations.
Pay,
discharge or satisfy in an amount in excess of US$3,000,000 in any one case,
any
claim, liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise) arising other than (i) in the ordinary course of
business, and (ii) the payment, discharge or satisfaction of liabilities
reflected or reserved against in the Target Financial Statements, as
applicable;
(i) Capital
Expenditures.
Make
any capital expenditures, capital additions or capital improvements except
in
the ordinary course of business and consistent with past practice that do not
exceed US$3,000,000 individually or in the aggregate;
(j) [RESERVED].
(k) Employment.
Except
as required under the Legal Requirements or agreements or pursuant to plans
or
arrangements existing on the date hereof, (i) take any action with respect
to,
adopt, enter into, terminate or amend any employment, severance, retirement,
retention, incentive or similar agreement, arrangement or benefit plan for
the
benefit or welfare of any current or former director, executive officer or
any
collective bargaining agreement, (ii) increase in any material respect the
compensation or fringe benefits of, or pay any bonus to, any director, executive
officer, (iii) materially amend or accelerate the payment, right to payment
or
vesting of any compensation or benefits, (iv) pay any material benefit not
provided for as of the date of this Agreement under any benefit plan, or (v)
grant any awards under any bonus, incentive, performance or other compensation
plan or arrangement or benefit plan, including the grant of stock options,
stock
appreciation rights, stock based or stock related awards, performance units
or
restricted stock, or the removal of existing restrictions in any benefit plans
or agreements or awards made thereunder;
(l) No
Solicitation.
None of
the Warrantors shall take (or authorize or permit any investment banker,
financial advisor, attorney, accountant or other Person retained by or acting
for or on behalf of Warrantors to take) directly or indirectly, any action
to
initiate, assist, solicit, negotiate, or encourage any offer, inquiry or
proposal from any Person other than Pantheon: (i) relating to the
acquisition of any capital stock or other voting securities of the Target or
any
of its Subsidiaries or any assets of the Target or any of its Subsidiaries
other
than sales of assets in the ordinary course of business (including any
acquisition structured as a merger, consolidation, share exchange or other
business combination) (an “Acquisition
Proposal”);
(ii) to reach any agreement or understanding (whether or not such agreement
or understanding is absolute, revocable, contingent or conditional) for, or
otherwise attempt to consummate, any Acquisition Proposal; (iii) to
participate in discussions or negotiations with or to furnish or cause to be
furnished any information with respect to Warrantors or afford access to the
assets and properties or books and records of Warrantors to any Person (other
than as contemplated by Section 11.1) who any of the Warrantors (or any
such Person acting for or on their behalf) knows or has reason to believe is
in
the process of considering any Acquisition Proposal relating to the Target
or
any of its Subsidiaries; (iv) to participate in any discussions or negotiations
regarding, furnish any material non-public information with respect to, assist
or participate in, or facilitate in any other manner any effort or attempt
by
any Person to do or seek any of the foregoing, or (v) to take any other action
that is inconsistent with the Transactions and that has the effect of avoiding
the Closing contemplated hereby;
36
(m) Other
Acquisition Proposals.
The
Warrantors will immediately cease any and all existing activities, discussions
or negotiations with any parties conducted heretofore with respect to any of
the
actions set forth in Section 10.1(l) above, if applicable. The Warrantors will
promptly (i) notify Pantheon if any of the Warrantors receives any proposal
or inquiry or request for information in connection with an Acquisition
Proposal, and (ii) notify Pantheon of the significant terms and conditions
of any such Acquisition Proposal including the identity of the party making
an
Acquisition Proposal;
(n) Facility.
Open or
close any facility or office except in the ordinary course of
business;
(o) Litigation.
Initiate, compromise or settle any material litigation or arbitration
proceedings; and
(p) Other.
Agree
in writing or otherwise to take any of the actions described in Sections 10.1(a)
through (o) above.
Section
10.2 Covenants
of Pantheon.
From
the date hereof until the earlier of the termination of this Agreement or the
Closing Date, Pantheon agrees that Pantheon shall use commercially reasonable
efforts, and cause Pantheon Arizona to use commercially reasonable efforts,
to
(except to the extent expressly contemplated by this Agreement or as consented
to in writing by the Target), (i) carry on its business in the ordinary course
in substantially the same manner as heretofore conducted, to pay debts and
Taxes
when due (subject to good faith disputes over such debts or taxes), to pay
or
perform other obligations when due, and to use all reasonable efforts consistent
with past practice and policies to preserve intact its present business
organizations and (ii) use its commercially reasonable efforts consistent with
past practice to keep available the services of its present officers, directors
and employees and use its commercially reasonable efforts consistent with past
practice to preserve its relationships with customers, suppliers, distributors,
licensors, licensees, and others having business dealings with it, to the end
that there shall not be a Material Adverse Effect in its ongoing business as
of
the Closing Date. Pantheon agrees to promptly notify the Target of any material
event or occurrence not in the ordinary course of its business and of any event
that would have a Material Adverse Effect on any of the Pantheon Parties.
Without limiting the generality of the forgoing, during the period from the
date
of this Agreement and continuing until the earlier of the termination of this
Agreement or the Closing Date, except as listed on Section 10.2 of the Pantheon
Disclosure Schedule or as otherwise expressly permitted by or provided for
in
this Agreement, the Pantheon Parties shall not do, allow, cause or permit any
of
the following actions to occur without the prior written consent of the Target,
which consent shall not be unreasonably delayed or withheld:
37
(a) Charter
Documents.
Cause
or permit any amendments in any of their constituent instruments except for
such
amendments required by any Legal Requirement or the rules and regulations of
the
SEC or OTCBB or as are contemplated by this Agreement (or such other applicable
national securities exchange);
(b) Accounting
Policies and Procedures.
Change
any method of accounting or accounting principles or practices by Pantheon,
except for any such change made pursuant to a Legal Requirement or by a change
in U.S. GAAP;
(c) SEC
Reports.
Fail to
timely file or furnish to or with the SEC all reports, schedules, forms,
statements and other documents required to be filed or furnished (except those
filings by affiliates of Pantheon required under Section 13(d) or 16(a) of
the
Exchange Act provided their failure to file such documents does not have a
Material Adverse Effect on Pantheon or the ability of Pantheon to consummate
the
Transactions);
(d) Dividends;
Changes in Capital Stock.
Declare
or pay any dividends on or make any other distributions (whether in cash, stock
or property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of
its
capital stock, or repurchase or otherwise acquire, directly or indirectly,
any
shares of its capital stock;
(e) Dispositions.
Sell,
lease, license or otherwise dispose of or encumber any of its properties or
assets;
(f) Material
Contracts.
Enter
into any new Pantheon Material Contract, or violate, amend or otherwise modify
or waive any of the terms of any existing Pantheon Material Contract, other
than
(i) contracts involving the payment or receipt by Pantheon of no more than
US$100,000, individually, or in the aggregate, that, in Pantheon’s reasonable
judgment, are necessary for the completion of the Transactions; or (ii) upon
prior consultation with, and prior written consent (which shall not be
unreasonably delayed or withheld) of the Warrantors;
(g) Issuance
of Securities.
Issue,
deliver or sell or authorize or propose the issuance, delivery or sale of,
or
purchase or propose the purchase of, any shares of its capital stock or
securities convertible into, or subscriptions, rights, warrants or options
to
acquire, or other agreements or commitments of any character obligating it
to
issue any such shares or other convertible securities;
38
(h) Indebtedness.
Issue
or sell any debt securities or guarantee any debt securities of
others;
(i) Payment
of Obligations.
Pay,
discharge or satisfy in an amount in excess of US$100,000 in any one case,
any
claim, liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise) arising other than (i) in the ordinary course of
business, and (ii) the payment, discharge or satisfaction of liabilities
reflected or reserved against in the Pantheon Financial Statements, as
applicable;
(j) Capital
Expenditures.
Make
any capital expenditures, capital additions or capital
improvements;
(k) Acquisitions.
Acquire
by merging or consolidating with, or by purchasing a substantial portion of
the
assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, or otherwise
acquire any assets which are material, individually or in the aggregate, to
its
business, taken as a whole, or acquire any equity securities of any corporation,
partnership, association or business organization;
(l) [RESERVED].
(m) Litigation.
Initiate, compromise or settle any material litigation or arbitration
proceedings; and
(n) Other.
Agree
in writing or otherwise to take any of the actions described in Sections 10.2(a)
through (m) above.
ARTICLE
XI
Additional
Covenants of the Warrantors
Section
11.1 Access
to Information.
Except
as required pursuant to any confidentiality agreement or similar agreement
or
arrangement to which any Warrantor is subject, between the date of this
Agreement and the Closing Date, subject to Pantheon’s undertaking to use its
commercially reasonable efforts to keep confidential and protect the Trade
Secrets of the Target and its Subsidiaries against any disclosure, the Target
and its Subsidiaries shall permit, upon reasonable request, Pantheon and
its Representatives access at dates and times agreed upon by the applicable
entity and Pantheon, to all of the books and records of the Target and its
Subsidiaries which the Pantheon Parties determine are necessary for the
preparation and amendment of the Proxy Statement/Prospectus and such other
filings or submissions in accordance with SEC rules and regulations as are
necessary to consummate the Transactions and as are necessary to respond to
requests of the SEC staff, Pantheon’s accountants and relevant Governmental
Authorities; provided,
however, that
the
Pantheon Parties may make a disclosure otherwise prohibited by this Section
11.1
if required by applicable law or regulation or regulatory, administrative or
legal process (including, without limitation, by oral questions,
interrogatories, requests for information, subpoena of documents, civil
investigative demand or similar process) or the rules and regulations of the
SEC
or any stock exchange having jurisdiction over Pantheon Parties.
39
Section
11.2 Interim
Financial Information.
The
Warrantors shall use their commercially reasonable efforts to deliver no later
than December 31, 2008 to Pantheon the unaudited consolidated balance sheets
as
of June 30, 2008 and the related consolidated statements of income and
statements of cash flows of the Target for the period then ended (the
“Target
Interim Financial Statements”).
The
Target Interim Financial Statements for the quarter ended June 30, 2008,
including the notes thereto, will be prepared in accordance with U.S. GAAP
applied on a consistent basis throughout the periods involved (except as may
be
otherwise specified in the notes thereto). The Target Interim Financial
Statements for the quarter ended June 30, 2008 will fairly present in all
material respects the consolidated financial condition and operating results,
change in stockholders’ equity and cash flow of the Target, as of the dates, and
for the periods, indicated therein, subject to the normal, recurring year-end
adjustments.
Section
11.3 Insurance.
Through
the Closing Date, the Warrantors shall cause the Target and its Subsidiaries
to
maintain insurance policies providing insurance coverage for the businesses
in
which the Target and its Subsidiaries are engaged and the assets and properties
of the Target and its Subsidiaries of the kinds, in the amounts and against
the
risks as are commercially reasonable for such businesses and risks covered
and
for the geographic areas where the Target and its Subsidiaries engage in such
businesses.
Section
11.4 Fulfillment
of Conditions.
The
Warrantors shall use their commercially reasonable efforts to fulfill the
conditions specified in Article XIV to the extent that the fulfillment of such
conditions is within their control. The foregoing obligation includes (a)
executing and delivering documents necessary or desirable to consummate the
Transactions contemplated hereby, (b) engaging in a road show, at mutually
agreed times and places, to seek the approval of the Transactions, and
(c) taking or refraining from such actions as may be necessary to fulfill
such conditions (including using their commercially reasonable efforts to
conduct their respective businesses in such manner that on the Closing Date
the
representations and warranties of the each of the Warrantors contained herein
shall be accurate as though then made, except as contemplated by the terms
hereof).
