Amended and Restated STOCK PURCHASE AGREEMENT
EXHIBIT
10.1
Execution
Copy
ASIA
SPECIAL SITUATION ACQUISITION CORP.
as
the Purchaser of
Capital
Stock
of
CHINA
TEL GROUP, INC.
Dated: as
of July 31, 2008
Execution
Copy
AMENDED
AND RESTATED STOCK PURCHASE AGREEMENT
THIS AMENDED AND RESTATED STOCK
PURCHASE AGREEMENT (the “Agreement”), is
entered into this 4th day of
August, 2008, to be effective as of July 31, 2008 (the “Effective Date”), by
and among Asia Special
Situation Acquisition Corp., a Cayman Islands corporation (the “Purchaser”); China Tel Group, Inc., a
Nevada corporation, formerly known as Mortlock Ventures, Inc. (the “Company”); Trussnet USA, Inc., a Nevada
corporation (“Trussnet”); and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the other
Persons listed on the signature page as “Company Principal
Stockholders.” The Purchaser, the Company, Trussnet and the
Company Principal Stockholders are sometimes referred to collectively herein as
the “Parties”,
and each individually as a “Party”.
RECITALS
This
Agreement is being entered into by the Purchaser based, in part, upon the truth
and accuracy of the following factual Recitals, each of which shall be deemed to
be additional representations and warranties by the Company and
Trussnet:
A. The
Company, through Trussnet, a wholly owned subsidiary of the Company, is in the
business of designing, developing, operating and maintaining wireless
communications facilities throughout the world.
B. CECT-Chinacomm Communications Co.,
Ltd., a company incorporated under the laws of the People’s Republic of
China (“Chinacomm”), is and
on the Closing Date (as hereinafter defined) shall be the holder of a basic
spectrum license (the “WiMAX License”)
issued by the Ministry of Information Industry of China (“MII”) authorizing the
ChinaComm to provide and deploy fixed 3.5 GHz of wireless world-wide
interoperability for microwave access (“WiMAX”) wireless
broadband operations in 29 cities in the People’s Republic of China (the “Wireless
Installations”).
C. Trussnet
is an entity formed on April 4, 2008 to acquire certain of the assets and
personnel, hereinafter described, of Trussnet USA, Inc., a Delaware
corporation, an
Affiliate entity engaged in the design, engineering, manufacture and
installation of space-frames, trusses structures and the management of
telecommunications facilities in Asia (“Trussnet
Delaware”).
D. Trussnet
owns a 100% equity interest in Trussnet Gulfstream (Dahlian) Co.,
Ltd. (“Trussnet
Gulfstream”), a foreign investment enterprise established under the laws
of the Peoples Republic of China (the “PRC”). Trussnet
Gulfstream has entered into that certain Exclusive Technical Services Agreement
dated May 23, 2008 (the “Technical Agreement”)
with Yunji Communications
Technology (China) Co. Ltd. a wholly foreign-owned investment enterprise
(“Yunji”). Pursuant
to the terms of the Technical Agreement, Trussnet Gulfstream will provide
technical and professional assistance to Yunji to assist Yunji in performing the
services described in the Management Agreement referred to in Paragraph E
below. Attached as Exhibit A is a fully executed
copy of the Technical Agreement.
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E. Pursuant
to the terms of that certain Exclusive Technical and Management Consulting
Services Agreement dated May 23, 2008 (the “Management
Agreement”), Yunji will provide technical and management services on an
exclusive basis to Chinacomm for the procurement, installation, operation and
maintenance of the Wireless Installation. Yunji has a contractual
interest in the revenues of Chinacomm. Attached as Exhibit B is a fully executed
copy of the Management Agreement.
F. Pursuant
to that certain lease agreement, dated May 23, 2008 between Trussnet Gulfstream,
as lessor, and Yunji, as lessee (the “Equipment Lease
Agreement”), Trussnet Gulfstream will lease to Yunji certain equipment
required for the Wireless Installations (the “Equipment”). Pursuant
to that certain sublease agreement dated May 23, 2008, between Yunji, as
sublessor, and Chinacomm, as sublessee (the Equipment Sublease
Agreement”), Yunji will sublease the Equipment to Chinacomm certain
equipment required for the Wireless Installations. Attached as Exhibit C-1 is a fully
executed copy of the Equipment Lease Agreement and attached hereto as Exhibit C-2 is a fully
executed copy of the Equipment Sublease Agreement.
