UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
June 11, 2014
Date
of Report (date of earliest event reported)
MONTAGE
TECHNOLOGY GROUP LIMITED
(Exact name of registrant as specified in its charter)
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Cayman |
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001-36064 |
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Not applicable |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS. Employer Identification No.) |
Room A1601, Technology Building, 900 Yi Shan Road
Xuhui District, Shanghai, 200233
Peoples Republic of China
(Address of registrants principal executive offices, including zip code)
Tel: (86 21) 6128-5678
(Registrants telephone number, including area code)
N/A
(Former name or
former address, if changed since last report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On June 11, 2014, Montage Technology Group Limited, a Cayman Islands exempted company (the Company or Montage), entered into an
Agreement and Plan of Merger (the Merger Agreement) with Shanghai Pudong Science and Technology Investment Co., Ltd., a Peoples Republic of China (PRC) limited liability company (Parent or
PDSTI), providing for the merger of a to be formed merger subsidiary (Merger Sub) with and into the Company (the Merger), with the Company surviving the Merger as a wholly-owned subsidiary of a to be formed Cayman
Islands exempted company, which will be a subsidiary of Parent (Parent Assignee). The Merger Agreement was unanimously approved by the Companys Board of Directors (the Board) in connection with the previously announced
exploration of strategic alternatives.
At the effective time of the Merger, each share of Company ordinary shares issued and outstanding immediately
prior to the effective time of the Merger (other than shares owned by the Company, Parent or any direct or indirect subsidiary of either of them) will be converted automatically into the right to receive $22.60 in cash, without interest (the
Per Share Merger Consideration).
Company stock options that are outstanding at the effective time of the Merger will be assumed by Parent
Assignee and converted into an option to purchase ordinary shares of the Parent Assignee; provided that holders of vested Company stock options that have a per-share exercise price less than the Per Share Merger Consideration may elect to cancel
such vested Company stock options in exchange for the right to receive the cash payment equal to the total number of underlying shares and the excess of the amount of the Per Share Merger Consideration over the exercise price per share pursuant to
the Merger Agreement. Each Company share that is outstanding and subject to vesting or other lapse restrictions will be canceled at the effective time of the Merger in exchange for the right to receive, upon the date on which the shares would have
vested in accordance with their terms after the Merger, a cash payment equal to the Per Share Merger Consideration.
Consummation of the Merger is subject
to various conditions, including, without limitation: (i) the approval by the holders of two-thirds of the votes cast at an extraordinary general meeting of the Companys shareholders (the Company Shareholder Approval),
(ii) the absence of any temporary restraining order, preliminary or permanent injunction or other judgment that enjoins or otherwise prohibits the consummation of the Merger; (iii) the obtainment by Parent of certain specified governmental
approvals in the PRC (the Parent Required Approvals); (iv) the obtainment of PRC antitrust clearance, if required by PRC law; (v) the accuracy of the parties respective representations and warranties and the performance
of the parties respective covenants (in each case, subject to certain materiality thresholds). In addition, the obligation of Parent and Merger Sub to consummate the Merger is subject to the absence, since the date of the Merger Agreement and
except as disclosed in the Company disclosure schedules, of any Material Adverse Effect (as defined in the Merger Agreement).
The Merger Agreement
contains a no shop provision that, in general, limits the Companys ability to solicit alternative acquisition proposals from third parties and to provide non-public information to and engage in discussions or negotiations with
third parties regarding alternative acquisition proposals. However, there are go shop provisions that allow the Company to solicit alternative acquisition proposals from, furnish non-public information to, and participate in discussions
and negotiations with third parties under the following circumstances: (i) during the period commencing 90 days after the Company Shareholder Approval is obtained and until the consummation of the Merger or the termination of the Merger
Agreement and (ii) until such time as Parent delivers acceptable financing commitment documents and evidence to the Company, but during such time, the Company may only continue negotiations and discussions with the two parties that are
Qualified Former Bidders, as defined in the Merger Agreement.
The no shop provision is also subject to a fiduciary out that
allows the Company, under certain circumstances and in compliance with certain obligations, to provide non-public information and engage in discussions and negotiations with respect to an unsolicited written alternative acquisition proposal from any
third party that is reasonably likely to result in a Superior Proposal (as defined in the Merger Agreement).
The Merger Agreement contains certain
termination rights for the Company and Parent. Upon termination of the Merger Agreement under specified circumstances, including with respect to the Companys entry into an agreement with respect to a Superior Proposal outside of the go
shop periods, the Company will be required to pay Parent a termination fee of $40,770,000, but if the Company terminates the Merger Agreement to enter into a Superior Proposal during a go shop period, the Company must only pay to
Parent a termination fee of $20,385,000. The Merger Agreement also provides that Parent will be required to pay the Company a reverse termination fee of $67,940,000 under specified circumstances set forth in the Merger Agreement, including if Parent
fails to obtain any of the Parent Required Approvals or PRC antitrust clearance other than as specified in the Merger Agreement.
The Merger Agreement requires Parent to have, as of the effective time, sufficient cash or other sources of
immediately available funds for consummation of the transactions contemplated in the Merger Agreement and for the satisfaction of all Parents, Parent Assignees and Merger Subsidiarys obligations under the Merger Agreement. The
Merger Agreement requires Parent to use its reasonable best efforts to obtain the financing on the terms and conditions described in any financing commitment entered into by Parent, Parent Assignee, Merger Subsidiary or any of their respective
affiliates.
In connection with the execution of the Merger Agreement, Parent and certain shareholders of the Company (the Voting
Shareholders) entered into a Voting Agreement (the Voting Agreement), pursuant to which the Voting Shareholders have agreed, among other things, (i) to vote all of their shares of Company ordinary shares in favor of obtaining
the Company Shareholder Approval and the other transactions contemplated by the Merger Agreement, and vote against any alternative acquisition proposals or other transaction that would be reasonably expected to impede, delay, or adversely affect any
transactions contemplated by the Merger Agreement; (ii) to irrevocably grant Parent and any designee of Parent a proxy (and appoint Parent or any such designee of Parent as its attorney-in-fact with full power of substitution) to vote their
shares of Company ordinary shares for the matters described in the preceding subclause (i); and (iii) not to sell, transfer, pledge, or otherwise dispose of any of their shares of Company ordinary shares, except for those transfers expressly
permitted under the Voting Agreement. The Voting Agreement terminates upon the termination of the Merger Agreement.
Concurrent with the execution of the
Merger Agreement, Parent, a subsidiary of Parent and the Company entered into an Escrow Agreement with Citibank N.A. (Citibank) serving as Escrow Agent, pursuant to which the Company agreed to deposit 50% of the termination fee and
Parent agreed to deposit 50% of the reverse termination fee in two accounts with Citibank (the Escrow Accounts) upon the date of the Merger Agreement or the first business day that the Escrow Accounts are available to receive deposits.
The parties agreed to deposit the remaining 50% of the termination fee and the reverse termination fee within five business days following the obtainment of the Company Shareholder Approval.
The Merger Agreement contains customary covenants, including, without limitation, covenants regarding: (i) the conduct of the business of the Company
prior to the consummation of the Merger, (ii) the calling and holding of a meeting of the Companys stockholders for the purpose of obtaining the Company Shareholder Approval and (iii) the use of reasonable best efforts to cause the
Merger to be consummated.
The Merger Agreement also contains customary representations and warranties. The representations and warranties of the Company
contained in the Merger Agreement have been made solely for the benefit of Parent. In addition, such representations and warranties (a) have been made only for purposes of the Merger Agreement, (b) have been qualified by documents filed
with, or furnished to, the Securities and Exchange Commission (the SEC), (c) have been qualified by confidential disclosures made to Parent in connection with the Merger Agreement, (d) are subject to materiality qualifications
contained in the Merger Agreement which may differ from what may be viewed as material by investors, (e) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement and (f) have been
included in the Merger Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as facts. Accordingly, the Merger Agreement is included with this filing only to provide investors with information
regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding the Company or its business. Investors should not rely on the representations and warranties or any descriptions thereof as
characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger
Agreement, which subsequent information may or may not be fully reflected in the Companys public disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the
Company that has been, is or will be contained in, or incorporated by reference into, any Form 10-K, Forms 10-Q, Forms 8-K, proxy statements and other documents that the Company files with the SEC.
The foregoing descriptions of the Merger Agreement, Voting Agreement and Escrow Agreement are not complete and are qualified in its entirety by reference to
the Merger Agreement, Voting Agreement and Escrow Agreement, which are filed as Exhibit 2.1, Exhibit 10.1 and Exhibit 10.2, respectively, hereto and are incorporated herein by reference.
Item 8.01 Other Events.
Attached as Exhibit 99.1
hereto is a copy of the Companys press release issued June 11, 2014, announcing the execution of the Merger Agreement.
Important
Information and Where to Find It
Montage plans prepare and mail to its stockholders a proxy statement regarding the proposed acquisition of Montage by
PDSTI. Investors and security holders are urged to read the proxy statement relating to such acquisition carefully and in its entirety, including any other relevant documents filed with the SEC and incorporated by reference in the proxy, when they
become available because they will contain important information. Investors and security holders
may obtain a free copy of the proxy statement and other documents that Montage prepares and mails to its shareholders on Montages website at www.montage-tech.com. In addition, the proxy
statement and other documents prepared by Montage may be obtained from Montage free of charge by directing a request to Montage Technology Group Limited, c/o Investor Relations, 19800 MacArthur Blvd, Suite 300, Irvine, CA 92612.
Forward-looking Statements
Statements about the expected
timing, completion and effects of the proposed merger and all other statements made herein that are not historical facts are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. In some cases, these forward-looking statements may be identified by the use of words such as may, will, should, expect, plan, anticipate, continuing,
believe or project, or the negative of those words or other comparable words. Any forward-looking statements included herein are made as of the date hereof only, based on information available to Montage as of the date
hereof, and, subject to any applicable law to the contrary, Montage undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Such forward-looking statements are
not a guarantee of future performance and are subject to a number of risks, assumptions and uncertainties that could cause Montages actual results to differ from those projected in such forward-looking statements. Such risks and uncertainties
include: any conditions imposed on the parties in connection with consummation of the transactions contemplated by the Merger Agreement; the ability to obtain regulatory approvals of the transactions contemplated by the Merger Agreement on the
proposed terms and schedule; the failure of Montages stockholders to approve the transactions contemplated by the Merger Agreement; Montages ability to maintain relationships with customers, employees or suppliers following the
announcement of the Merger Agreement; the ability of the parties to satisfy the conditions to closing of the transactions contemplated by the Merger Agreement; the risk that the transactions contemplated by the Merger Agreement may not be completed
in the time frame expected by the parties or at all; the risks that are described from time to time in Montages reports filed with the SEC, including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and in other of
Montages filings with the SEC; and general industry and economic conditions.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
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2.1 |
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Agreement and Plan of Merger dated June 11, 2014 |
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10.1 |
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Voting Agreement dated June 11, 2014 |
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10.2 |
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Escrow Agreement dated June 11, 2014 |
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99.1 |
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Press Release dated June 11, 2014 |
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Dated: June 11, 2014
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Montage Technology Group Limited |
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/s/ Mark Voll |
Mark Voll |
Chief Financial Officer |
Exhibit Index
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Exhibit
Number |
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Exhibit Title |
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2.1 |
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Agreement and Plan of Merger dated June 11, 2014 |
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10.1 |
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Voting Agreement dated June 11, 2014 |
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10.2 |
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Escrow Agreement dated June 11, 2014 |
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99.1 |
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Press Release dated June 11, 2014 |
Exhibit 2.1
EXECUTION COPY
AGREEMENT AND
PLAN OF MERGER
dated as of
June 11, 2014
between
MONTAGE TECHNOLOGY GROUP LIMITED
and
SHANGHAI PUDONG SCIENCE
AND TECHNOLOGY INVESTMENT CO., LTD.
TABLE OF CONTENTS
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PAGE |
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Article 1 |
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Definitions |
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1 |
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Section 1.01. |
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Definitions |
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1 |
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Section 1.02. |
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Other Definitional and Interpretative Provisions |
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10 |
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Article 2 |
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The Merger |
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11 |
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Section 2.01. |
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The Merger |
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11 |
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Section 2.02. |
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Conversion of Shares |
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12 |
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Section 2.03. |
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Surrender and Payment |
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13 |
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Section 2.04. |
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Dissenting Shares |
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16 |
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Section 2.05. |
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Company Equity Awards |
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17 |
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Section 2.06. |
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Lost Certificates |
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18 |
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Section 2.07. |
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Withholding Taxes |
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18 |
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Section 2.08. |
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Formation of Parent Assignee and Merger Subsidiary |
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18 |
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Article 3 |
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The Surviving Company |
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19 |
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Section 3.01. |
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Memorandum and Articles of Association |
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19 |
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Section 3.02. |
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Directors and Officers |
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20 |
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Article 4 |
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Representations and Warranties of the Company |
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20 |
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Section 4.01. |
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Corporate Existence and Power |
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20 |
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Section 4.02. |
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Corporate Authorization |
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20 |
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Section 4.03. |
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Governmental Authorization |
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21 |
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Section 4.04. |
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Non-contravention |
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21 |
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Section 4.05. |
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Capitalization |
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21 |
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Section 4.06. |
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Subsidiaries |
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23 |
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Section 4.07. |
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SEC Filings and the Sarbanes-Oxley Act |
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24 |
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Section 4.08. |
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Financial Statements |
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26 |
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Section 4.09. |
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Disclosure Documents |
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26 |
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Section 4.10. |
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Absence of Certain Changes |
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27 |
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Section 4.11. |
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No Undisclosed Material Liabilities |
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27 |
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Section 4.12. |
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Compliance with Laws and Court Orders |
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27 |
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Section 4.13. |
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Litigation |
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28 |
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Section 4.14. |
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Properties |
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28 |
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Section 4.15. |
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Intellectual Property |
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29 |
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Section 4.16. |
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Taxes |
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30 |
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Section 4.17. |
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Employee Benefit Plans |
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31 |
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Section 4.18. |
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Labor and Employment Matters |
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33 |
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Section 4.19. |
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Insurance Policies |
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34 |
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Section 4.20. |
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Environmental Matters |
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34 |
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Section 4.21. |
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Material Contracts |
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34 |
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-i-
TABLE OF CONTENTS
(continued)
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Page |
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Section 4.22. |
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Customers and Suppliers |
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37 |
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Section 4.23. |
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Compliance with Applicable Export Control, Sanctions, Import, and Anti-Corruption Laws |
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37 |
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Section 4.24. |
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Indebtedness and Security |
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38 |
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Section 4.25. |
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Finders Fees |
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38 |
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Section 4.26. |
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Opinion of Financial Advisor |
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38 |
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Section 4.27. |
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Antitakeover Statutes |
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39 |
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Section 4.28. |
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Affiliated Transactions |
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39 |
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Section 4.29. |
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No Additional Representations |
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39 |
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Article 5 |
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Representations and Warranties of Parent |
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39 |
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Section 5.01. |
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Corporate Existence and Power |
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39 |
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Section 5.02. |
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Corporate Authorization |
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40 |
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Section 5.03. |
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Governmental Authorization |
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40 |
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Section 5.04. |
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Non-contravention |
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40 |
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Section 5.05. |
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Disclosure Documents |
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41 |
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Section 5.06. |
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Financing |
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41 |
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Section 5.07. |
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Certain Arrangements |
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42 |
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Section 5.08. |
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Litigation |
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42 |
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Section 5.09. |
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Ownership of Company Shares |
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42 |
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Section 5.10. |
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Solvency |
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42 |
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Section 5.11. |
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Non-Reliance on Company Estimates |
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43 |
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Section 5.12. |
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Finders Fees |
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43 |
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Section 5.13. |
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Parent Financial Statements |
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44 |
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Section 5.14. |
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No Additional Representations |
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44 |
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Article 6 |
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Covenants of the Company |
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44 |
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Section 6.01. |
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Conduct of the Company |
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44 |
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Section 6.02. |
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Company Shareholder Meeting |
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48 |
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Section 6.03. |
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Acquisition Proposals |
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48 |
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Section 6.04. |
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Access to Information |
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53 |
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Section 6.05. |
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Escrow for Termination Fee |
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54 |
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Article 7 |
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Covenants of Parent |
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54 |
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Section 7.01. |
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Obligations of Merger Subsidiary |
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54 |
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Section 7.02. |
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Voting of Shares |
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54 |
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Section 7.03. |
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Indemnification and Insurance |
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54 |
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Section 7.04. |
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Employee Matters |
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56 |
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Section 7.05. |
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Escrow for Reverse Termination Fee |
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57 |
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Section 7.06. |
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Financing |
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57 |
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Article 8 |
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Covenants of Parent and the Company |
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60 |
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Section 8.01. |
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Reasonable Best Efforts: |
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60 |
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-ii-
TABLE OF CONTENTS
(continued)
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Page |
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Section 8.02. |
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Proxy Statement |
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62 |
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Section 8.03. |
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Public Announcements |
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63 |
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Section 8.04. |
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Further Assurances |
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63 |
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Section 8.05. |
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Notices of Certain Events |
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63 |
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Section 8.06. |
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Section 16 Matters |
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64 |
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Section 8.07. |
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Stock Exchange De-listing; 1934 Act Deregistration |
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64 |
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Section 8.08. |
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Financing Cooperation |
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64 |
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Section 8.09. |
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No Impeding Actions |
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65 |
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Article 9 |
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Conditions to the Merger |
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65 |
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Section 9.01. |
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Conditions to the Obligations of Each Party |
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65 |
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Section 9.02. |
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Conditions to the Obligations of Parent and Merger Subsidiary |
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66 |
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Section 9.03. |
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Conditions to the Obligations of the Company |
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66 |
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Section 9.04. |
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Frustration of Closing Conditions |
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66 |
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Article 10 |
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Termination |
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67 |
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Section 10.01. |
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Termination |
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67 |
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Section 10.02. |
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Effect of Termination |
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69 |
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Article 11 |
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Miscellaneous |
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69 |
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Section 11.01. |
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Notices |
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69 |
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Section 11.02. |
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Non-Survival of Representations and Warranties |
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71 |
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Section 11.03. |
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Amendments and Waivers |
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71 |
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Section 11.04. |
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Expenses |
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71 |
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Section 11.05. |
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Disclosure Schedule References |
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74 |
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Section 11.06. |
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Binding Effect; Benefit; Assignment |
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75 |
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Section 11.07. |
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Governing Law |
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75 |
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Section 11.08. |
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Consent to Jurisdiction |
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75 |
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Section 11.09. |
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WAIVER OF JURY TRIAL |
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76 |
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Section 11.10. |
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Counterparts; Effectiveness |
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76 |
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Section 11.11. |
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Entire Agreement; No Other Representations and Warranties |
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77 |
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Section 11.12. |
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Severability |
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77 |
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Section 11.13. |
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Specific Performance |
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Exhibit A Plan of Merger
Exhibit B Form of Assignment and Assumption Agreement
Exhibit C Form of Joinder Agreement
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this Agreement) dated as of June 11, 2014 between Montage Technology Group Limited, a
Cayman Islands exempted company (the Company) and Shanghai Pudong Science and Technology Investment Co., Ltd., a PRC limited liability company (Parent).
W I T N E S S E T H :
WHEREAS, following the execution of this Agreement, (i) Parent shall form, or shall cause to be formed, a new entity as a Cayman Islands
exempted company (Parent Assignee) and shall assign to Parent Assignee, and Parent Assignee shall assume, Parents rights under this Agreement by signing the assignment and assumption agreement in the form attached hereto as
Exhibit B (the Assignment and Assumption Agreement) and (ii) Parent shall form, or shall cause to be formed, a new entity as a Cayman Islands exempted company that will be a wholly-owned subsidiary of Parent Assignee
(Merger Subsidiary) and shall cause Merger Subsidiary and Parent Assignee to join this Agreement by signing the joinder agreement attached hereto as Exhibit C (the Joinder Agreement), provided that Parent
shall not be relieved of any of its obligations under and pursuant to this Agreement, and shall remain responsible for all representations, warranties, liabilities, covenants, agreements and any other obligations under and pursuant to the terms of
this Agreement;
WHEREAS, the respective Boards of Directors of the Company and Merger Subsidiary have adopted and deemed it advisable
that the respective shareholders of the Company and Merger Subsidiary approve this Agreement pursuant to which, among other things, Parent Assignee would acquire the Company by means of a merger of Merger Subsidiary with and into the Company on the
terms and subject to the conditions set forth in this Agreement; and
WHEREAS, as an inducement to Parents and Merger
Subsidiarys willingness to enter into this Agreement, concurrently with the execution and delivery of this Agreement, the Voting Shareholders have each executed and delivered to Parent the Voting Agreement, providing that, among other things,
such shareholders will vote their Shares in favor of the approval of this Agreement, the Plan of Merger and the Merger.
NOW, THEREFORE,
in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01. DEFINITIONS. (a) As used herein, the following terms have the following meanings:
1933 Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1934 Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Acquisition Proposal means, other than the transactions contemplated by this
Agreement, any offer or proposal of any Third Party relating to, or any Third Party bona fide indication of interest in writing relating to (i) any acquisition or purchase, direct or indirect, of assets equal to 25% or more of the
consolidated assets of the Company or to which 25% or more of the consolidated revenues or earnings of the Company are attributable or 25% or more of any class of equity or voting securities of the Company, (ii) any tender offer (including a
self-tender offer) or exchange offer that, if consummated, would result in such Third Party beneficially owning 25% or more of any class of equity or voting securities of the Company, or (iii) a merger, consolidation, share exchange, business
combination, sale of all or substantially of the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the Company or any of its Subsidiaries whose assets, individually or in the aggregate,
constitute 25% or more of the consolidated assets of the Company or to which 25% or more of the consolidated revenues or earnings of the Company are attributable.
Affiliate means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under
common control with such Person; provided that other state-owned enterprises or Governmental Authorities controlled by the PRC shall not be deemed as Affiliates of Parent, Parent Assignee or Merger Subsidiary unless they are controlled by Parent,
Parent Assignee or Merger Subsidiary. The term control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and the terms controlled and controlling have meanings correlative thereto.
Applicable Law means, with respect to any Person, any PRC local, provincial or national or United States federal, state or
local or other non-United States national, state or provincial (as applicable) or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other
similar requirement enacted, adopted, promulgated or applied by a Governmental Authority, or Cayman Islands Companies Law, in each case, that is legally binding upon and applicable to such Person.
Business Day means a day, other than Saturday, Sunday or other day on which commercial banks in the PRC or in New York, New
York are authorized or required by Applicable Law to close.
Code means the Internal Revenue Code of 1986, as amended.
Company Balance Sheet means the consolidated balance sheet of the Company as of March 31, 2014 set forth in the
Companys Form 8-K filed with the SEC on May 6, 2014.
Company Balance Sheet Date means March 31,
2014.
Company Disclosure Schedule means the disclosure schedule dated the date hereof regarding this Agreement
that has been provided by the Company to Parent and shall be deemed to have been provided by the Company to Parent Assignee and Merger Subsidiary upon their respective formations.
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Company Owned IP means any and all Intellectual Property that is owned by the
Company or any of its Subsidiaries (including any and all Company Registered IP).
Company Registered IP means all of
the Registered IP owned by the Company or any of its Subsidiaries.
Company Shares means the ordinary shares, $0.0125
par value per share, of the Company.
Company Share Plans means collectively, the Companys 2006 Share Incentive
Plan effective as of June 13, 2006 and the Companys Performance Incentive Plan effective as of October 1, 2013.
Confidentiality Agreement means the letter agreement between Parent and the Company dated March 25, 2014.
Contract means any written or oral contract, agreement, note, bond, indenture, mortgage, guaranty, option, lease (or
sublease), license, sales or purchase order, warranty, commitment or other instrument, obligation, arrangement or understanding of any kind.
Electronic Data Room means that certain electronic data room for Project Mission run by RR Donnelley and maintained by the
Company for purposes of the Merger and the other transactions contemplated by this Agreement.
Environmental Laws means
any Applicable Laws relating to the environment or, solely as it relates to exposure to hazardous or toxic substances, human health.
Environmental Permits means all permits, licenses, franchises, certificates, approvals and other similar authorizations of
Governmental Authorities required by Environmental Laws for the operation of the business of the Company or any of its Subsidiaries as currently conducted.
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate of any entity means any other entity that, together with such entity, would be treated as a single
employer within the meaning of Section 414(b), (c), (m) or (o) of the Code.
GAAP means generally
accepted accounting principles in the United States.
Governmental Authority means any transnational, domestic or
foreign, federal, provincial, regional, state, municipal or local governmental, regulatory or administrative authority, stock exchange, development zone authority sponsored by the PRC, free trade zone authority sponsored by the PRC, department,
court, agency or official, including any political subdivision thereof.
3
Governmental Official means, individually and collectively, any political
party or official of any political party or any candidate for political office.
Hazardous Substance means any toxic,
radioactive or otherwise hazardous substance, waste or material that in relevant form and concentration is regulated under any Environmental Law.
Intellectual Property means any or all of the following in any jurisdiction throughout the world, and all rights in:
(i) all United States, international and foreign patents, utility models, design patents, certificates of invention, and applications therefor, and all reissues, divisions, divisionals, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether or not patentable), trade secrets, know how, databases, business methods, technical data and customer lists, and other confidential or proprietary information; (iii) all works of
authorship, copyrights, moral rights, copyright registrations and applications throughout the world, Software, mask works and mask work registrations and applications; (iv) all industrial designs and any registrations and applications therefor
throughout the world; (v) all trade names, logos, trademarks and service marks, domain names, URLs, and other indicia of origin, and registrations and applications therefor throughout the world, together with all good will associated therewith;
and (vi) all other intellectual property and proprietary rights.
International Plan means any Employee Plan that
is maintained by the Company or any of its Affiliates primarily for the benefit of current or former employees of the Company or any of its Subsidiaries based outside of the United States.
knowledge of any Person that is not an individual means the actual knowledge of such Persons executive officers;
provided, however, that knowledge of the Company means the actual knowledge of the individuals listed in Section 1.01(a) of the Company Disclosure Schedule.
Lien means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance,
license, covenant not to sue or other adverse claim of any kind in respect of such property or asset. For purposes of this Agreement, a Person shall be deemed to own subject to a Lien any property or asset that it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset.
Material Adverse Effect means, except as provided in Section 1.01(a) of the Company Disclosure Schedule, with respect
to any Person, any fact, circumstance, change, event, condition, development, occurrence or effect (collectively, effects) that has had, or would reasonably expected to have, individually or in the aggregate, a material adverse effect on
(i) the financial condition, business, assets or results of operations of such Person and its Subsidiaries, taken as a whole, excluding any effect to the extent resulting from (A) changes in the financial, securities, credit or other
capital markets or general economic or regulatory, legislative or political conditions, (B) changes or conditions generally affecting the industry in which such Person and its Subsidiaries operate, including changes in interest and exchange
rates, in the United States, the PRC or any other jurisdiction in which the Company or its Subsidiaries
4
operate, (C) geopolitical conditions, acts of war, sabotage or terrorism or natural or man-made disasters or other force majeure events, or any escalation or worsening thereof after the date
hereof, (D) changes in Applicable Law or GAAP or interpretations thereof, (E) the failure, in and of itself, of such Person to meet any published projections, forecasts, estimates or predictions or changes in the market price or trading
volume of the securities of such Person or the credit rating of such Person (it being understood that the underlying facts giving rise or contributing to such failure or change may be taken into account in determining whether there has been a
Material Adverse Effect if such facts are not otherwise excluded under this definition), (F) the negotiation, announcement, pendency or consummation of the transactions contemplated by this Agreement including any loss or change in relationship
with any customer, supplier vendor, distributor, lender, employee, investor, venture partner or other business partner of such Person, (G) any shareholder litigation arising out of allegations of a breach of fiduciary duty relating to this
Agreement, or any agreement or undertaking entered into by the Company in connection with this Agreement, and (H) if such Person is the Company, (i) any action taken by the Company or any of its Subsidiaries at the written request, or with
the written consent, of Parent, Parent Assignee or Merger Subsidiary or (ii) compliance by the Company with the terms of, or the taking by the Company of any action required by, this Agreement, or the failure by the Company to take any action
prohibited by this Agreement; except, in the case of clauses (A), (B), (C) or (D), to the extent having a materially disproportionate adverse effect on such Person and its Subsidiaries, taken as a whole, relative to other participants in the
industry in which such Person and its Subsidiaries operate (in which case the incremental materially disproportionate impact or impacts may be taken into account in determining whether there has been a Material Adverse Effect) or (ii) such
Persons ability to consummate the transactions contemplated by this Agreement.
Memorandum and Articles means the
Amended and Restated Memorandum and Articles of Association of the Company, as amended to the date of this Agreement.
MOFCOM means the Ministry of Commerce of the PRC or its competent local counterparts.
NASDAQ means the Nasdaq Global Stock Market.
NDRC means the National Development and Reform Commission of the PRC or its competent local counterparts.
Orders means any order, writ, assessment, decision, injunction, decree, judgment, ruling, award, settlement or stipulation
of a Governmental Authority of competent jurisdiction.
Parent Ordinary Share means an ordinary share of Parent
Assignee, par value $0.0125 per share.
Parent Required Approvals means the approvals of NDRC, MOFCOM and SAFE to the
extent required with respect to the overseas investment by Parent in connection with the consummation of the transactions contemplated hereby, and for the avoidance of doubt, not including the PRC Antitrust Clearance.
5
Pending Class Action means all class action lawsuits currently pending in the
United States Courts, including but not limited to the United States District Court of the Southern District of New York and the United States District Court of the Northern District of California, against the Company and/or its directors and
officers that were brought by investors who purchased or otherwise acquired the Companys securities.
Permitted
Liens means (i) Liens for Taxes that are not due and payable or that may thereafter be paid without interest or penalty, or that are being contested in good faith by and through appropriate proceedings and for which adequate accruals
or reserves have been established in accordance with GAAP, (ii) mechanics, carriers, workmens, warehousemens, repairmens or other like Liens arising or incurred in the ordinary course of business and for which
adequate accruals or reserves have been established to the extent required by GAAP, (iii) Liens incurred in the ordinary course of business in connection with workers compensation, unemployment insurance and other types of social security
or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return of money bonds and similar obligations, (iv) zoning, building and other similar codes and
regulations, (v) Liens the existence of which are disclosed in the notes to the consolidated financial statements of the Company included in the Company SEC Documents, (vi) any conditions that would be disclosed by a current, accurate
survey or physical inspection, (vii) Liens, easements, rights-of-way, covenants and other similar restrictions that have been placed by any developer, landlord or other Person on real property over which the Company or any of its Subsidiaries
has easement rights or on any real property leased by the Company or any of its Subsidiaries and subordination or similar agreements relating thereto, (viii) with respect to tangible property, Liens (other than Liens securing indebtedness for
borrowed money), defects or irregularities in title, easements, rights-of-way, covenants, restrictions and other similar matters that would not reasonably be expected to, individually or in the aggregate, materially impair the continued use and
operation of the assets to which they relate in the business of the Company and its Subsidiaries as currently conducted and (ix) with respect to Intellectual Property, nonexclusive licenses granted in the ordinary course of business of the
Company and its Subsidiaries which are generally consistent with the Companys past business goals, which, for avoidance of doubt, shall include nonexclusive licenses granted to new Third Parties.
Person means an individual, corporation, partnership, limited liability company, association, trust or other entity or
organization, including a Governmental Authority.
PRC means the Peoples Republic of China, but solely for the
purposes of this Agreement, excluding the Hong Kong S.A.R., the Macau Special Administrative Region and the islands of Taiwan.
PRC Anti-Monopoly Bureau means the Anti-Monopoly Bureau of the Ministry of Commerce of the PRC, or any successor thereto.
PRC Anti-Monopoly Law means the PRC Anti-Monopoly Law adopted on August 1, 2008, as amended and the rules,
regulations, orders, notices, guidance notes and other legally binding documents promulgated thereunder, as in effect from time to time.
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PRC Antitrust Clearance means (i) Parent obtaining a Notice of Review
Decision or other document issued by the PRC Anti-Monopoly Bureau approving the Merger pursuant to PRC Anti-Monopoly Law or (ii) the relevant statutory periods for a decision by the PRC Anti-Monopoly Bureau prescribed by the PRC Anti-Monopoly
Law, including any extensions thereof, having expired and no Restraint having been raised or imposed by the PRC Anti-Monopoly Bureau with respect to the Merger that would have a Material Adverse Effect on the Company (except to the extent such
Material Adverse Effect on the Company is deemed acceptable to Parent and Parent Assignee).
Qualified Former Bidder
means (i) any Person or group (the number of which Qualified Former Bidders, other than Parent, being limited to two) that has submitted any Acquisition Proposal prior to the date hereof (it being agreed that the indications of interest dated
April 22, 2014 and April 23, 2014 are each Acquisition Proposals made by Qualified Former Bidders for purposes of this Agreement) and who is referenced in the minutes of the May 9, 2014 meeting of the Board of Directors of the Company
(other than Parent), or (ii) member of a group or Affiliate of a Person or group referred to in clause (i) of this definition.
Registered IP means all issued or registered Intellectual Property and applications therefor.
Release means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge or dispersal
into or through the environment.
SAFE means the State Administration of Foreign Exchange of the PRC or its competent
local counterparts.
SAFE Circular 75 means the Notice Regarding Certain Administrative Measures on Financing and
Inbound Investments by PRC Residents Through Offshore Special Purpose Vehicles issued by SAFE on October 21, 2005 and which became effective as of November 1, 2005, and any implementation, successor rule or regulation related thereto under
the PRC law.
Sarbanes-Oxley Act means the Sarbanes-Oxley Act of 2002.
SEC means the United States Securities and Exchange Commission.
Software means software of any type (including programs, applications, firmware, middleware, libraries, interfaces, systems
and tools), whether in source code or executable code form, data and databases, and related documentation, and all rights in the foregoing.
Subsidiary means, with respect to any Person, any entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons performing similar functions are at any time directly or indirectly owned by such Person.
Tax means any and all taxes or other like assessments or charges of any kind whatsoever imposed by any Governmental
Authority, including, without limitation, taxes or other charges on or with respect to income, franchise, windfall or other profits, gross receipts,
7
property, sales, use, capital stock, payroll, employment (including withholding obligations imposed on employer/payer), social security, workers compensation, unemployment compensation or
net worth, excise, withholding, alternative or add-on minimum, ad valorem, stamp, transfer, value-added or gains taxes, license, registration and documentation fees, customers duties, tariffs and other like assessment or charge of any kind
whatsoever, together with any interest, penalty, addition to tax and additional amounts imposed with respect thereto, whether disputed or not, and including any obligations to indemnify or otherwise assume or succeed to the Tax liability of any
other Person.
Tax Return means any Tax return, statement, report, election, declaration, disclosure, schedule or form
(including any estimated tax or information return or report, claim for refund, or amended return) filed or required to be filed with any Taxing Authority.
Taxing Authority means any governmental authority (domestic or foreign) responsible for the imposition or collection of any
Tax.
Third Party means any Person, including as defined in Section 13(d) of the 1934 Act, other than Parent or
any of its Affiliates.
US Plan means any Employee Plan that is not an International Plan.
Voting Agreement means that certain voting agreement, dated as of the date hereof, among Parent and the Voting
Shareholders.
Voting Shareholders means the shareholders party to the Voting Agreement (other than Parent).