Section
11.5 Disclosure
of Certain Matters.
From
the date hereof through the Closing Date, each of the Warrantors shall give
Pantheon prompt written notice of any event or development that occurs that
(a)
is of a nature that, individually or in the aggregate, would have or reasonably
be expected to have a Material Adverse Effect on the Target, or (b) would
require any amendment or supplement to the Proxy
Statement/Prospectus.
Section
11.6 Regulatory
and Other Authorizations; Notices and Consents.
(a) The
Warrantors shall use their commercially reasonable efforts to obtain all
material Consents that may be or become necessary for their execution and
delivery of, and the performance of their obligations pursuant to, this
Agreement and the Transaction Documents and will cooperate with Pantheon in
promptly seeking to obtain all such authorizations, consents, orders and
approvals.
40
(b) Each
Warrantor shall give promptly such notices to third parties and use its
commercially reasonable efforts to obtain such third party consents and estoppel
certificates as are required to consummate the Transactions.
(c) Each
of
the Warrantors shall cooperate and use commercially reasonable efforts to assist
the other in giving such notices and obtaining such consents and estoppel
certificates as are required to consummate the Transactions; provided,
however,
that
such Warrantor shall have no obligation to give any guarantee or other
consideration of any nature in connection with the seeking of such Consent
or to
consent to any change in the terms of any agreement or arrangement which such
Warrantor in its reasonable discretion may deem adverse to the interests of
Pantheon, Warrantors or the business of the Target.
(d) The
Warrantors shall use their commercially reasonable efforts to obtain, prior
to
the date of the mailing of the proxy statement relating to the Pantheon
Stockholders Meeting, (i) all necessary approvals from GM’s shareholders
for the Transactions contemplated under this Agreement in accordance with the
HKSE Listing Rules; (ii) all necessary approvals from HKSE for GM’s
spin-off proposal in relation to the Transactions contemplated by this Agreement
in accordance with the HKSE Listing Rules; (iii) all necessary approvals in
order to terminate the CSC Option Scheme; and (iv) all necessary approvals
in
order to implement the provisions of Section 5.2.
Section
11.7 Related
Taxes.
From
the date hereof through the Closing Date, each of the Target and its
Subsidiaries, consistent with past practice, shall (i) duly and timely file
all
Tax Returns and other documents required to be filed by it with applicable
Governmental Authorities subject to extensions permitted by law and properly
granted by the appropriate authority; provided,
that the
Target shall promptly notify Pantheon that any of the Target and its
Subsidiaries is availing itself of such extensions, and (ii) pay all Taxes
shown
as due on such Tax Returns.
Section
11.8 Proxy
Statement/Prospectus.
Each of
the Warrantors shall use commercially reasonable efforts to provide promptly
to
Pantheon such information concerning the business affairs and consolidated
financial statements of the Target as may reasonably be required for inclusion
in the Proxy Statement/Prospectus (except that the Warrantors shall only be
required to provide three (3) years of selected consolidated financial data
of
the Target in connection with the Proxy Statement/Prospectus, or in any
amendments or supplements thereto), shall direct that its counsel cooperate
with
Pantheon’s counsel in the preparation of the Proxy Statement/Prospectus and
shall request the cooperation of Pantheon’s auditors in the preparation of the
Proxy Statement/Prospectus. None of the information supplied or to be supplied
by or on behalf of the Warrantors for inclusion or incorporate by reference
in
the Proxy Statement/Prospectus will, at the time the Proxy Statement/Prospectus
is filed with the SEC or at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not
misleading. If any information provided by the Warrantors is discovered or
any
event occurs with respect to any of the Warrantors, or any change occurs with
respect to the other information provided by the Warrantors included in the
Proxy Statement/Prospectus which is required to be described in an amendment
of,
or a supplement to, the Proxy Statement/Prospectus so that such document does
not include any misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the Warrantors shall notify Pantheon
promptly of such event.
41
Section
11.9 Covenant
not to Xxx.
In
consideration of Pantheon’s entry into this Agreement, each of the Warrantors
and the Selling Shareholders waives all right, title, interest or claim of
any
kind against the Trust Fund that any of the Warrantors or the Selling
Shareholders may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with Pantheon, and will not seek recourse
against the Trust Fund.
Section
11.10 Closing
Date.
The
Warrantors acknowledge that pursuant to the Pantheon Constituent Instruments
Pantheon must consummate the Transactions contemplated by this Agreement no
later than December 14, 2008 and, at the request of Pantheon, shall use their
commercially reasonable efforts to assist Pantheon in seeking a required
amendment to the Pantheon Constituent Instruments in order to consummate the
Transactions contemplated by this Agreement.
Section
11.11 Share
Purchases Prior to Closing Date.
To the
extent necessary, practicable and permitted under the applicable Laws, GM shall
purchase, or procure the purchase of, shares of Common Stock in the open market
or in privately negotiated transactions for the purpose of assisting in the
successful outcome of the Pantheon Stockholders Meeting referred to in Section
12.1 below; provided that such purchases shall not commence until the receipt
by
GM of all the required approvals for the Transactions contemplated under this
Agreement (including approval by the shareholders of GM).
ARTICLE
XII
Additional
Covenants of Pantheon
Section
12.1 Proxy
Statement/Prospectus Filing, SEC Filings and Special Meeting.
(a) Pantheon
shall cause a meeting of its stockholders (the “Pantheon Stockholders
Meeting”)
to be
duly called and held as soon as reasonably practicable for the purpose of voting
on the adoption and approval of, among others, this Agreement and the
Transactions contemplated thereby. The board of directors of Pantheon shall
recommend to its stockholders that they vote in favor of the adoption of such
matters. In connection with the Pantheon Stockholders Meeting, Pantheon
(a) shall use commercially reasonable efforts to file with the SEC as
promptly as practicable the Proxy Statement/Prospectus, (b) upon receipt of
approval from the SEC, will mail to its stockholders the Proxy
Statement/Prospectus and other proxy materials, (c) will use commercially
reasonable efforts to obtain the necessary approvals by its stockholders of
this
Agreement and the Transactions contemplated hereby, and (d) will otherwise
comply with all Legal Requirements applicable to the Pantheon Stockholders
Meeting.
(b) Pantheon
shall timely provide to the Target all correspondence received from and to
be
sent to the SEC and shall not file any amendment to the filings with the SEC
without (i) providing the Target the opportunity to review and comment on any
responses to the SEC and (ii) the prior consent of the Target, which consent
shall not be unreasonably delayed or withheld. In addition, Pantheon shall
use
commercially reasonable efforts to cause the SEC to permit the Target and/or
its
counsel to participate in the SEC conversations on issues related to Pantheon’s
SEC filings together with Pantheon’s counsel.
42
Section
12.2 Fulfillment
of Conditions.
From
the date hereof to the Closing Date, Pantheon shall use its commercially
reasonable efforts to fulfill the conditions specified in Article XIV. The
foregoing obligation includes, without limitation, (a) executing and delivering
documents necessary or desirable to consummate the Transactions, (b) engaging
in
a road show, at mutually agreed to times and places, to seek the approval of
the
Transactions, and (c) taking or refraining from such actions as may be necessary
to fulfill such conditions (including using its commercially reasonable efforts
to conduct the business of Pantheon in such manner that on the Closing Date
the
representations and warranties of Pantheon contained herein shall be accurate
as
though then made).
Section
12.3 Disclosure
of Certain Matters.
From
the date hereof through the Closing Date, Pantheon shall give the Warrantors
prompt written notice of any event or development that occurs that (a) is of
a
nature that, individually or in the aggregate, would have or reasonably be
expected to have a Material Adverse Effect on Pantheon, or (b) would
require any amendment or supplement to the Proxy
Statement/Prospectus.
Section
12.4 Regulatory
and Other Authorizations; Notices and Consents.
Pantheon shall use its commercially reasonable efforts to obtain all
authorizations, consents, orders and approvals of all Governmental Authorities
and officials that may be or become necessary for its execution and delivery
of,
and the performance of its obligations pursuant to, this Agreement and the
Transaction Documents to which it is a party and shall cooperate fully with
the
Target in promptly seeking to obtain all such authorizations, consents, orders
and approvals (and in such regard use commercially reasonable efforts to cause
the relevant Government Authorities to permit the Target and/or its counsel
to
participate in the conversation and correspondence with such Government
Authorities together with Pantheon’s counsel). Without limiting the foregoing,
Pantheon shall use its commercially reasonable efforts to deliver to GM its
audited consolidated financial statements (collectively, the “Pantheon
IFRS Financial Statements”)
for
inclusion in a shareholders circular to be dispatched by GM in respect of the
special shareholders meeting for the purpose of voting on the approval of,
among
others, the Transactions contemplated under this Agreement. The Pantheon IFRS
Financial Statements shall (a) be accompanied by an unqualified opinion of
an
independent public accounting firm reasonably acceptable to GM and qualified
to
practice before the HKSE and (b) comply as to form in all material respects
with
applicable accounting requirements and the HKSE Listing Rules. The Pantheon
IFRS
Financial Statements shall not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
Section
12.5 Exclusivity;
No Other Negotiations.
(a) Pantheon
shall not take (or authorize or permit any investment banker, financial advisor,
attorney, accountant or other Person retained by or acting for or on behalf
of
Pantheon to take) directly or indirectly, any action to initiate, assist,
solicit, negotiate, or encourage any offer, inquiry or proposal from any Person:
(i) relating to the acquisition by Pantheon of that Person (regardless of
the structure of any such acquisitions) or any affiliate of that Person, or
(ii)
take any other action that is inconsistent with the Transactions and that has
the effect of avoiding the Closing contemplated hereby.
43
(b) Pantheon
shall immediately cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of the
actions set forth in Section 12.5(a) above, if applicable. Pantheon shall
promptly (i) notify the Warrantors if Pantheon receives any such proposal
or inquiry or request for information in connection with such proposal and
(ii) notify the Warrantors of the significant terms and conditions of any
such proposal including the identity of the party making the
proposal.
Section
12.6 Related
Taxes.
From
the date hereof through the Closing Date, Pantheon, consistent with past
practice, shall (i) duly and timely file all Tax Returns and other
documents required to be filed by it with applicable Governmental Authorities,
the failure to file of which could have a Material Adverse Effect on Pantheon,
subject to extensions permitted by law and properly granted by the appropriate
authority; provided,
that
Pantheon promptly notifies the Target that Pantheon is availing itself of such
extensions, and (ii) pay all Taxes shown as due on such Tax
Returns.
Section
12.7 Valid
Issuance of Pantheon Cayman Shares.
Pantheon shall ensure that the authorized share capital of Pantheon Cayman
be
sufficient to enable Pantheon Cayman to issue the Pantheon Cayman Shares to
the
Selling Shareholders pursuant to the Share Exchange and to meet its obligations
under the CSC Employee Options and the Pantheon Cayman Stock Rights issued
and
outstanding as of such time. At the Closing, the Pantheon Cayman Shares to
be
issued to the Selling Shareholders hereunder will be duly authorized, validly
issued, fully paid and nonassessable and, when issued and delivered in
accordance with the terms hereof for the consideration provided for herein,
will
be validly issued and will constitute a valid, binding and enforceable
obligation of Pantheon Cayman in accordance with their terms and will have
been
issued in compliance with all applicable federal and state securities
laws.
