EXHIBIT 1.3
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of
November __, 2006, is by and among CDC Corporation, a corporation organized
under the laws of the Cayman Islands (the "COMPANY"), CDC Games Corporation, a
corporation organized under the laws of the Cayman Islands ("GAMES"), CDC
Software Corporation, a corporation organized under the laws of the Cayman
Islands ("SOFTWARE"), and each of the entities whose names appear on the
signature pages hereof. Such entities are each referred to herein as an
"INVESTOR" and, collectively, as the "INVESTORS".
The Company has agreed, on the terms and subject to the conditions set
forth in the Note Purchase Agreement, dated as of November 10, 2006, between the
Company and each Investor (the "NOTE PURCHASE AGREEMENT"), to issue and sell to
each Investor one or more 3.75% Senior Exchangeable Convertible Notes (the
"NOTES").
The Notes are (i) convertible under certain conditions as described in the
Notes into Class A common shares of the Company (the "COMPANY COMMON SHARES"),
(ii) exchangeable under certain conditions as described in the Notes into Class
A common shares of Software (the "SOFTWARE COMMON SHARES") and/or (iii)
exchangeable under certain conditions as described in the Notes into Class A
common shares of Games (the "GAMES COMMON SHARES").
In order to induce each Investor to enter into the Note Purchase
Agreement, each of the Company, Software and Games has agreed to provide certain
registration rights under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and under applicable state securities laws.
In consideration of each Investor entering into the Note Purchase
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
meanings specified:
"ALLOWED DELAY" and "ALLOWED SUSPENSION" have the respective
meanings specified in SECTION 2(g) below.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a
day on which the Principal Market is closed or on which banks in the City
of New York are authorized by law to be closed.
"COMMISSION" means the U.S. Securities and Exchange Commission.
"COMPANY EFFECTIVE DATE" means the date on which the Company
Registration Statement is declared effective by the Commission.
"COMPANY FILING DEADLINE" means the thirtieth (30th) calendar day
following the Convertibility Date; provided, however, in the event that
pro forma financial statements reflecting acquisitions by the Company are
required to be included in the Company Registration Statement, the Company
Filing Deadline shall mean the sixtieth (60th) calendar day following the
Convertibility Date.
"COMPANY REGISTRATION DEADLINE" means the sixtieth (60th) calendar
day following the Company Filing Deadline; provided, however, in the event
of a full review of the Company Registration Statement by the Commission,
the Company Registration Deadline shall mean the ninetieth (90th) day
following the Company Filing Deadline.
"COMPANY REGISTRATION STATEMENT" means a Registration Statement
covering the resale of Company Common Shares comprising Registrable
Securities.
"CONVERTIBILITY DATE" means the first date on which the Notes
become, pursuant to the terms of the Notes, convertible into Company
Common Shares.
"EFFECTIVE DATE" means the Company Effective Date, the Games
Effective Date and/or the Software Effective Date, as the context requires
or permits.
"FILING DEADLINE" means the Company Filing Deadline, the Games
Filing Deadline and/or the Software Filing Deadline, as the context
requires or permits.
"GAMES EFFECTIVE DATE" means the date on which the Games
Registration Statement is declared effective by the Commission.
"GAMES EXCHANGE DATE" means the date on which the Games Qualified
IPO occurs.
"GAMES FILING DEADLINE" means the forty-fifth (45th) calendar day
following the Games Exchange Date.
"GAMES QUALIFIED IPO" means a Qualified IPO pursuant to which Games
Common Shares are sold to the public.
"GAMES REGISTRATION DEADLINE" means the later of (i) the sixtieth
(60th) calendar day following the Games Filing Deadline and (ii) the date
on which the Lock-Up Period applicable to the Games Qualified IPO expires.
"GAMES REGISTRATION STATEMENT" means a Registration Statement
covering the resale of Games Common Shares comprising Registrable
Securities.
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"HOLDER" means any person owning or having the right to acquire,
through conversion or exchange of the Notes or otherwise, Registrable
Securities, including initially each Investor and thereafter any permitted
assignee thereof.
"ISSUE DATE" means the first date on which Notes are issued pursuant
to the Note Purchase Agreement.
"LOCK-UP PERIOD" means the period immediately following a Games
Qualified IPO or Software Qualified IPO, as the case may be, during which
the managing underwriter of such Qualified IPO requires the then existing
shareholders of Games or Software, as applicable, to refrain from selling
its Common Shares, such period not to exceed one hundred and eighty (180)
calendar days.
"MAXIMUM EXCHANGE AMOUNT" means, at any time with respect to Games
or Software, as the case may be, 33.33% of the number of such entity's
Common Shares issued and outstanding at such time.
"QUALIFIED IPO" has the meaning set forth in the Note Purchase
Agreement.
"REGISTRABLE SECURITIES" means all Company Common Shares, Software
Common Shares or Games Common Shares (or other securities) issued or
issuable pursuant to the terms of the Notes, and any common shares issued
or issuable from time to time (with any adjustments) in replacement of, in
exchange for or otherwise in respect of any such securities; provided,
however, that "REGISTRABLE SECURITIES" shall not include any such
securities that (i) have been sold to the public pursuant to Rule 144
under the Securities Act ("RULE 144"), (ii) are eligible for resale
pursuant to Rule 144(k) under the Securities Act ("RULE 144(k)"), (iii)
have been sold pursuant to an effective Registration Statement, or (iv)
have been transferred by a Holder to a Person in a transaction in which
the rights under this Agreement are not assigned to such Person in
accordance with the terms hereof. For purposes hereof, a transfer of a
Note shall be deemed a transfer of the Registrable Securities issuable
thereunder.
"REGISTRANT" means (i) from and after the Convertibility Date, the
Company, (ii) from and after the Games Filing Deadline, Games and (iii)
from and after the Software Filing Deadline, Software, in each case as the
context requires or permits.
"REGISTRATION DEADLINE" means the Company Registration Deadline, the
Software Registration Deadline or the Games Registration Deadline, as the
context requires or permits.
"REGISTRATION PERIOD" has the meaning specified in SECTION 2(b)
below.
"REGISTRATION STATEMENT" means a registration statement or
statements prepared in compliance with the Securities Act and pursuant to
Rule 415 under the Securities Act ("RULE 415") or any successor rule
providing for the offering of securities on a continuous or delayed basis,
together with the related prospectus, all amendments to such Registration
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Statement, including post-effective amendments, all supplements to such
prospectus, and all exhibits and all information incorporated by reference
in such Registration Statement.
