EXHIBIT 4.7
EXECUTION COPY
XXXXXX INTERACTIVE ENTERTAINMENT LIMITED
ZERO COUPON SENIOR CONVERTIBLE NOTES DUE 2014
REGISTRATION RIGHTS AGREEMENT
October 20, 2004
Xxxxxxx Sachs (Asia) L.L.C.
68th Floor, Xxxxxx Kong Center,
0 Xxxxx'x Xxxx Xxxxxxx,
Xxxx Xxxx.
Ladies and Gentlemen:
Xxxxxx Interactive Entertainment Limited, an exempted company incorporated
in the Cayman Islands (the "Company"), proposes to issue and sell to the
Purchaser (as defined herein) upon the terms set forth in the Purchase Agreement
(as defined herein) its Zero Coupon Senior Convertible Notes due 2014 (the
"Securities"). As an inducement to the Purchaser to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Purchaser
thereunder, the Company agrees with the Purchaser for the benefit of Holders (as
defined herein) from time to time of the Registrable Securities (as defined
herein) as follows:
1. Definitions.
(a) Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Purchase Agreement. As used in this Agreement,
the following defined terms shall have the following meanings:
"Affiliate" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with such specified person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such person whether by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Closing Date" means the First Time of Delivery as defined in the Purchase
Agreement.
"Commission" means the United States Securities and Exchange Commission,
or any other federal agency at the time administering the Securities Act or the
Exchange Act, whichever is the relevant statute for the particular purpose.
"DTC" means The Depository Trust Company.
"Effective Date" has the meaning assigned thereto in Section 2(b)(i)
hereof..
"Effective Failure" has the meaning assigned thereto in Section 7(b)
hereof.
"Effectiveness Period" has the meaning assigned thereto in Section 2(b)(i)
hereof.
"Effective Time" means the time at which the Commission declares the Shelf
Registration Statement effective or at which the Shelf Registration Statement
otherwise becomes effective.
"Electing Holder" has the meaning assigned thereto in Section 3(a)(iii)
hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Holder" means any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).
"Indenture" means the Indenture, dated as of October 20, 2004, between the
Company and The Bank of New York, as amended and supplemented from time to time
in accordance with its terms.
"Liquidated Damages" has the meaning assigned thereto in Section 7(a)
hereof.
"Managing Underwriters" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering, if any,
conducted pursuant to Section 6 hereof.
"NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Appendix A
hereto.
"Ordinary Shares" means the Company's ordinary shares, par value US$0.01
per share.
The term "person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act)
included in the Shelf Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Shelf Registration Statement and by
all other amendments and supplements to such prospectus, including all material
incorporated by
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reference in such prospectus and all documents filed after the date of such
prospectus by the Company under the Exchange Act and incorporated by reference
therein.
"Purchase Agreement" means the purchase agreement, dated as of October 15,
between the Purchaser and the Company relating to the Securities.
"Purchaser" means the Purchaser named in Schedule I to the Purchase
Agreement.
"Registrable Securities" means all or any portion of the Securities issued
pursuant to the Purchase Agreement under the Indenture in registered form and
the shares of Ordinary Shares issuable upon conversion of such Securities;
provided, however, that a security ceases to be a Registrable Security when it
is no longer a Restricted Security.
"Registration Default" has the meaning assigned thereto in Section 7(a)
hereof.
"Restricted Security" means any Securities or Ordinary Shares issuable
upon conversion thereof except any such Securities or Ordinary Shares that (i)
have been effectively registered under the Securities Act and sold in a manner
contemplated by the Shelf Registration Statement or (ii) have been transferred
in compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any
successor provision thereto).
"Rules and Regulations" means the published rules and regulations of the
Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company pursuant to the
provisions of Section 2 of this Agreement, including the Prospectus contained
therein, any amendments and supplements to such registration statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.
"Trust Indenture Act" means the United States Trust Indenture Act of 1939,
or any successor thereto, and the rules, regulations and forms promulgated
thereunder, as the same shall be amended from time to time.
The term "underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
(b) Wherever there is a reference in this Agreement to a percentage of the
"principal amount" of Registrable Securities or to a percentage of Registrable
Securities, Ordinary Shares
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shall be treated as representing the principal amount of Securities that was
surrendered for conversion or exchange in order to receive such number of shares
of Ordinary Shares.
2. Shelf Registration.
(a) The Company shall, no later than 90 calendar days following the
Closing Date, file with the Commission a Shelf Registration Statement relating
to the offer and sale of the Registrable Securities by the Holders from time to
time in accordance with the methods of distribution elected by such Holders and
set forth in such Shelf Registration Statement and, thereafter, shall use its
commercially reasonable efforts to cause such Shelf Registration Statement to be
declared effective under the Securities Act no later than 210 calendar days
following the Closing Date; provided, however, that the Company may, upon
written notice to all Holders, postpone having the Shelf Registration Statement
declared effective for a reasonable period not to exceed 90 days if the Company
possesses material non-public information, the disclosure of which would have a
material adverse effect on the Company and its subsidiaries taken as a whole;
provided further, however, that no Holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement or to use the
Prospectus forming a part thereof for resales of Registrable Securities unless
such Holder is an Electing Holder.
