Document:

exv10w28

Exhibit 10.28

	 	 	 	 	 	 	 
	 

	 	DATED  
	 	 	2009	 

MAD CATZ INTERACTIVE, INC

 

AMENDMENT TO

CONSIDERATION LOAN NOTE INSTRUMENT

AND

PROMISSORY NOTE

 

 

 

THIS
AMENDMENT is made on June 24, 2009 (“the Amendment”) to (a) that certain Consideration Loan Note
Instrument, dated as of 20 November 2007 (“the Instrument”) issued by MAD CATZ INTERACTIVE, INC a
company incorporated and existing under the laws of Canada with incorporation number 294869-9
having its registered office at Brookfield Place 181 Bay Street Suite 2500 Toronto Ontario
M5J 2T7 (“the Company”) to GUYMONT SERVICES SA as trustee of The Winkler Atlantic Trust c/o: HSBC
Guyerzeller Trust Company AG Splugenstrasse 6 CH-8027 Zurich Switzerland (“the Holder”) and (b)
that certain Promissory Note dated as of August 1, 2008 (“the Completion Note”) issued by the
Company to THE WINKLER ATLANTIC TRUST aforesaid (“Winkler”)

WHEREAS

	(A)	 	The Company and the Holder are parties to the Acquisition Agreement (as defined in the
Instrument) which provides for the purchase by the Company of all the issued shares in the
capital of Winkler Atlantic Holdings Limited
	 
	(B)	 	Pursuant to the Acquisition Agreement, the Company agreed to issue and allot to the Holder as
part of the consideration payable under the Acquisition Agreement loan notes in a principal
amount equal to $14,500,000 and the loan notes constituted by the Instrument were issued by
the Company to the Holder to satisfy such obligation
	 
	(C)	 	Pursuant to the terms of an agreement between the Company and the Holder effective as of
August 1, 2008 the Company issued the Completion Note to Winkler
	 
	(D)	 	the Company and the Holder desire to amend the Instrument in the manner described below

NOW THIS AMENDMENT WITNESSES that:

	1.	 	PRELIMINARY
	 
	 	 	Capitalized terms used in this Amendment which are not otherwise defined shall
have the same meaning as set forth in the Instrument
	 
	2.	 	ENTRY INTO EFFECT AND PERFORMANCE

	 	2.1.1	 	This Amendment is conditional and shall become effective upon both the
following being fulfilled:

	 	(a)	 	the Company entering into with the Senior Lender and
other obligors a Third Amended and Restated Loan Agreement and the same
becoming effective (subject only to this Amendment becoming effective); and

1

 

	 	(b)	 	receipt by the Holder of evidence that funds of the
$20,000 payable by the Company pursuant to clause 8 below have been
transmitted by wire transfer to an account requested by Holder

	 	2.1.2	 	Simultaneously with and effective upon this Amendment becoming effective
under clause 2.1.1:

	 	(a)	 	that original Certificate issued by the Company to the
Holder on 20 November 2007 in respect of Loan Notes for the original
principal amount of $14,500,000 shall be delivered to the Company by the
Holder for cancellation and the Company shall simultaneously with the
execution of this Amendment deliver to the Holder a new Certificate for the
principal amount of $14,500,000 under the Instrument as amended hereby,
dated with the date upon which this Amendment becomes effective pursuant to
clause 2.1.1; the cancellation of such original Certificate and issue of
such new Certificate do not constitute redemption and reissue of the Loan
Notes and are merely for the purpose of evidencing the amendments of the
Instrument effected by this Amendment;
	 
	 	(b)	 	the Holder shall execute and deliver to the Company and
the Senior Lender without charge therefor a counterpart of an Amended and
Restated Intercreditor Agreement with the Senior Lender (being an
Instrument and Agreement evidencing its subordination to the Senior Lender)
on the terms already agreed between the parties

	3.	 	AMENDMENTS TO INSTRUMENT
	 
	3.1	 	Title
	 
	 	 	Clause 2.1 of the Instrument shall be deemed to be deleted and replaced with the
following wording:

“The Loan Notes shall be known as Convertible Unsecured Loan Notes 2019 and
shall constitute a single series”

	4.	 	AMENDMENT OF FORM OF LOAN NOTE CERTIFICATE AND CONDITIONS
	 
	4.1	 	Certificate
	 
	 	 	The form of certificate set out in Schedule 1 to the Instrument is hereby amended
in its entirety so as to be in the form attached hereto as Schedule 1
	 
	4.2	 	Preliminary
	 
	 	 	Condition 1.1 is deemed to be deleted in its entirety and replaced with the
following wording:

2

 

“The Loan Notes the subject of this certificate have been constituted by an
Instrument executed as a deed by Mad Catz Interactive, Inc dated 20 November
2007, as amended by an Amendment dated {   insert date upon which this
Amendment becomes effective under clause 2.1.1        } 2009 (“the
Instrument”) and a copy of the Instrument may be obtained from the Company
free of charge upon written request to it at its registered office”

	4.3	 	Definitions
	 
	 	 	Condition 1.2 is hereby amended to take the following actions:

	 	4.3.1	 	The definition of “Interest Rate” is deemed to be deleted in its entirety
and replaced with the following wording:

“means through March 31, 2014 the rate of seven decimal point five
per cent (7.5%) per annum and from and after April 1, 2014 the rate
of nine per cent (9.0%) per annum”

	 	4.3.2	 	The definition of “Emergency Credit Interest Rate” is deemed to be deleted
in its entirety and replaced with the following wording:

“means the Interest Rate plus three decimal point five per cent
(3.5%) per annum”

	 	4.3.3	 	The definition of “Second Maturity Date” is deemed to be deleted in its
entirety and replaced with the following wording:

“means March 31, 2019 or such earlier date on which the Loan Notes
have been repaid in full”

	 	4.3.4	 	The following definitions are deemed to be added in the appropriate
alphabetical order:

	 	 	 	 	 
	 

