Document:

Exhibit 10.4

 

ACQUITY GROUP, LLC

 

EMPLOYMENT AGREEMENT

 

AGREEMENT made as of [Column B], by and between [Column A] (the “Employee”) and Acquity Group, LLC, a Delaware limited liability company, with a principal place of business at 500 West Madison Street, Suite 2200, Chicago, IL 60661 (the “Company”).

 

WHEREAS, the Company believes it to be to its advantage to ensure that the Employee continues to render services to the Company as hereinafter provided.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the mutual covenants and obligations herein contained, the parties hereto agree as follows:

 

1.                                       Position and Responsibilities.  During the term of this Agreement, the Employee agrees to serve as [Column C].  The Employee shall at all times report to, and his activities shall at all times be subject to the direction and control of, the Chief Executive Officer, and to the extent contemplated by the Operating Agreement (as defined below), the Board of Directors of the Company (the “Board”), and the Employee shall exercise such powers and comply with and perform, faithfully and to the best of his ability, such directions and duties in relation to the business and affairs of the Company as may from time to time be vested in or requested of him by the Board, which directions and duties are commensurate with Employee’s position and title and the provisions of the Company’s Third Amended and Restated Operating Agreement, as amended from time to time (the “Operating Agreement”).  During the term of employment hereunder, the Employee agrees to devote his full business time and attention to the business of the Company.  The Employee shall not engage in any other business activity or serve on the board of directors in any enterprise, firm, corporation, trust or other business entity other than the Company without the prior written approval of the Board; provided, however, that, subject to the terms of the Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement (described in Section 5 below), nothing herein shall prevent (a) the Employee from serving on any civic, charitable, not-for-profit or similar board, (b) the Employee from continuing to serve on the board of any corporation or other for-profit enterprise on which Employee is serving as of the date hereof or from serving on the board of such an enterprise as may be approved by the Board after the date hereof, or (c) management by the Employee of his personal affairs and investments or ownership by the Employee of an equity interest in any business entity, provided such activities do not interfere significantly with the performance by Employee of his duties as contemplated by this Agreement.

 

 

2.                                       Compensation:  Salary, Bonuses, Equity Participation and Other Benefits.  During the term of the Employee’s employment (or as otherwise specifically stated herein), the Company shall pay the Employee the following compensation, including the following salary, bonus and other fringe benefits:

 

(A)                              Salary.  In consideration of the services to be rendered by the Employee to the Company, the Company will pay to the Employee a monthly salary at a rate of not less than $[          ] (the Employee’s “base rate”).  Following the end of each calendar year (or earlier in the discretion of the Board or its Compensation Committee), Employee’s base rate shall be subject to review and increase by the Board (or its Compensation Committee) and any increased amount shall become the “base rate.”  In considering such potential increases, the Board shall consider market competitive compensation levels, any changes to the size or scope of the Company’s business or Employee’s duties and responsibilities, the Company’s and Employee’s performance, and such other factors that the Board considers relevant.  Salary shall be payable in conformity with the Company’s customary practices for executive compensation as such practices shall be established or modified from time to time.  Salary payments shall be subject to all applicable federal and state withholding, payroll and other taxes.

 

(B)                                Employee Benefits; Fringe Benefits; Expenses.  The Employee shall be eligible to participate, subject to the terms and conditions thereof, in all benefit plans, incentive plans and programs, including bonus programs and equity incentive plans as may be in effect from time to time, and in such other plans and programs as the Board (or its Compensation Committee) may determine.  The Employee shall be entitled to vacation in accordance with Company practices.  The Employee shall be reimbursed by the Company, on terms and conditions that are substantially similar to those that apply to other similarly situated executives, for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging and similar items which are consistent with the Company’s expense reimbursement policy as in effect from time to time.

 

(C)                                Performance Based Bonus.  The Employee shall be entitled to receive performance based annual incentive bonuses from the Company for each fiscal year ending during the Term in accordance with the Company’s annual bonus plan as established by the Board (or the Compensation Committee thereof) in its sole discretion.  In establishing the annual bonus plan, the Board (or the Compensation Committee thereof) shall consider past practices of the Company in setting “target” bonus opportunity and “target” performance goals, market competitive compensation levels, any changes to the size or scope of the Company’s business or Employee’s duties and responsibilities, the Company’s and Employee’s performance expectations, and such other factors that the Board considers relevant.

 

3.                                       Term.  The term of this Agreement shall commence on the date first above written and shall terminate on the earlier to occur of (i) the third anniversary of this Agreement, (ii) the death, physical incapacity or mental incompetence of the Employee, or (iii) the occurrence of any of the circumstances described in Section 4 hereof (the “Expiration Date”).  For the purposes of this Agreement, the Employee shall be deemed to have suffered physical incapacity or mental incompetence if the Employee is unable to perform his duties hereunder for any 180

 

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work days out of any 365-day period of if the Employee suffers physical incapacity and mental incompetence as such terms are defined under the Company’s standard disability insurance policy in effect from time to time for management employees of the Company.  After the third anniversary of the date hereof, such employment may be extended, subject to earlier termination, upon mutual agreement between the Company and Employee.

 

4.                                       Termination.  The Employee’s term of employment under this Agreement may be terminated pursuant to clause (iii) of the first sentence of Section 3 as follows:

 

(A)                              At the Employee’s Option:

 

(i)                                     Generally:  The Employee may terminate his employment, with or without cause, at any time upon at least thirty (30) days’ advance written notice to the Company.  In the event of termination at the Employee’s option, the Employee shall be entitled to no severance or other termination benefits after the expiration of the thirty-day period referred to above; provided that Employee shall be entitled to receive vested benefits or other post-employment payments in accordance with applicable employee benefit plans.

 

(ii)                                  For Changed Circumstances:  Subject to the Company’s right to terminate the Employee pursuant to Sections 4(B) and 4(C) below, the Employee may terminate his employment hereunder upon the occurrence of “Changed Circumstances,” as hereinafter defined, upon written notice to the Company.  For the purposes of this Section 4(A), “Changed Circumstances” shall mean a reduction in Employee’s base rate or other material failure to pay the compensation and benefits required under Section 2 without Employee’s consent, a breach of this Agreement by the Company or of the Operating Agreement by the Company or the 2020 Member (as defined in the Operating Agreement) which results in a material adverse change in the nature, scope or status of the Employee’s position, authorities or duties from those in effect in accordance with Section 1; or a material breach of the obligations to make payments or cause the Company to make payments that are due to Employee under Section 2.5 (Distribution Escrow) or Section 12.3 (Indemnification and Payment of Damages by Buyer and Buyer Parent) of the Unit Purchase Agreement (as defined in the Operating Agreement) by the Buyer (as defined in the Unit Purchase Agreement) or the 2020 Member; provided that the occurrence of any of the foregoing events shall constitute Changed Circumstances only if the Company, Buyer or 2020 Member, as applicable, fails to cure such event within 30 days (or such longer period for cure as may be applicable under the Unit Purchase Agreement) after receipt from the Employee of written notice of such occurrence.  In the event that the Employee terminates his employment pursuant to this Section 4(A)(ii), the Employee shall be entitled to severance payments from the Company as determined in accordance with Section 4(C) below.

 

(B)                                At the election of the Company for Cause.  The Company may, immediately and unilaterally, terminate the Employee’s employment hereunder “for cause” at any time during the term of this Agreement without any prior written notice to the Employee (except as otherwise specifically identified in clause (v) of this paragraph 4(B) below).  Termination of the Employee’s employment by the Company

 

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shall constitute a termination “for cause” under this Section 4(B) if such termination is for one or more of the following causes, as found by the Board by a resolution duly adopted by a majority of its members, excluding the Employee:

 

(i)                                     willful misconduct, gross negligence, dishonesty, or breach of fiduciary duty in connection with the performance of his duties under, or a material breach of the terms of this Agreement or the other agreements executed in connection herewith;

 

(ii)                                  the commission by the Employee of an act of fraud, theft or embezzlement, or deliberate disregard of the rules or policies of the Company or the commission by the Employee of any other action with the intent to injure materially the Company;

 

(iii)                               acts of moral turpitude by the Employee which materially adversely affect the business or reputation of the Company or the Employee’s ability to perform his duties hereunder and represent the Company;

 

(iv)                              the conviction of or plea of nolo contendere by the Employee to a felony (other than a traffic offense); or

 

(v)                                 a material breach of the obligations of Employee to make payments under Section 2.5 (Distribution Escrow) or Section 12.2 (Indemnification and Payment of Damages by Members) of the Unit Purchase Agreement that are due to the Company, the Buyer, or the 2020 Member or their assignees; provided that the occurrence of such material breach shall constitute cause only if Employee fails to cure such event within 30 days (or such longer period for cure as may be applicable under the Unit Purchase Agreement) after receipt from the Company, the Buyer, or the 2020 Member or their assignees of written notice of such occurrence.

 

In the event of a termination “for cause” pursuant to the provisions of clauses (i) through (v) above, inclusive, the Employee shall be entitled to no severance or other termination benefits except as required by law.

 

(C)                                At the Election of the Company for Reasons Other than for Cause.  The Company may immediately and unilaterally, terminate the Employee’s employment hereunder at any time during the term of this Agreement without cause by giving at least thirty (30) days’ advance written notice to the Employee of the Company’s election to terminate.  In the event the Company exercises its right to terminate the Employee under this Section 4(C), and subject to compliance with the Employee of the provisions of the Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement, the Company agrees to pay the Employee a severance or termination payment equal to (i) the greater of the number of months (not greater than twelve (12)) remaining in the term as of immediately prior to the termination of employment, or six (6) months (the “Cash Portion of Severance”) multiplied by the Employee’s then current base rate (excluding any reduction thereof in violation of this Agreement), (ii) if any specific bonus arrangement is then in effect, the portion of any such bonus then earned by (but unpaid

 

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to) the Employee for the fiscal year in which termination occurs as determined in good faith by the Board, and (iii) medical and other health insurance benefits for the Severance Payment Period (as defined below) as provided for in Section 2(B) hereof.  The Cash Portion of Severance shall be payable over the number of months determined under clause (i) above (the “Severance Payment Period”) in conformity with the Company’s customary practices for executive compensation, the performance bonus shall be paid at the time and in the manner that performance bonuses are paid to the similarly situated executives, and the medical and other health insurance benefits shall be payable on a monthly basis during the Severance Payment Period.  All such severance benefits shall be subject to all applicable federal and state withholding, payroll and other taxes.  Except as expressly set forth in this Section 4(C), the Company shall not have any further obligations to the Employee under this Employment Agreement in the event of Employee’s termination under this Section 4(C), except such further obligations as may be imposed by law.

 

(D)                               Benefits if Agreement Terminated Due to Disability.  In the event the employment terminates pursuant to clause (ii) of the first sentence of Section 3 due to the physical incapacity or mental incompetence of the Employee, the Company shall pay the Employee an amount equal to (i) six months salary at the then current base rate, less (ii) any amounts recovered by the Employee under any health and disability insurance programs available through the Company.  The provisions of this Section 4(D) shall survive the termination of this Agreement by reason of the physical incapacity or mental incompetence of the Employee.

 

5.                                       Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement.  Simultaneously with the execution of this Agreement, and as a condition to the execution of this Agreement by the Company, the Employee agrees to sign the Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement in the form attached hereto as Exhibit A.

 

6.                                       Consent and Waiver by Third Parties.  The Employee hereby represents and warrants that he has obtained all waivers and/or consents from third parties which are necessary to enable him to enjoy employment with the Company on the terms and conditions set forth herein and to execute and perform this Agreement without being in conflict with any other agreement, obligation or understanding with any such third party.  The Employee represents that he is not bound by any agreement or any other existing or previous business relationship which conflicts with, or may conflict with, the performance of his obligations hereunder or prevent the full performance of his duties and obligations hereunder.

 

7.                                       Governing Law.  This Agreement, the employment relationship contemplated herein and any claim arising from such relationship, whether or not arising under this Agreement, shall be governed by and construed in accordance with the internal laws of the state of Illinois and this Agreement shall be deemed to be performable in Illinois.

 

8.                                       Severability.  In case any one or more of the provisions contained in this Agreement or the other agreements executed in connection with the transactions contemplated hereby for any reason shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or

 

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such other agreements, but this Agreement or such other agreements, as the case may be, shall be construed and reformed to the maximum extent permitted by law.

 

9.                                       Waivers and Modifications.  This Agreement may be modified, and the rights, remedies and obligations contained in any provision hereof may be waived, only in accordance with this Section 9.  No waiver by either party of any breach by the other or any provision hereof shall be deemed to be a waiver of any later or other breach thereof or as a waiver of any other provision of this Agreement.  This Agreement sets forth all of the terms of the understandings between the parties with reference to the subject matter set forth herein and may not be waived, changed, discharged or terminated orally or by any course of dealing between the parties, but only by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought.  No modification or waiver by the Company shall be effective without the consent of at least a majority of the members of the Board (excluding the Employee) then in office at the time of such modification or waiver.

 

10.                                 Assignment.  The Employee acknowledges that the services to be rendered by him hereunder are unique and personal in nature.  Accordingly, the Employee may not assign any of his rights or delegate any of his duties or obligations under this Agreement.  The rights and obligations of the Company under this Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Company.