G. Pursuant
to the terms of the Management Agreement and the Equipment Sublease Agreement
referred to above, Yunji will be entitled to receive 100% of the revenues
realized by Chinacomm from the operation of the Wireless
Installations.
H. Pursuant
to the terms of that certain Subscription and Shareholders’ Agreement, dated
May 23, 2008 (the “Subscription
Agreement”), among: (i) Gulfstream Capital Partners
Ltd., a Seychelles corporation, and a 100% owned subsidiary of Trussnet
(“Gulfstream
Capital”), (ii) Chinacomm Limited, a Cayman
Islands corporation (“Chinacomm Cayman”),
(iii) Chinacomm, (iv) Qui Ping (“Qui”) and ▇▇▇▇ ▇▇ (“Yuan”),
(v) Newtop Holdings
Limited (“Newtop”),
(vi) Thrive Century
International Limited, a British Virgin Islands corporation (“Thrive”), and
(vii) CECT Chinacomm
Shanghai Co. Ltd., a PRC corporation (“Chinacomm Shanghai”),
Trussnet, through its wholly owned subsidiary Gulfstream Capital, is
to provide $196,000,000 in financial assistance as a capital
investment and to finance the leasing of certain equipment for the benefit of
Chinacomm, in exchange for 2,450,000,000 ordinary shares of Chinacomm Cayman,
constituting the legal and beneficial ownership of 49% of the equity of
Chinacomm Cayman on a Fully-Diluted Basis. Attached as Exhibit D is a fully executed
copy of the Subscription Agreement.
I. The
Technical Agreement, the Management Agreement, the Equipment Lease Agreement,
the Equipment Sublease Agreement and the Subscription Agreement are hereinafter
collectively referred to as the “Chinacomm
Agreements”.
J. To
facilitate, among other things, the performance of Trussnet under the Chinacomm
Agreements, the Purchaser desires, in accordance with the terms of this
Agreement, to acquire for a maximum of $270,000,000: (a) certain
shares of the Class A common stock of the Company (the “Class A Common
Shares”), (b) certain shares of the Class B common stock of the
Company, a description of which is set forth as Exhibit E hereto (the “Class B Common
Shares”), and (c) certain shares of the Series A preferred stock of
the Company, a description of which is set forth in Exhibit F hereto (the “Series A Preferred
Shares”). The acquisition of the Class A Common Shares, the
Class B Common Shares and the Series A Preferred Shares is sometimes
collectively referred to herein as the “Stock Purchase,” and
the Class A Common Shares and the Series A Preferred Shares that may be
purchased by the Purchaser on the Closing Date are hereinafter sometimes
collectively referred to as the “Purchased
Securities.”.
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K. On
July 8, 2008, the Purchaser, the Company and Trussnet entered into a stock
purchase agreement (the “Prior
Agreement”).
L. The
Purchaser, the Company, Trussnet and the Company Principal Stockholders desire
to amend and restate in its entirety the Prior Agreement and enter into this
Agreement in order, inter
alia, to provide from the “Merger” (as hereinafter defined) between the
Company and the Purchaser, all upon the terms and conditions hereinafter set
forth. Upon execution of this Agreement, the Parties agree that the
Prior Agreement shall no longer be of any force or effect.
M. The
Board of Directors of the Company, Trussnet and the Purchaser and the
Company Principal Stockholders have each deemed it advisable, and in the best
interests of the Company and the Purchaser respectively, to consummate the Stock
Purchase and the Merger, in accordance with the terms of this Agreement, in
order to advance the long-term strategic business interests of the Company and
the Purchaser.
NOW, THEREFORE, in
consideration of the promises and the mutual covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
ARTICLE
I
SELECTED DEFINED TERMS AND
INTERPRETATION
1.1. Definitions. In
addition to the terms defined in the Recitals and other terms defined herein,
the following capitalized terms shall have the respective meanings specified in
this Article I. Other terms defined elsewhere herein shall have
meanings so given them.
1.1.1. Additional
Investment The term “Additional Investment” shall mean the
cash purchase by one or more Additional Investors on the Closing Date of
securities of either the Company or the Purchaser, in the aggregate amount of
not less than One Hundred and Five Million Dollars ($105,000,000) and all upon
such terms and conditions as shall be satisfactory to both the Company and the
Purchaser, in the exercise of their sole discretion.
