WAIVER AGREEMENT
Exhibit
10.1
THIS
WAIVER AGREEMENT (this
"Agreement"),
dated
as of November 18, 2008, is entered into by and among Asian Financial, Inc.,
a
Wyoming Corporation (the "Company"),
and
the Investors identified on the signature pages hereto.
WHEREAS,
the Investors and the Company have entered into (1) that certain Securities
Purchase Agreement dated as of October 24, 2006, as amended by the Amendment
to
Securities Purchase Agreement dated as of November 28, 2007 (as amended,
the
“Amended
Securities Purchase Agreement”),
which
pursuant to Sections 4.4 and 4.8 thereof restrict the filing of any registration
statement by the Company other than a resale registration statement filed
on
behalf of the Investors in respect of their Registrable Securities and requires
the listing of the Company’s shares as promptly as possible following the
effectiveness of that registration statement and (2) that certain Registration
Rights Agreement dated as of October 26, 2006 (the "Registration
Rights Agreement"),
which
provides the Investors certain registration rights as described therein;
WHEREAS,
the Company intends to file and cause to be declared effective, on or before
January 31, 2009, a registration statement on Form S-1 under the Securities
Act
relating to a primary offering of its Common Stock (the
“Offering”)
on
the
New York Stock Exchange (the “NYSE
Registration Statement”);
WHEREAS,
in order to permit the foregoing, (1) certain rights described in the Amended
Securities Purchase Agreement are required to be waived by Holders of no
less
than a majority interest of the outstanding Shares and (2) certain registration
rights described in the Registration Rights Agreement are required to be
waived
by Holders of no less than a majority in interest of the outstanding Registrable
Securities;
WHEREAS,
each of the Investors signatory hereto holds in aggregate the number of Shares
set forth on their respective signature pages hereto and collectively, the
Investors signatory hereto hold an aggregate of 3,625,634 Shares, representing
in excess of a majority in interest of the outstanding Shares (in the case
of
the Amended Securities Purchase Agreement) and the Registrable Securities
(in
the case of the Registration Rights Agreement);
NOW,
THEREFORE, the parties hereby agree as follow:
1. Defined
Terms. Capitalized terms used and not otherwise defined herein that are defined
in the Amended Securities Purchase Agreement and the Registration Rights
Agreement will have the meanings given such terms in the Amended Securities
Purchase Agreement and the Registration Rights Agreement.
2. Registration
and Listing. The Company shall no later than January 31, 2009: (a) file the
NYSE
Registration Statement with the Commission, (b) cause the NYSE Registration
Statement to be declared effective under the Securities Act, and (c) cause
its
Common Stock to be listed on the New York Stock Exchange.
3. Waiver.
On the basis of the foregoing, each
Investor agrees
to waive
all of its
rights
under (a) Sections 4.4 and 4.8 of the Amended Securities Purchase Agreement
and
(b) Sections 2(a) and (e) of the Registration Rights Agreement as they
relate to
the Registrable Securities until January 31, 2009. In addition, if, after
the
listing of the Company’s Common Stock on the New York Stock Exchange, all of the
Registrable Securities held by the Investors may be sold by them without
restrictions pursuant to Rule 144
as
determined by counsel to the Company pursuant to a written opinion letter
to
such effect, addressed and acceptable to the Company’s transfer agent and
affected Investors, the
Company shall no longer be required to maintain an effective registration
statement registering the resale of the Registrable Securities.
4. Piggy-Back
Rights. Notwithstanding Section 3.1(t) of the Amended Securities Purchase
Agreement and Schedule 3.1(t) thereto and Section 6(a) and (e) of the
Registration Rights Agreement, the Company and each Investor agree that
the
amount of Registrable Securities of the selling Investors to be included
in the
Offering (on a pro rata basis among themselves) shall be 20% of the total
amount
of securities included in the Offering, subject to the following
reductions:
(a) If
the
size of the Offering is US$85.0 million or less, then the selling Investors
shall not have the right to include any of their Registrable Securities in
the
Offering;
(b) If
the
size of the Offering is between US$85.0 million and US$106.25 million, then
the
selling Investors’ percentage of the total amount of securities to be included
in the Offering shall be reduced from 20% to a percentage equal to the quotient
of the following formula:
(A
-
B)/A
Where:
A
= Size
of the Offering
B
=
US$85.0 million
In
addition, each Investor agrees that the Company shall not be required to
include
a selling Investor’s Registrable Securities in the Offering unless such selling
Investor accepts the terms of the underwriting as agreed upon between the
Company and the underwriters of the Offering (the “Underwriters”),
including but not limited to the terms of the related lock-up agreement in
the
form of Exhibit A hereto, and provides the Company and the Underwriters with
a
completed Selling Shareholder Questionnaire and any other information reasonably
required by the Underwriters for the purpose of the Offering.
5. Reaffirmation.
Except as expressly provided herein, the Registration Rights Agreement
is
reaffirmed and ratified in all respects. In the event of any conflict between
the terms or provisions of this Agreement and the Registration Rights Agreement,
then this Agreement shall prevail in all respects
as to
the subject matter herein.
