EXCHANGE AGREEMENT
This Exchange Agreement (this “Agreement”) is dated as of January 31, 2014, by and among C Media Limited (“C Media”), Xxxxx XxXxxxx (“XxXxxxx”) and YOU On Demand Holdings, Inc. (the “Company”).
BACKGROUND
WHEREAS, XxXxxxx is the owner of 7,000,000 shares of the Company’s Series A Preferred Stock, par value $0.001 per share (the “XxXxxxx Series A Shares”), issued to him pursuant to that certain Securities Purchase Agreement, dated May 18, 2010, as amended as of July 9, 2010, between the Company and XxXxxxx;
WHEREAS, the Company intends to raise $19,000,000 through the issuance and sale of shares of Series E Preferred Stock of the Company, par value $.001 per share (the “Series E Shares”), to C Media and certain other purchasers (the “Other Purchasers”, and together with C Media, the “Purchasers”) pursuant to a Series E Preferred Stock Purchase Agreement, by and among the Company and the Purchasers (the “Series E SPA,” and the transactions contemplated thereby, collectively, the “Series E Financing”);
WHEREAS, on the date the Series E Financing is consummated (the “Series E Closing”), the Company will issue to C Media 933,333 Series E Shares (the “Series E Exchange Shares”) with the rights and preferences set forth in the Certificate of Designation of Series E Convertible Preferred Stock of the Company (the “Series E COD”);
WHEREAS, in order to induce C Media to consummate the Series E Financing, XxXxxxx and C Media have agreed that, immediately following the Series E Closing, XxXxxxx will exchange with C Media all of the XxXxxxx Series A Shares for the Series E Exchange Shares in accordance with the terms and conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties hereto hereby agree as follows:
1. All capitalized terms not otherwise defined herein shall have the meanings given to them in the Series E SPA.
2. XxXxxxx, C Media and the Company hereby acknowledge and agree that all of the rights and obligations of any of them set forth in this Agreement are entirely contingent upon the occurrence of a Series E Closing in accordance with the terms of the Series D Preferred Stock Purchase Agreement, by and between the Company and C Media, dated as of July 5, 2013, as amended as of November 4, 2013 (the “Series D SPA”), and that, if there is no Series E Closing, this Agreement shall terminate in accordance with Section 8 hereof.
3. XxXxxxx and C Media hereby agree that, assuming the Series E Closing occurs, simultaneously with the Series E Closing, that certain Amended and Restated Voting Agreement, dated as of July 18, 2013, between XxXxxxx and C Media shall be terminated, without further legal force or effect.
4. XxXxxxx, C Media and the Company hereby agree that immediately following the Series E Closing:
(a) XxXxxxx shall deliver to C Media stock certificate no. A-001, representing the XxXxxxx Series A Shares, duly endorsed for transfer, or an executed Affidavit of Lost Certificate, and XxXxxxx and the Company shall take any and all such further actions as may be required for all of XxXxxxx’x rights with respect to the XxXxxxx Series A Shares to be transferred in full to C Media; and
(b) C Media shall deliver to XxXxxxx stock certificate no. E-002, representing the Series E Exchange Shares, duly endorsed for transfer, and C Media and the Company, as applicable, shall take any and all such further actions as may be required for XxXxxxx to become the owner of the Series E Exchange Shares.
5. XxXxxxx hereby represents and warrants the following to C Media with regard to the XxXxxxx Series A Shares to be exchanged with C Media pursuant to Section 4(a) hereof:
(a) XxXxxxx has the power and authority to execute, deliver and perform his obligations under this Agreement, including with respect to the XxXxxxx Series A Shares, and this Agreement is a legal, valid and binding obligation, enforceable against XxXxxxx.
(b) XxXxxxx owns, of record and beneficially, and has valid title to and sole voting power with respect to, all of the XxXxxxx Series A Shares, free and clear of any and all liens or encumbrances.
(c) The XxXxxxx Series A Shares are all of the shares of Series A Preferred Stock of the Company, par value $0.001 per share, owned by XxXxxxx, free and clear of any liens or encumbrances.
6. C Media hereby represents and warrants the following to C Media with regard to the XxXxxxx Series A Shares to be exchanged with C Media pursuant to Section 4(b) hereof
(a) C Media has the power and authority to execute, deliver and perform its obligations under this Agreement, including with respect to the Series E Exchange Shares, and this Agreement is a legal, valid and binding obligation, enforceable against C Media.
(b) C Media owns, of record and beneficially, and has valid title to and sole voting power with respect to, all of the Series E Exchange Shares, free and clear of any liens or encumbrances.
7. Each party to this Agreement hereby represents, warrants and covenants as follows with respect to itself or himself, as applicable:
(a) This Agreement constitutes legal, valid and binding obligations of such party and is enforceable against such party in accordance with its terms.
(b) The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of such party except as expressly set forth herein.
(c) Such party agrees to execute and deliver promptly any and all such further reasonable documents, instruments and certificates, and to undertake all such further acts, as may be necessary, desirable or appropriate to effectuate the terms of this Agreement.
8. This Agreement shall terminate upon the earlier of (a) mutual written agreement by each of the parties hereto, (b) the date, if any, when C Media delivers written notice to the Company of its intention not to consummate the Series E Financing, (c) the Second Revised E Outside Date, as that term is defined in the Series D SPA and (d) the date that all of the transactions contemplated hereby are consummated in full.
9. This Agreement constitutes the entire understanding of the parties hereto relating to the subject matter hereof and supersedes all prior agreements and understandings, whether oral or written.
10. No amendment to this Agreement shall be effective unless in writing and signed by each of the parties hereto.
11. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and shall be governed by and construed in accordance with the laws of the State of New York.
12. This Agreement may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto.
[Signature Page Follows]
IN WITNESS WHEREOF, this Agreement has been duly executed by each of the parties hereto as of the day and year first written above.
| COMPANY | |||
| YOU ON DEMAND HOLDINGS, INC. | |||
| By: | /s/ Xxxx Xxxxxx | ||
| Name: Xxxx Xxxxxx | |||
| Title: CFO | |||
[Signature Page to Exchange Agreement]
| XXXXXXX | ||
| /s/ Xxxxx XxXxxxx | ||
| Xxxxx XxXxxxx |
[Signature Page to Exchange Agreement]
| C MEDIA | |||
| C MEDIA LIMITED | |||
| By: | /s/ Xuesong Song | ||
| Name: Xuesong Song | |||
| Title: Chairman & CEO | |||
[Signature Page to Exchange Agreement]