1.1.2. Additional
Investors The term Additional Investor” shall mean one or more
strategic or institutional Persons who shall, on or before the Closing Date,
make the Additional Investment.
1.1.3. Affiliate. The
term “Affiliate” shall mean a Person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control
with, the first Person.
1.1.4. Business
Day. The term “Business Day(s)” shall mean the individual or
collective reference to any one or more calendar days, excluding Saturday or
Sunday or another day in which any of the national banks located in the United
States or the PRC are closed for business.
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1.1.5. Class A
Common Shares. The term “Class A Common Shares” shall
mean the 500,000,000 shares of Class A common stock authorized for
issuance by the Company pursuant to its certificate of
incorporation.
1.1.6. Class A
Common Shares and Equivalents. The term “Class A Common Shares
and Equivalents” shall mean the sum of (a) the aggregate number of Class A
Common Shares and (b) the aggregate number of Class A Common Shares issuable
upon conversion of the Series A Preferred Shares, if any, that may be purchased
by the Purchaser under this Agreement.
1.1.7. Class B
Common Shares. The term “Class B Common Shares” shall
mean the 200,000,000 shares of Class B common stock authorized for
issuance by the Company pursuant to its certificate of
incorporation.
1.1.8. Common
Stock. The term “Common Stock” shall refer to either or both
of the Class A Common Shares and Class B Common Shares that have been
authorized for issuance by the Company pursuant to its certificate of
incorporation.
1.1.9. Control. The
term “Control” (including the terms “controlled by” and “under common control
with”) shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
1.1.10. Chinacomm
Parties. The term “Chinacomm Parties” shall mean the
collective reference to Chinacomm, Trussnet Gulfstream, Yunji, Gulfstream
Capital, Chinacomm Cayman, Qui, Yuan, Newtop, Thrive, and Chinacomm
Shanghai.
1.1.11. Due
Diligence Investigation. The term “Due Diligence
Investigation” shall mean consummation by the Purchaser of an investigation of
the business, assets and liabilities, financial condition, legal and regulatory
matters (including decisions and approvals of PRC Regulatory Authorities) and
prospects of each of the Company, Trussnet and the Chinacomm Parties, including,
without limitation, a review of all Financial Statements (when furnished), and
confirmation of the statements, warranties and satisfaction of all conditions
precedent contained in this Agreement and in each of the Chinacomm Agreements;
all of which investigation shall be satisfactory to the Purchaser, in the
exercise of its sole discretion.
1.1.12. Employment
Agreement. The term “Employment Agreement” shall mean the five
year employment agreement between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ the execution
of which shall be a condition precedent to the closing of the Stock
Purchase.
1.1.13. Financial
Statements. The term “Financial Statements” shall mean the
collective reference to: (a) the audited balance sheets and statement of
income or operations and statement of cash flows of the Company as of June 30,
2006 and June 30, 2007 and for each of the two fiscal years ended June 30, 2007,
(b) the unaudited comparative balance sheets and statements of income or
operations and cash flows of the Company as at March 31, 2008 and for the nine
months ended March 31, 2008; (c) the unaudited balance sheet as
at June 30, 2008 and the unaudited consolidated statements of income or
operations and statement of cash flows of Trussnet and its consolidated
Subsidiaries from inception through the period ended June 30, 2008; and
(d) if, and only to the extent required under GAAP and Regulations S-X
promulgated under the Securities Act of 1933, as amended, (i) the audited
balance sheets and statements of income or operations and cash flows of
Chinacomm as at December 31, 2006, and December 31, 2007, and (ii) the unaudited
comparative balance sheets and statements of income or operations and cash flows
of Chinacomm as at June 30, 2007 and June 30, 2008 and for the six months ended
June 30, 2007 and June 30, 2008.
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1.1.14. Fully
Diluted Basis. The term “Fully Diluted Basis” shall mean, with
respect to the Person in question, the sum of: (a) the aggregate number of
issued and outstanding shares of capital stock or other equity interests of such
Person at any point in time, plus (b) such additional shares of capital stock or
other equity interests that would be issued and outstanding on a fully-diluted
basis, assuming: (i) the conversion into capital stock (including without
limitation, Class A Common Shares, Class B Common Shares and Series A Preferred
Shares) of all securities issued by such Person, or (ii) the exercise of all
options, warrants or other rights entitling any holder to purchase shares of
capital stock or other equity interests of such Person.
1.1.15. GAAP. The
term “GAAP” means, at any time or for any period in question, United States
generally acceptable accounting principles then in effect.