ARTICLE
XIII
Additional
Agreements and Covenants
Section
13.1 Disclosure
Schedules.
Each of
the Parties shall, as of the Closing Date, have the obligation to supplement
or
amend its respective Disclosure Schedules being delivered concurrently with
the
execution of this Agreement and annexes and exhibits hereto with respect to
any
matter hereafter arising or discovered which resulted in, or could reasonably
be
expected to result in a Material Adverse Effect on such Party. The obligations
of the Parties to amend or supplement their respective Disclosure Schedules
being delivered herewith shall terminate on the Closing Date. Notwithstanding
any such amendment or supplementation, the representations and warranties of
the
Parties shall be made with reference to the Disclosure Schedules as they exist
at the time of execution of this Agreement.
44
Section
13.2 Confidentiality.
Between
the date hereof and the Closing Date, each of Pantheon and the Warrantors shall
hold and shall cause its Representatives to hold in strict confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law or by the rules and regulations of, or pursuant to any
agreement, rules or regulations of, the relevant stock exchange or trading
system, all documents and information concerning the other Party furnished
to it
by such other Party or its Representatives in connection with the Transactions,
except to the extent that such information can be shown to have been
(a) previously known by the Party to which it was furnished, (b) in
the public domain through no fault of such Party, or (c) later lawfully
acquired by the Party to which it was furnished from other sources, which source
is not a Representative of the other Party, and each Party shall not release
or
disclose such information to any other Person, except its Representatives in
connection with this Agreement. Each Party shall be deemed to have satisfied
its
obligations to hold confidential information concerning or supplied by the
other
Party in connection with the Transactions, if it exercises the same care as
it
takes to preserve confidentiality for its own similar information. For the
avoidance of doubt, any disclosure of information required to be included by
Pantheon or the Warrantors in their respective filings with the SEC as required
by the applicable laws will not be a violation of this Section
13.2.
Section
13.3 Public
Announcements.
From
the date of this Agreement until the Closing or termination of this Agreement,
Pantheon and each of the Warrantors shall cooperate in good faith to jointly
prepare all press releases and public announcements pertaining to this Agreement
and the Transactions governed by it, and none of the foregoing shall issue
or
otherwise make any public announcement or communication pertaining to this
Agreement or the Transactions without the prior consent of Pantheon (in the
case
of Warrantors) or any Warrantors (in the case of Pantheon), except as required
by Law or by the rules and regulations of, or pursuant to any agreement, rules
or regulations of, the relevant stock exchange or trading system. Each Party
will not unreasonably withhold approval from the others with respect to any
press release or public announcement. If any Party determines with the advice
of
counsel that it is required to make this Agreement and the terms of the
Transactions public or otherwise issue a press release or make public disclosure
with respect thereto, it shall, at a reasonable time before making any public
disclosure, consult with the other Parties regarding such disclosure, seek
such
confidential treatment for such terms or portions of this Agreement or the
transaction as may be reasonably requested by the other Parties and disclose
only such information as is legally compelled to be disclosed. This provision
will not apply to communications by any Party to its counsel, accountants and
other professional advisors.
Section
13.4 Organization
Documents Amendments; Board Composition.
(a) Effective
the Closing Date, Pantheon Cayman shall amend its Organization Documents to:
(i)
increase its authorized share capital to 1,000,000,000 shares of Common Stock;
(ii) change its name as described in the preamble to this Agreement; and (iii)
change the size of its board of directors to between five (5) and seven (7)
members.
(b) Effective
the Closing Date, the current directors of Pantheon shall appoint (i) Xxxxxx
Xxxx and Xxxx Xxxxx to serve as executive directors of Pantheon Cayman (ii)
Xxxx
Xxxx to serve as a non-executive director of Pantheon Cayman and (iii) certain
other persons to be selected and nominated by the Target such that a majority
of
the Combined Board will consist of independent directors, of which one shall
have U.S. GAAP experience. Simultaneously therewith, all other current directors
of Pantheon shall resign as directors of the Pantheon Board.
45
(c) Effective
the Closing Date or as soon as practicable thereafter, Pantheon Cayman shall
adopt an employee stock option plan with terms and conditions substantially
similar to the terms and conditions of the CSC Option Scheme (the “Pantheon Cayman
Option Scheme”).
Section
13.5 Fees
and Expenses.
Except
as expressly provided in Article XVI, in the event that there is no Closing
of
the Transactions contemplated by this Agreement, all fees and expenses incurred
in connection with this Agreement shall be paid by the Party incurring such
fees
or expenses.
Section
13.6 Director
and Officer Insurance.
As soon
as practicable, Pantheon shall arrange with a reputable insurance company a
tail
liability insurance policy covering Persons who are currently covered by
Pantheon’s directors and officers liability insurance policy (the “Tail
Policy”)
for
subscription by Pantheon Cayman at Closing, to the extent that, in the opinion
of Pantheon, the Tail Policy will serve the commercial needs of Pantheon
Cayman.
ARTICLE
XIV
Conditions
to Closing
Section
14.1 Warrantors
Conditions Precedent.
The
obligations of the Warrantors and Selling Shareholders to enter into and
complete the Closing are subject, at the option of the Target, to the
fulfillment on or prior to the Closing Date of the following conditions by
Pantheon, any one or more of which may be waived by the Target in
writing:
(a) Representations
and Covenants.
The
representations and warranties of the Pantheon Parties contained in this
Agreement shall be true on and as of the Closing Date, except where the failure
of such representations or warranties to be so true and correct, individually
or
in the aggregate, has not had or would not reasonably be expected to have a
Material Adverse Effect on the Pantheon Parties and each of the Pantheon Parties
shall have performed and complied in all material respects with all covenants
and agreements required by this Agreement to be performed or complied with
by
each of them on or prior to the Closing Date, and the Pantheon Parties shall
have delivered to the Target a certificate, dated the Closing Date, to the
foregoing effect.
(b) Litigation.
No
action, suit or proceeding (i) shall have been instituted before any court
or
governmental or regulatory body or instituted by any Governmental Authorities
to
restrain, modify or prevent the carrying out of the Transactions, or to seek
damages or a discovery order in connection with the Transactions, or (ii) has
or
may have, in the reasonable opinion of the Target, a Material Adverse Effect
on
Pantheon.
46
(c) No
Material Adverse Change.
There
shall not have been any occurrence, event, incident, action, failure to act,
or
transaction since December 31, 2007 which has had or is reasonably likely to
cause a Material Adverse Effect on Pantheon.
(d) Filing
of Proxy Statement/Prospectus.
Pantheon shall have filed the definitive Proxy Statement with the SEC and mailed
it to Pantheon’s stockholders.
(e) Approval
by Pantheon Board.
The
Merger shall have been approved by the Pantheon Board in accordance with Section
253 of the DGCL and the board of directors shall have approved the terms and
conditions of the Merger.
(f) Approval
by Pantheon’s Stockholders.
The
Merger and the Conversion shall have been approved by a majority of the issued
and outstanding Common Stock, voting as a group, in accordance with Section
253
of the DGCL and other applicable laws, and this Agreement and the Share Exchange
shall have been approved by the affirmative vote of the holders of a majority
of
the shares of Common Stock sold in Pantheon’s initial public offering voted at
the meeting in accordance with Pantheon Constituent Instruments, and the
aggregate number of shares of Common Stock held by public stockholders of
Pantheon who exercise their redemption rights with respect to their Common
Stock
in accordance with the Pantheon Constituent Instruments shall not constitute
twenty percent (20%) or more of the Common Stock sold in the Pantheon Public
Offering.
(g) Notice
to Trustee.
Pantheon shall have, prior to the Closing, delivered to the trustee of the
Trust
Fund instructions to disburse on the Closing Date the monies in the Trust Fund
in accordance with the documents governing the Trust Fund.
(h) Resignations.
Effective as of the Closing, the directors and officers of Pantheon who are
not
continuing directors and the officers of Pantheon Cayman shall have resigned
and
the copies of the resignation letters of such directors and officers shall
have
been delivered to Pantheon Cayman, stating, among others, that they shall have
no claim for employment compensation in any form from Pantheon except for any
reimbursement of outstanding expenses existing as of the date of such
resignation.
(i) SEC
Reports.
Each of
Pantheon, Pantheon Arizona or Pantheon Cayman, as appropriate, shall have filed
all reports and other documents required to be filed by it under the U.S.
federal securities laws through the Closing Date.
(j) OTCBB
Quotation.
Each of
Pantheon, Pantheon Arizona or Pantheon Cayman, as appropriate, shall have
maintained its status as a company whose common stock or ordinary shares, as
the
case may be, and warrants are quoted on the OTCBB and no reason shall exist
as
to why such status shall not continue immediately following the
Closing.
(k) Secretary’s
Certificate.
The
Target shall have received a certificate from Pantheon, signed by its Secretary,
certifying that the attached copies of the Pantheon Constituent Instruments
and
resolutions of the Pantheon Board approving the Agreement and the Transactions
are all true, complete and correct and remain in full force and
effect.
47
(l) Deliveries.
The
other deliveries required to be made by the Pantheon Parties in Article VI
shall
have been made by such parties.
(m) Governmental
Approvals.
Each of
Warrantors shall have timely obtained from each Governmental Authority all
approvals, waivers and consents, if any, necessary for consummation of or in
connection with this Agreement and the Transactions contemplated hereby,
including such approvals, waivers and consents as may be required under the
Cayman Islands Law and PRC Laws.
(n) Transaction
Documents.
The
Transaction Documents shall have been executed and delivered by the Pantheon
Parties.
(o) Merger
and Conversion Documents.
The
following documents shall have been executed and delivered by the Pantheon
Parties: (i) Certificate of Merger to be filed in accordance with the DGCL
as of
the Merger Effective Time; (ii) Articles of Merger to be filed in accordance
with the ARS as of the Merger Effective Time; (iii) documents required for
the
transfer of domicile of Pantheon Arizona pursuant to the ARS; and (iv) documents
required for the issuance of a certificate of registration by way of
continuation pursuant to the Cayman Companies Law.
(p) Completion
of the Merger and Conversion.
Each of
the Merger and Conversion shall have been completed.
(q) Opinions.
The
Warrantors shall have received legal opinions of the Pantheon Parties’ legal
counsel in Delaware, Arizona and Cayman Islands which opinions shall be in
form
and substance reasonably satisfactory to the Warrantors.
(r) Certificate
of Good Standing.
The
Warrantors shall have received a certificate of good standing under the
applicable Law of each of the Pantheon Parties.
(s) Injunctions
or Restraints on Conduct of Business.
No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal or regulatory
restraint provision limiting or restricting any Pantheon Party’s conduct or
operation of the business of the Pantheon Parties following the Share Exchange
shall be in effect, nor shall any proceeding brought by an administrative agency
or commission or other Governmental Authority, domestic or foreign, seeking
the
foregoing be pending.
(t) SEC
Actions.
No
formal or informal SEC investigation or proceeding shall have been initiated
by
the SEC against any of the Pantheon Parties or any of their officers or
directors.
(u) Approval
by GM’s Shareholders.