	 	““Additional Payment”
	 	means a prepayment pursuant to Condition
4.1.5;”
	 
	 	 	 	 
	 

	 	““Additional Payment Date”
	 	means the date that is thirty (30) days
after the Company has filed its Annual Report on Form 10-K with
the United States Securities and Exchange Commission with
respect to any fiscal year triggering an Additional Payment”
	 
	 	 	 	 
	 

	 	““Annual Payment Date”
	 	means the last Business Day of each fiscal
year of the Company, the first Annual Payment Date being
31 March 2010 and the last Annual Payment Date being on the
Second Maturity Date”

3

 

	 	 	 	 	 
	 

	 	““EBITDA”
	 	means, with respect to any fiscal year, an amount equal to
the Company’s net income for such fiscal year determined in
accordance with United States generally accepted accounting
principles, plus or minus, to the extent deducted or added in
determining such net income for such fiscal year, and without
duplication: (a) interest paid or payable or received or
receivable; (b) income taxes paid or payable or refunds
received or receivable in respect of income taxes; and
(c) depreciation and amortization expenses.”
	 
	 	 	 	 
	 

	 	““Net Proceeds”
	 	means the aggregate proceeds
received by the Noteholders in respect of any sale of
Conversion Shares less all costs and expenses incurred in
connection with such sale of Conversion Shares (including
without limitation legal fees and expenses, accounting fees and
expenses, investment banking fees, brokerage and sales
commissions and registration or other regulatory fees)”
	 
	 	 	 	 
	 

	 	““Quarterly Payment Date”
	 	means the last Business Day of each fiscal
quarter of the Company, the first Quarterly Payment Date being
30 June 2009 and the last Quarterly Payment Date being the
Second Maturity Date”

	4.4	 	Principal and Interest
	 
	 	 	Condition 3.1 is deemed to be deleted and replaced with the following wording:

“Subject to and in accordance with the Conditions the Company shall pay to
the Noteholders entitled to the same:

	 	3.1.1	 	the principal nominal amount of the Loan Notes or any
part of the Loan Notes as and when the same falls due for payment under
the Conditions

4

 

	 	 	 	3.1.2 subject to Condition 3.3, interest accrued under the
Conditions as and when the same is required under Condition 4.1”

	4.5	 	Scheduled Payments
	 
	 	 	The title to Condition 4 (“REPAYMENT”) shall be deleted and replaced by “SCHEDULED
PAYMENTS” and Conditions 4.1, 4.2 and 4.3 are deemed to be deleted and replaced
with the following wording:

“4.1 Repayment Dates and Circumstances

Subject to these Conditions, the Company shall make the following payments,
which shall be applied to outstanding interest and to outstanding principal
in accordance with Condition 4.1.8:

	 	4.1.1	 	Following Serious Event: The Company shall redeem the
Loan Notes at par by payment to the Noteholders if and as so required
and permitted by Condition 5.3, together with interest accrued under
the Conditions upon the amount so repaid up to
and including the actual date of payment
	 
	 	4.1.2	 	First Maturity Date: Subject to any election to the
contrary pursuant to condition 7.2.2(c) and subject to the statement
contained in a Conversion Notice pursuant to Condition 9.1.1, on the
First Maturity Date the Company shall pay $500,000
	 
	 	4.1.3	 	Quarterly Payment Date: Subject to any election to the
contrary pursuant to condition 7.2.2(c) and subject to the statement
contained in a Conversion Notice pursuant to Condition 9.1.1, on each
Quarterly Payment Date the Company shall pay $44,880.71 (or such less
amount as is then outstanding)
	 
	 	4.1.4	 	Annual Payment Date: Subject to any election to the
contrary pursuant to condition 7.2.2(c) and subject to the statement
contained in a Conversion Notice pursuant to Condition 9.1.1, on each
Annual Payment Date the Company shall pay $2,400,000 (or such less
amount as is then outstanding) except that the amount paid on the first
such Annual Payment Date (March 31, 2010) shall be $551,154.12
	 
	 	4.1.5	 	Additional Prepayments: Subject to any election to the
contrary pursuant to condition 7.2.2(c) and subject to the statement
contained in a Conversion Notice pursuant to Condition 9.1.1, if the
Company has EBITDA of greater than $12,500,000 a year in each of two
(2) consecutive fiscal years the Company shall pay on the Additional
Payment Date with respect to the second such fiscal year $2,000,000

5

 

	 	 	 	provided that any such payment shall not be required unless approved in
writing by the Senior Lender (and there shall be no penalties incurred
by the Company if such approval is not provided by the Senior Lender)
and provided further that the Company shall not be obligated to make
more than one such additional payment in any two (2) year period and
that the amount of such additional payment shall be reduced by the
amount of any voluntary prepayment(s) made pursuant to Condition 4.1.6
during the two (2) year period immediately prior to the payment under
this Condition 4.1.5
	 
	 	4.1.6	 	Voluntary Prepayments: Notwithstanding anything to the
contrary herein, the Company shall be permitted to prepay from time to
time and on any day any amount without premium or penalty
	 
	 	4.1.7	 	Second Maturity Date: Subject to any election to the
contrary pursuant to condition 7.2.2(c) and subject to the statement
contained in a Conversion Notice pursuant to Condition 9.1.1, on the
Second Maturity Date the Company shall repay at par the remaining
principal and accrued interest (accrued up to and including the date of
payment) on the Loan Notes then outstanding
	 
	 	4.1.8	 	Application of Payments: All payments made under this
Condition 4:

	 	(a)	 	shall be applied to outstanding
interest and outstanding principal only and only in that order
unless (solely with respect to payments made pursuant to
Condition 4.1.6) the Company provides notice that payment is to
be applied to outstanding principal first and outstanding
interest second;
	 
	 	(b)	 	in the case of Additional Payments and
voluntary prepayments pursuant to Conditions 4.1.5 or 4.1.6,
the same shall be applied in or towards discharge of the
payments required to be made by the Company under the
foregoing provisions of this Condition 4.1 in inverse order
to that in which they fall due for payment (ie latest
first)”

