Support Agreement
Exhibit 1
This SUPPORT AGREEMENT (this “Agreement”) is entered into on April 22, 2022 by and between:
| 1) | Happy Starlight Limited, a company incorporated in the British Virgin Islands and controlled by Mr. Xxxx Xxxxx (the “Lead Investor”); |
| 2) | [Please refer to “Name of the Buyer Consortium Member(s)” in Annex A], [a citizen of the [ ], whose identity card number is [ ]] [and] [a company incorporated in Cayman Islands] (a “Buyer Consortium Member”). |
Each of the Lead Investor and the Buyer Consortium Member is referred to herein individually as a “Party” and collectively as the “Parties”.
WHEREAS:
| (A) | The Lead Investor intends to, through the Buyer Consortium (as defined below), acquire all of the issued and outstanding ordinary shares of Glory Star New Media Group Holdings Limited (the “Target”), thereby privatizing the Target (the “Privatization”). |
| (B) | The Buyer Consortium Member intends to join the buyer consortium led by the Lead Investor (the “Buyer Consortium”) to participate in the Privatization. |
After friendly consultation, and intending to be legally bound hereby, the Parties hereto agree as follows:
| 1. | Exclusive Transaction and Voting Undertakings |
| 1.1 | Upon execution of this Agreement, the Buyer Consortium Member undertakes that it will, on an exclusive basis, participate in the Privatization, and will not, discuss with any other person about any potential privatization of the Target or any other similar transaction, nor will it enter into or reach any agreement or arrangement with any other person in relation thereto. |
| 1.2 | The Buyer Consortium Member undertakes to exercise, or cause to be exercised, all of the voting rights attached to the Covered Shares (as defined below) at the relevant general or special meeting of the shareholders of the Target, or in any other circumstance in which the voting, consent or other approval of all or some of the shareholders of the Target is sought, to vote in favour of the approval of the Privatization, and to vote against any competing transaction or any other action, transaction, proposal or agreement that may or is intended to prevent, hinder or in any material aspect interfere with or postpone, the Privatization. |
| 1.3 | The Buyer Consortium Member shall immediately cease, and shall cause its affiliates and the representatives of itself and its affiliates to immediately cease, any discussion or negotiation with any other person in connection with the acquisition of all or any portion of the shares or assets of the Target. From and after the date of this Agreement, the Buyer Consortium Member shall promptly notify the Lead Investor of any approach by any person (other than the Lead Investor) to the Buyer Consortium Member in relation to any potential acquisition of all or any portion of the shares or assets of the Target. |
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| 2. | Waiver of Appraisal Rights |
The Buyer Consortium Member irrevocably and unconditionally waives, and agrees to cause to be waived, any dissenters’ rights, rights of appraisal and any other similar rights with respect to the Privatization under the laws of the Cayman Islands.
| 3. | capital Contribution |
| 3.1 | The Lead Investor will form a newly established special purpose vehicle (the “Acquisition Vehicle”) for the purpose of effecting the Privatization. Upon completion of the Privatization, all members of the Buyer Consortium will collectively own 100% of the issued and outstanding share capital of the Target or the surviving company of the Privatization, either directly or indirectly through the Acquisition Vehicle (the Acquisition Vehicle or the surviving company in the Privatization (if the Acquisition Vehicle does not survive the relevant merger transaction that effects the Privatizatoin)) shall be referred to herein as the “HoldCo”). |
| 3.2 | The Shareholder shall contribute all of its Covered Shares (as defined below) to HoldCo in exchange for such number of shares of the HoldCo to be issued to the Shareholder immediately prior to completion of the Privatization. |
| 3.3 | The shareholding percentage of the Buyer Consortium Member in the delisted Target or the surviving company will be determined according to the proportion of its capital contribution amount in the form of shares of the Target (the value of which will be determined based on the final price of the Privatization) in the total amount of the capital contributions made by all Buyer Consortium members. |
| 4. | Privatization |
| 4.1 | The final terms of the Privatization, including the price per ordinary share of the Target to be paid by the Buyer Consortiutm, will be determined by the Lead Investor. |
| 4.2 | The Lead Investor may, in its sole and absolute discretion, introduce any new member to join the Buyer Consortium at any time. |
| 5. | Covered Shares |
| 5.1 | The Buyer Consortium Member undertakes that neither it nor any of its affiliates will acquire any additional equity securities of the Target, whether through open market purchase, off-market or private acquisition or otherwise, from and after the date hereof without prior written consent of the Lead Investor. |