(b) The Company shall use its commercially reasonable efforts:
(i) to keep the Shelf Registration Statement continuously effective
under the Securities Act in order to permit the Prospectus forming a part
thereof to be usable by Holders until the earliest of (1) the sale of all
Registrable Securities registered under the Shelf Registration Statement;
(2) the expiration of the period referred to in Rule 144(k) of the
Securities with respect to all Registrable Securities held by Persons that
are not Affiliates of the Company; and (3) two years from the date (the
"Effective Date") such Shelf Registration Statement is declared effective
(such period being referred to herein as the "Effectiveness Period");
(ii) after the Effective Time of the Shelf Registration Statement,
upon the receipt of a completed and signed Notice and Questionnaire from
any Holder of Registrable Securities that is not then an Electing Holder,
within 20 business days of receipt, file any amendments or supplements to
the Registration Statement necessary for the relevant Holders to be named
as selling securityholders in the Prospectus contained therein and to be
permitted to deliver the Prospectus to purchasers of the Holder's
Securities (subject to the Company's right to suspend the Registration
Statement as described in Section 2(c); provided, however, that the
Company will not be obligated to file more than one such amendment or
supplement to the Registration Statement in any 30-day period following
the date the Registration Statement is declared effective for the purpose
of naming Holders as selling securityholders who were not named in the
Registration Statement at the time of effectiveness; and
(iii) if at any time the Securities, pursuant to Article 14 of the
Indenture, are convertible into securities other than Ordinary Shares, to
cause, or to cause any successor under the Indenture to cause, such
securities to be included in the Shelf
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Registration Statement no later than the date on which the Securities may
then be convertible into such securities.
The Company shall be deemed not to have used its commercially reasonable efforts
to keep the Shelf Registration Statement effective during the requisite period
if the Company voluntarily takes any action that would result in Holders of
Registrable Securities covered thereby not being able to offer and sell any of
such Registrable Securities during that period, unless such action is (A)
required by applicable law and the Company thereafter promptly complies with the
requirements of paragraph 3(j) below or (B) permitted pursuant to Section 2(c)
below.
(c) The Company may suspend the use of the Prospectus for a period not to
exceed 30 days in any 90-day period or an aggregate of 90 days in any 12-month
period if the Board of Directors of the Company shall have determined in good
faith that because of valid business reasons (not including avoidance of the
Company's obligations hereunder), including the acquisition or divestiture of
assets, pending corporate developments and similar events, it is in the best
interests of the Company to suspend such use, and prior to suspending such use
the Company provides the Holders with written notice of such suspension, which
notice need not specify the nature of the event giving rise to such suspension.
3. Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a) (i) Not less than 25 calendar days prior to the Effective Time
of the Shelf Registration Statement, the Company shall mail the Notice and
Questionnaire to the Holders of Registrable Securities. No Holder shall be
entitled to be named as a selling securityholder in the Shelf Registration
Statement as of the Effective Time, and no Holder shall be entitled to use
the Prospectus forming a part thereof for resales of Registrable
Securities at any time, unless such Holder has returned a completed and
signed Notice and Questionnaire to the Company by the deadline for
response set forth therein; provided, however, Holders of Registrable
Securities shall have at least 20 calendar days from the date on which the
Notice and Questionnaire is first mailed to such Holders to return a
completed and signed Notice and Questionnaire to the Company.
(ii) After the Effective Time of the Shelf Registration Statement,
the Company shall, upon the request of any Holder of Registrable
Securities that is not then an Electing Holder, promptly send a Notice and
Questionnaire to such Holder. Without limiting Section 2(b)(ii) above, the
Company shall not be required to take any action to name such Holder as a
selling securityholder in the Shelf Registration Statement or to enable
such Holder to use the Prospectus forming a part thereof for resales of
Registrable Securities until such Holder has returned a completed and
signed Notice and Questionnaire to the Company.
(iii) The term "Electing Holder" shall mean any Holder of
Registrable Securities that has returned a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a)(i) or
3(a)(ii) hereof.
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(b) The Company shall furnish to each Electing Holder who requests in
writing, prior to the Effective Time, a copy of the Shelf Registration Statement
initially filed with the Commission, and shall furnish to such Holders, prior to
the filing thereof with the Commission, copies of each amendment thereto and
each amendment or supplement, if any, to the Prospectus included therein (other
than an amendment or supplement that does nothing more substantive than update
the table of selling securityholders set forth therein), and shall use its
commercially reasonable efforts to reflect in each such document, at the
Effective Time or when so filed with the Commission, as the case may be, such
comments as such Holders and their respective counsel reasonably may propose
within three business days of the Electing Holders having received such
amendment or supplement.
(c) The Company shall promptly take such action as may be necessary so
that (i) each of the Shelf Registration Statement and any amendment thereto and
the Prospectus forming a part thereof and any amendment or supplement thereto
(and each report or other document incorporated therein by reference in each
case) complies in all material respects with the Securities Act and the Exchange
Act and the respective rules and regulations thereunder, (ii) each of the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) each of the Prospectus forming a part of the
Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not at any time during the Effectiveness Period include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) The Company shall promptly advise each Electing Holder, and shall
confirm such advice in writing if so requested by any such Electing Holder:
(i) when a Shelf Registration Statement and any amendment thereto
has been filed with the Commission and when a Shelf Registration Statement
or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements
to the Shelf Registration Statement or the Prospectus included therein or
for additional information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Shelf Registration Statement or the initiation of
any proceedings for such purpose;
(iv) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the securities included in the
Shelf Registration Statement for sale in any jurisdiction or the
initiation of any proceeding for such purpose; and
(v) of the occurrence of any event or the existence of any state of
facts that requires the making of any changes in the Shelf Registration
Statement or the
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Prospectus included therein so that, as of such date, such Shelf
Registration Statement and Prospectus do not contain an untrue statement
of a material fact and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein (in the case of
the Prospectus, in light of the circumstances under which they were made)
not misleading (which advice shall be accompanied by an instruction to
such Holders to suspend the use of the Prospectus until the requisite
changes have been made).