	 	4.1.9	 	Payment Schedule: By way of explanation but without
any binding effect and so that the provisions of Conditions 4.1.1 to
4.1.8 shall have effect in priority to such schedule, there is attached
as Annex A a schedule of the payments to be made under this
Condition 4.1
	 
	 	4.2	 	Surrender of Certificate(s) upon Redemption

Intentionally Omitted

6

 

	 	4.3	 	Balance Certificate

Intentionally Omitted”

	4.6	 	Serious Events
	 
	 	 	Condition 5.1.1 is deemed to be deleted and replaced with the following wording:

“if the Company fails to make any payment when required to be made under
Condition 4.1 and such failure is not remedied or cured within five Business
Days after notice thereof to the Company is given by any Noteholder”

	4.7	 	Immediate Repayment on Notice
	 
	 	 	Condition 5.3 is deemed to be deleted and replaced with the following wording:

“Subject to and only to the extent permitted by the terms of the Senior
Lender Agreement or any successor agreement between the Senior Lender and
the Noteholders, the Noteholders shall be entitled to require immediate
repayment of all or any of the Loan Notes at any time during the continuance
of a Serious Event Provided That during the continuance of the Senior Lender
Agreement the Noteholders may not require such immediate repayment on the
grounds of a Serious Event under condition 5.1.1 unless the Senior Lender
grants consent for such requirement or itself takes steps to enforce any
security granted to it by the Company or such requirement for immediate
repayment is not prohibited by the terms of the Senior Lender Agreement or
any successor agreement between the Senior Lender and the Noteholders”

	4.8	 	Senior Lender Agreement
	 
	 	 	Condition 5.4 is deemed amended by adding the following wording:

“Each Noteholder further agrees to execute and deliver to the Company and
each Senior Lender without charge therefor but upon reimbursement before
delivery of the same of up to $20,000 for professional costs reasonably
incurred in relation to the same such further instruments and agreements
evidencing its subordination to such Senior Lender on terms no more onerous
to such Noteholder than contained in the Amended and Restated Intercreditor
Agreement entered into by such Noteholder on the date of this Amendment”

	4.9	 	Undertakings by the Company
	 
	 	 	Condition 8.1 is deemed to be amended by adding the following wording to the end
thereof:

“8.1.10 subject to receipt from the Noteholders of an agreement in form and
substance acceptable to the Company to maintain the confidentiality of
such information and to comply with
applicable securities laws, the Company will provide to the
Noteholders until the Loan Notes

7

 

are repaid in full (a) at the same
time it is sent to the Senior Lender the annual Board-approved
forecast provided by the Company to the Senior Lender (b) a
quarterly cash flow forecast and (c) a quarterly update by telephone
of the Company’s performance against the forecast”

	4.10	 	Notice of Conversion
	 
	 	 	Condition 9.1.1 shall be amended by deleting therefrom the words “it shall state
whether the Loan Notes to be converted are those due for repayment on the First
Maturity Date or the Second Maturity Date” and there shall be inserted in the
place of the words so deleted the words “it shall identify the Loan Notes to be
converted by reference to their due date for repayment under Condition 4.1”

	4.11	 	Agreements Regarding Conversion
	 
	 	 	A new Condition 9.7 is hereby added to the Loan Note to read as follows:

	 	 	 	“9.7 Sale of Conversion Shares

	 	9.7.1	 	In the event that the market price of
the Conversion Shares exceeds the Conversion Rate, the Company
will use reasonable commercial efforts to identify potential
purchasers of the Conversion Shares and to introduce such
purchasers to the Noteholders
	 
	 	9.7.2	 	The Noteholders agree to convert
pursuant to Condition 9 such portion of the principal amount of
the Loan Notes into Conversion Shares as any purchaser desires
to purchase in a transaction that will provide to the
Noteholders Net Proceeds per Conversion Share in excess of the
Conversion Rate and to sell such Conversion Shares to such
purchaser
	 
	 	9.7.3	 	The Company shall manage the sale
process of any Conversion Shares pursuant to this Condition 9.7
and shall deduct the expenses of such actions from the gross
sale proceeds in determining the Net Proceeds to be provided to
the Noteholders
	 
	 	9.7.4	 	Neither the Company nor any Noteholder
shall have any obligation to incur any out-of-pocket expenses
in connection with such conversion and sale transaction as such
transaction must be self funding (i.e. all expenses of such
transaction shall be paid from the proceeds of the sale and
leave Net Proceeds per Conversion Share in excess of the
Conversion Rate)

8

 

	 	9.7.5	 	Notwithstanding the foregoing:

	 	(a)	 	the conversion of Loan
Notes into Conversion Shares, the issue of the resultant
Conversion Shares, the sale and transfer of the
Conversion Shares to the purchaser and the receipt by
the Noteholders of the Net Proceeds shall be effected
simultaneously and if and to the extent that the
Noteholders do not receive any Net Proceeds the
corresponding conversion of Loan Notes into Conversion
Shares shall not have effect;
	 
	 	(b)	 	the Company shall
indemnify the Noteholders against all expenses of sale
incurred by or with the agreement of the Company;
provided that the Noteholders acknowledge and agree that
such expenses shall be fully satisfied from the gross
proceeds of the sale of Conversion Shares so long as
the Net Proceeds per Conversion Share exceed the
Conversion Rate”

	5.	 	AMENDMENTS TO THE COMPLETION NOTE
	 
	 	 	The Completion Note is hereby amended such that the maturity date thereunder shall
be March 31, 2010 and all principal and interest outstanding on such date, which
the parties agree shall be $948,845.88, shall be paid on such date (and upon and
by such payment the Completion Note will be cancelled). If the Company defaults in
payment of the said sum it shall pay to Winkler Interest upon so much of the same
as remains unpaid after such due date from time to time, at the Emergency Credit
Interest Rate Subject to the foregoing the terms of the Completion Note remain in
full force and effect and in the event of any conflict between the terms of the
Completion Note and this Amendment the terms of this Amendment shall control
	 