(b) Each of the following terms is defined in the Section set forth opposite such term:
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Term |
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Section |
Acceptable Commitment Letters |
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7.06 |
Acceptable Commitment Letter Default |
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7.06 |
Acceptable Confidentiality Agreement |
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6.03 |
Acceptable Financing Evidence |
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7.06 |
Action |
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4.13 |
Adverse Recommendation Change |
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6.03 |
Alternate Acquisition Agreement |
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6.03 |
Agreement |
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Introduction |
Antitrust Laws |
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8.01 |
Assignment and Assumption Agreement |
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Introduction |
Assumed Share Option |
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2.05 |
Available Funding |
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7.06 |
Bank of China Commitment |
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5.06 |
Bank of China Commitment Letter |
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5.06 |
Benefit Period |
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7.05 |
Cayman Companies Law |
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2.01 |
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Term |
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Section |
Closing |
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2.01 |
Closing Date |
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2.01 |
Commitment Letter Default |
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7.06 |
Commitment Letters |
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7.06 |
Company |
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Introduction |
Company Board Recommendation |
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4.02 |
Company Cash |
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7.06 |
Company Employees |
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7.04 |
Company Preferred Shares |
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4.05 |
Company Related Parties |
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11.04 |
Company Restricted Share |
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2.05 |
Company SEC Documents |
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4.07 |
Company Securities |
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4.05 |
Company Share Awards |
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4.05 |
Company Share Option |
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2.05 |
Company Shareholder Approval |
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4.02 |
Company Shareholder Meeting |
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6.02 |
Company Subsidiary Securities |
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4.06 |
debt |
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5.10 |
Dissenting Shares |
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2.04 |
Distributor Information |
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6.04 |
D&O Insurance |
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7.03 |
Effective Time |
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2.01 |
Employee Plan |
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4.17 |
End Date |
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10.01 |
Escrow Agent |
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6.05 |
Escrow Agreement |
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6.05 |
Excluded Shares |
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2.02 |
Financing |
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7.06 |
Financing Agreements |
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7.06 |
Funding Unavailability Event |
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7.06 |
Indemnified Person |
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7.03 |
Initially Deposited Termination Fee |
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6.05 |
Initially Deposited Reverse Termination Fee |
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7.05 |
Insurance Policies |
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4.19 |
Internal Controls |
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4.07 |
International Trade Laws |
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4.23 |
Intervening Event |
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6.03 |
Joinder Agreement |
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Introduction |
Lease |
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4.14 |
Major Customer |
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4.22 |
Major Supplier |
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4.22 |
Material Contract |
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4.21 |
Maximum Tail Premium |
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7.03 |
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Term |
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Section |
Measurement Date |
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4.05 |
Merger |
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2.01 |
Merger Consideration |
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2.03 |
Merger Documents |
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2.01 |
Merger Subsidiary |
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Introduction |
Multiemployer Plan |
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4.17 |
Necessary IP |
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4.15 |
Notice of Superior Proposal |
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6.03 |
OFAC |
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4.23 |
Option Exchange Ratio |
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2.05 |
Parent |
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Introduction |
Parent Assignee |
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Introduction |
Parent Related Parties |
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11.04 |
Parent Share Value |
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2.05 |
Paying Agent |
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2.03 |
Payment Fund |
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2.03 |
Per Share Merger Consideration |
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2.02 |
Plan of Merger |
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2.01 |
Proxy Statement |
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4.09 |
Qualified Bidder Solicitation Period |
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6.03 |
Remaining Termination Fee Deposit |
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6.05 |
Remaining Reverse Termination Fee Deposit |
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7.05 |
Representatives |
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6.03 |
Restraints |
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9.01 |
Reverse Termination Fee |
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11.04 |
PRC GAAP |
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5.13 |
Share Certificates |
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2.03 |
Solicitation Period |
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6.03 |
Solvent |
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5.10 |
Superior Proposal |
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6.03 |
Surviving Company |
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2.01 |
Termination Fee |
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11.04 |
Uncertificated Shares |
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2.03 |
Vesting Date |
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2.05 |
Section 1.02. Other Definitional and Interpretative Provisions. The words hereof,
herein and hereunder and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Annexes, Exhibits and Schedules are to Articles, Sections, Annexes, Exhibits and Schedules of this Agreement unless otherwise
specified. All Annexes, Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any terms used in
10
any Annex, Exhibit or Schedule or in any certificate or other document made or delivered pursuant hereto but not otherwise defined therein shall have the meaning as defined in this Agreement. The
definition of terms herein shall apply equally to the singular and the plural. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The word will shall be construed to have
the same meaning as the word shall. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the words without limitation,
whether or not they are in fact followed by those words or words of like import. The word extent in the phrase to the extent shall mean the degree to which a subject or thing extends, and shall not mean simply if.
The word or shall not be exclusive. Writing, written and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. Unless otherwise specified,
references to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof; provided that any agreement or contract listed on any schedules hereto must indicate whether such agreement or contract has been amended, modified or supplemented.
References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to law,
laws or to a particular statute or law shall be deemed also to include any Applicable Law. Any references in this Agreement to dollars or $ shall be to U.S. dollars and any references to RMB shall be
to PRC Renminbi. For purposes of measuring the beginning and ending of time periods in this Agreement (including for purposes of Business Day and for hours in a day or Business Day), the time at which a thing, occurrence or event shall
begin or end shall be deemed to occur in the time zone in which the city of Shanghai of the PRC is located. The terms furnished, made available and other similar terms shall mean the inclusion of any documents, agreements and
other instruments made available to Parent and its representatives in the Electronic Data Room, or otherwise delivered or made available to Parent. This Agreement is in the English language, and while this Agreement may be translated into other
languages, the English language version shall control.
ARTICLE 2
The Merger
Section 2.01. The Merger. (a) Upon the terms and subject to the conditions set forth in this Agreement, and in accordance
with the Cayman Islands Companies Law Cap. 22 (Law 3 of 1961, as consolidated and revised) (the Cayman Companies Law), at the Effective Time, Merger Subsidiary will be merged with and into the Company and the separate existence of
Merger Subsidiary shall thereupon cease (the Merger). The Company shall continue its existence under the Cayman Companies Law as the surviving company (within the meaning of the Cayman Companies Law) in the Merger (the
Surviving Company) and shall succeed to and assume all the undertakings, property, assets, rights, privileges, immunities, powers, franchises, debts, liabilities, duties and obligations of Merger Subsidiary and the Company in
accordance with the Cayman Companies Law. The Surviving Company shall be liable for and subject, in the same manner as Merger Subsidiary immediately prior to the Effective Time, to all credit agreements, mortgages, charges or security interests and
all contracts, obligations, claims, debts and liabilities of Merger Subsidiary.
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(b) Subject to the provisions of Article 9, the closing of the Merger (the
Closing) shall take place at the offices of OMelveny & Myers, Plaza 66, Tower 1, 37th Floor, 1266 Nanjing Road West, Shanghai 200040, Peoples Republic of China at 10:00 a.m. Shanghai time, as soon as possible,
but in any event no later than seven (7) Business Days after the date the conditions set forth in Article 9 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent
permissible, waiver of those conditions at the Closing) have been satisfied or, to the extent permissible, waived by the party or parties entitled to the benefit of such conditions; provided, however, that after the date that is two
(2) Business Days after the date the conditions set forth in Article 9 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permissible, waiver of those conditions at
the Closing) have been satisfied or, to the extent permissible, waived by the party or parties entitled to the benefit of such conditions, neither Parent, Parent Assignee nor Merger Subsidiary shall have any right to terminate, and shall not
terminate, this Agreement pursuant to the terms hereof (including Article 10) or otherwise, or have any right to claim, or claim, that any of the conditions set forth in Article 9 have not been satisfied (other than conditions that by their nature
are to be satisfied at the Closing), or at such other place, at such other time or on such other date as Parent and the Company may mutually agree (the Closing Date).
(c) Subject to the provisions of this Agreement, on the Closing Date, Parent, Merger Subsidiary and the Company will duly execute and file a
plan of merger, in the form attached as Exhibit A (the Plan of Merger) and other documents required to effect the Merger by the Cayman Companies Law with the Registrar of Companies of the Cayman Islands as provided in
Section 233 of the Cayman Companies Law (together, the Merger Documents). The Merger will become effective when the Merger Documents have been duly filed with the Registrar of Companies of the Cayman Islands or on such
subsequent date as Merger Subsidiary and the Company shall agree and specify in the Merger Documents in accordance with the Cayman Companies Law (the date and time the Merger becomes effective, the Effective Time).
(d) The Merger shall have the effects specified in the Cayman Companies Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, the Surviving Company shall succeed to and assume all the rights, property of every description, including choses in action, and the business, undertaking, goodwill, benefits, immunities and privileges, mortgages,
charges or security interests and all contracts, obligations, claims, debts and liabilities of Merger Subsidiary and the Company in accordance with the Cayman Companies Law.
Section 2.02. Conversion of Shares. At the Effective Time, by virtue of the Merger and without any action on the part of the
Company, Parent, Parent Assignee, Merger Subsidiary, any holder of any shares in the share capital of the Company or any other Person:
(a) except as otherwise provided in Section 2.02(b) or Section 2.04, each Company Share issued and outstanding immediately prior to
the Effective Time, other than Company
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Shares issued and outstanding immediately prior to the Effective Time that are owned by Parent, Parent Assignee, Merger Subsidiary, or any Subsidiary of the Company or Parent, or by the Company
as treasury shares (if applicable) (collectively, Excluded Shares) and, subject to Section 2.04, Dissenting Shares, shall be cancelled and converted into the right to receive $22.60 in cash per Company Share, without interest
(the Per Share Merger Consideration) payable in the manner provided in Section 2.03 subject to the terms and conditions set forth in this Agreement, and shall cease to exist and no longer be outstanding, and each holder
thereof shall cease to have any rights with respect thereto other than the right to receive the Per Share Merger Consideration without interest, upon surrender of the Share Certificate (if any) representing such share in accordance with
Section 2.03.
(b) each Company Share held by the Company as treasury stock or owned by Parent, Parent Assignee or Merger Subsidiary
or any Subsidiary of the Company or Parent immediately prior to the Effective Time shall be canceled, and no payment shall be made with respect thereto;
(c) each ordinary share of Merger Subsidiary outstanding immediately prior to the Effective Time shall be converted into and become one
ordinary share, par value $0.0125 per share, of the Surviving Company with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding capital shares of the Surviving Company;
(d) each Excluded Share shall, by virtue of the Merger and without any action on the part of the holders thereof, be cancelled and shall cease
to exist, and no consideration shall be delivered or deliverable in exchange therefor; and
(e) without limiting the other provisions of
this Agreement, if, at any time during the period between the date hereof and the Effective Time, any change in the outstanding capital shares of the Company shall occur by reason of any reclassification, recapitalization, share split (including
reverse share split) or combination, exchange or readjustment of shares, or any share dividend or distribution paid in share, the Per Share Merger Consideration and any other amounts payable pursuant to this Agreement shall be appropriately adjusted
to reflect such reclassification, recapitalization, share split (including reverse share split) or combination, exchange or readjustment of shares, or any share dividend or distribution paid in share and to provide to the holders of Company Shares
and Company Share Options the same economic effect as contemplated by this Agreement prior to such action.
Section 2.03.
Surrender and Payment. (a) Prior to the Effective Time, Parent shall appoint Citibank, N.A. in New York, New York or such other bank or trust company that may be designated by Parent and is reasonably satisfactory to the Company (such
consent not to be unreasonably withheld, conditioned or delayed) to act as agent (the Paying Agent) to receive the funds to which shareholders of the Company will become entitled pursuant to Section 2.02(a), Section 2.04
(in the case of Section 2.04, when ascertained) and Section 2.05 (collectively, the Merger Consideration) and Parent will enter into a paying agent agreement with the Paying Agent, in form and substance reasonably
acceptable to the Company. At or prior to the Effective Time or in the case of payments pursuant to Section 2.04, when ascertained, Parent shall deposit, or cause to be deposited, with the Paying Agent, for the benefit of the holders of Company
Shares, cash in an amount sufficient to pay the Merger Consideration (such
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cash being hereinafter referred to as the Payment Fund). The Payment Fund shall, pending its disbursement to the holders of Company Shares, be invested by the Paying Agent as
directed by Parent or, after the Effective Time, the Surviving Company in (i) short-term direct obligations of the United States of America, (ii) short-term obligations for which the full faith and credit of the United States of America is
pledged to provide for the payment of principal and interest, (iii) short-term commercial paper rated the highest quality by either Moodys Investors Service, Inc. or Standard and Poors Ratings Services, or (iv) certificates of
deposit, bank repurchase agreements or bankers acceptances of commercial banks reasonably acceptable to the Company; provided that no such investment or losses shall affect the amounts payable to such holders of Company Shares and Parent shall
promptly replace or cause to be replaced any funds deposited with the Paying Agent that are lost through any investment so as to ensure that the Payment Fund is at all times maintained at a level sufficient for the Paying Agent to pay the Merger
Consideration. Earnings from investments, subject to the immediately preceding proviso, shall be paid to and shall be the sole and exclusive property of Parent and the Surviving Company. Except as contemplated by Section 2.03(d) hereof, the
Payment Fund shall not be used for any other purpose.
(b) As promptly as practicable after the Effective Time (and in any event within
five (5) Business Days in the case of record holders and three (3) Business Days in the case of The Depository Trust Company on behalf of beneficial holders holding through brokers, nominees, custodians or through a third party), the
Surviving Company shall cause the Paying Agent to mail, and The Depository Trust Company to deliver, to each Person who was, at the Effective Time, a registered holder of Company Shares entitled to receive the Per Share Merger Consideration pursuant
to Section 2.02: (i) a letter of transmittal (which shall be in customary form for a company incorporated in the Cayman Islands reasonably acceptable to Parent and the Company, and shall specify the manner in which the delivery of the
Payment Fund to registered holders of Company Shares shall be effected and contain such other provisions as Parent and the Company may reasonably agree); and (ii) instructions for use in effecting the surrender of any issued share certificates
representing Company Shares (the Share Certificates) (or affidavits and indemnities of loss in lieu of the Share Certificates as provided in Section 2.06) and/or such other documents as may be required in exchange for the Per
Share Merger Consideration. Upon surrender of, if applicable, a Share Certificate (or affidavit and indemnity of loss in lieu of the Share Certificate as provided in Section 2.06) and/or such other documents as may be required pursuant to such
instructions to the Paying Agent in accordance with the terms of such letter of transmittal, duly executed in accordance with the instructions thereto, each registered holder of Company Shares represented by such Share Certificate and each
registered holder of Company Shares which are not represented by a Share Certificate (the Uncertificated Shares) shall be entitled to receive in exchange therefor a check, in the amount equal to (y) the number of Company
Shares represented by such Share Certificate (or affidavit and indemnity of loss in lieu of the Share Certificate as provided in Section 2.06) or the number of Uncertificated Shares multiplied by (z) the Per Share Merger Consideration, and
the Share Certificate so surrendered shall forthwith be marked as cancelled. No interest shall be paid or will accrue on any amount payable in respect of the Company Shares pursuant to the provisions of this Article 2. In the event of a transfer of
ownership of Company Shares that is not registered in the register of members of the Company, a check for any cash to be exchanged upon due surrender of the Share
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Certificate may be issued to such transferee if the Share Certificates, if any, which immediately prior to the Effective Time represented such Company Shares are presented to the Paying Agent,
accompanied by all documents reasonably required to evidence and effect such transfer and to evidence that any applicable share transfer taxes have been paid or are not applicable.
(c) If any portion of the Merger Consideration is to be paid to a Person other than the Person in whose name the surrendered Share Certificate
or the transferred Uncertificated Share is registered, it shall be a condition to such payment that (i) either such Share Certificate shall be properly endorsed or shall otherwise be in proper form for transfer or such Uncertificated Share
shall be properly transferred and (ii) the Person requesting such payment shall pay to the Paying Agent any transfer or other taxes required as a result of such payment to a Person other than the registered holder of such Share Certificate or
Uncertificated Share or establish to the satisfaction of the Paying Agent that such tax has been paid or is not payable.
(d) At any time
following the date that is nine months after the Closing Date, the Surviving Company will be entitled to require the Paying Agent to deliver to it any funds in the Payment Fund that had been made available to the Paying Agent and not disbursed to
holders of Company Shares (including all interest and other income received by the Paying Agent in respect of all funds made available to it), and thereafter such holders who have not complied with this Article 2 and received the Per Share Merger
Consideration therefor shall thereafter look only to the Surviving Company for the cash to which they are entitled pursuant to Section 2.02(a), Section 2.04 and Section 2.05 and, subject to applicable abandoned property, escheat and
other similar Laws, receive in consideration therefor the aggregate Per Share Merger Consideration that may be payable upon compliance by that holder of the procedures set forth in Section 2.03(b) relating to delivery by such holder of evidence
of such Company Shares, without interest or dividends thereon.
(e) After the Effective Time, there shall be no further registration of
transfers of Company Shares. If, after the Effective Time, Share Certificates, Uncertificated Shares are presented to the Surviving Company or the Paying Agent, they shall be canceled and exchanged for the Merger Consideration provided for, and in
accordance with the procedures set forth, in this Article 2.
(f) The Per Share Merger Consideration paid upon the delivery of a Share
Certificate (if any) in accordance with the terms of this Agreement will be deemed to have been paid in full satisfaction of all rights pertaining to the Company Shares formerly represented by such Share Certificate.
(g) To the fullest extent permitted by Applicable Law, none of Parent, Merger Subsidiary, the Company, the Surviving Company, or the Paying
Agent will be liable to any shareholders of the Company in respect of any cash properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar laws. Any portion of the Payment Fund remaining unclaimed by
shareholders of the Company as of a date that is immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Authority will, to the extent permitted by Applicable Law, become the property of
Parent free and clear of any claims or interest of any Person previously entitled thereto.
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(h) Remittances for the Per Share Merger Consideration shall not be sent to Company shareholders
who are untraceable unless and until, except as provided below, they notify the Paying Agent of their current contact details prior to the Effective Time. A holder of Company Shares will be deemed to be untraceable if (i) it had no registered
address in the register of members (or branch register) maintained by the Company, or (ii) on the last two consecutive occasions on which a dividend has been paid by the Company a cheque payable to such holder either (A) has been sent to
such holder and has been returned undelivered or has not been cashed or (B) has not been sent to such holder because on an earlier occasion a cheque for a dividend so payable has been returned undelivered, and in any such case no valid claim in
respect thereof has been communicated in writing to the Company, or (iii) notice of the Company Shareholder Meeting convened to vote on the Merger has been sent to such holder and has been returned undelivered. Monies due to Dissenting
Shareholders and shareholders of the Company who are untraceable shall be returned to the Surviving Company on demand and held in a non-interest bearing bank account for the benefit of Dissenting Shareholders and shareholders of the Company who are
untraceable. Monies unclaimed after a period of seven years from the date of the notice of the Company Shareholder Meeting shall be forfeited and shall revert to the Surviving Company. Dissenting Shareholders and shareholders of the Company who are
untraceable and who subsequently request payment of any monies otherwise payable in respect of the Merger within applicable time limits or limitation periods will be advised to contact the Surviving Company.
(i) Parent, Merger Subsidiary and the Company agree that the Per Share Merger Consideration represents the fair value of the Company Shares
for the purposes of Section 238(8) of the Cayman Companies Law.
Section 2.04. Dissenting Shares. No shareholder who has
validly exercised its appraisal and dissention rights pursuant to Section 238 of the Cayman Companies Law shall be entitled to receive the Per Share Merger Consideration as provided for in Section 2.02 with respect to the Company
Shares owned by such shareholder (the Dissenting Shares) unless and until such shareholder shall have effectively withdrawn or lost such shareholders appraisal and dissention rights under the Cayman Companies Law. Any such
shareholder shall instead be entitled to receive only the payment of the fair value resulting from the procedure in Section 238 of the Cayman Companies Law with respect to such shareholders Dissenting Shares, and such Dissenting Shares
shall be cancelled at the Effective Time. The Company shall give Parent (A) prompt notice of any demands for appraisal, attempted withdrawals of such demands, and any other instruments served pursuant to Applicable Law that are received by the
Company relating to Company shareholders rights of dissention, and (B) the opportunity to participate in all negotiations and proceedings with respect to demand for determining the fair value of the Dissenting Shares under the Cayman
Companies Law. Notwithstanding the foregoing, all Dissenting Shares held by any shareholder who shall have failed to validly exercise its appraisal and dissention rights, or withdrawn or lost such shareholders rights of dissention of such
Dissenting Shares under Section 238 of the Cayman Companies Law, shall thereupon (i) not be deemed to be Dissenting Shares and (ii) be deemed to have been cancelled and converted into, and to have become exchanged for, as of the
Effective Time, the right to receive the Per Share Merger Consideration in the manner provided in Section 2.03.
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Section 2.05. Company Equity Awards. (a) At or immediately prior to the
Effective Time, each option to purchase Company Shares outstanding at such time under any Company Share Plan (a Company Share Option), whether vested or unvested, shall be assumed by Parent Assignee and converted into an option
(each, an Assumed Share Option) to purchase a number of Parent Ordinary Shares (rounded down to the nearest whole share) equal to the product of the number of Company Shares subject to such Company Share Option immediately prior
to the Effective Time multiplied by the Option Exchange Ratio. The per-share exercise price for the Parent Ordinary Shares issuable upon exercise of such Assumed Share Option shall be equal (rounded up to the nearest whole cent) to the exercise
price per Company Share applicable to such Company Share Option immediately prior to the Effective Time divided by the Option Exchange Ratio. Except as provided above, each Assumed Share Option shall be subject to the same terms and conditions
(including expiration date, vesting and exercise provisions) as were applicable to the corresponding Company Share Option immediately prior to the Effective Time, subject to compliance with Applicable Laws, including compliance with SAFE
requirements. As soon as practicable after the Effective Time, Parent Assignee shall deliver to the holder of each Assumed Share Option appropriate notices setting forth the number of Parent Ordinary Shares subject to such Assumed Share Option then
held by such holder and the exercise price under each such Assumed Share Option, each as adjusted pursuant to this Section 2.05(a). For purposes of this Agreement, Option Exchange Ratio means the ratio of (x) the Per
Share Merger Consideration to (y) the Parent Share Value, and the Parent Share Value means the fair market value of a Parent Ordinary Share at the Effective Time as reasonably determined by the Company and Parent prior to the
Closing; provided that the Company and Parent hereby agree that such fair market value will be determined based upon the implied value of Parent Assignee (taking into account the implied value of the Surviving Company based on the Merger
Consideration). At least ten (10) Business Days prior to the Closing, the Company shall deliver a notice to the holders of Company Share Options that will be vested as of immediately prior to the Effective Time permitting such holders of vested
Company Share Options that have a per-share exercise price less than the Per Share Merger Consideration to elect to cancel such vested Company Share Options in exchange for the right to receive cash payment, subject to applicable tax withholding,
equal to the product of (x) the total number of Company Shares subject to such vested Company Share Option (or such lesser number of shares as such holder may elect), multiplied by (y) the excess of the amount of the Per Share Merger
Consideration over the exercise price per share of such vested Company Share Option (with the aggregate amount of such payment rounded to the nearest whole cent), with such cancellation to be effective upon and only upon the Closing, subject to the
Company delivering such elections to Parent Assignee at least five (5) Business Days prior to the Closing.
(b) At or immediately
prior to the Effective Time, each Company Share that is then outstanding and subject to vesting or other lapse restrictions under any Company Share Plan (each, a Company Restricted Share) shall be cancelled in exchange for the
right to receive, upon the date on which such Company Restricted Share would have vested following the Effective Time in accordance with the provisions of the award agreement that evidences such Company Restricted Share (each such date, a
Vesting Date), a cash payment (subject to all applicable withholding) equal to the Per Share Merger Consideration.
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(c) Prior to the Effective Time, the Board of Directors of the Company (or, if appropriate, any
committee thereof administering any Company Share Plan) shall adopt such resolutions or take action by written consent in lieu of a meeting, providing for (i) the termination of the Company Share Plans, and any relevant award agreements
applicable to the Company Share Plans, as of the Effective Time (except to the extent such Company Share Plans and award agreements provide terms and conditions applicable after the Effective Time to the Assumed Share Options and the rights to
receive cash payments in respect of Company Restricted Shares), (ii) the assumption or cancellation, as applicable, of each Company Share Award that is outstanding and unexercised, whether or not vested or exercisable, as of the Effective Time
in accordance with the provisions of this Section 2.05, and (iii) the effectuation of the transactions contemplated by this Section 2.05. From and after the Effective Time, neither Parent Assignee nor the Surviving Company shall be
required to issue any Company Shares, other share capital of the Company or the Surviving Company or any other consideration (other than required by this Section 2.05) to any person pursuant to or in settlement of any Company Share Award.
Promptly following the date hereof, the Company shall deliver written notice to each holder of a Company Share Award informing such holder of the effect of the Merger on its Company Share Awards.
Section 2.06. Lost Certificates. If any Share Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Share Certificate to be lost, stolen or destroyed and, if required by the Surviving Company, the posting by such Person of a bond, in such reasonable amount as the Surviving Company may direct, as
indemnity against any claim that may be made against it with respect to such Share Certificate, the Paying Agent will issue, in exchange for such lost, stolen or destroyed Share Certificate, the Merger Consideration to be paid in respect of the
shares of Company Share represented by such Share Certificate, as contemplated by this Article 2.
Section 2.07. Withholding
Taxes. Notwithstanding anything to the contrary contained in this Agreement, the Parent and its Affiliates, and any other Person that has a payment obligation pursuant to this Agreement, shall be entitled to deduct and withhold from any amount
payable pursuant to this Agreement such amounts that are required to be deducted and withheld with respect to the making of such payment under the Code, or under any provision of state, local or non-U.S. Tax Law. The withheld amounts shall be paid
over to the appropriate Taxing Authority and treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.
Section 2.08. Formation of Parent Assignee and Merger Subsidiary. As soon as reasonably practicable after the date of this
Agreement, Parent shall cause Parent Assignee and Merger Subsidiary to be formed as exempted companies under the laws of the Cayman Islands and shall immediately thereafter (a) cause Merger Subsidiary and Parent Assignee to join this Agreement
by signing the Joinder Agreement and (b) Parent shall, subject to the provisions of this Section 2.08, assign, and cause Parent Assignee to assume, all rights of Parent under this Agreement by signing the Assignment and Assumption
Agreement, provided that Parent shall
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not be relieved of any of its obligations under and pursuant to this Agreement, and shall remain responsible for all representations, warranties, liabilities, covenants, agreements and any other
obligations under and pursuant to the terms of this Agreement. As soon as reasonably practicable following the formation of Parent Assignee and Merger Subsidiary, Parent will make available to the Company the memorandum and articles of association
of Parent Assignee and Merger Subsidiary as then currently in effect. Parent shall take such actions as are necessary, proper and advisable to cause the board of directors of Parent Assignee and Merger Subsidiary to approve this Agreement and to
cause the shareholder(s) of Parent Assignee and Merger Subsidiary to approve the execution, delivery and performance of this Agreement, and the Joinder Agreement and the Assignment and Assumption Agreement, as applicable, the approval and
authorization of the Plan of Merger and the consummation of the Transactions by Merger Subsidiary and Parent Assignee and, if required, proper or advisable, Parent shall cause the board of directors of Merger Subsidiary to approve, and the Company
Board shall approve, the Plan of Merger in the form to be filed with the Registrar as contemplated by Section 2.01(b) with such changes as necessary, proper or appropriate in connection with the formation of Merger Subsidiary and in any case
consistent with the terms of this Agreement. (i) The obligations of Parent Assignee and Merger Subsidiary to perform its covenants under this Agreement, and of Parent to cause Parent Assignee or Merger Subsidiary to take any actions, shall
commence only at the time Merger Subsidiary so joins this Agreement or Parent Assignee so assumes the rights of Parent under this Agreement, as the case may be, and (ii) each representation and warranty made by or with respect to Parent
Assignee and Merger Subsidiary shall be deemed not made until Parent Assignee assumes the rights and obligations under this Agreement or Merger Subsidiary joins this Agreement, respectively and any references to the date of this Agreement with
respect thereto shall refer to the date of Parent Assignees assumption or Merger Subs joinder, respectively. Notwithstanding any other provision of this Agreement to the contrary, including this Section 2.08, Parent agrees and
acknowledges that Parent shall remain a party hereto and that Parent, Parent Assignee and Merger Subsidiary shall be jointly and severally responsible and liable for all representations, warranties, liabilities, covenants, agreements and any other
obligations under and pursuant to the terms of this Agreement, and for the avoidance of doubt Parent shall not be relieved of any of its obligations under and pursuant to this Agreement. Notwithstanding any other provision in this Agreement to the
contrary, Parent, Parent Assignee, Merger Subsidiary and their respective assigns understand and agree that no assignment by Parent of its rights under this Agreement to Parent Assignee or otherwise, or the joinder of Parent Assignee or Merger
Subsidiary to this Agreement in accordance with the terms hereof, shall be the basis for a claim that the Company has breached any of its representations, warranties, covenants, agreements or other obligations under this Agreement, or a claim that
any of the conditions set forth in Article 9 have not been satisfied.
ARTICLE 3
The Surviving Company
Section 3.01. Memorandum and Articles of Association. At the Effective Time, the memorandum and articles of association of the
Merger Subsidiary, as in effect immediately prior to the Effective Time, shall be the memorandum and articles of association of the Surviving Company until thereafter amended as provided by Applicable Law and such memorandum and articles of
association; provided, however, that, at the Effective Time, Article I of the memorandum of association of the Surviving Company shall be amended to read as follows: The name of the corporation is Montage Technology Group Limited.
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Section 3.02. Directors and Officers. From and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with Applicable Law, (i) the directors of Merger Subsidiary at the Effective Time shall be the directors of the Surviving Company and (ii) the officers of the Company at
the Effective Time shall be the officers of the Surviving Company.
ARTICLE 4
Representations and Warranties of the Company
Subject to Section 11.05, except as disclosed in the Company SEC Documents filed before the date of this Agreement (excluding statements
in any Risk Factors or Forward-Looking Statements or other statements that are cautionary, predictive or forward-looking in nature) or as set forth in the corresponding sections of the Company Disclosure Schedule, the Company
represents and warrants to Parent that:
Section 4.01. Corporate Existence and Power. (a) The Company is an exempted
company duly incorporated, validly existing and in good standing under the Laws of the Cayman Islands. The Company has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its
business as currently conducted, except for those powers, licenses, authorizations, permits, consents and approvals the absence of which would not have a Material Adverse Effect on the Company. The Company is duly qualified to do business as a
foreign corporation and (where applicable) is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified would not have a Material Adverse Effect on the Company.
(b) Complete and correct copies of the Memorandum and Articles have been made available through filings with the SEC. The Memorandum and
Articles are in full force and effect as of the date hereof. The Company is not in violation of any of the provisions of the Memorandum and Articles in any material respect.
Section 4.02. Corporate Authorization. (a) The execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby are within the Companys corporate powers and, except for the required approval of the Companys shareholders in connection with the consummation of the Merger, have been
duly authorized by all necessary corporate action on the part of the Company. A special resolution of the members of the Company passed by a majority of at least two-thirds of the votes cast, of such members being entitled to do so, by vote in
person or, where proxies are allowed, by proxy at the Company Shareholder Meeting in accordance with Section 233(6) of the Cayman Companies Law is the only vote of the holders of any of the Companys capital shares necessary in connection
with the consummation of the Merger (the Company Shareholder Approval). Assuming due authorization, execution and delivery by Parent, Parent Assignee and Merger Subsidiary, this Agreement constitutes a valid and binding agreement
of the Company enforceable against the Company in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors rights generally and general
principles of equity).
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(b) At a meeting duly called and held, the Companys Board of Directors has
(i) determined that this Agreement, the Merger and the other transactions contemplated by this Agreement are fair to, and in the best interests of, the shareholders of the Company and the Company, (ii) approved this Agreement, the Merger
and the other transactions contemplated by this Agreement, and (iii) resolved, subject to Section 6.03, to recommend authorization and approval of the Merger, the Plan of Merger and this Agreement by the shareholders of the Company (such
recommendation, the Company Board Recommendation).
Section 4.03. Governmental Authorization. The
execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority, other than
(a) the filing of the Merger Documents with the Registrar of Companies of the Cayman Islands pursuant to the Cayman Companies Law, (b) compliance with any applicable requirements of the 1933 Act, the 1934 Act and any other applicable state
or federal securities laws, (c) compliance with any applicable rules of NASDAQ, (d) the Parent Required Approvals and PRC Antitrust Clearance, and (e) any actions or filings the absence of which would not have a Material Adverse
Effect on the Company.
Section 4.04. Non-contravention. The execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby do not and will not (a) subject to receipt of the Company Shareholder Approval, contravene, conflict with, or result in any violation or breach of any provision of the
Memorandum and Articles, (b) assuming compliance with the matters referred to in Section 4.03, contravene, conflict with or result in a violation or breach of any provision of any Applicable Law, (c) assuming compliance with the
matters referred to in Section 4.03, require any consent, notice or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause or permit
the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Company or any of its Subsidiaries is entitled under any provision of any agreement or other instrument binding upon the
Company or any of its Subsidiaries or (d) result in the creation or imposition of any Lien (other than Permitted Liens) on any asset of the Company or any of its Subsidiaries, with only such exceptions, in the case of each of clauses
(b) through (d), as would not have a Material Adverse Effect on the Company.
Section 4.05. Capitalization. (a) The
authorized share capital of the Company consists of 200,000,000 Company Shares and the Company is authorized to issue preferred shares, $0.0125 par value per share, of the Company (Company Preferred Shares). As of May 26,
2014 at 5:00 p.m. (Shanghai, PRC time) (the Measurement Date), there were (i) 28,200,884 shares of Company Shares outstanding (which number includes all outstanding Company Restricted Shares), (ii) an aggregate of
3,929,896 Company Shares subject to outstanding Company Share Options and (iii) no Company Preferred Shares outstanding. All outstanding shares of the Company have been, and all shares that may be issued pursuant to any Company Share Plans or
other Employee Plan will be, when issued in accordance with the respective terms thereof, duly authorized, validly issued and fully paid.
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(b) All outstanding shares of the Company have been, and all shares that may be issued pursuant
to any Company Share Plans or other Employee Plan will be, when issued in accordance with the respective terms thereof, duly authorized, validly issued and fully paid.
(c) Except as set forth in this Section 4.05 and for changes since the Measurement Date resulting from the exercise of Company Share
Options outstanding as of the Measurement Date, there are no issued, reserved for issuance or outstanding (i) capital shares or other voting securities of or ownership interests in the Company, (ii) securities of the Company convertible
into or exchangeable for capital shares or other voting securities of or ownership interests in the Company, (iii) warrants, calls, options or other rights to acquire from the Company, or other obligation of the Company to issue, any capital
shares, voting securities or securities convertible into or exchangeable for capital shares or voting securities of the Company or (iv) restricted shares, share appreciation rights, performance units, contingent value rights,
phantom stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital shares of or voting securities of the Company (the items in clauses
(i) through (iv) being referred to collectively as the Company Securities). Neither the Company nor any of its Subsidiaries is a party to any voting agreement with respect to the voting of any Company Securities. There
are no Contracts of the Company or any of its Subsidiaries to purchase, redeem or otherwise acquire any Company Securities or other equity interests in the Company or any of its Subsidiaries or to provide funds to, or make any investment (in the
form of a loan, capital contribution or otherwise) in, the Company or any of its Subsidiaries or any other Person.
(d) Except as set
forth in this Section 4.05, no (i) capital shares of the Company or (ii) Company Securities are owned by any Subsidiary of the Company.
(e) The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or
convertible into or exercisable for securities having the right to vote) with the shareholders of the Company on any matter.
(f) Subject
to limitations imposed by Applicable Law, the Company and each of its Subsidiaries has the unrestricted right to vote, and to receive dividends and distributions on, all equity securities of their respective Subsidiaries.
(g) Section 4.05(g) of the Company Disclosure Schedule sets forth the following information with respect to each Company Share Option and
Company Restricted Share (collectively, the Company Share Awards) outstanding as of the Measurement Date: (i) the name and relationship to the Company of the recipient of such Company Share Award, (ii) the particular
Company Share Plan pursuant to which such Company Share Award was granted, (iii) the number of Company Shares subject to such Company Share Award, (iv) the exercise or purchase price of such Company Share Award, (v) the date on which
such Company Share Award was granted, (vi) the applicable conditions on vesting, including applicable performance criteria (if any) and vesting schedule, (vii) the date of which such Company Share Award
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expires, (viii) whether the exercisability of or right to repurchase such Company Share Award will be
accelerated in any way by the transactions contemplated by this Agreement, and the extent of such acceleration, and (ix) any other material terms and conditions of such Company Share Award (to the extent such terms materially differ from the
applicable form of award agreement made available to Parent). Each grant of the Company Share Options and the Company Restricted Shares was properly approved by the Board of Directors of the Company (or a duly authorized committee or subcommittee
thereof) and issued in compliance with all Applicable Laws, and all requirements set forth in the applicable Company Share Plan, and the per share exercise price of each Company Share Option was equal or greater than the fair market value (within
the meaning of Section 422 of the Code, in the case of each Company Share Option intended to be qualified as an incentive stock option, and within the meaning of Section 409A of the Code, in each case of each Company Share
Option awarded to a person subject to United States Tax Laws.
