Contract
Exhibit
10.7
THIS
NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
THIS
NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR U.S. FEDERAL
INCOME TAX PURPOSES. FOR INFORMATION CONCERNING THE ISSUE PRICE, THE
AMOUNT OF OID, AND THE YIELD TO MATURITY, PLEASE CONTACT XXXX XXXXXX, CHAIRMAN
OF THE COMPANY, AT (x00 000 0000 0000) WHO WILL PROMPTLY MAKE THIS INFORMATION
AVAILABLE UPON REQUEST.
PROMISSORY
NOTE
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US
$
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FOR VALUE
RECEIVED, China Networks Media, Ltd., a company registered under the laws of the
British Virgin Islands (“Company”), promises
to pay to
(“Investor”), or its
registered assigns, in lawful money of the United States of America the
principal sum of US
(US $
), or such lesser amount as shall equal the outstanding principal amount
hereof (the “Principal
Amount”), together with interest from the earlier of
, or the date of this Note on the unpaid Principal Amount at a rate
equal to ten percent (10.0%) per annum, computed on the basis of the actual
number of days elapsed and a year of 360 days.
Interest
on this Note shall be payable annually in arrears. The Principal
Amount evidenced hereby and all other amounts outstanding hereunder shall be due
and payable as follows: (i) in the event that the Business Combination is
consummated, the entire outstanding Principal Amount, together with any then
unpaid and accrued interest thereon and other amounts payable hereunder, shall
be due and payable upon the tenth (10th) day
following the closing of the Business Combination; or (ii) in the event that the
Business Combination is not consummated by March 31, 2009, (A) one-half of
the Principal Amount eighteen (18) months after the issuance date of this Note
and (B) the remaining one-half of the Principal Amount thirty-six (36) months
after the issuance date of this Note, each such payment together with any then
unpaid and accrued interest thereon and other amounts payable hereunder, or
(iii) when, upon or after the earlier occurrence of an Event of Default (as
defined below), such amounts are declared due and payable by Investor or made
automatically due and payable in accordance with the terms hereof. To
the extent required to do so, Company shall cause its subsidiaries to dividend
to Company amounts sufficient to satisfy in full all monetary obligations due
hereunder.
If any
payment of interest or any other amount owing to Investor by Company as provided
herein is not paid within ten days after the due date, Company shall pay
Investor a late payment fee equal to the lesser of five percent (5.0%) of the
amount of such late payment or the maximum amount permitted by applicable
law. After the occurrence and during the continuance of an Event of
Default, the Obligations shall bear interest at a rate equal to twelve percent
(12.0%) per annum.
This Note
is one of the “Notes” issued pursuant to the Purchase Agreement of even date
herewith (as amended, modified or supplemented, the “Purchase Agreement”)
between Company and the Investors (as defined in the Purchase
Agreement).
The
following is a statement of the rights of Investor and the conditions to which
this Note is subject, and to which Investor, by the acceptance of this Note,
agrees:
1. Definitions. As used
in this Note, the following capitalized terms have the following
meanings:
· “Act” shall mean the
Securities Act of 1933, as amended.
· “Business Combination”
shall mean the transaction contemplated by the Merger Agreement as amended from
time to time in accordance with its terms and the terms of any other agreement
governing such amendment, or any entity substituted for an affiliate of Alyst
Acquisition Corp. (“Alyst”) in accordance with the terms of the Purchase
Agreement.
· “Company” includes the
corporation initially executing this Note and any Person which shall succeed to
or assume the obligations of Company under this Note.
· “Event of Default” has
the meaning given in Section 3 hereof.
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· “Investor” shall mean
the Person specified in the introductory paragraph of this Note or any Person
who shall at the time be the registered Investor of this Note.
· “Investor Notes” shall
mean all Notes issued pursuant to the Purchase Agreement and all notes issued in
substitution thereof.
· “Kunming Acquisition
Agreements” shall have the meaning set forth in the Purchase
Agreement.
· “Kunming Acquisition”
shall mean the transactions described in the Kunming Acquisition
Agreements.
· “Lien” shall mean,
with respect to any property, any security interest, mortgage, pledge, lien,
claim, charge or other encumbrance in, of, or on such property or the income
therefrom, including, without limitation, the interest of a vendor or lessor
under a conditional sale agreement, capital lease or other title retention
agreement, or any agreement to provide any of the foregoing, and the filing of
any financing statement or similar instrument under the Uniform Commercial Code
or comparable law of any jurisdiction.