	6.	 	NO OTHER AMENDMENTS
	 
	 	 	Except as expressly amended by this Amendment, the terms of the Instrument remain
in full force and effect. In the event of any conflict between the terms of the
Instrument and this Amendment the term of this Amendment shall control
	 
	7.	 	RELEVANT COMMITMENTS
	 
	 	 	The Company acknowledges its continuing liability under clause 6.4 of the
Acquisition Agreement in respect of Relevant Commitments

9

 

	8.	 	EXPENSES OF THIS AMENDMENT
	 
	 	 	The Company agrees to pay to the Noteholders a fixed fee of $20,000 at execution
of this Amendment to pay the Noteholders’ expenses in connection with the
negotiation and execution of this Amendment, including legal and consulting fees
	 
	9.	 	MISCELLANEOUS
	 
	 	 	This Amendment may be executed in any number of counterparts with the same effect
as if all Parties hereto had signed the same document. All counterparts shall be
construed together and shall constitute one agreement. This Amendment and any
signed agreement or instrument entered into in connection with this Agreement or
contemplated hereby, and any amendments hereto or thereto, to the extent signed
and delivered by means of a facsimile machine or other electronic means, shall be
treated in all manner and respects as an original agreement or instrument and
shall be considered to have the same binding legal effect as if it were the
original signed version thereof delivered in person
	 
	10.	 	GOVERNING LAW
	 
	 	 	This Amendment shall be governed and construed in all respects by the
laws of England and the parties irrevocably submit to the non-exclusive
jurisdiction of the courts of England

10

 

	 	 	 	 	 	 	 	 	 
	SIGNED BY

	 	 	)	 	 	/s/ Werner Schweiter
	 	 
	 

	 	 	)	 	 	Werner Schweiter	 	 
	for and on behalf of

	 	 	)	 	 	 	 	 
	GUYMONT SERVICES SA (in Liqu.)

	 	 	)	 	 	/s/ Marzell Beck	 	 
	in the presence of:

	 	 	)	 	 	Marzell Beck	 	 
	 
	 	 	 	 	 	 	 	 
	Witness Signature: /s/ D. Eggenberger
	 	 	 	 	 	 	 	 
	Name: David Eggenberger
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address: Bawargs 8, 7204 Unkvaz
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Occupation: Secretary
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED BY

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	/s/ Darren Richardson	 	 
	for and on behalf of MAD

	 	 	)	 	 	 	 	 
	CATZ INTERACTIVE, INC.

	 	 	)	 	 	 	 	 
	in the presence of:

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Witness Signature: /s/ Michael Guerero
	 	 	 	 	 	 	 	 
	Name: Michael Guerero
	 	 	 	 	 	 	 	 

			
	Address:	 	7480 Mission Valley Rd.

Suite 101

San Diego, CA 92108

			
	Occupation:	 	Contracts Manager

11

 

SCHEDULE 1

Clause 1 : Form of Loan Note Certificate and Conditions

Certificate No.             representing $     Nominal Amount of Loan Notes

MAD CATZ INTERACTIVE, INC

A company incorporated in Canada

corporate ID number 294869-9

(“the Company”)

ISSUE OF $14,500,000 CONVERTIBLE

UNSECURED LOAN NOTES 2019

(“the Loan Notes”)

Issued under the authority of the statutes and by-laws of the Company and pursuant to a Resolution
of the Board of Directors of the Company passed on {                           } 2009

THIS IS TO CERTIFY THAT                                                      of
                                                                               is the registered
holder of                                          US DOLLARS ($     ) nominal amount of
the Loan Notes which Loan Notes are constituted by an Instrument entered into by the Company on
November 20, 2007 as amended by an Amendment entered into by the Company with Guymont Services SA
and The Winkler Atlantic Trust on {          } 2009 (“the Instrument”) and are
issued with the benefit of and subject to the provisions contained in the Instrument and the
Conditions endorsed on or attached to this certificate (“the Conditions”)

	 	 	 	 	 	 	 
	DATED

	 	 	2009	 	 	 

	 	 	 	 	 	 	 
	DULY EXECUTED

	 	 	)	 	 	 
	by MAD CATZ INTERACTIVE, INC

	 	 	)	 	 	 
	acting by its authorised officer

	 	 	)	 	 	 

Name:

Status:

	 	 	 	 	 	 	 
	Notes:

	 	 	(1	)	 	The Company will not register any transfer of
any Loan Notes unless the Certificate or a
suitable indemnity is produced relating to
such Loan Notes. The Certificate or a
suitable indemnity must be surrendered before
any transfer, whether for the whole or any
part of the Loan Notes represented hereby,
can be registered or a new certificate issued
in exchange.
	 
	 	 	 	 	 	 
	 

	 	 	(2	)	 	The Loan Notes are transferable in part in amounts of not less than $1,000
nominal or as a whole, subject to the restrictions on transfer contained in the
Conditions.
	 
	 	 	 	 	 	 
	 

	 	 	(3	)	 	The Loan Notes are not and will not be the subject of any listing, permission to
deal or registration on any investment exchange or with any other authority.
	 
	 	 	 	 	 	 
	 

	 	 	(4	)	 	The Loan Notes shall not be offered to the public for purchase.
	 
	 	 	 	 	 	 
	 

	 	 	(5	)	 	The address of the Transfer Office is 7840 Mission Valley Road Suite 101 San
Diego 92108.
	 
	 	 	 	 	 	 
	 

	 	 	(6	)	 	The Loan Notes are subject to set-off of any Provisional Claims and any
Substantiated Claims as provided in the Conditions and amounts of the Loan Notes the
subject of this Certificate may be cancelled to the extent necessary to satisfy such
Substantiated Claims
	 
	 	 	 	 	 	 
	 

	 	 	(7	)	 	Accelerated payment of the Loan Notes following the occurrence of a Serious Event
under the Conditions is restricted under the terms of the Senior Lender Agreement (as
those terms are defined in the Conditions).