(h) The Company has made available to Parent accurate and correct copies of
(i) the Company Share Plans pursuant to which the Company has granted the Company Share Options and Company Restricted Shares that are currently outstanding, (ii) the form of all award agreements evidencing such Company Share Options and
Company Restricted Shares and (iii) any award agreements evidencing any Company Share Options or Company Restricted Shares with terms that are materially different from those set forth in the form of award agreement.
Section 4.06. Subsidiaries. (a) Section 4.06(a) of the Company Disclosure Schedule sets forth a complete and correct
list, as of the date of this Agreement, of each Subsidiary of the Company and its place and form of organization and any other Person in which any of the Company or its Subsidiaries own any material equity interest, together with (i) the
jurisdiction of organization of each such Subsidiary or Person, (ii) the outstanding issued share capital or registered capital, as the case may be, of each such Subsidiary or Person, and (iii) a list of shareholders or other equity
holders of, and their respective percentages ownership in, each such Subsidiary or Person. Except for the capital shares or other voting securities of, or ownership interests in, its Subsidiaries, there are no other Persons in which the Company or
any of its Subsidiaries controls or owns, of record or beneficially, any direct or indirect equity or other interest or right (contingent or otherwise) to acquire the same, and neither the Company or any of its Subsidiaries is a participant in (nor
is any part of their businesses conducted through) any joint venture, partnership, strategic alliance, or contract the primary purpose of which is a profit, loss, risk or revenue sharing arrangement, that is material to the business of the Company
and its Subsidiaries, taken as a whole.
(b) Each Subsidiary of the Company has been duly organized, is validly existing and (where
applicable) in good standing under the laws of its jurisdiction of organization and has all organizational powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as currently
conducted, except for those powers, licenses, authorizations, permits, consents and approvals the absence of which would not have a Material Adverse Effect on the Company. Each such Subsidiary is duly qualified to do business as a foreign entity and
(where applicable) is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified would not have a Material Adverse Effect on the Company.
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(c) The Company has heretofore furnished to Parent a complete and correct copy of the memorandum
and articles of association or equivalent organizational documents, each as amended or modified as of the date hereof, of each of its Subsidiaries. Such memorandum and articles of association or equivalent organizations documents are in full force
and effect as of the date hereof. None of the Subsidiaries of the Company are in violation of any of the provisions of its memorandum and articles of association or equivalent organizational documents in any material respect.
(d) All of the outstanding capital shares of or other voting securities of, or ownership interests in, each Subsidiary of the Company, is
owned by the Company, directly or indirectly, free and clear of any Lien (other than Permitted Liens) and free of any transfer restriction (other than transfer restrictions of general applicability as may be provided under the 1933 Act or other
applicable securities laws), including any restriction on the right to vote, sell or otherwise dispose of such capital shares or other voting securities or ownership interests. There are no issued, reserved for issuance or outstanding
(i) securities of the Company or any of its Subsidiaries convertible into, or exchangeable for, capital shares or other voting securities of, or ownership interests in, any Subsidiary of the Company, (ii) warrants, calls, options or other
rights to acquire from the Company or any of its Subsidiaries, or other obligations of the Company or any of its Subsidiaries to issue, any capital shares or other voting securities of, or ownership interests in, or any securities convertible into,
or exchangeable for, any capital shares or other voting securities of, or ownership interests in, any Subsidiary of the Company or (iii) restricted shares, share appreciation rights, performance units, contingent value rights,
phantom shares or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital shares or other voting securities of, or ownership interests in, any
Subsidiary of the Company (the items in clauses (i) through (iii) being referred to collectively as the Company Subsidiary Securities). There are no outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any of the Company Subsidiary Securities.
Section 4.07. SEC Filings and the
Sarbanes-Oxley Act. (a) The Company has filed with or furnished to the SEC all reports, schedules, forms, statements, prospectuses, registration statements and other documents required to be filed with or furnished to the SEC by the Company
since September 25, 2013 (collectively, together with any exhibits and schedules thereto and other information incorporated therein, and together with any such documents that are voluntarily filed or furnished by the Company with the SEC, the
Company SEC Documents).
(b) No Subsidiary of the Company is required to file or furnish any report, statement,
schedule, form or other document with, or make any other filing with, or furnish any other material to, the SEC.
(c) As of its filing
date (or, if amended or superseded by a filing prior to the date hereof, on the date of such filing), each Company SEC Document filed (i) did not contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances under which they were made, not misleading and (ii) complied as to the form in all material respects with the requirements of the 1933 Act or the 1934 Act, as the case
may be, and rules and regulations promulgated thereunder, each as in effect on the date so filed or effective.
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(d) Each Company SEC Document that is a registration statement, as amended or supplemented, if
applicable, filed pursuant to the 1933 Act, as of the date such registration statement or amendment became effective, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(e) The Company and each of its officers are in compliance in all material
respects with the applicable provisions of the Sarbanes-Oxley Act. The management of the Company has, in material compliance with Rule 13a-15 under the 1934 Act, designed disclosure controls and procedures to ensure that material information
relating to the Company, including its consolidated Subsidiaries, is made known to the management of the Company by others within those entities, and disclosed, based on its most recent evaluation prior to the date hereof, to the Companys
auditors and the audit committee of the Companys Board of Directors (A) any significant deficiencies in the design or operation of internal control over financial reporting (Internal Controls) which would adversely
affect the Companys ability to record, process, summarize and report financial data and have identified for the Companys auditors any material weaknesses in Internal Controls and (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Companys Internal Controls.
(f) Since January 1, 2014, the
Company and its Subsidiaries have established and maintained a system of internal control over financial reporting (as defined in Rule 13a-15 under the 1934 Act) sufficient to provide reasonable assurance regarding the reliability of the
Companys financial reporting and the preparation of Company financial statements for external purposes in accordance with GAAP. The Company has disclosed, based on its most recent evaluation of internal control over financial reporting prior
to the date hereof, to the Companys auditors and audit committee (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the Companys ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in internal control over
financial reporting. The Company has made available to Parent a summary of any such disclosure made by management to the Companys auditors and audit committee since January 1, 2014.
(g) Since September 25, 2013, the Company has complied in all material respects with the applicable listing and corporate governance
rules and regulations of NASDAQ.
(h) The Company is a Foreign Private Issuer as defined in Section 240.3b-4 of the 1934 Act.
(i) Since September 25, 2013, neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director,
officer, employee, auditor, accountant or representative of the Company or any Subsidiary, has received or otherwise been made aware of any material complaint, allegation, assertion or claim, whether written or oral, regarding the
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accounting or auditing procedures, methodologies or methods of the Company or any of its Subsidiaries or their respective internal accounting controls, including any material complaint,
allegation, assertion or claim that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices. To the knowledge of the Company, no attorney representing the Company or any of its Subsidiaries, whether or not
employed by the Company or any of its Subsidiaries, has reported any evidence of any material violation of securities laws, breach of fiduciary duty or similar violation by the Company or any Subsidiary or any of their officers or directors, in each
case, in such capacities, to the Company Board or any committee thereof or to any director or officer of the Company or any of its Subsidiaries. Since September 25, 2013, there have been no internal investigations regarding accounting or
revenue recognition discussed with, reviewed by or initiated at the direction of the chief executive officer, chief financial officer, general counsel, the board of directors or any committee thereof of the Company or any of its Subsidiaries.
(j) None of the Company or any of its Subsidiaries has any off-balance sheet arrangements (as defined in Item 303 of Regulation S-K
promulgated under the 1933 Act) that would be required to be disclosed under Item 303 of Regulation S-K.
(k) Since
September 25, 2013, the Company has been and is in compliance in all material respects with the applicable rules and regulations of the 1933 Act, the 1934 Act and NASDAQ.
Section 4.08. Financial Statements. The financial statements (including all related notes and schedules thereto) of the Company
and its Subsidiaries included or incorporated by reference into the Company SEC Documents present fairly in all material respects the consolidated financial position of the Company and its Subsidiaries, as at the respective dates thereof, and the
consolidated results of their operations and their cash flows for the respective periods then ended (subject, in the case of the unaudited statements, to normal year-end audit adjustments, the effect of which, individually and in the aggregate, is
not material, and the exclusion of certain notes in accordance with the rules of the SEC relating to unaudited financial statements) and were prepared in conformity with GAAP (except, in the case of the unaudited statements, as permitted by the SEC)
applied on a consistent basis during the periods involved.
Section 4.09. Disclosure Documents. The information supplied by
the Company for inclusion in the proxy statement, or any amendment or supplement thereto, to be sent to the Company shareholders in connection with the Merger and the other transactions contemplated by this Agreement (the Proxy
Statement) shall not, on the date the Proxy Statement, and any amendments or supplements thereto, is first mailed to the shareholders of the Company or at the time of the Company Shareholder Approval contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The representations and warranties contained in this Section 4.09
shall not apply to statements or omissions included or incorporated by reference in the Proxy Statement based upon information supplied by Parent, Parent Assignee Merger Subsidiary or any of their respective Representatives specifically for use or
incorporation by reference therein.
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Section 4.10. Absence of Certain Changes. (a) From the Company Balance Sheet
Date until the date hereof, (i) the business of the Company and its Subsidiaries has been conducted in the ordinary course consistent with past practice and (ii) there has not been a Material Adverse Effect on the Company.
(b) From the Company Balance Sheet Date until the date hereof, there has not been any action taken by the Company or any of its Subsidiaries
that, if taken during the period from the date of this Agreement through the Effective Time without Parents consent, would constitute a breach of Section 6.01.
Section 4.11. No Undisclosed Material Liabilities. There are no liabilities or obligations of the Company or any of its
Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, other than: liabilities or obligations disclosed, reflected or reserved against in the Company Balance Sheet; liabilities or
obligations incurred in the ordinary course of business since the Company Balance Sheet Date; liabilities or obligations incurred in connection with the transactions contemplated hereby; and liabilities or obligations that would not have a Material
Adverse Effect on the Company.
Section 4.12. Compliance with Laws and Court Orders. (a) The Company and each of its
Subsidiaries are in compliance with, and to the knowledge of the Company are not under investigation by any Governmental Authority with respect to, Applicable Law, except for failures or violations that would not have a Material Adverse Effect on
the Company.
(b) There is no judgment, decree, injunction, rule or order of any arbitrator or Governmental Authority outstanding against
the Company or any of its Subsidiaries that would have a Material Adverse Effect on the Company.
(c) Other than the Parent Required
Approvals, all approvals of, and filings and registrations and other requisite formalities with, Governmental Authorities in the PRC that are material to the Company and its Subsidiaries taken as a whole and required to be made by the Company or its
Subsidiaries in respect of the Company and the Subsidiaries and their capital structure and operations, including but not limited to registrations with the State Administration for Industry and Commerce, the State Administration of Foreign Exchange
and the State Administration of Taxation, the Ministry of Industry and Information Technology, the State Bureau of Surveying, Mapping and Geoinformation and their respective local counterparts, have been duly completed in accordance with applicable
PRC Laws, except for any approvals, filings, registrations or other requisite formalities of a Governmental Authority in the PRC as would not have a Material Adverse Effect on the Company. Each Subsidiary incorporated in the PRC has complied with
all applicable PRC Laws regarding the contribution and payment of its registered capital, except where failures to comply or violations would not have a Material Adverse Effect on the Company.
(d) The directors and officers of the Company, and to the knowledge of the Company, any persons subject to the requirements of SAFE Circular
75, have complied with the requirements of such circular in all material respects.
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(e) The Company and its Subsidiaries, and to the knowledge of the Company, the directors,
officers and employees of the Company and each Subsidiary and authorized agents acting on behalf of the Company and its Subsidiaries, have not offered, paid, promised to pay or authorized the payment of any money or anything else of value, whether
directly or, at such persons express direction, through another person, to:
(i) any Governmental Official in order
to improperly (A) influence any act or decision of any Government Official, (B) induce such Governmental Official to use his or its influence with a Governmental Authority or (C) otherwise secure any improper advantage; or
(ii) any other person in any manner that constitutes commercial bribery or an illegal kickback, or would otherwise violate
applicable anti-bribery Law (including the U.S. Foreign Corrupt Practices Act of 1977).
Section 4.13. Litigation.
(a) There is no action, suit, litigation, or any judicial, criminal, administrative or regulatory, hearing, proceeding or formal regulatory
document production request proceeding, or, to the Companys knowledge, investigation, that is material to the Company and its Subsidiaries, taken as a whole, (an Action) pending or, to the knowledge of the Company,
threatened against the Company, any of its Subsidiaries or any present or former officer, director or employee of the Company or any of its Subsidiaries or any of the respective material properties or assets of the Company or any of its
Subsidiaries, acting in such capacity, for whom the Company or any of its Subsidiaries may be liable before (or, in the case of threatened actions, suits, investigations or proceedings, that would be before) or by any Governmental Authority or
arbitrator.
Section 4.14. Properties. (a) None of the Company or its Subsidiaries own any real property. Except as would
not have a Material Adverse Effect on the Company, the Company or its Subsidiaries have good title to, or valid leasehold interests in, all property and assets reflected on the Company Balance Sheet or acquired after the Company Balance Sheet Date,
free and clear of all Liens except Permitted Liens, except as have been disposed of since the Company Balance Sheet Date in the ordinary course of business.
(b) Except as would not have a Material Adverse Effect on the Company, (i) each lease or sublease (each, a Lease)
under which the Company or any of its Subsidiaries leases or subleases any real property is valid and in full force and effect and (ii) neither the Company nor any of its Subsidiaries, nor to the Companys knowledge any other party to a
Lease, has violated any provision of, or taken or failed to take any act which, with or without notice, lapse of time, or both, would constitute a default under the provisions of such Lease, and neither the Company nor any of its Subsidiaries has
received any notice in writing that it has breached, violated or defaulted under any Lease.
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Section 4.15. Intellectual Property. (a) The Company and its Subsidiaries own or
otherwise hold the valid and enforceable right to use all Intellectual Property used or held for use in or necessary for the conduct of the businesses of the Company and its Subsidiaries as currently conducted (the Necessary IP),
except for such Intellectual Property which the failure by the Company or any of its Subsidiaries to own or otherwise hold the right to use would not have a Material Adverse Effect on the Company and its Subsidiaries.
(b) The Company and/or its Subsidiaries have valid title and an exclusive ownership interest in the Company Owned IP (including the
Intellectual Property set forth in Section 4.15(e) of the Company Disclosure Schedule), free and clear of any Liens (other than Permitted Liens).
(c) As of the date of this Agreement, there are no legal disputes or claims pending or, to the knowledge of the Company, threatened in writing
alleging infringement, misappropriation or any other violation of any Intellectual Property rights of any Third Party by the Company or any of its Subsidiaries or, except as would not have a Material Adverse Effect on the Company or its
Subsidiaries, contesting the ownership, use, scope, validity or enforceability of any Company Owned IP, and no such disputes or claims have been pending within the past three (3) years. None of the Company or its Subsidiaries has infringed,
misappropriated or otherwise violated any Intellectual Property rights of any Person, except for such infringements, misappropriations or violations that would not have a Material Adverse Effect on the Company and its Subsidiaries. No material
Company Owned IP is subject to any Order regarding the ownership, use, scope, validity or enforceability thereof.
(d) To the knowledge of
the Company, none of the Company Owned IP has been infringed, misappropriated or otherwise violated by any Third Party, except for such infringements, misappropriations or violations that would not have a Material Adverse Effect on the Company and
its Subsidiaries.
(e) Section 4.15(e) of the Company Disclosure Schedule contains a complete and correct list, as of the date of
this Agreement, of all Company Registered IP and material Software owned by the Company or its Subsidiaries. Except as would not reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, (i) the Company and
its Subsidiaries have paid all maintenance and other fees and filed all statements of use and other filings reasonably necessary to maintain and protect the Company Registered IP, and (ii) none of the issued Registered IP owned by the Company
and its Subsidiaries has been adjudged invalid or unenforceable in whole or in part. To the knowledge of the Company, all such material Registered IP is valid and enforceable.
(f) The Company and its Subsidiaries have taken commercially reasonable steps to maintain and protect their rights in the Necessary IP, to
protect any confidential information provided to them by any other Person under obligation of confidentiality, and to protect the security, integrity and continuity of the information technology systems used by the Company and its Subsidiaries. To
the knowledge of the Company, there have been no material unauthorized intrusions or material breaches of security of any such system, including violation of data privacy.
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(g) The Company and its Subsidiaries have obtained from (i) all Persons (including employees
and current or former consultants and subcontractors) who have created or developed any portion of, or otherwise who would have any rights in or to, any material Company Owned IP valid and enforceable written agreements including present assignments
of ownership of any such work, invention or improvement or other rights to the Company and its Subsidiaries, and (ii) all Persons (including employees and current or former consultants and subcontractors) who have had access to any material
confidential Company Owned IP valid and enforceable written agreements including appropriate confidentiality provisions providing for the protection of such confidential Company Owned IP. To the knowledge of the Company, no such agreement described
in this Section 4.15(g) has been breached by any such Person.
(h) No material Software owned by the Company or its
Subsidiaries has been or is subject to any open source, public source, freeware or copyleft license that would impose any obligation or condition on the Company or any of its Subsidiaries with respect to any such Software to
disclose or license any source code to any Person. Neither the Company nor any of its Subsidiaries has disclosed or licensed (other than disclosure to its employees on a need-to-know basis), or is obligated to disclose or license, to any Person any
source code for any material Software owned by the Company or its Subsidiaries, including pursuant to any source code escrow agreement.
Section 4.16. Taxes. (a) All income and other material Tax Returns required by Applicable Law to be filed with any Taxing
Authority by, or on behalf of, the Company or any of its Subsidiaries have been filed when due (taking into account any extension of time within which to file) in accordance with all Applicable Law, and all such material Tax Returns are true and
complete in all material respects.
(b) The Company and each of its Subsidiaries has paid (or has had paid on its behalf) and has withheld
and remitted to the appropriate Taxing Authority all material Taxes due and payable, other than such Taxes that are being contested in good faith by appropriate proceedings and where payment is not yet due, the Company has made adequate provision
for all material Taxes in its financial statements in accordance with GAAP.
(c) Neither the Company nor any of its Subsidiaries has
granted any extension or waiver of the statute of limitations period with respect to, or any extension of a period for the assessment of, any material Tax, which period (after giving effect to such extension or waiver) has not yet expired.
(d) There is no material claim, audit, action, suit, proceeding or investigation now pending or, to the Companys knowledge, threatened
against or with respect to the Company or its Subsidiaries in respect of any Tax or Tax asset. No material deficiency for any amount of Tax has been asserted or assessed by a Governmental Authority against the Company or any of its Subsidiaries that
has not been satisfied by payment, settled or withdrawn.
(e) There are no material Liens with respect to Taxes upon any of the assets or
properties of the Company or any of its Subsidiaries, other than Permitted Liens.
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(f) There are no unresolved claims by any Governmental Authority in a jurisdiction where the
Company or any of its Subsidiaries does not file Tax Returns that the Company or any of its Subsidiaries is or may be subject to Taxes in such jurisdiction.
(g) Neither the Company nor any of its Subsidiaries that is established outside of the PRC takes the position for tax purposes that it is a
resident enterprise of the PRC or tax resident in any jurisdiction other than its jurisdiction of formation.
(h) Neither the
Company nor any of its Subsidiaries (A) is or has ever been a member of a combined, consolidated, unitary, affiliated or similar Tax group (other than a group of which the common parent is or was the Company or any of its Subsidiaries) or
(B) has any liability for Taxes of any person as a result of being a member of such a Tax group or arising from the application of any provision of U.S. federal, state, local or non-U.S. law, or as a transferee or successor, by contract, or
otherwise.
(i) Neither the Company nor any of its Subsidiaries is a party to, is bound by or has any obligation under any Tax sharing or
Tax indemnity agreement or similar contract or arrangement, other than such agreement or arrangement (A) solely between any one of the Company or its Subsidiaries or (B) entered into in the ordinary course of business and for which the
primary purpose does not relate to Taxes.
(j) Each of the Company and its Subsidiaries is in material compliance with terms and
conditions of any Tax exemption, Tax holiday, Tax incentive, Tax deferral, or other Tax reduction agreement or order of a Governmental Authority. Any submissions made on behalf of the Company and its Subsidiaries to any Governmental Authority in
connection with obtaining Tax exemptions, Tax holidays, Tax incentives, Tax deferrals or other Tax reduction agreement or order of a Governmental Authority are accurate and complete in all material respects.
(k) The Companys Subsidiaries located in the PRC have, in accordance with applicable PRC Law, duly registered with the relevant PRC
Governmental Authority, obtained and maintained the validity of all national and local Tax registration certificates and complied with all requirements in all material respects imposed by such Governmental Authorities.
(l) As of the date hereof, no suspension, revocation or cancellation of any Tax exemption, Tax holiday, Tax incentive, Tax deferral, or other
Tax reduction agreement or order of a Governmental Authority is pending or, to the knowledge of the Company, threatened.
Section 4.17. Employee Benefit Plans. (a) Section 4.17(a) of the Company Disclosure Schedule contains a complete and
correct list, as of the date of this Agreement, of each material Employee Plan. Employee Plan means each employee benefit plan, as defined in Section 3(3) of ERISA and each other employment, severance or similar
contract, plan, practice, arrangement or policy providing for compensation, bonuses, profit-sharing, stock option or other stock-related rights or other forms of incentive or deferred compensation, vacation benefits, insurance (including any
self-insured arrangements), health or medical benefits, employee assistance program, disability or sick leave benefits, and post-employment or retirement benefits (including compensation, pension, health, medical or life insurance benefits) which is
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maintained, administered or contributed to by the Company or any of its Subsidiaries or with respect to which the Company or any of its Subsidiaries has any liability, other than (i) any
Multiemployer Plan and (ii) any plan, policy, program, or arrangement sponsored and administered by a Governmental Authority. Copies of the material Employee Plans (and, if applicable, related administrative service agreements and insurance
policies) and all material amendments thereto have been made available to Parent together with, if any, the most recent annual report (Form 5500 including, if applicable, Schedule B thereto) prepared in connection with any such plan.
(b) Neither the Company nor any of its ERISA Affiliates sponsors, maintains or contributes to, or has in the past six years sponsored,
maintained or contributed to, or otherwise has any actual or contingent liability or obligation with respect to any Employee Plan subject to Title IV of ERISA or Section 412 of the Code.
(c) Neither the Company nor any of its ERISA Affiliates contributes to, or has in the past six years contributed to, any multiemployer plan,
as defined in Section 3(37) of ERISA (a Multiemployer Plan).
(d) Each US Plan that is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter, or has pending or has time remaining in which to file, an application for such determination from the Internal Revenue Service, and, to the knowledge of the
Company, no circumstances exist that could reasonably be expected to adversely affect the qualified status of such US Plan. The Company has made available to Parent copies of the most recent Internal Revenue Service determination letter with respect
to each such US Plan.
(e) Each US Plan has been established, funded, maintained and administered in all material respects in compliance
with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations including ERISA and the Code, which are applicable to such US Plan.
(f) The consummation of the transactions contemplated by this Agreement will not (either alone or together with a termination of employment,
to the extent such termination of employment alone would not trigger such benefit) (i) entitle any employee or independent contractor of the Company or any of its Subsidiaries to severance pay or (ii) accelerate the time of payment or
vesting or trigger any payment of funding (through a grantor trust or otherwise) of compensation or benefits under, or increase the amount payable or trigger any other material obligation pursuant to, any Employee Plan.
(g) Neither the Company nor any of its Subsidiaries has any liability in respect of post-retirement health, medical or life insurance benefits
for retired, former or current employees of the Company or its Subsidiaries except (i) benefits in the nature of severance pay with respect to one or more of the Employee Plans identified on Section 4.17 of the Company Disclosure Schedule,
(ii) coverage or benefits as required under Section 4980B of the Code or any similar Applicable Law, the cost of which is borne by the employee or former employee, or (iii) contributions to a plan, policy, program, or arrangement
sponsored and administered by a Governmental Authority.
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(h) Except as would not reasonably be expected to result, individually or in the aggregate, in
material liability to the Company or any of its Subsidiaries, there is no action, suit, audit or proceeding pending against or involving or, to the knowledge of the Company, threatened against or involving or investigation pending against or
involving, any Employee Plan, other than routine claims for benefits.
(i) Each International Plan has been maintained in all material
respects in compliance with its terms and with the requirements prescribed by any and all applicable statutes, orders, rules and regulations (including any special provisions relating to qualified, registered or tax-favored plans where such plan was
intended so to qualify or be registered or tax-favored) and in good standing with applicable regulatory authorities, (ii) each International Plan intended to be funded or book reserved is fully funded or book reserved, as appropriate, based on
reasonable actuarial assumptions, and (iii) no International Plan has any unfunded liabilities that could have a Material Adverse Effect on the Company.
(j) Neither the Company nor any of its Subsidiaries is a party to any contract, agreement, plan or arrangement including this Agreement, which
could give rise to the payment of any amount on account of the transactions contemplated by this Agreement that would not be deductible pursuant to Section 280G of the Code.
Section 4.18. Labor and Employment Matters. (a) Neither the Company nor any of its Subsidiaries is a party to any collective
bargaining agreement or similar agreement with a labor union or organization. There is no (i) material unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceeding pending or, to the knowledge
of the Company, threatened against the Company or any of its Subsidiaries relating to their businesses, (ii) activity or proceeding by a labor union or representative thereof to the knowledge of the Company to organize any employees of the
Company or any of its Subsidiaries or (iii) lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to such employees, and during the last three years there has not been any such action.
(b) Each of the Company its Subsidiaries is and has been in compliance with all Applicable Laws respecting employment, discrimination in
employment, terms and conditions of employment, worker classification (including the proper classification of workers as independent contractors and consultants), wages, hours and occupational safety and health and employment practices, including
the Immigration Reform and Control Act and the payment and withholding of taxes or benefit contributions and other sums as required by the appropriate Governmental Authority, except where such failures or violations would not have a Material Adverse
Effect on the Company and its Subsidiaries.
(c) As of the date hereof, the Company has not received any notice (whether in writing or
oral) from any key employees listed on Section 4.18(c) of the Company Disclosure Schedule hereof that he/she intends to, and to the Companys knowledge, no such key employee intends to, resign from or reduce his/her business time and
attention with respect to the Company or its Subsidiaries.
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Section 4.19. Insurance Policies. Section 4.19 of the Company Disclosure
Schedule lists, as of the date of this Agreement, all material insurance policies and fidelity bonds covering the assets, business, equipment, properties, operations, employees, officers or directors of the Company and its Subsidiaries
(collectively, the Insurance Policies). There is no material claim by the Company or any of its Subsidiaries pending under any of such policies or bonds as to which the Company has been notified that coverage has been questioned,
denied or disputed by the underwriters of such policies or bonds. Except as would not have a Material Adverse Effect on the Company, (i) all of the Insurance Policies or renewals thereof are in full force and effect, (ii) all premiums due
and payable under all of the Insurance Policies have been paid when due and (iii) the Company and its Subsidiaries are otherwise in material compliance with the terms of all of the Insurance Policies (or other policies and bonds providing
substantially similar insurance coverage).
Section 4.20. Environmental Matters. Except as would not have a Material Adverse
Effect on the Company:
(i) no written notice, notification, demand, request for information, citation, summons or order
has been received and remains unresolved, no complaint has been filed and is pending and no action, claim, suit or proceeding is pending or, to the knowledge of the Company, threatened by any Governmental Authority or other Person, in each case that
alleges that the Company or any of its Subsidiaries has violated or has any liability under any Environmental Law;
(ii)
the Company and its Subsidiaries are and, since January 1, 2014, have been in compliance with all Environmental Laws and all Environmental Permits; and
(iii) there has been no Release of any Hazardous Substance by the Company or any of its Subsidiaries that has resulted in any
obligation to conduct any remedial action of the Company or any of its Subsidiaries under or pursuant to any Environmental Law.
Section 4.21. Material Contracts. (a) Except for this Agreement, any Employee Plans listed on Section 4.17 of the
Company Disclosure Schedule and the Contracts filed as exhibits to the Company SEC Documents that are available as of the date of this Agreement, Section 4.21(a) of the Company Disclosure Schedule contains a complete and correct list, as of the
date of this Agreement, of each of the following Contracts to which the Company or any of its Subsidiaries is a party or which bind their respective properties or assets, and except as provided in this Section 4.21(a), to the extent that any
such Contract is to be performed in whole or in part or is a Contract under which the Company or its Subsidiaries has any material obligations after the date hereof:
(i) each Contract that involves performance of services or delivery of goods, products or developmental, consulting or other
services commitments by the Company or any of its Subsidiaries, and that either (A) provided for payments to the Company of
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$500,000 or more in the Companys fiscal year ended December 31, 2013 or (B) provides for aggregate payments to the Company after December 31, 2013 of $2,000,000 or more,
other than Contracts terminable by the Company or one of its Subsidiaries on no more than 90 days notice or in connection with an annual renewal without liability or financial obligation to the Company or any of its Subsidiaries;
(ii) each Contract that involves performance of services or delivery of goods, materials, supplies or equipment or
developmental, consulting or other services commitments to the Company or any of its Subsidiaries, or the payment therefor by the Company or any of its Subsidiaries, and that either (A) provided for payments by the Company of $500,000 or more
in the Companys fiscal year ended December 31, 2013 or (B) provides for aggregate payments by the Company after December 31, 2013 of $2,000,000 or more, other than Contracts terminable by the Company or one of its Subsidiaries
on no more than 90 days notice or in connection with an annual renewal without liability or financial obligation to the Company or any of its Subsidiaries;
(iii) each Contract that contains any provisions restricting the Company or any of its Affiliates or their successors from
(A) competing or engaging in any activity or line of business or with any Person or in any area or pursuant to which any benefit or right is required to be given or lost as a result of so competing or engaging or which, pursuant to its terms,
could have such effect after the Closing solely as a result of the consummation of the transactions contemplated hereby or (B) hiring or soliciting for hire the employees or contractors of any Third Party (other than non-hire and
non-solicitation provisions contained in confidentiality agreements), except in the case of each of clauses (A) and (B) for such restrictions that are not material to the Company and its Subsidiaries, taken as a whole;
(iv) each Contract that (A) grants any exclusive rights to any Third Party, including any exclusive license or supply or
distribution agreement or other exclusive rights or which, pursuant to its terms, could have such effect after the Closing solely as a result of the consummation of the transactions contemplated hereby, (B) grants any rights of first refusal or
rights of first negotiation with respect to any product, service or Company Owned IP, (C) contains any provision that requires the purchase of all or any portion of the Companys or any of its Subsidiaries requirements from any Third
Party or (D) grants most favored nation rights, except in the case of each of clauses (A), (B), (C) and (D) for such rights and provisions that are not material to the Company and its Subsidiaries, taken as a whole;
(v) each Contract pursuant to which the Company or any of its Subsidiaries has granted or has been granted any license to, or
covenant not-to-sue or other rights under, any Intellectual Property (other than nonexclusive licenses granted in the ordinary course of business of the Company and its Subsidiaries consistent with past practice) and each Contract that affects the
ability of the Company or any of its Subsidiaries to own or use any Intellectual Property, in each case, that is material to the Company and any of its Subsidiaries, taken as a whole;
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(vi) each Contract relating to indebtedness for borrowed money or the deferred
purchase price of property (in either case, whether incurred, assumed, guaranteed or secured by any asset), except any such agreement (A) with an aggregate outstanding principal amount not exceeding $250,000 or (B) between or among any of
the Company and its Subsidiaries;
(vii) each Contract pursuant to which the Company or any of its Subsidiaries is a party
that creates or grants a material Lien on properties or other assets of the Company or any of its Subsidiaries, other than any Permitted Liens;
(viii) each Contract under which the Company or any of its Subsidiaries has, directly or indirectly, made or obligations to
make any loan, capital contribution to, or other investment in, any Person (except for the Company or any of its Subsidiaries), other than (A) extensions of credit in the ordinary course of business consistent with past practice and
(B) investments in marketable securities in the ordinary course of business;
(ix) each Contract under which the
Company or any of its Subsidiaries has any obligations (including indemnification obligations) which have not been satisfied or performed (other than confidentiality obligations) relating to the acquisition or disposition of all or any portion of
any business (whether by merger, sale of shares, sale of assets or otherwise) for consideration in excess of $500,000, except for acquisitions or dispositions of inventory, properties and other assets in the ordinary course of business;
(x) each partnership, joint venture, strategic cooperation or other similar Contract or arrangement or any other agreement
involving a sharing of profits, losses, costs or liabilities that is material to the Company and its Subsidiaries, taken as a whole;
(xi) each Contract entered into since January 1, 2014 in connection with the settlement or other resolution of any action
or proceeding under which the Company or any of its Subsidiaries have any continuing obligations, liabilities or restrictions that are material to the Company and its Subsidiaries, taken as a whole, or that involved payment by the Company or any of
its Subsidiaries of more than $500,000;
(xii) each Contract between any of the Company or its Subsidiaries, on the one
hand, and any directors or officers of any of the Company or its Subsidiaries, on the other hand or their immediate family members; or each Contract between any of the Company or its Subsidiaries, on the one hand, and shareholders of any of the
Company or any of its Subsidiaries holding more than 5% of the voting securities of any of the Company or its Subsidiaries, on the other hand;
(xiii) each Contract with a Major Customer or Major Supplier;
(xiv) each Contract providing for any earn-out or similar payment payable by the Company or any of its Subsidiaries (other than
to another Subsidiary); and
(xv) each Contract required to be filed by the Company pursuant to Item 601(b)(10) of
Regulation S-K under the 1933 Act.
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(b) Except as would not have a Material Adverse Effect on the Company, each Contract disclosed in
Section 4.21(a) of the Company Disclosure Schedule or required to be disclosed pursuant to Section 4.21(a) (each, a Material Contract) (unless it has terminated or expired (in each case according to its terms)) is in
full force and effect and is a legal, valid and binding agreement of the Company or its Subsidiary, as the case may be, and, to the knowledge of the Company, of each other party thereto, enforceable against the Company or such Subsidiary, as the
case may be, and, to the knowledge of the Company, against the other party or parties thereto, in each case, in accordance with its terms except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other similar Applicable
Law affecting creditors rights generally and by general principles of equity. To the knowledge of the Company, neither the Company nor any of its Subsidiaries has received, as of the date of this Agreement, any notice in writing to terminate
or not renew, in whole or in part, any Material Contract. Except as would not have a Material Adverse Effect on the Company, none of the Company, any of its Subsidiaries or, to the knowledge of the Company, any other party thereto is in default or
breach under the terms of any Material Contract and, to the knowledge of the Company, no event or circumstance has occurred that, with notice or lapse of time or both, would constitute any event of default thereunder.
(c) Complete, correct and unredacted copies of each Material Contract, as amended and supplemented, have been filed with the SEC or made
available by the Company to Parent.
Section 4.22. Customers and Suppliers. Section 4.22(a) of the Company Disclosure
Schedule lists the ten largest customers of the Company and its Subsidiaries (determined on the basis of aggregate revenues recognized by the Company and its Subsidiaries over the four consecutive fiscal quarter period ended December 31, 2013)
(each, a Major Customer). Section 4.22(b) of the Company Disclosure Schedule lists the ten largest suppliers of the Company and its Subsidiaries (determined on the basis of aggregate purchases made by the Company and its
Subsidiaries over the four consecutive fiscal quarter period ended December 31, 2013) (each, a Major Supplier). The Company has not received, as of the date of this Agreement, any notice in writing from any Major Customer or
Major Supplier that it intends to terminate, not renew, or materially and adversely change the terms of (whether related to payment, price or otherwise) its relationship with the Company or its Subsidiaries.
Section 4.23. Compliance with Applicable Export Control, Sanctions, Import, and Anti-Corruption Laws.
(a) The Company and its Subsidiaries have, during the last five (5) years from the date hereof, complied and currently are in compliance
with: (i) all applicable export control, sanctions, and import laws, including, but not limited to, the U.S. export controls and economic sanctions, the U.S. anti-boycott laws, and the U.S. import laws; and (ii) the U.S. Foreign Corrupt
Practices Act of 1977 and other applicable anti-corruption laws (hereinafter, the laws referenced in (i) and (ii) are referred to as the International Trade Laws). Without limiting the foregoing, as of the date hereof,
there are no unresolved questions or claims concerning any liability of the Company or any Subsidiary with respect to any International Trade Laws and, within the last two (2) years from the date hereof, neither the Company nor any Subsidiary
has submitted any disclosures, received any notice, or otherwise become aware that it was or is subject to any civil or criminal investigation, audit or any other inquiry involving or otherwise relating to any alleged or actual violation of such
laws.
