Amendment No. 2 to Majority Stockholder Consent Agreement [Xu Hong Bin]
Execution
Copy
Amendment
No. 2 to Majority Stockholder Consent Agreement
[Xu
Hong Bin]
This
Amendment No. 2 to Majority Stockholder Consent Agreement (this
“Amendment”)
is
made and entered into as of September 26, 2008, by and among Xxxxxxxx
Corporation,
a
Delaware corporation (“Parent”),
and
Xu
Hong Bin
(the
“Consenting
Stockholder”),
and
amends that certain Majority Stockholder Consent Agreement (the “Agreement”)
by and
between Parent and the Consenting Stockholder dated as of May 19, 2008, as
amended by Amendment No. 1 to Majority Stockholder Consent Agreement dated
as of
September 19, 2008.
Recitals
A. Parent,
Xxxxxxxx Acquisition II Corp., a Delaware corporation and a wholly owned
Subsidiary of Parent (“Merger
Sub”)
and
China Water and Drinks, Inc., a Nevada corporation (the “Company”)
have
entered into an agreement and plan of merger and reorganization (the
“Merger Agreement”),
pursuant to which the Company will be merged with and into Merger Sub (the
“Merger”)
with
the Company ceasing to exist and Merger Sub remaining as a wholly owned
subsidiary of Parent.
B. Pursuant
to Section 7.2 of the Agreement, Parent and the Consenting Stockholder may
amend
the Agreement by signing an instrument in writing.
C. In
light
of extraordinary conditions in world credit and capital markets, the desire
of
Parent to preserve its cash in light of these conditions, the de minimis price
paid for Company Common Stock by the Consenting Stockholder, and other factors,
the Consenting Stockholder has agreed to sell some of his shares of Company
Common Stock that he owns directly or indirectly to Parent immediately prior
to
the Effective Time of the Merger at a price significantly lower than the Merger
consideration.
D. Capitalized
terms used in this Amendment and not otherwise defined shall have the meaning
ascribed to such terms in the Agreement.
Now
therefore, in accordance with the procedures for amendment of the Agreement
set
forth in Section 7.2 thereof, and in consideration of the foregoing and the
mutual agreements herein set forth, the parties hereby agree as
follows:
SECTION
1: Amendment
1.1 Recital
D
of the Agreement is amended and restated in its entirety to read as
follows:
“Concurrently
with the execution of this Agreement, Parent, the Company and certain specified
holders of Company Common Stock are entering into an undertaking agreement
(the
“Undertaking
Agreement”),
pursuant to which each such holder will (i) immediately prior to the Effective
Time, sell to Parent each share of Company Common Stock held by such holder,
and
(ii) provide a general release of claims against the Company, Parent and Merger
Sub.”
1.2 Clause
(ii) of Recital G is amended and restated in its entirety to read as
follows:
“(ii)
sell the Transferred Shares to Parent and elect to receive stock in the Merger
with respect to the Stock Electing Shares.”
1.3 Section
2
of the Agreement is amended and restated in its entirety to read as
follows:
“SECTION
2: Sale
and purchase of Shares; Election Pursuant to Merger
Agreement
2.1 Sale.
Upon
the terms and subject to the conditions set forth in this Agreement, immediately
prior to the Effective Time (the “Share
Sale Closing”)
:
2.1(a) The
Consenting Stockholder shall sell, assign, transfer, convey and deliver to
Parent, and Parent shall purchase from the Consenting Stockholder, the
Transferred Shares, free and clear of any and all Liens. The Transferred Shares,
together with the Stock Electing Shares, constitute 100% of the Shares held,
beneficially and of record, by the Consenting Stockholder. The Consenting
Stockholder will execute such further instruments and provide such further
information, including declarations related to Taxes, as Parent shall reasonably
request in connection with the foregoing. The Consenting Stockholder
acknowledges that his election to sell the Transferred Shares under this
Agreement was made on a completely voluntary basis.
2.1(b)
In
consideration for the transfer of Shares pursuant to Section
2.1(a),
Parent
shall pay to the Consenting Stockholder the amount in cash set forth opposite
the Consenting Stockholder’s name on Schedule
A
by wire
transfer of immediately available funds to such bank accounts as the Consenting
Stockholder shall designate in writing to Parent within 3 days of the purchase.