 

 

Annex A

	 	 	 	 	 
	June 30, 2009
	 	 	44,881	 
	September 30, 2009
	 	 	44,881	 
	October 31, 2009
	 	 	500,000	 
	December 31, 2009
	 	 	44,881	 
	March 31, 2010*
	 	 	1,544,881	 
	 
	June 30, 2010
	 	 	44,881	 
	September 30, 2010
	 	 	44,881	 
	December 31, 2010
	 	 	44,881	 
	March 31, 2011
	 	 	2,444,881	 
	 
	June 30, 2011
	 	 	44,881	 
	September 30, 2011
	 	 	44,881	 
	December 31, 2011
	 	 	44,881	 
	March 31, 2012
	 	 	2,444,881	 
	 
	June 30, 2012
	 	 	44,881	 
	September 30, 2012
	 	 	44,881	 
	December 31, 2012
	 	 	44,881	 
	March 31, 2013
	 	 	2,444,881	 
	 
	June 30, 2013
	 	 	44,881	 
	September 30, 2013
	 	 	44,881	 
	December 31, 2013
	 	 	44,881	 
	March 31, 2014
	 	 	2,444,881	 
	 
	June 30, 2014
	 	 	44,881	 
	September 30, 2014
	 	 	44,881	 
	December 31, 2014
	 	 	44,881	 
	March 31, 2015
	 	 	2,444,881	 
	 
	June 30, 2015
	 	 	44,881	 
	September 30, 2015
	 	 	44,881	 
	December 31, 2015
	 	 	44,881	 
	March 31, 2016
	 	 	2,444,881	 
	 
	June 30, 2016
	 	 	44,881	 
	September 30, 2016
	 	 	44,881	 
	December 31, 2016
	 	 	44,881	 
	March 31, 2017
	 	 	2,444,881	 
	 
	June 30, 2017
	 	 	44,881	 
	September 30, 2017
	 	 	44,881	 
	December 31, 2017
	 	 	44,881	 
	March 31, 2018
	 	 	2,444,881	 
	 
	June 30, 2018
	 	 	44,881	 
	September 30, 2018
	 	 	44,881	 
	December 31, 2018
	 	 	44,881	 
	March 31, 2019
	 	 	2,444,877	 
	 

	*	 	Includes payment under the Completion Note in the amount of
$948,845.88ex4_39.htm

    
       

       

      Exhibit 4.39

      
 

      

       

      

       

       

      EFFECTIVE
AS OF THE 24TH DAY OF
APRIL 2009

      

       

       

      

       

       

      

       

       

      

       

      __________________________________________

      

      THE
GLOBAL SOURCES

      

       

      DIRECTORS
SHARE GRANT AWARD PLAN

       

      __________________________________________

       

       

      

       

       

      

       

       

      

       

      
        
           

        

        
          118

          
            

          

        

        
           

        

      

      

       

      

      CONTENTS

      

      Section                      Heading

       

      

      
        	
                1.  

              	
                Name
      of the Plan

              

      

      

      
        	
                2.  

              	
                Purpose
      of the Plan

              

      

      

      
        	
                3.  

              	
                Shares
      Subject to the Plan

              

      

      

      
        	
                4.  

              	
                Grants
      to Eligible Persons

              

      

      

      
        	
                5.  

              	
                Non-transferability

              

      

      

      
        	
                6.  

              	
                Adjustments

              

      

      

      
        	
                7.  

              	
                Vesting
      of Shares

              

      

      

      
        	
                8.  

              	
                Plan
      Duration

              

      

      

      
        	
                9.  

              	
                Administration

              

      

      

      
        	
                10.  

              	
                Terminating
      Transactions

              

      

      

      
        	
                11.  

              	
                Government
      Regulations

              

      

      

      
        	
                12.  

              	
                Costs
      and Expenses

              

      

      

      
        	
                13.  

              	
                Amendment
      of Termination of the Plan

              

      

      

      
        	
                14.  

              	
                Effective
      Date of the Plan

              

      

      

      
        	
                15.  

              	
                Limitation
      of Liability

              

      

      

      
        	
                16.  

              	
                Governing
      Law and Jurisdiction

              

      

      

      
        	
                17.  

              	
                Status
      of the Plan

              

      

      

      Annex                       Form
of Share Award Certificate

      

      Schedule
1              
Certain Other Conditions Relating to the Award of Shares

       

      

       

       

      

       

       

      

       

       

      

       

      
        
           

        

        
          119

          
            

          

        

        
           

        

      

       

      

       

      

      

      THE GLOBAL
SOURCES

      DIRECTORS SHARE GRANT AWARD
PLAN

       

      

      
        	
                1.  

              	
                Name of the
      Plan

              

      

      

      
        	
                1.1

              	
                This
      equity compensation plan shall be known as “The Global Sources Directors
      Share Grant Award Plan” (the “Plan”).

              

      

      

      
        	
                1.2

              	
                This
      Plan is made pursuant to The Global Sources Equity Compensation (2007)
      Master Plan (the “Master
      Plan”), and constitutes a supplementary or subsidiary document to
      (and shall form an integral part of and be read in conjunction with) the
      Master Plan.

              

      

      

      

      
        	
                2.  

              	
                Purpose of the
      Plan

              

      

      

      
        	
                2.1

              	
                The
      purpose of this Plan is to make awards of common shares of US$0.01 each
      (the “Shares”) in
      Global Sources Ltd. (the “Company”), a company
      incorporated in Bermuda, through The Global Sources Equity Compensation
      Trust 2007 (the “Trust”) to Eligible
      Persons as set out in Section 4.

              

      

      

       

      
        	
                3.  

              	
                Shares Subject to the
      Plan

              

      

      

      
        	
                3.1

              	
                The
      Trust has been established pursuant to a Declaration of Trust dated 28
      November 2006 (“Trust
      Document”) by Appleby Trust (Bermuda) Limited (now known as
      “Appleby Services (Bermuda) Limited”) (the “Trustee”), and the
      trusts set out therein have been accepted by the
  Trustee.