 

11.                                 Acknowledgments.  The Employee hereby acknowledges and recognizes that the enforcement of any of the provisions in this Agreement and the Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement may potentially interfere with the Employee’s ability to pursue a proper livelihood.  The Employee represents that he is knowledgeable about the business of the Company and further represents that he is capable of pursuing a career in other industries to earn a proper livelihood.  The Employee recognizes and agrees that the enforcement of the Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement is necessary to ensure the preservation, protection and continuity of the business, trade secrets and goodwill of the Company.  The Employee agrees that, due to the proprietary nature of the Company’s business, the restrictions set forth in the Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement are reasonable as to time and scope.  The foregoing shall not prohibit the Employee from employment with any company by which the Employee has been employed in the past so long as his activities with any such company do not otherwise constitute a breach of the Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement.

 

12.                                 Entire Agreement.  This Agreement constitutes the entire understanding of the parties relating to the subject matter hereof and supersedes and cancels all agreements, written or oral, made prior to the date hereof between the Employee and the Company relating to employment, salary, bonus, or other compensation of any description, equity participation, pension, post-retirement benefits, severance or other remuneration.  The Employee specifically waives any claim to any accrued salary or deferred compensation from the date of Employee’s employment with the Company to the date hereof, other than the Employee’s right to received his normal compensation for the current pay period.  Notwithstanding the foregoing, nothing in this Agreement shall supercede or otherwise affect rights and obligations of the Company or Employee under the Operating Agreement, Unit Purchase Agreement, or the Unit Holders’ Agreement.

 

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13.                                 Notices.  All notices hereunder shall be in writing and shall be delivered in person or mailed by certified or registered mail, return receipt requested, addressed as follows:

 

If to the Company, to:

 

Chairman of the Board of Managers
 Acquity Group, LLC
 500 West Madison Street
 Suite 2200
 Chicago, IL 60661

 

If to the Employee, at the Employee’s address set forth on the signature page hereto.

 

14.                                 Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

15.                                 Section Headings.  The descriptive section headings herein have been inserted for convenience only and shall not be deemed to define, limit, or otherwise affect the construction of any provision hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first above written as an instrument under seal.

 

	
ACQUITY   GROUP, LLC
    	
 
    	
EMPLOYEE:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Column   A]
    
	
 
    	
 
    	
Print   Name
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature
    
	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Street   Address
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
City   State Zip Code
    

 

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Schedule I

 

Key Man Life Insurance Policy

 

Insured Name:

 

Owner:                         Acquity Group LLC

 

Issue Date:

 

Policy Date:

 

Policy Number:

 

Maximum Annual Premium Amount:

 

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EXHIBIT A

 

ACQUITY GROUP, LLC

 

NONDISCLOSURE, CONFIDENTIALITY, ASSIGNMENT AND NONCOMPETITION AGREEMENT

 

THIS NONDISCLOSURE CONFIDENTIALITY AND ASSIGNMENT AGREEMENT (this “Agreement”) is made as of [Column B] by and between Acquity Group, LLC, an Illinois corporation with a principal place of business at 500 West Madison Street, Suite 2200, Chicago, IL 60661 (collectively with any predecessors, successors, and assignees, the “Company”), and the undersigned employee (“I” or “me”).

 

In consideration of my employment or continued employment by the Company and in keeping with Section 5 of my Employment Agreement with the Company which references this Agreement, and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, I hereby agree as follows:

 

16.                                 DEFINITIONS.

 

(A)                              “Affiliate” means any direct or indirect subsidiary of the Company.

 

(B)                                “Confidential Information” means any and all confidential and/or proprietary knowledge, data or information concerning the business, business relationships and financial affairs of the Company or its Affiliates whether or not in writing and whether or not labeled or identified as confidential or proprietary. By way of illustration, but not limitation, Confidential Information includes: (a) Inventions and (b) research and development activities of the Company or its Affiliates, services and marketing plans, business plans, budgets and unpublished financial statements, licenses, prices and costs, customer and supplier information and information disclosed to the Company or its Affiliates or to me by third parties of a proprietary or confidential nature or under an obligation of confidence. Confidential Information is contained in various media, including without limitation, patent applications, computer programs in object and/or source code, flow charts and other program documentation, manuals, plans, drawings, designs, technical specifications, laboratory notebooks, supplier and customer lists, internal financial data and other documents and records of the Company or its Affiliates.

 

(C)                                “Inventions” means all ideas, concepts, discoveries, inventions, developments, improvements, formulations, products, processes, know-how, designs, formulas, methods, developmental or experimental work, clinical data, original works of authorship, software programs, software and systems documentation, trade secrets, technical data, or licenses to use (whether or not patentable or registrable under copyright or similar statutes), that are or were made, conceived, devised, invented, developed or reduced to practice or tangible medium by me, either alone or jointly with others (a) during any period that I am employed or engaged by the Company, whether or not during normal working hours or on the premises of the Company, which relate, directly or indirectly, to the business of the Company or its Affiliates or (b) which arise out of, or are incidental to, my employment or engagement by with the Company.

 

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(D)          “Prior Inventions” means any inventions made, conceived, devised, invented, developed or first reduced to practice by me, under my direction or jointly with others prior to the date of this Agreement and which do not constitute Inventions within the meaning of Section 1.4 above.

 

(E)           “Third Party Information” means any confidential or proprietary information received by the Company or its Affiliates from third parties.

 

17.           CONFIDENTIALITY.

 

(A)          Recognition of the Company’s Rights. I understand that the Company continually obtains and develops valuable Confidential Information which may or has become known to me in connection with my employment or any prior engagement by the Company. I acknowledge that all Confidential Information is and shall remain the exclusive property of the Company or the third party providing such Confidential Information to myself, the Company, or the Company’s Affiliates.

 

(B)           Nondisclosure of Confidential Information. I agree that during the term of my employment and thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon, publish or otherwise make available to any third party (other than personnel of the Company or its Affiliates who need to know such information in connection with their work for the Company), any Confidential Information of the Company, except as such disclosure, use or publication may be required in connection with my work for the Company, or as expressly authorized in writing by an executive officer of the Company. I agree that I shall use such Confidential Information only in the performance of my duties for the Company and in accordance with any Company policies with respect to the protection of Confidential Information. I agree not to use such Confidential Information for my own benefit or for the benefit of any other person or business entity.

 

(C)           Third Party Information. In addition, I understand that the Company has received and in the future will receive Third Party Information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the term of my employment with the Company and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than personnel of the Company or its Affiliates who need to know such information in connection with their work for the Company) or use any Third Party Information, except as such disclosure or use may be required in connection with my work for the Company, or as expressly authorized in writing by an officer of the Company.

 

(D)          Exceptions. My obligations under Sections 2.2 and 2.3 hereof shall not apply to the extent that certain Confidential Information: (a) is or becomes generally known within the Company’s industry through no fault of mine; (b) was known to me at the time it was disclosed as evidenced by my written records at the time of disclosure; (c) is lawfully and in good faith made available to me by a third party who did not derive it from the Company or the Company’s Affiliates and who imposes no obligation of confidence to me, the Company, or the Company’s Affiliates; or (d) is required to be disclosed by a governmental authority or by order of a court of competent jurisdiction, provided that such disclosure is subject to all applicable governmental or judicial protection available for like material and reasonable advance notice is given to the Company.

 

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(E)           Protection and Return of Confidential Information. I agree to exercise all reasonable precautions to protect the integrity and confidentiality of Confidential Information in my possession and not to remove any materials containing Confidential Information from the premises of the Company, except to the extent necessary to my employment or unless expressly authorized in writing by an executive officer of the Company. Upon the termination of my employment, or at any time upon the Company’s request, I shall return immediately to the Company any and all notes, memoranda, specifications, devices, formulas and documents, together with copies thereof, and any other material containing or disclosing any Confidential Information of the Company or Third Party Information then in my possession or under my control.

 

18.           ASSIGNMENT OF INVENTIONS.

 

(A)          Ownership of Inventions. I acknowledge that all Inventions already existing at the date of this Agreement or which arise after the date of this Agreement, belong to and are the absolute property of the Company and will not be used by me for any purpose other than carrying out my duties as an employee of the Company.

 

(B)           Assignment of Inventions; Enforcement of Rights. Subject to Section 3.1, I hereby assign and agree to assign in the future to the Company all of my right, title and interest to any and all Inventions and any and all related patent rights, copyrights and applications and registrations therefor. I also agree to assign all my right, title and interest in and to any particular Inventions to a third party as directed by the Company. During and after my employment with the Company, I shall cooperate with the Company, at the Company’s expense, in obtaining proprietary protection for the Inventions and I shall execute all documents which the Company shall reasonably request in order to perfect the Company’s rights in the Inventions. I hereby appoint the Company my attorney to execute and deliver any such documents on my behalf in the event I should fail or refuse to do so within a reasonable period following the Company’s request. I understand that, to the extent this Agreement shall be construed in accordance with the laws of any country or state which limits the assignability to the Company of certain employee inventions, this Agreement shall be interpreted not to apply to any such invention which a court rules or the Company agrees is subject to such limitation.

 

(C)           Works for Hire. I acknowledge that all original works of authorship made by me (solely or jointly with others) within the scope of my employment or any prior engagement by the Company, which are protectible by copyright are intended to be “works made for hire”, as that term is defined in Section 101 of the United States Copyright Act of 1976 (the “Act”), and shall be the property of the Company and the Company shall be the sole author within the meaning of the Act. If the copyright to any such copyrightable work shall not be the property of the Company by operation of law, I will, without further consideration, assign to the Company all of my right, title and interest in such copyrightable work and will cooperate with the Company and its designees, at the Company’s expense, to secure, maintain and defend for the Company’s benefit copyrights and any extensions and renewals thereof on any and all such work. I hereby waive all claims to moral rights in any Inventions.

 

(D)          Records. I agree to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that may be required by the Company) of all Inventions made by me during the period of my employment or any prior

 

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engagement by the Company, which records shall be available to and remain the sole property of the Company at all times.

 

(E)           Obligation to Keep Company Informed. During the period of my employment, and for six (6) months after termination of my employment with the Company, I agree to promptly disclose to the Company fully and in writing all Inventions authored, conceived or reduced to practice by me, either alone or jointly with others. In addition, I will promptly disclose to the Company all patent applications filed by me or on my behalf within a year after termination of employment.

 

(F)           Prior Inventions. I further represent that the attached Schedule A contains a complete list of all Prior Inventions. Such Prior Inventions are considered to be my property or the property of third parties and are not assigned to the Company hereunder. If there is no such Schedule A attached hereto, I represent that there are no such Prior Inventions. If I am claiming any Prior Inventions on Schedule A, I agree that, if in the course of my employment or any prior engagement by the Company, I incorporate any Prior Invention into a Company product, process or machine, the Company shall automatically be granted and shall have a non-exclusive, royalty-free, irrevocable, transferable, perpetual, world-wide license (with rights to sublicense) to make, have made, modify, use and sell such Prior Invention as part of, or in connection with, such product, process or machine. Notwithstanding the foregoing, I agree that I will not incorporate, or permit to be incorporated, Prior Inventions in any Company Inventions without the Company’s prior written consent.

 

19.           OTHER AGREEMENTS.

 

(A)          No Conflicting Obligations. I hereby represent to the Company that, except as identified on Schedule B, I am not bound by any agreement or any other previous or existing business relationship which conflicts with or prevents the full performance of my duties and obligations to the Company (including my duties and obligations under this or any other agreement with the Company) during my employment. I agree I will not enter into, any agreement either written or oral that conflicts with this Agreement.

 

(B)           No Improper Use of Information of Prior Employers or Others. ,I understand that the Company does not desire to acquire from me any trade secrets, know-how or confidential business information I may have acquired from others. Therefore, I agree during my employment with the Company, I will not improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer, or any other person or entity with whom I have an agreement or to whom I owe a duty to keep such information in confidence. Those persons or entities with whom I have such agreements or to whom I owe such a duty are identified on Schedule B.

 

20.           NON-COMPETITION. I agree that while I am employed by the Company and for a period of twenty-four (24) months after termination or cessation of such employment for any reason, I shall not, without the Company’s prior written consent, directly or indirectly, as a principal, employee, consultant, partner, or stockholder of, or in any other capacity with, any business enterprise (other than in my capacity as a holder of not more than 1 % of the combined voting power of the outstanding stock of a publicly held company) (a) engage in direct or indirect competition with the Company or its Affiliates, (b) conduct a business of the type or character engaged in by the Company or its Affiliates at the time of termination or cessation of my employment that

 

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offers similar goods and/or services as the Company or its Affiliates, or (c) develop products or services competitive with those of the Company or its Affiliates.

 

21.           GENERAL NON-SOLICITATION. I agree that during my employment with the Company and for a period of twenty-four (24) months after the termination or cessation of such employment for any reason, I shall not solicit, divert or take away, or attempt to divert or take away, the business or patronage of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company or its Affiliates which were contacted, solicited or served by me while employed by the Company or any Affiliate. For the purposes of this Agreement, “clients, customers or accounts” shall include any persons for which the Company or an Affiliate has provided services during the twenty-four month period immediately preceding the date on which the determination of “client, customer or account” status is being determined, if such determination is being made during my employment or the twenty-four month period ending on my last day of employment if the determination is being made after my last pay of employment. This twenty-four-month look-back period is referred to as the “24-month reference period”. For the purposes of this Agreement, prospective clients, customers or accounts shall include any persons which the Company or an Affiliate has specifically identified as potential clients, customers or accounts in any of its business plans, account lists, or proposals, adopted or otherwise utilized during the 24-month reference period, which business plans, account lists and proposals shall have been made available to me.