2.2 Election.
The
Consenting Stockholder hereby elects (the “Stock
Election”)
to, in
the event the Merger occurs, receive in the Merger shares of Parent Common
Stock
at the Exchange Ratio in respect of the Stock Electing Shares. The Consenting
Stockholder agrees that, subject to the consummation of the Merger, the Stock
Election is unconditional and irrevocable. The Consenting Stockholder
acknowledges that his Stock Election pursuant to this Section
2.2
was made
on a completely voluntary basis. The Consenting Stockholder will execute such
further instruments and provide such further information relevant to the Stock
Election, including declarations related to Taxes, as Parent shall reasonably
request in connection with the foregoing.
2.3 Effectiveness;
Agreement Not to Revoke.
The
Consenting Stockholder acknowledges and agrees that the Stock Election is
effective upon the execution and delivery thereof to Parent in accordance with
Section
2.2
above,
and the Consenting Stockholder will not revoke, seek to revoke, or take any
action, directly or indirectly, for the purpose of, or having the effect of,
revoking or seeking to revoke, the Stock Election. The Consenting Stockholder
also covenants and agrees to re-execute and re-deliver the Stock Election as
and
when requested by Parent in order that such Stock Election remains continuously
in effect at all times from the date hereof through the first to occur of (a)
the Effective Time, or (b) the Termination.
2.4 Termination.
This
Agreement shall terminate, without liability to any party other than for willful
breach, upon any termination of the Merger Agreement. The provisions of
Section
7
(Miscellaneous) and Section
5.3
(Public
Disclosure) shall survive any termination.
2.5 Conditions.
Parent’s obligation to consummate the Contemplated Transactions shall be subject
to:
2
2.5(a) satisfaction
of all pre-closing conditions to the Merger Agreement, including all necessary
shareholder approvals;
2.5(b) the
receipt of all necessary consents or approvals, the making of any required
filings or applications, and the absence of any legal or regulatory restriction,
pending or threatened, in connection with the Contemplated Transactions,
including the absence of any pending or threatened restrictions pertaining
to
ownership of the Shares or operation of the business of the Company;
and
2.5(c) the
representations and warranties of the Consenting Stockholder being true and
correct as of the Share Sale Closing, and all obligations required to be
performed by the Consenting Stockholder prior to the Share Sale Closing having
been so performed.”
1.4 Section
5.6(b) of the Agreement is hereby amended and restated in its entirety to read
as follows:
“5.6(b) Each
Releasing Party acknowledges that (i) the cash price paid per share pursuant
to
Section
2.1(a) is
less
than the cash election price in the Merger and, as of the date hereof, than
the
stock election under which Parent Common Stock will be issued, (ii) Parent
Common Stock could trade at prices lower or higher than the current price,
and
(iii) Parent may take any number of actions that could have an effect on the
price of its stock, including the issuance of Parent Company Stock and mergers
or acquisitions. To the extent that Releasing Party is receiving cash hereunder,
he will not participate in any appreciation of Parent’s Common Stock. Any and
all Causes of Action, without limitation arising from or relating to such
differences in value or such other transactions or such increases or decreases
in value are encompassed within the scope of the release set forth
herein.”
1.5 The
parenthetical “(to the extent of the Merger Consideration received by the
Consenting Stockholder in connection with the Merger)” in Section 6.2(a) of the
Agreement is hereby amended and restated in its entirety to read as follows:
“(to the extent of the consideration received by Consenting Stockholder in
connection with the Merger and under Section 2.1(a)).”
1.6 Section
6.2(c) of the Agreement is hereby amended and restated in its entirety to read
as follows:
6.2(c)
Monetary
Limitation.
No
claim for Losses may be brought under this Section
6.2
unless
and until the aggregate amount of all claims for Losses of a Parent Indemnified
Party is at least $5 million (without double counting for the same threshold
in
the stockholder written consent agreements between Parent and Chen Xing Hua)
whereupon all claims for Losses of such Parent Indemnified Party may be brought
by such Parent Indemnified Party, and the maximum liability of the Stockholder
Indemnifying Parties shall be the sum of (i) the total Value of consideration
received by the Consenting Stockholder under the Merger as of the Effective
Time
(based on Parent Common Stock valued in the manner described in Section
6.2(e)
below,
but with the 15-day trading period ending on the day before the day on which
the
Effective Time occurs), and (ii) the purchase price paid by Parent for the
Transferred Shares.