(e) The Company shall use its commercially reasonable efforts to prevent
the issuance, and if issued to obtain the withdrawal at the earliest possible
time, of any order suspending the effectiveness of the Shelf Registration
Statement.
(f) The Company shall furnish to each Electing Holder for such time as
such Electing Holder continues to be a Holder, without charge, at least one copy
of the Shelf Registration Statement and all post-effective amendments thereto,
including financial statements and schedules, and, if such Electing Holder so
requests in writing, all reports, other documents and exhibits that are filed
with or incorporated by reference in the Shelf Registration Statement.
(g) The Company shall, during the Effectiveness Period, deliver to each
Electing Holder, without charge, as many copies of the Prospectus (including
each preliminary Prospectus) included in the Shelf Registration Statement and
any amendment or supplement thereto as such Electing Holder may reasonably
request; and the Company consents (except during the periods specified in
Section 2(c) above or during the continuance of any event or the existence of
any state of facts described in Section 3(d)(v) above) to the use of the
Prospectus and any amendment or supplement thereto by each of the Electing
Holders in connection with the offering and sale of the Registrable Securities
covered by the Prospectus and any amendment or supplement thereto during the
Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant to the Shelf
Registration Statement, the Company shall use its commercially reasonable
efforts to (i) register or qualify or cooperate with the Electing Holders and
their respective counsel in connection with the registration or qualification of
such Registrable Securities for offer and sale under the securities or "blue
sky" laws of such jurisdictions within the United States as any Electing Holder
may reasonably request, (ii) keep such registrations or qualifications in effect
and comply with such laws so as to permit the continuance of offers and sales in
such jurisdictions for so long as may be necessary to enable any Electing Holder
or underwriter, if any, to complete its distribution of Registrable Securities
pursuant to the Shelf Registration Statement, and (iii) take any and all other
actions necessary or advisable to enable the disposition in such jurisdictions
of such Registrable Securities; provided, however, that in no event shall the
Company be obligated to (A) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to so
qualify but for this Section 3(h) or (B) file any general consent to service of
process in any jurisdiction where it is not as of the date hereof so subject.
(i) Unless any Registrable Securities shall be in book-entry only form,
the Company shall cooperate with the Electing Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold pursuant to the Shelf Registration
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Statement, which certificates, if so required by any securities exchange upon
which any Registrable Securities are listed, shall be penned, lithographed or
engraved, or produced by any combination of such methods, on steel engraved
borders, and which certificates shall be free of any restrictive legends and in
such permitted denominations and registered in such names as Electing Holders
may request in connection with the sale of Registrable Securities pursuant to
the Shelf Registration Statement.
(j) Upon the occurrence of any event or the existence of any state of
facts contemplated by paragraph 3(d)(v) above, the Company shall promptly
prepare a post-effective amendment to any Shelf Registration Statement or an
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If the Company notifies the Electing Holders of the
occurrence of any event or the existence of any state of facts contemplated by
paragraph 3(d)(v) above, the Electing Holder shall suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made.
(k) Not later than the Effective Time of the Shelf Registration Statement,
the Company shall provide a CUSIP number for the Registrable Securities that are
debt securities.
(l) The Company shall use its commercially reasonable efforts to comply
with all applicable Rules and Regulations, and to make generally available to
its securityholders as soon as practicable, but in any event not later than
eighteen months after (i) the effective date (as defined in Rule 158(c) under
the Securities Act) of the Shelf Registration Statement, (ii) the effective date
of each post-effective amendment to the Shelf Registration Statement, and (iii)
the date of each filing by the Company with the Commission of an Annual Report
on Form 20-F that is incorporated by reference in the Shelf Registration
Statement, an earning statement of the Company and its subsidiaries complying
with Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule 158).
(m) Not later than the Effective Time of the Shelf Registration Statement,
the Company shall cause the Indenture to be qualified under the Trust Indenture
Act; in connection with such qualification, the Company shall cooperate with the
Trustee under the Indenture and the Holders (as defined in the Indenture) to
effect such changes to the Indenture as may be required for such Indenture to be
so qualified in accordance with the terms of the Trust Indenture Act; and the
Company shall execute, and shall use all reasonable efforts to cause the Trustee
to execute, all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to enable
such Indenture to be so qualified in a timely manner. In the event that any such
amendment or modification referred to in this Section 3(m) involves the
appointment of a new trustee under the Indenture, the Company shall appoint a
new trustee thereunder pursuant to the applicable provisions of the Indenture.
(n) In the event of an underwritten offering conducted pursuant to Section
6 hereof, the Company shall, if requested, promptly include or incorporate in a
Prospectus supplement or
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post-effective amendment to the Shelf Registration Statement such information as
the Managing Underwriters reasonably agree should be included therein and to
which the Company does not reasonably object and shall make all required filings
of such Prospectus supplement or post-effective amendment as soon as practicable
after it is notified of the matters to be included or incorporated in such
Prospectus supplement or post-effective amendment.
(o) The Company shall enter into such customary agreements (including an
underwriting agreement in customary form in the event of an underwritten
offering conducted pursuant to Section 6 hereof) and take all other appropriate
action in order to expedite and facilitate the registration and disposition of
the Registrable Securities, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification provisions
and procedures substantially identical to those set forth in Section 5 hereof
with respect to all parties to be indemnified pursuant to Section 5 hereof.
