THE SMART SOHO INTERNATIONAL LIMITED Ugland House Grand Cayman, KY1-1104 Cayman Islands June 30, 2016
Exhibit 99.13
THE SMART SOHO INTERNATIONAL LIMITED
X.X. Xxx 000
Xxxxxx Xxxxx
Xxxxx Xxxxxx, XX0-0000
Cayman Islands
June 30, 2016
To the Sellers to the
dated November 4, 2015
Ladies and Gentlemen:
We refer to the Purchase and Sale Agreement among us dated as of November 4, 2015, as amended by the letter agreement dated December 4, 2015 (the “First Amendment”), by the letter agreement dated December 16, 2015 (the “Second Amendment”) and by the letter agreement dated January 8, 2016 (the “Third Amendment” and, as so amended, the “Agreement”). This letter agreement (this “Fourth Amendment”) sets forth our agreement with respect the further amendment of certain provisions of the Agreement and the waiver of the satisfaction of certain conditions to the respective obligations of the parties. Capitalized terms used in this Fourth Amendment without definitions specified herein have the respective meanings assigned to them in the Agreement.
We hereby agree that, notwithstanding any inconsistent provision of the Agreement (including, without limitation, any inconsistent provisions of Section 1.03(b), Section 1.03(c), or Section 1.04 through Section 1.06), the remaining portion of the Purchase Price for the Ordinary Shares and the additional amounts referred to below shall be paid, and the remaining 6,739,932 Ordinary Shares subject to the Agreement shall be delivered, as follows:
1. Extension Payments. In consideration of the waivers set forth in this Fourth Amendment, Acquirer shall make the following payments to Shah Capital Opportunity Fund LP (“Shah Capital”):
| (a) Acquirer shall cause the US$2,000,000 deposited in the Escrow Account in accordance with the Third Amendment to be released to one or more accounts to be designated by the Shah Sellers, together with any interest earned thereon, on or prior to June 30, 2016, as the part of the compensation for the non-occurrence of the Closing by June 30, 2016; and |
| (b) Acquirer shall pay Shah Capital the additional amount of US$1,000,000 no later than July 31, 2016, as the part of the compensation for the non-occurrence of the Closing by June 30, 2016. |
2. Payment into Escrow. Acquirer shall deposit US$1,000,000 in cash (the “New Escrow Amount”) in the Escrow Account previously established with Li, Wong, Xxx & W.I. Xxxxxx (the “Escrow Agent”) pursuant to the Term Sheet or an escrow account under the name of Acquirer (or any of its designated affiliates on its behalf) to be established with the Escrow Agent pursuant to a mutually satisfactory escrow agreement (the “Escrow Agreement”) to be entered into by Acquirer and the Shah Sellers with the Escrow Agent. The Acquirer shall deposit New Escrow Amount no later than July 31, 2016. The Escrow Agreement shall provide that the New Escrow Amount shall be (i) released to the Shah Sellers upon the Closing, together with any interest earned thereon, and the New Escrow Amount and any such interest shall be credited against the Purchase Price for the Ordinary Shares to be purchased from the Shah Sellers, or (ii) refunded to the Acquirer together with any interest earned thereon in the event that the Closing has not occurred by August 31, 2016 (the “New Termination Date”), unless the Acquirer is obligated to pay a termination fee to the Shah Sellers under the conditions set forth in this Fourth Amendment, or (iii) released to one or more accounts to be designated by the Shah Sellers if the Acquirer is obligated to pay a termination fee to the Shah Sellers under the conditions set forth in this Fourth Amendment.