Otherwise, the provisions of the Registration Rights Agreement shall remain
in
full force and effect.
6. Execution
and Counterparts. For the avoidance of doubt, it is understood that each
Investor is executing this Agreement solely on its behalf, but this Agreement
(as it is executed by Investors holding a majority of the Shares/Registrable
Securities) is binding on all Investors. This Agreement may be executed in
any
number of counterparts, each of which when so executed shall be deemed to
be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same
with
the same force and effect as if such facsimile signature were the original
thereof.
7. Governing
Law. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard
to
the principles of conflicts of law thereof.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed on the date
first
above written.
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COMPANY
Asian
Financial, Inc.
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By:
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/s/
Xxxxxx Xxx
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Name:
Xxxxxx Xxx
Title:
Chief Executive Officer
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INVESTORS
Pinnacle
China Fund, L.P.
Total
number of Shares owned: 1,300,002
By:
Pinnacle China Advisers, L.P., its general partner
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Xxxxx
X. Xxxx
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By:
Pinnacle China Management, LLC, its general
partner
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the
Manager of Kitt China Management, L.L.C.
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By:
Kitt China Management, LLC, its manager
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the
Manager of Pinnacle China Management, L.L.C.
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By:
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/s/
Xxxxx X. Xxxx
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the
General Partner of Pinnacle China Advisors, L.P.
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the
General Partner of Pinnacle China Fund, L.P.
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Name:
Xxxxx X. Xxxx
Title:
Manager
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Xxxxx
X. Xxxx
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INVESTORS
Pinnacle
Fund, L.P.
Total
number of Shares owned: 242,293
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the
Sole Member of Pinnacle Fund Management, LLC
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By:
Pinnacle Advisers, L.P., its general partner
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the
General Partner of Pinnacle Advisors, L.P.
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By:
Pinnacle Fund Management, LLC, its general
partner
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the
General Partner of Pinnacle Fund, L.P.
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By:
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/s/
Xxxxx X. Xxxx
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Name:
Xxxxx X. Xxxx
Title:
Sole member
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INVESTORS
Renaissance
US Growth Investment Trust PLC
Total
number of Shares owned: 390,626
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By:
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/s/
Xxxxxxx Xxxxxxxxx
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Name:
Xxxxxxx Xxxxxxxxx
Title:
Director
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US
Special Opportunities Trust PLC
Total
number of Shares owned: 390,626
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By:
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/s/
Xxxxxxx Xxxxxxxxx
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Name:
Xxxxxxx Xxxxxxxxx
Title:
US Portfolio Manager
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Renaissance
Capital Growth & Income Fund III, Inc.
Total
number of Shares owned: 130,209
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By:
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/s/
Xxxxxxx Xxxxxxxxx
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Name:
Xxxxxxx Xxxxxxxxx
Title:
President
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Premier
XXXX US Emerging Growth Fund Limited
Total
number of Shares owned: 130,209
By:
XXXX Capital Group, Inc., Investment Adviser
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By:
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/s/
Xxxxxxx Xxxxxxxxx
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Name:
Xxxxxxx Xxxxxxxxx
Title:
President
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INVESTORS
Westpark
Capital, L.P.
Total
number of Shares owned: 260,417
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By:
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/s/
Xxxxxxx X. Xxxxxxxxx
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Name:
Xxxxxxx X. Xxxxxxxxx
Title:
General Partner
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INVESTORS
Jayhawk
Private Equity Co Invest Fund LP
Total
number of Shares owned: 42,276
Jayhawk
Private Equity Fund
Total
number of Shares owned: 734,976
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By:
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/s/
Xxxxxxx X. Xxxxxxx
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Name:
Xxxxxxx X. Xxxxxxx
Title:
CFO of GP of GP
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Exhibit
A
LOCK-UP
LETTER AGREEMENT
Xxxxx
Xxxxxxx & Co.
As
Representative of the several Underwriters
named
in
Schedule II of the Purchase Agreement
c/o
Xxxxx
Xxxxxxx & Co.
000 Xxxxxxxx
Xxxx, Xxxxx 000
Xxxxxxxxxxx,
XX 00000
Ladies
and Gentlemen:
The
undersigned understands that you and certain other firms (the “Underwriters”)
propose to enter into a purchase agreement (the “Purchase
Agreement”)
providing for the purchase by the Underwriters of shares (the “Stock”)
of
common stock, par value $0.001 per share (the “Common
Stock”),
of
Asian Financial, Inc., a Wyoming corporation (the “Company”),
and
that the Underwriters propose to reoffer the Stock to the public (the
“Offering”).