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(b) Within the last five (5) years from the date hereof, neither the Company, any of its
Subsidiaries, nor, to the Companys knowledge after due inquiry, any employees, officers, or directors of the Company and its Subsidiaries, nor, to the Companys knowledge after due inquiry, any agents acting for or on behalf of the
Company or any of its Subsidiaries: (i) has been or is designated on, or is owned or controlled by any party that has been or is designated on, any list of restricted parties maintained by any Governmental Authority, including, but not limited
to, the list of Specially Designated Nationals and Blocked Persons maintained by the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC); (ii) has participated in any transaction involving such designated
person or entity, or any country subject to an embargo or substantial restrictions on trade under the U.S. sanctions administered by OFAC; (iii) has exported (including deemed exportation) or re-exported, directly or indirectly, any commodity,
software, technology, or services in violation of any applicable U.S. export control or economic sanctions laws; or (iv) has participated in any transaction connected with any purpose prohibited by U.S. export control and economic sanctions
laws, including, without limitation, support for international terrorism and nuclear, chemical, or biological weapons proliferation. For purposes of Section 4.23(b), due inquiry is deemed to include screening employees, officers,
and directors of the Company and its Subsidiaries and agents acting for or on behalf of the Company or any of its Subsidiaries against the list of Specially Designated Nationals and Blocked Persons and the Foreign Sanctions Evaders list maintained
by the U.S. Department of the Treasury, Office of Foreign Assets Control, and Entity and Denied Persons lists maintained by the U.S. Department of Commerce, Bureau of Industry and Security.
Section 4.24. Indebtedness and Security. None of the Company or any of its Subsidiaries has any secured creditors holding fixed or
floating security interests. None of the Company or any of its Subsidiaries has sought any protection pursuant to any bankruptcy or insolvency Law, nor does the Company have any knowledge that any creditors of the Company or any of its Subsidiaries
intend to initiate involuntary bankruptcy or insolvency proceedings.
Section 4.25. Finders Fees. Except for Stifel,
Nicolaus & Company, Incorporated, a copy of whose engagement agreement has been provided to Parent promptly following the execution hereof, there is no investment banker, broker, finder or other intermediary that has been retained by or is
authorized to act on behalf of the Company or any of its Subsidiaries who is entitled to any fee or commission from the Company or any of its Affiliates in connection with the transactions contemplated by this Agreement.
Section 4.26. Opinion of Financial Advisor. The Company has received the opinion of Stifel, Nicolaus & Company,
Incorporated, financial advisor to the Company, to the effect that, as of June 6, 2014, the Merger Consideration is fair to the Companys shareholders from a financial point of view. A signed copy of each such opinion will be made
available to Parent for information purposes only promptly following the date of this Agreement.
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Section 4.27. Antitakeover Statutes. The Company has taken all action necessary to
exempt this Agreement, the Merger and the other transactions contemplated hereby from any anti-takeover provision set forth in the Cayman Companies Law.
Section 4.28. Affiliated Transactions. No director, officer or Affiliate (other than Subsidiaries of the Company) of the Company,
or any of their respective Affiliates is, or since January 1, 2012 has been, a party to any Material Contract with the Company or its Subsidiaries or has any material interest in any material property used by the Company or its Subsidiaries.
Section 4.29. No Additional Representations. Except for the representations and warranties made by the Company in this
Article 4, neither the Company nor any other person makes any other express or implied representation or warranty with respect to the Company or any of its Subsidiaries or their respective business, operations, assets, liabilities, condition
(financial or otherwise) or prospects or any information provided to Parent, Merger Subsidiary or any of their respective affiliates or Representatives, notwithstanding the delivery or disclosure to Parent or any of its affiliates or Representatives
of any documentation, forecasts or other information in connection with the transactions contemplated hereby, and each of Parent and Merger Subsidiary acknowledge the foregoing. Neither the Company nor any other person will have or be subject to any
liability to Parent or Merger Subsidiary, or any other person resulting from the distribution to the Parent or any of its affiliates or Representatives, or the Parents (or any of or any of its affiliates or Representatives) use of,
any such information, including any information, documents, projections, forecasts, management presentations in expectation of the Merger or the other transactions contemplated hereunder or other material made available to them by the Company or its
Representatives, unless any such information is expressly included in a representation or warranty contained in this Article 4.
ARTICLE 5
Representations and Warranties of Parent
Except as set forth in the corresponding sections of the Parent Disclosure Schedule, Parent represents and warrants to the Company that:
Section 5.01. Corporate Existence and Power. (a) Each of Parent, Parent Assignee and Merger Subsidiary is a corporation and
exempted company, respectively, duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as currently conducted, except for those powers, licenses, authorizations, permits, consents and approvals the absence of which would not have a Material Adverse Effect on Parent or Parent Assignee. Since the date
of its incorporation, Merger Subsidiary has not engaged in any activities other than in connection with or as contemplated by this Agreement. As of the Closing, Parent Assignee will own beneficially and of record all of the outstanding capital
shares of Merger Subsidiary.
(b) Parent has heretofore made available to the Company complete and correct copies of the governing
documents of Parent and the memorandum and articles of association of Merger Subsidiary as currently in effect. When joining this Agreement, Parent Assignee and Merger Subsidiary will be Subsidiaries of Parent.
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Section 5.02. Corporate Authorization. The execution, delivery and performance by
Parent, Parent Assignee and Merger Subsidiary of this Agreement and the consummation by Parent, Parent Assignee and Merger Subsidiary of the transactions contemplated hereby are within the corporate powers of Parent have been, or with respect to
Parent Assignee and Merger Subsidiary, will be following their respective formations, duly authorized by all necessary corporate action. Assuming due authorization, execution and delivery by the Company, this Agreement constitutes, or will
constitute, a valid and binding agreement of each of Parent, Parent Assignee (when the Assignment and Assumption Agreement and Joinder Agreement is executed) and Merger Subsidiary (when the Joinder Agreement is executed), enforceable against each of
Parent, Parent Assignee and Merger Subsidiary in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors rights generally and general
principles of equity). On March 25, 2014, Parent received from the NDRC the Letter of Confirmation to the Information Report of Outbound Acquisition or Bidding Project relating to the Merger, this Agreement and the other
transactions contemplated hereby as required by the Interim Measures for the Administration of Examination and Approval of the Overseas Investment Projects (NDRC 2004 No. 21), the Circular on Several Issues About Improving the Administration of
Overseas Investment Projects (NDRC Foreign Investment 2009 NO. 1479), and other Applicable Laws of the PRC, and such Letter of Confirmation to the Information Report of Outbound Acquisition or Bidding Project is valid and effective.
Section 5.03. Governmental Authorization. The execution, delivery and performance by Parent, Parent Assignee and Merger Subsidiary
of this Agreement and the consummation by Parent, Parent Assignee and Merger Subsidiary of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority, other than (a) the filing of the
Merger Documents with the Registrar of Companies of the Cayman Islands pursuant to the Cayman Companies Law, (b) compliance with any applicable requirements of the 1933 Act, the 1934 Act and any other applicable state or federal securities
laws, (c) compliance with any applicable rules of NASDAQ, (d) the Parent Required Approvals and PRC Antitrust Clearance and (e) any actions or filings the absence of which would not have a Material Adverse Effect on Parent or Parent
Assignee.
Section 5.04. Non-contravention. The execution, delivery and performance by Parent, Parent Assignee and Merger
Subsidiary of this Agreement, as applicable, and the consummation by Parent, Parent Assignee and Merger Subsidiary of the transactions contemplated hereby do not and will not (a) contravene, conflict with, or result in any violation or breach
of any provision of the governing documents of Parent or Parent Assignee or the memorandum and articles of association of Merger Subsidiary, (b) assuming compliance with the matters referred to in Section 5.03, contravene, conflict with or
result in a violation or breach of any provision of any Applicable Law, (c) assuming compliance with the matters referred to in Section 5.03, require any consent or other action by any Person under, constitute a default, or an event that,
with or without notice or lapse of time or both, would constitute a default, under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the
40
loss of any benefit to which Parent, Parent Assignee or any of its Subsidiaries is entitled under any provision of any agreement or other instrument binding upon Parent, Parent Assignee or any of
its Subsidiaries or any license, franchise, permit, certificate, approval or other similar authorization by which any asset of Parent, Parent Assignee or any of its Subsidiaries is bound or (d) result in the creation or imposition of any Lien
(other than Permitted Liens or Liens created or imposed in connection with the Financing) on any asset of Parent, Parent Assignee or any of its Subsidiaries, except, in the case of each of clauses (b) through (d), as would not have a Material
Adverse Effect on Parent or Parent Assignee.
Section 5.05. Disclosure Documents. The information supplied by Parent, Parent
Assignee or Merger Subsidiary for inclusion in the Proxy Statement shall not, on the date the Proxy Statement, and any amendments or supplements thereto, is first mailed to the shareholders of the Company or at the time of the Company Shareholder
Approval, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The representations and
warranties contained in this Section 5.05 shall not apply to statements or omissions included or incorporated by reference in the Proxy Statement based upon information supplied by the Company or any of its Representatives specifically for use
or incorporation by reference therein.
Section 5.06. Financing. Parent shall have (and shall cause Parent Assignee and Merger
Subsidiary to have) at the Effective Time available sufficient cash, or other sources of immediately available funds, to make payment of all of the amounts required to be provided by Parent, Parent Assignee and Merger Subsidiary for the consummation
of the transactions contemplated hereby, and for the satisfaction of all of Parents, Parent Assignees and Merger Subsidiarys obligations under this Agreement, including the payment of the Merger Consideration and the payment of all
associated costs and expenses of the Merger (including any repayment or refinancing of indebtedness of Parent, Parent Assignee, Merger Subsidiary or the Company required in connection therewith). Parent has delivered to the Company a true, correct
and complete copy of the executed Loan Commitment Letter, dated April 8, 2014, from Bank of China Shanghai Branch (the Bank of China Commitment Letter), pursuant to which, and subject to the terms and conditions thereof, the
lender parties thereto have committed to lend the amounts set forth therein to Parent for the purpose of funding the transactions contemplated by this Agreement (the Bank of China Commitment). As of the date hereof, the Bank of
China Commitment Letter is in full force and effect pursuant to its terms and, to the knowledge of Parent, has not been withdrawn or terminated or otherwise amended, supplemented or modified in any respect. The Bank of China Commitment Letter, in
the form so delivered, is a legal, valid and binding obligation of the parties thereto, subject to the terms and conditions thereof. There are no side letters or other agreements, contracts or arrangements with Parent, Parent Assignee or Merger
Subsidiary as a party that would result in changes to the terms of the Bank of China Commitment Letter. To the knowledge of Parent, no event has occurred which, with or without notice, lapse of time or both, would constitute a default or breach on
the part of Parent, Parent Assignee or Merger Subsidiary under any term, or failure of any condition, of the Bank of China Commitment Letter or otherwise result in any portion of the Bank of China Commitment contemplated thereby to be unavailable,
in each case subject to the terms thereof. Parent has no reason to believe that Parent is, or that Parent Assignee or Merger Subsidiary when formed will
41
be, unable to satisfy on a timely basis any term or condition of the Bank of China Commitment Letter, to the extent such term or condition is within Parents, Parent Assignees or
Merger Subsidiarys control, as the case may be. The Bank of China Commitment Letter does not require Parent, Parent Assignee and/or Merger Subsidiary to pay any commitment fees or other fees to the Bank of China on or before the date of this
Agreement. There are no conditions precedent or other contingencies related to the funding, as applicable, of the full amount of the Bank of China Commitment, other than as set forth in or contemplated by the Bank of China Commitment Letter.
Section 5.07. Certain Arrangements. Other than the Voting Agreement, there are no Contracts or commitments to enter into Contracts
(a) between Parent, Parent Assignee, Merger Subsidiary or any of their Affiliates, on the one hand, and any director, officer or employee of the Company or any of its Subsidiaries, on the other hand, or (b) pursuant to which any
shareholder of the Company would be entitled to receive consideration of a different amount or nature than the Merger Consideration or pursuant to which any shareholder of the Company agrees to vote to approve this Agreement or the Merger or agrees
to vote against any Superior Proposal.
Section 5.08. Litigation. There are no actions pending or, to the knowledge of Parent,
Parent Assignee and Merger Subsidiary, threatened against Parent, Parent Assignee, Merger Subsidiary or any of their respective affiliates, other than any such action that would not, individually or in the aggregate, reasonably be expected to
prevent or materially delay the consummation of the Merger by Parent, Parent Assignee or Merger Subsidiary, and none of Parent, Parent Assignee or Merger Subsidiary or any of its affiliates is a party to or subject to the provisions of any order
which would reasonably be expected to prevent or materially delay the consummation of the Merger by Parent, Parent Assignee or Merger Subsidiary.
Section 5.09. Ownership of Company Shares. Other than as a result of this Agreement, none of Parent, Parent Assignee or Merger
Subsidiary beneficially owns (as such term is used in Rule 13d-3 promulgated under the 1934 Act) any Company Shares, Company Securities or other securities or any other economic interest (through derivative securities or otherwise) of the Company or
any options, warrants or other rights to acquire Company Shares, Company Securities or other securities of, or any other economic interest (through derivatives securities or otherwise) in the Company. Subject to Section 5.09 of the Parent
Disclosure Schedule, promptly after the execution of the Assignment and Assumption Agreement and the Joinder Agreement, as applicable, by Parent Assignee and Merger Subsidiary, Parent Assignee and Merger Subsidiary shall promptly inform the Company
in writing of any exception to this Section as applied to Parent Assignee or Merger Subsidiary.
Section 5.10. Solvency.
Parent is Solvent as of the date of this Agreement, and Parent Assignee and Merger Subsidiary will be Solvent as of the date of their respective formations, and each of Parent, Parent Assignee and the Surviving Company will, after giving effect to
all of the transactions contemplated by this Agreement, including the Financing and any alternative financing, the payment of the Merger Consideration, the repayment of the Financing, the payment of all other amounts required to be paid in
connection with the consummation of the transactions contemplated by this Agreement and the payment of all related fees and expenses,
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be Solvent at and immediately after the Effective Time. As used in this Section 5.10, the term Solvent means, with respect to a particular date, that on such date,
(a) the sum of the assets, at a fair valuation, of Parent, Parent Assignee and Merger Subsidiary (and, after the Merger, the Surviving Company) (on a consolidated basis) will exceed their debts (on a consolidated basis), (b) each of
Parent, Parent Assignee and Merger Subsidiary (and, after the Merger, the Surviving Company) (on a consolidated basis) has not incurred and does not intend to incur, and does not believe that it will incur, debts or liabilities beyond its ability to
pay such debts or liabilities as such debts or liabilities mature, and (c) each of Parent, Parent Assignee and Merger Subsidiary (and, after the Merger, the Surviving Company) (on a consolidated basis) has reasonably sufficient capital with
which to conduct its business as presently conducted. For purposes of this Section 5.10, debt means any liability on a claim, and claim means (a) any right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured, and (b) any right to an equitable remedy for breach of performance if such breach gives rise to a payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
Section 5.11. Non-Reliance on Company Estimates. The Company has made available to Parent and Merger Subsidiary, and may continue
to make available, certain estimates, projections and other forecasts for the business of the Company and its Subsidiaries and certain plan and budget information. Each of Parent, Parent Assignee and Merger Subsidiary acknowledges that these
estimates, projections, forecasts, plans and budgets and the assumptions on which they are based were prepared for specific purposes. Further, each of Parent, Parent Assignee and Merger Subsidiary acknowledges that that there are uncertainties
inherent in attempting to make such estimates, projections, forecasts, plans and budgets, that Parent and Merger Subsidiary are taking full responsibility for making their own evaluation of the adequacy and accuracy of all estimates, projections,
forecasts, plans and budgets so furnished to them, and that neither Parent nor Merger Subsidiary is relying on any estimates, projections, forecasts, plans or budgets furnished by the Company, its Subsidiaries or their respective Affiliates and
Representatives; provided that, except as set forth in Section 5.11 nothing contained in this Section 5.11 shall be deemed to limit in any way the representations and warranties of the Company set forth in this Agreement.
Section 5.12. Finders Fees. Except for Barclays and China International Capital Corporation Limited, there is no investment
banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Parent or any of its Subsidiaries who is entitled to any fee or commission from Parent or any of its Affiliates in connection with the
transactions contemplated by this Agreement. Promptly after the execution of the Assignment and Assumption Agreement and the Joinder Agreement, as applicable, by Parent Assignee and Merger Subsidiary, Parent Assignee and Merger Subsidiary shall
promptly inform the Company in writing if any investment bank, broker, finder or other intermediary is entitled to any fee or commission from Parent Assignee, Merger Subsidiary or any of their respective Affiliates in connection with the
transactions contemplated by this Agreement.
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Section 5.13. Parent Financial Statements. The audited consolidated balance sheets as
of December 31, 2013 and the related audited consolidated statements of income and cash flows for the year ended December 31, 2013 and the unaudited interim consolidated balance sheet as of March 31, 2014 and the related unaudited
interim consolidated statements of income and cash flows for the three months ended March 31, 2014 of Parent fairly present in all material respects, in conformity with generally accepted accounting principles in the PRC (PRC
GAAP) applied on a consistent basis (except as may be indicated in the notes thereto), the consolidated financial position of Parent as of the dates thereof and their consolidated results of operations and cash flows for the periods then
ended (subject to normal year-end adjustments in the case of any unaudited interim financial statements). The books and records of Parent and its Subsidiaries have been, and are being, maintained, in all material respects, in accordance with PRC
GAAP and any other applicable legal and accounting requirements.
Section 5.14. No Additional Representations. Except for the
representations and warranties made by Parent, Parent Assignee and Merger Subsidiary in this Article 5, none of Parent, Parent Assignee or Merger Subsidiary nor any other person makes any other express or implied representation or warranty with
respect to Parent, Parent Assignee or Merger Subsidiary or their respective business, operations, assets, liabilities, condition (financial or otherwise) or prospects, notwithstanding the delivery or disclosure to the Company or any of its
Affiliates or Representatives of any documentation, forecasts or other information with respect to any one or more of the foregoing, and the Company acknowledges the foregoing.
ARTICLE 6
Covenants of
the Company
The Company agrees that:
Section 6.01. Conduct of the Company. Except for matters set forth in Section 6.01 of the Company Disclosure Schedule,
as contemplated by this Agreement, as required by Applicable Law or with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from and after the date hereof and prior to the Effective Time,
the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course consistent with past practice and use its reasonable best efforts to (i) preserve intact its present business organization,
(ii) keep available the services of its directors, officers and key employees and (iii) maintain satisfactory relationships with its customers, lenders, suppliers and others having material business relationships with it. Without limiting
the generality of the foregoing, except for matters set forth in Section 6.01 of the Company Disclosure Schedule, as contemplated by this Agreement, as required by Applicable Law or with the prior written consent of Parent (which consent shall
not be unreasonably withheld, conditioned or delayed), between the date hereof and the Effective Time, as applicable, the Company shall not, nor shall it permit any of its Subsidiaries to:
(a) amend or otherwise change its memorandum and articles of association or equivalent organizational documents;
(b) (i) split, combine, subdivide or reclassify any of its capital shares, (ii) declare, set aside or pay any dividends on, or make any
other distributions (whether in cash, shares, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital
44
shares of the Company or any of its Subsidiaries, other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent or (iii) redeem,
repurchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire any Company Securities or any Company Subsidiary Securities, other than (A) the acquisition by the Company of Company Shares in connection with the surrender of
Company Shares by holders of Company Share Options in order to pay the exercise price thereof, (B) the withholding of Company Shares to satisfy tax obligations with respect to awards granted pursuant to the Company Share Plans, (C) the
acquisition by the Company of Company Share Options and Company Restricted Shares in connection with the forfeiture of such awards and (D) as required by any Employee Plan listed on Section 4.17(a) of the Company Disclosure Schedule as in
effect on the date of this Agreement;
(c) (i) issue, deliver, sell, grant, pledge, transfer, lease, sublease, license, dispose of,
subject to any Lien (other than Permitted Liens) or otherwise encumber or dispose of any Company Securities or Company Subsidiary Securities or authorize any of the foregoing, other than the issuance (A) of any Company Shares upon the exercise
of Company Share Options that are outstanding on the date of this Agreement, or issued in compliance with Section 6.01, in each case in accordance with their terms on the date of this Agreement, (B) as required by any Employee Plan listed
on Section 4.17(a) of the Company Disclosure Schedule as in effect on the date of this Agreement and (C) of any Company Subsidiary Securities to the Company or any other Subsidiary of the Company or (ii) amend any term of any Company
Security or any Company Subsidiary Security;
(d) incur any capital expenditures or any obligations or liabilities in respect thereof,
except for (i) those contemplated by the capital expenditure budget as set forth in Section 6.01(c) of the Company Disclosure Schedule and (ii) any unbudgeted capital expenditures not to exceed $150,000 individually or $500,000 in the
aggregate;
(e) adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution,
scheme of arrangement, restructuring, recapitalization or other reorganization, merger, consolidation, amalgamation, recapitalization, or similar transaction, each with respect to the Company or any of its Subsidiaries (other than the Merger or any
merger or consolidation among wholly-owned Subsidiaries of the Company) or create any new Subsidiaries;
(f) acquire (including by merger,
consolidation, acquisition of shares or assets or any other business combination) or make any capital contribution or investment in, directly or indirectly, any corporations, partnerships, other business organizations, properties, interests or
businesses, or any assets or securities in connection with the acquisition of any corporations, partnerships, other business organizations, properties, interests or businesses, if the aggregate amount of consideration paid or transferred by the
Company and its Subsidiaries would exceed $1,000,000;
(g) sell, lease or otherwise transfer, or create, grant or incur any Lien (other
than Permitted Liens) on, any of the Companys or its Subsidiaries material assets, properties, interests or businesses, other than (i) pursuant to existing contracts or commitments or (ii) sales of Company products and
services, inventory or used equipment in the ordinary course of business consistent with past practice;
45
(h) (i) repurchase, prepay, assume, alter, amend, modify or incur any indebtedness for
borrowed money, including by way of a guarantee or an issuance or sale of debt securities, or issue or sell options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, enter into any keep
well or other Contract to maintain any financial statement or similar condition of another Person, or enter into any arrangement having the economic effect of any of the foregoing (other than (A) in connection with the financing of
ordinary course trade payables consistent with past practice or (B) accounts payable in the ordinary course of business consistent with past practice), or (ii) make any loans, advances or capital contributions to, or investments in, any
other Person (other than (A) to the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice or (B) accounts receivable and extensions of credit in the ordinary course of business and advances of
expenses to employees in the ordinary course of business consistent with past practice);
(i) guarantee the performance or obligations of
any Person (other than guarantees in connection with any indebtedness as permitted by the foregoing clause (h));
(j) (A) except as is in
the ordinary course of business, (i) enter into any Contract that would have been a Material Contract if entered into prior to the date hereof or (ii) amend, renew, extend, modify or terminate, or otherwise waive, release or assign any
rights, claims or benefits of the Company or any of its Subsidiaries under, any Material Contract (or Contract that would have been a Material Contract if entered into prior to the date hereof) if such amendment, renewal, extension, modification,
termination, waiver, release or assignment would be reasonably expected to be adverse to the Company and its Subsidiaries, taken as a whole, in any material respect or (B) fail to comply with or breach in any material respect any Material
Contract;
(k) enter into any Contract that would have been a Material Contract between any of the Company or any of its Subsidiaries, on
the one hand, and any of their respective directors, officers or Affiliates (other than any of the Subsidiaries of the Company), or any of their respective Affiliates, on the other hand;
(l) terminate or cancel, let lapse, or amend or modify in any material respect, other than renewals in the ordinary course of business, any
material insurance policies maintained by it which is not promptly replaced by a comparable amount of insurance coverage with reputable independent insurance companies or underwriters;
(m) enter into any Contract that contains any provisions restricting the Company or any of its Affiliates from competing or engaging in any
material respect in any activity or line of business or with any Person or in any area or pursuant to which any material benefit or right is required to be given or lost as a result of so competing or engaging, or which, pursuant to its terms, could
have such effect after the Closing solely as a result of the consummation of the transactions contemplated hereby;
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(n) except (x) as required by the terms of any Employee Plan as in effect on the date of
this Agreement that is listed on Section 4.17(a) of the Company Disclosure Schedule or (y) disclosed on Section 6.01(n) of the Company Disclosure Schedule: (i) hire any new employee to whom a written offer of employment has not
previously been made and accepted prior to the date of this Agreement (except for new hires of non-executive level employees in the ordinary course of business and new hires of executive level employees to replace executive level employees existing
as of the date hereof who resign or whose employment is terminated, in each case, on substantially the same terms and conditions as a similarly situated existing employee), (ii) other than in the ordinary course of business, grant to any
current or former director, officer, employee or consultant of the Company or any of its Subsidiaries any increase in compensation, bonus or benefits in addition to those pursuant to Employee Plans listed on Section 4.17(a) of the Company
Disclosure Schedule, (iii) other than payments of severance under the Employee Plans listed on Section 4.17(a) of the Company Disclosure Schedule in the event of an actual or planned termination of an employee, make any Person a
participant in or party to any severance plan or grant any material increase in severance compensation, or (iv) establish, adopt, enter into or materially amend any Employee Plan (other than entering into offer letters that contemplate at
will employment, where permitted by Applicable Law, that do not provide for notice or severance pay or benefits or employment agreements consistent with the Companys ordinary course of business practices in the applicable jurisdiction)
or collective bargaining agreement; provided, however, that the foregoing provisions of this clause (iv) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired non-executive level
employees, or to non-executive employees in the context of promotions based on job performance or workplace requirements, Employee Plans and benefits and compensation practices and arrangements (excluding equity grants) that have a value that is
consistent with those provided to similarly situated employees or newly hired employees;
(o) make any change in any financial accounting
principles, methods or practices, including changes affecting the reported consolidated assets, liabilities or results of operations of the Company or any of its Subsidiaries, in each case except for any such change required by GAAP or Applicable
Law, including Regulation S-X under the 1934 Act;
(p) (A) (i) institute, pay, discharge, compromise, settle or satisfy (or agree to
do any of the preceding with respect to) (1) any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), including with respect to any pending actions, suits, investigations or
proceedings, in excess of $500,000 in any individual case, other than as required by their terms as in effect on the date of this Agreement and other than such claims, liabilities or obligations reserved against on the Company Balance Sheet (for
amounts not in excess of such reserves); provided that the payment, discharge, settlement or satisfaction of such claim, liability or obligation does not include any material obligations (other than the payment of money) to be performed by the
Company or any of its Subsidiaries following the Closing, or (ii) waive, relinquish, release, grant, transfer or assign any right with a value of more than $500,000 in any individual case or (B) commence any material actions, suits,
investigations or proceedings (other than in respect of collection of amounts owed in the ordinary course of business);
47
(q) engage in the conduct of any new line of business material to the Company and its
Subsidiaries, taken as a whole;
(r) make or change any material Tax election, amend any material Tax Return (except as required by
Applicable Law), enter into any material closing agreement with respect to Taxes or request any material ruling with respect to Taxes, assign or surrender any right to claim a material refund of Taxes, settle (or request to settle) or finally
resolve any material controversy with respect to Taxes, change any material method of Tax accounting or Tax accounting period, extend or waive any statute of limitation with respect to any material Tax, or take any action outside the ordinary course
of business that could reasonably be expected to result in the Company or any of its Subsidiaries being required to include a material item of income in, or exclude a material deduction from, a Tax Return for a period beginning after the Closing
Date;
(s) sell, assign, transfer, license, abandon, permit to lapse, create or incur any Lien (other than Permitted Liens) on, or
otherwise dispose of, any material Intellectual Property (other than nonexclusive licenses granted in the ordinary course of business of the Company and its Subsidiaries consistent with past practice) or fail to maintain or protect Company
Registered IP or fail to protect confidentiality of any material confidential Company Owned IP; or
(t) authorize, agree, resolve or
commit to do any of the foregoing.
Section 6.02. Company Shareholder Meeting. Subject to Section 6.03, the Company shall
convene and hold an extraordinary general meeting of its shareholders (the Company Shareholder Meeting) as soon as reasonably practicable for the purpose of voting on the approval and adoption of this Agreement, the Merger and the
other transactions contemplated hereby. Notwithstanding the immediately preceding sentence, the Company may adjourn or postpone the Company Shareholder Meeting (i) after consultation with Parent, to the extent necessary to ensure that any
required supplement or amendment to the Proxy Statement is provided to the Companys shareholders within a reasonable amount of time in advance of the Company Shareholder Meeting, (ii) as otherwise required by Applicable Law or
(iii) if as of the time for which the Company Shareholder Meeting is scheduled as set forth in the Proxy Statement, there are insufficient Company Shares represented (in person or by proxy) to constitute a quorum necessary to conduct the
business of the Company Shareholder Meeting. Subject to Section 6.03, the Board of Directors of the Company shall (A) recommend approval and adoption of this Agreement, the Merger and the other transactions contemplated hereby by the
Companys shareholders, (B) use its reasonable best efforts to obtain the Company Shareholder Approval and (C) otherwise comply with all legal requirements applicable to such meeting. For the avoidance of doubt, no Adverse
Recommendation Change shall obviate or otherwise affect the obligation of the Company to call and hold the Company Shareholder Meeting pursuant to and in accordance with this Section 6.02.
Section 6.03. Acquisition Proposals. (a) Notwithstanding anything to the contrary contained in this Agreement,
(i) during the period beginning on the date that is ninety (90) days after the date the Company Shareholder Approval is obtained and ending at the Effective Time (the Solicitation Period), the Company and its
Subsidiaries and their respective directors,
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officers, employees, Affiliates, investment bankers, attorneys, accountants and other advisors or representatives (collectively, Representatives) shall have the right to,
directly or indirectly, (A) solicit, initiate, facilitate and encourage any Acquisition Proposals, including by way of providing access to non-public information pursuant to one or more Acceptable Confidentiality Agreements; provided, however,
that any material non-public information concerning the Company or its Subsidiaries provided to any Third Party given such access shall be provided to Parent, Parent Assignee or Merger Subsidiary as promptly as reasonably practicable after it is
provided to such Third Party (which requirement may be satisfied by posting such information to the Electronic Data Room); and (B) enter into, continue or otherwise participate in any discussions or negotiations with respect to any Acquisition
Proposal or otherwise cooperate with or assist or participate in or facilitate any such discussions or negotiations or any effort or attempt to make any Acquisition Proposal and (ii) during the period beginning on the date hereof and ending on
the date that Parent has provided to the Company Acceptable Financing Evidence (the Qualified Bidder Solicitation Period) (provided, that if an Acceptable Commitment Letter Default shall have occurred, then the Qualified Bidder
Solicitation Period shall immediately recommence and shall end at such time as the Acceptable Commitment Letter Default shall have been cured by Parent or alternative Acceptable Financing Evidence has been provided by Parent to the Company), the
Company and its Representatives shall have the right to, directly or indirectly, (A) solicit, initiate, facilitate and encourage any Acquisition Proposals from the Qualified Former Bidders, including by way of providing access to non-public
information pursuant to one or more Acceptable Confidentiality Agreements with such Qualified Former Bidders or pursuant to one or more confidentiality agreements with such Qualified Former Bidders existing as of the date hereof; provided,
however, that any material non-public information concerning the Company or its Subsidiaries provided to any Qualified Former Bidder shall be provided to Parent, Parent Assignee or Merger Subsidiary as promptly as reasonably practicable after
it is provided to such Qualified Former Bidder (which requirement may be satisfied by posting such information to the Electronic Data Room); and (B) enter into, continue or otherwise participate in any discussions or negotiations with respect
to any Acquisition Proposal from a Qualified Former Bidder or otherwise cooperate with or assist or participate in or facilitate any such discussions or negotiations or any effort or attempt to make any Acquisition Proposal from a Qualified Former
Bidder, whether or not such Acquisition Proposal are submitted or provided to the Company or its Representatives before or after the date hereof.
(b) Except as expressly permitted by this Section 6.03, with respect to all Third Parties other than Qualified Former Bidders, from and
after the date hereof but prior to the commencement of the Solicitation Period, and with respect to Qualified Former Bidders, from the end of and after the Qualified Bidder Solicitation Period but prior to the commencement of the Solicitation
Period, the Company shall, and shall use its reasonable best efforts to cause each of its Representatives to (x) cease and cause to be terminated any existing solicitation, encouragement, discussion or negotiation with any Third Parties or
Qualified Former Bidders, as the case may be, that may be ongoing with respect to an Acquisition Proposal, and (y) request any such Third Party or Qualified Former Bidder to promptly return or destroy all confidential information concerning the
Company and its Subsidiaries. Except as expressly permitted by this Section 6.03, with respect to all Third Parties other than Qualified Former Bidders, from and
49
after the date hereof but prior to the commencement of the Solicitation Period, and with respect to Qualified Former Bidders, from the end of and after the Qualified Bidder Solicitation Period
but prior to the commencement of the Solicitation Period, neither the Company nor any of its Subsidiaries shall, nor shall the Company or any of its Subsidiaries authorize or permit any of its or their respective Representatives to, directly or
indirectly, (i) solicit, initiate or knowingly facilitate or encourage the submission of any Acquisition Proposal, (ii) enter into or participate in any discussions or negotiations with, or furnish any non-public information relating to
the Company or any of its Subsidiaries to, any Third Party or Qualified Former Bidder, as the case may be, for the purpose of knowingly facilitating or encouraging an Acquisition Proposal or (iii) enter into any agreement in principle, letter
of intent, merger agreement, acquisition agreement or other similar agreement relating to an Acquisition Proposal (an Alternate Acquisition Agreement).
(c) Notwithstanding anything to the contrary contained in Section 6.03(b), but subject to and except as expressly permitted by
Section 6.03(a), prior to obtaining the Company Shareholder Approval, the Company or its Board of Directors, directly, or indirectly through its Representatives, may (i) furnish nonpublic information to any Third Party making an
unsolicited Acquisition Proposal (provided, however, that such Acquisition Proposal shall not have been obtained in material violation of Section 6.03(b) and prior to so furnishing such information, the Company receives from such Third Party an
executed Acceptable Confidentiality Agreement); provided that the Company shall provide any material non-public information concerning the Company or its Subsidiaries provided to any Third Party to Parent, Parent Assignee or Merger Subsidiary as
promptly as reasonably practicable after it is provided to such Third Party (which requirement may be satisfied by posting such information to the Electronic Data Room), and (ii) engage in discussions or negotiations with such Third Party with
respect to the Acquisition Proposal if such Third Party has submitted an Acquisition Proposal which a majority of the members of the Board of Directors of the Company (after taking any abstentions into account but subject to quorum requirements)
determines in good faith, after consultation with its financial advisor and outside legal counsel, constitutes, or would reasonably be expected to result in, a Superior Proposal and that, in light of such Acquisition Proposal, failure to furnish
such information or enter into discussions or negotiations with such Third Party would not be in the best interests of the shareholders of the Company.
(d) Except as expressly permitted by this Section 6.03, neither the Board of Directors of the Company nor any committee thereof shall
(i) withdraw or modify, or publicly propose to withdraw or modify, in a manner adverse to Parent or Merger Subsidiary, the approval or recommendation by the Board of Directors of the Company or any such committee of this Agreement or the
transactions contemplated hereby or (ii) approve or recommend, publicly propose to approve or recommend, any Acquisition Proposal made or received after the date hereof (any of the actions described in clauses (i) and (ii) of this
Section 6.03(d), an Adverse Recommendation Change).