"SOFTWARE EFFECTIVE DATE" means the date on which the Software
Registration Statement is declared effective by the Commission.
"SOFTWARE EXCHANGE DATE" means the date on which the Software
Qualified IPO occurs.
"SOFTWARE FILING DEADLINE" means the forty-fifth (45th) calendar day
following the Software Exchange Date.
"SOFTWARE QUALIFIED IPO" means a Qualified IPO pursuant to which
Software Common Shares are sold to the public.
"SOFTWARE REGISTRATION DEADLINE" means the later of (i) the sixtieth
(60th) calendar day following the Software Filing Deadline and (ii) the
date on which the Lock-Up Period applicable to the Software Qualified IPO
expires.
"SOFTWARE REGISTRATION STATEMENT" means a Registration Statement
covering the resale by the Holders of Software Common Shares comprising
Registrable Securities.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings specified in the Note Purchase Agreement or the Notes, as
applicable. All definitions contained in this Agreement are equally applicable
to the singular and plural forms of the terms defined. The words "hereof",
"herein" and "hereunder" and words of similar import contained in this Agreement
refer to this Agreement as a whole and not to any particular provision of this
Agreement.
2. REGISTRATION.
(a) Filing of Registration Statements.
(i) Filing of Company Registration Statement. Upon the
occurrence of the Convertibility Date, the Company shall prepare and, on or
before the Company Filing Deadline, file with the Commission a Company
Registration Statement covering the resale of one hundred and twenty-five
percent (125%) of the number of Company Common Shares issuable upon conversion
in full of the Notes on the date such filing is made (such number to be
determined without regard to any restriction on such conversion contained in the
Notes). Such Registration Statement shall state, to the extent permitted by Rule
416 under the Securities Act, that it also covers such indeterminate number of
additional Company Common Shares as may become issuable upon the conversion or
exchange of the Notes in order to prevent dilution resulting from stock splits,
stock dividends or similar events.
(ii) Filing of Games Registration Statement. Upon the
occurrence of the Games Exchange Date, Games shall prepare and, on or before the
Games Filing Deadline, file with the Commission the Games Registration Statement
covering the resale of the lesser of (x) one
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hundred and twenty-five percent (125%) of the number of Games Common Shares
deliverable by CDC upon the exchange in full of the Notes for Games Common
Shares on the date such filing is made (such number to be determined without
regard to any restriction on such exchange contained in the Notes), (y) the
Maximum Exchange Amount applicable to the Games Common Shares on such date and
(z) such number of Games Common Shares as Games is then permitted by the
Commission pursuant to its interpretation of Rule 415(a)(1) of the Securities
Act to register for resale. Such Registration Statement shall state, to the
extent permitted by Rule 416 under the Securities Act, that it also covers such
indeterminate number of additional Games Common Shares as may become issuable
upon the conversion or exchange of the Notes in order to prevent dilution
resulting from stock splits, stock dividends or similar events.
(iii) Filing of Software Registration Statement. Upon the
occurrence of the Software Exchange Date, Software shall prepare and, on or
before the Software Filing Deadline, file with the Commission the Software
Registration Statement covering the resale of the lesser of (x) one hundred and
twenty-five percent (125%) of the number of Software Common Shares deliverable
by CDC upon the exchange in full of the Notes for Software Common Shares on the
date such filing is made (such number to be determined without regard to any
restriction on such exchange contained in the Notes), (y) the Maximum Exchange
Amount applicable to the Software Common Shares on such date and (z) such number
of Software Common Shares as Software is then permitted by the Commission
pursuant to its interpretation of Rule 415(a)(1) of the Securities Act to
register for resale. Such Registration Statement shall state, to the extent
permitted by Rule 416 under the Securities Act, that it also covers such
indeterminate number of additional Software Common Shares as may become issuable
upon the conversion or exchange of the Notes in order to prevent dilution
resulting from stock splits, stock dividends or similar events.
(iv) Registration Statement on Form F-3/S-3. If a Registrant
is eligible on the Filing Deadline applicable to it to file a Registration
Statement on Form F-3 or S-3 for the resale of Registrable Securities by the
Holders, it shall file such Registration Statement on such form. If, on the
Filing Deadline applicable to it, a Registrant does not meet the eligibility
requirements for filing a Registration Statement on Form F-3 or S-3 for the
resale of Registrable Securities by the Holders, then in each such case such
Registrant shall instead prepare and file with the Commission a Registration
Statement on such form as such Registrant is then eligible to use. In the event
that a Registrant files one or more Registration Statements on a form other than
Form F-3 or S-3, and thereafter meets the eligibility requirements to use Form
F-3 or S-3 for the resale of Registrable Securities by the Holders, such
Registrant shall re-file such Registration Statement(s), or file one or more new
Registration Statements on Form F-3 or S-3 covering the greater of (i) the
number of Registrable Securities then registered on the existing Registration
Statement(s) (and not previously sold pursuant to an existing Registration
Statement or pursuant to Rule 144) and (ii) the number of Registrable Securities
required to be registered pursuant to the terms of this Agreement, as promptly
as practicable (but in no event later than thirty (30) days) after such
Registrant meets such requirements; provided that the Registrant shall maintain
the effectiveness of the Registration Statement then in effect until such time
as a Registration Statement on Form F-3 or S-3 covering the Registrable
Securities being registered on such Registration Statement has been declared
effective by the SEC.
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(b) Effectiveness of Registration Statements. Each Registrant shall
use its reasonable best efforts to cause the Registration Statement required to
be filed by it hereunder to become effective as soon as practicable following
the filing thereof, but in no event later than the Registration Deadline
applicable to such Registrant. Each Registrant shall respond promptly to any and
all comments made by the staff of the Commission on with respect to its
Registration Statement, and shall submit to the Commission, within two (2)
Business Days after such Registrant learns that no review of such Registration
Statement will be made by the staff of the Commission or that the staff of the
Commission has no further comments on such Registration Statement, as the case
may be, a request for acceleration of the effectiveness of such Registration
Statement to a time and date not later than two (2) Business Days after the
submission of such request. Each Registrant will maintain the effectiveness of
the Registration Statement required to be filed by it hereunder until the
earlier of (i) the date on which all of the Registrable Securities remaining to
be sold under such Registration Statement (in the reasonable opinion of counsel
to such Registrant) may be immediately sold to the public under Rule 144(k) or
(ii) with respect to Games Common Shares or Software Common Shares, the
six-month anniversary of the Maturity Date (the period beginning on the
Registration Deadline applicable to such Registrant and ending on the earliest
to occur of CLAUSE (i) or (ii) above being referred to herein as such
Registrant's "REGISTRATION PERIOD") or until such later date as such Registrant
shall determine; provided that in the event a Qualified IPO of Games or Software
occurs less than six (6) months prior to the Maturity Date, the Registration
Period shall expire on the one-year anniversary of the Maturity Date.