All
necessary approvals for (i) the Transactions contemplated under this Agreement
shall have been obtained from GM’s shareholders in accordance with the HKSE
Listing Rules; (ii) GM’s spin-off proposal in relation to the transactions
contemplated under this Agreement shall have been approved by HKSE pursuant
to
the HKSE Listing Rules; (iii) the termination of the CSC Option Scheme shall
have been obtained; and (iv) implementing the provisions of Section 5.2 shall
have been obtained.
48
Section
14.2 Pantheon
Conditions Precedent.
The
obligations of Pantheon to enter into and complete the Closing are subject,
at
the option of Pantheon, to the fulfillment on or prior to the Closing Date
of
the following conditions by each of the Warrantors, any one or more of which
may
be waived by Pantheon in writing:
(a) Representations
and Covenants.
The
representations and warranties of the Warrantors contained in this Agreement
shall be true on and as of the Closing Date, except where the failure of such
representations or warranties to be so true and correct, individually or in
the
aggregate, has not had or would not reasonably be expected to have a Material
Adverse Effect on the Warrantors and each of the Warrantors shall have performed
and complied in all material respects with all covenants and agreements required
by this Agreement to be performed or complied with by each of them on or prior
to the Closing Date, and the Warrantors shall have delivered to Pantheon a
certificate, dated the Closing Date, to the foregoing effect.
(b) Litigation.
No
action, suit or proceeding (i) shall have been instituted before any court
or
governmental or regulatory body or instituted by any Governmental Authorities
to
restrain, modify or prevent the carrying out of the Transactions, or to seek
damages or a discovery order in connection with such Transactions, or (ii)
has
or may have, in the reasonable opinion of Pantheon, a Material Adverse Effect
on
the Target.
(c) No
Material Adverse Change.
There
shall not have been any occurrence, event, incident, action, failure to act,
or
transaction since March 31, 2008 which has had or is reasonably likely to cause
a Material Adverse Effect on any of the Warrantors.
(d) Approval
by Pantheon Board.
The
Merger shall have been approved by the Pantheon Board in accordance with Section
253 of the DGCL and the board of directors shall have approved the terms and
conditions of the Merger.
(e) Approval
by Pantheon’s Stockholders.
The
Merger and the Conversion shall have been approved by a majority of the issued
and outstanding Common Stock, voting as a group, in accordance with Section
253
of the DGCL and other applicable laws, and this Agreement and the Share Exchange
shall have been approved by the affirmative vote of the holders of a majority
of
the shares of Common Stock sold in Pantheon’s initial public offering voted at
the meeting in accordance with Pantheon Constituent Instruments, and the
aggregate number of shares of Common Stock held by public stockholders of
Pantheon who exercise their redemption rights with respect to their Common
Stock
in accordance with the Pantheon Constituent Instruments shall not constitute
twenty percent (20%) or more of the Common Stock sold in the Pantheon Public
Offering.
(f) Delivery
of Target Interim Financial Statements.
The
Target shall have furnished Pantheon the Target Interim Financial Statements
for
the quarter ended June 30, 2008, which shall have been prepared in accordance
with U.S. GAAP applied on a consistent basis throughout the period
involved.
49
(g) Opinions.
Pantheon shall have received legal opinions of the Target’s legal counsel in the
PRC and the Cayman Islands, which opinions shall be in form and substance
reasonably satisfactory to Pantheon.
(h) Officer’s
Certificate.
Pantheon shall have received a certificate from each of the Warrantors signed
by
an authorized officer or representative of such Party, respectively, certifying
that the attached copies of each such Party’s constituent instruments and
resolutions or other authorizing documents approving the Agreement and the
Transactions are all true, complete and correct and remain in full force and
effect.
(i) Certificate
of Good Standing.
Pantheon shall have received a certificate of good standing or equivalent under
the applicable Law of the Target.
(j) Injunctions
or Restraints on Conduct of Business.
No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal or regulatory
restraint provision limiting or restricting the Target’s conduct or operation of
its business or the business of any of its Subsidiaries following the Share
Exchange shall be in effect, nor shall any proceeding brought by an
administrative agency or commission or other Governmental Authority, domestic
or
foreign, seeking the foregoing be pending.
(k) Deliveries.
All
other deliveries required to be made by the Warrantors in Article VI shall
have
been made by them.
(l) Transaction
Documents.
The
Transaction Documents shall have been executed and delivered by the
Warrantors.
(m) [RESERVED].
(n) [RESERVED].
(o) SEC
Actions.
No
formal or informal SEC investigation or proceeding shall have been initiated
or
sent by the SEC against any of the Pantheon Parties or any of their officers
or
directors.
ARTICLE
XV
Indemnification
Section
15.1 Survival.
All of
the representations and warranties of the Parties contained in this Agreement
shall survive the Closing for a period of twelve (12) months and shall
thereafter be of no further force and effect; provided,
however,
that
(a) the representations and warranties contained in Article VII and in Sections
8.2, 8.3, 9.1(a), 9.2, and 9.3 (the “Basic
Representations”)
shall
survive the Closing for a period equal to any applicable statute of limitations,
and (b) the representations and warranties contained in Section 8.17, 8.24,
8.32
and 9.24 shall survive the Closing for a period equal to any applicable statute
of limitations (including any waivers or extensions thereof) plus 60 days.
All
of the covenants and obligations of the Parties contained in this Agreement
shall survive the Closing unless they expire sooner in accordance with their
terms. The term during which any representation, warranty, or covenant survives
hereunder is referred to as the “Survival
Period.”
Except
as expressly provided in this paragraph, no claim for indemnification hereunder
may be made after the expiration of the Survival Period.
50
Section
15.2 Indemnification
by the Warrantors.
The
Warrantors shall, subject to the terms hereof, jointly and severally indemnify,
defend and hold harmless Pantheon (which term, for the purposes of this Article
XV shall include any of Pantheon’s successors) and permitted assigns (the
“Pantheon
Indemnified Parties”)
from
and against any liabilities, loss, claims, damages, fines, penalties, expenses
(including costs of investigation and defense and reasonable attorneys’ fees and
court costs) (collectively, “Damages”)
arising from: (i) any breach of any representation or warranty made by the
Warrantors in Article VIII hereof or in any certificate delivered by the
Warrantors pursuant to this Agreement; or (ii) any breach by any Warrantor
of
its covenants or obligations in this Agreement to be performed or complied
with
by such Warrantor at or prior to the Closing.
Section
15.3 Indemnification
by the Selling Shareholders.
The
Selling Shareholders shall, subject to the terms hereof, severally but not
jointly, indemnify, defend and hold harmless the Pantheon Indemnified Parties
from and against any Damages arising from: (i) any breach of any representation
or warranty made by the Selling Shareholders in Article VII hereof or in any
certificate delivered by the Selling Shareholders pursuant to this Agreement;
and (ii) any breach by any Selling Shareholder of its covenants or obligations
in this Agreement to be performed or complied with by such Selling Shareholder
at or prior to the Closing.
Section
15.4 Indemnification
by the Pantheon Parties.
The
Pantheon Parties shall, subject to the terms hereof, jointly and severally
indemnify, defend and hold harmless the Warrantors and the Selling Shareholders
(the “Shareholder
Indemnified Parties”)
from
and against any Damages arising from any breach of any representation or
warranty made by the Pantheon Parties in Article IX hereof or in any certificate
delivered by the Pantheon Parties pursuant to this Agreement.
Section
15.5 Limitations
on Indemnity.
Notwithstanding any other provision in this Agreement to the contrary, the
Pantheon Indemnified Parties shall not be entitled to indemnification pursuant
to Section 15.2, unless and until the aggregate amount of Damages to the
Pantheon Indemnified Parties with respect to such matters under Section 15.2
or
15.3 collectively exceeds US$5,000,000 (the “Deductible”).
The
aggregate amount of Damages of the Warrantors under this Agreement shall not
exceed US$17,000,000 (the “Cap”).
The
amount payable by any Selling Shareholder pursuant to Section 15.3 shall not
exceed the market value of the Pantheon Cayman Shares received by the Selling
Shareholder on the Closing Date.
51
Section
15.6 Defense
of Third Party Claims.
If any
Pantheon Indemnified Party or Shareholder Indemnified Party determines to make
a
claim for indemnification under Section 15.2, 15.3 or 15.4 (each an
“Indemnitee”),
Pantheon or GM, as applicable, shall notify the indemnifying party (an
“Indemnitor”)
of the
claim in writing promptly after receiving notice of any action, lawsuit,
proceeding, investigation, demand or other claim against the Indemnitee (if
by a
third party), describing the claim, the amount thereof (if known and
quantifiable) and the basis thereof in reasonable detail (such written notice,
an “Indemnification
Notice”);
provided that the failure to so notify an Indemnitor shall not relieve the
Indemnitor of its obligations hereunder except to the extent that (and only
to
the extent that) such failure shall have caused the damages for which the
Indemnitor is obligated to be greater than such damages would have been had
the
Indemnitee given the Indemnitor prompt notice hereunder. Any Indemnitor shall
be
entitled to participate in the defense of such action, lawsuit, proceeding,
investigation or other claim giving rise to an Indemnitee’s claim for
indemnification at such Indemnitor’s expense, and at its option shall be
entitled to assume the defense thereof by appointing a reputable counsel
reasonably acceptable to the Indemnitee to be the lead counsel in connection
with such defense; provided,
that
the Indemnitee shall be entitled to participate in the defense of such claim
and
to employ counsel of its choice for such purpose; provided,
however,
that
the fees and expenses of such separate counsel shall be borne by the Indemnitee
and shall not be recoverable from such Indemnitor under this Article XV. If
the
Indemnitor shall control the defense of any such claim, the Indemnitor shall
be
entitled to settle such claims; provided,
that
the Indemnitor shall obtain the prior written consent of the Indemnitee (which
consent shall not be unreasonably withheld, conditioned or delayed) before
entering into any settlement of a claim or ceasing to defend such claim if,
pursuant to or as a result of such settlement or cessation, injunctive or other
equitable relief will be imposed against the Indemnitee or if such settlement
does not expressly and unconditionally release the Indemnitee from all
liabilities and obligations with respect to such claim. If the Indemnitor
assumes such defense, the Indemnitor shall not be liable for any amount required
to be paid by the Indemnitee that exceeds, where the Indemnitee has unreasonably
withheld or delayed consent in connection with the proposed compromise or
settlement of a third party claim, the amount for which that third party claim
could have been settled pursuant to that proposed compromise or settlement.
In
all cases, the Indemnitee shall provide its reasonable cooperation with the
Indemnitor in defense of claims or litigation, including by making employees,
information and documentation reasonably available. If the Indemnitor shall
not
assume the defense of any such action, lawsuit, proceeding, investigation or
other claim, the Indemnitee may defend against such matter as it deems
appropriate; provided that the Indemnitee may not settle any such matter without
the written consent of the Indemnitor (which consent shall not be unreasonably
withheld, conditioned or delayed) if the Indemnitee is seeking or will seek
indemnification hereunder with respect to such matter.
Section
15.7 Determining
Damages.
The
amount of Damages subject to indemnification under Section 15.2 shall be
calculated net of (i) any Tax Benefit inuring to the Indemnitee on account
of
such Damages, (ii) any reserves set forth in any of the Target Financial
Statements or the Target Interim Financial Statements relating to such Damages
and (iii) any insurance proceeds or other amounts under indemnification
agreements received or receivable by the Indemnitee on account of such Damages.
