AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT
AMENDMENT
TO THE INVESTOR RIGHTS AGREEMENT
THIS
AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT, dated as of March 29, 2007 (this
“Amendment”),
is
entered into by and among (i) (a) China Security & Surveillance Technology,
Inc., a Delaware corporation (the “Company”),
(b)
China Safetech Holdings Limited, a wholly-owned subsidiary of the Company,
incorporated under the laws of British Virgin Islands (“Safetech”)
and
China Security & Surveillance Technology (HK) Ltd., a wholly-owned
subsidiary of Safetech, incorporated under the laws of Hong Kong (“CSST
HK”),
(c)
Golden Group Corporation (Shenzhen) Limited,
a limited liability company organized and existing under the laws of the
People’s
Republic of China (the “PRC”)
and a wholly-owned subsidiary of Safetech (“Golden”),
Shanghai Xxxxx Xxxx Digital Technology Co., Ltd., a limited liability company
organized and existing under the laws of the PRC and a wholly-owned subsidiary
of CSST HK (“Xxxxx
Xxxx”)
and
China Security & Surveillance Technology (PRC), Inc., a
limited liability company organized and existing under the laws of the PRC
and a
wholly-owned subsidiary of the Company (“CSST
PRC”,
and
collectively with the Company, Safetech, CSST HK, Golden and Xxxxx Xxxx, the
“Group
Companies”),
(d)
Mr. Tu Xxx Xxxx (“Mr.
Tu”),
a
resident of the City of Hangzhou in the PRC, Ms. Xx Xxx Xxx (“Xx.
Xx”),
a
resident of the City of Shenzhen in the PRC and Whitehorse Technology Limited,
a
British Virgin Islands company wholly owned by Mr. Tu and the registered owner
of Mr. Tu’s equity interest in the Company (“Whitehorse”,
and
collectively with Mr. Tu and Xx. Xx, the “Controlling
Shareholders”)
and
(ii) Citadel Equity Fund Ltd. (“Citadel”).
Capitalized terms used herein but not otherwise defined herein shall have the
respective meanings set forth in the Investor Rights Agreement (as defined
below).
WITNESSETH
WHEREAS,
the Group Companies, the Controlling Shareholders and Citadel entered into
that
certain Investment Rights Agreement, dated as of February 16, 2007 (the
“Investor
Rights Agreement”);
and
WHEREAS,
the parties to the Investor Rights Agreement wish to amend certain provisions
of
the Investor Rights Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the respective covenants and
agreements et forth herein, the parties hereto agree as follows:
ARTICLE
I
AMENDMENTS
SECTION
1.1. Amendment.
The
parties hereto agree that the Investor Rights Agreement shall be amended as
set
forth in this Section 1.1.
1
(a) The
first
sentence of Section 3.1 is hereby amended and restated as follows:
“As
long
as Citadel is the beneficial owner (as such term is defined in the Exchange
Act
and the rules and regulations promulgated thereunder (the “Beneficial
Owner”))
of
the Notes then outstanding (including the principal amount of the Notes
converted into Conversion Shares as if such conversion had not taken place
and
to the extent such Conversion Shares are held by Citadel at the time of
calculating such percentage), the principal amount of which is at least 25%
of
the principal amount of the Notes then outstanding (including the principal
amount of the Convertible Notes converted into Conversion Shares as if such
conversion had not taken place and to the extent such Conversion Shares are
beneficially owned by Citadel at the time of calculating such percentage) (the
“Minimum
Holdings”),
each
Group Company shall permit Citadel and any authorized representative thereof,
to
visit and inspect the properties of such Group Company, including its corporate
and financial records, to examine its records and make copies thereof and to
discuss its affairs, finances and accounts with its officers, at all such
reasonable times and as often as may be reasonably requested upon reasonable
notice, provided
that
such visits and inspections shall not unduly interrupt the daily operation
of
such Group Company. Each reference in this Agreement to ‘holds the Minimum
Holdings’ shall be construed as ‘is the Beneficial Owner of the Minimum
Holdings’.”