(c) Filing of Additional Registration Statements. In the event that,
at any time following the Filing Deadline with respect to a Registrant, the
number of Registrable Securities available for resale under the Registration
Statement required to be filed by such Registrant hereunder is insufficient to
cover at least one hundred percent (100%) of the aggregate number of Registrable
Securities then (in the case of CDC Common Shares) issued or issuable or (in the
cases of Games or Software Common Shares) deliverable under the Notes (such
number to be determined using the Conversion Price or Exchange Price, as the
case may be, in effect at such time and without regard to any restriction on the
ability of any Holder to convert or exchange such Holder's Note(s)), such
Registrant shall promptly amend such Registration Statement or file a new
Registration Statement, in any event as soon as practicable, but not later than
the tenth (10th) day following notice from a Holder of the occurrence of such
event, so that such Registration Statement or such new Registration Statement,
or both, covers no less than (i) in the case of the Company, one hundred and
twenty-five percent (125%) of the aggregate number of Company Common Shares then
issued or issuable (assuming such issued or issuable shares constitute
Registrable Securities) under the Notes (without regard to any restriction on
the ability of any Holder to convert such Holder's Note(s)) and (ii) in the case
of Games or Software, as the case may be, the lesser of (x) one hundred and
twenty-five percent (125%) of the number of Games Common Shares or Software
Common Shares, as the case may be, deliverable upon the exchange in full of the
Notes at such time (without regard to any restriction on the ability of any
Holder to exchange such Holder's Note(s)), (y) the Maximum Exchange Amount
applicable at such time to the Games Common Shares or Software Common Shares, as
the case may be and (z) such number of Games Common Shares or Software Common
Shares, as the case may be, as Games or Software is then permitted by the
Commission pursuant to is interpretation of Rule 415(a)(1) of the Securities Act
to register for resale. Each Registrant shall use its reasonable best efforts to
cause such amendment and/or new Registration Statement to become effective as
soon as practicable following the filing thereof. Any such Registration
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Statement shall state that, to the extent permitted by Rule 416 under the
Securities Act, such Registration Statement also covers such indeterminate
number of additional shares of Common Shares as may become issuable under the
Notes in order to prevent dilution resulting from stock splits, stock dividends
or similar events. Unless and until such amendment or new Registration Statement
becomes effective, each Holder shall have the rights described in PARAGRAPH 2(d)
below.
(d) Registration Default. If a Registrant is required by the terms
of this Agreement to file a Registration Statement and (i) such Registration
Statement is not declared effective by the Commission on or before such
Registrant's Registration Deadline (unless such effectiveness is delayed as a
result of an Allowed Delay or an Allowed Suspension), (ii) after such
Registration Statement has been declared effective by the Commission, sales of
Registrable Securities cannot be made by a Holder under such Registration
Statement for any reason not within the exclusive control of such Holder (other
than during an Allowed Delay or Allowed Suspension) or (iii) an amendment or
supplement to the Registration Statement, or a new Registration Statement,
required to be filed pursuant to the terms of this Agreement, is not filed on or
before the date required by this Agreement (other than during an Allowed Delay
or Allowed Suspension) (each of the foregoing CLAUSES (i), (ii) and (iii) being
referred to herein as a "REGISTRATION DEFAULT"), such Registrant shall pay to
each Holder (which for purposes of this clause only shall mean any Person that
beneficially owns one or more of the Notes) an amount of cash equal to one-half
of one percent (0.5%) of the aggregate principal amount of Notes then held by
such Holder and, for each month thereafter (pro rated for partial months) in
which a Registration Default exists, a cash payment equal to one percent (1%) of
the aggregate principal amount of Notes into which the Common Shares covered or
required by this Agreement to be covered by such Registration Statement are
convertible or exchangeable (without regard to any restriction on such
conversion or exchange). In the event that a Registration Default occurs under
one of the foregoing CLAUSES (i), (ii) or (iii) and, prior to the cessation of
such Registration Default, another Registration Default occurs pursuant to a
different clause, the subsequent Registration Default shall be deemed to be a
continuation of the earlier Registration Default for purposes of calculating the
payments required to be made under this SECTION 2(d). Notwithstanding the
foregoing, Registration Default payments made by a Registrant under this SECTION
2(d) shall not exceed, for each individual or continuous occurrence of a
Registration Default with respect to such Registrant, six percent (6%) of the
aggregate principal amount of Notes outstanding at the time such Registration
Default first occurred. The first payment required to be made by a Registrant
under this SECTION 2(d) shall be made within five (5) Business Days following
date on which a Registration Default first occurs and subsequent payments shall
be made on the last day of each calendar month in which a Registration Default
exists (or, if such day is not a Business Day, on the Business Day immediately
following such day). Any such payment shall be in addition to any other remedies
available to each Holder at law or in equity, whether pursuant to the terms
hereof, the Note Purchase Agreement, the Notes, or otherwise.
(e) Allocation of Registered Shares. The initial number of
Registrable Securities included in a Registration Statement, and each increase
in the number thereof included therein or in a subsequent Registration
Statement, shall be allocated pro rata among the Holders based on the aggregate
number of Registrable Securities issued or issuable to each Holder at the time
such Registration Statement or subsequent Registration Statement is declared
effective by the Commission (such number to be determined using the Conversion
Price or Exchange Price, as applicable, in effect at such time and without
regard to any restriction on the ability of a Holder to
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convert or exchange such Holder's Note(s) as of such date). In the event that a
Holder sells or otherwise transfers any of such Holder's Registrable Securities,
each transferee shall be allocated the portion of the then remaining number of
Registrable Securities included in such Registration Statement and allocable to
such Holder.