· “Majority in Interest”
shall mean holders of more than half of the aggregate current outstanding
Principal Amount of the Investor Notes.
· “Material Adverse
Effect” shall mean a material adverse effect on (a) the business, assets,
operations, or financial or other condition of Company; (b) the ability of
Company to pay or perform the Obligations in accordance with the terms of this
Note and the other Transaction Documents; or (c) the rights and remedies of
Investor under this Note, the other Transaction Documents or any related
document, instrument or agreement.
· “Merger Agreement”
shall mean the draft Agreement and Plan of Merger, by and among Xxxxx and/or one
or more wholly owned subsidiaries of Alyst, the Company and the Shareholders of
the Company in the form of Exhibit K to the Purchase
Agreement.
· “Parent” shall mean
Alyst.
· “Purchase Agreement”
has the meaning given in the introductory paragraph hereof.
· “Obligations” shall
mean and include all loans, advances, debts, liabilities and obligations,
howsoever arising, owed by Company to Investor of every kind and description,
now existing or hereafter arising under or pursuant to the terms of this Note,
the Purchase Agreement and the other Transaction Documents,
including, all interest, fees, charges, expenses, attorneys’ fees and costs and
accountants’ fees and costs chargeable to and payable by Company hereunder and
thereunder, in each case, whether direct or indirect, absolute or contingent,
due or to become due, and whether or not arising after the commencement of a
proceeding under Title 11 of the United States Code (11 U. S. C.
Section 101 et seq.), as amended
from time to time (including post-petition interest) and whether or not allowed
or allowable as a claim in any such proceeding.
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· “Person” shall mean
and include an individual, a partnership, a corporation (including a business
trust), a joint stock company, a limited liability company, an unincorporated
association, a joint venture or other entity or a governmental
authority.
· “Pro Rata Share” shall
mean when calculating an Investor’s portion of any distribution or amount, that
distribution or amount (expressed as a percentage) equal to a fraction (i) the
numerator of which is the current outstanding Principal Amount of the Note and
(ii) the denominator of which is the current aggregate outstanding Principal
Amount of all Investor Notes.
· “Transaction
Documents” shall mean this Note, the Purchase Agreement, the Registration
Rights Agreement, the Escrow Agreement and the Pledge Agreement.
· “Yellow River Acquisition
Agreements” shall have the meaning set forth in the Purchase
Agreement.
2. Prepayment.
(a) Optional
Prepayment. This Note may be prepaid at any time without
penalty or premium. Any prepayment shall be accompanied by all
accrued and unpaid interest to the date of prepayment. Any prepayment
shall be credited against and reduce the next amounts otherwise due
hereunder.
3. Events of
Default. The occurrence of any of the following shall
constitute an “Event of Default” under this Note and the other Transaction
Documents:
(a) Company
shall fail to pay any Principal Amount of or interest on this Note or any other
monetary Obligations within ten days after the date due;
(b) Company
shall fail to comply with any other provision of this Note or any other
Transaction Document, which failure is not cured within the time period required
under this Note or other Transaction Document, as the case may be, after notice
from Investor to Company that such failure has occurred;
(c) any
warranty, representation, statement, report or certificate made or delivered to
Investor by Company or on Company’s behalf shall be untrue or misleading in a
material respect as of the date given or made;
(d) there
shall be a change in the record or beneficial ownership of an aggregate of more
than 30% of the issued and outstanding shares of Common Stock of Company, in one
or more transactions, compared to the ownership of issued and outstanding shares
of the Common Stock of the Company in effect on the date hereof, except for the
closing of the Business Combination or changes that have the prior written
consent of the holders of a Majority in Interest of the Investor
Notes;
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(e) a default
or event of default shall occur under any agreement to which Company is a party
resulting in a right by the other party to such agreement, whether or not
exercised, to accelerate the maturity of any indebtedness and such acceleration
would have a Material Adverse Effect;
(f) dissolution,
termination of existence, or insolvency of Company or Alyst; or the Company or
Alyst fails to meet its debts as they mature; or appointment of a receiver,
trustee or custodian, for all or any material part of the property of,
assignment for the benefit of creditors by, or the commencement of any
proceeding by or against Company or Alyst under any reorganization, bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, now or in the future in effect (except that, in the
case of a proceeding commenced against Company or Alyst, Company or Alyst, as
the case may be, shall have forty-five (45) days after the date such proceeding
was commenced to have it dismissed);
(g) a
judgment is rendered against the Company or Alyst involving a liability of more