(b) Each
of
Section 3.6 and Section 3.7 is hereby deleted in its entirety.
(c) The
first
sentence of Section 3.9 is hereby amended and restated as follows:
“Until
the maturity of the Notes, the Company shall not (i) have more than 60,000,000
shares of Common Stock outstanding at any time or (ii) issue any new class
of
Equity Securities of the Company.”
(d) Section
3.10 is hereby amended and restated in its entirety as follows:
“3.10 Other
Covenants.
As long
as Citadel is the Beneficial Owner of the Minimum Holdings, each Group Company
hereby covenants and agrees as follows:
“(a) No
Group
Company shall change the substantive responsibilities of Mr. Tu as a member
of
the management of such Group Company and its Subsidiaries, or substitute any
other Person to perform the substantive responsibilities of Mr. Tu as such
member of management as they are performed as of the date hereof, other than
in
the case of incapacity of Mr. Tu.
“(b) No
Group
Company shall amend, alter, waive or repeal any provision of such Group
Company’s or its Subsidiaries’ certificate of incorporation, memorandum and
articles of association or any other organizational or constitutional documents
of such Group Company or its Subsidiaries in a manner that would have a material
adverse effect on the interests of Citadel.”
2
(e) Each
of
Sections 5 and 6 is hereby deleted in its entirety.
SECTION
1.2. Full
Force and Effect.
For the
avoidance of doubt, all other provisions of the Investor Rights Agreement shall
remain in full force and effect.
ARTICLE
II
MISCELLANEOUS
SECTION
2.1. Governing
Law.
This
Amendment shall be governed by and construed in accordance with the laws of
the
State of New York.
SECTION
2.2. Counterparts.
This
Amendment may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
3
IN
WITNESS WHEREOF, the undersigned have executed this Investor Rights Agreement
as
of the day and year written above.
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GROUP
COMPANIES:
CHINA
SECURITY & SURVEILLANCE TECHNOLOGY, INC.
By:
/s/
Tu Xxx
Xxxx
Name:
Tu Xxx Xxxx
Title:
Director
CHINA
SAFETECH HOLDINGS LIMITED
By:
/s/
Tu Xxx
Xxxx
Name:
Tu Xxx Xxxx
Title:
Director
CHINA
SECURITY & SURVEILLANCE
TECHNOLOGY
(HK) LTD.
By:
/s/
Tu Xxx
Xxxx
Name:
Tu Xxx Xxxx
Title:
Director
GOLDEN
GROUP CORPORATION (SHENZHEN) LIMITED
By:
/s/
Tu Xxx
Xxxx
Name:
Tu Xxx Xxxx
Title:
Director
|
|
SHANGHAI
XXXXX XXXX DIGITAL
TECHNOLOGY
CO., LTD.
By:
/s/
Tu Xxx
Xxxx
Name:
Tu Xxx Xxxx
Title:
Director
CHINA
SECURITY & SURVEILLANCE
TECHNOLOGY
(PRC), INC.
By:
/s/
Tu Xxx
Xxxx
Name:
Tu Xxx Xxxx
Title:
Director
|
|
CONTROLLING
SHAREHOLDERS:
By:
/s/
Tu Xxx
Xxxx
Mr.
Tu Xxx Xxxx
By:
/s/
Xx Xxx
Qun
Ms.
Xx Xxx Xxx
XXXXXXXXXX
TECHNOLOGY LIMITED
By:
/s/
Tu Xxx
Xxxx
Name:
Tu Xxx Xxxx
Title:
Director
|
Accepted
and Agreed to:
CITADEL
EQUITY FUND LTD.
By:
Citadel Limited Partnership, its Portfolio Manager
By:
Citadel Investment Group, L.L.C., its General Partner
By:
/s/
Xxxxxx
Xxxx
Name:
Xxxxxx Xxxx
Title:
Authorized Signatory