(f) Registration of Other Securities. Each Registrant agrees that,
during the period beginning on the Filing Deadline applicable to such Registrant
and ending on the Effective Date applicable to such Registrant, such Registrant
shall refrain from filing any registration statement (other than (i) a
Registration Statement filed hereunder or (ii) a registration statement on Form
S-4, Form F-4 or, with respect to stock option plans and agreements and stock
plans currently in effect and disclosed in the Note Purchase Agreement or the
schedules thereto, or as may be adopted thereafter from time to time with the
approval of such Registrant's board of directors or shareholders, Form S-8). In
no event shall a Registrant include any securities other than Registrable
Securities on any Registration Statement filed by such Registrant on behalf of
the Holders pursuant to the terms hereof.
(g) Allowed Delay; Allowed Suspension. Notwithstanding anything to
the contrary herein, a Registrant may, at any time after the Effective Date
applicable to such Registrant, (i) delay the disclosure of material, non-public
information concerning such Registrant, the disclosure of which at the time is
not, in the good faith opinion of the Board of Directors of such Registrant, in
the best interest of such Registrant and, in the opinion of counsel to such
Registrant, otherwise required (an "ALLOWED DELAY"), and (ii) suspend the
availability of a Registration Statement on Form S-1or F-1 if pursuant to
applicable law it must file a post-effective amendment to such Registration
Statement in connection with filing its Annual Report on Form 10-K, Form 10-KSB
or Form 20-F and such amendment is reviewed by the Commission (an "ALLOWED
SUSPENSION"); provided, that (x) no Allowed Delay shall exceed twenty (20)
consecutive days or sixty (60) days in any period of three hundred sixty-five
(365) days and (y) no Allowed Suspension shall exceed twenty (20) consecutive
days. Notwithstanding any Allowed Delay, Allowed Suspension, event described in
SECTION 3(e), or stop order described in SECTION 3(f), each Registrant shall
cause its transfer agent to deliver Common Shares without any restrictive legend
to a transferee of a Holder as long as such Holder has entered into a binding
contract for sale with such transferee, and delivered a copy of the prospectus
included as part of the applicable Registration Statement to such transferee
(unless an exemption from such prospectus delivery requirement then existed),
prior to such Holder's receipt of notice from the Company of such Allowed Delay,
Allowed Suspension, event or stop order.
(h) Piggyback Rights. If Games or Software, or both, commences a
Qualified IPO at any time while any Notes are outstanding, and any holders of
Games Common Shares or Software Common Shares, as the case may be, existing
immediately prior to the commencement of such Qualified IPO (collectively, the
"EXISTING SHAREHOLDERS") are permitted to sell Common Shares of such entity in
such Qualified IPO, each Holder shall have the right (a "PIGGYBACK RIGHT") to
include for sale in such Qualified IPO the Games Common Shares or Software
Common Shares, as the case may be, that it may acquire through the exchange of
its Note(s) and, if such Qualified IPO is conducted in the United States
pursuant to a registration statement, to include such Registrable Securities for
resale on such registration statement. The number of Common Shares which a
Holder may include for sale pursuant to a Qualified IPO shall be equal to (A)
the number of
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such Common Shares into which such Holder's Note is then exchangeable (without
giving effect to any restriction on such exchange) times (B) the quotient
determined by dividing (x) the aggregate number of such Common Shares being
offered for sale pursuant to such Qualified IPO by the Existing Shareholders by
(y) the total number of such Common Shares then outstanding, subject to any
reduction in such amount as the managing underwriter(s) thereof shall impose;
provided, however, that any such reduction shall be made pro rata among the
Holders and the Existing Shareholders. In no event shall a Registrant include
any securities other than Registrable Securities in any Registration Statement
filed on behalf of the Holders pursuant to the terms hereof.
(i) Plan of Distribution. Each Registration Statement shall contain
(except with respect to information regarding a Holder as to which such Holder
has notified the Registrant) a "PLAN OF DISTRIBUTION" section in substantially
the form attached hereto as EXHIBIT A.
3. OBLIGATIONS OF EACH REGISTRANT.
In addition to performing its obligations hereunder, including without
limitation those pursuant to SECTION 2 above, each Registrant shall, with
respect to the Registration Statement to be filed by it hereunder:
(a) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statement as may be necessary to comply with the
provisions of the Securities Act or to maintain the effectiveness of such
Registration Statement during the Registration Period applicable to such
Registrant, or as may be reasonably requested by a Holder in order to
incorporate information concerning such Holder or such Holder's intended method
of distribution;
(b) as soon as practicable following (i) the Convertibility Date, in
the case of the Company, (ii) the Software Exchange Date, in the case of
Software, and (iii) the Games Exchange Date, in the case of Games, take all
steps necessary and otherwise use its reasonable best efforts to secure the
listing of such Registrant's Registrable Securities on the Principal Market on
which such Registrant's Common Shares are then listed or eligible for quotation,
and at any Holder's request, provide such Holder with reasonable evidence
thereof;
(c) so long as such Registration Statement is effective, furnish to
each Holder such number of copies of the prospectus included in such
Registration Statement, including a preliminary prospectus, in conformity with
the requirements of the Securities Act, and such other documents as such Holder
may reasonably request in order to facilitate the disposition of such Holder's
Registrable Securities;
(d) use commercially reasonable efforts to register or qualify the
Registrable Securities covered by such Registration Statement under the
securities or "blue sky" laws of such jurisdictions within the United States as
shall be reasonably requested from time to time by a Holder, and do any and all
other acts or things which may reasonably be necessary or advisable to enable
such Holder to consummate the public sale or other disposition of such
Registrable Securities in such jurisdictions; provided that such Registrant
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such jurisdiction;
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(e) (i) notify each Holder in writing immediately after becoming
aware of the occurrence of an Allowed Delay or Allowed Suspension or any other
event (without disclosing to such Holder any facts or circumstances relating to
such Allowed Delay, Allowed Suspension or other event that would constitute
material non-public information, unless such Holder has given the Company its
prior written consent to such disclosure) as a result of which the prospectus
included in such Registration Statement, as then in effect, contains an untrue
statement of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (ii) as promptly as
practicable (other than during an Allowed Delay or Allowed Suspension, in which
case, no later than the expiration of the applicable time period(s) described in
SECTION 2(g)) prepare and file with the Commission and furnish to each Holder a
reasonable number of copies of a supplement or an amendment to such prospectus
as may be necessary so that such prospectus does not contain an untrue statement
of material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing and (iii) notify each Holder in writing immediately
upon the termination of an Allowed Delay, Allowed Suspension or such other
event;
(f) use commercially reasonable efforts to prevent the issuance of
any stop order or other order suspending the effectiveness of such Registration
Statement and, if such an order is issued, to use commercially reasonable