(p) The Company shall:
(i)(A) make reasonably available for inspection by the Electing
Holders, any underwriter participating in any disposition pursuant to the
Shelf Registration Statement, and any attorney, accountant or other agent
retained by such Electing Holders or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties
of the Company and its subsidiaries, and (B) cause the Company's officers,
directors and employees to supply all information reasonably requested by
such Electing Holders or any such underwriter, attorney, accountant or
agent in connection with the Shelf Registration Statement, in each case,
as is customary for similar due diligence examinations; provided, however,
that all records, information and documents that are designated in writing
by the Company, in good faith, as confidential shall be kept confidential
by such Electing Holders and any such underwriter, attorney, accountant or
agent, unless such disclosure is made in connection with a court
proceeding or required by law, or such records, information or documents
become available to the public generally or through a third party without
an accompanying obligation of confidentiality; and provided further that,
such inspection and information gathering shall, to the greatest extent
reasonably possible, be coordinated on behalf of the Electing Holders and
the other parties entitled thereto by one counsel designated by and on
behalf of the Electing Holders and other parties;
(ii) in connection with any underwritten offering conducted pursuant
to Section 6 hereof, make such representations and warranties to the
Electing Holders participating in such underwritten offering and to the
Managing Underwriters, in form, substance and scope as are customarily
made by the Company to underwriters in primary underwritten offerings of
equity and convertible debt securities and covering matters including, but
not limited to, those set forth in the Purchase Agreement;
(iii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain opinions of counsel to the Company
(which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Managing Underwriters) addressed to each
Electing Holder participating in such underwritten
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offering and the underwriters, covering such matters as are customarily
covered in opinions requested in primary underwritten offerings of equity
and convertible debt securities and such other matters as may be
reasonably requested by such Electing Holders and underwriters (it being
agreed that the matters to be covered by such opinions shall include,
without limitation, as of the date of the opinion and as of the Effective
Time of the Shelf Registration Statement or most recent post-effective
amendment thereto, as the case may be, the absence from the Shelf
Registration Statement and the Prospectus, including the documents
incorporated by reference therein, of an untrue statement of a material
fact or the omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading);
(iv) in connection with any underwritten offering conducted pursuant
to Section 6 hereof, obtain "cold comfort" letters and updates thereof
from the independent public accountants of the Company (and, if necessary,
from the independent public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements
and financial data are, or are required to be, included in the Shelf
Registration Statement), addressed to each Electing Holder participating
in such underwritten offering (if such Electing Holder has provided such
letter, representations or documentation, if any, required for such cold
comfort letter to be so addressed) and the underwriters, in customary form
and covering matters of the type customarily covered in "cold comfort"
letters in connection with primary underwritten offerings; and
(v) in connection with any underwritten offering conducted pursuant
to Section 6 hereof, deliver such documents and certificates as may be
reasonably requested by any Electing Holders participating in such
underwritten offering and the Managing Underwriters, if any, including,
without limitation, certificates to evidence compliance with Section 3(j)
hereof and with any conditions contained in the underwriting agreement or
other agreements entered into by the Company.
(q) The Company will use its commercially reasonable efforts to cause the
ADRs representing the Ordinary Shares issuable upon conversion of the Securities
to be listed for quotation on the Nasdaq National Market System or other stock
exchange or trading system on which the ADRs representing the Ordinary Shares
primarily trades on or prior to the Effective Time of the Shelf Registration
Statement hereunder.
(r) In the event that any broker-dealer registered under the Exchange Act
shall be an "affiliate" (as defined in Rule 2720(b)(1) of the NASD Rules (or any
successor provision thereto)) of the Company or has a "conflict of interest" (as
defined in Rule 2720(b)(7) of the NASD Rules (or any successor provision
thereto)) and such broker-dealer shall be intended to underwrite, participate as
a member of an underwriting syndicate or selling group or assist in the
distribution of any Registrable Securities covered by the Shelf Registration
Statement, whether as a Holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, and such Holder cannot by reasonable efforts appoint an
alternative broker-dealer then the Company shall assist such broker-dealer in
complying with the
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requirements of the NASD Rules, including, without limitation, by (A) engaging a
"qualified independent underwriter" (as defined in Rule 2720(b)(15) of the NASD
Rules (or any successor provision thereto)) to participate in the preparation of
the registration statement relating to such Registrable Securities, to exercise
usual standards of due diligence in respect thereto and to recommend the public
offering price of such Registrable Securities, (B) indemnifying such qualified
independent underwriter to the extent of the indemnification of underwriters
provided in Section 5 hereof, and (C) providing such information to such
broker-dealer as may be required in order for such broker-dealer to comply with
the requirements of the NASD Rules.
(s) The Company shall use its commercially reasonable efforts to take all
other steps necessary to effect the registration, offering and sale of the
Registrable Securities covered by the Shelf Registration Statement contemplated
hereby.
4. Registration Expenses. Except as otherwise provided in Section 3, the
Company shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2, 3 and 6 hereof and shall bear
or reimburse the Electing Holders for the reasonable fees and disbursements of a
single counsel selected by a plurality of all Electing Holders who own an
aggregate of not less than 25% of the Registrable Securities covered by the
Shelf Registration Statement to act as counsel therefore in connection
therewith. Each Electing Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Electing Holder's Registrable Securities pursuant to the Shelf Registration
Statement.
5. Indemnification and Contribution.
(a) Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2 hereof, the Company shall indemnify
and hold harmless each Electing Holder and each underwriter and its affiliates,
selling agent or other securities professional, if any, which facilitates the
disposition of Registrable Securities, and each of their respective officers and
directors and each person who controls such Electing Holder, underwriter,
selling agent or other securities professional within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act (each such person being
sometimes referred to as an "Indemnified Person") against any losses, claims,
damages or liabilities, joint or several, to which such Indemnified Person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Shelf Registration Statement under which such Registrable
Securities are to be registered under the Securities Act, or any Prospectus
contained therein or furnished by the Company to any Indemnified Person, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
Company hereby agrees to reimburse such Indemnified Person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable to any such Indemnified Person in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or
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alleged omission made in such Shelf Registration Statement or Prospectus, or
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by such Indemnified Person expressly for
use therein; provided, further, that this indemnity agreement shall not apply to
loss, liability, claim, damage or expense if the Holder fails to deliver at or
prior to the written confirmation of sale, the most recent Prospectus, as
amended or supplemented, and such Prospectus, as amended or supplemented, would
have corrected such untrue statement or omission or alleged untrue statement or
omission of a material fact and delivery thereof by such Holder was required by
law.