 

22.           NON-SOLICITATION OF EMPLOYEES AND CONSULTANTS. I agree that during my employment and for a period of twenty-four (24) months after the termination or cessation of my employment for any reason, I shall not directly or indirectly hire, recruit, or solicit any employee, independent contractor or consultant of the Company or its Affiliates, or induce or attempt to induce any employee independent contractor or consultant of the Company or its Affiliates to discontinue his or her relationship with the Company or its Affiliates.

 

23.           NOTICE OF SUBSEQUENT EMPLOYMENT OR ENGAGEMENT. I shall, for a period of twenty-four (24) months after the termination or cessation of my employment with the Company, notify the Company of any change of address, and of any subsequent employment or engagement (stating the name and address of the employer and the nature of the position) or any other business activity which employment, engagement or business activity is of the type or character engaged in by the Company or its Affiliates at the time of termination or cessation of my employment.

 

24.           GENERAL.

 

(A)          Assignment; Successors and Assigns. This Agreement may not :be assigned by either party except that the Company may assign this Agreement to any Affiliate or in connection with the merger, consolidation or sale of all or substantially all of its business or assets. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and other legal representatives and, to the extent that any assignment hereof is permitted hereunder, their assignees.

 

(B)           Entire Agreement. The obligations pursuant to Sections 2 and 3 of this Agreement shall apply to any time during which I was previously employed or engaged, or am in the future employed or engaged by the Company or any Affiliate if no other agreement

 

14

 

governs nondisclosure and assignment of inventions during such period. This Agreement supersedes all prior agreements, written or oral, with respect to the subject matter of this Agreement.

 

(C)           Severability. In the event that any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and all other provisions shall remain in full force and effect. If any of the provisions of this Agreement is held to be excessively broad, it shall be reformed and construed by limiting and reducing it so as to be enforceable to the maximum extent permitted by law. I agree that should I violate any obligation imposed on me in this Agreement, I shall continue to be bound by the obligation until a period equal to the term of such obligation without violation of such obligation.

 

(D)          Amendments and Waivers. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by the party to be charged. No delay or omission by the Company in exercising any right under this Agreement will operate as a waiver of that or any other right. A waiver or consent given by the Company on any occasion if effective only in that instance and will not be construed as a bar to or waiver of any right on any other occasion.

 

(E)           Employment. I understand that this Agreement does not constitute a contract of employment or create an obligation on the part of the Company to continue my employment with the Company. I understand that my obligations under this Agreement shall not be affected by any change in my position, title or function with, or compensation, by the Company. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

 

(F)           Legal and Equitable Remedies. I acknowledge that (a) the business of the Company and its Affiliates is global in scope and its services may be marketed and sold throughout the world; (b) the Company and its Affiliates compete with other businesses that are or could be located in any part of the world; (c) the Company has required that I make the covenants contained in this Agreement as a condition to my employment; and (d) the restrictions contained in this Agreement are necessary for the protection of the business and goodwill of the Company and its Affiliates and are reasonable for such purpose. I agree that any breach of this Agreement by me will cause irreparable damage to the Company and its Affiliates and that in the event of such breach, the Company shall be entitled, in addition to monetary damages and to any other remedies available to the Company under this Agreement and at law, to equitable relief, including injunctive relief, and to payment by myself of all costs  incurred by the Company in enforcing of the provisions of this Agreement, including reasonable attorneys’ fees. I agree that should I violate any obligation imposed on me in this Agreement, I shall continue to be bound by the obligation until a period equal to the term of such obligation has expired without violation of such obligation.

 

(G)           Governing Law. This Agreement shall be construed as a sealed instrument and shall in all events and for all purposes be governed by, and construed in accordance with, the laws of the State of Illinois without regard to any choice of law principle that would dictate the application of the laws of another jurisdiction. Any action, suit or other legal proceeding which I may commence to resolve any matter arising under or relating to any provision of this Agreement shall be commenced only in a court of the State of Illinois (or, if appropriate, a federal court located within the State of Illinois), and I hereby consent to

 

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the jurisdiction of such court with respect to any action, suit or proceeding commenced in such court by the Company.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Nondisclosure, Confidentiality, Assignment and Noncompetition Agreement as of the date first above written as an instrument under seal.

 

 

	
ACQUITY GROUP, LLC
    	
 
    	
EMPLOYEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Column A]
    
	
 
    	
 
    	
Print Name
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature
    
	
Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Street Address
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
City
    	
State
    	
Zip Code
    

 

 

	
Column A
    	
 
    	
Column B
    	
 
    	
Column C
    
	
Christopher Dalton
    	
 
    	
President and Chief Executive Officer
    	
 
    	
March 20, 2008
    
	
Paul Weinewuth
    	
 
    	
Chief Financial Officer
    	
 
    	
March 20, 2008
    
	
Matthew Schmeltz
    	
 
    	
Executive Vice President
    	
 
    	
March 20, 2008
    
	
Raymond Grady
    	
 
    	
Executive Vice President
    	
 
    	
March 20, 2008
    
	
James Newman
    	
 
    	
Executive Vice President
    	
 
    	
March 20, 2008
    
	
Andrew Peebler
    	
 
    	
Senior Vice President
    	
 
    	
March 20, 2008
    
	
Jay Dettling
    	
 
    	
Senior Vice President
    	
 
    	
March 20, 2008
    

 

2Exhibit 10.5

 

DATED 21st December 2007

 

(1)                                 2020 GLOBALGROWTH EQUITIES LIMITED

 

(2)                                 SHK ASIAN OPPORTUNITIES HOLDINGS LTD

 

 

AGREEMENT IN RESPECT OF

THE ISSUE OF CONVERTIBLE BONDS

BY

2020 GLOBALGROWTH EQUITIES LIMITED

 

 

Deacons

5th Floor

Alexandra House

18 Chater Road

Central, Hong Kong

Tel: +852 2825 9211

Fax: +852 2810 0431

hongkong@deaconslaw.com

www.deacons.com.hk

 

 

CONTENTS

 

	
Clause
    	
 
    	
Heading
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.
    	
 
    	
Interpretation
    	
 
    	
1
    
	
2.
    	
 
    	
Issue of the Bonds
    	
 
    	
5
    
	
3.
    	
 
    	
Completion
    	
 
    	
6
    
	
4.
    	
 
    	
Board Committees
    	
 
    	
6
    
	
5.
    	
 
    	
Representations, Warranties and Undertakings by the   Issuer
    	
 
    	
7
    
	
6.
    	
 
    	
Representations, Warranties and Undertakings by the   Investor
    	
 
    	
8
    
	
7.
    	
 
    	
Use of Proceeds
    	
 
    	
9
    
	
8.
    	
 
    	
Provision of Information
    	
 
    	
9
    
	
9.
    	
 
    	
Undertakings and other Provisions
    	
 
    	
9
    
	
10.
    	
 
    	
Provisions Ceasing to be effective upon IPO
    	
 
    	
10
    
	
11.
    	
 
    	
Further   Assurance
    	
 
    	
11
    
	
12.
    	
 
    	
Assignment   and Successors and Assigns
    	
 
    	
11
    
	
13.
    	
 
    	
Costs   and Expenses
    	
 
    	
11
    
	
14.
    	
 
    	
Notices
    	
 
    	
11
    
	
15.
    	
 
    	
Confidentiality   and Announcements
    	
 
    	
12
    
	
16.
    	
 
    	
Counterparts
    	
 
    	
12
    
	
17.
    	
 
    	
Miscellaneous
    	
 
    	
13
    
	
18.
    	
 
    	
Governing   Law and Jurisdiction
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Schedule 1
    	
 
    	
Form of the Certificate
    	
 
    	
14
    
	
Schedule 2
    	
 
    	
Completion Requirements
    	
 
    	
24
    
	
Schedule 3
    	
 
    	
Issuer’s Warranties
    	
 
    	
25
    
	
Schedule 4
    	
 
    	
Call Notice
    	
 
    	
28
    
	
Schedule 5
    	
 
    	
Principal Terms and Conditions of the Investment   Management Agreement
    	
 
    	
29
    
	
Schedule 6
    	
 
    	
Principal Terms and Conditions of the Service Agreements
    	
 
    	
32
    
	
Schedule 7
    	
 
    	
Investment Committee
    	
 
    	
33
    
	
Schedule 8
    	
 
    	
Nomination Committee
    	
 
    	
36
    
	
Schedule 9
    	
 
    	
Guarantee
    	
 
    	
37
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Execution page
    	
 
    	
 
    	
 
    	
42
    

 

 

THIS AGREEMENT is made on the 21st day of December 2007

 

BETWEEN:

 

(1)                                  2020 GlobalGrowth Equities Limited, a company incorporated in the Cayman Islands, whose registered office is at Campbell Corporate Services Limited, Scotia Centre, P.O. Box 268, Grand Cayman KY1-1104, Cayman Islands (“Issuer”); and

 

(2)                                  SHK Asian Opportunities Holdings Ltd., a company incorporated in Cayman Islands, whose registered office is at Campbell Corporate Services Limited, 4th Floor, Scotia Centre, P.O. Box 268, Grand Cayman KY1-1104, Cayman Islands  (“Investor”).

 

WHEREAS:

 

(A)                             The Issuer is an exempted company incorporated in the Cayman Islands with limited liability with an authorised share capital of US$50,000 divided into 500,000 Shares and as at the date hereof, two Shares have been issued to Louis Koo and Adrian Chan respectively and are fully paid or credited as fully paid.

 

(B)                                The Issuer has conditionally agreed to issue and the Investor has conditionally agreed to subscribe for the Bond upon the terms and subject to the conditions contained in this Agreement and the Conditions.

 

NOW IT IS HEREBY AGREED as follows:

 

1.                                     INTERPRETATION

 

1.1                                In this Agreement and the recitals, unless the context otherwise requires:

 

“Affiliates” of a company means any subsidiaries or holding companies of such company or any subsidiaries of the holding companies of such company;

 

“Agreement” means this Agreement and the Schedules as varied or amended from time to time in accordance with the provisions of Clause 17.5;

 

“Banking Day” means a day (excluding Saturday and Sunday) on which banks are generally open for business in Hong Kong and Dublin;

 

“Board” means the board of Directors of the Issuer;

 

“Bondholder” means the person who is for the time being the registered holder of the Bond;

 

“Bonds” means the convertible bonds in the aggregate principal sum of up to US$5 million, to be issued by the Issuer to the Investor in accordance with the terms of

 

1

 

this Agreement with the benefit of and subject to the provisions of the Conditions; and “Bond” means any of them;

 

“Business” means the business of the Issuer as set out in paragraph 3.1 of Schedule 5;

 

“Call Notice” means a call notice to be served by the Issuer on the Investor from time to time substantially in the form set out in Schedule 4 pursuant to Clause 2;

 

“Certificate” means the certificate to be issued in respect of the Bond substantially in the form set out in Schedule 1;

 

“Closing Date” means 30 June 2008;

 

“Completion” means, in respect of any call made under a Call Notice served by the Issuer on the Investor pursuant to Clause 2.1, completion of the issue and subscription of the Bond at its full face value of the amount so called in accordance with Clause 3 and Schedule 2;

 

“Completion Date” means, in each case, the 5th Banking Day after a Call Notice is served by the Issuer to the Investor;

 

“Conditions” means the terms and conditions to be attached to the Certificate substantially in the form set out in Schedule 1 (with such amendments thereto as the Issuer and Investor may agree), and “Condition” refers to the relative numbered paragraph of the Conditions;

 

“Conditions Precedent” means the conditions precedent set out in Clause 2.1;

 

“Conditions Precedent Date” means the date falling on the 45th day after the day of this Agreement or such later date as may be agreed by the Parties in writing from time to time;

 

“Conversion Price” means the price per Share to be issued upon conversion of all or part of the Bond and which is calculated in accordance with Condition 5.1 or 6.2;

 

“Conversion Rights” means the rights attached to the Bond to convert the principal amount (or any part(s) thereof) into Conversion Shares;

 

“Conversion Shares” means the Shares to be issued by the Issuer upon exercise by the Bondholder of the Conversion Rights or any of them (as the context requires);

 

“Convertible Bonds” means such convertible bonds subject to the Conditions issued pursuant to this Agreement or to be issued by the Issuer pursuant to agreement(s) entered or to be entered into by the parties thereto on or prior to the Closing Date; and “Convertible  Bond” means any of them;

 

“Director” means a director of the Issuer;

 

2

 

“Equity Value” means the aggregate par value of the issued share capital and principal amount of other issued securities of the Issuer (including but not limited to any securities convertible into or exercisable or exchangeable for or that represent the right to receive share capital of the Issuer);

 

“Hong Kong” means the Hong Kong Special Administrative Region of the PRC;

 

“Investment Committee” means the investment committee of the Issuer to be established pursuant to Clause 4.1;

 

“Investment Management Agreement” means the investment management agreement to be entered into between the Issuer and the Manager pursuant to which the Manager shall manage all investment activities of the Issuer subject to the terms and conditions therein contained, as the same may be varied or amended from time to time, and which is expected to contain certain principal terms and conditions similar to those set out in Schedule 5;

 

“Investor’s Warranties” means the representations, warranties and undertakings given by the Investor under Clause 6.1;

 

“IPO” means the proposed initial public offering of the Shares in connection with the listing of the Shares on the Stock Exchange;

 

“IPO Date” means the date on which dealings in the Shares on the Stock Exchange commence;

 

“Issuer’s Warranties” means the representations, warranties and undertakings given by the Issuer under Clause 5.1 and Schedule 3;

 

“Key Personnel” means George Lu and Louis Koo;

 

“Listing Rules” means the rules of the Stock Exchange;

 

“Manager” means 2020 Equity Partners Limited;

 

“Nomination Committee” means the nomination committee of the Issuer to be established pursuant to Clause 4.2;

 

“Parties” means the parties to this Agreement and “Party” means any one of them;

 

“PRC” means the People’s Republic of China;

 

“Proceeds” means the proceeds from the issue of the Bonds;

 

“Service Agreements” means the two service agreements to be entered into between the Manager and the Key Personnel respectively subject to the terms and conditions therein contained, as the same may be varied or amended from time to time, and which is expected to contain certain principal terms and conditions similar to those set out in Schedule 6;

 

3

 

“Share(s)” means the ordinary share(s) of US$0.10 each in the issued share capital of the Issuer existing on the date of this Agreement and all other (if any) stock or shares from time to time and for the time being ranking pari passu therewith and all other (if any) stock or shares in the capital of the Company resulting from any sub-division, consolidation or re-classification thereof;

 

“Shareholder(s)” means the holder(s) of Share(s) from time to time;

 

“Stock Exchange” means the London Stock Exchange or, as the context may require, its main board for the listing of securities, or any other recognised stock exchange;

 

“Subscription Money” means, in respect of each Bond, the amount set out in the relevant Call Notice and the face value of such Bond;

 

“Underlying Assets” means assets acquired by the Issuer using the Proceeds and “Underlying Asset” means any of them; and

 

“United States Dollars” or “US$” means United States Dollars, the lawful currency of the United States of America.