efforts obtain the withdrawal thereof at the earliest possible time and to
notify each Holder in writing of the issuance of such order and the resolution
thereof;
(g) furnish to each Holder, on the date that such Registration
Statement, or any successor registration statement, becomes effective, a letter,
dated such date, signed by counsel to such Registrant and addressed to such
Holder, confirming such effectiveness and, to the knowledge of such counsel, the
absence of any stop order;
(h) provide to each Holder and its representatives (collectively,
"HOLDER REPRESENTATIVES") the opportunity to conduct a reasonable inquiry of
such Registrant's financial and other records during normal business hours and
make available during normal business hours its officers, directors and
employees for questions regarding information which such Holder or Holder
Representative may reasonably request in order to fulfill any due diligence
obligation on its part; provided, however, that (i) in connection with any such
inspection, any such Holder and Holder Representative shall cooperate to the
extent reasonably practicable to minimize any disruption to the operation of the
Registrant's business and (ii) any records and information obtained by or
disclosed to such Holder or Holder Representative pursuant hereto shall be used
only in connection with conducting such inquiry, shall be kept confidential and
shall not be disclosed by such Holder or Holder Representative unless (A) the
disclosing party advises the other party that the disclosure of such records or
information is necessary to avoid or correct a misstatement or omission in a
Registration Statement or is otherwise required by law, (B) the release of such
records or information is ordered pursuant to a subpoena or other order from a
court or governmental authority of competent jurisdiction (provided, however,
that such Person shall use its reasonable efforts to provide the Registrant with
prior written notice of such requirement in order to afford the Registrant with
an opportunity to seek a protective order or other appropriate remedy in
response) or (C) such
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records or information otherwise become generally available to the public other
than through disclosure by such Holder or Holder Representative in breach
hereof;
(i) permit counsel for each Holder to review such Registration
Statement and all amendments and supplements thereto, and any comments made by
the staff of the Commission and the Company's responses thereto, within a
reasonable period of time prior to the filing thereof with the Commission (or,
in the case of comments made by the staff of the Commission, within a reasonable
period of time following the receipt thereof by such Registrant); and
(j) execute and deliver written instructions to the transfer agent
for the Company Common Shares and, immediately prior to a Qualified IPO, cause
Games or Software, as the case may be, to execute and deliver written
instructions to the transfer agent for the Games Common Shares or the Software
Common Shares, for the removal of any legends or restrictive language stamped on
the Securities no later than the close of business on the third (3rd) Business
Day following the receipt of a request for such removal from a Holder, as long
as (A) the resale or transfer (including without limitation a pledge) of such
Securities is registered pursuant to an effective Registration Statement, (B)
such Securities have been sold pursuant to Rule 144, or (C) such Securities are
eligible for resale under Rule 144(k) or any successor provision; and
(k) within two (2) Business Days after a Registration Statement
which covers Registrable Securities is ordered effective by the Commission, the
Registrant shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities confirmation that
such Registration Statement has been declared effective by the Commission in the
form attached hereto as Exhibit B.
4. OBLIGATIONS OF EACH HOLDER.
In connection with the registration of Registrable Securities by a
Registrant pursuant to a Registration Statement, each Holder shall:
(a) timely furnish to such Registrant in writing such information
regarding itself and the intended method of disposition of such Registrable
Securities as such Registrant shall reasonably request in order to effect the
registration thereof;
(b) upon receipt of any notice from such Registrant of the happening
of any event of the kind described in PARAGRAPHS 3(e) or 3(f), immediately
discontinue any sale or other disposition of such Registrable Securities
pursuant to such Registration Statement until the filing of an amendment or
supplement as described in PARAGRAPH 3(e) or the withdrawal of the stop order
referred to in PARAGRAPH 3(f), and use commercially reasonable efforts to
maintain the confidentiality of such notice and its contents;
(c) to the extent required by applicable law, deliver a prospectus
to the purchaser of such Registrable Securities;
(d) notify such Registrant when it has sold all of the Registrable
Securities beneficially owned by it;
11
(e) notify such Registrant in the event that any information
supplied by such Holder in writing for inclusion in such Registration Statement
or related prospectus contains an untrue statement of material fact or omits to
state a material fact required to be stated therein or necessary to make such
information not misleading in light of the circumstances then existing; and
immediately discontinue any sale or other disposition of such Registrable
Securities pursuant to such Registration Statement until the filing of an
amendment or supplement to such prospectus as may be necessary so that such
prospectus does not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;
and
(f) refrain from selling any Games Common Shares, in the case of a
Games Registration Statement, or any Software Common Shares, in the case of a
Software Registration Statement, during any Lock-Up Period, except that such
restriction shall not apply to the extent that such Holder exercises a Piggyback
Right pursuant to SECTION 2(h) above.
5. INDEMNIFICATION.
In the event that any Registrable Securities are included in a
Registration Statement filed by a Registrant under this Agreement:
(a) Such Registrant shall indemnify and hold harmless each Holder
who is named in such Registration Statement as a selling shareholder, the
officers, directors, employees, agents and representatives of such Holder, and
each person, if any, who controls such Holder within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), against any losses, claims, damages, liabilities or reasonable
out-of-pocket expenses (whether joint or several) (collectively, including
reasonable legal expenses or other expenses reasonably incurred in connection
with investigating or defending same, "LOSSES"), insofar as any such Losses
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement under
which such Registrable Securities were registered, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Subject to the provisions of PARAGRAPH 5(c) below, such Registrant
will reimburse such Holder, and each such officer, director, employee, agent,
representative or controlling person, for any reasonable legal expenses or other
out-of-pocket expenses (promptly as such expenses are incurred) by any such
entity or person in connection with investigating or defending any Loss;
provided, however, that the foregoing indemnity shall not apply to amounts paid
in settlement of any Loss if such settlement is effected without the consent of
such Registrant (which consent shall not be unreasonably withheld), nor shall
such Registrant be obligated to indemnify any person for any Loss to the extent
that such Loss arises out of or is based upon (i) any untrue statement of a
material fact or any omission to state a material fact required to be stated
therein or necessary to make statements therein not misleading that conforms in
all material respects to written information furnished by such person expressly
for use in such Registration Statement or (ii) a failure of such person to
deliver or cause to be delivered the final prospectus contained in the
Registration Statement and made available by such Registrant, if such delivery
is required by applicable law.