| 5.2 | The Buyer Consortium Member undertakes that it will not, and will procure that none of its affiliates will, directly or indirectly, transfer, pledge, exchange or otherwise dispose of any equity securities of the Target held by it (including the Existing Shares (as defined below) and any equity securities of the Target acquired by it or its affiliates after the date hereof (including any equity securities of the Target acquired by the Buyer Consortium Member or its affiliate through any share dividend, distribution or other similar transaction), collectively, the “Covered Shares”) or any voting right or power or economic interest therein, or enter into any agreement to effect such transfer, pledge, exchange or disposal, in each case without the prior written consent of the Lead Investor. |
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| 5.3 | This Agreement, as well as the obligations hereunder, shall also bind upon any person who obtains the legal or beneficial ownership of any Covered Shares, including the Buyer Consortium Member’s successors or permitted transferees. |
| 6. | Representations and Warranties |
The Buyer Consortium Member represents and warrants to the Lead Investor as follows:
| 6.1 | Capacity and Authorization |
| (a) | The Buyer Consortium Member has full legal capacity, as well as all requisite powers and authorities, to enter into this Agreement, perform all its obligations hereunder, and to consummate the transaction contemplated hereby, and has obtained requisite authorization to execute and deliver this Agreement (if applicable). |
| (b) | Upon execution, the Agreement will become legally binding upon the Buyer Consortium Member. |
| 6.2 | Ownership of Shares |
| (a) | As of the date of this Agreement, the Buyer Consortium Member is the sole beneficial owner of [Please refer to “Number of Existing Shares (as of April 22, 2022)” in Annex A] ordinary shares of the Target (the “Existing Shares”), and owns good and valid title to the Existing Shares. As of the date of this Agreement, other than the Existing Shares, the Buyer Consortium Member does not hold, beneficially or legally, any ordinary shares, American depositary shares, options, warrants or restricted shares of the Target, or any convertible notes or other securities that are convertible, exercisable or exchangeable into or for any ordinary shares of the Target. |
| (b) | As of the date of this Agreement and as of completion of the Privatization, (i) the Covered Shares are and will be free and clear of all encumbrances (other than those arising under this Agreement, the articles of association of the Target or any applicable securities laws), (ii) the Buyer Consortium Member is, and will be, the sole legal and beneficial owner of the Covered Shares and (iii) the Buyer Consortium Member has, and will have, the sole power of disposition and the sole power to agree to all of the matters set forth in this Agreement with respect to the Covered Shares. The Buyer Consortium Member has not executed any voting, support or other similar agreement that is inconsistent with this Agreement but remains valid, nor will it execute any such agreement prior to the completion of the Privatization. |
| 7. | Shareholders Agreement |
Upon completion of the Privatization, the Lead Investor, the Buyer Consortium Member and the other members of the Buyer Consortium will enter into a shareholders agreement with respect to the HoldCo reflecting the key terms set forth in Schedule 1 hereto.
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| 8. | Announcement and Confidentiality |
| 8.1 | Upon execution of this Agreement, the Buyer Consortium Member may not, nor may it allow any of its affiliates, to publish any announcement or make any other public statement with respect to this Agreement, the transactions contemplated hereby or any other matter in relation hereto without the prior written consent of the Lead Investor. |
| 8.2 | Upon execution of this Agreement, the Buyer Consortium Member undertakes that it will, and will cause its affiliates, keep strict confidential all the information received or obtained by it or them in connection with the execution or performance of this Agreement or the transactions contemplated hereby (the “Confidential Information”), and will not disclose any Confidential Information to any other person, or directly or indirectly allow any other person to use such Confidential Information, without the prior written consent of the Lead Investor. |
| 8.3 | Notwithstanding the provisions of Clauses 8.1 and 8.2 above, the Buyer Consortium Member and its affiliates may make certain disclosure in any of the following circumstances: |
| (a) | any disclosure required to be made by the Buyer Consortium Member in accordance with applicable laws or requirements of any regulatory authority or stock exchange with competent jurisdiction; or |
| (b) | any disclosure required to be made by the Target in its filings with the U.S. Securities and Exchange Commission in connection with the Privatization in accordance with applicable laws and regulations . |
| 9. | Costs and Expenses |
| 9.1 | The Lead Investor shall have the sole and absolute discretion to designate and engage, on behalf of the Buyer Consortium, any financial, legal or other advisors in connection with the Privatization. |
| 9.2 | All fees, costs and expenses (including all fees and disbursements charged by external advisors) incurred by the Lead Investor on behalf of the Buyer Consortium in connection with the Privatization will be (i) borne by the HoldCo, in the event the Privatization is consummated, or (ii) shared by the Buyer Consortium Member in proportion to the ownership interest it holds in the Target on the execution date of this Agreement, in the event that the Privatization fails to be consummated. |
| 10. | Termination |
This Agreement may be terminated by the Lead Investor unilaterally at any time.