If the Indemnitee receives a Tax Benefit on account of such Damages after an
indemnification payment is made to it, the Indemnitee shall promptly pay to
the
Person or Persons that made such indemnification payment the amount of such
Tax
Benefit at such time or times as and to the extent that such Tax Benefit is
realized by the Indemnitee. For purposes hereof, “Tax
Benefit”
shall
mean any refund of Taxes to be paid or reduction in the amount of Taxes which
otherwise would be paid by the Indemnitee, in each case computed at the highest
marginal tax rates applicable to the recipient of such benefit. To the extent
Damages are recoverable by insurance, the Indemnitees shall take all
commercially reasonable efforts to obtain maximum recovery from such insurance.
In the event that an insurance or other recovery is made by any Indemnitee
with
respect to Damages for which any such Person has been indemnified hereunder,
then a refund equal to the aggregate amount of the recovery shall be made
promptly to the Person or Persons that provided such indemnity payments to
such
Indemnitee. The Indemnitors shall be subrogated to all rights of the Indemnitees
in respect of Damages indemnified by the Indemnitors. The Indemnitees shall
take
all commercially reasonable efforts to mitigate all Damages upon and after
becoming aware of any event which could reasonably be expected to give rise
to
Damages. For Tax purposes, the Parties agree to treat all payments made under
this Article XV as adjustments to the consideration received for the Target
Shares.
52
Section
15.8 Right
of Setoff.
To the
extent that any Party is obligated to indemnify any other Party after Closing
under the provisions of this Article XV for Damages reduced to a monetary
amount, such Party after Closing shall have the right to decrease any amount
due
and owing or to be due and owing under any agreement with the other Party,
whether under this Agreement or any other agreement between such Parties on
the
one hand, and any of the other Party or any of their respective Affiliates,
Subsidiaries or controlled persons or entities on the other.
Section
15.9 Limitation
on Recourse; No Third Party Beneficiaries.
(a) No
claim
shall be brought or maintained by any Party or its respective successors or
permitted assigns against any officer, director, partner, member, agent,
representative, Affiliate, equity holder, successor or permitted assign of
any
Party which is not otherwise expressly identified as a Party, and no recourse
shall be brought or granted against any of them, by virtue of or based upon
any
alleged misrepresentation or inaccuracy in or breach of any of the
representations, warranties, covenants or obligations of any Party set forth
or
contained in this Agreement or any exhibit or schedule hereto or any certificate
delivered hereunder.
(b) The
provisions of this Article XV are for the sole benefit of the Parties and
nothing in this Article XV, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Article XV.
ARTICLE
XVI
Termination
Section
16.1 Methods
of Termination.
Unless
waived by the Parties hereto in writing, the Transactions may be terminated
and/or abandoned at any time but not later than the Closing:
(a) by
mutual
written consent of the Parties;
(b) by
either
Pantheon or the Warrantors, if the Closing has not occurred by the later of
(i)
December 14, 2008, (ii) such other date as the shareholders of Pantheon may
agree to extend the corporate existence of Pantheon or (iii) such other date
that has been agreed by the Parties in writing;
53
(c) by
the
Warrantors, if there has been a breach by the Pantheon Parties of any
representation, warranty, covenant or agreement contained in this Agreement
which has prevented the satisfaction of the conditions to the obligations of
the
Warrantors at the Closing under Section 14.1(a) and such violation or breach
has
not been waived by the Warrantors or cured by the Pantheon Parties within ten
(10) business days after written notice thereof from the
Warrantors;
(d) by
Pantheon, if there has been a breach by any Warrantor of any representation,
warranty, covenant or agreement contained in this Agreement which has prevented
the satisfaction of the conditions to the obligations of the Pantheon Parties
at
the Closing under Section 14.2(a) and such violation or breach has not been
waived by the Pantheon Parties or cured by the Warrantors within ten (10)
business days after written notice thereof from the Pantheon
Parties;
(e) by
the
Warrantors, if the Pantheon Board (or any committee thereof) shall have failed
to recommend or shall have withdrawn or modified in a manner adverse to the
Warrantors its approval or recommendation of this Agreement and the
Transactions;
(f) by
either
Pantheon or the Warrantors, if, at the Pantheon Stockholders Meeting (including
any adjournments thereof), the Merger shall fail to be approved by a majority
of
the outstanding Common Stock, voting as a group, in accordance with Section
253
of the DGCL, and/or this Agreement and the Share Exchange contemplated hereby
shall fail to be approved and adopted by the affirmative vote of the holders
of
a majority of the shares of Common Stock sold in the Pantheon Public Offering
voted at the meeting in accordance with Pantheon Constituent Instruments, or
the
aggregate number of shares of Common Stock held by public stockholders of
Pantheon who exercise their redemption rights with respect to their Common
Stock
in accordance with the Pantheon Constituent Instruments shall constitute twenty
percent (20%) or more of the Common Stock sold in Pantheon Public
Offering.
Section
16.2 Effect
of Termination.
(a) In
the
event of termination and abandonment by either Pantheon or the Warrantors,
or
all of them, pursuant to Section 16.1 hereof, written notice thereof shall
forthwith be given to the other Party, and except as set forth in this Article
XVI, all further obligations of the Parties shall terminate, no Party shall
have
any right against the other Party hereto, and each Party shall bear its own
costs and expenses.
(b) If
the
Transactions contemplated by this Agreement are terminated and/or abandoned
as
provided herein:
(i) each
Party hereto shall destroy all documents, work papers and other material (and
all copies thereof) of the other Party relating to the Transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the Party
furnishing the same; and
(ii) all
confidential information received by either Party hereto with respect to the
business of the other Party hereto shall be treated in accordance with Section
13.2 hereof, which shall survive such termination or abandonment. The following
other provisions shall survive termination of this Agreement: Article XVI and
Article XVII.
54
ARTICLE
XVII
Miscellaneous
Section
17.1 Notices.
All
notices, requests, claims, demands and other communications under this Agreement
shall be in writing and shall be deemed given upon receipt by the Parties at
the
addresses set forth on the signature pages and Schedule I hereto (or at such
other address for a Party as shall be specified in writing to all other
Parties).
Section
17.2 Amendments;
Waivers; Additional Selling Shareholders.
No
provision of this Agreement may be waived or amended except in a written
instrument signed by all of the Parties hereto. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall
be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof,
nor
shall any delay or omission of any Party to exercise any right hereunder in
any
manner impair the exercise of any such right. The Selling Shareholders named
in
Schedule I hereto who shall have executed and delivered a counterpart signature
page to each other Party on the date hereof shall be the initial Selling
Shareholders and Parties to this Agreement, shall at a minimum hold at least
50.25% of the total outstanding Target Shares and shall be indicated as Selling
Shareholders in the appropriate column of Schedule I; provided
however
that
each other Shareholder of Target who shall at any time after such date and
prior
to the Closing Date execute and deliver a counterpart signature page hereto
shall become a Selling Shareholder and the appropriate indication shall be
made
in such column of Schedule I without affecting any of the rights, duties or
obligations of the other Parties hereto, except solely insofar as such Selling
Shareholder shall have become a Party hereto.
Section
17.3 No
Fractional Shares.
No
fractional shares of Pantheon Arizona Securities shall be issued in connection
with the Merger and no fractional shares of Pantheon Cayman Securities shall
be
issued in connection with the Conversion. No certificates or scrip for any
such
fractional shares shall be issued. Any shareholder of Pantheon Securities who
would otherwise be entitled to receive a fraction of a share of Pantheon Arizona
Securities and/or Pantheon Cayman Securities (after aggregating all fractional
shares of Pantheon Arizona Securities and/or Pantheon Cayman Securities issuable
to such holder) shall, in lieu of such fraction of a share, be paid in cash
the
dollar amount (rounded to the nearest whole cent), without interest, determined
by multiplying such fraction by the closing bid price of a share of Pantheon
Cayman Securities on the OTCBB, or such other public trading market on which
Pantheon Cayman Securities may be trading at such time, at the Conversion
Effective Time.
Section
17.4 Lost,
Stolen or Destroyed Certificates.
In the
event any certificates representing the Pantheon Securities shall have been
lost, stolen or destroyed, Pantheon Cayman shall issue in exchange for such
lost, stolen or destroyed certificates upon the making of an affidavit of that
fact by the holder thereof, such shares of Pantheon Cayman Securities, as may
be
required pursuant to Article IV; provided,
however,
that
Pantheon Cayman may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificates to deliver a bond in such sum as it may reasonably direct as
indemnity against any claim that may be made against Pantheon Cayman with
respect to the certificates alleged to have been lost, stolen or
destroyed.
55
Section
17.5 Adjustments
to Initial Equity Payment.
The
Initial Equity Payment shall be adjusted to reflect appropriately the effect
of
any stock split, reverse stock split, stock dividend, extraordinary cash
dividends, reorganization, recapitalization, reclassification, combination,
exchange of shares or other like change with respect to Pantheon Securities,
occurring on or after the date hereof and prior to the Conversion Effective
Time.
Section
17.6 Withholding
Rights.
Pantheon Cayman shall be entitled to deduct and withhold from the number of
shares of Pantheon Cayman Securities or Earn-Out Warrants otherwise deliverable
under this Agreement, such amounts as Pantheon Cayman reasonably determines
are
required to be deducted and withheld with respect to such delivery and payment
under the Code or any provision of state, local, provincial or foreign tax
law.
To the extent that any amounts are so withheld all appropriate evidence of
such
deduction and withholding, including any receipts or forms required in order
for
the person with respect to whom such deduction and withholding occurred to
establish the deduction and withholding and payment to the appropriate authority
as being for its account with the appropriate authorities shall be delivered
to
the Person with respect to whom such deduction and withholding has occurred,
and
such withheld amounts shall be treated for all purposes as having been delivered
and paid to the Person otherwise entitled to the Pantheon Cayman Securities
or
Earn-Out Warrants in respect of which such deduction and withholding was made
by
Pantheon Cayman. Notwithstanding the foregoing, Pantheon Cayman, at its option,
may require any such amounts required to be deducted and withheld to be
reimbursed in cash to Pantheon Cayman prior to the issuance of the Pantheon
Cayman Securities or Earn-Out Warrants.
Section
17.7 Interpretation.
When a
reference is made in this Agreement to a Section, such reference shall be to
a
Section of this Agreement unless otherwise indicated. Whenever the words
“include,” “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation.”
Section
17.8 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 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 Transactions are fulfilled to the extent
possible.
Section
17.9 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.
56
Section
17.10 Entire
Agreement; Third Party Beneficiaries.
This
Agreement, taken together with all Exhibits, Annexes and Schedules hereto (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.
Section
17.11 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.
Section
17.12 Dispute
Resolution.
(a) All
disputes among the Parties arising out of or relating to this Agreement will
be
resolved by mandatory, binding arbitration in accordance with this Section
17.12.
(b) Before
any arbitration is commenced pursuant to this Section 17.12, the Parties must
endeavor to reach an amicable settlement of the dispute through friendly
negotiations.
(c) If
no
mutually acceptable settlement of the dispute is made within the sixty (60)
days
from the commencement of the settlement negotiation or if any Party refuses
to
engage in any settlement negotiation, any Party may submit the dispute for
arbitration.
(d) Any
arbitration commenced pursuant to this Section 17.12 will be conducted in Hong
Kong under the Arbitration Rules of the United Nations Commission on
International Trade Law by arbitrators appointed in accordance with such rules.
The arbitration and appointing authority will be the Hong Kong International
Arbitration Centre (“HKIAC”).