12
(b) Each Holder who is named in such Registration Statement as a
selling shareholder, acting severally and not jointly, shall indemnify and hold
harmless such Registrant, the officers, directors, employees, agents and
representatives of such Registrant, and each person, if any, who controls such
Registrant within the meaning of the Securities Act or the Exchange Act, against
any Losses to the extent (and only to the extent) that any such Losses arise out
of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact required
to be stated therein or necessary to make statements therein not misleading in
light of the circumstances in which they were made, that conforms in all
material respects to written information furnished by such person expressly for
use in such Registration Statement, or (ii) a failure of such Holder to deliver
or cause to be delivered the final prospectus contained in such Registration
Statement and made available by such Registrant, if such delivery is required
under applicable law. Subject to the provisions of PARAGRAPH 5(c) below, such
Holder will reimburse any reasonable legal or other expenses (promptly as such
expenses are incurred) by such Registrant and any such officer, director,
employee, agent, representative, or controlling person, in connection with
investigating or defending any such Loss; provided, however, that the foregoing
indemnity shall not apply to amounts paid in settlement of any such Loss if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided, further, that, in no event shall
any indemnity under this PARAGRAPH 5(b) exceed the amount of the net proceeds
resulting from the sale of Registrable Securities by such Holder under such
Registration Statement.
(c) Promptly after receipt by an indemnified party under this
SECTION 5 of notice of the commencement of any action or proceeding (including
any governmental action or proceeding), such indemnified party will, if a claim
in respect thereof is to be made against any indemnifying party under this
SECTION 5, promptly deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in and to assume the defense thereof with counsel selected by the
indemnifying party and reasonably acceptable to the indemnified party; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the reasonably incurred fees and expenses of such counsel to be
paid by the indemnifying party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate under
applicable standards of professional conduct due to actual or potential
conflicting interests between such indemnified party and any other party
represented by such counsel in such action or proceeding. The failure by an
indemnified party to notify the indemnifying party within a reasonable time
following the commencement of any action or proceeding of which the indemnified
party is aware, to the extent materially prejudicial to such indemnifying
party's ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this SECTION 5 with respect to such
action or proceeding, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this SECTION 5 or with respect to any
other action or proceeding.
(d) In the event that the indemnity provided in PARAGRAPH (a) or (b)
of this SECTION 5 is unavailable or insufficient to hold harmless an indemnified
party for any reason, such Registrant and each Holder agree, severally and not
jointly, to contribute to the aggregate Losses to which such Registrant or such
Holder (or its respective officers, directors, employees, agents,
13
representatives or controlling persons), may be subject in such proportion as is
appropriate to reflect the relative fault of such Registrant and such Holder in
connection with the statements or omissions which resulted in such Losses;
provided, however, that in no case shall such Holder be responsible for any
amount in excess of the net proceeds resulting from the sale of Registrable
Securities sold by such Holder under such Registration Statement. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to information provided by such Registrant or by such Holder.
Such Registrant and each Holder agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this PARAGRAPH (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. For purposes of this SECTION 5,
each person who controls a Holder within the meaning of either the Securities
Act or the Exchange Act and each officer, director, employee, agent or
representative of such Holder shall have the same rights to contribution as such
Holder, and each person who controls such Registrant within the meaning of
either the Securities Act or the Exchange Act and each officer, director,
employee, agent or representative of such Registrant shall have the same rights
to contribution as such Registrant, subject in each case to the applicable terms
and conditions of this PARAGRAPH (d).
(e) The obligations of such Registrant and each Holder under this
SECTION 5 shall survive the conversion or exchange of the Notes in full, the
completion of any offering or sale of Registrable Securities pursuant to a
Registration Statement under this Agreement, or otherwise.
6. REPORTS.
With a view to making available to each Holder the benefits of Rule
144 and any other similar rule or regulation of the Commission that may at any
time permit such Holder to sell securities of a Registrant to the public without
registration, each Registrant agrees to, from and after the date on which such
Registrant becomes subject to the reporting requirements of the Exchange Act:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports and
other documents required to be filed by such Registrant under the Exchange Act;
and
(c) furnish to such Holder, so long as such Holder owns any
Registrable Securities, promptly upon written request (i) a written statement by
such Registrant, if true, that it has complied with the reporting requirements
of Rule 144 and the Exchange Act, (ii) to the extent not publicly available
through the Commission's XXXXX database, a copy of the most recent annual or (to
the extent applicable) quarterly report of such Registrant and such other
reports and documents so filed by such Registrant with the Commission, and (iii)
such other information as may be reasonably requested by such Holder in
connection with such Holder's compliance with any rule or regulation of the
Commission which permits the selling of any such securities without
registration.
14
7. MISCELLANEOUS.
(a) Expenses of Registration. Except as otherwise provided in the
Note Purchase Agreement, all reasonable expenses, other than underwriting
discounts and commissions and fees and expenses of counsel and other advisors to
each Holder, incurred in connection with the registrations, filings or
qualifications of a Registrant as described herein, including (without
limitation) all registration, filing and qualification fees, printers' and
accounting fees, the fees and disbursements of counsel for such Registrant, and
the fees and disbursements incurred in connection with the letter described in
PARAGRAPH 3(g) hereof, shall be borne by such Registrant.
(b) Amendment; Waiver. Except as expressly provided herein, neither
this Agreement nor any term hereof may be amended or waived except pursuant to a
written instrument executed by such Registrant and the Holders of at least a
majority of the Registrable Securities issued or issuable under all of the Notes
then outstanding (without regard to any limitation on such conversion or
exchange). Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each Holder, each future Holder and such Registrant. The
failure of any party to exercise any right or remedy under this Agreement or
otherwise, or the delay by any party in exercising such right or remedy, shall
not operate as a waiver thereof.