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3. Payment of Purchase Price Balance. On the “Final Closing Date” (as defined below), and subject to paragraph 4 below, Acquirer shall pay an aggregate of US$40,439,592 to the Sellers via wire transfer of immediately available funds in U.S. dollars to one or more accounts to be designated by the Sellers by notice to the Acquirer (which notice shall be delivered not later than five (5) days prior to the Final Closing Date) against delivery by the Sellers of the remaining 6,739,932 Ordinary Shares of the Sellers required to be delivered to Acquirer pursuant to the Agreement. Such payments shall be made to the following Sellers and in the following amounts:
| (a) to Shah Capital, in the amount of US$33,896,214; and |
| (c) to the Lu Sellers, payments in the aggregate amount of US$6,543,378, of which Acquirer shall pay to each Lu Seller an amount equal to the sum of the First Tranche Payment and the Second Tranche Payment set forth for such Lu Seller in Schedule B to the Agreement. |
4. Closing. The closing of the purchase and sale of the remaining 6,739,932 Ordinary Shares (the “Closing”), and the delivery of the Ordinary Shares by Sellers and of the payments required by paragraph 3 by Acquirer shall take on place as soon as practicable as agreed among the Parties, but in no event later than the New Termination Date. The date on which the Closing occurs is referred to herein as the “Final Closing Date.” For the avoidance of doubt:
| (a) the obligations of the Acquirer to make the payments required by paragraph 3 of this Fourth Amendment at the Closing are not subject to the performance of any obligation or fulfillment of any closing condition by any Seller or any other condition, other than the following: |
| (i) Sellers shall deliver the remaining 6,739,932 Ordinary Shares to be delivered to the Acquirer; and |
| (ii) Mr. GU shall hold his directorship on the board until the date the Agreement is terminated. |
| (b) the obligations of the Sellers to deliver such 6,739,932 Ordinary Shares at the Closing are not subject to the performance of any obligation or fulfillment of any closing condition by Acquirer other than Acquirer’s delivery of the payments required by paragraphs 1, 2 and 3 of this Fourth Amendment, in each case in the manner and on the terms set forth in the Agreement, as amended hereby. Upon the Closing or termination of the Agreement in accordance with Section 1.06 of the Agreement as further amended in paragraph 5 below, Phicomm Technology (Hong Kong) Co., Limited (“Phicomm HK”) shall be released from any liability or obligation under the letter of guarantee issued to Sellers. |
| (c) In the event that the Agreement is terminated or the Closing fails to occur by the New Termination Date, Acquirer shall procure that Mr. GU shall resign from the board, effective immediately upon termination of the Agreement. |
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5. Termination in Lieu of Closing.
| (a) With respect to the termination of the Agreement as set forth in Section 1.06 of the Agreement, for the avoidance of doubt, references in Section 1.06 of the Agreement to (i) the “Closing” shall mean the Closing as defined hereunder, (ii) the “Closing Date” shall mean the Final Closing Date and (iii) the “Termination Date” shall mean the New Termination Date. |
| (b) If the Closing has not occurred by the New Termination Date solely due to a failure by the Acquirer to make the payments required by paragraphs 1, 2 or 3 of this Fourth Amendment, the Acquirer shall cause the New Escrow Amount (together with any interest earned thereon) to be released to one or more accounts to be designated by the Shah Sellers as the termination fee. |
| (c) If the Closing has not occurred by the New Termination Date solely due to: |
| (i) a failure of the condition in paragraph 4(a)(ii) to be satisfied; or |
| (ii) decline to deliver such 6,739,932 Ordinary Shares, the Shah Sellers shall (i) pay the Acquirer a termination fee of US$1,000,000 to one or more accounts to be designated by the Acquirer, and (ii) cause the New Escrow Amount (together with any interest earned thereon) to be released to the account to be designated by the Acquirer, and none of the Sellers shall be subject to any penalty, termination fee or any other obligations or liabilities of any kind to Acquirer. |
| (d) Furthermore, upon the payment of the applicable termination fee and the release of the New Escrow Amount, none of the parties shall have any further liability or obligation to any other Party under the Agreement. |
6. Standstill. Each of Acquirer and Phicomm HK agrees that until the earlier to occur of the Closing and Termination of this Agreement it will not, and it will use its best efforts to cause its Affiliates not to, in each case without the prior written consent of the Shah Sellers: (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Ordinary Shares or any securities convertible into or exercisable or exchangeable for Ordinary Shares, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in the preceding clauses (i) or (ii) above is to be settled by delivery of Ordinary Shares or other securities, in cash, or otherwise. The foregoing provisions shall not apply to (x) a direct or indirect transfer of Ordinary Shares to an Affiliate of Acquirer that assume Acquirer’s obligations under the Agreement, or (y) Phicomm HK’s pledge of the Acquirer’s shares to Chongqing Liangjiang New Area Strategic Emerging Industries Equity Investment Fund Partnership (Limited Liability Partnership) (the “Fund”) pursuant to the Capital Increase and Share Subscription Agreement dated December 2, 2015, among the Fund, Shanghai Phicomm Communication Co., Ltd., Phicomm HK and Acquirer. The Shah Sellers agree that the Waiver and Consent issued by the Shah Sellers set forth in the letter dated April 25, 2016 from Acquirer and Phicomm HK to the Shah Sellers with respect to the pledges of (A) all Phicomm HK Shares owned by Phicomm, and (B) 5,000,000 Ordinary Shares owned by the Acquirer is hereby extended until the New Termination Date. Except as set forth in this paragraph 6, the other provision of such Waiver and Consent remain in effect.