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| 11. | Specific Performance |
The Buyer Consortium Member hereby acknowledges that the obligations imposed on it under this Agreement are specific, unique and of special nature, and that if any term hereof fails to be performed in accordance with its specific provisions, or is otherwise violated, it will cause irreparable damages to the Lead Investor. In consideration of the foregoing,
| (a) | the Lead Investor is entitled to one or more injunctions, specific performance and/or other equitable remedies in order to prevent the Buyer Consortium Member from violating, or potentially violating, this Agreement; and |
| (b) | the Buyer Consortium Member hereby waives the requirement for the posting of any bond or similar collaterals in connection with the above-mentioned remedies. |
| 12. | Assignment |
| 12.1 | The Lead Investor may assign its rights and/or obligations hereunder to its affiliates. |
| 12.2 | Unless permitted under this Clause 12, neither Party may transfer or assign any rights or obligations hereunder without the prior written consent of the other Party. |
| 13. | General |
| 13.1 | Any alteration, modification or amendment of or to this Agreement may not be effective unless and until signed by the Parties in writing. |
| 13.2 | If any provision of this Agreement, or the application thereof in any circumstance, is held invalid or unenforceable, the remainder of this Agreement, and the validity or enforceability of the application of such provision in any other circumstances, shall not be affected by such invalidity or unenforceability. |
| 14. | Entire Agreement |
| 14.1 | This Agreement constitutes the sole and entire agreement between the Lead Investor or any of its affiliates, on the one hand, and the Buyer Consortium Member or any of its affiliates, on the other hand, with respect to the subject matter contained herein, and supersedes all understandings and agreements, written or oral, with respect to such subject matter. |
| 15. | Dispute Resolution |
| 15.1 | This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to the conflicts of law principles thereof. Notwithstanding the foregoing, the following matters arising out of or relating to this Agreement shall be construed, performed and enforced in accordance with the laws of the Cayman Islands: the Privatization, the rights provided in Section 238 of the Companies Law (2018 Revision) of the Cayman Islands, and internal corporate affairs of the Target. |
| 15.2 | Any dispute arising out of or in connection with this Agreement, including but not limited to the execution, binding effect, performance, interpretation, liability for breach, amendment and termination of this Agreement, shall be submitted to Hong Kong International Arbitration Centre (“HKIAC”) and resolved in accordance with the Arbitration Rules of HKIAC in force at the time. The place of arbitration shall be Hong Kong. The award of the arbitration tribunal shall be final and binding upon the Parties. |
(Remainder of Page Intentionally Left Blank)
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Signature Page
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
| Lead Investor： | ||
| Happy Starlight Limited | ||
| By: | ||
| Name: | Xxxx Xxxxx | |
| Buyer Consortium Member： | ||
| [name of the Buyer Consortium Member] | ||
| By: | ||
| Name: | [name of the Buyer Consortium Member] | |
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Annex A
Particulars for the Buyer Consortium Member(s) who executed the Support Agreements dated April 22, 2022
| Name of the Buyer Consortium Member(s) | Number of Existing Shares (as of April 22, 2022) |
| Xxx Xx and Enjoy Starlight Limited | 6,554,281 |
| Xxxxxxx Xxxxx and Wealth Starlight Limited | 4,222,119 |
| Xxx Xxxxx | 720,595 |
| Xxx Xxx | 3,362,521 |
| Xxxxxxx Xx and Lilly Starlight Limited | 967,232 |
| Xxxx Xxx | 500,000 |
| Xxxxxxx Xxx | 2,353,068 |
| Xxxxxxxx Xxxxx | 1,334,299 |
| Xxx Xx | 1,025,348 |
| Xxxxxxx Xxxx | 1,000,000 |
| Ailin Xin | 257,525 |