(c) Notices. Any notice, demand or request required or permitted to
be given by a Registrant or a Holder pursuant to the terms of this Agreement
shall be in writing and shall be deemed delivered (i) when delivered personally
or by verifiable facsimile transmission, unless such delivery is made on a day
that is not a Business Day, in which case such delivery will be deemed to be
made on the next succeeding Business Day and (ii) on the next Business Day after
timely delivery to a reputable overnight courier, addressed as follows:
If to the Company:
CDC Corporation
33/F Citicorp Center
00 Xxxxxxxxx Xxxx
Xxxxxxxx Xxx
Xxxx Xxxx
Attn: Legal Department
Tel: (000) 0000-0000
Fax: (000) 0000-0000
If to Games:
CDC Games Corporation
c/o CDC Corporation
33/F Citicorp Center
00 Xxxxxxxxx Xxxx
Xxxxxxxx Xxx
Xxxx Xxxx
15
Attn: Legal Department
Tel: (000) 0000-0000
Fax: (000) 0000-0000
If to Software:
CDC Software Corporation
c/o CDC Corporation
33/F Citicorp Center
00 Xxxxxxxxx Xxxx
Xxxxxxxx Xxx
Xxxx Xxxx
Attn: Legal Department
Tel: (000) 0000-0000
Fax: (000) 0000-0000
with a copy (which shall not constitute notice) to:
King & Spalding LLP
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
and if to a Holder, to such address for such party as shall appear on Exhibit A
of the Note Purchase Agreement, or as shall be designated by such party in
writing to the other parties hereto in accordance this SECTION 7(c). Written
confirmation of receipt generated by the sender's facsimile machine containing
the time, date, recipient facsimile number and an image of the first page of
such transmission shall be rebuttable evidence of receipt by facsimile in
accordance with CLAUSE (i) above.
(d) Assignment. Upon the transfer of any Note or Registrable
Securities by a Holder, the rights of such Holder hereunder with respect to such
securities so transferred shall be assigned automatically to the transferee
thereof, and such transferee shall thereupon be deemed to be a "Holder" for
purposes of this Agreement, as long as: (i) the CDC Entities are, within a
reasonable period of time following such transfer, furnished with written notice
of the name and address of such transferee, (ii) the transferee agrees in
writing with the CDC Entities to be bound by all of the provisions hereof, and
(iii) such transfer is made in accordance with the applicable requirements of
the Note Purchase Agreement and the Notes, as applicable.
(e) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, and all of which together shall be
deemed one and the same instrument. This Agreement, once executed by a party,
may be delivered to any other party hereto by facsimile transmission.
16
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within the State of New York except to the
extent that such laws would permit or require the laws of any other jurisdiction
to apply.
(g) Submission to Jurisdiction. Each of the Company, Games and
Software hereby irrevocably submits to the exclusive jurisdiction of any New
York State or United States Federal court sitting in the City and County of New
York over any suit, action or proceeding arising out of or related to this
Agreement. Each of the Company, Games and Software irrevocably waives, to the
fullest extent permitted by law, any objection which it may have to the venue of
any such suit, action or proceeding brought in such a court and any claim that
any such suit, action or proceeding brought in such a court has been brought in
an inconvenient forum. Each of the Company, Games and Software agrees that final
judgment in any such suit, action or proceeding brought in such a court shall be
conclusive and binding upon the Company and may be enforced in any court to the
jurisdiction of which the Company is subject by a suit upon such judgment;
provided that service of process is effected upon the Company in the manner
specified in SECTIONS 7(c) and 7(h) or as otherwise permitted by law.
(h) Agent for Service of Process. As long as any Registrable
Securities remain outstanding, each of the Company, Games and Software will at
all times maintain an authorized agent in the City of New York, upon whom
process may be served in any legal action or proceeding arising out of or
relating to this Note. Service of process upon such agent and written notice of
such service mailed or delivered to such entity shall to the extent permitted by
law be deemed in every respect effective service of process upon the Company in
any such legal action or proceeding. Each of the Company, Games and Software has
appointed Xxxxx Xxxxx as its agent for such purpose, and covenants and agrees
that service of process in any legal action or proceeding may be made at the
office of such agent at CDC Corporation, Chrysler Building, 000 Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or at such other address or, at
the office of such other authorized agent as the Company may designate by
written notice to the Holders).
(i) Holder of Record. A person is deemed to be a Holder whenever
such person owns or is deemed to own of record such Registrable Securities,
including through ownership of the Notes. If the Company receives conflicting
instructions, notices or elections from two or more persons with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the record owner of such
Registrable Securities.
(j) Entire Agreement. This Agreement and the other Transaction
Documents constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement and the other Transaction Documents supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
(k) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
17
(l) Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
[Signature Page to Follow]
18
IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.
CDC CORPORATION
By: __________________________
Name:
Title:
CDC GAMES CORPORATION
By: __________________________
Name:
Title:
CDC SOFTWARE CORPORATION
By: __________________________
Name:
Title:
EVOLUTION MASTER FUND LTD. SPC,
SEGREGATED PORTFOLIO M
By: __________________________
Name:
Title:
ALEXANDRA GLOBAL MASTER FUND LTD.
BY: ALEXANDRA INVESTMENT MANAGEMENT, LLC
By: __________________________
Name: Xxxxxxx Xxxxxxxxx
Title: Chairman & Chief Executive Officer
CAPITAL VENTURES INTERNATIONAL
BY: HEIGHTS CAPITAL MANAGEMENT, INC.
By: __________________________
Name: Xxxxxx Xxxxxxxx
Title: Investment Manager
DEUTSCHE BANK AG, LONDON BRANCH
By: __________________________
Name:
Title:
JAYHAWK XX XXXXXXX CORP.
By: __________________________
Name: Xxxxxxx X. Xxxxxxx
Title: CFO of GP
JAYHAWK PE CO-INVEST BLOCKER CORP.
By: __________________________
Name: Xxxxxxx X. Xxxxxxx
Title: CFO of GP
JGB CAPITAL OFFSHORE, LTD.
By: __________________________
Name: Xxxxx Xxxxx
Title: President
KINGS ROAD INVESTMENTS LTD.
BY: POLYGON INVESTMENT PARTNERS LP
By: __________________________
Name: Xxxxxxx Xxxxx
Title: Authorized Signatory
M KINGDON OFFSHORE LTD
By: __________________________
Name: Xxxx Xxxxxxx
Title:
PORTSIDE GROWTH AND OPPORTUNITY FUND
BY: RAMIUS CAPITAL GROUP, LLC
By: __________________________
Name: Xxxxxxx Xxxxx
Title:
RADCLIFFE SPC, LTD. FOR AND ON BEHALF OF
THE CLASS A CONVERTIBLE CROSSOVER
SEGREGATED PORTFOLIO
BY: RG CAPITAL MANAGEMENT, L.P.
BY: RGC MANAGEMENT COMPANY, LLC
By: __________________________
Name: Xxxxxx X. Xxxxxxxxxx
Title: Managing Director
XXXXXXX INTERNATIONAL FUND, LTD.