than $150,000 which shall not have been vacated, discharged, stayed or bonded
within thirty (30) days from the entry thereof;
(h) the
occurrence of a Material Adverse Effect to the Company or Alyst;
(i) a default
by the Company or Alyst of a material obligation under any material agreement,
instrument or document of the Company or Alyst in an aggregate monetary amount
in excess of $1,000,000, which default would have a Material Adverse Effect and
is not cured within the time period prescribed in such material agreement,
unless the Company or Alyst, as the case may be, is contesting the validity of
such obligation in good faith;
(j) the
parties to the Merger Agreement terminate the Merger Agreement prior to the
consummation of the Business Combination or the Merger Agreement is otherwise
abandoned; or
(k) the
consummation of the transactions described in the Yellow River Acquisition
Agreements or the Kunming Acquisition Agreements is on terms that depart
materially from the terms in the Yellow River Acquisition Agreements and Kunming
Acquisition Agreements.
4. Rights of Investor upon
Default. Upon the occurrence or existence of any Event of
Default (other than an Event of Default referred to in Section 3(a) and(f), and Section 3(c)
with respect to the representations and warranties made by the Company in
Section 2(m) of the Purchase Agreement) and at any time thereafter during
the continuance of such Event of Default, Investor may by written notice to
Company, declare all outstanding Obligations payable by Company hereunder to be
immediately due and payable without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived, in accordance with
the payment schedule set forth in (ii) of the second introductory paragraph of
this Note. Upon the occurrence of any Event of Default described in
Sections 3(a) and (f),
immediately and without notice, all outstanding Obligations payable by Company
hereunder shall automatically become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived. In addition to the foregoing remedy, upon
the occurrence or existence of any Event of Default and subject to the consent
of a Majority in Interest, an Investor may exercise any other right, power or
remedy granted to it by the Transaction Documents or otherwise permitted to it
by law, either by suit in equity or by action at law, or both. Upon the
occurrence or existence of an Event of Default described in Section 3(c) with respect to
the representations and warranties made by the Company in Section 2(m) of the
Purchase Agreement, the Company shall cause Advertising Networks Limited and its
subsidiaries and affiliates to enforce any and all rights, power or remedy
available to it directly or indirectly under the Yellow River Acquisition
Agreements and the Kunming Acquisition Agreements or otherwise permitted to it
by law, either by suit in equity or action at law and seek damages for the
benefit of the Holders and the Company.
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5. Successors and
Assigns. Subject to the restrictions on transfer described in
Sections 7 and 8 below, the rights and
obligations of Company and Investor of this Note shall be binding upon and
benefit the successors, assigns, heirs, administrators and transferees of the
parties.
6. Waiver and
Amendment. Any provision of this Note may be amended, waived
or modified upon the written consent of Company and Investors constituting a
Majority in Interest, other than Sections 3(a) and
(f).
7. Transfer of this
Note. With respect to any offer, sale or other disposition of
this Note, Investor will give written notice to Company prior thereto,
describing briefly the manner thereof, together with a written opinion of
Investor’s counsel, or other evidence if reasonably satisfactory to the Company,
to the effect that such offer, sale or other distribution may be effected
without registration or qualification (under any applicable law then in effect).
Upon receiving such written notice and reasonably satisfactory opinion, if so
requested, or other evidence, Company, as promptly as practicable, shall notify
Investor that Investor may sell or otherwise dispose of this Note, all in
accordance with the terms of the notice delivered to Company. If a
determination has been made pursuant to this Section 7 that the
opinion of counsel for Investor, or other evidence, is not reasonably
satisfactory to Company, Company shall so notify Investor promptly after such
determination has been made. Each Note thus transferred shall bear a
legend as to the applicable restrictions on transferability in order to ensure
compliance with the Act, unless in the opinion of counsel for Company such
legend is not required in order to ensure compliance with the
Act. Company may issue stop transfer instructions to its transfer
agent in connection with such restrictions. Subject to the foregoing,
transfers of this Note shall be registered upon registration books maintained
for such purpose by or on behalf of Company. Prior to presentation of
this Note for registration of transfer, Company shall treat the registered
Investor hereof as the owner and Investor of this Note for the purpose of
receiving all payments of the Principal Amount and interest hereon and for all
other purposes whatsoever, whether or not this Note shall be overdue and Company
shall not be affected by notice to the contrary.