1.7 The
following defined terms are added to Exhibit
A:
3
Stock
Electing Shares.
“Stock
Electing Shares”
shall
mean the number of Shares set forth opposite the Consenting Stockholder’s name
on Schedule
A
under
the heading “Stock Electing Shares.”
Transferred
Shares. “Transferred
Shares”
shall
mean the number of Shares set forth opposite the Consenting Stockholder’s name
on Schedule
A
under
the heading “Transferred Shares.”
1.8 Schedule
A of the Agreement is amended and replaced in its entirety with Schedule
A
attached
hereto.
SECTION
2: MISCELLANEOUS PROVISIONS
2.1 Effectiveness.
This
Amendment shall become effective upon execution.
2.2 Limited
Nature of Amendment.
Except
as expressly amended hereby, the Agreement remains in full force and effect
in
accordance with its terms and this Amendment shall not by implication or
otherwise alter, modify, amend or in any way affect any of the terms,
conditions, obligations, representations, warranties, covenants or agreements
contained in the Agreement, all of which are ratified and affirmed in all
respects and shall continue in full force and effect.
2.3 Governing
Law.
Except
to the extent that the corporate laws of the State of Delaware apply to a party,
this Amendment shall be governed by, and construed in accordance with, the
laws
of the State of New York, regardless of the laws that might otherwise govern
under applicable principles of conflicts of law thereof.
2.4 Execution
of Agreement; Counterparts; Electronic Signatures.
2.4(a) This
Amendment may be executed in several counterparts, each of which shall be deemed
an original and all of which shall constitute one and the same instrument,
and
shall become effective when counterparts have been signed by each of the parties
and delivered to the other parties; it being understood that all parties need
not sign the same counterpart.
2.4(b) The
exchange of copies of this Amendment and of signature pages by facsimile
transmission (whether directly from one facsimile device to another by means
of
a dial-up connection or whether mediated by the worldwide web), by electronic
mail in “portable document format” (“.pdf”
format),
or by any other electronic means intended to preserve the original graphic
and
pictorial appearance of a document, or by a combination of such means, shall
constitute effective execution and delivery of this Amendment as to the parties
and may be used in lieu of an original Amendment for all purposes. Signatures
of
the parties transmitted by facsimile shall be deemed to be their original
signatures for all purposes.
2.4(c) Notwithstanding
the Electronic Signatures in Global and National Commerce Act (15 U.S.C. Sec.
7001 et
seq.),
the
Uniform Electronic Transactions Act, or any other Legal Requirement relating
to
or enabling the creation, execution, delivery, or recordation of any contract
or
signature by electronic means, and notwithstanding any course of conduct engaged
in by the parties, no party shall be deemed to have executed this Amendment
or
any other document contemplated by this Amendment (including any amendment
or
other change thereto) unless and until such party shall have executed this
Amendment or such document on paper by a handwritten original signature or
any
other symbol executed or adopted by a party with current intention to
authenticate this Amendment or such other document contemplated.
4
2.5 Legal
Representation of the Parties.
This
Amendment was negotiated by the parties with the benefit of legal representation
and any rule of construction or interpretation otherwise requiring this
Amendment to be construed or interpreted against any party shall not apply
to
any construction or interpretation hereof.
2.6 Headings.
The
headings contained in this Amendment are for convenience of reference only,
shall not be deemed to be a party of this Amendment and shall not be referred
to
in connection with the construction or interpretation of this
Amendment.
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of page intentionally left blank - signature page follows]
5
In
Witness Whereof,
the
parties have caused this Amendment to be executed as of the date first above
written:
| PARENT: | ||
| Xxxxxxxx Corporation | ||
| |
|
|
| By: | ||
| Name: | ||
| Title: | ||
| CONSENTING STOCKHOLDER: | ||
| Xu Hong Bin | ||
6
SCHEDULE
A
|
Name
of Consenting Stockholder
|
Transferred
Shares
|
Stock
Electing Shares
|
Purchase
Price (US$)
|
|||
|
Xu
Hong Bin
|
5,400,000
|
30,600,000
|
$15,000,000
|