 

1.2                                The expressions “Issuer” and “Investor”  shall, where the context permits, include their respective successors and permitted assigns and personal representatives and any persons deriving title under them.

 

1.3                                Any reference in this Agreement to a “person” includes any individual, company, body corporate or unincorporate or other juridical person, partnership, firm, joint venture or trust or any federation, state or subdivision thereof or any government or agency thereof.

 

1.4                                Any reference in this Agreement to a “Recital”, “Clause” or “Schedule” shall be construed as a reference to a recital or a clause of or a schedule to this Agreement.

 

1.5                                Words importing the singular number shall include the plural and vice versa and words importing a gender shall include every gender.

 

1.6                                Headings of Clauses are for reference only and shall be ignored in construing this Agreement.

 

1.7                                Save as provided in Clause 1.1, words and expressions defined in the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) shall have the same meaning in this Agreement.

 

1.8                                In this Agreement, unless the context requires otherwise, references to statutory provisions shall be construed as references to those provisions as replaced, amended, modified or re-enacted from time to time; words importing the singular include the plural and vice versa and words importing a gender include every gender; references to this Agreement shall be construed as references to such document as the same may be amended or supplemented from time to time; unless otherwise stated, references to Clauses and Schedules are to clauses of and

 

4

 

schedules to this Agreement.  Clause headings are inserted for reference only and shall be ignored in construing this Agreement.

 

2.                                     ISSUE OF THE BONDS

 

2.1                                The obligations of the Issuer to issue, and of the Investor to subscribe for, the Bonds are conditional upon the fulfilment of the following Conditions Precedent:

 

(a)                                  the Issuer and the Manager entering into the Investment Management Agreement;

 

(b)                                 the Manager and the Key Personnel entering into the Service Agreements;

 

(c)                                  the Investor having obtained a legal opinion of Campbells or another qualified Cayman Islands law firm covering matters in respect of the Issuer, this Agreement, the issue of the Bonds subject to the Conditions and allotment of the Conversion Shares under the laws of the Cayman Islands; and

 

(d)                                the Issuer having obtained a legal opinion of a law firm reasonably satisfactory to the Issuer covering matters in respect of the due incorporation of the Investor and the legality and enforceability of this Agreement against the Investor under the laws of the place of incorporation in such form and substance to the Issuer’s reasonable satisfaction.

 

2.2                                The Parties will use their respective reasonable commercial endeavours to procure the fulfilment of all the Conditions Precedent set out in Clause 2.1 as soon as practicable, and in any event, on or before the Conditions Precedent Date.  If the Conditions Precedent are not fulfilled in all respects or (in respect of the Conditions Precedent set out in Clauses 2.1(a), (b) and (c) not waived by the Investor or in respect of the Condition Precedent set out in Clause 2.1(d) not waived by the Issuer) on or before the Conditions Precedent Date, then this Agreement (save and except Clauses 11 to 18) shall, subject to the liability of the Parties to each other in respect of any prior breaches of this Clause 2.2, terminate immediately and be of no further effect and no Party shall have any claim against the other in respect thereof.

 

2.3                                Subject to the fulfilment or waiver of the Conditions Precedent as set out in Clause 2.2, the Issuer may from time to time during a period of 24 months from the date of issue of the first Bond issued under this Agreement serve one or more Call Notice(s) on the Investor each specifying the amount to be called thereunder provided that the aggregate principal sum of all calls made under such Call Notices shall not exceed US$5 million.

 

2.4                                Subject to the serving of a Call Notice by the Issuer on the Investor and at the relevant Completion, the Issuer shall issue to the Investor the Bond at its full face value of an amount so called in such Call Notice, and subject to:

 

(a)              there being no material breach of any of the terms or warranties of this Agreement by the Issuer which breach will have a material adverse impact on the ability of the Issuer to perform its obligations hereunder;

 

5

 

(b)             the Board not having served a notice of breach of any of the material terms or warranties of the Investment Management Agreement by the Manager; and

 

(c)              the Board not having served a notice of breach of any of the material terms or warranties of the Investment Management Agreement arising from a breach of any of the material terms or warranties of the Service Agreements by any of the Key Personnel,

 

the Investor shall subscribe for such Bond and shall settle the consideration for the issue of the Bond. The Bond shall be issued upon and subject to the Conditions and the Certificate.

 

3.                                     COMPLETION

 

3.1                                Completion for the issue and subscription of each Bond shall take place before 11 a.m. (Hong Kong time) on the Completion Date or at such other time as the Parties may agree, whereupon each of the Issuer and the Investor shall perform all (but not some only) of their respective obligations as set out in Schedule 2.

 

3.2                                If the foregoing provisions of this Clause 3 are not fully complied with by the Investor in respect of any Call Notice served by the Issuer to the Investor pursuant to Clause 2.1 by or on any Completion Date, the Issuer shall be entitled (in addition to and without prejudice to all other rights or remedies available to it including the right to claim damages) by written notice to the Investor to elect to and shall be deemed to be fully and effectively authorised by the Investor to:

 

(a)                                  redeem the principal amount of all or any of the Bonds issued pursuant to this Agreement and outstanding at 80% of the face value of such Bonds; and/or

 

(b)                                 sell the principal amount of all or any of the Bonds issued pursuant to this Agreement and outstanding for and on behalf of the Investor to other holder(s) of the Convertible Bonds on a pro-rata basis at a price equal to 80% of the face value of such Bonds.

 

4.                                     COMMITTEES

 

4.1                                 The Issuer shall establish the Investment Committee.  The composition of the Investment Committee shall be as follows:

 

(a)                                  the Investment Committee shall comprise, in the first instance, George Lu, William Sharp and one nominee from Datai Bay Investments Ltd., with additional members to be approved by the Nomination Committee; and

 

(b)                                 the chairman of the Investment Committee shall be elected by the Manager.

 

Certain matters relating to the terms of reference and meetings of the Investment Committee are set out in Schedule 7 hereto.

 

6

 

4.2                                 The Issuer shall establish the Nomination Committee.  The composition of the Nomination Committee shall be as follows:

 

(a)                                  the Nomination Committee shall comprise, in the first instance, George Lu, William Sharp and Louis Koo; and

 

(b)                                 the chairman of the Nomination Committee shall be elected by the Manager.

 

The terms of reference of the Nomination Committee are set out in Schedule 8 hereto.

 

5.                                     REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS BY THE ISSUER

 

5.1                                The Issuer hereby represents and warrants to the Investor that the Issuer’s Warranties in the terms set out in Schedule 3 are true in all material respects and not misleading in any material respect as at the date of this Agreement and as at each Completion Date.

 

5.2                                Each of the Issuer’s Warranties shall be construed as a separate and independent warranty and save as expressly provided shall not be limited by reference to any other Issuer’s Warranties.

 

5.3                                Save and except as expressly stipulated in Clause 5.1, the Investor expressly acknowledges and agrees that the Issuer has not, and shall not be deemed to have, given any representation, warranties or undertakings in relation to its entering into of this Agreement and the performance of its obligations hereunder and any and all such representations, warranties and undertakings are hereby expressly excluded.

 

5.4                                The Issuer acknowledges that the Investor has entered into this Agreement in reliance on each of the Issuer’s Warranties which has also been given as a representation and with the intention of inducing the Investor to enter into this Agreement.

 

5.5                                The Issuer shall notify the Investor in writing immediately upon becoming aware of any event, facts, matters or circumstances that may give rise to a breach, which is a breach of or inconsistent with any of the Issuer’s Warranties.  Upon receipt of notice from the Investor requiring remedy of such breach, the Issuer shall (if the breach is capable of remedy) remedy such breach on or before the relevant Completion Date, failing that and provided that such breach is material in the context of the subscription and issuance of the Bonds contemplated hereunder, the Investor shall be released from all further obligations to make payment pursuant to any Call Notice.

 

5.6                                The Issuer agrees with the Investor to indemnify it against all losses, liabilities and costs which it may incur or suffer arising out of, or in connection with, the breach of any of the Issuer’s Warranties.

 

7

 

6.                                     REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS BY THE  INVESTOR

 

6.1                                The Investor hereby represents, warrants and undertakes to the Issuer in the terms set out in this Clause 6 that as at the date of this Agreement and as at each Completion Date:

 

(a)                                  the Investor has the authority to enter into and perform this Agreement and the Bond and that in entering into and performing this Agreement and the Bond, it does not do so in breach of any applicable legislation and this Agreement constitutes its valid, binding and enforceable obligations;

 

(b)                                 all necessary consents authorisations and approvals of any governmental agency or body or other third parties required in its place of incorporation or elsewhere for or in connection with this Agreement and the subscription of the Bond and the performance of the terms hereof and thereof have been, in relation to the Investor, obtained or made or will have been obtained or made by each Completion; and

 

(c)                                  upon subscription of the Bond and execution of the Certificate and delivery of the same, the Bond and the Certificate will constitute legal, valid and binding obligations of the Bondholder.

 

6.2                                Each of the Investor’s Warranties shall be construed as a separate and independent warranty and save as expressly provided shall not be limited by reference to any other Investor’s Warranties.

 

6.3                                Save and except as expressly stipulated in Clause 6.1, the Issuer expressly acknowledges and agrees that the Investor has not, and shall not be deemed to have, given any representation, warranties or undertakings in relation to its entering into of this Agreement and the performance of its obligations hereunder and any and all such representations, warranties and undertakings are hereby expressly excluded.

 

6.4                                The Investor acknowledges that the Issuer has entered into this Agreement in reliance on each of the Investor’s Warranties which has also been given as a representation and with the intention of inducing the Issuer to enter into this Agreement.

 

6.5                                Investor shall notify the Issuer in writing immediately upon becoming aware of any event, facts, matters or circumstances that may give rise to a breach, which is a breach of or inconsistent with any of the Investor’s Warranties.  Upon receipt of notice from the Issuer requiring remedy of such breach, the Investor shall (if the breach is capable of remedy) remedy such breach on or before the relevant Completion Date, failing that and provided that such breach is material in the context of the subscription and issuance of the Bond contemplated hereunder, the Issuer shall not be bound to proceed to the relevant Completion and the Issuer may by notice in writing to the Investor be entitled to treat this Agreement as terminated insofar as it applies to the relevant Completion Date.

 

8

 

6.6                                The Investor agrees with the Issuer to indemnify it against all losses, liabilities and costs which it may incur or suffer arising out of, or in connection with, the breach of any of the Investor’s Warranties.

 

7.                                     USE OF PROCEEDS

 

Subject to compliance with all applicable laws, regulations, the Listing Rules and any requirements of the Stock Exchange or any other applicable authorities, the Issuer hereby agrees that the Proceeds shall be used for one or more of the following:

 

(a)                                 making investment in any Underlying Asset in accordance with the Manager’s investment strategy as set out in the Investment Management Agreement;

 

(b)                                 paying management fee and all other payments under the Investment Management Agreement;

 

(c)                                  paying all business, legal, financial, tax and other expenses of the Issuer, including but not limited to due diligence on potential investment targets; and

 

(d)                                 making all other payments as may be incidental to any of the above.

 

8.                                     PROVISION OF INFORMATION

 

Subject to the Investor executing a non-disclosure or confidentiality agreement in favour of the Issuer in such form acceptable to the Issuer, the Issuer shall provide and procure the Manager to provide the Investor with:

 

(a)                                  regular reporting on the investment activities, financial information and accounts of the Issuer including such information as the same is available to members of the Investment Committee and/or the Board from time to time;

 

(b)                                 reporting on business and operational activities of the Underlying Assets and reporting on financial information of the Underlying Assets to the extent the same is available to the Issuer; and

 

(c)                                  access to the records, documents, agreements and financial data of the Issuer during normal business hours of the Issuer and after giving to the Issuer not less than seven (7) days prior notice in writing.

 

9.                                     UNDERTAKINGS AND OTHER PROVISIONS

 

9.1                                Each of the Issuer and the Investor undertakes to co-operate with the other and use its reasonable commercial endeavours to assist in seeking a listing of the Shares on the Stock Exchange subject to market conditions prevailing from time to time, eg. passing all resolutions and executing all such document(s) as may be necessary for the listing.