By: __________________________
Name: Xxxxx Xxxxxx
Title: Managing Member
UBS X'XXXXXX LLC FBO X'XXXXXX PIPES
CORPORATE STRATEGIES MASTER LIMITED
BY: UBS X'XXXXXX LLC
By: __________________________
Name: Xxxxx Xxxxxxx
Title:
EXHIBIT A
PLAN OF DISTRIBUTION
We are registering certain of our Common Shares [issuable][exchangeable]
upon [conversion][exchange] of the Notes to permit the resale of such Common
Shares by the holders of the Notes from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by the selling
shareholders of such Common Shares. We will bear all fees and expenses incident
to our obligation to register such Common Shares.
The selling shareholders may sell all or a portion of such Common Shares
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If such Common
Shares are sold through underwriters or broker-dealers, the selling shareholders
will be responsible for underwriting discounts or commissions or agent's
commissions. Such Common Shares may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of the sale, at varying prices
determined at the time of sale, or at negotiated prices. These sales may be
effected in transactions, which may involve crosses or block transactions,
- on any national securities exchange or quotation service on which
the securities may be listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions otherwise than on these exchanges or systems or in
the over-the-counter market;
- through the writing of options, whether such options are listed on
an options exchange or otherwise, or other derivatives;
- constituting ordinary brokerage transactions and transactions in
which the broker-dealer solicits purchasers;
- constituting block trades in which the broker-dealer will attempt to
sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
- constituting purchases by a broker-dealer as principal and resale by
the broker-dealer for its account;
- constituting an exchange distribution in accordance with the rules
of the applicable exchange;
- constituting privately negotiated transactions;
- constituting short sales;
- constituting sales pursuant to Rule 144;
- where one or more broker-dealers agree with the selling shareholders
to sell a specified number of such shares at a stipulated price per
share;
- constituting a combination of any such methods of sale; and
- constituting any other method permitted pursuant to applicable law.
If the selling shareholders effect such transactions by selling such
Common Shares to or through underwriters, broker-dealers or agents, such
underwriters, broker-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling shareholders or
commissions from purchasers of such Common Shares for whom they may act as agent
or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved). In connection
with sales of such Common Shares or otherwise, the selling shareholders may
enter into hedging transactions with broker-dealers, which may in turn engage in
short sales of such Common Shares in the course of hedging in positions they
assume. The selling shareholders may also sell such Common Shares short and, to
the extent permitted by applicable law, deliver such Common Shares to close out
short positions and to return borrowed shares in connection with such short
sales. The selling shareholders may also loan or pledge such Common Shares to
broker-dealers that in turn may sell such shares.
The selling shareholders may pledge or grant a security interest in some
or all of the Notes or Common Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell such Common Shares from time to time pursuant to this prospectus
or any amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act of 1933, as amended, amending, if necessary, the
list of selling shareholders to include the pledgee, transferee or other
successors in interest as selling shareholders under this prospectus. The
selling shareholders also may transfer and donate such Common Shares in other
circumstances in which case the transferees, donees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
The selling shareholders and any broker-dealer participating in the
distribution of such Common Shares may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commission paid, or any discounts or
concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular
offering of such Common Shares is made, a prospectus supplement, if required,
will be distributed which will set forth the aggregate amount of such Common
Shares being offered and the terms of the offering, including the name or names
of any broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling shareholders and any discounts,
commissions or concessions allowed or reallowed or paid to broker-dealers.
Under the securities laws of some states, such Common Shares may be sold
in such states only through registered or licensed brokers or dealers. In
addition, in some states such Common Shares may not be sold unless such shares
have been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
There can be no assurance that any selling shareholder will sell any or
all of such Common Shares registered pursuant to the registration statement, of
which this prospectus forms a part.
The selling shareholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of such Common Shares by the selling shareholders
and any other participating person. Regulation M may also restrict the ability
of any broker-dealer engaged in the distribution of such Common Shares to engage
in market-making activities with respect to such Common Shares. All of the
foregoing may affect the marketability of such Common Shares.
We will pay all expenses of the registration of such Common Shares
pursuant to the registration rights agreement, estimated to be $[ ] in total,
including, without limitation, Securities and Exchange Commission filing fees
and expenses of compliance with state securities or "blue sky" laws; provided,
however, that a selling shareholder will pay all underwriting discounts and
selling commissions, if any. We will indemnify the selling shareholders against
liabilities, including some liabilities under the Securities Act, in accordance
with the registration rights agreements, or the selling shareholders will be
entitled to contribution. We may be indemnified by the selling shareholders
against civil liabilities, including liabilities under the Securities Act, that
may arise from any written information furnished to us by the selling
shareholder specifically for use in this prospectus, in accordance with the
related registration rights agreement, or we may be entitled to contribution.
Once sold under the registration statement of which this prospectus forms
a part, such Common Shares will be freely tradable in the hands of persons other
than our affiliates.
EXHIBIT B
[ ]
[ ]
Fax: [ ]
Attn: [ ]
Re: CDC Corporation
Ladies and Gentlemen:
We are counsel to CDC Corporation, a corporation organized under the
laws of the Cayman Islands (the "COMPANY"), and have represented the Company in
connection with that certain Note Purchase Agreement, dated as of November 10,
2006 (the "NOTE PURCHASE AGREEMENT") entered into by and among the Company and
the buyers named therein (collectively, the "HOLDERS") pursuant to which the
Company issued to the Holders convertible notes (the "NOTES") convertible into
the Company's Class A Common Stock (the "COMMON STOCK"). Pursuant to the Note
Purchase Agreement, the Company also has entered into a Registration Rights
Agreement, dated November 10, 2006, with the Holders (the "REGISTRATION RIGHTS
AGREEMENT") pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), including the Common Shares issuable upon conversion of the Notes,
under the Securities Act of 1933, as amended (the "1933 ACT"). In connection
with the Company's obligations under the Registration Rights Agreement, on
____________ ___, 200_, the Company filed a Registration Statement on Form F-3
(File No. 333-_____________) (the "REGISTRATION STATEMENT") with the Securities
and Exchange Commission (the "SEC") relating to the Registrable Securities which
names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
This letter shall serve as our standing instruction to you that the
shares of Common Stock are freely transferable by the Holders pursuant to the
Registration Statement. You need not require further letters from us to effect
any future legend-free issuance or reissuance of Common Shares to the Holders.
Very truly yours,
[ ]
By:_____________________
C.C. [LIST NAMES OF HOLDERS]