The
arbitration will be conducted by a panel of three arbitrators, one chosen by
the
Pantheon Representative, one chosen by the Warrantors and the third chosen
by
agreement of the two selected arbitrators; failing agreement within thirty
(30)
days prior to commencement of the arbitration proceeding, the HKIAC will appoint
the third arbitrator. The proceedings will be confidential and conducted in
English. The arbitral tribunal will have the authority to grant any equitable
and legal remedies that would be available in any judicial proceeding instituted
to resolve a disputed matter, and its award will be final and binding on the
Parties. The arbitral tribunal will determine how the Parties will bear the
costs of the arbitration. Notwithstanding the foregoing, each Party will have
the right at any time to immediately seek injunctive relief, an award of
specific performance or any other equitable relief against the other Party
in
any court or other tribunal of competent jurisdiction. During the pendency
of
any arbitration or other proceeding relating to a dispute between the Parties,
the Parties will continue to exercise their remaining respective rights and
fulfill their remaining respective obligations under this Agreement, except
with
regard to the matters under dispute.
57
Section
17.13 Assignment.
Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by any of the Parties without the prior written consent of the other
Parties. Any purported assignment without such consent shall be void. Subject
to
the preceding sentences, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the Parties and their respective successors
and assigns. Without limiting the generality of the foregoing, any covenants
of
Pantheon hereunder that are to be performed by Pantheon following the effective
date of the Conversion are covenants that will be performed by Pantheon Cayman
as the successor to Pantheon.
Section
17.14 Governing
Language.
This
Agreement shall be governed and interpreted in accordance with the English
language.
[Signature
Page Follows]
58
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
|
By:
|
/s/
Xxxx X. Xxxx
|
|
Name:
Xxxx X. Xxxx
|
|
|
Title:
Chairman and CEO
|
|
|
Address:
Suite 10-64 #9 Jianguomenwai Avenue,
Beijing,
China, 100600
|
|
|
PANTHEON
ARIZONA CORP.
|
|
|
By:
|
/s/
Xxxx X. Xxxx
|
|
Name:
Xxxx X. Xxxx
|
|
|
Title:
Director
|
|
|
Address:
Xxxxx 00-00 #0 Xxxxxxxxxxxxx Xxxxxx,
Xxxxxxx,
Xxxxx, 000000
|
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES FOR WARRANTORS FOLLOW]
59
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
|
GOLDEN
MEDITECH COMPANY LIMITED
|
|
|
By:
|
/s/
Xxxx Xxx
|
|
Name:
Xxxx Xxx
|
|
|
Title:
Chairman
|
|
|
Address:
48/F Bank of Xxxxx Xxxxx
|
|
|
0
Xxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx
|
|
|
XXXXX
CORD BLOOD SERVICES
CORPORATION
|
|
|
By:
|
/s/
Xxxx Xxx
|
|
Name:
Xxxx Xxx
|
|
|
Title:
Chairman
|
|
|
Address:
48/F Bank of China Tower
|
|
|
0
Xxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx
|
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOR THE
SELLING
SHAREHOLDERS FOLLOWS]
60
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
|
GOLDEN
MEDITECH STEM CELLS (BVI)
COMPANY
LIMITED
|
|
|
By:
|
/s/
Xxxx Xxx
|
|
Name:
Xxxx Xxx
|
|
|
Title:
Chairman
|
|
|
TREASURE
HOME INVESTMENTS
LIMITED
|
|
|
By:
|
/s/
Xxxx Xxx
|
|
Name:
Xxxx Xxx
|
|
|
Title:
Director
|
|
|
ATLANTIS
CHINA FORTUNE FUND
|
|
|
By:
|
/s/
X. Xxxxxxxx
|
|
Name:
X. Xxxxxxxx
|
|
|
Title:
Director
|
|
|
BETHELLA
INVESTMENTS LIMITED
|
|
|
By:
|
/s/
Xxxxxxx Xxxxxx Xxxx
|
|
Name:
Xxxxxxx Xxxxxx Shen
|
|
|
Title:
Director
|
|
|
CREDIT
SUISSE MANAGEMENT LLC
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
00
|
XXXXX
XXXXXXXXX HEALTH VENTURES,
FUND
VII , LP
|
|
|
By:
|
/s/
Xxxxxxxx Xxxxxxxxx
|
|
Name:
Xxxxxxxx Xxxxxxxxx
|
|
|
Title:
Managing Director
|
|
|
STATE
STREET BANK AND TRUST
COMPANY
AS TRUSTEE FOR FIRST PLAZA
GROUP
TRUST II
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
GAM
TRADING (NO. 24) INC.
|
|
|
By:
|
/s/
N. Khokhrai
|
|
Name:
N. Khokhrai
|
|
|
Title:
on behalf of GAM Trading (No. 24) Inc.
|
|
|
GREAT
AVENUE INVESTMENTS LIMITED
|
|
|
By:
|
/s/
Xxxxxxx Xxxxxx Xxxx
|
|
Name:
Xxxxxxx Xxxxxx Shen
|
|
|
Title:
Director
|
|
|
HTSS
CAPITAL LIMITED
|
|
|
By:
|
/s/
Xxxxxx X. Xxxx
|
|
Name:
Xxxxxx X. Xxxx
|
|
|
Title:
Director
|
|
|
INDUS
OPPORTUNITY MASTER FUND, LTD
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
62
|
INDUS
ASIA PACIFIC MASTER FUND, LTD.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
JAYHAWK
CHINA FUND (CAYMAN) LTD.
|
|
|
By:
|
/s/
Xxxx X. XxXxxxxx
|
|
Name:
Xxxx X. XxXxxxxx
|
|
|
Title:
President
|
|
|
KTB/UCI
CHINA VENTURES II LIMITED
|
|
|
By:
|
/s/
Xxxxx Xx
|
|
Name:
Xxxxx Xx
|
|
|
Title:
Authorized Signatory
|
|
|
MEGASTAR
MANAGEMENT (CHINA) LTD.
|
|
|
By:
|
/s/
Cui Xxx Xx
|
|
Name:
Cui Xxx Xx
|
|
|
Title:
Director
|
|
|
MUARATI
INVESTMENTS LIMITED
|
|
|
By:
|
/s/
Xxx Xxxxx
|
|
Name:
Xxx Xxxxx
|
|
|
Title:
Director
|
|
|
NEW
HORIZON CELLSTAR INVESTMENT
CO.,
LIMITED
|
|
|
By:
|
/s/
Xxxxxxxx Xx
|
|
Name:
Xxxxxxxx Xx
|
|
|
Title:
Director
|
|
63
|
STARR
INTERNATIONAL INVESTMENTS
LIMITED
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
THE
CHINA DEVELOPMENT CAPITAL
PARTNERSHIP
MASTER FUND LP acting by
Xxxxxx
Xxxxxx Investment Management Limited
as
its investment manager
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
TIME
REGION HOLDINGS LIMITED
|
|
|
By:
|
/s/
Fang, Lei
|
|
Name:
Fang, Lei
|
|
|
Title:
Director
|
|
|
TIME
GALAXY LIMITED
|
|
|
By:
|
/s/
Lu, Yungang
|
|
Name:
Lu, Yungang
|
|
|
Title:
Director
|
|
|
WEIXIAO
MEDICAL TECHNOLOGY
LIMITED
|
|
|
By:
|
/s/
Xxxxxxxx Xx
|
|
Name:
Xxxxxxxx Xx
|
|
|
Title:
Director
|
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
64
ANNEX
A
Definitions
“Acquisition
Proposal”
has
the
meaning set forth in Section 10.1(l) of the Agreement.
“Action”
has
the
meaning set forth in Section 8.12 of the Agreement.
“Affiliates”
means
any Person that directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the Person
specified. For purposes of this definition, control of a Person means the power,
direct or indirect, to direct or cause the direction of the management and
policies of such Person whether by Contract or otherwise and, in any event
and
without limitation of the previous sentence, any Person owning fifty percent
(50%) or more of the voting securities of a second Person shall be deemed
to control that second Person. For the purposes of this definition, a Person
shall be deemed to control any of his or her immediate family
members.
“Agreement”
has
the
meaning set forth in the preamble to the Agreement.
“ARS”
has
the
meaning set forth in the background to the Agreement.
“Articles
of Merger”
has
the
meaning set forth in Section 1.2 of the Agreement.
“Basic
Representations”
has
the
meaning set forth in Section 15.1 of the Agreement.
“Business
Day”
means
a
day (excluding Saturdays, Sundays and public holidays) on which commercial
banks
are generally open for banking business in the United States and Hong
Kong.
“Cap”
has
the
meaning set forth in Section 15.5 of the Agreement.
“Cayman
Companies Law”
means
the Companies Law (2007 Revision) of the Cayman Islands.
“Certificates”
has
the
meaning set forth in Section 4.3(a) of the Agreement.
“Certificate
of Merger”
has
the
meaning set forth in Section 1.2 of the Agreement.
“Closing”
has
the
meaning set forth in Section 6.1 of the Agreement.
“Closing
Date”
has
the
meaning set forth in Section 6.1 of the Agreement.
“Code”
means
the United States Internal Revenue Code of 1986, as amended.
“Combined
Board”
means
the board of directors of Pantheon Cayman following the Closing.
“Common
Stock”
means
the Common Stock of Pantheon, US$0.001 par value per share.
65
“Consent”
has
the
meaning set forth in Section 8.6 of the Agreement.
“Contract”
means
a
contract, lease, license, indenture, note, bond, agreement, permit, concession,
franchise or other instrument.
“Conversion”
has
the
meaning set forth in the background to the Agreement.
“Conversion
Effective Time”
has
the
meaning set forth in Section 2.2 of the Agreement.
“Conversion
Rights”
means
the right of holders of the Class B Common Stock voting against a business
combination to convert their shares of Class B Common stock for a pro-rata
share
of the Trust Fund, if the business combination is approved and completed.
Holders of the Class B Common Stock who exercise such Conversion Rights will
continue to have the right to exercise any warrants they may hold.
“CSC”
has
the
meaning set forth in Section 5.2 of the Agreement.
“CSC
Option Scheme”
has
the
meaning set forth in Section 5.2 of the Agreement.
“CSC
Employee Options”
has
the
meaning set forth in Section 5.2 of the Agreement.
“Damages”
has
the
meaning set forth in Section 15.2 of the Agreement.
“Deductible”
has
the
meaning set forth in Section 15.5 of the Agreement.
“DGCL”
has
the
meaning set forth in the background to the Agreement.
“Disclosure
Schedules”
means
the Target Disclosure Schedule and the Pantheon Disclosure
Schedule.
“Earn-Out
Warrants”
has
the
meaning set forth in Section 5.4 of the Agreement.
“Environment”
means
soil, land surface or subsurface strata, surface waters (including navigable
waters, ocean waters, streams, ponds, drainage basins, and wetlands),
groundwaters, drinking water supply, stream sediments, ambient air (including
indoor air), plant and animal life, and any other environmental medium or
natural resource.