(e) Notwithstanding anything to the contrary contained in
Sections 6.03(b), 6.03(c) or 6.03(d), prior to obtaining the Company Shareholder Approval or during the Solicitation Period or during the Qualified Bidder Solicitation Period, if the Company has received an Acquisition Proposal and a majority of the
members of the Board of Directors of the Company (after taking
50
any abstentions into account but subject to quorum requirements) determines in good faith, after consultation with outside legal counsel and a financial advisor who shall be an internationally
recognized investment banking firm (it being agreed that Stifel, Nicolaus & Company is such a financial advisor) that such Acquisition Proposal constitutes, or is reasonably likely to result in, a Superior Proposal and determines in good
faith, after consultation with outside legal counsel, that failure to take any of the actions provided for in clauses (y) or (z) below in connection with such a Superior Proposal would, or would reasonably be expected to be, inconsistent
with the fiduciary duties of the Board of Directors of the Company under Applicable Law, the Board of Directors may (y) terminate this Agreement and enter into an Alternate Acquisition Agreement with respect to such a Superior Proposal pursuant
to Section 10.01(d)(i) and subject to compliance with Section 11.04(b)(i) and/or (z) make an Adverse Recommendation Change with respect to a such a Superior Proposal but only if, for purposes of both clauses (y) and (z),
(i) at least five (5) Business Days before taking such action, the Company has provided a written notice (a Notice of Superior Proposal) to Parent, Parent Assignee or Merger Subsidiary that the Company intends to take
such action, attaching the most current version of the proposed agreement under which such Superior Proposal is proposed to be consummated or, if no agreement exists, then summarizing the material terms of such Superior Proposal (including the
identity of the Third Party making such Superior Proposal), and (ii) (A) the Board of Directors of the Company shall have considered in good faith any revisions to this Agreement and the Financing irrevocably proposed in writing by Parent,
Parent Assignee or Merger Subsidiary in a manner that would form a binding Contract if accepted by the Company and (B) a majority of the members of the Board of Directors of the Company (after taking any abstentions into account but subject to
quorum requirements) shall have determined that such Superior Proposal would continue to constitute a Superior Proposal if such revisions were to be given effect (it being understood and agreed that any material amendment to the financial terms or
other material terms of such Superior Proposal shall require a new written Notice of Superior Proposal and the Company shall comply again with the requirements of this Section 6.03(e)); provided, however, that references to the five
(5) Business Day period above shall be deemed to be references to a three (3) Business Day period).
(f) Notwithstanding
Section 6.03(d), at any time prior to obtaining the Company Shareholder Approval or during the Solicitation Period, if an Intervening Event has occurred and a majority (after taking any abstentions into account but subject to quorum
requirements) of the members of the Board of Directors of the Company determines in good faith, after consultation with outside legal counsel, that the failure to take such action would, or would reasonably be expected to, be inconsistent with its
fiduciary duties under Applicable Law, the Board of Directors of the Company may make an Adverse Recommendation Change; provided that the Board of Directors of the Company shall not make such Adverse Recommendation Change unless the Company has
(i) provided to Parent, Parent Assignee or Merger Subsidiary at least five (5) Business Days prior written notice that it intends to take such action and specifying in reasonable detail the facts underlying the decision by the Board
of Directors of the Company to take such action and (ii) during such five (5) Business Day period, if requested by Parent, Parent Assignee, or Merger Subsidiary, engaged in good faith negotiations with Parent to amend this Agreement in
such a manner that obviates the need for such Adverse Recommendation Change.
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(g) The Company shall notify Parent promptly (but in no event later than two (2) Business
Days) after receipt by the Company (or any of its Representatives) of any Acquisition Proposal, which notice shall identify the material terms and conditions of any such Acquisition Proposal (it being understood that such notice need not include the
identity of the Third Party) and the Company shall keep Parent reasonably informed promptly (but in no event later than two (2) Business Days) after any material developments, discussions or negotiations regarding any Acquisition Proposal and
shall provide to Parent promptly (but in no event later than two (2) Business Days) after receipt thereof copies of all the proposed transaction agreements or proposed letters sent or provided to the Company or any of its Subsidiaries that
describe any material terms or conditions of any Acquisition Proposal (it being understood that such agreement or letters need not include the identity of the Third Party).
(h) In addition, nothing contained herein shall prevent the Board of Directors of the Company from (i) complying with Rule 14e-2(a), Rule
14d-9 or Item 1012(a) of Regulation M-A promulgated under the 1934 Act with regard to an Acquisition Proposal; provided that any such action taken or statement made that relates to any Acquisition
Proposal shall not be deemed to be an Adverse Recommendation Change if the Board of Directors of the Company reaffirms the Company Board Recommendation in such statement or in connection with such action or (ii) making any disclosure to the
shareholders of the Company if the Board of Directors of the Company determines in good faith, after consultation with outside legal counsel, that the failure to take such action would, or would reasonably be expected to be, inconsistent with
Applicable Law (including its fiduciary duties); provided that if such disclosure has the effect of withdrawing or adversely modifying the Company Board Recommendation, such disclosure shall be deemed to be an Adverse Recommendation Change;
provided, further, that any such disclosure shall not be deemed to be an Adverse Recommendation Change if the Board of Directors of the Company reaffirms the Company Board Recommendation in such disclosure.
(i) As used in this Agreement:
(i) Acceptable Confidentiality Agreement means a confidentiality agreement that contains provisions that are
no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement; provided that such confidentiality agreement may contain a less restrictive or no standstill restriction, in which case the Confidentiality
Agreement shall be deemed to be amended to contain only such less restrictive provision, or to omit such provision, as applicable.
(ii) Intervening Event means a material event, development or change with respect to the Company and its
Subsidiaries or the business of the Company and its Subsidiaries, in each case, taken as a whole, that (1) is unknown or not reasonably foreseeable by the Board of Directors of the Company as of or prior to the date of this Agreement or, if
known or reasonably foreseeable to the Board of Directors of the Company as of or prior to the date of this Agreement, the material consequences of which were not known or reasonably foreseeable to the Board of Directors of the Company as of or
prior to the date of this Agreement, and (2) occurs, arises or becomes known to the Board of Directors of the Company after the date of this Agreement and on or prior to the date of the Company Shareholder Approval; provided that the receipt by
the Company of an Acquisition Proposal or Superior Proposal or any inquiry related thereto or the consequences of completing such Acquisition Proposal or Superior Proposal will not be deemed to constitute an Intervening Event.
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(iii) Superior Proposal means an unsolicited bona fide,
written Acquisition Proposal for at least a majority of the outstanding Company Shares or a majority of the consolidated assets of the Company and its Subsidiaries that the Board of Directors of the Company determines in good faith, after
consultation with its financial advisor and outside legal counsel, and taking into account all relevant terms and conditions of such Acquisition Proposal, (1) would be more reasonably likely than the Merger to be consummated in accordance with
its terms, taking into account such factors as the Board of Directors of the Company considers appropriate, which may include legal, financial, regulatory approvals, and other aspects of such Acquisition Proposal, including conditionality and the
identity and credibility of the Person or group making the Acquisition Proposal, and (2) is more favorable to the Companys shareholders than the Merger (taking into account any irrevocable written proposal by Parent to amend the terms of
this Agreement pursuant to Section 6.03(e)); provided however, that any such Acquisition Proposal shall not be deemed to be a Superior Proposal (A) if the definitive agreement for such proposal contains a due
diligence condition in favor of the Third Party or (B) unless in the good faith judgment of the Board of Directors of the Company, any financing required to consummate the transaction contemplated by such Acquisition Proposal is
determined to be reasonably obtainable by the Third Party.
Section 6.04. Access to Information. (a) Subject to
Section 6.04(a) of the Company Disclosure Schedule, from the date hereof until the Effective Time, and subject to Applicable Law and the Confidentiality Agreement, the Company shall (a) give to Parent, its counsel, financial advisors,
auditors and other authorized representatives reasonable access during normal business hours to the offices, properties, books and records of the Company and its Subsidiaries (including Tax records, Tax and accounting work papers, Tax and general
ledgers, subsidiary ledgers, accounting documents and other financial related information), to the extent available as of the date hereof, or to the extent created by or received by, or in the possession of, the Company after the date hereof, and
(b) instruct its employees, counsel, financial advisors, auditors and other authorized representatives to reasonably cooperate with Parent in such access. Any access pursuant to this Section shall be conducted under supervision of appropriate
personnel of the Company and in such manner as not to unreasonably interfere with the conduct of the business of the Company. Without limiting the generality of the foregoing, as soon as reasonably practicable after the date of the request, the
Company shall deliver or make available to Parent information, books and records relating to the distribution arrangements (including with respect to revenue recognition) of the Company or any of its Subsidiaries or its controlled Affiliates (the
Distributor Information) as Parent has reasonably requested or may reasonably request.
(b) Notwithstanding anything to
the contrary in Section 6.04(a), nothing in this Agreement shall require the Company or any of its Subsidiaries or Representatives to provide Parent or any of its Representatives with access to any books, records, documents or other information
(i) to the extent that such books, records, documents or other information is subject
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to the terms of a confidentiality agreement with a Third Party, (ii) to the extent that the disclosure of such books, records, documents or other information would result in the loss of
attorney-client privilege or (iii) to the extent the disclosure of such books, records, documents or other information is prohibited by Applicable Law; provided that the Company shall take all commercially reasonable steps to permit inspection
of or to disclose such information on a basis that does not waive the Companys or its Subsidiarys, as the case may be, privilege with respect thereto
Section 6.05. Escrow for Termination Fee. (a) As of the date hereof or on the first Business Day that the escrow account
referenced herein is available to receive deposits if such account is not available to receive deposits on the date hereof, the Company has deposited or will deposit, or has caused to be deposited or will cause to be deposited, an amount of cash
equal to 50% of the Termination Fee (the Initially Deposited Termination Fee) with Citibank, N.A. in New York, New York (the Escrow Agent), as escrow agent, and (b) within five (5) Business Days
following the obtainment of the Company Shareholder Approval (if obtained), the Company shall deposit, or cause to be deposited, an additional amount of cash equal to the remaining amount of the Termination Fee which has not been deposited with the
Escrow Agreement at or prior to such time (the Remaining Termination Fee Deposit) with the Escrow Agent, and which amounts shall be held and released by Escrow Agent subject to the terms of this Agreement and that certain escrow
agreement, dated as of the date hereof, entered into between the Escrow Agent, Parent and the Company (the Escrow Agreement).
ARTICLE 7
Covenants of
Parent
Parent agrees that:
Section 7.01. Obligations of Merger Subsidiary. Parent shall take all action necessary to cause Parent Assignee and Merger
Subsidiary to perform its obligations under this Agreement and to consummate the Merger on the terms and conditions set forth in this Agreement.
Section 7.02. Voting of Shares. Parent shall vote or cause to be voted all Company Shares beneficially owned by it or any of its
Subsidiaries in favor of adoption and approval of this Agreement at the Company Shareholder Meeting.
Section 7.03.
Indemnification and Insurance. Parent shall cause the Surviving Company, and the Surviving Company hereby agrees, to do the following:
(a) For six years after the Effective Time, the Surviving Company shall indemnify and hold harmless the present and former officers and
directors of the Company or any of its Subsidiaries (each, an Indemnified Person) in respect of acts or omissions occurring at or prior to the Effective Time (including acts or omissions with respect to the adoption of this
Agreement and the consummation of the transactions contemplated hereby) pursuant to any agreements between such Indemnified Person and the Company or its Subsidiaries and pursuant to the Memorandum and Articles to the fullest extent permitted by
Cayman Companies Law or any other Applicable Law.
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(b) For six years after the Effective Time, Parent shall cause to be maintained in effect
provisions in the memorandum and articles of association of the Surviving Company and each of its Subsidiaries (or in such documents of any successor to the business of the Surviving Company or any of its Subsidiaries) regarding elimination of
liability, indemnification and advancement of expenses that are no less advantageous to the intended beneficiaries than the corresponding provisions in the memorandum and articles of association of the Company and each of its Subsidiaries in
existence on the date of this Agreement. From and after the Effective Time, any agreement of any Indemnified Person with the Company or any of its Subsidiaries regarding elimination of liability, indemnification or advancement of expenses shall be
assumed by the Surviving Company, shall survive the Merger and shall continue in full force and effect in accordance with its terms.
(c)
Prior to the Effective Time, the Company shall, or if the Company is unable to, Parent shall cause the Surviving Company as of the Effective Time to, obtain and fully pay the premium for the non-cancellable extension of the directors and
officers liability coverage of the Companys existing directors and officers insurance policies and the Companys existing fiduciary liability insurance policies (collectively, D&O Insurance), in
each case for a claims reporting or discovery period of at least six years from and after the Effective Time with respect to any claim related to any period of time at or prior to the Effective Time (including claims with respect to the adoption of
this Agreement and the consummation of the transactions contemplated hereby) with terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under the Companys existing policies; provided that
the Company shall give Parent a reasonable opportunity to participate in the negotiation of such tail insurance policy or extension and the Company shall give good faith consideration to any comments made by Parent with respect thereto;
and provided that the premium per annum payable for such tail insurance policy or extension shall not exceed 300% of the amount per annum the Company paid in its last full fiscal year (which amount is set forth in Section 7.03(b) of
the Company Disclosure Schedule) (such maximum amount, the Maximum Tail Premium) and if the cost for such tail insurance policy or extension exceeds the Maximum Tail Premium, then the Company shall obtain a policy with
the greatest coverage available for a cost not exceeding the Maximum Tail Premium.
(d) If Parent or the Surviving Company
(i) consolidates with or merges into any other Person and shall not be the continuing or surviving company or entity of such consolidation or merger, or (ii) transfers or conveys of its property and assets to any Person, then, and in each
such case, proper provision shall be made so that the applicable successor, assign or transferee shall assume the obligations set forth in this Section 7.03 (including this Section 7.03(d)).
(e) The rights of each Indemnified Person under this Section 7.03 shall be in addition to any rights such Person may have under the
memorandum and articles of association of the Company or any of its Subsidiaries, under Cayman Companies Law or any other Applicable Law, under any agreement of any Indemnified Person with the Company or any of its Subsidiaries or otherwise. These
rights shall survive consummation of the Merger and are intended to benefit, and shall be enforceable by, each Indemnified Person. The obligations of Parent and the Surviving Company under this Section 7.03 shall not be terminated or modified
in such a manner as to adversely affect the rights of any Indemnified Person without the consent of such Indemnified Person.
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Section 7.04. Employee Matters. (a) With respect to employees of the Company or
its Subsidiaries immediately before the Effective Time who remain employees of the Company or its Subsidiaries immediately after the Effective Time (Company Employees), for a period of twelve (12) months following the Closing
(or, if earlier, the termination of the applicable Company Employees employment with Parent, the Surviving Company and their Affiliates) (the Benefit Period), Parent shall, or shall cause the Surviving Company to, for so
long as a particular Company Employee is engaged by Parent, the Surviving Company or any of their Subsidiaries, provide compensation and employee benefits to such Company Employee that, taken as a whole, are substantially similar in the aggregate to
the compensation and benefits provided to the Company Employee immediately prior to the Effective Time under the Employee Plans listed on Section 4.17(a) of the Company Disclosure Schedule (or, in Parents sole discretion, if more
favorable to the Company Employee, the compensation and benefits provided to similarly situated employees of Parent and its Affiliates).
(b) Without limiting the generality of Section 7.04(a), from the Effective Time, Parent shall, or shall cause the Surviving Company to,
assume, honor and continue during the Benefit Period or, if sooner, until all obligations thereunder have been satisfied, all of the Companys employment, severance, change in control, retention and termination plans and agreements, in each
case, as in effect at the Effective Time and listed on Section 4.17(a) of the Company Disclosure Schedule, including with respect to any payments, benefits or rights arising as a result of the transactions contemplated by this Agreement (either
alone or in combination with any other event) that are described in Section 4.17(f) of the Company Disclosure Schedule, in accordance with the terms of such plans and agreements (including the terms regarding the right to amend or terminate
such plans or agreements); provided, however, that to the extent an event triggering benefits under any such agreement occurs during the Benefit Period, the obligations of Parent or the Surviving Company, as applicable, hereunder shall continue
until such obligations to provide such benefits have been fully satisfied.
(c) With respect to any employee benefit plan, as
defined in Section 3(3) of ERISA, maintained by the Surviving Company or any of its Affiliates (including any vacation, paid time-off and severance plans), for purposes of determining eligibility to participate, level of vacation, paid-time off
and severance benefits, and vesting, each Company Employees service with the Company or any of its Subsidiaries prior to the Effective Time (as well as service with any predecessor employer of the Company or any such Subsidiary, to the extent
service with the predecessor employer is recognized by the Company or such Subsidiary under the comparable Employee Plans) shall be treated as service with the Surviving Company or its Affiliates; provided, however, that such service was recognized
for such Company Employee for the same purpose under the comparable Employee Plan as of the Effective Time and that such service need not be recognized to the extent that such recognition would result in any duplication of benefits.
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(d) Parent shall use commercially reasonable efforts to waive, or shall cause the Surviving
Company or any of its Affiliates to waive, any pre-existing condition limitations, exclusions, actively-at-work requirements and waiting periods under any US health benefit plan maintained by the Parent, the Surviving Company or any of their
Affiliates in which any Company Employee (or the dependents of any eligible employee) will be eligible to participate during the Benefit Period, except to the extent that such pre-existing condition limitations, exclusions, actively-at-work
requirements and waiting periods would not have been satisfied or waived under the comparable Employee Plan immediately prior to the Effective Time. Parent shall use commercially reasonable efforts to recognize, or shall cause the Surviving Company
or any of its Affiliates to recognize, the dollar amount of all co-payments, deductibles and similar expenses incurred by each Company Employee (and his or her eligible dependents) during the calendar year in which the Effective Time occurs for
purposes of satisfying such years deductible and co-payment limitations under the relevant welfare benefit plans in which such Company Employee will be eligible to participate from and after the Effective Time.
(e) Without limiting the generality of Section 11.06, nothing in this Section 7.04 shall create any right in any Person, including
any employees, former employees, any participant in any Employee Plan or any beneficiary thereof, nor create any right to continued employment with Parent, Company, the Surviving Company or any of their Affiliates, nor be construed in any way as
modifying or amending the provisions of an Employee Plan.
Section 7.05. Escrow for Reverse Termination Fee. (a) As of
the date hereof or on the first Business Day that the escrow account referenced herein is available to receive deposits if such account is not available to receive deposits on the date hereof, Parent has deposited or will deposit, or has caused to
be deposited or will cause to be deposited, an amount of cash equal to 50% of the Reverse Termination Fee (the Initially Deposited Reverse Termination Fee) with the Escrow Agent and (b) within five (5) Business Days
following the obtainment of the Company Shareholder Approval (if obtained), Parent shall deposit, or cause to be deposited, an additional amount of cash equal to the remaining amount of the Reverse Termination Fee which has not been deposited with
the Escrow Agreement at or prior to such time (the Remaining Reverse Termination Fee Deposit) with the Escrow Agent, in each case, as collateral and security for the payment of the Reverse Termination Fee pursuant to
Section 11.04 and which amounts shall be held and released by Escrow Agent subject to the terms of this Agreement and the Escrow Agreement.
Section 7.06. Financing.
(a) Parent, Parent Assignee and Merger Subsidiary acknowledge and agree that the Company and its Affiliates and its and their respective
Representatives shall not have any responsibility for, or incur any liability prior to the Effective Time to any person under, any financing that Parent, Parent Assignee or Merger Subsidiary may raise in connection with the transactions contemplated
by this Agreement or any cooperation provided pursuant to Section 8.08, including in connection with the Bank of China Commitment Letter, or any other debt commitment letter including those included in the Acceptable Financing Evidence
(Commitment Letters) (other than to Parent, Parent Assignee and Merger Subsidiary for breach of such covenants pursuant to the terms herein) and that Parent, Parent Assignee and Merger Subsidiary shall, on a joint and several
basis, indemnify and hold harmless the Company and its Affiliates and its and their respective Representatives from and against any and all losses, damages, claims, costs or expenses suffered or incurred by any of them in connection with the
Financing and any information utilized in connection therewith.
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(b) Each of Parent, Parent Assignee and Merger Subsidiary shall use, and shall cause their
Affiliates to use, their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange and obtain the proceeds of any debt financing on the terms
and conditions described in the Acceptable Commitment Letters and the Available Funding (collectively, the Financing), including using (and causing their affiliates to use) their respective reasonable best efforts to:
(i) enter into Acceptable Commitment Letters (other than the Bank of China Commitment Letter), which such Acceptable Commitment Letters shall be in effect as promptly as practicable after the date hereof and (A) shall be legal, valid and
binding obligations of Parent, Parent Assignee and Merger Subsidiary and the other parties thereto, and (B) subject to the terms and conditions thereof, the lender parties thereto shall have committed to lend the amounts set forth therein to
Parent, Parent Assignee and/or Merger Subsidiary for the purpose of funding the transactions contemplated by this Agreement, (ii) enter into definitive agreements with respect thereto on the terms and conditions contained in any Commitment
Letter, which agreements shall be in effect as promptly as practicable after the date hereof, but in no event later than the Closing, (iii) satisfy, or cause their Representatives to satisfy, on a timely basis all conditions applicable to
Parent, Parent Assignee, Merger Subsidiary or their respective Representatives in such definitive agreements, and (iv) cause the lenders and any other persons providing Financing to fund the Financing at the Closing. The term
Acceptable Commitment Letters means one or more fully executed debt commitment letters from one or more banks to Parent, Parent Assignee, Merger Subsidiary or any of their respective controlled Affiliates that in form and
substance does not contain conditions to funding beyond the satisfaction or waiver of each of the conditions in Sections 9.01 and 9.02 (other than any conditions in Section 9.01 and 9.02 that by their nature are to be satisfied at the Closing,
but subject to the prior or substantially concurrent satisfaction or waiver of such conditions) and is otherwise presently customary for a United States going private transaction as to its conditionality and deal certainty provisions,
and that would provide for an aggregate amount of financing that shall at least equal the aggregate amount sufficient to fund all of the amounts required to be provided by Parent, Parent Assignee and Merger Subsidiary for the consummation of the
transactions contemplated by this Agreement and for the satisfaction of all of Parents Parent Assignees and Merger Subsidiarys obligations under this Agreement, including the payment of the Merger Consideration, other than amounts
that Parent, Parent Assignee and/or Merger Subsidiary have available in the form of immediately available funds or readily marketable securities and the Company Cash, in each case, as evidenced by the Acceptable Financing Evidence. The term
Acceptable Financing Evidence means, collectively, the Acceptable Commitment Letters, the Initially Deposited Termination Fee and, if deposited pursuant to Section 6.05 of this Agreement, the Remaining Termination Fee Deposit
(the Company Cash), and true, correct and authenticated bank statements, brokerage statements, or such other similar statements of accounts that are exclusively controlled by Parent, Parent Assignee or Merger Subsidiary that are
evidence of immediately available cash or readily marketable securities available exclusively to Parent, Parent Assignee and/or Merger Subsidiary, that together with the amounts under the Acceptable Commitment Letters and the Company Cash, represent
sufficient funds to make payment of all amounts required to be provided by Parent, Parent Assignee and Merger Subsidiary for the consummation of the transactions contemplated hereby (the Available Funding).
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(c) With respect to any Commitment Letter entered into by Parent, Parent Assignee or Merger
Subsidiary or any of their respective controlled Affiliates, Parent, Parent Assignee and Merger Subsidiary shall not (and shall not permit any of their respective controlled Affiliates to) agree to any amendments or modifications to, or grant any
waivers of, any condition or other provision under such Commitment Letter without the prior written consent of the Company if such amendments, modifications or waivers would reduce the aggregate amount of the Financing (including by changing the
amount of fees to be paid or original issue discount of the Financing) (except to the extent that Parent, Parent Assignee, Merger Subsidiary or any of their respective controlled Affiliates concurrently with such amendment, modification or waiver
enters into a new Acceptable Commitment Letter for the amount of such reduction in the Financing), impose new or additional conditions or otherwise be reasonably likely to (i) prevent or materially delay or impair the ability of Parent, Parent
Assignee and Merger Subsidiary to consummate the Merger and the other transactions contemplated by this Agreement or (ii) adversely impact the ability of Parent, Parent Assignee, Merger Subsidiary and any of their respective controlled
Affiliates to enforce its rights against the other parties to the Commitment Letters. Parent, Parent Assignee and Merger Subsidiary shall not (and shall not permit any of their respective Affiliates to) release or consent to the termination of the
obligations of the lenders under any Commitment Letters without the prior written consent of the Company, except to the extent any such released or terminated obligations are concurrently replaced by a new Acceptable Commitment Letter. With respect
to the Available Funding, Parent, Parent Assignee and Merger Subsidiary shall use their reasonable best efforts to not take any actions that would reduce the Available Funding to an amount that would prevent or materially delay or impair the ability
of Parent, Parent Assignee and Merger Subsidiary to consummate the Merger and the other transactions contemplated by this Agreement.
(d)
In the event any Commitment Letter shall be withdrawn or terminated, or Parent, Parent Assignee, Merger Subsidiary or any other party thereto shall take any action with respect to any Commitment Letter that requires the prior written consent of the
Company pursuant to Section 7.06(c) and such action is taken without the Companys prior written consent, or in the event Parent, Parent Assignee, Merger Subsidiary or any other party thereto shall default on or breach in any material
respect any term of any Commitment Letter, or there shall be any failure or waiver of any condition of any Commitment Letter, Parent, Parent Assignee and Merger Subsidiary shall as soon as practical (but in any event within one (1) Business Day
thereof) provide written notice to the Company of such event or circumstance (any such event or circumstance, an Commitment Letter Default). The occurrence of a Commitment Letter Default or Funding Unavailability Event with
respect to an Acceptable Commitment Letter or the Available Funding is an Acceptable Commitment Letter Default.
(e) In
the event that any portion of the Financing becomes or could reasonably be expected to become unavailable in the manner or from the sources contemplated by the Commitment Letters, or any portion of the Available Funding becomes or could reasonably
be expected to become unavailable in any manner (each, a Funding Unavailability Event), (i) Parent shall immediately so notify the Company and (ii) Parent, Parent Assignee and Merger
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Subsidiary shall use their respective reasonable best efforts to arrange and obtain, and to negotiate and enter into definitive agreements with respect to, alternative financing from alternative
financial institutions in an amount sufficient to consummate the transactions contemplated by this Agreement upon conditions not materially less favorable, taken as a whole, to Parent, Parent Assignee, Merger Subsidiary and the Company than those in
the Commitment Letters, as promptly as practicable following the occurrence of such event (and in any event no later than the Closing Date). The definitive agreements entered into pursuant to the first sentence of this Section 7.06(e) or
Section 7.06(b)(ii) are referred to in this Agreement, collectively, as the Financing Agreements.
(f) Each
of Parent, Parent Assignee and Merger Subsidiary acknowledges and agrees that neither the obtaining of the Financing or any alternative financing, is a condition to the Closing, and reaffirms its obligation to consummate the transactions
contemplated by this Agreement irrespective and independently of the availability of the Financing or any alternative financing, or the completion of any such issuance, subject to the applicable conditions in Section 9.01 and Section 9.02.
(g) Any material breach of the Financing Agreements or any alternative financing agreement by Parent, Parent Assignee or Merger
Subsidiary or their respective controlled Affiliates shall be deemed a breach by Parent of this Section 7.06. Parent shall (i) furnish to the Company complete, correct and executed copies of the Financing Agreements or any alternative
financing agreement promptly upon their execution, (ii) give the Company prompt notice of any breach or threatened breach by any party of the Commitment Letters, the Financing Agreements, or any alternative financing agreement of which Parent,
Parent Assignee or Merger Subsidiary or their respective controlled Affiliates becomes aware or any termination or threatened termination thereof, and (iii) otherwise keep the Company reasonably informed of the status of its efforts to arrange
the Financing (or any alternative financing).
ARTICLE 8
Covenants of Parent and the Company
The parties hereto agree that:
Section 8.01. Reasonable Best Efforts. Subject to the terms of this Agreement, including Section 6.04:
(a) The Company and Parent shall cooperate with each other and use their reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable under Applicable Law to consummate the Merger and the other transactions contemplated by this Agreement as promptly as practicable, including (i) preparing and filing as
promptly as practicable after the date hereof with any Governmental Authority all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, financial statements, records, applications
and other documents, in each case, to the extent available, including under the PRC Anti-Monopoly Law and to obtain the Parent Required Approvals, (ii) obtaining and maintaining all approvals, consents, registrations, permits, authorizations,
licenses, waivers and other confirmations required to be
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obtained from any Governmental Authority that are necessary to consummate the transactions contemplated by this Agreement, including the Parent Required Approvals and under the PRC Anti-Monopoly
Law, (iii) defending or contesting any action, suit or proceeding challenging this Agreement or the transactions contemplated hereby and (iv) executing and delivering any additional instruments necessary to consummate the transactions
contemplated hereby.
(b) In furtherance and not in limitation of the provisions of Section 8.01(a), Parent, and, to the
extent required by PRC Anti-Monopoly Law, the Company, agree (1) to the extent required by the PRC Anti-Monopoly Law, to (x) prepare and file as promptly as practicable, an initial filing with the PRC Anti-Monopoly Bureau pursuant to the
PRC Anti-Monopoly Law, and (y) to request and seek to have this Agreement and the transactions contemplated hereby accorded the simple cases treatment described in Interim Regulation on the Application of Simple Case Criteria to
Concentrations of Undertakings (the Simple Cases Regulation) issued by MOFCOM on February 13, 2014 and (2) prepare and file as promptly as practicable all filings required to obtain the Parent Required Approvals.
(c) If a party receives a request (written or verbal) for information or documentary material from any Governmental Authority with respect to
this Agreement or any of the transactions contemplated hereby, including the Merger, or any Parent Required Approval or PRC Antitrust Clearance (or activities related thereto), then such party shall, to the extent not prohibited by Applicable Law or
a Governmental Authority, in good faith make, or cause to be made, as soon as reasonably practicable and after consultation with the other party (to the extent legally possible), a response that is, at a minimum, in substantial compliance with such
request.
(d) The parties hereto shall keep each other apprised of the status of matters relating to the completion of the Merger and the
other transactions contemplated hereby, including the obtaining of the Parent Required Approvals or PRC Antitrust Clearance, and work cooperatively in connection with obtaining the Parent Required Approvals or PRC Antitrust Clearance and all other
approvals of, or clearances from, each applicable Governmental Authority with respect to the Merger and the other transactions contemplated hereby, including:
(i) cooperating with each other in connection with filings required to be made by any party hereto (including under the PRC Anti-Monopoly Law
or in connection with any Parent Required Approval) with respect to the Merger and the other transactions contemplated hereby and liaising with each other in relation to each step of the procedure before, and as to the contents of (to the extent
such content relates to information about Parent, Parent Assignee, Merger Subsidiary, the Company or the Merger), all communications with such Governmental Authorities with respect to the Merger and the other transactions contemplated hereby. In
particular, to the extent permitted by Applicable Law or Governmental Authority, no party will make any notification in relation to any of the Merger and the other transactions contemplated hereby or any Parent Required Approval or the PRC Antitrust
Clearance without first providing the other party with a copy of such notification in draft form and giving such other party a reasonable opportunity to discuss its content before it is filed with the relevant Governmental Authorities, and such
first party shall consider and take account of all reasonable comments timely made by the other party in this respect;
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(ii) furnishing to each other all information (to the extent such information is relating to
Parent, Parent Assignee, Merger Subsidiary, the Company or the Merger) within its possession that is required for any application or other filing to be made by the other party pursuant to Applicable Law in connection with the Merger and the other
transactions contemplated hereby or any Parent Required Approval or the PRC Antitrust Clearance;
(iii) promptly notifying each other of
any communications from or with any Governmental Authority with respect to the Merger and the other transactions contemplated hereby or any Required Approval and ensuring to the extent permitted by law or Governmental Authority that each of the
parties hereto is entitled to attend any meetings with or other appearances before any Governmental Authority with respect to the Merger and the other transactions contemplated hereby or any Required Approval;
(iv) consulting and cooperating with each other in connection with all analyses, appearances, presentations, memoranda, briefs, arguments,
opinions and proposals made or submitted by or on behalf of any party hereto in connection with proceedings under or relating to the PRC Anti-Monopoly Law or any Parent Required Approval;
(v) keeping each other reasonably apprised of any developments in connection with the Parent Required Approvals and the PRC Antitrust
Clearance; and
(vi) without prejudice to any rights of the parties hereto hereunder, consulting and cooperating in all respects with
each other in defending all lawsuits and other proceedings by or before any Governmental Authority challenging this Agreement or the consummation of any of the Merger and the other transactions contemplated hereby.
(e) Subject to the terms and provisions herein, Parent, Parent Assignee, Merger Subsidiary and the Company shall use their reasonable best
efforts to take, or cause to be taken, all actions necessary to obtain the Parent Required Approvals and the PRC Antitrust Clearance, to obtain any consents, approvals, permits or authorizations and to remove any impediments to the Merger relating
to the Parent Required Approvals, the PRC Anti-Monopoly Law and other antitrust, competition or premerger notification, or trade regulation law, regulation or order (Antitrust Laws), and Parent, Parent Assignee, Merger Subsidiary
and the Company shall use their reasonable best efforts to take any and all actions to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining order or other order in any suit or proceeding relating to the Parent
Required Approvals and the Antitrust Laws, including effecting an internal corporate restructuring to the extent reasonable and practicable.
Section 8.02. Proxy Statement. As promptly as practicable following the date hereof, the Company shall prepare and mail the Proxy
Statement to the Companys shareholders; provided that the Company shall provide Parent and its counsel at least five (5) Business Days to review the Companys proposed Proxy Statement in advance of mailing and consider in good faith
any comments reasonably proposed by Parent and its counsel. Subject to Section 6.03, the Proxy Statement shall include the recommendation of the Board of Directors of the Company in favor of approval and adoption of this Agreement and the
Merger. Parent and Merger Subsidiary shall
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furnish to the Company all information concerning Parent and Merger Subsidiary as may be reasonably required by the Company in connection with the Proxy Statement. Each of the Company, Parent and
Merger Subsidiary shall promptly correct any information provided by it for use in the Proxy Statement if and to the extent that such information shall have become false or misleading in any material respect, and the Company shall take all steps
necessary to amend or supplement the Proxy Statement and to cause the Proxy Statement, as so amended or supplemented, to be mailed to its shareholders, to the extent required by Applicable Law.
Section 8.03. Public Announcements. Subject to Section 6.03, and unless and until an Adverse Recommendation Change has
occurred, Parent and the Company shall consult with each other before issuing any press release, having any communication with the press (whether or not for attribution), making any other public statement or scheduling any press conference or
conference call with investors or analysts with respect to this Agreement or the transactions contemplated hereby and, except in respect of any such press release, communication, other public statement, press conference or conference call as may be
required by Applicable Law or any listing agreement with or rule of any national securities exchange or association, shall not issue any such press release, have any such communication, make any such other public statement or schedule any such press
conference or conference call prior to such consultation.
Section 8.04. Further Assurances. At and after the
Effective Time, the officers and directors of the Surviving Company shall be authorized to execute and deliver, in the name and on behalf of the Company or Merger Subsidiary, any deeds, bills of sale, assignments or assurances and to take and do, in
the name and on behalf of the Company or Merger Subsidiary, any other actions and things to vest, perfect or confirm of record or otherwise in the Surviving Company any and all right, title and interest in, to and under any of the rights, properties
or assets of the Company acquired or to be acquired by the Surviving Company as a result of, or in connection with, the Merger.
Section 8.05. Notices of Certain Events.
(a) Each of the Company and Parent shall promptly notify the other of:
(i) any notice or other communication from any Person alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any
Governmental Authority in connection with the transactions contemplated by this Agreement;
(iii) any Actions commenced or,
to its knowledge, threatened against the Company, its directors in such capacities or any of its Subsidiaries, or Parent, its directors in such capacities or any of its Subsidiaries, as the case may be, that relate to the consummation of the
transactions contemplated by this Agreement (and, to the extent such Action is commenced against the Company, its directors in such capacities or any of its Subsidiaries that relate to the consummation of the transactions contemplated by this
Agreement, the Company shall give Parent the opportunity to participate in and direct the
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defense or settlement of any such Action and no such Action shall be settled or compromised, and the Company shall not take any action to adversely and materially affect or prejudice any such
Action, without Parents prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed); and
(iv) any event, change, circumstance, effect, development or condition that causes, or would be reasonably be expected to
cause, or constitutes a breach of such partys representations and warranties which would reasonably be expected to result in a failure of the condition in Section 9.02(a) or 9.03(a), as the case may be, as of the Effective Time.