 

9

 

9.2                                 The Issuer agrees that:

 

(a)                                  all investment and divestment decisions of the Issuer are subject to the prior approval of the Investment Committee;

 

(b)                                 all of the Issuer’s investment activities will be managed by the Manager subject to the terms and conditions contained in the Investment Management Agreement; and

 

(c)                                  save and except for any issue of Shares pursuant to the exercise of conversion rights attaching to any Convertible Bonds or in connection with the IPO, there shall be no increase in the issued and paid up capital of the Issuer without the prior written consent of holders holding not less than 80% of the aggregate principal amount of all Convertible Bonds issued and outstanding.

 

9.3                                 The Issuer shall, upon the signing of this Agreement, deliver to the Investor a certified copy of the Board resolutions approving and authorising the execution, performance and completion of this Agreement and the issue of the Bonds by the Issuer.

 

9.4                                 The Investor shall, upon the signing of this Agreement:

 

(a)                                  upon the request of the Issuer, deliver to the Issuer a guarantee substantially in the form as set out in Schedule 9 hereto to be issued by such party as is acceptable to the Issuer; and

 

(b)                                 deliver to the Issuer a certified copy of the board resolutions of the Investor approving and authorising the execution, performance and completion of this Agreement and the subscription of the Bonds by the Investor.

 

9.5                                It is the current intention of the Issuer to, and the Investor hereby agrees that the Issuer can, enter into agreement(s) for the issue of additional Convertible Bonds up to an aggregate principal amount of US$150 million (which, for the avoidance of doubt, shall include the Bonds to be issued pursuant to this Agreement) on or prior to the Closing Date.  The Parties hereby agree that the Issuer shall not enter into any agreement(s) for the issue of convertible notes after the Closing Date without the prior written consent of holders holding not less than 50% of the aggregate principal amount of all Convertible Bonds issued and outstanding (which shall include the affirmative vote of Datai Bay Investments Ltd.).

 

10.                              PROVISIONS CEASING TO BE EFFECTIVE UPON IPO

 

Notwithstanding anything herein contained to the contrary, Clauses 4, 8, 9.1, 9.2 and 9.5 shall cease to have any effect and shall not be binding on any of the Parties from (and inclusive of) the IPO Date.

 

10

 

11.                              FURTHER ASSURANCE

 

Each of the Parties agrees to do and execute or procure to be done and executed all such further acts, deeds, documents and things as may be reasonable and appropriate for such Party to do or execute or procure to be done in order to give full effect to the terms of this Agreement.

 

12.                              ASSIGNMENT AND SUCCESSORS AND ASSIGNS

 

This Agreement shall be binding on and enure to the benefit of each Party’s successors in title and (subject to the other provisions of this Agreement) permitted assigns provided that the benefits and obligations or any part thereof bestowed upon each Party to this Agreement shall not be capable of being assigned, transferred, encumbered or otherwise disposed of except with the prior written consent of the other Party (which consent may be granted or withheld at the other Party’s absolute discretion).

 

13.                              COSTS AND EXPENSES

 

Each Party shall bear its own costs and expenses incurred by it in connection with the preparation and negotiation of this Agreement and the issuance of the Bonds.

 

14.                              NOTICES

 

14.1                           Each notice, demand or other communication to be given or made under this Agreement shall be in writing, in the English language and delivered or sent to the relevant Party at its respective address or facsimile number set out below (or such other address or facsimile number as the addressee has by five (5) days’ prior written notice specified to the other Parties):

 

	
To the   Issuer:
    	
 
    	
Address:
    	
1503   Ruttonjee House, 11 Duddell Street,
    
	
 
    	
 
    	
 
    	
Hong Kong
    
	
 
    	
 
    	
Fax:
    	
(852) 3106   4706
    
	
 
    	
 
    	
Attention: 
    	
Louis Koo
    
	
 
    	
 
    	
 
    	
 
    
	
To the   Investor:
    	
 
    	
Address: 
    	
SHK Asian   Opportunities Fund, L.P.
    
	
 
    	
 
    	
 
    	
c/o SHK Fund   Management Limited
    
	
 
    	
 
    	
 
    	
Units 902-905 Bank   of America Tower
    
	
 
    	
 
    	
 
    	
12 Harcourt Road
    
	
 
    	
 
    	
 
    	
Hong Kong
    
	
 
    	
 
    	
Fax:
    	
(852) 3158   0386
    
	
 
    	
 
    	
Attention: 
    	
Christophe Lee /   David Chong
    

 

14.2                           Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been delivered: (a) if given or made by letter and delivered by hand or courier, when actually delivered to the relevant address; (b) if given or sent by registered mail, on the date which is two (2) Banking Days (in the case of mail sent to a local address) or five (5) Banking Days (in the case of mail sent to an overseas address) after the posting thereof; and (c) if given or made by facsimile, when despatched with confirmation of successful transmission (and if the deemed date of delivery is not a Banking Day, on the immediately following Banking Day).

 

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15.                              CONFIDENTIALITY AND ANNOUNCEMENTS

 

15.1                          Each of the Parties agrees that it shall treat as strictly confidential all information received or obtained by it or its employees or advisers as a result of entering into or performing this Agreement and the Bond including information relating to the provisions of this Agreement and the Bond and the negotiations leading up to this Agreement and the Bond, the subject matter thereof or the business or affairs of the Issuer and, subject to the provisions of Clauses 15.2 and 15.3, it will not at any time hereafter make use of or disclose or divulge to any person other than to its Affiliates any such information and shall use its reasonable endeavours to prevent the publication or disclosure of any such information (provided that in the case of the Investor this undertaking shall not require it to take any legal action against any person).

 

15.2                          The restrictions contained in Clause 15.1 shall not apply so as to prevent any Party from making any disclosure required by law or legal process by any securities exchange or supervisory or regulatory or governmental body pursuant to rules to which any Party is subject (provided that the requirements of Clause 15.3 are complied with) or from making any disclosure to any professional adviser for the purposes of obtaining advice (provided always that the provisions of Clause 15 shall apply to, and the relevant Party shall procure that they apply to and are observed in relation to, the use or disclosure by such professional adviser of the information provided to him) nor shall the restrictions apply in respect of any information which comes into the public domain otherwise than by a breach of Clause 15 by any of the Parties.

 

15.3                          No public announcement or communication of any kind shall be made in respect of the subject matter of this Agreement or the Bond unless specifically agreed by the Parties or unless an announcement is required pursuant to relevant law or regulation the requirements of the Stock Exchange or any other recognised stock exchange.  Any announcement by any Party required to be made pursuant to any relevant law or the requirements of the Stock Exchange or any relevant stock exchange shall be issued only after such prior consultation with the other Party as is reasonably practicable in the circumstances.

 

15.4                          Notwithstanding the above, at the request of the holder or potential holder of any convertible bonds of the Issuer, and with the prior written consent of the Investor, which consent may be given or withheld at the sole discretion of the Investor, such holder may be given the opportunity to review this Agreement and Conditions of the Bond.

 

16.                              COUNTERPARTS

 

This Agreement may be executed in any number of counterparts and by the different Parties on separate counterparts, each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute one and the same instrument.  Immediate evidence that a counterpart has been executed may be provided by transmission of such counterpart by facsimile machine with the original executed counterpart(s) to be forthwith put in the mail or delivered to the other Party.

 

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17.                              MISCELLANEOUS

 

17.1                          Time shall be of the essence of this Agreement.

 

17.2                          This Agreement (together with the documents referred to herein including, without limitation, the Bond) constitutes the entire agreement between the Parties with respect to its subject matter (no Party having relied on any representation or warranty made by the other Party which is not contained in this Agreement) and no variation of this Agreement shall be effective unless made in writing and signed by all of the Parties.  This Agreement supersedes all and any previous agreements, arrangements or understanding between the Parties relating to the matters referred to in this Agreement and all such previous agreements, understanding or arrangements (if any) shall cease and determine with effect from the date hereof.

 

17.3                          If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect, the legality, validity or enforceability of the remaining provisions shall not be affected or impaired thereby.

 

17.4                          The terms of this Agreement and the Bond shall remain valid and enforceable notwithstanding the issue and redemption or conversion or exchange of the Bond to the extent that any of the terms in this Agreement or the Bond has not been fully and properly performed or satisfied.

 

17.5                          No variation of this Agreement shall be effective unless made in writing and signed by the Parties.

 

17.6                          No failure or delay by any Party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy.  Without limiting the foregoing, no waiver by any Party of any breach of any provision hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof.

 

17.7                          In the event of any conflict between the provisions of this Agreement and the provisions of the Articles of Association of the Issuer, then as between the Parties the provisions of this Agreement shall prevail.

 

18.                              GOVERNING LAW AND JURISDICTION

 

This Agreement shall be governed by and construed in accordance with the laws of Hong Kong and the Parties hereby submit to the non-exclusive jurisdiction of the Hong Kong courts.

 

13

 

SCHEDULE 1

 

FORM OF THE CERTIFICATE

 

2020 GLOBALGROWTH EQUITIES LIMITED

(incorporated in the Cayman Islands with limited liability)

 

Certificate No.: [*]

 

[*] CONVERTIBLE BOND

 

Issued pursuant to the memorandum and articles of association of 2020 GlobalGrowth Equities Limited (the “Issuer”), a resolution of the board of directors of the Issuer passed on [*] and a resolution of the shareholders of the Issuer passed on [*].

 

THIS IS TO CERTIFY that [*] whose registered office is situate at [*] is the registered holder (“Bondholder”) of the above-mentioned Convertible Bond (“Bond”).  The Bondholder is entitled to require the Issuer to convert, exchange and/or redeem the whole or any part(s) of the principal amount outstanding under this Bond subject to and in accordance with the terms and conditions attached hereto which shall form an integral part of this Certificate (“Conditions”).

 

	
GIVEN under   the seal of [*]   this          day   of               .
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Director
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Secretary/Director
    	
 
    

 

Notes:

The Bond cannot be transferred to bearer on delivery and is only transferable to the extent permitted by Condition 2 of the terms and conditions thereof.  This Certificate must be delivered to the company secretary of 2020 GlobalGrowth Equities Limited for cancellation and reissue of an appropriate certificate in the event of any such transfer.

 

14

 

(For endorsement in the event of partial conversion or exchange or redemption)

 

	
Date
    	
 
    	
Amount
   Converted/Exchanged/Redeemed
    	
 
    	
Amount Outstanding
    	
 
    
	
 
    	
 
    	
(please   specify)
    	
 
    	
 
    	
 
    

 

15

 

TERMS AND CONDITIONS OF THE BOND

 

The Bond shall be held subject to and with the benefit of the terms and conditions set out below and such terms and conditions shall be binding on 2020 GlobalGrowth Equities Limited (the “Issuer”) and the Bondholder.  Expressions defined in the agreement in respect of the issue of convertible bonds between the Issuer and [*] (the “Investor”) dated [*] (“Agreement”) shall bear the same meaning in this Certificate.  In addition, “Issue Date” means the date of issue of this Bond.  The definitions and rules of construction set out in the Agreement shall apply in the interpretation of the Bond.

 

1.                                      PERIOD

 

1.1                                 For the purposes of these Conditions, “Maturity Date” means the Banking Day immediately preceding the second anniversary of the date of issue of the first Bond issued under the Agreement, such expression (as the context requires) includes any extension of the original Maturity Date or the extended Maturity Date under Condition 1.2.

 

1.2                                 In the event that IPO does not take place on or before the expiry of 24 months from the date of the date of the first Bond issued under the Agreement, the Maturity Date may, on the recommendation of the Manager, be extended by holders holding not less than 70% of the aggregate principal amount of all Convertible Bonds issued and outstanding (which shall include the affirmative vote of Datai Bay Investments Ltd.) for a period of one year (“Extended Maturity Date”) by giving notice in writing to the Issuer not less than 14 days prior to the original Maturity Date.  In the event that IPO does not take place on or before the Extended Maturity Date, the Maturity Date may, on the recommendation of the Manager, be further extended by holders holding not less than 70% of the aggregate principal amount of all Convertible Bonds issued and outstanding (which shall include the affirmative vote of Datai Bay Investments Ltd.) for another period of one year, provided that the Maturity Date so extended shall not be further extended. If such date as extended is not a Banking Day, the Maturity Date shall be the Banking Day immediately preceding such date. Any such notice, once given, shall be irrevocable. Any resulting extended Maturity Date shall be endorsed on the Certificate. For the avoidance of doubt, the final Maturity Date may not fall later than the Banking Day preceding the fourth anniversary of the date of issue of the first Bond issued under the Agreement.

 

1.3                                 All Bonds which are redeemed or converted or exchanged will forthwith be cancelled and such Bonds may not be reissued or resold.

 

2.                                      STATUS AND TRANSFER

 

2.1                                 The obligations of the Issuer arising under the Bond constitute general unsubordinated, direct, unconditional unsecured obligations of the Issuer and shall at all times rank equally among themselves and pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer except for obligations accorded preference by mandatory provisions of applicable law.  No application will be made for a listing of the Bond on any stock exchange.

 

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2.2                                 Subject to the prior written approval of the Board, the Bond (in whole or in part) may be transferred to any person.  The decision of the Board shall for all purposes be final, conclusive and binding on the Bondholder.

 

2.3                                 Notwithstanding anything herein to the contrary, the Bondholder may transfer the whole (but not part) of the Bond to its Affiliate for the purpose of internal reorganisation only.