In
consideration of the execution of the Purchase Agreement by the Underwriters,
and for other good and valuable consideration, the undersigned hereby agrees
that the undersigned will
not,
without the prior written consent of Xxxxx Xxxxxxx & Co., on
behalf
of the Underwriters,
from
the date of execution of this lock-up letter agreement (the “Lock-Up
Letter Agreement”)
and
continuing to and including the date 180 days after the date of the final
prospectus relating to the Offering (the “Lock-Up
Period”),
offer
for sale, sell, contract to sell, pledge, grant any option for the sale of,
enter into any transaction which is designed to, or might reasonably be expected
to, result in disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) or otherwise issue or dispose
of, directly or indirectly (or publicly disclose the intention to make any
such
offer, sale, pledge, grant, or other disposition), any Common Stock or any
securities convertible into or exchangeable for, or any options or rights
to
purchase or acquire, Common Stock, except to the Underwriters pursuant to
the
Purchase Agreement. In addition, the undersigned agrees that, without the
prior
written consent of Xxxxx Xxxxxxx & Co., it will not, during the Lock-Up
Period, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into
or
exercisable or exchangeable for shares of Common Stock. The Company agrees
not
to accelerate the vesting of any option or warrant or the lapse of any
repurchase right prior to the expiration of the Lock-Up Period. If (1) during
the period that begins on the date that is 18 calendar days before the last
day
of the Lock-Up Period and ends on the last day of the Lock-Up Period, (a)
the
Company issues an earnings release, (b) the Company publicly announces
material news or (c) a material event relating to the Company occurs; or
(2)
prior to the expiration of the Lock-Up Period, the Company announces that
it
will release earnings results during the 16-day period beginning on the last
day
of the Lock-Up Period, then the restrictions in this Lock-Up Letter Agreement,
unless otherwise waived by Xxxxx Xxxxxxx & Co. in writing, shall
continue to apply until the expiration of the date that is 18 calendar days
after the date on which (i) the Company issues the earnings release, (ii)
the
Company publicly announces material news or (iii) a material event relating
to
the Company occurs. The Company will provide the undersigned with prior notice
of any such announcement that gives rise to the extension of the Lock-Up
Period.
The
undersigned hereby further agrees that, prior to engaging in any transaction
or
taking any other action that is subject to the terms of this Lock-Up Letter
Agreement during the period from the date of this Lock-Up Letter Agreement
to
and including the 34th
day
following the expiration of the Lock-Up Period, it will give notice thereof
to
the Company and will not consummate such transaction or take any such action
unless it has received written confirmation from the Company that the Lock-Up
Period (as such may have been extended pursuant to this paragraph) has
expired.
Any
shares of Common Stock received upon exercise of options granted to the
undersigned will also be subject to the above lock-up restrictions.
Notwithstanding the foregoing, a transfer of shares of Common Stock in
connection with a bona fide gift or to a family member or trust may be made,
provided the transferee agrees to be bound in writing by the terms of this
Lock-Up Letter Agreement. In addition, if the undersigned is a corporation,
business trust, association, limited liability company, partnership, limited
liability partnership, limited liability limited partnership or other entity
(collectively, the “Entities”
or,
individually, the “Entity”),
the
undersigned may transfer shares of Common Stock or securities convertible
into
or exchangeable or exercisable for any shares of Common Stock to any Entity
which is directly or indirectly controlled by, or is under common control
with
the undersigned and, if the undersigned is a partnership or limited liability
company, it may transfer the Common Stock or securities convertible into
or
exchangeable or exercisable for any shares of Common Stock to its partners,
former partners or an affiliated partnership (or members, former members
or an
affiliated limited liability company) managed by the same manager or managing
partner (or managing member, as the case may be) or management company, or
managed by an entity controlling, controlled by, or under common control
with,
such manager or managing partner (or managing member) or management company
in
accordance with partnership (or membership) interests; provided, however,
that
in any such case, it shall be a condition to the transfer that the transferee
execute an agreement stating that the transferee is receiving and holding
such
shares of Common Stock or securities convertible into or exchangeable or
exercisable for any shares of Common Stock subject to the provisions of this
Lock-Up Letter Agreement and there shall be no further transfer of such Common
Stock or securities convertible into or exchangeable or exercisable for any
shares of Common Stock except in accordance with this Lock-Up Letter Agreement,
and provided further that any such transfer shall not involve a disposition
for
value.
In
furtherance of the foregoing, the Company and its transfer agent are hereby
authorized to decline to make any transfer of securities if such transfer
would
constitute a violation or breach of this Lock-Up Letter Agreement.
It
is
understood that, if the Company notifies the Underwriters that it does not
intend to proceed with the Offering, if the Purchase Agreement does not become
effective prior to January 31, 2009, or if the Purchase Agreement (other
than
the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Stock, the undersigned
will
be released from its obligations under this Lock-Up Letter
Agreement.
The
undersigned understands that the Company and the Underwriters will proceed
with
the Offering in reliance on this Lock-Up Letter Agreement.
Whether
or not the Offering actually occurs depends on a number of factors, including
market conditions. Any Offering will only be made pursuant to the Purchase
Agreement, the terms of which are subject to negotiation among the Company,
the
Selling Stockholders named therein and the Underwriters.
[Signature
page follows]
The
undersigned hereby represents and warrants that the undersigned has full
power
and authority to enter into this Lock-Up Letter Agreement and that, upon
request, the undersigned will execute any additional documents necessary
in
connection with the enforcement hereof. Any obligations of the undersigned
shall
be binding upon the heirs, personal representatives, successors and assigns
of
the undersigned.
| Very truly yours, | ||
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| By: | ||
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Name:
Title:
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Dated:
[
● ], 2008