(b) Indemnification by the Electing Holders and any Agents and
Underwriters. Each Electing Holder agrees, as a consequence of the inclusion of
any of such Electing Holder's Registrable Securities in such Shelf Registration
Statement, and each underwriter, selling agent or other securities professional,
if any, which facilitates the disposition of Registrable Securities shall agree,
as a consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors and officers who sign any Shelf Registration Statement and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities to which the Company or such other persons may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in such Shelf Registration Statement or Prospectus, or any
amendment or supplement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Electing
Holder, underwriter, selling agent or other securities professional expressly
for use therein, and (ii) reimburse any such party for any legal or other
expenses reasonably incurred by such party in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party under this Section 5, notify such indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under the indemnification provisions of or
contemplated by subsection (a) or (b) above. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, such indemnifying party shall
not be liable to such indemnified party under this Section 5 for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such
12
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to,
or an admission of, fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) Contribution. If the indemnification provided for in this Section 5 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation (even if the Electing Holders or any underwriters, selling
agents or other securities professionals or all of them were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 5(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. 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 was not guilty of such fraudulent
misrepresentation. The obligations of the Electing Holders and any underwriters,
selling agents or other securities professionals in this Section 5(d) to
contribute shall be several in proportion to the percentage of principal amount
of Registrable Securities registered or underwritten, as the case may be, by
them and not joint.
(e) Notwithstanding any other provision of this Section 5, in no event
will any (i) Electing Holder be required to undertake liability to any person
under this Section 5 for any amounts in excess of the dollar amount of the
proceeds to be received by such Holder from the sale of such Holder's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Shelf Registration Statement under which
such Registrable Securities are to be registered under the Securities Act and
(ii) underwriter, selling agent or other securities professional be required to
undertake liability to any person hereunder
13
for any amounts in excess of the discount, commission or other compensation
payable to such underwriter, selling agent or other securities professional with
respect to the Registrable Securities underwritten by it and distributed to the
public.
(f) The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Electing Holder, underwriter,
selling agent or other Securities professional referred to in Section 5(b) above
shall be in addition to any liability which such Electing Holder, underwriter,
selling agent or other securities professional referred to in Section 5(b) above
may otherwise have to the Company. The remedies provided in this Section 5 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.
6. Underwritten Offering. The Company shall use reasonable best efforts to
facilitate an underwritten offering if any Holder of Registrable Securities
desires to sell Registrable Securities (in whole or in part) in an underwritten
offering; provided that (i) the Electing Holders of at least 33-1/3% in
aggregate principal amount of the Registrable Securities then covered by the
Shelf Registration Statement shall request such an offering, (ii) at least such
aggregate principal amount of such Registrable Securities shall be included in
such offering and (iii) at least US$10,000,000 aggregate principal amount of
such Registrable Securities shall be included in such offering; and provided
further that the Company shall not be obligated to cooperate with more than one
underwritten offering during the Effectiveness Period Upon receipt of such a
request, the Company shall provide all Holders of Registrable Securities written
notice of the request, which notice shall inform such Holders that they have the
opportunity to participate in the offering. In any such underwritten offering,
the investment banker or bankers and manager or managers that will administer
the offering will be selected by, and the underwriting arrangements with respect
thereto (including the size of the offering) will be approved by, the holders of
a majority of the Registrable Securities to be included in such offering;
provided, however, that such investment bankers and managers and underwriting
arrangements must be reasonably satisfactory to the Company. No Holder may
participate in any underwritten offering contemplated hereby unless (a) such
Holder agrees to sell such Holder's Registrable Securities to be included in the
underwritten offering in accordance with any approved underwriting arrangements,
(b) such Holder completes and executes all reasonable questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such approved underwriting arrangements,
and (c) if such Holder is not then an Electing Holder, such Holder returns a
completed and signed Notice and Questionnaire to the Company in accordance with
Section 3(a)(ii) hereof within a reasonable amount of time before such
underwritten offering. The Holders participating in any underwritten offering
shall be responsible for any underwriting discounts and commissions and fees
and, subject to Section 4 hereof, expenses of their own counsel. The Company
shall pay all expenses customarily borne by issuers in an underwritten offering,
including but not limited to filing fees, the fees and disbursements of its
counsel and independent public accountants and any printing expenses incurred in
connection with such underwritten offering. Notwithstanding the foregoing or the
provisions of Section 3(n) hereof, upon receipt of a request from the Managing
Underwriter or a representative of holders of a majority of the Registrable
Securities to be included in an underwritten offering to prepare and file an
amendment or supplement to the
14
Shelf Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Board of Directors of the Company shall have determined
in good faith that the Company has a bona fide business reason for such delay.
7. Liquidated Damages.
(a) Notwithstanding any postponement of effectiveness permitted by Section
2(a) hereof, if (i) on or prior to the 90th day following the Closing Date, a
Shelf Registration Statement has not been filed with the Commission or (ii) on
or prior to the 270th day following the Closing Date, such Shelf Registration
Statement is not declared effective by the Commission (each, a "Registration
Default"), the Company shall be required to pay liquidated damages ("Liquidated
Damages"), from and including the day following such Registration Default until
such Shelf Registration Statement is either so filed or so filed and
subsequently declared effective, as applicable, at a rate per annum equal to
one-quarter of one percent (0.25%) of the principal amount of Registrable
Securities for the period from the occurrence of the Registration Default until
such time as no Registration Default is in effect.