 

2.4                                 In relation to any assignment or transfer of the Bond permitted under or otherwise pursuant to this Condition 2:

 

(a)                                  The Bond may only be transferred by execution of a form of transfer (“Transfer Form”) which shall be in a form previously agreed between the Issuer and the Bondholder by the transferor and the transferee (or their duly authorised representatives). In this Condition, “transferor” shall, where the context permits or requires, include joint transferors or can be construed accordingly.

 

(b)                                 The Certificate of the Bond must be delivered to the Issuer accompanied by: (i) a duly executed (and if required, duly stamped) Transfer Form; and (ii) in the case of the execution of the Transfer Form on behalf of a corporation by its officers, the authority of that person or those persons to do so and a copy of the constitutional document of such corporation.  The Issuer shall, within three (3) Banking Days of receipt of such documents from the Bondholder, cancel the existing Certificate and issue a new certificate under the seal of the Issuer, in favour of the transferee or assignee in respect of the Bond (or the transferred or assigned part of the Bond) as applicable and, if the Bond is assigned or transferred in part only, issue a new certificate under the seal of the Issuer, in favour of the transferor in relation to the part of the Bond not assigned or transferred.

 

2.5                                 Any legal and other costs and expenses incurred by the Issuer in connection with any transfer or assignment of the Bond or any request therefor shall be borne by the Bondholder.

 

3.                                      INTEREST

 

The Bond does not bear any interest.

 

4.                                      PAYMENTS

 

4.1                                 Any payment under the terms and conditions of the Bond by the Issuer to the Bondholder shall be made for value on the due dates into such bank account in [*] as the Bondholder may notify the Issuer in writing from time to time.  All payments by the Issuer shall be made in US Dollars in immediately available funds.  In the event that the Issuer is required by law to make any such deduction or withholding from any amount paid (except where such deduction or withholding represents any income, profits or other tax payable by the Bondholder), the Issuer shall pay to the Bondholder such amount less any such withholding or deduction required to be made.

 

17

 

4.2                                 All payments by the Issuer hereunder shall be made, not later than 12:00 p.m. (Hong Kong time) on the due date, by remittance to such bank account as the Bondholder may notify the Issuer from time to time.

 

4.3                                 If the due date for payment of any amount in respect of the Bond is not a Banking Day, the Bondholder will be entitled to payment on the next following Banking Day in the same manner without interest.

 

4.4                                 The Issuer shall not be liable to make any payment in respect of the outstanding principal amount of the Bond unless and until the original of the Certificate is presented to the Issuer at its address specified in Condition 13.  The Issuer shall retain the original of the Certificate upon the redemption or conversion thereof.

 

4.5                                 Save as provided under the terms of the Bond, the outstanding principal amount of the Bond or any part thereof shall not be repaid or prepaid by the Issuer.

 

5.                                      REDEMPTION OR CONVERSION AND LIQUIDATION

 

5.1                                 If IPO does not take place by the Maturity Date (as may be extended as provided herein) or if an Event of Default (as defined in Condition 9) occurs, holders holding more than 50% of the aggregate principal amount of all Convertible Bonds issued and outstanding may resolve to and shall thereafter promptly notify the Issuer either (a) require the Issuer to redeem the whole (but not part) of all the Convertible Bonds outstanding (less the Exchange Amount in respect of each Convertible Bond) at the Redemption Amount and subject to the following provisions of this Condition 5; or (b) convert the whole of the outstanding principal amount of all the Convertible Bonds (less the Exchange Amount in respect of each Convertible Bond) into Shares at a conversion price not less than the then par value of a Share and the shareholders of the Issuer shall thereafter proceed with the voluntary liquidation of the Issuer subject to the following provisions of this Condition 5.

 

5.2                                 For the purposes of these Conditions, the Redemption Amount shall be calculated on the basis of the following formula:

 

Redemption Amount = (A x (1 + IRR)N)

 

where:

 

	
 
    	
A
    	
 
    	
=
    	
 
    	
the   principal amount of the Bond outstanding as at the date of redemption less   the Exchange Amount;
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
IRR
    	
 
    	
=
    	
 
    	
0.05;
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
N
    	
 
    	
=
    	
 
    	
number of   years elapsed from the Issue Date to the date of redemption (on the basis of   the actual number of days elapsed and a 365-day year).
    

 

 

5.3                                 If holders holding more than 50% of the aggregate principal amount of all Convertible Bonds issued and outstanding resolve to require the Issuer to redeem

 

18

 

the Convertible Bonds as aforesaid, the Bondholder shall within seven (7) days thereafter give notice of redemption to the Issuer and present the original of the Certificate to the Issuer at its address specified in Condition 13 for redemption of the whole (but not part) of the Bond outstanding (less the Exchange Amount) at the Redemption Amount subject to the following provisions of this Condition 5.  The Issuer shall deliver to the Bondholder at its own risk at its address set out in Condition 13, (if appropriate) an endorsement on the Certificate by a director of the Issuer for any balance of the Bond not so redeemed.

 

5.4                                Redemption of all Convertible Bonds shall be based on the proportionate holdings of all Convertible Bonds issued and outstanding and shall take place in stages subject to availability of funds of the Issuer arising from the sale of its underlying assets and investments.  The Issuer shall use its reasonable commercial endeavours to complete the redemption of all Convertible Bonds within 12 months of the date it receives the redemption notice referred to in Condition 5.3.

 

5.5                                Notwithstanding the formula for the Redemption Amount set out above, the last stage of the redemption of all Convertible Bonds (that is the redemption of the balance of all Convertible Bonds outstanding), shall be subject to the maximum aggregate amount equivalent to the residue value or proceeds from the sale of all remaining underlying assets and investments of the Issuer less all costs, expenses and liabilities (including for the avoidance of doubts all contingent liabilities and all payments payable to the Manager under the Investment Management Agreement) of the Issuer.

 

5.6                                 If holders holding more than 50% of the aggregate principal amount of all Convertible Bonds issued and outstanding resolve to convert the Convertible Bonds as aforesaid, the Bondholder shall within seven (7) days thereafter deliver to the Issuer in accordance with Condition 13 the original of the Certificate. The Bondholder shall be responsible for payment of all taxes and stamp, issue and registration duties (if any) and charges (if any) arising on any such conversion.  Subject to all applicable laws, regulations or any other applicable government or regulatory authorities, the Conversion Shares shall be allotted and issued by the Issuer, credited as fully paid, to the Bondholder. The Issuer shall deliver to the Bondholder at its own risk at its address set out in Condition 13, (if appropriate) an endorsement on the Certificate by a director of the Issuer for any balance of the Bond not so converted.

 

5.7                                After completion of the conversion mentioned above, shareholders of the Issuer shall proceed with the voluntary liquidation of the Issuer whereupon all the assets of the Issuer or proceeds thereof shall be applied in the following order:

 

(a)                                  first, in or towards payment or discharge of any fees, costs and expenses payable by or liabilities of the Issuer including but not limited to those payable to the Manager under the Investment Management Agreement; and

 

(b)                                 secondly, in or towards payment to all Shareholders (which, for the avoidance of doubt, shall include all Bondholders upon conversion of all Convertible Bonds issued and outstanding) pro-rata to their shareholdings in the Issuer.

 

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6.                                      CONVERSION

 

6.1                                 Subject to all applicable laws, regulations, the Listing Rules and any requirements of the Stock Exchange or any other applicable authorities, the whole of the outstanding principal amount of the Bond (less the Exchange Amount) shall immediately prior to the IPO be mandatorily converted into Shares at the Conversion Price. The Shares shall be allotted and issued in the name of the Bondholder pursuant to such conversion and shall be fully paid, free from any liens, charges, encumbrances, pre-emptive rights or other third party rights.  No fraction of a Share will be issued on conversion and the number of Conversion Shares to be issued shall be rounded down to the nearest integer.  Such Shares shall rank pari passu in all respects with all other Shares in issue on the IPO Date and shall be entitled to all dividends, bonuses and other distributions the record date of which falls on a date on or after the IPO Date.  Subject to compliance with any relevant lock-up provisions of all applicable laws, regulations, the Listing Rules and any requirements of the Stock Exchange or any other applicable authorities and the terms and conditions of Agreement, such Shares issued upon conversion of the Bond shall be freely transferable by the Bondholder.

 

6.2                                 Subject to all applicable laws, regulations, the Listing Rules and any requirements of the Stock Exchange or any other applicable government or regulatory authorities, the Conversion Price shall be in United States Dollars that will yield to the Bondholders a return equal to 20% annualized IRR at the time of the IPO.

 

7.                                      PROCEDURE FOR CONVERSION

 

7.1                                 The Conversion Rights shall be deemed, subject as provided herein and in Condition 6.1, to have been exercised immediately prior to the IPO.  The Bondholder shall upon the demand of the Issuer forthwith deliver to the Issuer in accordance with Condition 13 the original of the Certificate. The Bondholder shall be responsible for payment of all taxes and stamp, issue and registration duties (if any), and Stock Exchange levies and charges (if any) arising on any such conversion.

 

7.2                                 Subject to all applicable laws, regulations, the Listing Rules and any requirements of the Stock Exchange or any other applicable government or regulatory authorities, the Conversion Shares shall be allotted and issued by the Issuer, credited as fully paid, to the Bondholder at such time and in such manner as new shares are to be issued pursuant to the IPO. The Issuer shall take all necessary steps (including the increase of the authorised share capital or the reduction of the par value of the Shares) to ensure that the Conversion Shares shall be allotted and issued not less than its par value. The Issuer shall deliver to the Bondholder at its own risk at its address set out in Condition 13, (if appropriate) an endorsement on the Certificate by a director of the Issuer for any balance of the Bond not so converted.

 

8.                                      UNDERLYING EXCHANGE

 

8.1                                After (a) all legal and contractual restrictions on the transfer and/or dealings of the shares in any Underlying Asset (“Underlying Shares”) to which the Issuer may be

 

20

 

subject have been absolutely and unconditionally released (“Release”) and (b) all calls under the Agreement and other agreement(s) relating to the Convertible Bonds have been made and fully paid for, the Issuer shall use all reasonable endeavours to effect the exchange of the Exchange Amount of the Bond into 20% of such number of Underlying Shares acquired by the Issuer utilising 20% of the Investment Amount at the same valuation as the original investment by the Issuer into such Underlying Asset, free from carried interest (“Underlying Exchange”).  The Underlying Exchange shall be based on the proportionate holdings of all Convertible Bonds issued and outstanding, and may take place in stages.

 

8.2                                For the purposes of these Conditions:

 

(a)                                 “Exchange Amount” means, in relation to a Bond, an amount equivalent to 20% of the original principal amount of the Bond and such amount may decrease from time to time by such an amount subject to which the Underlying Exchange has taken place in stages; and

 

(b)                                “Investment Amount” means, in relation to a Bond, such part of the principal amount of the Bond which has been used by the Issuer for making investment in any Underlying Assets (excluding, for the avoidance of doubt, any amount used for the making of any payment under Clause 7(b), (c) or (d) of the Agreement).

 

8.3                                 The Bondholder shall upon the demand of the Issuer forthwith deliver to the Issuer in accordance with Condition 13 the original of the Certificate and do and execute or procure to be done and executed all such further acts, deeds, documents and things as may be reasonable and appropriate for it to do or execute or procure to be done in order to implement and complete the Underlying Exchange subject to the terms and conditions herein contained. The Bondholder shall be responsible for payment of all taxes and stamp, transfer and registration duties (if any), and stock exchange levies and charges (if any) arising on any such exchange.

 

8.4                                 After completion of the Underlying Exchange, the Issuer shall deliver to the Bondholder at its own risk at its address set out in Condition 13,  (if appropriate) an endorsement on the Certificate by a director of the Issuer for any balance of the Bond not so exchanged.

 

8.5                                 To the extent that the Underlying Exchange has not been fully completed pursuant to this Condition 8 prior to the IPO, the Issuer shall use all reasonable endeavours to transfer such portion of Bond to a special purpose vehicle or take such other actions as it may consider appropriate in the circumstances to effect the Underlying Exchange after the IPO provided that the Bondholder shall do and execute or procure to be done and executed all such acts, deeds, documents and things as may be reasonably required by the Issuer to implement such transfer or actions.

 

9.                                      EVENTS OF DEFAULT

 

For the purposes of these Conditions, an “Event of Default”  means any of the following events  which has a material adverse impact on the Issuer or on the ability of the Issuer to perform its obligations hereunder:

 

21

 

(a)                                  the Issuer defaults in performance of any of its material obligations contained in the terms and conditions of the Bond, and such event continues to subsist for a continuous period of thirty (30) days after notice of such event is sent from the Bondholder to the Issuer; or

 

(b)                                 the Issuer fails to pay the principal amount of the Bond when due unless such non-payment is due solely to administrative or technical error and payment is made within fifteen (15) days of the due date thereof; or

 

(c)                                  an order is made or an effective resolution passed for winding-up of the Issuer; or

 

(d)                                 if it is or will become unlawful for the Issuer to perform or comply with any of its material obligations under or in respect of the Bond.

 

10.                               VOTING

 

The Bondholder will not be entitled to receive notices of, attend or vote at any meetings of the Issuer by reason only of it being the Bondholder.

 

11.                               SELLING RESTRICTIONS

 

The Bondholder agrees not to offer the Bond or Shares issued and allotted to it upon any exercise of the Conversion Rights for sale or subscription to the public pursuant to a prospectus within the meaning of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) except such as, and under circumstances that are, permitted under the Companies Ordinance or otherwise permitted under this Agreement and the Conditions.