(b) The Company shall promptly (but in any event within 4 Business Days of the relevant event) notify Parent in writing and provide true and
correct copies (where applicable) of any material correspondence, rulings, briefs and other updates with respect to any pending Actions against the Company, its directors in such capacities or any of its Subsidiaries, not related to the consummation
of the transactions contemplated by this Agreement (including the Pending Class Action), but in no event shall Parent, Parent Assignee or Merger Subsidiary, or any of their Affiliates, have any right to participate in or direct the defense or
settlement of any such Action, and, subject to Section 6.01, any such Action may be settled or compromised by the Company, its directors or any of its Subsidiaries in their respective sole discretions.
Section 8.06. Section 16 Matters. Prior to the Effective Time, if required by Applicable Law, the Company shall take
all reasonable steps intended to cause any dispositions of Company Shares (including derivative securities with respect to Company Shares) resulting from the transactions contemplated by Article 2 of this Agreement by each individual who is subject
to the reporting requirements of Section 16(a) of the 1934 Act with respect to the Company to be exempt under Rule 16b-3 promulgated under the 1934 Act.
Section 8.07. Stock Exchange De-listing; 1934 Act Deregistration. As promptly as possible following the Effective Time, the
Surviving Company shall use its reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things, reasonably necessary on its part under Applicable Laws and rules and policies of NASDAQ to enable the
de-listing by the Surviving Company of the Company Shares from NASDAQ and the deregistration of the Company Shares under the 1934 Act as promptly as practicable after the Effective Time.
Section 8.08. Financing Cooperation. Subject to the terms of this Agreement, including Section 6.04 and Section 7.06(a),
the Company shall and shall cause its Subsidiaries to, at Parents and Parent Assignees sole expense, reasonably cooperate in connection with the arrangement of the Financing as may be reasonably requested by Parent (provided that such
requested cooperation does not unreasonably interfere with the ongoing operations of the Company and its Subsidiaries). Subject to the terms of this Agreement, including Section 6.04, such cooperation by the Company shall include, at the
reasonable request of Parent, (a) agreeing to enter into such agreements, and to use its reasonable best efforts to deliver such officers certificates, as are customary in financings of such type and as are, in the good faith
determination of the persons executing such officers certificates, accurate, and agreeing to
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pledge, grant security interests in, and otherwise grant liens on, the Companys assets pursuant to such agreements as may be reasonably requested, provided that no obligation of the Company
under any such agreement, pledge or grant shall be effective until the Effective Time, and (b) subject to Section 6.04, providing to the potential Financing sources (or alternative financing sources) financial and other information with
respect to the Company and the Merger, making the Companys senior officers available to assist the potential Financing sources (or alternative financing sources) and otherwise reasonably cooperating in connection with the consummation of the
Financing and any alternative financing. Parent shall promptly reimburse the Company for any expenses and costs incurred in connection with the Companys or its Affiliates obligations under this Section 8.08. Notwithstanding anything
in this Agreement to the contrary, neither the Company nor any of its Subsidiaries shall be required to pay any commitment or other similar fee or enter into any definitive agreement or incur any other liability or obligation in connection with the
Financing (or any alternative financing) prior to the Effective Time.
Section 8.09. No Impeding Actions. Subject to
the terms of this Agreement, including Section 6.04, each of Company, Parent, Parent Assignee and Merger Subsidiary agrees that, from the date hereof to the Effective Time, it shall not: (a) take any action that is intended to or would
reasonably be likely to result in any of the conditions to effecting the Merger becoming incapable of being satisfied or (b) take any action or fail to take any action that is intended, or which would reasonably be likely, to prevent,
materially delay or materially impede the ability of Company, Parent, Parent Assignee or Merger Subsidiary to consummate the Merger or the other transactions contemplated under this Agreement, in each case, other than pursuant to the terms of this
Agreement.
ARTICLE 9
Conditions to the Merger
Section 9.01. Conditions to the Obligations of Each Party. The obligations of the Company, Parent and Merger Subsidiary to
consummate the Merger are subject to the satisfaction of the following conditions:
(a) the Company Shareholder Approval shall have
been obtained in accordance with Cayman Companies Law;
(b) no temporary restraining order, preliminary or permanent injunction or other
judgment issued by any court of competent jurisdiction (collectively, Restraints) shall be in effect enjoining or otherwise prohibiting the consummation of the Merger;
(c) Parent shall have received all the Parent Required Approvals; and
(d) the PRC Antitrust Clearance shall have been obtained, if required by PRC law.
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Section 9.02. Conditions to the Obligations of Parent and Merger Subsidiary.
The obligations of Parent and Merger Subsidiary to consummate the Merger are subject to the satisfaction of the following further conditions:
(a) (i) the Company shall have performed in all material respects all of its covenants and obligations hereunder required to be
performed by it at or prior to the Effective Time, (ii) (A) the representations and warranties of the Company contained in Sections 4.01(a)(first sentence), 4.02, 4.04(a) and 4.25 shall be true and correct in all but de minimis
respects which have no adverse effect on the Companys ability to consummate the Merger at and as of the Effective Time as if made at and as of such time (other than such representations and warranties that by their terms address matters only
as of another specified time, which shall be true only as of such time), (B) the representations and warranties of the Company contained in Sections 4.05(a) (first two sentences) and 4.06(a) (first sentence) shall be true and correct in all but
de minimis respects at and as of the Effective Time as if made at and as of such time (other than such representations and warranties that by their terms address matters only as of another specified time, which shall be true only as of such
time) and (C) the other representations and warranties of the Company contained in Article 4 (disregarding all materiality and Material Adverse Effect qualifications contained therein) shall be true at and as of the Effective Time as if made at
and as of such time (other than representations and warranties that by their terms address matters only as of another specified time, which shall be true only as of such time), with, in the case of this clause (C) only, only such exceptions as
have not had and would not reasonably be expected to have a Material Adverse Effect on the Company, and (iii) Parent shall have received a certificate signed by an executive officer of the Company to the foregoing effect; and
(b) since the date hereof, except as disclosed on Section 9.02(b) of the Company Disclosure Schedule, there has not been any Material
Adverse Effect on the Company.
Section 9.03. Conditions to the Obligations of the Company. The obligations of the
Company to consummate the Merger are subject to the satisfaction of the following further conditions:
(a) (i) each of Parent,
Parent Assignee and Merger Subsidiary shall have performed in all material respects all of its covenants and obligations hereunder required to be performed by it at or prior to the Effective Time, (ii) (A) the representations and
warranties of Parent, Parent Assignee and Merger Subsidiary contained in Section 5.01, 5.02, and 5.07 shall be true in all material respects at and as of the Effective Time as if made at and as of such time (other than such representations and
warranties that by their terms address matters only as of another specified time, which shall be true only as of such time) and (B) the other representations and warranties of Parent, Parent Assignee and Merger Subsidiary contained in Article 5
(disregarding all materiality and Material Adverse Effect qualifications contained therein) shall be true at and as of the Effective Time as if made at and as of such time (other than representations and warranties that by their terms address
matters only as of another specified time, which shall be true only as of such time), with, in the case of this clause (B) only, only such exceptions as have not had and would not reasonably be expected to have a Material Adverse Effect on
Parent, and (iii) the Company shall have received a certificate signed by an executive officer of Parent to the foregoing effect.
Section 9.04. Frustration of Closing Conditions. None of the Company, Parent, Parent Assignee or Merger Subsidiary may rely
on the failure of any condition set forth in Article 9 to be satisfied if such failure was caused by such partys failure to perform any of its obligations under this Agreement or to act in good faith or, subject to Section 6.04, to use
its reasonable best efforts to consummate the Merger.
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ARTICLE 10
Termination
Section 10.01. Termination. This Agreement may be terminated and the Merger may be abandoned at any time prior to the
Effective Time (notwithstanding any approval of this Agreement by the shareholders of the Company):
(a) by mutual written agreement
of the Company and Parent;
(b) by either the Company or Parent, if:
(i) the Merger has not been consummated on or before the date that is one hundred eighty (180) days after the date of the
Company Shareholder Meeting (including any adjournment or postponement thereof) (the End Date); provided, however, that if on such 180th day the conditions in Section 9.01(b), Section 9.01(c) and/or Section 9.01(d)
shall not have been satisfied or waived, then the End Date shall be extended one time by an additional ninety (90) days (and such 90th day after the 180th day shall be the End Date); provided, further, that the right to
terminate this Agreement pursuant to this Section 10.01(b)(i) shall not be available to any party whose breach of any provision of this Agreement results in the failure of the Merger to be consummated by the End Date;
(ii) any Restraint shall be in effect that permanently makes illegal or otherwise prohibits consummation of the Merger or
permanently enjoins the Company, Parent, Parent Assignee or Merger Subsidiary from consummating the Merger, and such Restraint shall have become final and nonappealable; provided that the right to terminate this Agreement pursuant to this
Section 10.01(b)(ii) shall not be available to any party whose breach of any provision of this Agreement results in such Restraint; or
(iii) at the Company Shareholder Meeting (including any adjournment or postponement thereof), the Company Shareholder Approval
shall not have been obtained; or
(c) by Parent, if:
(i) an Adverse Recommendation Change shall have occurred or the Company fails to include the Company Board Recommendation in
the Proxy Statement; provided, however, that Parent shall not be permitted to terminate this Agreement pursuant to this Section 10.01(c)(i) unless the notice of termination pursuant to this Section 10.01(c)(i) is delivered by Parent to the
Company within five (5) Business Days following the occurrence of the Adverse Recommendation Change or the Companys failure to include the Company Board Recommendation in the Proxy Statement;
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(ii) a breach of any representation or warranty or failure to perform any
covenant or agreement on the part of the Company set forth in this Agreement shall have occurred that would cause the condition set forth in Section 9.02(a) not to be satisfied, and such condition is incapable of being satisfied by the End Date
(provided that any material breach of Section 6.03 which is not cured shall be deemed to cause the condition set forth in Section 9.02(a) to not be satisfied and incapable of being satisfied by the End Date); provided that the right to
terminate this Agreement pursuant to this Section 10.01(c)(ii) shall not be available to Parent if Parents, Parent Assignees or Merger Subsidiarys breach of any provision of this Agreement would cause any of the conditions set
forth in Section 9.03(a) not to be satisfied;
(iii) the Company shall not have deposited, or shall not have caused to
be deposited, with the Escrow Agent (A) the Initially Deposited Termination Fee in accordance with Section 6.05, or (B) the Remaining Termination Fee Deposit within five (5) Business Days following the obtainment of the Company
Shareholder Approval (if obtained) in accordance with Section 6.05, provided that that right to terminate this Agreement pursuant to this Section 10.01(c)(iii) shall not be available to Parent if Parent shall not have deposited, or shall
not have caused to be deposited, with the Escrow Agent the Initially Deposited Reverse Termination Fee in accordance with Section 7.05 or the Remaining Reverse Termination Fee Deposit within five (5) Business Days following the obtainment
of the Company Shareholder Approval (if obtained) in accordance with Section 7.05;
(d) by the Company, if:
(i) prior to the receipt of the Company Shareholder Approval or during the Solicitation Period or during the Qualified Bidder
Solicitation Period, a majority of the members of the Board of Directors of the Company determines to terminate this Agreement when permitted to do so in accordance with Section 6.03 in order to permit the Company, in compliance with
Section 6.03, to enter into an Alternate Acquisition Agreement with respect to a Superior Proposal, which agreement shall be entered into as soon as practicable after the effectiveness of the written notice of such termination by the Company
given in accordance with this Section 10.01; provided, that as an additional condition to the effectiveness of such termination, the Company will be required to pay the Termination Fee payable pursuant to Section 11.04(b)(i) within three
(3) Business Days after such termination of this Agreement;
(ii) a breach of any representation or warranty or
failure to perform any covenant or agreement on the part of Parent or Merger Subsidiary set forth in this Agreement shall have occurred that would cause the conditions set forth in Section 9.03(a) not to be satisfied, and such condition is
incapable of being satisfied by the End Date; provided that the right to terminate this Agreement pursuant to this Section 10.01(d)(ii) shall not be available to the Company if the Companys breach of any provision of this Agreement would
cause any of the conditions set forth in Section 9.02(a) not to be satisfied;
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(iii) all of the conditions set forth in Section 9.01 and Section 9.02
have been satisfied (other than those conditions that by their nature are to be satisfied by actions taken at the Closing), the Company has confirmed in writing that it is ready and able to consummate the Closing, and Parent and Merger Subsidiary
fail to consummate the Merger by the date the Closing should have occurred pursuant to Section 2.01(b); or
(iv)
Parent shall not have deposited, or shall not have caused to be deposited, with the Escrow Agent (A) the Initially Deposited Reverse Termination Fee in accordance with Section 7.05, or (B) the Remaining Reverse Termination Fee Deposit
within five (5) Business Days following the obtainment of the Company Shareholder Approval (if obtained) in accordance with Section 7.05; provided that that right to terminate this Agreement pursuant to this Section 10.01(d)(iv) shall
not be available to the Company if the Company shall not have deposited, or shall not have caused to be deposited, with the Escrow Agent the Initially Deposited Termination Fee in accordance with Section 6.05 or the Remaining Termination Fee
Deposit within five (5) Business Days following the obtainment of the Company Shareholder Approval (if obtained) in accordance with Section 6.05.
The party desiring to terminate this Agreement pursuant to this Section 10.01 (other than pursuant to Section 10.01(a)) shall give notice of such
termination to the other party.
Section 10.02. Effect of Termination. If this Agreement is terminated pursuant to
Section 10.01, this Agreement shall become void and of no effect without liability of any party (or any shareholder, director, officer, employee, agent, consultant or representative of such party) to the other party hereto; provided that
(a) the provisions of this Section 10.02 and Sections 11.01, 11.04, 11.07, 11.08, 11.09 and 11.13 and the Confidentiality Agreement shall survive any termination hereof pursuant to Section 10.01 and (b) neither the Company nor
Parent shall be relieved or released from any liabilities or damages arising out of its willful and material breach of any provision of this Agreement.
ARTICLE 11
Miscellaneous
Section 11.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing
(including facsimile transmission or email (provided, that such email states that it is a notice delivered pursuant to this Section 11.01)) and shall be given,
if to Parent, Parent Assignee or Merger Subsidiary, to:
Shanghai Pudong Science and Technology Investment Co., Ltd.
13 Building No. 439 Chunxiao Rd.
Zhangjiang High-Tech Park, Pudong, Shanghai, PRC
Attention: Bogu Liang
Mengzhao Chen
Facsimile No.: +86-21-5027-6385
Email: liangbg@pdsti.com
chenmz@pdsti.com
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with a copy to (which shall not constitute notice):
Kirkland & Ellis
26th
Floor, Gloucester Tower
The Landmark
15 Queens Road Central
Hong Kong
Attention: David Zhang
Stephanie Tang
Facsimile No.: +852-03761-3301
Email: david.zhang@kirkland.com
stephanie.tang@kirkland.com
if to the Company, to:
Montage
Technology Group Limited
Room A1601, Technology Building, 900 Yi Shan Road
Xuhui District, Shanghai, 200233
Attention: Peoples Republic of China
Facsimile No.: +86-21-5426-3132
+1-408-982-2789
Email: howard.yang@montage-tech.com
with a copy to (which shall not constitute notice):
OMelveny & Myers LLP
Two Embarcadero Center, 28th Floor
San Francisco, California 94111
Attention: Paul Scrivano, Esq.
Facsimile No.: 415-984-8701
Email: pscrivano@omm.com
or to such other
address or facsimile number or email address as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.
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Section 11.02. Non-Survival of Representations and Warranties. The
representations, warranties and agreements contained herein and in any certificate or other writing delivered pursuant hereto shall not survive the Effective Time; provided that this Section 11.02 shall not limit any covenant or agreement by
the parties that by its terms contemplates performance after the Effective Time.
Section 11.03. Amendments and
Waivers. (a) Any provision of this Agreement may be amended or waived prior to the Effective Time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement or,
in the case of a waiver, by each party against whom the waiver is to be effective; provided that after the Company Shareholder Approval has been obtained, there shall be no amendment or waiver that would require the further approval of the
shareholders of the Company under Cayman Islands law without such approval having first been obtained.
(b) No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.
Section 11.04. Expenses. (a) General. Except as otherwise provided in this Section 11.04, all costs and expenses
incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.
(b) Termination Fees.
(i) If this Agreement is terminated by Parent pursuant to Section 10.01(c)(i) or by the Company pursuant to
Section 10.01(d)(i), then the Company shall pay an amount equal to $40,770,000 (subject to the proviso below, the Termination Fee) to Parent, in the case of a termination by Parent, within three (3) Business Days after
such termination and, in the case of a termination by the Company, within three (3) Business Days after such termination; provided, however, that in the event that this Agreement is terminated by the Company pursuant to Section 10.01(d)(i)
and such termination occurs during the Solicitation Period or the Qualified Bidder Solicitation Period (only with respect to Qualified Former Bidders), then the Company shall pay, or cause to be paid, to Parent an amount equal to $20,385,000 (and
only when paid under such circumstances such amount shall be the Termination Fee) within three (3) Business Days after such termination.
(ii) If (A) this Agreement is terminated by Parent or the Company pursuant to Section 10.01(b)(i) or
Section 10.01(b)(iii), (B) after the date of this Agreement and prior to the date of the Company Shareholder Meeting, any Acquisition Proposal shall have been publicly announced or publicly communicated to the Companys shareholders
and not withdrawn, or otherwise made or become known to the Board of Directors of the Company, including an Acquisition Proposal made by a Qualified Former Bidder after the date hereof and (C) within twelve (12) months following the date
of such termination, any such Acquisition Proposal shall have been consummated, then the Company shall pay to Parent in immediately available funds, concurrently with such consummation, the Termination Fee; provided that for purposes of this
Section 11.04(b)(ii), all references to 25% in the definition of Acquisition Proposal shall be deemed to be references to 50%.
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(iii) If this Agreement is terminated (x) by Parent or the Company pursuant
to Section 10.01(b)(i) or Section 10.01(b)(ii) (due to a Restraint that arises as a result of or is issued in respect of a failure described in clause (A) or (B) below) and, at the time of such termination, all of the conditions
set forth in Sections 9.01(a), 9.01(b) (other than a Restraint that arises as a result of or is issued in respect of a failure described in clause (A) or (B) below) and 9.02 (as if the date of such termination were the Effective Time,
where applicable) shall have been satisfied or waived by the applicable parties hereto, other than those conditions that are not satisfied as a result of, or in connection with, (A) any failure to obtain any of the Parent Required Approvals
(other than any such failure primarily caused by the Companys breach of any provisions of this Agreement which would cause Section 9.02(a)(i) not be satisfied or other than as set forth on Section 11.04(b)(iii) of the Company
Disclosure Schedule), then, Parent shall pay, or cause to be paid, to the Company an amount equal to $67,940,000 (the Reverse Termination Fee) or (B) any failure to obtain the PRC Antitrust Clearance (other than as set forth
on Section 11.04(b)(iii) of the Company Disclosure Schedule) then, Parent shall pay, or cause to be paid, to the Company an amount equal to the Reverse Termination Fee or (y) by the Company pursuant to Section 10.01(d)(iii), then,
Parent shall pay, or cause to be paid, to the Company an amount equal to the Reverse Termination Fee, in each case, not later than the third (3rd) Business Day following such termination.
(iv) If this Agreement is terminated by Parent pursuant to Section 10.01(c)(iii), then the Company shall pay to
Parent an amount equal to the Termination Fee within three (3) Business Days after such termination.
(v) If this
Agreement is terminated by the Company pursuant to Section 10.01(d)(iv), then Parent shall pay to the Company an amount equal to the Reverse Termination Fee within three (3) Business Days after such termination.
(vi) In no event shall the Company be required to pay the Termination Fee or Parent be required to pay the Reverse Termination
Fee on more than one occasion. If a Person is designated by Parent to receive the Termination Fee or by the Company to receive the Reverse Termination Fee, when payable pursuant to the terms of this Agreement, then, if paid to such designee, the
Termination Fee or the Reverse Termination Fee, as applicable, shall be deemed paid pursuant to the terms of this Agreement.
(c) Each of
the Company, Parent and Merger Subsidiary acknowledges that (i) the agreements contained in this Section 11.04 are an integral part of the transactions contemplated by this Agreement, (ii) without these agreements, the Company, Parent
and Merger Subsidiary would not enter into this Agreement and (iii) each of the Termination Fee and the Reverse Termination Fee is not a penalty, but, except as set forth in Section 11.04(f), is liquidated damages, in a reasonable amount
that will compensate the Company or Parent, as the case may
72
be, in the circumstances in which such fee is payable for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on
the expectation of the consummation of the transactions contemplated hereby, which amount would otherwise be impossible to calculate with precision. Accordingly, if the Company or Parent, as the case may be, fails to timely pay any amount due
pursuant to this Section 11.04 and, in order to obtain such payment, either Parent or the Company, as the case may be, commences a suit that results in a judgment against the other party for the payment of any amount set forth in this
Section 11.04, such paying party shall pay the other party its reasonable and documented out-of-pocket costs and expenses in connection with such suit, together with interest on such amount at the annual rate of the prime rate plus five percent
(5%) as published in The Wall Street Journal in effect on the date such payment was required to be made through the date such payment was actually received, or such lesser rate as is the maximum permitted by Applicable Law.
(d) Parent and Merger Subsidiary agree that, upon any termination of this Agreement under circumstances where the Termination Fee is payable by
the Company pursuant to this Section 11.04 and such Termination Fee is paid in full, except as provided in Section 11.04(f) and Section 11.13, Parent, Parent Assignee, Merger Subsidiary, the financing sources under the Financing or
any of their respective former, current or future directors, officers, employees, partners, managers, members, shareholders or Affiliates or their respective Representatives (collectively, the Parent Related Parties) shall be
precluded from any other remedy against the Company, at law or in equity or otherwise, and neither Parent, Parent Assignee nor Merger Subsidiary shall seek to obtain any recovery, judgment, or damages of any kind, including consequential, indirect,
or punitive damages, against the Company or any of its Subsidiaries or any of their respective former, current or future directors, officers, employees, partners, managers, members, shareholders or Affiliates or their respective Representatives
(collectively, the Company Related Parties) in connection with this Agreement or the transactions contemplated hereby, and that Parents right to receive payment of the Termination Fee pursuant to Section 11.04 shall
constitute the sole and exclusive remedy of the Parent Related Parties for all losses and damages suffered as a result of the failure of the transactions contemplated by this Agreement to be consummated or for a breach or failure to perform
hereunder or otherwise, and upon payment of such amount, none of the Company Related Parties shall have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated by this Agreement (except that
the Company shall also be obligated with respect to Section 11.04(c)).
(e) The Company agrees that, upon any termination of this
Agreement under circumstances where the Reverse Termination Fee is payable by Parent pursuant to this Section 11.04 and such Reverse Termination Fee is paid in full, except as provided in Section 11.04(f) and Section 11.13, the
Company Related Parties shall be precluded from any other remedy against the Parent, at law or in equity or otherwise, and the Company shall not seek to obtain any recovery, judgment, or damages of any kind, including consequential, indirect, or
punitive damages, against the Parent Related Parties in connection with this Agreement or the transactions contemplated hereby, and that the Companys right to receive payment of the Reverse Termination Fee pursuant to Section 11.04 shall
constitute the sole and exclusive remedy of the Company Related Parties for all losses and damages suffered as a result of the
73
failure of the transactions contemplated by this Agreement to be consummated or for a breach or failure to perform hereunder or otherwise, and upon payment of such amount, none of the Parent
Related Parties shall have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated by this Agreement (except that Parent shall also be obligated with respect to Section 11.04(c) and for
any of its expense reimbursement and indemnification obligations contained in Section 8.08).
(f) Notwithstanding
Section 11.04(d), payment of the Termination Fee pursuant to Section 11.04(b)(i) or 11.04(b)(ii) (i) shall not constitute liquidated damages with respect to any claim for damages or any other claim which Parent, Parent Assignee, or
Merger Subsidiary would be entitled to assert against the Company, any Company Related Parties or any of their respective assets with respect to any such termination of this Agreement based upon the knowing or intentional breach or intentional
misrepresentation of any representations, warranties or covenants of the Company in this Agreement, and (ii) shall not constitute the sole and exclusive remedy with respect to any such termination of this Agreement based upon the knowing or
intentional breach or misrepresentation of any of the representations, warranties or covenants of the Company in this Agreement. Notwithstanding Section 11.04(e), payment of the Reverse Termination Fee pursuant to Section 11.04(b)(iii):
(i) shall not constitute liquidated damages with respect to any claim for damages or any other claim which the Company would be entitled to assert against Parent, any Parent Related Parties (other than any financing source in respect of the
Financing) or any of their respective assets with respect to any such termination of this Agreement based upon the knowing or intentional breach or intentional misrepresentation of any representations, warranties or covenants of Parent, Parent
Assignee or Merger Subsidiary in this Agreement, and (ii) shall not constitute the sole and exclusive remedy with respect to any such termination of this Agreement based upon the knowing or intentional breach or misrepresentation of any of the
representations, warranties or covenants of Parent in this Agreement, it being understood that the failure to obtain the Financing shall not, in and of itself, constitute a knowing or intentional breach.
Section 11.05. Disclosure Schedule References. Notwithstanding anything to the contrary herein, the parties hereto agree
that any reference in a particular Section of the Company Disclosure Schedule shall be deemed to be an exception to (or, as applicable, a disclosure for purposes of) the representations, warranties, covenants, agreements or other provisions hereof
of the relevant party that are contained in the corresponding Section of this Agreement, and any other representations, warranties, covenants, agreements or other provisions hereof of such party that is contained in this Agreement, but only if the
relevance of that reference as an exception to (or a disclosure for purposes of) such representations, warranties, covenants, agreements and other provisions hereof, would be readily apparent to a reasonable person who has read that reference and
such representation, warranty, covenant, agreement, or other provision hereof, without any independent knowledge on the part of the reader regarding the matter(s) so disclosed. The mere inclusion of an item in the Company Disclosure Schedule as an
exception to a representation, warranty, covenant, agreement or other provision hereof shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would
reasonably be expected to have a Material Adverse Effect on the Company.
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Section 11.06. Binding Effect; Benefit; Assignment. (a) The provisions of
this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors and permitted assigns (including Parent Assignee). Except as provided in Article 2 (only with respect
to shareholders and only after the Effective Time) and Section 7.03, no provision of this Agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and
their respective successors and permitted assigns.
(b) Except as provided in Section 2.08 (provided, that Parent shall remain a party
hereto and is not relieved of any of its obligations under and pursuant to this Agreement and remains responsible and liable for all representations, warranties, liabilities, covenants, agreements and any other obligations under and pursuant to the
terms of this Agreement pursuant to, and otherwise complies with, the last sentence of Section 2.08), no party may assign, delegate or otherwise transfer, by operation of law or otherwise, any of its rights or obligations under this Agreement
without the consent of each other party hereto, except that Parent or Merger Subsidiary may transfer or assign its rights and obligations under this Agreement, in whole or from time to time in part, to one or more of its Affiliates at any time and
after the Effective Time, to any Person; provided that such transfer or assignment shall not relieve Parent or Merger Subsidiary of its obligations hereunder or enlarge, alter or change any obligation of any other party hereto or due to Parent or
Merger Subsidiary. Any purported assignment not permitted under this Section 11.06(b) shall be null and void.
Section 11.07.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law rules (other than New York General Obligations Law Sections 5-1401 and
5-1402) of such State (provided that the fiduciary duties of the Board of Directors of the Company, the internal corporate affairs of the Company, and the Merger and any exercise of appraisal and dissention rights with respect to the Merger, shall
in each case be governed by the laws of the Cayman Islands).
Section 11.08. Consent to Jurisdiction. Each of Parent,
Parent Assignee, Merger Subsidiary and the Company irrevocably submits to the exclusive jurisdiction of any New York federal court (or if jurisdiction is not available therein, a New York state court) sitting in the Borough of Manhattan of the City
of New York, and any appellate court from any thereof, for the purposes of any suit, action or other proceeding arising out of this Agreement, the other agreements contemplated hereby or any transaction contemplated hereby. Each of Parent, Merger
Subsidiary and the Company agrees to commence any action, suit or proceeding relating hereto in a New York federal court (or if jurisdiction is not available therein, a New York state court) sitting in the Borough of Manhattan of the City of New
York, and any appellate court from any thereof. Each of Parent, Parent Assignee, Merger Subsidiary and the Company further agrees that service of any process, summons, notice or document by U.S. registered mail to such partys respective
address set forth above shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction in this Section 11.08. Each of Parent, Parent Assignee, Merger
Subsidiary and the Company irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in any New
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York federal court sitting in the Borough of Manhattan of the City of New York, and any appellate court from any thereof, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. Each of Parent, Parent Assignee, Merger Subsidiary and the Company irrevocably waives any objections or
immunities to jurisdiction to which it may otherwise be entitled or become entitled (including sovereign immunity, immunity to pre-judgment attachment, post-judgment attachment and execution) in any legal suit, action or proceeding against it
arising out of or relating to this Agreement or the transactions contemplated hereby which is instituted in any such court. Each of Parent, Parent Assignee, Merger Subsidiary and the Company hereby irrevocably and unconditionally designates,
appoints and empowers is Law Debenture Corporate Services Inc., 400 Madison Avenue, 4th Floor, New York, NY 10017, as its designee, appointee and agent to receive, accept and acknowledge for and on its behalf service of any and all legal process,
summons, notices and documents that may be served in any action, suit or proceeding brought against such party in any such United States federal or state court with respect to its obligations, liabilities or any other matter arising out of or in
connection with this Agreement and that may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such courts. If for any reason such designee, appointee and agent hereunder shall cease to be available to
act as such, each of Parent, Parent Assignee, Merger Subsidiary and the Company agrees to promptly designate a new designee, appointee and agent in the State of New York on the terms and for the purposes of this Section 11.08 reasonably
satisfactory to the other parties hereto. Parent, Parent Assignee, Merger Subsidiary and the Company hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any such action, suit or
proceeding against Parent, Parent Assignee, Merger Subsidiary and the Company, respectively, by serving a copy thereof upon the relevant agent for service of process referred to in this Section 11.08 (whether or not the appointment of such
agent shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by sending copies thereof by a recognized next day courier service to Parent, Parent Assignee, Merger Subsidiary and the Company,
respectively, at its address specified in or designated pursuant to this Agreement. Each party agrees that the failure of any such designee, appointee and agent to give any notice of such service to them shall not impair or affect in any way the
validity of such service or any judgment rendered in any action or proceeding based thereon. The parties agree that service of process may also be effected by certified or registered mail, return receipt requested, or by reputable overnight courier
service, directed to the other party at the addresses set forth herein in Section 11.01, and service so made shall be completed when received.
Section 11.09. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 11.10.
Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the
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other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other
communication). Facsimile signatures or signatures received as a pdf attachment to electronic mail shall be treated as original signatures for all purposes of this Agreement.
Section 11.11. Entire Agreement; No Other Representations and Warranties. (a) This Agreement, including
the Company Disclosure Schedule, together with the Confidentiality Agreement, constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral
and written, between the parties with respect to the subject matter of this Agreement.
(b) Except for the representations and warranties
contained in Article 4, each of Parent and Merger Subsidiary acknowledges that neither the Company nor any Person on behalf of the Company makes any other express or implied representation or warranty with respect to the Company or any of its
Subsidiaries or with respect to any other information made available to Parent or Merger Subsidiary in connection with the transactions contemplated by this Agreement. Neither the Company nor any other Person will have or be subject to any liability
or indemnification obligation to Parent, Merger Subsidiary or any other Person resulting from the distribution to Parent or Merger Subsidiary, or Parents or Merger Subsidiarys use of, any such information, including any information,
documents, projections, forecasts or other material made available to Parent or Merger Subsidiary in certain data rooms or management presentations in expectation of the transactions contemplated by this Agreement, unless, and then only
to the extent that, any such information is expressly included in a representation or warranty contained in Article 4.
(c) Except for the
representations and warranties contained in Article 5, the Company acknowledges that none of Parent, Merger Subsidiary or any other Person on behalf of Parent or Merger Subsidiary makes any other express or implied representation or warranty with
respect to Parent or Merger Subsidiary or with respect to any other information made available to the Company in connection with the transactions contemplated by this Agreement.
Section 11.12. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
Section 11.13. Specific Performance. The parties hereto agree that irreparable damage for which monetary damages, even if
available, would not be an adequate remedy would occur in the event that the parties hereto do not perform their obligations under the provisions of this Agreement (including failing to take such actions as are required of them hereunder to
consummate the Merger and the other transactions contemplated by this Agreement) in
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accordance with its specified terms or otherwise breach such provisions. The parties acknowledge and agree that the parties shall be entitled to an injunction or injunctions, specific performance
or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the courts described in Section 11.08 without proof of damages or otherwise, this being in addition to any other
remedy to which they are entitled under at law or in equity, and the right of specific enforcement is an integral part of the transactions contemplated by this Agreement and without that right, neither the Company nor Parent would have entered into
this Agreement. Each of the parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that the other parties hereto have an adequate remedy at law or an award of
specific performance is not an appropriate remedy for any reason at law or in equity. The parties hereto acknowledge and agree that any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement in accordance with this Section 11.13 shall not be required to provide any bond or other security in connection with any such order or injunction. If, prior to the End Date, any party brings any suit,
action or proceeding, in each case in accordance with Section 11.08, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, the End Date shall automatically be extended by (A) the amount of time
during which such suit, action or proceeding is pending, plus twenty (20) Business Days or (B) such other time period established by the court presiding over such suit, action or proceeding, as the case may be. Notwithstanding the
foregoing, it is explicitly agreed that the Company shall only be entitled to obtain an injunction, or other appropriate form of equitable relief, to cause Parent, Parent Assignee and Merger Subsidiary to consummate the Closing pursuant to the terms
herein if, and only if, each of the following conditions has been satisfied: (i) the Financing (or, if alternative financing is being used in accordance with Section 7.06(e), the alternative financing) has been funded or will be funded at
the Closing and (ii) the Company has irrevocably confirmed that if specific performance is granted and the Financing (or alternative financing, as the case may be) is funded, then the Closing will occur. For the avoidance of doubt, while the
Company may pursue both a grant of specific performance of the type provided in the preceding sentence and the payment of the Reverse Termination Fee under Section 11.04, under no circumstances shall the Company be permitted or entitled to
receive both a grant of specific performance of the type contemplated by the preceding sentence and monetary damages, including all or any portion of the Reverse Termination Fee.
[The remainder of this page has been intentionally left blank; the next
page is the signature page.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the date set forth on the cover page of this Agreement.
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Montage Technology Group Limited |
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By: |
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/s/ Howard C. Yang |
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Name: Howard C. Yang |
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Title: Chief Executive Officer |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the date set forth on the cover page of this Agreement.
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Shanghai Pudong Science and
Technology Investment Co., Ltd. |
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By: |
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/s/ Xudong Zhu |
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Name: Xudong Zhu |
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Title: Chairman |
Exhibit 10.1
EXECUTION COPY
VOTING
AGREEMENT
VOTING AGREEMENT, dated as of June 11, 2014 (this Voting Agreement), among Shanghai Pudong Science
and Technology Investment Co., Ltd., a PRC limited liability company (Parent), and the shareholders of Montage Technology Group Limited, a Cayman Islands exempted company (the Company) listed on the signature
pages hereto (each, a Shareholder and, collectively, the Shareholders). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, Parent and the Company propose to enter into an Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented, the Merger Agreement) providing for the merger of a newly-formed Cayman Islands entity (Merger Subsidiary) with and into the Company;
WHEREAS, each Shareholder is the beneficial owner of the number of shares of Company Shares and Company Restricted Shares set forth
opposite such Shareholders name on Schedule A hereto (together with any other Company Shares, Company Restricted Shares or other voting share capital of the Company acquired (whether beneficially or of record) by the Shareholder after
the date hereof and prior to the earlier of (i) the Effective Time and (ii) the termination of all of the Shareholders obligations under this Agreement, including any such share capital acquired by means of purchase, dividend or
distribution, or issued upon the exercise of any Company Share Option or warrants or the conversion of any convertible securities or otherwise, collectively referred to herein as the Subject Shares);
WHEREAS receipt of the Company Shareholder Approval is a condition to the consummation of the Merger; and
WHEREAS, as a condition and inducement to the willingness of Parent to enter into the Merger Agreement, Parent has required that the
Shareholders enter into this Voting Agreement in connection with the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing,
the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Representations and Warranties of the Shareholders. Each Shareholder hereby represents and warrants (severally and not
jointly) to Parent as follows:
(a) Authority; Enforceability. Each Shareholder has the legal capacity and all requisite power and
authority to execute this Voting Agreement, perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by each Shareholder of this Voting Agreement and consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the part of such Shareholder.