(b) In the event that during the Effectiveness Period (i) the Shelf
Registration Statement ceases to be effective, (ii) the Company suspends the use
of the Prospectus pursuant to Section 2(c) or 3(j) hereof, (iii) the Holders are
not authorized to use the Prospectus pursuant to Section 3(g) hereto or (iv) the
Holders are otherwise prevented or restricted by the Company from effecting
sales pursuant to the Shelf Registration Statement (each an "Effective Failure")
for more than 30 days, whether or not consecutive, in any 90-day period, or for
more than 90 days, whether or not consecutive, during any 12-month period, then
the Company shall pay Liquidated Damages at a rate per annum equal to one-half
of one percent (0.50%) of the principal amount of Registrable Securities for the
period from the occurrence of the Effective Failure until such time as no
Effective Failure is in effect.
(c) Any amounts to be paid as Liquidated Damages pursuant to paragraphs
(a) or (b) of this Section 7 shall be paid in cash semi-annually in arrears,
with the first semi-annual payment due on the first Interest Payment Date (as
defined in the Indenture), as applicable, following the date of such
Registration Default or Effective Failure, as applicable. Such Liquidated
Damages will accrue (1) in respect of the Securities at the rates set forth in
paragraphs (a) or (b) of this Section 7, as applicable, on the principal amount
of the Securities and (2) in respect of the Ordinary Shares issued upon
conversion of the Securities, at the rates set forth in paragraphs (a) or (b) of
this Section 7, as applicable, applied to the Conversion Price (as defined in
the Indenture) at the time of such Registration Default or Effective Failure.
(d) Except as provided in Section 8(b) hereof, the Liquidated Damages as
set forth in this Section 7 shall be the exclusive monetary remedy available to
the Holders of Registrable Securities for such Registration Default or Effective
Failure. In no event shall the Company be required to pay Liquidated Damages in
excess of the applicable maximum amount of one-half of one percent (0.50%) set
forth above, regardless of whether one or multiple Registration Defaults or
Effective Failures exist.
15
8. Miscellaneous.
(a) Form F-6 Registration Statement. The Company will use its commercially
reasonable efforts to maintain the effectiveness under the Securities Act of the
registration statement on Form F-6 (File No. 333-114759) relating to the ADSs
representing the Ordinary Shares.
(b) Other Registration Rights. The Company may grant registration rights
that would permit any person that is a third party the right to piggy-back on
any Shelf Registration Statement, provided that such piggy-back rights shall be
in accordance with the piggy-back rights described in the Shareholders'
Agreement dated as of December 19, 2003 between the Company and each of the
Shareholders named therein.
(b) Specific Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Purchasers and the Holders from time to time
may be irreparably harmed by any such failure, and accordingly agree that the
Purchasers and such Holders, in addition to any other remedy to which they may
be entitled at law or in equity and without limiting the remedies available to
the Electing Holders under Section 7 hereof, shall be entitled to compel
specific performance of the obligations of the Company under this Agreement in
accordance with the terms and conditions of this Agreement, in any court of the
United States or any State thereof having jurisdiction.
(c) Amendments and Waivers. This Agreement, including this Section 8(c),
may be amended, and waivers or consents to departures from the provisions hereof
may be given, only by a written instrument duly executed by the Company and the
holders of a majority in aggregate principal amount of Registrable Securities
then outstanding. Each Holder of Registrable Securities outstanding at the time
of any such amendment, waiver or consent or thereafter shall be bound by any
amendment, waiver or consent effected pursuant to this Section 8(c), whether or
not any notice, writing or marking indicating such amendment, waiver or consent
appears on the Registrable Securities or is delivered to such Holder.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Indenture.
(e) Parties in Interest. The parties to this Agreement intend that all
Holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities which are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any Holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
Holder of Registrable Securities shall acquire Registrable Securities, in any
lawful manner, whether by gift, bequest, purchase, operation of law or
otherwise, such transferee shall, without any further writing or action of any
kind, be entitled to
16
receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate 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.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(i) Submission to Jurisdiction; Appointment of Agent for Service of
Process.
(i) Each party hereto hereby irrevocably consents and agrees, for
the benefit of each other party hereto, that any legal action, suit or
proceeding against it with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Agreement may be
brought in any Federal or State court located in the Borough of Manhattan, The
City of New York (a "Chosen Court"), and hereby irrevocably accepts and submits
to the non-exclusive jurisdiction of each such Chosen Court with respect to any
such action, suit or proceeding. Each party hereto hereby waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions, suits or proceedings brought in any such court and hereby
further waives and agrees not to plead or claim in any such court that any such
action, suit or proceeding brought therein has been brought in an inconvenient
forum.
(ii) Each party hereto agrees that a final judgment against it in
any action, suit or proceeding taken in any Federal or State Court in the
Borough of Manhattan, the City of New York in accordance with the immediately
preceding paragraph shall be conclusive and may be enforced in any jurisdiction
by suit on the judgment, a certified copy of which judgment shall be conclusive
evidence thereof, or by any other means provided by law.