 

12.                               REPLACEMENT NOTE

 

If the Certificate is lost or mutilated, the Bondholder shall notify the Issuer as soon as practicable and a replacement Certificate shall be issued if the Bondholder provides the Issuer with:

 

(a)                                 the mutilated Certificate or a declaration by the Bondholder or its officer that the Certificate had been lost or mutilated (as the case may be) or other evidence that the Certificate had been lost or mutilated; and

 

(b)                                an appropriate indemnity in such form and content as the Issuer may reasonably require. Any Certificate replaced in accordance with this Condition shall forthwith be cancelled.

 

13.                               NOTICES

 

13.1                           Each notice, demand or other communication to be given or made under this Agreement shall be in writing, in the English language and delivered or sent to the relevant Party at its respective address or facsimile number set out below (or such

 

22

 

other address or facsimile number as the addressee has by five (5) days’ prior written notice specified to the other Party):

 

	
To the   Issuer:
    	
Address:
    
	
 
    	
Fax:
    
	
 
    	
Attention:
    
	
 
    	
 
    
	
To the   Bondholder:
    	
Address:
    
	
 
    	
Fax:
    
	
 
    	
Attention:
    
	
 
    	
 
    

13.2                           Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been delivered: (a) if given or made by letter and delivered by hand or courier when actually delivered to the relevant address; (b) if given or sent by registered mail, on the date which is two (2) Banking Days (in the case of mail sent to a local address) or five (5) Banking Days (in the case of mail sent to an overseas address) after the posting thereof; and (c) if given or made by facsimile, when despatched with confirmation of successful transmission (and if the deemed date of delivery is not a Banking Day, on the immediately following Banking Day).

 

14.                               AMENDMENT

 

The terms and conditions of the Bond may be varied, expanded or amended by agreement in writing between the Issuer and the Bondholder.

 

15.                               GOVERNING LAW AND JURISDICTION

 

The Bond and the Conditions are governed by and shall be construed in accordance with the laws of Hong Kong and the Parties agree to submit to the non-exclusive jurisdiction of the courts of Hong Kong.

 

23

 

SCHEDULE 2

 

COMPLETION REQUIREMENTS

 

1.                                      Obligations of the Issuer

 

At Completion in respect of each Call Notice served by the Issuer on the Investor pursuant to Clause 2.1, the Issuer shall deliver to the Investor by facsimile (to be followed by sending the original by mail) the Certificate for the Bond duly issued and credited as fully paid in accordance with the terms of the Agreement.

 

2.                                      Obligations of the Investor

 

At Completion in respect of each Call Notice served by the Issuer on the Investor pursuant to Clause 2.1, the Investor shall pay the Subscription Money in clear and immediately available funds to the account as may be designated by the Issuer in the Call Notice.

 

In the event that the Investor is required by law to make any deduction or withholding from any Subscription Money, the Investor shall pay to the Issuer such additional amount as shall be necessary so that the Issuer will receive a net amount equal to the full amount which it would have received if such withholding or deduction had not been made.

 

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SCHEDULE 3

 

ISSUER’S WARRANTIES

 

1.                                       The Issuer has full power and authority to enter into and perform this Agreement and that in entering into and performing this Agreement, the Issuer does not infringe any applicable law or regulation, or breach any of the terms of its memorandum of association or articles of association, nor does its entering into or performance of this Agreement conflict with or result in a breach (with or without the giving of notice or lapse of time, or both) or acceleration of any obligation of the Issuer under any deed or agreement which is binding on the Issuer (save and except any such conflict, breach or acceleration which does not have a material adverse effect on the Issuer or on the Issuer’s ability to perform any of its obligations contemplated hereunder) and this Agreement constitutes valid, binding and enforceable obligations of the Issuer.

 

2.                                       The Issuer will on each Completion have full power and authority to issue the relevant Bond and perform its obligations thereunder (to the extent unredeemed and unconverted), and the Issuer will at the date of conversion have sufficient authorised but unissued share capital for the Issuer to perform its obligations under the relevant Bond and the Directors will be authorised to issue the relevant Bond and the Conversion Shares upon exercise of the Conversion Rights and the Conversion Shares, when issued, will be duly authorised, fully paid and shall rank pari passu in all respects with all other existing Shares outstanding at the date of conversion and be entitled to all dividends, bonuses and distributions the record date for which falls on a date on or after the date of the relevant conversion notice.

 

3.                                       The issue of the Bond and the Certificate and (subject also to Completion) the allotment and issue of the Conversion Shares will not infringe and will not be contrary to any laws or regulations of any governmental or regulatory body of Hong Kong or the Cayman Islands or any other relevant jurisdiction and will not result in any breach of the terms of the memorandum of association and articles of association of the Issuer or constitute a breach (with or without the giving of notice or lapse of time, or both) or acceleration of any obligations of the Issuer under any deed, agreement, mortgage or other instrument which is binding on the Issuer (save and except any such conflict, breach or acceleration which does not have a material adverse effect on the Issuer or on the Issuer’s ability to perform any of its obligations contemplated hereunder) and upon issue of the Bond and the execution of the Certificate by the Issuer and delivery of the same, the Bond and the Conditions will constitute legal, valid and binding obligations of the Issuer enforceable against it.

 

4.                                       All necessary consents, authorisations and approvals of any governmental agency or body or any other third parties required in Hong Kong or the Cayman Islands or elsewhere for or in connection with this Agreement, the issue of the relevant Bond and the performance of other terms and conditions of this Agreement have been, in relation to itself, obtained or made or will have been obtained or made by each Completion.

 

25

 

5.                                       The Issuer is duly incorporated and validly existing under the laws of its incorporation with power to conduct its business in the manner presently conducted and has complied with all applicable laws and regulations in all jurisdictions in which it operates (save and except any laws or regulations the non-compliance with which does not have any material adverse effect on the Issuer).

 

6.                                       No litigation, arbitration or administrative proceeding which materially and adversely affects the business or financial condition of the Issuer is currently taking place or so far as the Issuer is aware is pending or threatened against the Issuer or its assets.

 

7.                                       There is no outstanding indebtedness of the Issuer which has become payable or repayable by reason of any default of the Issuer and which will have a material adverse effect on the Issuer or on the Issuer’s ability to perform any of its obligations contemplated hereunder.

 

8.                                       The Bond (when issued) will constitute unconditional, unsecured and unsubordinated obligations of the Issuer and will at all times rank pari passu without any preference among themselves.

 

9.                                       No event has occurred or circumstances arisen which, had the Bond already been issued, could reasonably be expected to (whether or not with the giving of notice and/or the passage of time and/or the fulfilment of any other requirement) constitute an event described under “Events of Default” in the Conditions of the Bonds.

 

10.                                No meeting has been convened or resolution proposed, or petition presented, and no order has been made, for the winding-up of the Issuer.  No distress, execution or other similar order or process has been levied on any of the property or assets of the Issuer.  No voluntary arrangement has been proposed or reached by the Issuer with any of its creditors.  No receiver, receiver and manager, provisional liquidator, liquidator or other officer of the court has been appointed in relation to the Issuer.

 

11.                                As at the date of this Agreement, the Issuer has no subsidiary or shares in any company.

 

12.                                As at the date of this Agreement, there are no loans, guarantees, pledges, mortgages, charges, liens, debentures or encumbrances given, made or incurred by or on behalf of the Issuer.

 

13.                                As at the date of this Agreement, there are no contracts, agreements, arrangements, acknowledgements, debts, liabilities or obligations of any description (whether actual or contingent) entered into or incurred by the Issuer otherwise than arising from, in connection with or incidental to its incorporation, matters relating to this Agreement or the issuance of the Convertible Bonds.

 

14.                                As at the date of this Agreement, the Issuer has not issued or agreed to issue any shares or given or agreed to give any option in respect of any shares not issued or agreed to issue or give any option in respect of any debentures or other securities other than as disclosed in the Agreement or in relation to the Convertible Bonds.

 

26

 

15.                                As at the date of this Agreement, save for activities relating to the negotiations and the issuance of the Convertible Bonds or the entering into of this Agreement or any documents in connection thereunder or ancillary thereto and the transactions contemplated thereunder, the Issuer has not carried on any business.

 

27

 

SCHEDULE 4

 

CALL NOTICE

 

[Investor]

 

[Date]

 

Dear Sirs,

 

Agreement in respect of the issue of convertible bonds dated [*] (“Agreement”)

 

We refer to the Agreement and the terms defined in the Agreement shall bear the same meaning in this Call Notice.

 

We hereby make a call under Clause 2.1 of the Agreement for an amount of US$[*] and you are required to  pay to us such amount in clear and immediately available funds to the following account in accordance with the terms and conditions of the Agreement:

 

[details of the account].

 

Pursuant to the terms and conditions of the Agreement, in the event that you are required by law to make any deduction or withholding from the amount so called, you shall pay to us such additional amount as shall be necessary so that we will receive a net amount equal to the full amount which we would have received if such withholding or deduction had not been made.

 

Yours faithfully,

For and on behalf of

2020 GlobalGrowth Equities Limited

 

 

 

	
 
    	
 
    
	
Title:
    	
 
    

 

28

 

SCHEDULE 5

 

PRINCIPAL TERMS AND CONDITIONS OF THE INVESTMENT MANAGEMENT AGREEMENT

 

The Investment Management Agreement shall contain, among other things, the following principal terms and conditions:

 

1.             Manager

 

During the continuance of the Investment Management Agreement, the Manager shall be constituted with the following equity interests: 2020 International Capital Group Limited (60%), George Lu (10%), Louis Koo (10%), Adrian Chan (10%) and 2020 Advisors LLC (10%).

 

2.             Payments to the Manager

 

2.1           The Issuer shall pay to the Manager the following:

 

(a)           2% of total commitment of all the Convertible Bonds (not on amount called) as annual management fee, payable quarterly in advance, with the first payment made on signing of the Investment Management Agreement Provided That such management fee shall be adjusted only in the event of default of the subscriber(s) of the Convertible Bonds in paying up such commitment; and

 

(b)           Carried Interest (subject to an 8% hurdle rate) arising from the Underlying Assets (excluding the Exchange Amount as defined in Condition 8.2), (if there is IPO) payable with effect from the IPO, and thereafter with effect from the end of each subsequent financial year of the Issuer; or (if there is no IPO) payable on redemption of the Convertible Bonds or liquidation of the Issuer (as the case may be).

 

(c)           “Carried Interest” means:

 

(if there is IPO) (i) in respect of the first payment, 20% on any increase in the net asset value of the Issuer in comparison to the aggregate investment in the Equity Value in the Issuer as at the IPO Date; (ii) in respect of subsequent payments after IPO, 20% on any increase in the net asset value of the Issuer in comparison to the net asset value of the Issuer in the preceding financial year; or

 

(if there is no IPO) 20% of the proceeds of sale of all Underlying Assets less the original investment costs and all costs and expenses of the Issuer.

 

2.2           The net asset value of the Issuer shall be calculated by qualified professional valuer or accountant acceptable to the Manager and in accordance with guidelines laid down by the Board.

 

29

 

3.             Investment Objective and Investment Decisions

 

3.1           The investment objective of the Issuer is to generate superior, long-term capital appreciation typically through privately negotiated equity and equity-related investments in companies which can be transformed from leading domestic enterprises into world class leaders. Target companies may be located within Greater China and other emerging markets, or may be companies located in other countries which will benefit from establishing operations in Greater China or other emerging markets. Investments will be effected using a broad variety of investment types and transaction structures, including but not limited to buyout investments, expansion stage, pre-IPO, restructurings, recapitalizations, and purchase of debt or publicly traded securities made in connection with or with a view to a contemplated privately negotiated transaction (including purchases of securities subsequent to a privately negotiated transaction in the same portfolio company).

 

3.2           No variation of the above investment objective shall be effective unless approved by the affirmative vote of holders holding not less than 80% of the aggregate principal amount of all Convertible Bonds issued and outstanding.

 

3.3           All investment and divestment decisions of the Manager are subject to the prior approval of the Investment Committee of the Issuer.

 

4.             Term of the Investment Management Agreement

 

The Investment Management Agreement shall be executed within 45 days from the date of the Agreement.  After the expiry of the three-year period from the IPO Date, either the Issuer or the Manager shall be entitled to undertake a review of the Investment Management Agreement and terminate the Investment Management Agreement without cause by giving the other party not less than six months written notice.

 

5.            Powers and Duties of the Manager

 

The Manager shall work exclusively for the Issuer. Discretionary management in accordance with the Investment Objective.  No applicable investment (or borrowing) restrictions.

 

6.            Exculpation and Indemnification of the Manager

 

The Manager is not liable save in the case of fraud, wilful default or negligence.  There is no guarantee that the investment objective will be achieved.  The Manager will be indemnified by the Issuer against claims arising from its appointment, save for the Manager’s own fraud, wilful default or negligence.

 

7.            Representations of the Manager

 

The Manager will represent to the Issuer that it:

 

(a)            will comply with all applicable laws and regulations; and

 

30

 

(b)           does not require any licence and shall hold all licences if required in compliance with all applicable laws and regulations, as replaced, amended, modified or re-enacted from time to time to fulfil its obligations under the Investment Management Agreement.

 

31

 

SCHEDULE 6

 

PRINCIPAL TERMS AND CONDITIONS OF THE SERVICE AGREEMENTS

 

The Service Agreements shall contain, among other things, the following principal terms and conditions:

 

1.            Parties

 

The Manager as the employer.

 

Each of the Key Personnel as the employee.

 

2.            Term

 

Each of the Service Agreements shall commence on the date of signing and shall continue until the earlier of (a) the expiration or termination of the Investment Management Agreement in accordance with the terms and the conditions therein contained; or (b) (if there is IPO) a period of three years after the IPO Date.