(b) Execution; Delivery. Each Shareholder has duly executed and delivered this Voting
Agreement, and this Voting Agreement constitutes the valid and binding obligation of such Shareholder, enforceable against such Shareholder in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to the enforcement of creditors rights generally and (ii) is subject to general principles of equity. No consent of, or registration or filing with, any Governmental
Authority or any third party is required to be obtained or made by or with respect to such Shareholder in connection with the execution, delivery and performance of this Voting Agreement or the consummation of the transactions contemplated hereby,
other than (i) such reports, schedules or statements under Sections 13(d) and 16 of the 1934 Act as may be required in connection with this Voting Agreement and the transactions contemplated hereby and (ii) such consents, registrations or
filings the failure of which to be obtained or made would not have a material adverse effect on such Shareholders ability to perform its obligations hereunder.
(c) The Subject Shares. Each Shareholder is the sole record holder and beneficial owner of the Subject Shares listed on
Schedule A across from its name, free and clear of any Lien (other than any Liens pursuant to this Agreement or the Merger Agreement). Each Shareholder has the sole voting power, the sole power of disposition and the sole power to agree
to all of the matters set forth in this Agreement with respect to the Subject Shares listed on Schedule A across from its name. As of the date of this Agreement, the Subject Shares listed on Schedule A across from its name constitute
all of the Company Shares, Company Restricted Shares and any other voting share capital of the Company beneficially owned or owned of record by the Shareholder. None of the Subject Shares owned by it are subject to any voting agreement, voting
trust, other voting agreement, proxy, power of attorney or any other agreement that would have the effect of preventing or disabling such Shareholder from performing any of its obligations under this Agreement, except as contemplated by this Voting
Agreement.
Section 2. Representations and Warranties of Parent. Parent hereby represents and warrants to each Shareholder as
follows:
(a) Authority; Enforceability. Parent has all requisite corporate power and authority to execute this Voting Agreement
and to consummate the transactions contemplated hereby. The execution and delivery by Parent of this Voting Agreement and consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Parent.
(b) Execution; Delivery. Parent has duly executed and delivered this Voting Agreement, and this Voting Agreement constitutes the
valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors rights generally and (ii)
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is subject to general principles of equity. No consent of, or registration or filing with, any Governmental Authority or third party is required to be obtained or made by or with respect to
Parent in connection with the execution, delivery and performance of this Voting Agreement or the consummation of the transactions contemplated hereby, other than (i) reports, schedules or statements by Parent under Sections 13(d) and 16 of the
1934 Act as may be required in connection with this Voting Agreement and the transactions contemplated hereby and (ii) such consents, registrations or filings the failure of which to be obtained or made would not have, or be reasonably expected
to have, an adverse effect on Parents ability to perform its obligations hereunder.
(c) Available Funds. Parent will have
available to it at the Closing all funds necessary to satisfy all of its, Parent Assignees and Merger Subsidiarys obligations under the Merger Agreement and otherwise in connection with the Merger and the other transactions contemplated
by this Voting Agreement and the Merger Agreement, including payment of all charges and expenses required to be paid by Parent, Merger Subsidiary or the Surviving Company pursuant to Section 2.03(a) and (b) of the Merger Agreement.
Section 3. Covenants of the Shareholders. (a) Voting. During the Support Period (as defined below), each Shareholder
covenants and agrees as follows:
(i) at any meeting (whether annual or extraordinary, including any adjournment, recess or postponement
thereof) of shareholders of the Company, however called, or in connection with any written resolution of the Companys shareholders or in any other circumstances upon which a vote with respect to the Merger Agreement, the Merger or any other
transaction contemplated by the Merger Agreement is sought, each Shareholder shall (solely in its capacity as a Shareholder of the Company) (i) appear at each such meeting or otherwise cause the Subject Shares to be counted as present for
purposes of calculating a quorum and to ensure that any vote at such meeting be a poll vote and respond to each request by the Company for written consent, if any; and (ii) vote (or cause to be voted) the Subject Shares to the extent the
Subject Shares may vote on the matter in question, in favor of obtaining the Company Shareholder Approval and the other transactions contemplated by the Merger Agreement, including the approval, adoption and authorization of the Merger, the Merger
Agreement, any other transactions contemplated by the Merger Agreement or any related action reasonably required in furtherance thereof. Notwithstanding anything in this Voting Agreement to the contrary, only the Subject Shares shall be subject to
this Voting Agreement and any adjournment, recess or postponement of any meeting of shareholders of the Company;
(ii) at any meeting
(whether annual or extraordinary, including any adjournment, recess or postponement thereof) of shareholders of the Company, however called, or in connection with any written resolution of the Companys shareholders or in any other
circumstances upon which the Shareholders vote, consent or other approval is sought, such Shareholder shall (solely in its capacity as a Shareholder of the Company) vote (or cause to be voted) the Subject Shares (to the extent the Subject
Shares may vote on the matter in question) against (A) any Acquisition Proposal (other than the Merger), (B) any other transaction, proposal, agreement or action made in
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opposition to approval of the Merger Agreement or the transactions contemplated by the Merger Agreement (including the Merger) or in competition or inconsistent with the Merger and the other
transactions contemplated by the Merger Agreement, (C) any other action, agreement or transaction that is intended, that would be reasonably expected to, or the effect of which would be reasonably expected to, impede, interfere with, delay,
postpone, discourage or adversely affect the Merger or any of the other transactions contemplated by the Merger Agreement or this Agreement or the performance by such Shareholder of its obligations under this Agreement, including, without
limitation: (1) any extraordinary corporate transaction, such as a scheme of arrangement, merger, consolidation or other other business combination involving the Company or any of its Subsidiaries (other than the Merger); (2) a sale, lease
or transfer of 25% or more of the assets of the Company or any Subsidiary or a reorganization, recapitalization or liquidation of the Company or any Subsidiary; (3) an election of new members to the board of directors of the Company, other than
(i) individuals who on the date hereof constituted the board of directors of the Company, (ii) any new directors whose election to the board of directors of the Company or whose nomination for election by the shareholders of the Company
was approved by at least a majority of the directors then still in office (or a duly constituted committee thereof) either who were directors on the date hereof or whose election or nomination for election was previously so approved, and/or
(iii) as otherwise provided in the Merger Agreement; (4) any material change in the present capitalization or dividend policy of the Company or any amendment or other change to the Companys memorandum or articles of association,
except if approved in writing by Parent; or (5) any other material change in the Companys corporate structure, except if approved in writing by Parent;
(iii) other than pursuant to this Voting Agreement, each Shareholder shall not, directly or indirectly, (A) sell, transfer, assign,
tender, pledge, grant, encumber, hypothecate or otherwise dispose of, by merger, operation of law or otherwise (collectively, Transfer), other than by will or the laws of intestacy, any Subject Shares to any person other than
pursuant to the Merger or (B) enter into any voting arrangement, whether by proxy, voting trust, voting agreement, power of attorney with respect to any Subject Shares or any other arrangement that grants a third party the right to vote or
direct the voting of the Subject Shares; and
(iv) each such Shareholder (A) hereby grants to Parent (and any designee of Parent) a
proxy (and appoints Parent or any such designee of Parent as its attorney-in-fact with full power of substitution) to vote the Subject Shares owned beneficially and of record by such Shareholder for the matters set forth in Sections 3(a)(i) and
3(a)(ii) and such proxy and appointment shall (1) be irrevocable, (2) be coupled with an interest, and (3) survive the dissolution, bankruptcy or other incapacity of such Shareholder as well as the death, bankruptcy or other
incapacity of such Shareholder, (B) shall take such further action or execute such other instruments as may be necessary to effectuate the intent of the foregoing proxy and power-of-attorney, and (C) hereby revokes (or causes to be
revoked) any and all previous proxies, powers of attorney, instruction or other requests with respect to such Shareholders Subject Shares.
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The Support Period shall commence on the date hereof and continue until the
first to occur of (1) the Effective Time, (2) termination of the Merger Agreement in accordance with its terms and (3) the time (if any) at which the Board of Directors of the Company shall have made an Adverse Recommendation Change.
(b) Capacity. Notwithstanding anything to the contrary in this Voting Agreement, (i) each Shareholder is entering into this
Voting Agreement, and agreeing to become bound hereby, solely in its capacity as a shareholder of the Company and not in any other capacity (including without limitation any capacity as a director of the Company) and (ii) nothing in this Voting
Agreement shall obligate such Shareholder to take, or forbear from taking, any action as a director (including without limitation through the individuals that it has elected to the Board of Directors of the Company) or any other action, other than
in the capacity as a Shareholder of the Company with respect to the voting of the Subject Shares as specified in Sections 3(a)(i) and 3(a)(ii).
(c) Dissenters Rights. Each Shareholder hereby waives, and agrees not to exercise or assert, if applicable, any appraisal and
dissention rights under Section 238 of the Cayman Companies Law in connection with the Merger.
(d) Acquisition Proposals.
Each Shareholder agrees that it will not, directly or indirectly, and shall use reasonable best efforts to cause its Representatives not to, take any action that the Company is prohibited from taking pursuant to Section 6.03 of the Merger
Agreement.
(e) Additional Shares. Each Shareholder agrees to notify Parent in writing of any additional Subject Shares acquired by
such Shareholder after the date hereof as soon as practicable, but in no event later than five (5) Business Days, after such acquisition. Any such additional Subject Shares shall automatically become subject to the terms of this Agreement and
shall constitute Subject Shares for all purposes of this Agreement.
(f) Documentation and Information. Each Shareholder
(i) consents to and authorizes the publication and disclosure by Parent or Parent Assignee of such Shareholders identity and holding and beneficial ownership of the Subject Shares and the nature of its commitments and obligations under
this Agreement in any disclosure required by the SEC or other Governmental Authority, including, without limitation, the Proxy Statement, and any amendment thereto, relating to the Merger, and (ii) agrees promptly to give to Parent and Merger
Subsidiary any information Parent, Parent Assignee or Merger Subsidiary may reasonably request for the preparation of any such disclosure documents so long as such information is required by Applicable Law to be disclosed therein. No Shareholder
shall issue any press release or make any other public statement with respect to the transactions contemplated by this Agreement without the prior written consent of Parent except as such release or statement may be required by Applicable Law or the
rules and regulations of any national securities exchange or Governmental Authority of competent jurisdiction.
Section 4.
Termination. This Voting Agreement shall terminate upon the earliest to occur of (a) the Effective Time and (b) the termination of the Merger
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Agreement. Nothing in this Section 4 shall relieve or otherwise limit any partys liability for any breach of this Agreement prior to termination. This Section 4 and Section 5
shall survive any termination of this Agreement.
Section 5. General Provisions.
(a) Amendments. This Voting Agreement may not be amended except by an instrument in writing signed by each of the parties hereto.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or
sent by overnight courier (providing proof of delivery) or sent by email (provided, that such email states that it is a notice defined pursuant to this Section 5(b)) to the Company and Parent in accordance with Section 11.01 of the Merger
Agreement and to a Shareholder at its address set forth on Schedule A hereto (or at such other address for a party as shall be specified by like notice).
(c) Interpretation. The Section headings herein are for convenience of reference only, do not constitute part of this Voting Agreement
and shall not be deemed to limit or otherwise affect any of the provisions hereof. Where a reference in this Voting Agreement is made to a Section, such reference shall be to a Section of this Voting Agreement unless otherwise indicated. Unless
otherwise indicated, whenever the words include, includes or including are used in this Voting Agreement, they shall be deemed to be followed by the words without limitation. In the event an ambiguity
or question of intent or interpretation arises, this Voting Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the
authorship of any provisions of this Agreement. This Agreement is in the English language, and while this Agreement may be translated into other languages, the English language version shall control.
(d) Severability. The provisions of this Voting Agreement shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability or the other provisions hereof. If any provision of this Voting Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (i) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (ii) the remainder of this Voting Agreement and the
application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
(e) Counterparts. This Voting Agreement may be executed in any number of counterparts, each
such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement.
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(f) Entire Agreement; No Third-Party Beneficiaries. This Voting Agreement constitutes the
entire agreement, and supersede all other prior agreements, understandings, representations and warranties both written and oral, among the parties, with respect to the subject matter hereof. This Voting Agreement is not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.
(g) Governing Law. This Voting Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law rules (other than New York General Obligations Law Sections 5-1401 and 5-1402) of such State (provided that the fiduciary duties of the
Board of Directors of the Company, the internal corporate affairs of the Company, and the Merger and any exercise of appraisal and dissention rights with respect to the Merger, shall in each case be governed by the laws of the Cayman Islands).
(h) Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS VOTING AGREEMENT IS LIKELY
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS VOTING AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS VOTING AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS VOTING AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5(h).
(i)
Merger Agreement. Parent acknowledges that the Shareholders have been induced to enter into this Voting Agreement based on the terms and conditions of the Merger Agreement.
(j) Assignment. Unless otherwise agreed in writing by the parties hereto, no rights or obligations under this Voting Agreement may be
assigned or delegated by operation of Applicable Law or otherwise, and any purported assignment or delegation in violation of this Voting Agreement is void, except that Parent may assign its rights herein to Parent Assignee; provided that Parent
shall remain jointly and severally responsible and liable with Parent Assignee for all representations, warranties, liabilities, covenants, agreements and any other obligations under and pursuant to the terms of this Voting Agreement assumed by
Parent Assignee.
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(k) Consent to Jurisdiction. The parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Voting Agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its
Affiliates) shall be brought in any New York federal court (or if jurisdiction is not available therein, a New York state court) sitting in the borough of Manhattan of the City of New York, and any appellate court from any thereof, and each of the
parties hereto hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any
such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in
Section 5(b) shall be deemed effective service of process on such party. The parties hereto agree that a final trial court judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law; provided, however, that nothing in the foregoing shall restrict any partys rights to seek any post-judgment relief regarding, or any appeal from, such final trial court judgment.
(l) Specific Performance. Each Shareholder acknowledges that monetary damages would not be an adequate remedy in the event that any
covenant or agreement in this Voting Agreement is not performed in accordance with its terms, and it is therefore agreed that, in addition to and without limiting any other remedy or right it may have, Parent will have the right to an injunction,
temporary restraining order or other equitable relief in any court of competent jurisdiction permitted by Section 5(k) enjoining any such breach and enforcing specifically the terms and provisions hereof. Each Shareholder agrees not to oppose
the granting of such relief in the event such a court determines that such a breach has occurred, and to waive any requirement for the securing or posting of any bond in connection with such remedy. All rights, powers, and remedies provided under
this Voting Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by Parent shall not preclude the simultaneous or later exercise
of any other such right, power or remedy by it.
[Signature Page Follows]
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IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
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Shanghai Pudong Science and Technology Investment Co., Ltd. |
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By |
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/s/ Xudong Zhu |
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Name: Xudong Zhu |
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Title: Chairman |
IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
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SHAREHOLDERS:
Howard C. Yang |
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/s/ Howard C. Yang |
IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
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SHAREHOLDERS: |
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Xueren Yang |
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/s/ Xueren Yang |
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Shuzhang Liang |
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/s/ Shuzhang Liang |
IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
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SHAREHOLDERS: |
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Stephen Tai |
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/s/ Stephen Tai |
IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
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SHAREHOLDERS: |
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Tai Kuai Lap |
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/s/ Tai Kuai Lap |
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Chao Iong Wa |
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/s/ Chao Iong Wa |
IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
|
|
|
SHAREHOLDERS: |
|
Absolute Pioneer Co., Ltd. |
|
|
By |
|
/s/ Cathy Yen |
|
|
Name: Wei-Tsuei Yen
Title: |
IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
|
SHAREHOLDERS: |
|
Wei-Tsuei Yen |
|
/s/ Cathy Yen |
IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
|
SHAREHOLDERS: |
|
Yung-Kuei Yu |
|
/s/ Yung-Kuei Yu |
IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
|
SHAREHOLDERS: |
|
Yung Do Way |
|
/s/ Yung Do Way |
IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
|
SHAREHOLDERS: |
|
Charles G. Sodini |
|
/s/ Charles G. Sodini |
IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
|
SHAREHOLDERS: |
|
Jung Kung Yang |
|
/s/ Jung Kung Yang |
IN WITNESS WHEREOF, each party has duly executed this Voting Agreement, all as of the date first
written above.
|
SHAREHOLDERS: |
|
Mark Thomas Voll |
|
/s/ Mark Thomas Voll |
SCHEDULE A
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholder |
|
Number of Subject Shares |
|
|
Ordinary Shares |
|
|
Restricted Shares |
|
|
Total |
|
Howard Yang |
|
|
1,013,319 |
|
|
|
36,000 |
|
|
|
1,049,319 |
|
Xueren Yang and Shuzhuang Liang jointly |
|
|
404,000 |
|
|
|
|
|
|
|
404,000 |
|
Stephen Tai |
|
|
505,319 |
|
|
|
36,000 |
|
|
|
541,319 |
|
Tai Kuai Lap and Chao Iong Wa jointly |
|
|
912,000 |
|
|
|
|
|
|
|
912,000 |
|
Wei-Tsuei Yen (Cathy)1 |
|
|
49,234 |
|
|
|
4,000 |
|
|
|
53,234 |
|
Yung-Kuei Yu (YK) |
|
|
|
|
|
|
4,000 |
|
|
|
4,000 |
|
Yung Do Way (Edward) |
|
|
|
|
|
|
4,000 |
|
|
|
4,000 |
|
Charles G Sodini |
|
|
|
|
|
|
4,000 |
|
|
|
4,000 |
|
Jung Kung Yang (Jackie) |
|
|
39,766 |
|
|
|
4,000 |
|
|
|
43,766 |
|
Mark Thomas Voll |
|
|
40,050 |
|
|
|
14,500 |
|
|
|
54,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
2,963,688 |
|
|
|
106,500 |
|
|
|
3,070,188 |
|
1. |
Ms. Yen beneficially owns 49,234 of the Subject Shares through Absolute Pioneer Co., Ltd. |
Notice
|
|
|
Shareholder |
|
Mailing Address |
Howard Yang |
|
Unit E-F F10 No.9 Lane 1720, Hong Qiao Rd, Shanghai 200336, China |
Stephen Tai |
|
Room 304, No.2, Lane 680, Shuicheng Rd, Shanghai 200336, China |
Wei-Tsuei Yen/ Absolute Pioneer Co., Ltd. |
|
N66 Tomson Golf Villa, No. 1 Longdong Ave., Pudong Shanghai 200120, China |
Yung-Kuei Yu (YK) |
|
18F, No.333, Section 2, Tunhwa S. Rd., Taipei 106, Taiwan, ROC |
Yung Do Way (Edward) |
|
12F., No. 9, Lane 157, Jihu Rd., Zhongshan Dis., Taipei City 462, Taiwan, ROC |
Charles G Sodini |
|
37 Larch Circle, Belmont, MA 02478, USA |
Jung Kung Yang (Jackie) |
|
18893 Bellgrove Circle, Saratoga,CA 95070, USA |
Mark Thomas Voll |
|
710 Morningside Circle, Los Altos, CA 94022, USA |
Tai Kuai Lap and Chao Iong Wa |
|
c/o Stephen Tai, Room 304, No.2, Lane 680, Shuicheng Rd, Shanghai 200336, China |
Xueren Yang and Shuzhuang Liang |
|
c/o Howard Yang, Unit E-F F10 No.9 Lane 1720, Hong Qiao Rd, Shanghai 200336, China |
with a copy to (which shall not constitute notice):
OMelveny & Myers LLP
Two Embarcadero Center, 28th Floor
San Francisco, CA 94111
Attention: Paul Scrivano, Esq.
Facsimile: 415-984-8701
Email: pscrivano@omm.com
Exhibit 10.2
EXECUTION COPY
Citibank Preferred Custody Services
Agreement
Between
Citibank, N. A. as
Escrow Agent
and
Montage Technology
Group Limited
(the Company)
and
Shanghai Pudong
Science and Technology Investment Co., Ltd.
(Parent)
and
New Star Venture
Capital Investment Co., Ltd.
(HK Co)
Termination Fee Escrow Account
Reverse
Termination Fee Escrow Account
(Account Numbers)
Citibank
Escrow Agent Custody Account
THIS ESCROW AGREEMENT (this Escrow Agreement herein) is made this 11th day of June, 2014 among
Montage Technology Group Limited, a Cayman Islands exempted company (the Company), Shanghai Pudong Science and Technology Investment Co., Ltd., a limited liability company organized under the laws of the Peoples Republic of
China (Parent), New Star Venture Capital Investment Co., Ltd., a limited company organized under the laws of Hong Kong (the HK Co), and CITIBANK, N.A. (the Escrow Agent herein).
The above-named parties appoint said Escrow Agent with the duties and responsibilities and upon the terms and conditions provided in Schedule A annexed hereto
and made apart hereof, and references herein to this Escrow Agreement shall include Schedule A annexed hereto.
ARTICLE FIRST: The above-named
parties agree that the following provisions shall control with respect to the rights, duties, liabilities, privileges and immunities of the Escrow Agent:
|
a) |
The Escrow Agent shall neither be responsible for or under, nor chargeable with knowledge of, the terms and conditions of any other agreement, instrument or document executed between/among the parties hereto, except as
may be specifically provided in Schedule A annexed hereto (including verification of the capitalized terms used in Schedule A and defined in the Merger Agreement (as defined in Schedule A)). This Escrow Agreement sets forth all of the obligations of
the Escrow Agent, and no additional obligations shall be implied from the terms of this Escrow Agreement or any other agreement, instrument or document. As only between the Company, Parent and HK Co, in the event of a conflict between the Merger
Agreement and this Escrow Agreement, the terms of the Merger Agreement (as defined in Schedule A) shall prevail over the terms of this Escrow Agreement. |
|
b) |
The Escrow Agent may act in reliance upon any instructions, notice, certification, demand, consent, authorization, receipt, power of attorney or other writing delivered to it by any other party without being required to
determine the authenticity or validity thereof or the correctness of any fact stated therein, the propriety or validity of the service thereof, or the jurisdiction of the court issuing any judgment or order. The Escrow Agent may act in reliance upon
any signature believed by it to be genuine, and may assume that such person has been properly authorized to do so, so long as it first completes the telephone call back procedure described in Article Sixth. |
|
c) |
Each of the parties, jointly and severally, agrees to reimburse the Escrow Agent on demand for, and to indemnify and hold the Escrow Agent harmless against and with respect to, any and all loss, liability, damage or
expense (including, but without limitation, attorneys fees, costs and disbursements) that the Escrow Agent may suffer or incur in connection with this Escrow Agreement and its performance hereunder or in connection herewith, except to the
extent such loss, liability, damage or expense arises from a breach of this Escrow Agreement as adjudicated by a court of competent jurisdiction to constitute willful misconduct or gross negligence. The Escrow Agent shall have the further right at
any time and from time to time to charge, and reimburse itself from, the property held in escrow hereunder. |
|
d) |
The Escrow Agent may consult with legal counsel of its selection in the event of any dispute or question as to the meaning or construction of any of the provisions hereof or its duties hereunder, and it shall incur no
liability and shall be fully protected in acting in accordance with the opinion and instructions of such counsel. Each of the parties, jointly and severally, agrees to reimburse the Escrow Agent on demand for such legal fees, disbursements and
expenses and in addition, in the event that the Escrow Agent shall not have been paid or reimbursed for any such legal fees, disbursements or expenses within 30 calendar days of a request to the other parties hereto, the Escrow Agent shall have the
right to reimburse itself for such fees, disbursements and expenses from the property held in escrow hereunder. |
|
e) |
The Escrow Agent shall be under no duty to give the property held in escrow by it hereunder any greater degree of care than it gives its own similar property. |
|
|
|
Citibank Preferred Custody Services Escrow Agent Agreement |
|
Page 2 |
|
f) |
The Escrow Agent shall invest the property held in escrow in such a manner as directed in Schedule A annexed hereto, which may include deposits in Citibank and mutual funds advised, serviced or made available by
Citibank or its affiliates even though Citibank or its affiliates may receive a benefit or profit therefrom. The Escrow Agent and any of its affiliates are authorized to act as counterparty, principal, agent, broker or dealer while purchasing or
selling investments as specified herein. The Escrow Agent and its affiliates are authorized to receive, directly or indirectly, fees or other profits or benefits for each service, task or function performed, in addition to any fees as specified in
Schedule B hereof, without any requirement for special accounting related thereto. |
The parties to this Escrow Agreement
acknowledge that non-deposit investment products are not obligations of, or guaranteed, by Citibank/Citigroup nor any of its affiliates; are not FDIC insured; and are subject to investment risks, including the possible loss of principal amount
invested. Only deposits in the United States are subject to FDIC insurance.
|
g) |
The Escrow Agent shall have no obligation to invest or reinvest the property held in escrow if all or a portion of such property is deposited with the Escrow Agent after 11:00 AM Eastern Time on the day of deposit.
Instructions to invest or reinvest that are received after 11:00 AM Eastern Time will be treated as if received on the following business day in New York. The Escrow Agent shall have the power to sell or liquidate the foregoing investments whenever
the Escrow Agent shall be required to distribute amounts from the escrow property pursuant to the terms of this Escrow Agreement. Requests or instructions received after 11:00 AM Eastern Time by the Escrow Agent to liquidate all or any portion of
the escrowed property will be treated as if received on the following business day in New York. The Escrow Agent shall have no responsibility for any investment losses resulting from the investment, reinvestment or liquidation of the escrowed
property, as applicable, provided that the Escrow Agent has made such investment, reinvestment or liquidation of the escrowed property in accordance with the terms, and subject to the conditions of this Escrow Agreement. |
|
h) |
In the event of any disagreement between/among any of the parties to this Escrow Agreement, or between/among them or either or any of them and any other person, resulting in adverse claims or demands being made in
connection with the subject matter of the Escrow, or in the event that the Escrow Agent, in good faith, be in doubt as to what action it should take hereunder, the Escrow Agent may, at its option, refuse to comply with any claims or demands on it,
or refuse to take any other action hereunder, so long as such disagreement continues or such doubt exists, and in any such event, the Escrow Agent shall not become liable in any way or to any person for its failure or refusal to act, and the Escrow
Agent shall be entitled to continue to so refrain from acting until (i) the rights of all parties shall have been fully and finally adjudicated by a court of competent jurisdiction, or (ii) all differences shall have been adjusted and all
doubt resolved by agreement among all of the interested persons, and the Escrow Agent shall have been notified thereof in writing signed by all such persons. The Escrow Agent shall have the option, after 60 calendar days notice to the other
parties of its intention to do so, to file an interpleader requiring the parties to answer and litigate any claims and rights among themselves. The rights of the Escrow Agent under this paragraph are cumulative of all other rights which it may have
by law or otherwise. |
|
i) |
The Escrow Agent is authorized, for any securities at any time held hereunder, to register such securities in the name of its nominee(s) or the nominees of any securities depository, and such nominee(s) may sign the
name of any of the parties hereto to whom or to which such securities belong and guarantee such signature in order to transfer securities or certify ownership thereof to tax or other governmental authorities. |
|
j) |
Notice to the parties shall be given as provided in Schedule A annexed hereto. |
|
|
|
Citibank Preferred Custody Services Escrow Agent Agreement |
|
Page 3 |
ARTICLE SECOND: The Escrow Agent shall make payments of income earned on the escrowed property as provided
in Schedule A annexed hereto. Each such payee shall provide to the Escrow Agent an appropriate W-9 form for tax identification number certification or a W -8 form for non-resident alien certification. The Escrow Agent shall be responsible
only for income reporting to the Internal Revenue Service with respect to income earned on the escrowed property.
ARTICLE THIRD: The Escrow Agent
may, in its sole discretion, resign and terminate its position hereunder at any time with no less than 30 calendar days written notice to the parties to this Escrow Agreement herein. Any such resignation shall terminate all obligations and
duties of the Escrow Agent hereunder; provided that a successor escrow agent shall have first been appointed in accordance with this Article Third. On the effective date of such resignation, the Escrow Agent shall deliver this Escrow Agreement
together with any and all related instruments or documents to any successor escrow agent agreeable to the parties, subject to this Escrow Agreement herein. If a successor escrow agent has not been appointed prior to the expiration of 30 calendar
days following the date of the notice of such resignation, the then acting Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent, which shall be a United States bank that is internationally
recognized. Any such resulting appointment shall be binding upon all of the parties to this Escrow Agreement.
ARTICLE FOURTH: The Escrow Agent
shall receive the fees provided in Schedule B annexed hereto. In the event that such fees are not paid to the Escrow Agent within 30 calendar days of presentment to the party responsible for such fees as set forth in said Schedule B, then the Escrow
Agent may pay itself such fees from the property held in escrow hereunder. Once fees have been paid, no recapture or rebate will be made by the Escrow Agent.
ARTICLE FIFTH: Any modification of this Escrow Agreement or any additional obligations assumed by any party hereto shall be binding only if evidenced
by a writing signed by each of the parties hereto.
ARTICLE SIXTH: In the event funds transfer instructions are given (other than in writing at the
time of execution of this Escrow Agreement), whether in writing, by telecopier or otherwise, the Escrow Agent shall seek confirmation of such instructions by telephone call back to the person or persons designated in Schedule A annexed hereto, and
the Escrow Agent may rely upon the confirmations of anyone purporting to be the person or persons so designated. To assure accuracy of the instructions it receives, the Escrow Agent may record such call backs. If the Escrow Agent is unable to verify
the instructions, or is not satisfied with the verification it receives, it will not execute the instruction until all issues have been resolved. The persons and telephone numbers for call backs may be changed only in writing actually received and
acknowledged by the Escrow Agent. The parties agree to notify the Escrow Agent of any errors, delays or other problems within 30 calendar days after receiving notification that a transaction has been executed. If it is determined that the Escrow
Agent has released funds from escrow other than in accordance with this Escrow Agreement, the Escrow Agents sole obligation is to pay or refund such amount as was erroneously released by the Escrow Agent. In no event shall the Escrow Agent be
responsible for any incidental or consequential damages or expenses in connection with the instruction. Any claim for interest payable will be at the Escrow Agents published savings account rate in effect in New York, New York.
ARTICLE SEVENTH: This Escrow Agreement shall be governed by the law of the State of New York in all respects. The parties hereto irrevocably and
unconditionally submit to the jurisdiction of a federal or state court located in the Borough of Manhattan, City, County and State of New York, in connection with any proceedings commenced regarding this Escrow Agreement, including but not limited
to, any interpleader proceeding or proceeding for the appointment of a successor escrow agent the Escrow Agent may commence pursuant to this Escrow Agreement, and all parties irrevocably submit to the jurisdiction of such courts for the
determination of all issues in such proceedings, without regard to any principles of conflicts of laws, and irrevocably waive any objection to venue of inconvenient forum.
ARTICLE EIGHTH: This Escrow Agreement may be executed in one or more counterparts, each of which counterparts shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same Escrow Agreement. Facsimile signatures on counterparts of this Escrow Agreement shall be deemed original signatures with all rights accruing thereto.
|
|
|
Citibank Preferred Custody Services Escrow Agent Agreement |
|
Page 4 |
ARTICLE NINTH: The Escrow Agent shall not incur any liability for not performing any act or fulfilling any
obligation hereunder by reason of any occurrence beyond its control (including, but not limited to, any provision of any present or future law or regulation or any act of any governmental authority, any act of God or war or terrorism, or the
unavailability of the Federal Reserve Bank wire services or any electronic communication facility). Parent and HK Co shall be jointly and severally liable for all representations, warranties, covenants, agreements and obligations of each of Parent
and HK Co under and pursuant to the terms of this Escrow Agreement and Schedule A attached hereto.
ARTICLE TENTH: No printed or other material in
any language, including prospectuses, notices, reports, and promotional material which mentions Citibank by name or the rights, powers, or duties of the Escrow Agent under this Escrow Agreement shall be issued by any other parties
hereto, or on such partys behalf, without the prior written consent of the Escrow Agent, in each case, except for references in the Merger Agreement or the Proxy Statement that Citibank, N.A. is acting as Escrow Agent for the transactions
contemplated therein.
In witness whereof the parties have executed this Escrow Agreement as of the date first above written.
CITIBANK, N.A.
as Escrow Agent
|
|
|
By: |
|
/s/ Kerry M. McDonough |
|
|
(Signature) |
Title: |
|
Director |
|
|
Date: |
|
June 11, 2014 |
|
|
|
Citibank Preferred Custody Services Escrow Agent Agreement |
|
Page 5 |
|
|
|
MONTAGE TECHNOLOGY GROUP LIMITED |
|
|
By: |
|
/s/ Howard C. Yang |
|
|
(Signature) |
Title: |
|
Chief Executive Officer |
|
|
Date: |
|
June 11, 2014 |
|
|
|
Citibank Preferred Custody Services Escrow Agent Agreement |
|
Page 6 |
|
|
|
NEW STAR VENTURE CAPITAL INVESTMENT CO., LTD. |
|
|
By: |
|
/s/ Qinghua Wang |
|
|
(Signature) |
Title: |
|
Authorized Signatory |
|
|
Date: |
|
June 11, 2014 |
|
|
|
Citibank Preferred Custody Services Escrow Agent Agreement |
|
Page 7 |
|
|
|
SHANGHAI PUDONG SCIENCE AND TECHNOLOGY INVESTMENT CO., LTD. |
|
|
By: |
|
/s/ Xudong Zhu |
|
|
(Signature) |
Title: |
|
Chairman |
|
|
Date: |
|
June 11, 2014 |
For additional signers, attach signature pages as needed.
|
|
|
Citibank Preferred Custody Services Escrow Agent Agreement |
|
Page 8 |
SEC Shareholder Disclosure Rule 14b-2: SEC Rule 14b-2 directs us to contact you to request authorization
to provide your name, address and share position with respect to the referenced account to requesting companies whose stock you have voting authority over. Under the Rule, we must make the disclosures for accounts opened after
December 28, 1986, if requested, unless you specifically object to disclosure. Hence, failure to respond will be deemed consent to disclosure. Thank you for assisting us in complying with this SEC rule.
¨ |
Yes, we are authorized to release your name, address and share positions |
x |
No, we are not authorized to release your name, address and share positions. |
|
|
|
|
|
/s/ Xudong Zhu |
|
|
|
June 11, 2014 |
(Signature) |
|
|
|
(Date) |
Reference Account No.: |
|
|
|
|
Citi Private Bank is a business of Citigroup Inc. (Citigroup), which provides its clients access to a broad array
of products and services available through bank and non-bank affiliates of Citigroup. Not all products and services are provided by all affiliates or are available at all locations.
Investment Products: No Bank Guarantee Not FDIC Insured May Lose Value
Citigroup Inc., its affiliates, and its employees are not in the business of providing tax or legal advice to any taxpayer outside of Citigroup Inc. and its
affiliates. These materials are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayers particular
circumstances from an independent tax advisor.
Custody Services are provided by Citibank N.A.
Citi and Citi with Arc Design are registered service marks of Citigroup Inc. or its affiliates.
© 2014 Citigroup Inc. All rights reserved.
Citibank, N.A.
Member FDIC
|
|
|
Citibank Preferred Custody Services Escrow Agent Agreement |
|
Page |
SEC Shareholder Disclosure Rule 14b-2: SEC Rule 14b-2 directs us to contact you to request authorization
to provide your name, address and share position with respect to the referenced account to requesting companies whose stock you have voting authority over. Under the Rule, we must make the disclosures for accounts opened after
December 28, 1986, if requested, unless you specifically object to disclosure. Hence, failure to respond will be deemed consent to disclosure. Thank you for assisting us in complying with this SEC rule.
¨ |
Yes, we are authorized to release your name, address and share positions |
x |
No, we are not authorized to release your name, address and share positions. |
|
|
|
|
|
/s/ Qinghua Wang |
|
|
|
June 11, 2014 |
(Signature) |
|
|
|
(Date) |
Reference Account No.: |
|
|
|
|
Citi Private Bank is a business of Citigroup Inc. (Citigroup), which provides its clients access to a broad array
of products and services available through bank and non-bank affiliates of Citigroup. Not all products and services are provided by all affiliates or are available at all locations.
Investment Products: No Bank Guarantee Not FDIC Insured May Lose Value
Citigroup Inc., its affiliates, and its employees are not in the business of providing tax or legal advice to any taxpayer outside of Citigroup Inc. and its
affiliates. These materials are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayers particular
circumstances from an independent tax advisor.