(iii) Each party hereto, at its own expense, hereby appoints CT
Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, U.S.A., as its
authorized agent (the "Authorized Agent") upon which process may be served in
any action arising out of or relating to this Agreement or the transactions
contemplated by this Agreement, which may be instituted in any Chosen Court by
another party to this Agreement or by the Trustee. Such appointment shall be
irrevocable until October 20, 2007. Each party hereto hereby irrevocably waives
any immunity to service of process in respect of any such action to which it
might otherwise be entitled in any action arising out of or relating to this
Agreement or the transactions contemplated by this Agreement which may be
instituted in any Chosen Court by another party to this Agreement or by the
Trustee. Service of process upon the Authorized Agent at the address indicated
above, as such address may be changed within the Borough of Manhattan, The City
of New York, the State of New York, U.S.A., by notice given by the Authorized
Agent to each party hereto, shall be deemed, in every respect, effective service
of process upon each other party hereto.
17
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(k) Survival. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such Holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Registrable Securities of such Holder.
18
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
Xxxxxx Interactive Entertainment Limited
By: /s/ Tianqiao Chen
------------------------------------
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx Xxxxx (Asia) L.L.C.
By: /s/ Xxxx Xxx
------------------------------------
Name: Xxxx Xxx
Title: Executive Director and Counsel
19
APPENDIX A
XXXXXX INTERACTIVE ENTERTAINMENT LIMITED
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [DATE]
The Depository Trust Company ("DTC") has identified you as a DTC
Participant through which beneficial interests in the Xxxxxx Interactive
Entertainment Limited (the "Company") Zero Coupon Senior Convertible Notes due
2014 (the "Securities") are held.
The Company is in the process of registering the Securities under
the Securities Act of 1933 for resale by the beneficial owners thereof. In order
to have their Securities included in the registration statement, beneficial
owners must complete and return the enclosed Notice of Registration Statement
and Selling Securityholder Questionnaire.
It is important that beneficial owners of the Securities receive a
copy of the enclosed materials as soon as possible as their rights to have the
Securities included in the registration statement depend upon their returning
the Notice and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy
of the enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact Xx. 0 Xxxxxxxxxxx
Xxxxxx Xxxxxxxx, Xx. 000 Bibo Road, Zhangjiang Xxxxx-Xxxxxxxxxxx Xxxxxx, Xxxxxx
Xxx Xxxx, Xxxxxxxx 000000 China, Attention: Xxxx Xxxxxxxxxx.
20
XXXXXX INTERACTIVE ENTERTAINMENT LIMITED
Notice of Registration Statement
and
Selling Securityholder Questionnaire
[DATE]
Xxxxxx Interactive Entertainment Limited (the " Company") has filed
with the United States Securities and Exchange Commission (the "Commission") a
registration statement on Form [__] (the "Shelf Registration Statement") for the
registration and resale under Rule 415 of the United States Securities Act of
1933, as amended (the "Securities Act"), of the Company's Zero Coupon Senior
Convertible Notes due 2014 (the "Securities") and the shares of Ordinary Shares,
par value US$0.01 per share (the "Ordinary Shares"), issuable upon conversion
thereof, in accordance with the Registration Rights Agreement, dated as of
October ___, 2004 (the "Registration Rights Agreement"), between the Company and
the purchaser named in Schedule I therein. A copy of the Registration Rights
Agreement is attached hereto. All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Registration Rights Agreement.
In order to have Registrable Securities included in the Shelf
Registration Statement (or a supplement or amendment thereto), this Notice of
Registration Statement and Selling Securityholder Questionnaire ("Notice and
Questionnaire") must be completed, executed and delivered to the Company at the
address set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE].
Beneficial owners of Registrable Securities who do not complete, execute and
return this Notice and Questionnaire by such date (i) will not be named as
selling securityholders in the Shelf Registration Statement and (ii) may not use
the Prospectus forming a part thereof for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus.
21
The term "Registrable Securities" is defined in the Registration
Rights Agreement to mean all or any portion of the Securities issued pursuant to
the Purchase Agreement under the Indenture in registered form and the Ordinary
Shares issuable upon conversion of such Securities; provided, however, that a
security ceases to be a Registrable Security when it is no longer a Restricted
Security.
The term "Restricted Security" is defined in the Registration Rights
Agreement to mean any Securities or Ordinary Shares issuable upon conversion
thereof except any Securities or Ordinary Shares which (i) has been effectively
registered under the Securities Act and sold in a manner contemplated by the
Shelf Registration Statement or (ii) has been transferred in compliance with
Rule 144 under the Securities Act (or any successor provision thereto) or is
transferable pursuant to paragraph (k) of such Rule 144 (or any successor
provision thereto).
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item (3).
The undersigned, by signing and returning this Notice and Questionnaire, agrees
to be bound with respect to such Registrable Securities by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement, including, without limitation, Section 5 of the Registration Rights
Agreement, as if the undersigned Selling Securityholder were an original party
thereto.
Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement, the Selling Securityholder will be required to deliver
to the Company and the Trustee the Notice of Transfer (completed and signed) set
forth in Exhibit 1 to this Notice and Questionnaire.
The Selling Securityholder hereby provides the following information
to the Company and represents and warrants that such information is accurate and
complete:
22
QUESTIONNAIRE
(1)(a) Full Legal Name of Selling Securityholder:
_________________________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as in (a) above)
of Registrable Securities Listed in Item (3) Below:
_________________________________________________________________________
(c) Full Legal Name of DTC Participant (if applicable and if not the same as
(b) above) Through Which Registrable Securities Listed in Item (3) Below
are Held:
_________________________________________________________________________
(2) Address for Notices to Selling Securityholder:
___________________________
___________________________
___________________________
Telephone: _______________________
Fax: _______________________
Contact Person: _______________________
(3) Beneficial Ownership of Securities:
Except as set forth below in this Item (3), the undersigned Selling
Securityholder does not beneficially own any Securities or shares of
Ordinary Shares issued upon conversion, repurchase or redemption of any
Securities.