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7. Go-Shop. Acquirer hereby expressly agrees that, during the period beginning on the date of this Fourth Amendment and continuing until the New Termination Date, each Seller, and any officer, director, partner or employee of, or any financial advisor, attorney or other advisor or representative of, such Seller or any of its affiliates shall be permitted to individually or jointly, (i) directly or indirectly solicit, initiate or encourage the sale of the remaining 6,739,932 Ordinary Shares to one or more potential purchasers other than Acquirer, and (ii) directly or indirectly participate in discussions or negotiations regarding, and furnish to any person information with respect to, and take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, a sale of the remaining 6,739,932 Ordinary Shares, and each Seller shall have the option to, in its sole discretion, sell and transfer such Seller’s relevant portion of shares within the remaining 6,739,932 Ordinary Shares to one or more persons other than Acquirer (a “Third Party Deal”), provided, however, that no Seller shall enter or conclude any Third Party Deal prior to the New Termination Date.
8. Waiver. The Acquirer hereby waives satisfaction of the conditions set forth in clauses e)(i) and e)(ii) of the Conditions to the Obligations of the Acquirer set forth in Schedule C of the Agreement in respect of the 6,739,932 Ordinary Shares to be delivered by the Sellers on the “Final Closing Date” (as defined in the Second Amendment), subject to the payments required to be made by the Acquirer on the Final Closing Date established hereunder, provided, however, that the Sellers shall be obligated to deliver the 6,739,932 Ordinary Shares in the manner set forth in clauses e)(i) and e)(ii) of the Conditions to the Obligations of the Acquirer set forth in Schedule C of the Agreement on the Final Closing Date established by this Fourth Amendment upon the receipt by the Sellers of all the payments required to be made under paragraphs 1, 2 and 3 of this Fourth Amendment.
9. Miscellaneous. Except as otherwise expressly provided by this Fourth Amendment, all of the terms, conditions and provisions of the Agreement shall remain unchanged and in full force and effect. The Agreement, as amended hereby, shall continue in full force and effect, and this Second Amendment and the Agreement shall be read and construed as one instrument. This Fourth Amendment may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, but all of which together shall constitute one instrument. The delivery of this Fourth Amendment by facsimile transmission or email of an executed original hereof or signature page hereto and/or the retransmission of any executed facsimile transmission hereof or signature page hereto shall be deemed to be the same as delivery of an executed original. In proving this Fourth Amendment, it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought. This Fourth Amendment shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of law principles thereof.
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If the foregoing is acceptable to you, please confirm your agreement, effective the date first set forth above, by countersigning this letter below and returning it to the undersigned.
| For and on behalf of | For and on behalf of | |
| THE SMART SOHO INTERNATIONAL LIMITED | PHICOMM TECHNOLOGY (HONG KONG) CO., LIMITED | |
| /s/ Gu Guoping | /s/ Gu Xxxxxxx | |
| Xx Xxxxxxx | Xx Xxxxxxx | |
| The foregoing is accepted and agreed as of the date first above written. | ||
| For and on behalf of | HONG LIANG XX | |
| XXXX CAPITAL MANAGEMENT, INC. | ||
| /s/ Xxxxxxxx X. Xxxx | /s/ Hong Xxxxx Xx | |
| Xxxxxxxx X. Xxxx | Hong Xxxxx Xx | |
| For and on behalf of | For and on behalf of | |
| SHAH CAPITAL OPPORTUNITY FUND XX | XX CHARITABLE REMAINDER TRUST | |
| /s/ Xxxxxxxx X. Xxxx | /s/ Hong Xxxxx Xx | |
| Xxxxxxxx X. Xxxx | Hong Xxxxx Xx | |
| XXXXXXXX X. XXXX | For and on behalf of | |
| THE LU FAMILY LIMITED PARTNERSHIP | ||
| /s/ Xxxxxxxx X. Xxxx | ||
| Xxxxxxxx X. Xxxx | ||
| /s/ Hong Liang Xx | ||
| Xxxx Xxxxx Xx | ||
| For and on behalf of | ||
| LU FAMILY TRUST | ||
| /s/ Hong Liang Xx | ||
| Xxxx Xxxxx Xx | ||
[Signature Page to Fourth Amendment to Purchase and Sale Agreement]
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