Custody Services are provided by Citibank N.A.
Citi and Citi with Arc Design are registered service marks of Citigroup Inc. or its affiliates.
© 2014 Citigroup Inc. All rights reserved.
Citibank, N.A.
Member FDIC
|
|
|
Citibank Preferred Custody Services Escrow Agent Agreement |
|
Page |
Schedule A
This Schedule A is the Schedule A referred to in that certain Escrow Agreement dated June 11, 2014 (the Escrow
Agreement, including this schedule and any other schedules and/or exhibits attached thereto, all of the terms and conditions of which are incorporated herein by reference, in each case as amended and/or supplemented from time to time in accordance
with the terms hereof and thereof, the Escrow Agreement) by and among Montage Technology Group Limited, a Cayman Islands exempted company (the Company), Shanghai Pudong Science and Technology Investment Co.,
Ltd., a limited liability company organized under the laws of the Peoples Republic of China (Parent), New Star Venture Capital Investment Co., Limited, a Hong Kong limited company (the HK Co), and Citibank, N.A.
(the Escrow Agent). Capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Merger Agreement (as defined below).
WHEREAS, the Company and Parent, the sole shareholder of the HK Co, entered into that certain Agreement and Plan of Merger, dated as of
the date hereof (the Merger Agreement), whereby Merger Subsidiary will be merged with and into the Company with the Company surviving;
WHEREAS, in the event the Merger Agreement is terminated under certain circumstances as set forth therein, Parent shall be required to
pay, or cause to be paid, to the Company the Reverse Termination Fee;
WHEREAS, in the event the Merger Agreement is terminated
under certain circumstances as set forth therein, the Company shall be required to pay to Parent or its designee the Termination Fee;
WHEREAS, Parent desires that its subsidiary, the HK Co, (i) make the payment of the Reverse Termination Fee if required to be paid
to the Company pursuant to the Merger Agreement, and (ii) receive the Termination Fee from the Company in the event required to be paid to Parent pursuant to the Merger Agreement;
WHEREAS, Parent through HK Co desires to escrow, as collateral and security for the payment (on behalf of Parent) of the Reverse
Termination Fee to the Company in the event such fee becomes payable pursuant to the Merger Agreement, an amount in cash equal to the Reverse Termination Fee;
A-1
WHEREAS, the Company desires to escrow, as collateral and security for the payment of the
Termination Fee to HK Co (as the designee of Parent) in the event such fee becomes payable pursuant to the Merger Agreement, an amount in cash equal to the Termination Fee; and
WHEREAS, in connection with the foregoing the Company, Parent and the HK Co have entered into the Escrow Agreement with the Escrow
Agent.
I. |
Description of Transaction |
The parties hereto hereby appoint Citibank, N.A. as
the escrow agent for the Escrowed Funds (as hereinafter defined) and direct Citibank, N.A., as the escrow agent, to open and maintain a separate escrow account for each of the Termination Fee (the Termination Fee Escrow Account)
and the Reverse Termination Fee (the Reverse Termination Fee Escrow Account and together with the Termination Fee Escrow Account, the Escrow Accounts), in each case upon the terms and conditions set forth in
this Escrow Agreement. Citibank, N.A. hereby accepts such appointment as the escrow agent for the Escrowed Funds and agrees to open and maintain the Escrow Accounts and to act as the escrow agent for the Escrowed Funds, in each case upon the terms
and conditions set forth in this Escrow Agreement.
In accordance with Section 6.05 of the Merger Agreement, the Company shall
deposit US$20,385,000 (the Initial Termination Fee Escrow Amount) via wire transfer of immediately available funds to the Termination Fee Escrow Account. Within five Business Days following the obtainment of the Company
Shareholder Approval (if obtained), the Company shall deposit an additional US$20,385,000 (the Second Termination Fee Escrow Amount and together with the Initial Termination Fee Escrow Amount, the Termination Fee Escrow
Amount) via wire transfer of immediately available funds to the Termination Fee Escrow Account. The amount of all deposits in the Termination Fee Escrow Account, and the interest, net realized gains and other earnings accrued on such
deposits, minus any distributions therefrom hereunder are collectively referred to as the Termination Fee Escrowed Funds. The Escrow Agent shall have no duty to solicit the delivery of any property into the Termination Fee Escrow
Account.
In accordance with Section 7.05 of the Merger Agreement, Parent, through the HK Co, shall deposit US$33,970,000 (the
Initial Reverse Termination Fee Escrow Amount) via wire transfer of immediately available funds to the Reverse Termination Fee Escrow Account. Within five Business Days following the obtainment of the Company Shareholder Approval
(if obtained), Parent, through the HK Co, shall deposit an additional US$33,970,000 (the Second Reverse Termination Fee Escrow Amount and together with the Initial Reverse termination Fee Escrow Amount, the Reverse
Termination Fee Escrow Amount) via wire transfer of immediately available funds to
A-2
the Reverse Termination Fee Escrow Account. The amount of all deposits in the Reverse Termination Fee Escrow Account, and the interest, net realized gains and other earnings accrued on such
deposits, minus any distributions therefrom hereunder are collectively referred to as the Reverse Termination Fee Escrowed Funds and together with the Termination Fee Escrowed Funds, the Escrowed Funds. The
Escrow Agent shall have no duty to solicit the delivery of any property into the Reverse Termination Fee Escrow Account.
For purposes of
this Schedule A, (a) Escrow Amounts shall mean, together, the Termination Fee Escrow Amount and the Reverse Termination Fee Escrow Amount, and (b) Business Day shall mean a day, other than Saturday,
Sunday or other day on which commercial banks in the Peoples Republic of China (PRC) or in New York, New York are authorized or required by Applicable Law to close.
The Escrow Agent is not a party to any other provisions, covenants or agreements as may exist between the Company, on the one hand, and Parent
or the HK Co, on the other hand, and shall not distribute or release the Escrowed Funds except in accordance with the express terms and conditions of Article III below; provided that the Escrow Agent shall be required to refer to the Merger
Agreement to the extent it references capitalized terms used in the Escrow Agreement and this Schedule A (and solely to verify the meanings of such capitalized terms).
II. |
Investment Instructions |
Unless otherwise instructed in writing by the Company
and Parent, the Escrow Agent shall invest and reinvest the Escrowed Funds in a noninterest-bearing transaction account insured by the Federal Deposit Insurance Corporation (FDIC) to the applicable limits. The Escrowed Funds
shall at all times remain available for distribution in accordance with Section III below.
The Escrow Agent is authorized to establish a
noninterest-bearing transaction account for each of the Termination Fee Escrowed Funds and the Reverse Termination Fee Escrowed Funds and to transfer cash balances between the Escrow Accounts and its respective noninterest-bearing transaction
account as necessary to facilitate transactions as contemplated by the Escrow Agreement and this Schedule A. The parties hereto acknowledge that a monthly account statement will be issued for the noninterest-bearing transaction account in addition
to the monthly account statement for the Escrow Accounts.
A-3
III. |
Disbursement Instructions |
The Escrow Agent shall retain the Termination Fee
Escrowed Funds in the Termination Fee Escrow Account and the Reverse Termination Fee Escrowed Funds in the Reverse Termination Fee Escrow Account unless and until such funds are to be released pursuant to this Section III.
A. In the event that the HK Co delivers to the Escrow Agent a notice executed by the HK Co certifying:
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(X) |
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(1) |
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that the Merger Agreement has been validly terminated by Parent pursuant to Section 10.01(c)(i) of the Merger Agreement or by the Company pursuant to Section 10.01(d)(i) of the Merger Agreement, |
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(2) |
that pursuant to Section 11.04(b)(i) of the Merger Agreement Parent or its designee is entitled to payment by the Company of the Termination Fee and that Parent is entitled to the return of all of the Reverse
Termination Fee Escrow Funds, and |
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(3) |
the dollar amount (USD) to which Parent or its designee is entitled under Section 11.04(b)(i) of the Merger Agreement in respect of the Termination Fee, or |
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(Y) |
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(1) |
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that the Merger Agreement has been validly terminated by Parent pursuant to Section 10.01(c)(iii) of the Merger Agreement, |
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(2) |
that pursuant to Section 11.04(b)(iv) of the Merger Agreement Parent or its designee is entitled to the payment by the Company of the Initially Deposited Termination Fee and that the HK Co is entitled to the return
of all of the Reverse Termination Fee Escrow Funds, and |
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(3) |
the dollar amount (USD) to which Parent or its designee is entitled under Section 11.04(b)(iv) of the Merger Agreement in respect of the Initially Deposited Termination Fee, |
then, subject to Section III(D) below, no less than two but no more than three Business Days from delivery of a copy of such notice by the HK Co to the
Escrow Agent and the Company (provided, that such notice shall not be deemed valid unless such notice is delivered by electronic mail (email) substantially concurrently to the Company), the Escrow Agent shall disburse (x) by wire transfer of
immediately available funds to the HK
A-4
Co as set forth in Annex A or as otherwise directed in such notice, (i) out of the Termination Fee Escrow Account, the amount of the Termination Fee Escrow Funds specified in such notice and
(ii) the full amount of the Reverse Termination Fee Escrowed Funds held in the Reverse Termination Fee Escrow Account and (y) to the Company as set forth in Annex A or as may otherwise be directed in a notice to the Escrow Agent executed
by the Company, the amount of the remaining Termination Fee Escrowed Funds held in the Termination Fee Escrow Account, after disbursement of the amounts provided for in clause (x)(i) immediately above.
Each of Parent and HK Co agree that it shall deliver to the Company by electronic mail (email) and its counsel a copy of each notice it
delivers to the Escrow Agent pursuant to this Section III(A) substantially concurrent with the delivery of such notice to the Escrow Agent.
B. In the event that the Company delivers to the Escrow Agent a notice executed by the Company certifying:
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(X) |
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(1) |
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that the Merger Agreement has been validly terminated by the Company or Parent pursuant to Section 10.01(b)(i) or Section 10.01(b)(ii) of the Merger Agreement or by the Company pursuant to Section 10.01(d)(iii) of the
Merger Agreement, |
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(2) |
that pursuant to Section 11.04(b)(iii) of the Merger Agreement the Company is entitled to payment by Parent or Parent Assignee of the Reverse Termination Fee and the Company is entitled to the return of all of the
Termination Fee Escrowed Funds, and |
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(3) |
the dollar amount (USD) to which the Company is entitled under Section 11.04(b)(iii) of the Merger Agreement in respect of the Reverse Termination Fee, or |
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(Y) |
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(1) |
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that the Merger Agreement has been validly terminated by the Company pursuant to Section 10.01(d)(iv) of the Merger Agreement, |
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(2) |
that pursuant to Section 11.04(b)(v) of the Merger Agreement the Company is entitled to payment by Parent, through the HK Co, of the Initially Deposited Reverse Termination Fee and the Company is entitled to the
return of all of the Termination Fee Escrowed Funds; and |
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(3) |
the dollar amount (USD) to which the Company is entitled under Section 11.04(b)(v) of the Merger Agreement in respect of the Initially Deposited Reverse Termination Fee, |
A-5
then, subject to Section III(D) below, no less than two but no more than three Business Days from delivery
of a copy of such notice by the Company to the Escrow Agent and HK Co (provided, that such notice shall not be deemed valid unless such notice is delivered by electronic mail (email) substantially concurrently to the HK Co), the Escrow Agent shall
disburse (x) by wire transfer of immediately available funds to the Company as set forth in Annex A or as otherwise directed in such notice, (i) out of the Reverse Termination Fee Escrow Account, the amount of the Reverse Termination Fee
Escrowed Funds specified in such notice and (ii) the full amount of the Termination Fee Escrowed Funds held in the Termination Fee Escrow Account, and (y) to the HK Co as set forth in Annex A or as may otherwise be directed in a notice to
the Escrow Agent executed by the HK Co, the amount of the remaining Reverse Termination Fee Escrowed Funds held in the Reverse Termination Fee Escrow Account, after disbursement of the amounts provided for in clause (x) immediately above.
The Company agrees that it shall deliver by electronic mail (email) to the HK Co and its counsel a copy of each notice it delivers to the
Escrow Agent pursuant to this Section III(B) substantially concurrent with the delivery of such notice to the Escrow Agent.
C. In
the event that either the HK Co or the Company delivers to the Escrow Agent a notice executed by the HK Co or the Company, as applicable, and certifying that
(1) the Merger Agreement has been validly terminated by the Company and/or Parent pursuant to the terms thereof and
(2) pursuant to the terms of the Merger Agreement, neither the Termination Fee nor the Initially Deposited Termination Fee is payable to Parent and neither
the Reverse Termination Fee nor the Initially Deposited Reverse Termination Fee is payable to the Company,
then, subject to Section III(D) below,
no less than two but no more than three Business Days from delivery of a copy of such notice by either the Company or the HK Co, as applicable, to the Escrow Agent and the other party hereto (provided, that such notice shall not be deemed valid
unless such notice is delivered by electronic mail (email) substantially concurrently to such other party hereto), the Escrow Agent shall disburse (x) the full amount of the Termination Fee Escrowed Funds held in the Termination Fee Escrow
Account by wire transfer of immediately available funds to the Company as set forth in Annex A or as otherwise directed in a notice to the Escrow Agent executed by the
A-6
Company and (y) the full amount of the Reverse Termination Fee Escrowed Funds held in the Reverse Termination Fee Escrow Account by wire transfer of immediately available funds to the HK Co
as set forth in Annex A or as directed in a notice to the Escrow Agent executed by the HK Co.
Each of the Company and the HK Co agrees
that it shall deliver to the HK Co or the Company, as applicable, and its counsel a copy of each notice it delivers to the Escrow Agent pursuant to this Section III(C) substantially concurrent with the delivery of such notice to the Escrow
Agent.
D. In the event that the Escrow Agent receives a notice in accordance with any of the foregoing clauses of this Section III
and that, prior to disbursing the Escrowed Funds, the Escrow Agent receives a notice from the Company or the HK Co objecting to such disbursement, then the Escrow Agent shall not disburse the Termination Fee Escrowed Funds or the Reverse Termination
Fee Escrowed Funds until (x) delivery to the Escrow Agent of joint instructions executed by both the HK Co and the Company and then only in accordance with such joint instructions or (y) receipt of an order of a court specified in the
Escrow Agreement ordering disbursement of the Termination Fee Escrowed Funds or the Reverse Termination Fee Escrowed Funds and then only in accord with such court order.
E. In the event that the Escrow Agent receives joint instructions executed by both the HK Co and the Company requesting the release of the
Escrowed Funds, then the Escrow Agent shall release the Escrowed Funds in accordance with such joint instructions. The Company, Parent and the HK Co agree that in connection with the Closing under the Merger Agreement, (i) the Company and HK Co
shall execute and deliver joint instructions to the Escrow Agent to request that the Escrow Agent disburse (x) the full amount of the Termination Fee Escrowed Funds held in the Termination Fee Escrow Account by wire transfer of immediately
available funds to the Company as set forth in Annex A or as otherwise directed by the Company and (y) the full amount of the Reverse Termination Fee Escrowed Funds held in the Reverse Termination Fee Escrow Account by wire transfer of
immediately available funds to the Paying Agent and applied toward payment of a portion of the Merger Consideration payable under the Merger Agreement (or as otherwise directed by HK Co).
F. Parent and HK Co shall be jointly and severally liable for all representations, warranties, covenants, agreements and obligations of each
of Parent and HK Co under and pursuant to the terms of the Escrow Agreement and this Schedule A.
A-7
The Company shall be responsible for and the taxpayer on all
taxes due on the interest or income earned on such portion or all, if any, as applicable, of the Termination Fee Escrowed Funds that it receives pursuant to Section III hereof for the calendar year in which such interest or income is earned, and the
HK Co shall be responsible for and the taxpayer on all taxes due on the interest or income earned on such portion, if any, of the Termination Fee Escrowed Funds that it receives pursuant to Section III hereof for the calendar year in which such
interest or income is earned. To the extent the Reverse Termination Fee Escrowed funds are disbursed to the Company pursuant to Section III hereof, the Company shall be responsible for and the taxpayer on all taxes due on the interest or income
earned, if any, on the Reverse Termination Fee Escrowed Funds for the calendar year in which such interest or income is earned, otherwise the HK Co shall be responsible for and the taxpayer on all taxes due on the interest or income earned, if any,
on the Reverse Termination Fee Escrowed Funds for the calendar year in which such interest or income is earned. A W-8BEN for each of the Company and the HK Co shall be provided to the Escrow Agent upon execution of this Escrow Agreement. For proxy
and corporate action purposes, the Company shall be the primary owner of the Termination Fee Escrow Account and HK Co shall be the primary owner of the Reverse Termination Fee Escrow Account.
V. |
Termination of the Escrow Account |
This Escrow Agreement, the duties of the
Escrow Agent and the Escrow Accounts shall automatically terminate upon the payment in full by the Escrow Agent of all of the Escrowed Funds as directed herein.
A-8
Any notice or other communication required or permitted to be delivered
to any party under this Escrow Agreement shall be in writing and shall be deemed properly delivered, given and received when delivered (by hand, by registered mail, by courier or express delivery service or by facsimile or email) to the address or
facsimile telephone number set forth beneath the name of such party below (or to such other address or facsimile telephone number as such party shall have specified in a written notice given to the other parties):
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If to the Company: |
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Name: |
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Montage Technology Group Limited |
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Address: |
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Room A1601, Technology Building, 900 Yi Shan Road |
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Xuhui District, Shanghai, 200233 |
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Peoples Republic of China |
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Attn: |
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Howard Yang |
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Telephone: |
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+86-21-6128-5678 |
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Facsimile: |
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+86-21-5426-3132 +1-408-982-2789 |
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Email: |
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howard.yang@montage-tech.com
mark.voll@montage-tech.com |
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With a copy to the Companys counsel: |
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Name: |
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OMelveny & Myers LLP |
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Address: |
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Two Embarcadero Center, 28th Floor |
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San Francisco, California 94111 |
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Attn: |
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Paul Scrivano, Esq. |
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Telephone: |
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415-984-8734 |
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Facsimile: |
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415-984-8701 |
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Email: |
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pscrivano@omm.com |
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If to the HK Co or Parent: |
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Name: |
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Shanghai Pudong Science and Technology Investment Co., Ltd. |
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Address: |
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13 Building, No. 439 Chunxiao Rd. |
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Zhangjiang High-Tech Park, Pudong, Shanghai, PRC |
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Attn: |
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Qinghua Wang / Xuexia Duan |
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Telephone: |
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+86-21-5027-6353 / +86-21-5027-6322 |
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+86-13501778483 / +86-13482274160 |
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Facsimile: |
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+86-21-5027-6385 |
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Email: |
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wangqh@pdsti.com / duanxx@pdsti.com / xuexiaduan@126.com |
A-9
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With a copy to the HK Cos and Parents counsel: |
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Name: |
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Kirkland & Ellis |
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Address: |
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26th Floor, Gloucester Tower |
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The Landmark |
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15 Queens Road Central |
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Hong Kong |
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Attn: |
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David Zhang / Stephanie Tang |
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Telephone: |
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Facsimile:
Email: |
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852-03761-3301 david.zhang@kirkland.com and
stephanie.tang@kirkland.com |
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If to the Escrow Agent |
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Name: |
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Citibank, N.A. |
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Address: |
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Citi Private Bank |
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153 East 53rd Street, 21st Floor |
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New York, NY 10022 |
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Attn: |
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Ms. Kerry McDonough, Director |
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Telephone: |
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212-783-7110 |
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Facsimile:
Email: |
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212-783-7131
kerry.mcdonough@citi.com |
VII. |
Account Statements and Advices |
The Escrow Agent shall keep accurate and detailed
records of all investments, receipts, disbursements, and all other transactions made in respect of the Escrowed Funds. Unless instructed otherwise in writing by the party in question, the Escrow Agent shall prepare monthly account statements for the
Escrow Accounts and deliver such statements to all parties listed in the Notices section herein within ten days from the close of each month, statements shall set forth all investments, receipts, disbursements and other transactions
effected by the Escrow Agent, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash,
securities and other property held in the Escrow Accounts at the end of such month. All such parties shall also receive advices for all transactions in the Escrow Account as any such transactions occur. Any party hereto may at any time during the
Escrow Agents business hours (with reasonable notice) inspect any records or reports relating to the Escrow Fund.
A-10
VIII. |
AUTHORIZED PERSONS OF THE COMPANY AND THE HK CO |
The Escrow Agent shall be
authorized to take instructions singly from each of Howard Yang (Telephone: +86-21-6128-5678) or Mark Voll (Telephone: 1-408-982-2780; Alternate Phone: +86-21-6128-5678 x8618) on behalf of the Company and Xuexia Duan (Telephone: +86-21-5027-6322;
Alternative/Cell Phone: +86-134-8227-4160) or Qinghua Wang (Telephone: +86-21-5027-6353; Alternative/Cell Phone: +86-135-0177-8483) on behalf of the HK Co and Parent with respect to the Escrowed Funds in accordance with the terms herein. The above
persons shall also be the designated callback authorized individuals of the Company and the HK Co, respectively, and at least one of the above persons on behalf of each of the Company, on the one hand, and HK Co and Parent, on the other hand, shall
be notified by the Escrow Agent, prior to the release of all or a portion of the Escrowed Funds from the Escrow Accounts; provided, that if the designated person of the party not receiving any of the Escrowed Funds from the Escrow Account does not
answer the telephone call by the Escrow Agent or respond to the Escrow Agent after two (2) telephone calls (separated by at least 18 hours) by the Escrow Agent to such person, the callback procedure of the Escrow Agent under this paragraph
shall be deemed satisfied with respect to such party.
IX. |
Certificate of Incumbency |
A Certificate of Incumbency for each of the Company,
HK Co and Parent shall be provided to the Escrow Agent upon execution of this Escrow Agreement.
X. |
Fee Information; Miscellaneous |
The HK Co shall be responsible for and agrees to
promptly pay the Escrow Agent, upon request from the Escrow Agent, Escrow Agents compensation with respect to the Reverse Termination Fee Escrow Account as set forth on Schedule B for its services as escrow agent hereunder, and to reimburse
the Escrow Agent for all costs and expenses in connection with the performance of its duties and obligations hereunder in connection with the Reverse Termination Fee Escrow Account, including reasonable attorneys fees incurred by the Escrow
Agent. The Company shall be responsible for and
A-11
agrees to promptly pay the Escrow Agent, upon request from the Escrow Agent, Escrow Agents compensation with respect to the Termination Fee Escrow Account as set forth on Schedule B for its
services as escrow agent hereunder, and to reimburse the Escrow Agent for all costs and expenses in connection with the performance of its duties and obligations hereunder in connection with the Termination Fee Escrow Account, including reasonable
attorneys fees incurred by the Escrow Agent. All references in the Escrow Agreement and this Schedule A to $, USD or dollars refer to United States dollars. The Escrow Agreement and this Schedule A
is in the English language, and while the Escrow Agreement and/or this Schedule A may be translated into other languages, the English version of the Escrow Agreement and of this Schedule A shall control.
Unless otherwise agreed in writing by the parties hereto, no rights
or obligations under the Escrow Agreement or this Schedule A may be assigned or delegated by operation of law or otherwise, and any purported assignment or delegation in violation of this Section XI is void.
The Escrow Agent agrees to treat information relating to all
aspects of the transactions contemplated in the Escrow Agreement and this Schedule A as confidential information and agrees not to disclose such information to any other person without the prior written consent of each of the Company and the HK
Co. The Escrow Agent shall not make any public disclosures or statements to the press or any other person with respect to the transactions contemplated hereunder without the prior written consent of each of the Company and the HK Co.
XII. |
Limited Rights in Escrow Property; Security Interest. |
(a) It is the intention of
the parties hereto that this Escrow Agreement create a true escrow and none of the parties shall have any ownership of, or rights in, the Escrow Accounts or the Escrowed Funds, other than the limited contractual right to receive the Escrow Funds
under the circumstances specified in Section III of this Schedule A.
A-12
(b) As security for the due and punctual payment when due of the Termination Fee, the Company
hereby pledges, assigns and grants to HK Co, a continuing security interest in, and a lien on, all of its rights, title and interest to, and arising under, this Escrow Agreement, whether now owned or hereafter acquired. As security for the due and
punctual payment when due of the Reverse Termination Fee, HK Co hereby pledges, assigns and grants to the Company, a continuing security interest in, and a lien on, all of its rights, title and interest to, and arising under, this Escrow Agreement,
whether now owned or hereafter acquired. The Company and HK Co, in their capacities as issuers of their respective escrow under this Escrow Agreement, are collectively referred to herein as the Escrow Issuers.
(c) If, notwithstanding the intention of the parties set forth in XII(a) hereof, the Company is determined to have any right, title or
interest in the Termination Fee Escrowed Funds whether now owned or hereafter acquired, then as security for the due and punctual payment when due of the Termination Fee, the Company hereby pledges, assigns and grants to HK Co, a continuing security
interest in, and a lien on, the Termination Fee Escrowed Funds. If, notwithstanding the intention of the parties set forth in XII(a) hereof, HK Co is determined to have any right, title or interest in the Reverse Termination Fee Escrowed Funds
whether now owned or hereafter acquired, then as security for the due and punctual payment when due of the Reverse Termination Fee, HK Co hereby pledges, assigns and grants to the Company, a continuing security interest in, and a lien on, the
Reverse Termination Fee Escrowed Funds.
(d) The parties hereto acknowledge and agree that: (i) each Escrow Account will be treated
as a Securities Account, (ii) the Escrowed Amounts will be treated as Financial Assets, (iii) this Agreement governs the Escrow Accounts and provides rules governing the priority among possible Entitlement
Orders received by the Escrow Agent as Securities Intermediary from the Escrow Issuers and any other persons entitled to give Entitlement Orders with respect to such Financial Assets and (iv) the Securities
Intermediarys Jurisdiction is the State of New York. The Escrow Agent is a Securities Intermediary with respect to the Escrow Accounts and the Financial Assets credited to the Escrow Account. Except as
specifically provided herein, the terms of the New York Uniform Commercial Code, as amended, or any successor provision (the UCC), will apply to this Agreement, and all terms quoted in this Section XII will have the meanings
assigned to them by Article 8 of the UCC.
(e) The Escrow Agent hereby agrees that all property delivered to the Escrow Agent for
crediting to each Escrow Account will be promptly credited to such Escrow Account by the Escrow Agent. The Escrow Agent has not and shall not enter into any control agreement or any other agreement relating to the Escrow Account or the Escrowed
Funds with any other third party without the prior written consent of the Escrow Issuers, except for this Escrow Agreement.
A-13
(f) The Company acknowledges and agrees that the Termination Fee Escrow Account will be under the
control (within the meanings of Sections 8-106, 9-106 and 9-104 of the UCC) of HK Co and, notwithstanding any other provision of this Escrow Agreement, the Escrow Agent will comply with all Entitlement Orders and instructions given by HK
Co with respect to the Termination Fee Escrow Account or Termination Fee Escrowed Funds without further consent of the Company. HK Co acknowledges and agrees that the Reverse Termination Fee Escrow Account will be under the control (within the
meanings of Sections 8-106, 9-106 and 9-104 of the UCC) of the Company and, notwithstanding any other provision of this Escrow Agreement, the Escrow Agent will comply with all Entitlement Orders and instructions given by the Company with
respect to the Reverse Termination Fee Escrow Account or Reverse Termination Fee Escrowed Funds without further consent of HK Co.
(g)
Except as expressly set forth in Sections II and III hereof, none of the Escrow Issuers shall have any right to give any Entitlement Orders or instructions. Each Escrow Issuer agree to take all steps necessary or as may be reasonably
requested by the other party in connection with the perfection of the such partys security interest in this Agreement and the applicable Escrowed Amounts and, without limiting the generality of the foregoing, each of the Escrow Issuers hereby
authorizes the other party to file one or more UCC financing statements, in such jurisdictions and filing offices and containing such description of collateral as is necessary or advisable in order to perfect the security interest granted herein
(although such right shall not be implied in any way to impose any obligation on the Escrow Agent to do so).
(h) Upon the release of any
Escrowed Amounts pursuant to Section III hereof, the applicable security interest hereunder automatically terminate with respect to any such Escrowed Amounts without any further action and such released Escrowed Amounts will be delivered free and
clear of any and all liens, claims or encumbrances of any person. At the written request of the applicable Escrow Issuers, the other party will give all necessary authorizations to allow such Escrow Issuer or its designee to terminate any financing
statements and will execute such other documents without recourse, representation or warranty of any kind as such Escrow Issuer may reasonably request in writing to evidence or confirm the termination of the security interest in such released Escrow
Amounts.
A-14
XIII. |
Consent to Jurisdiction by the Company, Parent and HK Co. |
Each of Parent, HK Co
and the Company hereby irrevocably and unconditionally designates, appoints and empowers Law Debenture Corporate Services Inc., 400 Madison Avenue, 4th Floor, New York, NY 10017, as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf service of any and all legal process, summons, notices and documents that may be served in any action, suit or proceeding brought against such party in any such United States federal or state court with respect to
its obligations, liabilities or any other matter arising out of or in connection with the Escrow Agreement or this Schedule A and that may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such
courts. If for any reason such designee, appointee and agent hereunder shall cease to be available to act as such, each of Parent, HK Co and the Company agrees to promptly designate a new designee, appointee and agent in the State of New York on the
terms and for the purposes of this Article XIII reasonably satisfactory to the other parties hereto. Parent, HK Co and the Company hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in
any such action, suit or proceeding against Parent, HK Co and the Company, respectively, by serving a copy thereof upon the relevant agent for service of process referred to in this Article XIII (whether or not the appointment of such agent
shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by sending copies thereof by a recognized next day courier service to Parent, HK Co. and the Company, respectively, at its address specified in
or designated pursuant to the Escrow Agreement and this Schedule A. Each party agrees that the failure of any such designee, appointee and agent to give any notice of such service to them shall not impair or affect in any way the validity of
such service or any judgment rendered in any action or proceeding based thereon. The parties agree that service of process may also be effected by certified or registered mail, return receipt requested, or by reputable overnight courier service,
directed to the other party at the addresses set forth herein, and service so made shall be completed when received.
A-15
Annex A
Company Default Wire Instructions
HK Co Default Wire
Instructions
Paying Agent Wire Transfer Instructions
To be
provided at or prior to the Closing of the Merger.
A-1
Exhibit 99.1
Montage Technology Group Enters into Merger Agreement to be Acquired by
Shanghai Pudong Science and Technology Investment Co. for US$22.60 per Share
SHANGHAI, China, June 11, 2014 Montage Technology Group Limited (NASDAQ: MONT; Montage or Montage Technology or the
Company), a global fabless provider of analog and mixed-signal semiconductor solutions addressing the home entertainment and cloud computing markets, and Shanghai Pudong Science and Technology Investment Co., Ltd. (PDSTI), a
wholly state-owned limited liability company directly under Pudong New Area government of Shanghai, today jointly announced that they have entered into a definitive merger agreement under which PDSTI will acquire all of the outstanding Ordinary
Shares of Montage for US$22.60 per Ordinary Share. The merger values Montages equity at approximately US$693 million, on a fully diluted basis. The transaction is subject to approval by the shareholders of Montage, and antitrust and other
regulatory approvals.
The Companys Board of Directors unanimously approved the merger agreement and recommends that the Companys shareholders
vote to approve the merger agreement. Montage expects to hold a special meeting of its shareholders to consider and act upon the proposed transaction as promptly as practicable. Details regarding the record date for, and the date, time and place of,
the special meetings will be included in a press release when finalized.
With annual revenues of approximately US$110.9 million for 2013, Montage is a
global fabless provider of analog and mixed-signal semiconductor solutions addressing the home entertainment and cloud computing markets. In the home entertainment market, Montages technology platform enables the company to design highly
integrated end-to-end solutions with customized software for set-top boxes. These solutions optimize signal processing performance under demanding operating conditions typically found in emerging marketing environments. In the cloud computing
market, Montage offers high performance, low power memory interface solutions that enable memory intensive server applications. Its technology platform approach allows Montage to provide integrated solutions that meet the expanding needs of
customers through continuous innovation, efficient design and rapid product development.
After a review of strategic alternatives, the Montage
board of directors is pleased to reach this agreement, which provides shareholders with substantial cash value, as well as a premium to our unaffected share price, said Dr. Howard Yang, Chairman and Chief Executive Officer at Montage. In
addition, Montage believes the transaction will provide additional operational flexibility and position us to invest more strategically to drive powerful innovation and deliver cutting edge customer solutions. We look forward to working closely with
all parties to complete this transaction.
Dr. Mr. Xudong Zhu, Chairman of PDSTI, commented, This acquisition underscores PDSTIs
strategy of supporting leading companies within the semiconductor industry. Montage has a remarkable track record of pioneering and delivering best-in-class technology solutions for the global semiconductor market. We look forward to working with
Montages talented management team as they continue their strong performance and innovative corporate culture.
Stifel is serving as financial advisor to Montage and OMelveny & Myers LLP is serving as legal
advisor to Montage. Barclays Bank PLC and China International Capital Corporation Limited are serving as financial advisors to PDSTI, and Kirkland & Ellis is serving as legal advisor to PDSTI.
Montage will furnish to the Securities and Exchange Commission (the SEC) a Report on Form 8-K regarding the transaction, which will include the
merger agreement. All parties desiring details regarding the transaction are urged to review these documents, which are available at the SECs website (http://www.sec.gov).
This announcement is neither a solicitation of proxies, an offer to purchase nor a solicitation of an offer to sell any securities and it is not a substitute
for any proxy statement or other proxy materials that may be filed or furnished with the SEC with respect to the proposed merger.
About Montage
Montage Technology is a global fabless provider of analog and mixed-signal semiconductor solutions currently addressing the home entertainment and
cloud computing markets. In the home entertainment market, Montages technology platform enables the Company to design highly integrated end-to-end solutions with customized software for set-top boxes. These solutions optimize signal processing
performance under demanding operating conditions typically found in emerging marketing environments. In the cloud computing market, Montage offers high performance, low power memory interface solutions that enable memory intensive server
applications. Its technology platform approach allows Montage to provide integrated solutions that meet the expanding needs of customers through continuous innovation, efficient design and rapid product development. For more information regarding
Montage please visit the Companys website at www.montage-tech.com.
About PDSTI
PDSTI, a wholly state-owned limited liability company directly under Pudong New Area government of Shanghai, combines proprietary investments with investment
management services. The business of PDSTI currently covers a broad range of areas, including venture capital and private equity investments, mergers and acquisitions, management of fund of funds and private equity funds, and debt investments. PDSTI
has deep industry knowledge of integrated circuit design and has invested in several well-known IC design companies. For additional information, please see the website at http://www.pdsti.com.
Forward Looking Statements
This press release contains
or incorporates a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based
on current expectations, and are not strictly historical statements. In some cases, you can identify forward-looking statements by terminology such as if, may, should, believe, anticipate,
future, forward, potential, estimate, opportunity, goal, objective, growth, outcome, could, expect,
intend, plan, strategy, provide, commitment, result, seek, pursue, ongoing, include or in the negative of such terms or
comparable terminology. These forward-looking statements inherently involve certain risks and uncertainties. Factors or risks that could cause our actual results to differ materially from the results are more fully described in our filings with the
Securities and Exchange Commission, which are available through our website at www.montage-tech.com. Factors that relate to the proposed acquisition of Montage include the risk that we may not obtain
stockholder and regulatory approval of the transactions contemplated by the definitive agreement on the proposed terms and schedule; the risk that the transaction will impair our ability to
maintain third party relationships following the announcement of the transaction; the risk that the parties may not be able to satisfy the conditions to closing of the transactions contemplated by the definitive agreement; and the risk that the
transactions contemplated by the definitive agreement may not be completed in the time frame expected by the parties or at all. Other unknown or unpredictable factors could also affect our business, financial condition and results. Although we
believe that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that any of the estimated or projected results will be realized. You should not place undue reliance on these forward-looking
statements, which apply only as of the date hereof. Subsequent events and developments may cause our views to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation
to do so.
Company Contact:
Montage Technology
Mark Voll, CFO
P: 408-982-2780 or 86-21-6128-5678 x8618
E: ir@montage-tech.com
Investor Relations Contact:
Shelton Group
Leanne Sievers, EVP
P: 949-224-3874
E: lsievers@sheltongroup.com
Matt Kreps, Managing Director
P: 972-239-5119 ext. 125
E: mkreps@sheltongroup.com
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