(a) Principal amount of Registrable Securities (as defined in the
Registration Rights Agreement) beneficially owned:_______________________
CUSIP No(s). of such Registrable Securities: ___________________________
Number of shares of Ordinary Shares (if any) issued upon conversion,
repurchase or redemption of Registrable Securities:______________________
(b) Principal amount of Securities other than Registrable Securities
beneficially owned:
_________________________________________________________________________
CUSIP No(s). of such other Securities:___________________________________
Number of shares of Ordinary Shares (if any) issued upon conversion of
such other Securities:___________________________________________________
(c) Principal amount of Registrable Securities which the undersigned wishes
to be included in the Shelf CUSIP No(s). of such Registrable Securities
to be included in the Shelf Registration Statement:______________________
_________________________________________________________________________
Number of shares of Ordinary Shares (if any) issued upon conversion of
Registrable Securities which are to be included in the Shelf
Registration Statement:__________________________________________________
23
(4) Beneficial Ownership of Other Securities of the Company:
Except as set forth below in this Item (4), the undersigned Selling
Securityholder is not the beneficial or registered owner of any shares of
Ordinary Shares or any other securities of the Company, other than the
Securities and shares of Ordinary Shares listed above in Item (3).
State any exceptions here:
____________
(5) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any of
its affiliates, officers, directors or principal equity holders (5% or
more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates) during
the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder intends
to distribute the Registrable Securities listed above in Item (3) only as
follows (if at all): Such Registrable Securities may be sold from time to
time directly by the undersigned Selling Securityholder or,
alternatively, through underwriters, broker-dealers or agents. Such
Registrable Securities may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale, or at negotiated prices. Such
sales may be effected in transactions (which may involve crosses or block
transactions) (i) on any national securities exchange or quotation
service on which the Registrable Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) in
transactions otherwise than on such exchanges or services or in the
over-the-counter market, or (iv) through the writing of options. In
connection with sales of the Registrable Securities or otherwise, the
Selling Securityholder may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the
Registrable Securities in the course of hedging the positions they
assume. The Selling Securityholder may also sell Registrable Securities
short and deliver Registrable Securities to close out such short
positions, or loan or pledge Registrable Securities to broker-dealers
that in turn may sell such securities.
State any exceptions here:
Note: In no event may such method(s) of distribution take the form
of an underwritten offering of the Registrable Securities without the prior
agreement of the Company.
24
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
prospectus delivery and other provisions of the Securities Act and the Exchange
Act and the rules and regulations thereunder, particularly Regulation M.
In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after the date on
which such information is provided to the Company, the Selling Securityholder
agrees to notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Registration Rights
Agreement.
By signing below, the Selling Securityholder consents to the
disclosure of the information contained herein in its answers to Items (1)
through (6) above and the inclusion of such information in the Shelf
Registration Statement and related Prospectus. The Selling Securityholder
understands that such information will be relied upon by the Company in
connection with the preparation of the Shelf Registration Statement and related
Prospectus.
In accordance with the Selling Securityholder's obligation under
Section 3(a) of the Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Company of any inaccuracies
or changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the Registration Rights Agreement
shall be made in writing, by hand-delivery, first-class mail, or air courier
guaranteeing overnight delivery as follows:
(i) To the Company:
______________________
______________________
______________________
______________________
______________________
(ii) With a copy to:
______________________
______________________
______________________
______________________
______________________
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company, the terms of this Notice and
Questionnaire, and the representations and warranties contained herein, shall be
binding on, shall inure to the benefit of and shall be
25
enforceable by the respective successors, heirs, personal representatives, and
assigns of the Company and the Selling Securityholder (with respect to the
Registrable Securities beneficially owned by such Selling Securityholder and
listed in Item (3) above). This Agreement shall be governed in all respects by
the laws of the State of New York.
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IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:____________________
____________________________________________________________________
Selling Securityholder
(Print/type full legal name of beneficial owner of Registrable
Securities)
By:_________________________________________________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY AT:
_____________________________
_____________________________
_____________________________
_____________________________
_____________________________
27
EXHIBIT 1
TO APPENDIX A
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Xxxxxx Interactive Entertainment Limited
Xx. 0 Xxxxxxxxxxx Xxxxxx Xxxxxxxx,
Xx. 000 Bibo Road,
Zhangjiang Xxxxx-Xxxxxxxxxxx Xxxxxx,
Xxxxxx Xxx Xxxx, Xxxxxxxx 000000
Xxxxx
Attention: Xxxx Xxxxxxxxxx
[NAME OF TRUSTEE]
[ADDRESS OF TRUSTEE]
Attention: [CORPORATE TRUST SERVICES]
Re: Xxxxxx Interactive Entertainment Limited (the "Company")
Zero Coupon Senior Convertible Notes due 2014 (the "Notes")
Dear Sirs:
Please be advised that _____________________ has transferred
$___________ aggregate principal amount of the above-referenced Notes or shares
of the Company's ordinary shares, par value US$0.01 per share, issued upon
conversion, repurchase or redemption of Notes, pursuant to an effective
Registration Statement on Form [___] (File No. 333-____) filed by the Company.
We hereby certify that the prospectus delivery requirements, if any,
of the Securities Act of 1933, as amended, have been satisfied with respect to
the transfer described above and that the above-named beneficial owner of the
Notes or ordinary shares is named as a selling securityholder in the Prospectus
dated [DATE], or in amendments or supplements thereto, and that the aggregate
principal amount of the Notes or number of ordinary shares transferred are [A
PORTION OF] the Notes or ordinary shares listed in such Prospectus as amended or
supplemented opposite such owner's name.
Dated:
Very truly yours,
________________________
(Name)
By:
________________________
(Authorized Signature
28