 

For the avoidance of doubt, the Service Agreements shall no longer subsist after all Convertible Bonds issued and outstanding have been redeemed or converted and exchanged or the liquidation procedure of the Issuer has commenced.

 

32

 

SCHEDULE 7

 

INVESTMENT COMMITTEE

 

I.          Charter

 

The Investment Committee shall be established with the terms of reference set out below.

 

II.         Composition of the Investment Committee

 

A.         The Investment Committee shall, in the first instance, consist of 4 members, who shall be approved by the Nomination Committee and appointed by the Board.

 

B.          The initial members of the Investment Committee shall be:

 

George Lu

William Sharp

A nominee of Datai Bay Investments Ltd.

 

C.          A member of the Investment Committee shall be entitled to appoint any person to be his proxy and each proxy shall have one vote for the member whom he represents.

 

III.        The Chairman

 

The Manager shall have the right to appoint the chairman of the Investment Committee (the “Investment Committee Chairman”) and determine the period for which he will hold that office. In the absence of the Investment Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting.

 

IV.       Proceedings

 

Unless varied by these terms of reference, meetings and proceedings of the Investment Committee shall be governed by the Issuer’s articles of association regulating the meetings and proceedings of the directors of the Issuer.

 

V.         Quorum and votes

 

A.        The quorum for decisions of the Investment Committee shall be any two members of whom one shall be a member nominated by Datai Bay Investment Ltd. (or his proxy). A duly convened meeting of the Investment Committee which is quorate shall have the power to exercise all or any of the powers, authorities or discretions vested in or exercisable by the Investment Committee.

 

B.          At any time prior to the IPO, questions arising at any Investment Committee’s meeting shall be decided unanimously by all the members present at a meeting.

 

33

 

VI.       Attendance at Meetings

 

A.         Only members (or his/her respective proxies) of the Investment Committee have the right to attend Investment Committee meetings.

 

B.          Meetings of the Investment Committee may be held by telephone or other communication equipment which allows those participating to hear and speak to each other.

 

VII.      Frequency of Meetings

 

Meetings of the Investment Committee shall be held as and when appropriate.  The Investment Committee Chairman or any other member may convene a meeting of the Investment Committee whenever he or she considers it necessary or desirable.

 

VIII.     Notices of Meetings

 

A.         Meetings of the Investment Committee shall be summoned by any of its members.

 

B.          Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Investment Committee, no later than 48 hours before the time of the meeting.  Supporting papers shall be sent to Investment Committee members as appropriate, at the same time.

 

IX.       Minutes of Meetings

 

A.         The proceedings and resolutions of the Investment Committee shall be recorded.

 

B.          Copies of the minutes of meetings of the Investment Committee shall be circulated to all members of the Investment Committee.

 

X.         Duties

 

The duties of the Investment Committee shall be to:

 

A.        perform reviews on sector specific market research reports, commercial and legal due diligence reports and the investment report covering key aspects of the proposed investments for making all investment or divestment decisions; and

 

B.         approve all investment and divestment decisions of the Manager.

 

34

 

XI.       Authority

 

The Investment Committee shall be entitled to obtain outside legal or other independent professional advice, including the advice of independent remuneration consultants at the cost of the Issuer, if it considers necessary.

 

35

 

SCHEDULE 8

 

NOMINATION COMMITTEE

 

I.          Charter

 

The Nomination Committee shall be established with the terms of reference set out below.

 

II.         Composition of the Nomination Committee

 

A.         The Nomination Committee shall consist of, in the first instance, 3 members.

 

B.          The initial members of the Nomination Committee shall be:

 

George Lu

William Sharp

Louis Koo

 

C.          The additional or substituting member(s) of the Nomination Committee shall be appointed by the Board.

 

III.        Duties

 

The duties of the Nomination Committee shall be to:

 

A.         review the structure, size and composition (including the skills, knowledge and experience) of the Board and the Investment Committee, respectively, on a regular basis and make recommendations to the Board regarding any proposed changes;

 

B.          identify individuals suitably qualified to become members of the Board and/or the Investment Committee and select or make recommendations to the Board and/or the Investment Committee on the selection of, individuals nominated for directorships or members to the Investment Committee, respectively; and

 

C.          make recommendations to the Board on relevant matters relating to the appointment or re-appointment of directors and succession planning for directors of the Board and/or the members of the Investment Committee.

 

For the avoidance of doubt, the Nomination Committee shall not be entitled to change the terms of reference of the Investment Committed as set out in Schedule 7.

 

IV.       Authority

 

The Nomination Committee shall be entitled to obtain outside legal or other independent professional advice, including the advice of independent remuneration consultants at the cost of the Issuer, if it considers necessary.

 

36

 

SCHEDULE 9

 

DATED THE            DAY OF

 

[*]

(as Covenantor)

 

and

 

[*]

(as Guarantor)

 

and

 

2020 GLOBALGROWTH EQUITIES LIMITED

(as Covenantee)

 

 

DEED OF GUARANTEE

 

 

Deacons

Solicitors & Notaries

Alexandra House

3rd-7th, 14th and 29th Floors

Hong Kong

www.deaconslaw.com

Fax : 28100431

Tel : 28259211

 

37

 

THIS DEED OF GUARANTEE is made  the day of

 

BY

 

(1)           [*], a company incorporated in [*], whose registered office is at [*] (the “Covenantor”);

 

(2)           [*], a company incorporated in [*], whose registered office is at [*] (the “Guarantor”);

 

IN FAVOUR OF

 

(3)           2020 GlobalGrowth Equities Limited, a company incorporated in the Cayman Islands, whose registered office is at Cambell Corporate Services Limited, Scotia Centre, P.O. Box 268, Grand Cayman KY1-1104, Cayman Islands (the “Covenantee”)

 

WHEREAS

 

(A)          This Deed is made pursuant to an agreement dated [*] (the “Principal Agreement”) entered into between the Covenantor and the Covenantee providing for, amongst other thing, the subscription by the Covenantor of the Bonds.

 

(B)           The Guarantor has agreed to guarantee the due and punctual performance by the Covenantor of all its obligations under the Principal Agreement.

 

NOW THEREFORE the parties hereby agree as follows:

 

1.             INTERPRETATION

 

Unless otherwise provided in this Deed or the context otherwise requires, terms and expressions herein shall have the same meanings as defined in the Principal Agreement.

 

2              GUARANTEE

 

2.1           In consideration of the Covenantee entering into the Principal Agreement and upon the request of Covenantor, the Guarantor hereby undertakes to procure, and guarantees, unconditionally and irrevocably as primary obligor (as if the Guarantor had indemnified the Covenantee in full in respect of the payment obligations under the Principal Agreement) to the Covenantee, the due and punctual observance and performance by Covenantor of all the agreements, undertakings, warranties, indemnities, stipulations, terms and conditions contained in the Principal Agreement to be observed and performed by Covenantor and the full and punctual payment of all amounts payable by Covenantor under the Principal Agreement and that if Covenantor shall fail to so observe and perform such obligations or pay such amounts in accordance with the Principal Agreement, the Guarantor shall immediately on demand (as often and whenever made) by the Covenantee:

 

38

 

(a)                                  make good or rectify such failure to observe and/or perform;

 

(b)                                 pay the relevant amount in the manner and in the currency provided for under the Principal Agreement; and/or

 

(c)                                  indemnify and keep indemnified fully the Covenantee against any loss or damage (including all costs, expenses and legal fees) the Covenantee may incur as a result of such failure by the Covenantor.

 

2.2.                              The guarantee and indemnity provided by the Guarantor in this Deed (the “Guarantee”) shall be a continuing guarantee and indemnity and shall cover all obligations of the Covenantor under the Principal Agreement.  The Guarantee shall remain in full force and effect until all obligations of the Covenantor under the Principal Agreement have been paid and/or discharged in full.  The Guarantee is in addition to, and not in substitution for, and shall not merge with or otherwise affect or prejudice or be affected or prejudiced by any other security, guarantee, indemnity or right which the Covenantee may now or at any time hereafter be entitled to.

 

2.3                                 The Guarantor undertakes to indemnify and keep indemnified the Covenantee on a full indemnity basis from and against all losses, damages, costs and expenses which the Covenantee may suffer or incur as a result of, or in consequence of, any breach of duties and /or obligations by the Covenantor under the Principal Agreement.

 

2.4                                 The Guarantor waives any right to require that, prior to any claim under or enforcement of this Deed, (a) proceedings be taken against any other person or (b) any action be taken to realise or enforce any other security, guarantee, indemnity or right.

 

2.5                                 The Guarantor shall be liable under this Deed as if it were a primary obligor and the liability of it shall not be impaired, reduced or discharged by reason of:

 

(a)                                  any time or indulgence at any time given to, or any compromise or composition made with, the Covenantor or any other person or any other release (conditional or otherwise) of the Covenantor or any other person;

 

(b)                                 any amendment or novation whatsoever, to or of the Principal Agreement and this Deed or any other security, guarantee, indemnity or right;

 

(c)                                  any assignment by the Covenantor of its rights and obligations under the Principal Agreement and this Deed;

 

(d)                                 the making or absence of any demand on Covenantor or any other person to make good or rectify any default, or pay any amount due, under the Principal Agreement;

 

(e)                                  any defect in any provision of this Agreement and this Deed or any other document or the obligations of any party thereunder being unenforceable at any time and/or for any reason (whether or not known to the Covenantee);

 

39

 

(f)                                    any party not being bound by this Agreement and this Deed or any other document whether as a result of any failure to execute, or any deficiency in the execution of, the same or as a result of any defect in or insufficiency or want of the necessary powers or any irregular or improper exercise thereof, whether or not known to the Covenantee or for any other reason whatsoever;

 

(g)                                 any right of the Covenantor or any other surety to the Covenantee to set-off amounts due to it from the Covenantee against amounts due to the Covenantee under the Principal Agreement and this Deed;

 

(h)                                 the insolvency, bankruptcy, dissolution, composition, winding-up, liquidation, amalgamation, reconstruction, reorganisation, change in constitution, death or incapacity of the Covenantor or any other person; or

 

(i)                                     any other act, omission, event or thing whatsoever which but for this provision would or might afford an equitable defence to a surety or otherwise operate to discharge, impair or affect the obligations or liabilities of the Covenantor hereunder.

 

2.6                                 So long as any of the obligations of the Covenantor under the Principal Agreement remain outstanding, the Guarantor shall not exercise any right of subrogation or any other right of a surety or enforce any security or other right or claim against the Covenantor or any other person whether in respect of its liability under the Principal Agreement or this Deed or otherwise or claim in insolvency, liquidation or bankruptcy of the Covenantor in competition with the Covenantee.

 

3.                                      MISCELLANEOUS

 

3.1                                 Time shall be of the essence of this Deed.  All references to time shall be Hong Kong time.

 

3.2                                 This Deed shall be binding on and (where applicable) enure to the benefit of, the Covenantor, the Guarantor and the Covenantee and their respective successors and assigns except that the Covenantor and the Guarantor shall not, and shall not be entitled to, assign or transfer any of its rights, benefits or obligations hereunder without the prior consent of the Covenantee.

 

3.3                                 The illegality, invalidity or unenforceability of any provision of this Principal Agreement and this Deed under the law of any jurisdiction shall not affect its legality, validity or enforceability under the laws of any other jurisdiction nor the legality, validity or enforceability of any other provision.

 

3.4                                 Any provision of this Deed may be amended only if the parties hereto so agree in writing.

 

4.                                      GOVERNING LAW

 

4.1                                 This Deed shall be governed by and construed in accordance with the laws of Hong Kong.

 

40

 

4.2                                 The parties hereto hereby submit to the non-exclusive jurisdiction of the Hong Kong Courts.

 

41

 

IN WITNESS  whereof this Deed has been duly executed on the day and year first above written.

 

 

	
SEALED with the Seal of
    	
)
    
	
[*]
    	
)
    
	
and SIGNED by
    	
)
    
	
 
    	
)
    
	
in the presence of :-
    	
)
    

 

 

	
SEALED with the Seal of
    	
)
    
	
[*]
    	
)
    
	
and SIGNED by
    	
)
    
	
 
    	
)
    
	
in the presence of :-
    	
)
    
	
 
    	
 
    
	
 
    	
 
    
	
SEALED with the Seal of
    	
)
    
	
2020   GLOBALGROWTH EQUITIES
    	
)
    
	
LIMITED
    	
)
    
	
and SIGNED by
    	
)
    
	
 
    	
)
    
	
in the presence of :-
    	
)
    

 

42

 

IN WITNESS WHEREOF the Parties have executed this Agreement on the day and year first above written.

 

	
SIGNED by
    	
)
    
	
 
    	
)
    	
 
    
	
duly authorised for and on behalf of
    	
)
    	
/s/ Louis Koo
    
	
2020   GlobalGrowth Equities Limited
    	
)
    	
 
    
	
in the presence of:
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SIGNED by
    	
)
    	
For and on behalf of
    
	
 
    	
)
    	
SHK ALPHA MANAGERS LTD
    
	
duly authorised for and on behalf of
    	
)
    	
As role of the Investment Manager of
    
	
SHK   Asian Opportunities Holdings Ltd
    	
)
    	
SHK Asian Opportunities Fund L.P.
    
	
in the presence of:
    	
)
    	
(The parent company of SHK Asian
    
	
 
    	
 
    	
 Opportunities Holdings Ltd)
    

 

 

	
 
    	
/s/ Christopher Lee
    
	
 
    	
/s/ Christine Wong
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Authorised Signatories
    

 

43

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