              

      

      

      
        	
                3.2

              	
                All
      Awarded Shares (as defined in Section 4.3) awarded to a Grantee (as
      defined in Section 4.2) shall be issued and allotted by the Company to the
      Trustee (which Awarded Shares so issued and allotted shall form part of
      the Trust property to be held by the Trustee as trustee of the Trust), and
      shall be eligible for the subsequent transfer (and shall be subsequently
      transferred) by the Trustee to the respective Grantee pursuant to this
      Plan, subject to and in accordance with the vesting rules and other
      applicable provisions of this Plan.

              

      

      

      
        	
                3.3

              	
                A
      plan committee (the “Plan
      Committee”) has been constituted to (amongst other things)
      determine the award and allocation of the grant of Shares and other
      benefits to the Grantees, with such powers, functions, rights,
      responsibilities and terms of reference as are provided for, and/or
      contemplated, by the Master Plan and/or the Trust
  Document.

              

      

      

      

      
        	
                4.  

              	
                Grants to Eligible
      Persons

              

      

      

      
        	
                4.1

              	
                In
      this Plan, “Eligible
      Person” shall mean any person who, on or after the Commencement
      Date (as defined in Section 14.1) hereof, is a director of the Company at
      the time an award of Shares is made to him or her under this
      Plan.

              

      

       

      
        	
                4.2

              	
                Each
      Eligible Person shall be eligible to receive awards of Shares under this
      Plan. The Plan Committee shall select and determine (in its sole and
      absolute discretion) which Eligible Persons shall receive awards of Shares
      (the persons receiving such awards of Shares being hereinafter referred to
      collectively as the “Grantees” and
      individually as a “Grantee”).

              

      

       

      
        
           

        

        
          120

          
            

          

        

        
           

        

      

      

       

      

      

      
        	
                4.3

              	
                The
      number of Shares to be awarded to a Grantee (“Awarded Shares”) shall
      be determined by the Plan Committee (in its sole and absolute discretion)
      at the time of the award. Such Awarded Shares shall vest in accordance
      with the provisions of Section 7.

              

      

      

      

      
        	
                5.  

              	
                Non-transferability

              

      

      

      
        	
                5.1

              	
                Any
      Shares awarded under this Plan shall be non-transferable except in
      accordance with the provisions of Section 7.1(a)(ii) hereof and/or
      paragraph 1 of Schedule 1 hereto.

              

      

       

      

      
        	
                6.  

              	
                Adjustments

              

      

      

      
        	
                6.1

              	
                If
      the outstanding Shares then subject to this Plan are changed into or
      exchanged for a different number or kind of shares or securities, as a
      result of one or more reorganisations, recapitalisations, stock splits,
      reverse stock splits, stock dividends and the like, appropriate
      adjustments shall be made in the number and/or type of the outstanding
      Shares as shall be directed by the Plan Committee.  Any such
      adjustment in outstanding Shares shall be made in order to preserve, but
      not to increase or decrease, the benefits to the Grantees existing
      immediately prior to the event giving rise to such
    adjustment.

              

      

      

      

      
        	
                7.  

              	
                Vesting of
      Shares

              

      

      

      
        	
                7.1

              	
                Provided
      that the Grantee is “in good standing” (the definition and determination
      of which shall be at the sole and absolute discretion of the Plan
      Committee) at the time of the award and remains in good standing at the
      time of vesting, Shares awarded under this Plan shall vest in the Grantee
      at the end of four (4) years after such effective date as may be specified
      by the Plan Committee (or in accordance with such other vesting schedule
      as may be determined by the Plan Committee in its sole and absolute
      discretion) at the time the Shares are awarded, subject to the
      following:

              

      

      

      
        	
                 
      

              	
                (a)

              	
                In
      the case of every Share awarded
hereunder:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                if,
      before all the Awarded Shares are vested in accordance with their
      applicable vesting schedule(s), a Grantee ceases to be a director of the
      Company, by virtue of resignation or retirement, or for any reason other
      than death, then all Awarded Shares which have not yet vested at the time
      of such cessation shall not be forfeited, but shall vest in the Grantee in
      accordance with their applicable vesting schedule(s); subject however to
      the provisions of Section 7 (a)(iii) below;
or

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                if,
      before all the Awarded Shares are vested in accordance with their
      applicable vesting schedule(s), a Grantee shall die, then all Awarded
      Shares which have not yet vested at the time of death shall immediately
      vest, and the person or persons to whom the Grantee’s rights to the
      Awarded Shares shall have lawfully passed, whether by will, by the
      applicable laws of succession or otherwise, shall be entitled to receive
      such Awarded Shares; or

              

      

      
        
           

        

        
          121

          
            

          

        

        
           

        

      

      

      

      
        	
                 
      

              	
                (iii)

              	
                if,
      before all the Awarded Shares are vested in accordance with their
      applicable vesting schedule(s), a Grantee shall become a director, officer
      or employee of, or a consultant or advisor to, or an independent
      contractor of, a Competitor (or any parent, subsidiary or affiliate
      thereof); or he or she ceases to be of “good standing” (the definition and
      determination of shall be at the sole and absolute discretion of the Plan
      Committee); or he or she does anything, or conducts himself or herself in
      a manner, which is prejudicial to any Global Sources Network company (as
      determined by the Plan Committee in its sole and absolute discretion); or
      for any other reason (as determined by the Plan Committee in its sole and
      absolute discretion); then all the Awarded Shares which have not yet
      vested at the time of such occurrence may (at the sole and absolute
      discretion of the Plan Committee) be forfeited, whereupon the Grantee
      shall not be entitled to the vesting or receipt thereof and any forfeited
      Shares held by the Trustee for the Grantee shall be available for further
      grants under the Master Plan, this Plan and/or any other equity
      compensation plan made under or pursuant to the Master
    Plan.