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8. Assignment by
Company. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by Company without the prior written consent of
Investor.
9. Notices. All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (a) personally served, (b) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (c)
delivered by a reputable overnight courier service with charges prepaid, or (d)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective upon hand delivery or
delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours, or the first business day following
such delivery (if delivered other than on a business day during normal business
hours), (ii) on the first business day following the date deposited with an
overnight courier service with charges prepaid, or (iii) on the fifth business
day following the date of mailing pursuant to subpart (b) above, or upon actual
receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be: (i) if to the Company, to: China Networks
Media, Ltd., Suite A-16E, Oriental Kenzo, Xx. 00, Xxxxxxxxxxxxx Xxxxxx,
Xxxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxx, Attention: Xx Xxxxxxxxxx, Facsimile No.:
(00)-000-00000000, Telephone No.: (00)-000-00000000, with a copy by fax only to:
Loeb & Loeb LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attn: Xxxxxxxx X.
Xxxxxxxx, Esq., fax number: (000) 000-0000, and (ii) if to the Subscriber, to:
the one or more addresses and fax numbers indicated on the signature pages
hereto, with an additional copy by fax only to: Grushko & Xxxxxxx, P.C., 000
Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, fax number: (000)
000-0000.
10. Pari Passu
Notes. Investor acknowledges and agrees that the payment of
all or any portion of the outstanding Principal Amount of this Note and all
interest hereon shall be pari
passu in right of payment and in all other respects to the other Investor
Notes or pursuant to the terms of such Notes. In the event Investor
receives payments in excess of its Pro Rata Share of Company’s aggregate
concurrent payments to the Investors of all of the Investor Notes, then Investor
shall hold in trust all such excess payments for the benefit of the Investors of
the other Notes and shall pay such amounts held in trust to such other Investors
upon demand by such Investors.
11. Usury. In
the event any interest is paid on this Note which is deemed to be in excess of
the then legal maximum rate, then that portion of the interest payment
representing an amount in excess of the then legal maximum rate shall be deemed
a payment of Principal Amount and applied against the Principal Amount of this
Note.
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12. Waivers. Company
hereby waives notice of default, presentment or demand for payment, protest or
notice of nonpayment or dishonor and all other notices or demands relative to
this instrument.
13. Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York, and without giving
effect to choice of laws provisions that would result in the application of the
substantive law of another jurisdiction.
14. Jurisdiction; Service;
Waivers. ANY ACTION OR PROCEEDING IN CONNECTION WITH THIS
AGREEMENT MAY BE BROUGHT IN A COURT OF RECORD OF THE STATE OF NEW YORK IN THE
COUNTY OF NEW YORK. THE PARTIES TO THIS AGREEMENT HEREBY CONSENT TO
THE EXCLUSIVE JURISDICTION OF SUCH COURTS OF THE STATE OF NEW YORK,
AND SERVICE OF PROCESS MAY BE MADE UPON THE PARTIES TO THIS AGREEMENT BY MAILING
A COPY OF THE SUMMONS AND ANY COMPLAINT TO SUCH PERSON, BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS TO BE USED FOR THE
GIVING OF NOTICES UNDER THIS AGREEMENT. BY ACCEPTANCE HEREOF, THE
PARTIES HERETO EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OR
MAINTAINING OF ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTION.
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IN WITNESS WHEREOF, Company
has caused this Note to be issued as of the date first written
above.
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CHINA
NETWORKS MEDIA, LTD.
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a
British Virgin Islands company
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By:
________________________________
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Name:
Xx Xxxxxxxxxx
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Title: CEO
and Co-Chairman
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SCHEDULE
H
CHINA NETWORKS MEDIA, LTD.
SHAREHOLDERS
MediaInv
Limited
Xxxxx
Xxxxxxx
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