“Environmental
Law”
means
any Legal Requirement that requires or relates to:
(a) advising
appropriate authorities, employees, and the public of intended or actual
releases of pollutants or hazardous substances or materials, violations of
discharge limits, or other prohibitions and of the commencements of activities,
such as resource extraction or construction, that could have significant impact
on the Environment;
(b) preventing
or reducing to acceptable levels the release of pollutants or hazardous
substances or materials into the Environment;
(c) reducing
the quantities, preventing the release, or minimizing the hazardous
characteristics of wastes that are generated;
66
(d) assuring
that products are designed, formulated, packaged, and used so that they do
not
present unreasonable risks to human health or the Environment when used or
disposed of;
(e) protecting
resources, species, or ecological amenities;
(f) reducing
to acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil, or other potentially harmful
substances;
(g) cleaning
up pollutants that have been released, preventing the threat of release, or
paying the costs of such clean up or prevention; or
(h) making
responsible parties pay private parties, or groups of them, for damages done
to
their health or the Environment, or permitting self-appointed representatives
of
the public interest to recover for injuries done to public assets.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, supplemented or otherwise
modified from time to time.
“Expenses”
means
all out-of-pocket expenses (including all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto
and
its Affiliates) incurred by a party on its behalf in connection with or related
to the authorization, preparation, diligence, negotiation, execution and
performance of this Agreement and the Transaction Documents.
“Facilities”
means
any real property, leaseholds, or other interests currently or formerly owned
or
operated by the Target or any of its Subsidiaries and any buildings, plants,
structures, or equipment (including motor vehicles, tank cars, and rolling
stock) currently or formerly owned or operated by the Target or any of its
Subsidiaries.
“FCPA”
has
the
meaning set forth in Section 8.23 of the Agreement.
“FINRA”
means
the Financial Industry Regulatory Authority, Inc.
“Form
20-F”
has
the
meaning set forth in Section 5.4(a) of the Agreement.
“GM”
has
the
meaning set forth in the preamble of the Agreement.
“GM
BVI”
means
Golden Meditech Stem Cells (BVI) Company Limited.
“Governmental
Authority”
means
any national, federal, state, provincial, local or foreign government,
governmental, regulatory or administrative authority, agency or commission
or
any court, tribunal or judicial or arbitral body of competent jurisdiction,
or
other governmental authority or instrumentality, domestic or
foreign.
“Hazardous
Material”
means
(a) any chemical, material or substance defined as or included in the definition
of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely
hazardous waste,” “restricted hazardous waste,” or “toxic substances” or words
of similar import under any applicable law or regulations, including
Environmental Laws, and (b) any other chemical, material or substance, exposure
to which is prohibited, limited or regulated by any Governmental Authority
having jurisdiction over the Target and its Subsidiaries or any of their
properties.
67
“HKIAC”
has
the
meaning set forth in Section 17.12(d) of the Agreement.
“HKSE
Listing Rules”
has
the
meaning set forth in Section 8.18(c) of the Agreement.
“HKSE”
means
The Stock Exchange of Hong Kong Limited.
“Hong
Kong”
means
the Hong Kong Special Administrative Region of the People’s Republic of
China.
“Indemnitee”
has
the
meaning set forth in Section 15.6 of the Agreement.
“Indemnitor”
has
the
meaning set forth in Section 15.6 of the Agreement.
“Indemnification
Notice”
has
the
meaning set forth in Section 15.6 of the Agreement.
“Initial
Equity Payment”
has
the
meaning set forth in Section 5.1 of the Agreement.
“Intellectual
Property Rights”
shall
have the meaning set forth in Section 8.16 of the Agreement.
“Judgment”
means
any judgment, order or decree.
“Knowledge”,
(i)
with respect to any of the Warrantors, means the actual knowledge of its
executive officers and members of its board of directors, and (ii) with respect
to Pantheon, means the actual knowledge of its executive officers and the
members of its board of directors.
“Law(s)”
means
any law, statute, ordinance, rule, regulation, order, writ, injunction or
decree.
“Legal
Requirement”
means
any federal, state, local, municipal, provincial, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance, code, edict,
decree, rule, regulation, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority
of any Governmental Authorities (or under the authority of any national
securities exchange upon which Pantheon Securities are then listed or
traded)
“Liens”
means
any liens, security interests, pledges, equities and claims of any kind, voting
trusts, shareholder agreements and other encumbrances.
“Material
Adverse Effect”
means
any event, change or effect that is materially adverse to the condition
(financial or otherwise), properties, assets, liabilities, business, operations
or results of operations of such Person and its subsidiaries, taken as a whole.
Notwithstanding the foregoing, the definition of Material Adverse Effect shall
not include events caused by (A) changes in the PRC economic conditions; (B)
changes to the economic conditions affecting the industries in which the Target
and its Subsidiaries operates; (C) changes related to or arising from the
execution, announcement or performance of, or compliance with, this Agreement
or
the consummation of the Transactions, including the impact thereof on
relationships, contractual or otherwise, governmental authorities, customers,
cooperators, suppliers, distributors or employees; (D) changes in accounting
requirements or principles or any change in applicable laws or policies or
the
interpretation thereof, or any change of the attitude of the competent
authorities; (E) the failure to meet any projections or budgets; or (F) matters
listed in the Disclosure Schedules.
68
“Material
Contract”
means
a
written Contract, as amended and supplemented to which the Target or any of
its
Subsidiaries is a party or by which any of their respective assets and
properties is currently bound, that is material to the Target’s business,
properties, assets or condition (financial or otherwise) results of operations
or prospects, including contracts that have expired by their terms or otherwise
terminated but have liabilities that continue to attach to the
Target.
“Material
Permits”
means
all Permits other than such franchises, licenses, permits, authorizations and
approvals the lack of which, individually or in the aggregate, has not had
and
would not reasonably be expected to have a Material Adverse Effect on any
Parties.
“Merger”
has
the
meaning set forth in the background to the Agreement.
“Merger
Effective Time”
has
the
meaning set forth in Section 1.2 of the Agreement.
“Money
Laundering Laws”
has
the
meaning set forth in Section 8.24 of the Agreement.
“New
Subscriber”
means
a
customer who executes an umbilical cord blood stem cells storage agreement
providing for the transportation of the subject umbilical cord blood stem cells
for testing, processing and storage in a facility operated by CSC or its
subsidiaries, affiliates or contractors; provided that such customer shall
not
be deemed to be a New Subscriber unless and until testing results have shown
that such subject umbilical cord blood stem cells are suitable for
storage.
“OTCBB”
means
the electronic Over-the-Counter Bulletin Board maintained by the
FINRA.
“OFAC”
has
the
meaning set forth in Section 8.30 of the Agreement.
“Off-balance
Sheet Arrangement”
means
with respect to any Person, any securitization transaction to which that Person
or its Subsidiaries is party and any other transaction, agreement or other
contractual arrangement to which an entity unconsolidated with that Person
is a
party, under which that Person or its Subsidiaries, whether or not a party
to
the arrangement, has, or in the future may have: (a) any obligation under a
direct or indirect guarantee or similar arrangement; (b) a retained or
contingent interest in assets transferred to an unconsolidated entity or similar
arrangement; or (c) derivatives to the extent that the fair value thereof
is not fully reflected as a liability or asset in the financial
statements.
“Option
Exchange Rate”
has
the
meaning set forth in Section 5.2 of the Agreement.
69
“Pantheon”
has
the
meaning set forth in the preamble to the Agreement.
“Pantheon
Arizona”
has
the
meaning set forth in the preamble to the Agreement.
“Pantheon
Arizona Securities”
has
the
meaning set forth in the background to the Agreement.
“Pantheon
Arizona Share(s)”
has
the
meaning set forth in the background to the Agreement.
“Pantheon
Arizona Stock Right(s)”
has
the
meaning set forth in the background to the Agreement.
“Pantheon
Board”
means
the board of directors of Pantheon prior to the Merger.
“Pantheon
Cayman”
has
the
meaning set forth in the background to the Agreement.
“Pantheon
Cayman Option Scheme”
has
the
meaning set forth in Section 13.4(c) of the Agreement.
“Pantheon
Cayman Securities”
has
the
meaning set forth in the background to the Agreement.
“Pantheon
Cayman Share(s)”
has
the
meaning set forth in the background to the Agreement.
“Pantheon
Cayman Stock Right(s)”
has
the
meaning set forth in the background to the Agreement.
“Pantheon
Cayman Warrants”
means
the securities (other than the Earn-Out Warrants) issuable by Pantheon Cayman
that are equivalent to the Warrants and has the same terms and conditions of
the
Warrants as in effect immediately prior to the Conversion.
“Pantheon
Constituent Instruments”
has
the
meaning set forth in Section 9.2 of the Agreement.
“Pantheon
Disclosure Schedule”
has
the
meaning set forth in Article IX of the Agreement.
“Pantheon
Financial Statements”
has
the
meaning set forth in Section 9.7 of the Agreement.
“Pantheon
IFRS Financial Statements”
has
the
meaning set forth in Section 12.4 of the Agreement.
“Pantheon
Indemnified Parties”
has
the
meaning set forth in Section 15.2 of the Agreement.
70
“Pantheon
Material Contract”
has
the
meaning set forth in Section 9.23(a) of the Agreement.
“Pantheon
Parties”
has
the
meaning set forth in the background to the Agreement.
“Pantheon
Public Offering”
means
the initial public offering of Pantheon completed on December 14, 2006, in
which
Pantheon sold 5,000,000 Units at a price of US$6.00 per unit and the related
subsequent exercise of the over-allotment option.
“Pantheon
Representative”
means
Xxxx Xxxx.
“Pantheon
SEC Documents”
has
the
meaning set forth in Section 9.7 of the Agreement.
“Pantheon
Securities”
has
the
meaning set forth in the background to the Agreement.
“Pantheon
Stockholders Meeting”
has
the
meaning set forth in Section 12.1 of the Agreement.
“Pantheon
Share(s)”
has
the
meaning set forth in the background to the Agreement.
“Pantheon
Stock Right(s)”
has
the
meaning set forth in the background to the Agreement.
“Party”
or
“Parties”
has
the
meaning set forth in the preamble to the Agreement.
“Permits”
means
all governmental franchises, licenses, permits, authorizations and approvals
necessary to enable a Person to own, lease or otherwise hold its properties
and
assets and to conduct its businesses as presently conducted.
“Permitted
Lien”
means
(a) any restriction on transfer arising under applicable securities law; (b)
any
Liens for Taxes not yet due or delinquent or being contested in good faith
by
appropriate proceedings for which adequate reserves have been established in
accordance with U.S. GAAP; (c) any statutory Liens arising in the ordinary
course of business by operation of Law with respect to a liability that is
not
yet due and delinquent and which are not, individually or in the aggregate,
significant; (d) zoning, entitlement, building and other land use regulations
imposed by governmental agencies having jurisdiction over the Real Property
which are not violated by the current use and operation of the Real Property;
(e) covenants, conditions, restrictions, easements and other similar matters
of
record affecting title to the Real Property which do not materially impair
the
occupancy or use of the Real Property for the purposes for which it is currently
used or proposed to be used in connection with the such relevant Person’s
business; (f) Liens identified on title policies, title opinions or preliminary
title reports or other documents or writings included in the public records;
(g)
Liens arising under worker’s compensation, unemployment insurance, social
security, retirement and similar legislation; (h) Liens of lessors and licensors
arising under lease agreements or license arrangements; and (i) those Liens
set
forth in the Target Disclosure Schedule.
“Person”
means
an individual, partnership, corporation, joint venture, unincorporated
organization, cooperative or a governmental entity or agency
thereof.
71
“PRC”
means
the People’s Republic of China, for the purposes of this Agreement, excluding
the Hong Kong Special Administrative Region and the Macao Special Administrative
Region and Taiwan.