              

      

      

      For the
purposes hereof:-

      

      the
definition of “Competitor” shall be as
determined by the Plan Committee (in its sole and absolute discretion), and such
determination shall be final and binding upon the Grantee and his/her
successor(s); and

      

      “Global Sources Network” shall
mean the Company and its subsidiaries, and any independent contractors of the
Company or any of its subsidiaries (including the Company) as may be determined
by the Plan Committee from time to time, collectively.

      

      
        	
                 
      

              	
                (b)

              	
                All
      Awarded Shares, when vested and issued to a Grantee, shall rank pari passu in all
      respects with other Shares of the Company of the same class, including the
      right for the holder thereof to receive dividends (if any); provided
      however that (for the avoidance of doubt), unless and until Awarded Shares
      are actually vested and issued to a Grantee, the Grantee shall not be
      entitled to receive any dividends thereon or to have any voting rights
      therein.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Once
      Shares are awarded to a Grantee, the terms of vesting cannot be varied to
      the detriment of the Grantee without the written consent of such
      Grantee.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                The
      rights to Awarded Shares acquired by a Grantee under this Plan shall not
      be transferable, except in accordance with the provisions of Section
      7.1(a)(ii) hereof or paragraph 1 of Schedule 1
  hereto.

              

      

      

      

      
        	
                8.  

              	
                Plan
      Duration

              

      

      

      
        	
                8.1

              	
                This
      Plan shall commence with effect from the Commencement Date (as defined in
      Section 14.1) and shall terminate
upon:-

              

      

      
        	
                 
      

              	
                (a)

              	
                the
      expiration or termination of the Master Plan;
or

              

      

      
        	
                 
      

              	
                (b)

              	
                the
      termination of this Plan in accordance with the provisions of Section 10.1
      or Section 13.1 hereof,

              

      

      

      whichever
is the earliest to occur.

       

      
        
           

        

        
          122

          
            

          

        

        
           

        

      

      

       

      

       

      
        	
                8.2

              	
                Shares
      may not be awarded after this Plan is terminated, provided that (for the
      avoidance of doubt) if the terms of any award made prior to the
      termination date of this Plan provide for the vesting of Shares thereunder
      to occur upon or after such termination date, then such award and the
      vesting of Shares thereunder shall not be prejudiced by the termination of
      this Plan.

              

      

      

      
        	
                9.  

              	
                Administration

              

      

      

      
        	
                9.1

              	
                This
      Plan shall be managed and administered by the Trustee, subject always to
      the directions of the Plan Committee as provided under the Trust
      Document.

              

      

      

      
        	
                9.2

              	
                The
      interpretation and construction by the Plan Committee of any of the
      provisions of this Plan or of any Grants awarded hereunder shall be final
      and binding upon Grantees and their respective
  successors.

              

      

      

      
        	
                9.3

              	
                The
      Plan Committee may, from time to time, adopt further rules and regulations
      for carrying out this Plan and, subject to the provisions of this Plan and
      the directions and approval of the Plan Committee, the Trustee may issue a
      certificate in the form set out in the Annex to this Plan or such other
      form or forms of the instruments evidencing Shares awarded under this Plan
      as may be prescribed and approved by the Plan
  Committee.

              

      

      

      
        	
                9.4

              	
                Subject
      to the provisions of this Plan, the Plan Committee shall have full and
      final authority (in its sole and absolute
  discretion):-

              

      

      

      
        	
                 
      

              	
                (a)

              	
                to
      determine (from amongst Eligible Persons) the Grantees to be awarded
      Shares;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                to
      determine the number of Shares to be
awarded;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                to
      determine the terms of award, including any vesting
      provisions;

              

      

      

      
        	
                 
      

              	
                (d)

              	
                to
      determine such other terms and provisions of award as it may authorise at
      the time when each Share is awarded (each of which terms and provisions
      may be different for each award);
and

              

      

      

      
        	
                 
      

              	
                (e)

              	
                (subject
      to Section 7.1(c) above) to amend the terms of any existing award to
      accelerate the time or times at which Shares awarded under this Plan, or
      any part thereof, shall become vested, or in any other respect which shall
      not adversely affect the rights of the Grantee of such award of
      Shares.

              

      

      

      

      
        	
                9.5

              	
                The
      Trustee, the Plan Committee, the board of directors of the Company and the
      Company shall not be liable for any action taken, or any determination
      made, in good faith, in connection with this
  Plan.

              

      

      

      
        	
                9.6

              	
                The
      Company or its board of directors may delegate any of its powers, rights,
      duties and/or responsibilities under this Plan to the Plan Committee, who
      may discharge the same with the authority and in the place and stead of
      the Company or its board of directors (as the case may
  be).

              

      

      
        
           

        

        
          123

          
            

          

        

        
           

        

      

      

      

      
        	
                10.  

              	
                Terminating
      Transactions

              

      

      

      
        	
                10.1

              	
                Upon
      the occurrence of a Terminating Transaction, as hereinafter defined, this
      Plan shall terminate.  Upon the happening of a Terminating
      Transaction and the corresponding termination of this Plan, any Awarded
      Shares which have not yet vested (at the time of the Terminating
      Transaction and the corresponding termination of this Plan) shall ipso facto become
      vested in the respective Grantees.

              

      

      

      
        	
                10.2

              	
                “Terminating
      Transaction” shall mean such transaction or proceedings, resulting
      (whether at the time of, or upon the conclusion of, such transaction or
      proceedings) in the liquidation of the Company, as the Plan Committee
      shall in its sole and absolute discretion
  determine.

              

      

      

      

      11.           Government
Regulations

      

      
        	
                11.1

              	
                The
      Trustee shall not issue any Awarded Shares upon the vesting thereof,
      unless and until all licences, permissions and authorisations required to
      be granted by the Government of Bermuda, or by any authority or agency
      thereof, shall have been duly
received.

              

      

      

      

      
        	
                12.

              	
                Costs and
      Expenses

              

      

      

      
        	
                12.1

              	
                All
      costs and expenses with respect to the adoption of this Plan and in
      connection with the registration of Shares shall be borne by the Company;
      provided, however, that (except as otherwise specifically provided in this
      Plan or in any agreement between the Company and a Grantee), the Company
      shall not be obliged to pay or be otherwise responsible for any costs or
      expenses (including but not limited to any legal fees) incurred by any
      Grantee, or any brokerage, service or other fees, charges, costs or
      expenses due or payable, or any taxes which may be due or payable, upon or
      in connection with any award of Shares or any Awarded Shares, and/or the
      vesting or issuance of Awarded Shares, and/or the holding or transfer of
      any Awarded Shares by any Grantee.

              

      

      

      
        	
                12.2

              	
                All
      Shares awarded to a Grantee shall be denominated in United States Dollars
      only, and any currency exchange gains and/or losses relating to such
      Awarded Shares during the vesting period shall be borne solely by the
      Grantee concerned.

              

      

      

      

      
        	
                13.

              	
                Amendment or
      Termination of the Plan

              

      

      

      
        	
                13.1

              	
                The
      Plan Committee (acting in its sole and absolute discretion) may alter,
      amend, suspend or terminate this Plan; provided however that, except as
      otherwise provided in this Plan, no such action shall deprive any Grantee,
      without his or her consent, of any of his or her rights under an award of
      Shares already made to the Grantee pursuant to this
  Plan.

              

      

      

      
        	
                13.2

              	
                No
      amendment of this Plan shall increase the duties and/or responsibilities
      of the Trustee without its consent.

              

      

      

      

      
        	
                14.  

              	
                Effective Date of the
      Plan

              

      

      

      
        	
                14.1

              	
                This
      Plan shall be deemed to commence with effect from 24 April 2009 (“Commencement
      Date”).

              

      

       

      
        
           

        

        
          124

          
            

          

        

        
           

        

      

      

       

      15.           Limitation of
Liability

       

      
        	
                15.1

              	
                No
      member of the board of directors of the Company or the Plan Committee, or
      any person authorised to act on their behalf, shall be personally liable
      for any action, determination or interpretation taken or made in good
      faith with respect to this Plan, and all members of the board of directors
      of the Company or the Plan Committee, and each and any person authorised
      to act on their behalf, shall, to the extent permitted by law, be fully
      indemnified and protected by the Company in respect of any such action,
      determination or interpretation.

              

      

      

      
        	
                16.

              	
                Governing Law and
      Jurisdiction

              

      

      

      
        	
                16.1

              	
                This
      Plan shall be governed by and interpreted and construed in accordance with
      the laws of Bermuda; and the Company, the Trustee, the Plan Committee (and
      its members) and each Grantee, hereby irrevocably submits to the exclusive
      jurisdiction of the courts of
Bermuda.

              

      

      

      

      17.           Status of the
Plan

      

      
        	
                17.1

              	
                This
      Plan shall be subject and subordinate to the Master Plan, and in the event
      of any conflict or inconsistency between the provisions of this Plan and
      the provisions of the Master Plan, the provisions of the Master Plan shall
      prevail (but only to the extent of such conflict or
      inconsistency).

              

      

      

      
        
           

        

        
          125

          
            

          

        

        
           

        

      

      

      ANNEX – FORM OF SHARE AWARD
CERTIFICATE

      

      

      THIS
DOCUMENT IS IMPORTANT AND SHOULD BE KEPT IN A SAFE PLACE

      

      GLOBAL
SOURCES LTD.

      

      SHARE
AWARD CERTIFICATE

      

       

      THE
GLOBAL SOURCES DIRECTORS SHARE GRANT AWARD PLAN

       

      

       

      THIS IS TO CERTIFY that, on
the date shown below, a grant of Shares was awarded to the Grantee named below,
subject to the provisions of the above-mentioned Plan, as amended from time to
time and to the Rules made pursuant thereto for the time being in force, to
receive the number of common shares of US$0.01 each in the capital of Global
Sources Ltd. specified below.

      

      
        
          	
                  Grantee:

                	 
      	
                  Name:

                	______________________________
	 
      	 
      	 
      	 
      
	 
      	 
      	
                  Address:

                	______________________________
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	______________________________
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	______________________________

        

      

      

      
        
          	
                  Date
      of Award:

                	 
      	______________________________
	 
      	 
      	 
      
	
                  Number
      of Awarded Shares:

                	 
      	______________________________ 
      
	 
      	 
      	 
      
	
                  Vesting
      Date:

                	 
      	
                  ______________________________

                

        

      

      

      

      

      

      

      
        
          
            	
                    For
      and on behalf of the Trustee

                  
	 
      
	 
      
	 
      
	 
      
	 
      
	 
      
	
                    __________________________

                  

          

        

      

      
        
           

        

        
          126

          
            

          

        

        
           

        

      

      

      

      SCHEDULE
1

      

      CERTAIN OTHER CONDITIONS
RELATING TO THE AWARD OF SHARES

      

      

      Upon the
awarding of Shares to the Grantee, such Awarded Shares shall not vest in the
Grantee, but shall be held by the Trustee for the Grantee subject to the
following provisions and subject to and in accordance with the provisions of
this Plan:

      

      
        	
                1.

              	
                The
      Grantee can direct the Trustee to transfer the Awarded Shares, upon the
      vesting thereof, to the Grantee or to such person as the Grantee
      directs.

              

      

      

      
        	
                2.

              	
                No
      loans shall be made to a Grantee against the award of Shares under this
      Plan.

              

      

      

      
        	
                3.

              	
                Awarded
      Shares which have not yet vested under this Plan cannot be committed as
      collateral.

              

      

      

      
        	
                4.

              	
                It
      is the responsibility of the Grantee to ensure that he or she may
      participate in this Plan under the laws of his or her
      jurisdiction.

              

      

      

      
        	
                5.

              	
                All
      disputes regarding this Plan shall be referred to the Plan Committee for
      resolution, and its decision shall be final and
  binding.

              

      

      

127

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