“Proxy
Statement/Prospectus”
means
the proxy statement/prospectus to be sent to Pantheon stockholders in connection
with the Pantheon Stockholders Meeting.
“Real
Estate Leases”
has
the
meaning set forth in Section 8.15 of the Agreement.
“Real
Property”
has
the
meaning set forth in Section 8.15 of the Agreement.
“Regulation
S-K”
means
Regulation S-K promulgated under the Securities Act of 1933, as
amended.
“Representatives”
of
any
Party means such Party’s employees, accountants, auditors, actuaries, counsel,
financial advisors, bankers, investment bankers and consultants and any other
person acting on behalf of such Party.
“Restriction
Period”
has
the
meaning set forth in Section 7.12 of the Agreement.
“Xxxxxxxx-Xxxxx
Act”
has
the
meaning set forth in Section 9.14 of the Agreement.
“SEC”
means
the United States Securities and Exchange Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended, supplemented or otherwise modified
from
time to time.
“Selling
Shareholder”
and
“Selling
Shareholders”
have
the meaning set forth in the preamble to the Agreement.
“Selling
Shareholders’ Required Approvals”
has
the
meaning set forth in Section 7.5 of the Agreement
“Share
Exchange”
has
the
meaning set forth in the background to the Agreement.
“Shareholder
Approval”
has
the
meaning set forth in Section 9.6 of the Agreement.
“Subsidiary”
means
with respect to a Person an entity if (a) such Person directly or indirectly
owns, beneficially or of record, an amount of voting securities or other
interests in such entity that is sufficient to enable such Person to elect
at
leased a majority of the members of such entity’s board of directors or other
governing body, or (b) at least 50% of the outstanding equity or financial
interests of such entity such that its financial results are consolidated with
such other Person.
“Survival
Period”
has
the
meaning set forth in Section 15.1 of this Agreement.
“Surviving
Corporation”
has
the
meaning set forth in Section 1.1 of the Agreement.
“Tail
Policy”
has
the
meaning set forth in Section 13.6 of the Agreement.
72
“Tangible
Personal Property”
has
the
meaning set forth in Section 8.15(b) of the Agreement.
“Target”
has
the
meaning set forth in the preamble to the Agreement.
“Target
Balance Sheet”
has
the
meaning set forth in Section 8.7(c) of the Agreement.
“Target
Benefit Plans”
has
the
meaning set forth in Section 8.18(a) of the Agreement.
“Target
Constituent Instruments”
means
the memorandum and articles of association of the Target and each of its
Subsidiaries together with its statutory registers, each as amended to the
date
of the Agreement.
“Target
Disclosure Schedule”
has
the
meaning set forth in Article VIII of the Agreement.
“Target
Financial Statements”
has
the
meaning set forth in Section 8.7 of the Agreement.
“Target
Interim Financial Statements”
has
the
meaning set forth in Section 11.2 of the Agreement.
“Target
Shares”
has
the
meaning set forth in the background to the Agreement.
“Taxes”
includes all forms of taxation, whenever created or imposed, and whether of
the
United States or elsewhere, and whether imposed by a local, municipal,
governmental, state, foreign, federal or other Governmental Authority, or in
connection with any agreement with respect to Taxes, including all interest,
penalties and additions imposed with respect to such amounts.
“Tax
Benefit”
has
the
meaning set forth in Section 15.7 of the Agreement.
“Tax
Return”
means
all federal, state, local, provincial and foreign Tax returns, declarations,
statements, reports, schedules, forms and information returns and any amended
Tax return relating to Taxes.
“Trade
Secrets”
means
all trade secrets under applicable law and other rights in know-how and
confidential or proprietary information, processing, manufacturing or marketing
information, including new developments, inventions, processes, ideas or other
proprietary information that provides advantages over competitors who do not
know or use it.
“Transaction
Documents”
means
this Agreement and any other agreement or document to be delivered by the
Parties on the Closing Date.
“Transactions”
has
the
meaning set forth in Section 6.1 of the Agreement.
“Trust
Fund”
has
the
meaning set forth in Section 9.21 of the Agreement.
“U.S.”
or
“United
States”
means
the United States of America.
“U.S.
GAAP”
means
generally accepted accounting principles of the United States.
73
“Underwriters
Purchase Option”
means
the Option granted by Pantheon initially to the underwriters in its initial
public offering, which entitles the registered holder to purchase one Unit
at a
price of US$6.60 per Unit.
“Unit”
means
the Unit of Pantheon which
entitles the registered holder to one share of Common Stock and one
Warrant.
“Voting
Pantheon Debt”
has
the
meaning set forth in Section 9.1(c) of the Agreement.
“Voting
Target Debt”
has
the
meaning set forth in Section 8.1(b) of the Agreement.
“Warrant”
means
the Warrant of Pantheon which entitles the registered holder to purchase one
share of Common Stock at a price of US$5.00 per share, subject to
adjustment at any time commencing on the completion of a business
combination
“Warrantor”
or
“Warrantors”
has
the
meaning set forth in the Article VIII of the Agreement.
74
SCHEDULE
I
|
Selling Shareholder
|
Address
|
Number of
Pantheon
Cayman Shares
to be received
in Share
Exchange
|
Number of
Shares in
Target
|
% Holdings
|
Selling
Shareholder
|
||||||
|
Golden
Meditech Stem Cells (BVI) Company Limited
|
P.O.
Box 957
Offshore
Incorporations Centre,
Road
Town, Tortola, British Virgin Islands
|
29,068,087
|
81,347,700
|
50.25
|
%
|
√
|
|||||
|
Treasure
Home Investments Limited
|
Offshore
Incorporations Centre,
P.O.
Box 957
Road
Town, Tortola
British
Virgin Islands
|
3,573,314
|
10,000,000
|
6.18
|
%
|
√
|
|||||
|
Atlantis
China Xxxxxxx Xxxx
|
Xxxxxxx
Xxxxx
00-00
Xxxxxxxx Xxxxxx
Xxxxxx
0
|
389,134
|
1,089,000
|
0.67
|
%
|
√
|
|||||
|
Bethella
Investments Limited
|
P.O.
Box 957
Offshore
Incorporations Centre
Road
Town, Tortola
British
Virgin Islands
|
726,383
|
2,032,800
|
1.26
|
%
|
√
|
|||||
|
Credit
Suisse Management LLC
|
0000
Xxxxxxxxxxx Xxxx
Xxxxxxxxxx
Xxxxxxxx
00000
X.X.X.
|
1,815,958
|
5,082,000
|
3.14
|
%
|
||||||
|
Essex
Woodlands Health Ventures, Fund VII, LP
|
Essex
Woodlands
Health
Ventures
000
Xxxxx Xxxxxx, Xxxxx 000
Xxxx
Xxxx, XX 00000
XXX
|
1,037,690
|
2,904,000
|
1.79
|
%
|
√
|
|||||
|
State
Street Bank and Trust Company as Trustee for First Plaza Group Trust
II
|
[767
Xxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx
Xxx
Xxxx 00000
USA]
|
1,124,165
|
3,146,000
|
1.94
|
%
|
||||||
|
GAM
Trading (No.24) Inc.
|
Xxxxxxxxx
Xxxxxxxx
X.X.
Xxx 00, Xxxx Xxxx
Xxxxxxx
Xxxxxxx
Xxxxxx Xxxxxxx
|
648,557
|
1,815,000
|
1.12
|
%
|
√
|
|||||
|
Great
Avenue Investments Limited
|
P.O.
Box 957
Offshore
Incorporations Centre
Road
Town, Tortola
British
Virgin Islands
|
2,801,478
|
7,840,000
|
4.84
|
%
|
√
|
|||||
|
HTSS
Capital Limited
|
Xxxxx
0, Xxx Xxxx
Xxxx
Xxxxxx, Xxxx
Samoa
|
1,807,382
|
5,058,000
|
3.12
|
%
|
√
|
|||||
|
Indus
Opportunity Master Fund, Ltd.
|
X.X.
Xxx 000 XX
Xxxxxxx
Xxxxxx, 0xx Xxxxx
Xxxxx
Church Street
Grand
Cayman
Cayman
Islands
|
676,071
|
1,892,000
|
1.17
|
%
|
75
|
Selling Shareholder
|
Address
|
Number of
Pantheon
Cayman Shares
to be received
in Share
Exchange
|
Number of
Shares in
Target
|
% Holdings
|
Selling
Shareholder
|
||||||
|
Indus
Asia Pacific Master Fund, Ltd.
|
Indus
Capital Partners LLC
000
Xxxx 00xx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx, XX 00000
U.S.A.
|
1,014,107
|
2,838,000
|
1.75
|
%
|
||||||
|
Jayhawk
China Fund (Cayman) Ltd.
|
0000
Xxxx 00xx Xxxxx,
Xxxxx
000, Xxxxxxx
XX
00000, X.X.X.
|
2,858,651
|
8,000,000
|
4.94
|
%
|
√
|
|||||
|
KTB/UCI
China Ventures II Limited
|
Portcullis
TrustNet Xxxxxxxx
X.X.
Xxx 0000, Xxxx Xxxx
Xxxxxxx
Xxxxxxx
Xxxxxx Xxxxxxx
|
1,297,113
|
3,630,000
|
2.24
|
%
|
√
|
|||||
|
Megastar
Management (China) Ltd.
|
Drake
Xxxxxxxx, Road Town
Tortola
British
Virgin Islands
|
1,429,326
|
4,000,000
|
2.47
|
%
|
√
|
|||||
|
Muaratai
Investments Limited
|
P.O.
Box 957
Offshore
Incorporations Centre
Road
Town, Tortola
British
Virgin Islands
|
389,134
|
1,089,000
|
0.67
|
%
|
√
|
|||||
|
New
Horizon Cellstar Investment Co., Limited
|
X.X.
Xxx 0000
Xxxx
Xxxx, Xxxxxxx
Xxxxxxx
Xxxxxx Xxxxxxx
|
2,501,320
|
7,000,000
|
4.32
|
%
|
√
|
|||||
|
Starr
International Investments Limited
|
Bermuda
Commercial Bank
Building
00
Xxx Xxxxxxx Xxxx
Xxxxxxxx
XX00
Xxxxxxx
|
964,116
|
2,698,100
|
1.67
|
%
|
||||||
|
The
China Development Capital Partnership Master Fund XX
|
Xxxxxxxxxx
Mall I
Phase
I, 00 Xxxxxx Xxxxxx
Xxxxxxxx
XX 00
Xxxxxxx
|
1,124,165
|
3,146,000
|
1.94
|
%
|
||||||
|
Time
Region Holdings Limited
|
3401,
Xxxxx X
00X
Xxxxxxx Xxxx
Xxxx
Xxxx
|
409,216
|
1,145,200
|
0.71
|
%
|
√
|
|||||
|
Time
Galaxy Limited
|
P.O.
Box 957
Offshore
Incorporations Centre
Road
Town, Tortola
British
Virgin Islands
|
409,216
|
1,145,200
|
0.71
|
%
|
√
|
|||||
|
Weixiao
Medical Technology Limited
|
X.X.
Xxx 0000
Xxxx
Xxxx, Xxxxxxx
Xxxxxxx
Xxxxxx Xxxxxxx
|
1,786,657
|
5,000,000
|
3.09
|
%
|
√
|
|||||
|
Total
No. of shares
|
|
|
57,851,240
|
|
161,898,000
|
|
100.00
|
%
|
76