1.1.16. Knowledge. The
term “Knowledge” shall mean actual knowledge after reasonable
investigation.
1.1.17. Management
Stockholders. The term “Management Stockholders” shall mean
the collective reference to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the other Persons listed on
Schedule 3.8(a) to this Agreement.
1.1.18. Material
Adverse Change. The term “Material Adverse Change” shall mean
a change which results in a Material Adverse Effect.
1.1.19. Material
Adverse Effect. The term “Material Adverse Effect” shall mean: with
respect to the Person in question: (i) a material adverse effect (whether
taken individually or in the aggregate with all other such effects) on the
financial condition, business, results of operations or properties of such
Person; or (ii) an effect which would materially impair the Person’s
ability to timely consummate the transactions contemplated under this Agreement;
or (iii) any event, circumstance or condition affecting a Person which
would prevent or materially delay the consummation of the transactions
contemplated under this Agreement.
1.1.20. Merger. The
term “Merger” shall mean the merger, to be effected following the Closing of the
Purchaser’s acquisition of the Purchased Securities pursuant to this Agreement,
all upon the terms and conditions set forth in the Merger
Agreement.
1.1.21. Merger
Agreement. The term “Merger Agreement” shall mean the
agreement and plan of merger in substantially the form of Exhibit
G annexed hereto and made a part hereof, pursuant to which a wholly-owned
acquisition subsidiary of the Purchaser will be merged into the Company, with
the Company as the surviving corporation of such merger, as a result of which
the Company will become a wholly-owned subsidiary of the Purchaser.
1.1.22. Merger
Date. The term “Merger Date” shall mean the date
that the certificate of merger and articles of merger with respect to
the Merger shall have been filed with the appropriate filing authorities in the
State of Nevada.
1.1.23. MII. The
term “MII” shall mean the Ministry of Information and Industry of the People’s
Republic of China.
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1.1.24. Preferred
Stock. The term “Preferred Stock” shall refer to the Series A
Preferred Shares and any other shares of preferred stock of the Company
authorized for issuance pursuant to its certificate of
incorporation.
1.1.25. Ordinary
Course of Business. The term “Ordinary Course of Business”
shall mean the course of business procedures and practices consistent with past
custom and practice (including with respect to quantity and
frequency).
1.1.26. PRC
Regulatory Authorities. The term “PRC Regulatory
Authorities” shall mean the collective reference to: (a) the MII,
(b) the State Agency of Foreign Exchange (“SAFE”), (b) the China Securities
Regulatory Commission (“CSRC”), and (c) any other agency or instrumentality
of the central PRC government and/or any Provincial governmental agency having
jurisdiction over Chinacomm and the Chinacomm Parties.
1.1.27. Person. The
term “Person” means an individual, partnership, limited liability company,
corporation, association, joint stock company, trust, a joint venture,
unincorporated organization, or any other type of entity.
1.1.28. Purchased
Securities. The term “Purchased Securities” shall mean the
aggregate number of the Class A Common Shares and/or Series A Preferred
Shares that shall be purchased by the Purchaser in accordance with the terms of
this Agreement.
1.1.29. Purchaser
Note. The term “Purchaser Note” shall have the
meaning as is defined in Section 2.1.2(b) of
this Agreement.
1.1.30. Requirement
of Law. The term “Requirement of Law” shall mean, with respect
to any Person, any judgment, statute, law, code, act, order, writ, rule,
ordinance, regulation, governmental consent or governmental requirement, or
determination or decree of any arbitrator, court, or other governmental agency
or administrative body, which now or at any time hereafter may be applicable to
and enforceable against the relevant Person, work, or activity in question or
any part thereof.
1.1.31. Sale of
Control. The term “Sale of Control” means, with respect
to any Party to this Agreement or any Trussnet Subsidiary, the sale or transfer
to any unaffiliated Person of securities of such Party or Trussnet Subsidiary or
of all or substantially all of the assets of such Party or Trussnet Subsidiary,
whether by merger, consolidation, combination, asset sale, stock sale, tender
offer or otherwise, in a transaction whereby the power to elect a majority of
the board of directors of such Party or Trussnet Subsidiary shall be vested in
such unaffiliated Person.
1.1.32. SEC. The
term “SEC” shall mean the United States Securities and Exchange
Commission.
1.1.33. Securities
Act. The term “Securities Act” shall mean the Securities Act
of 1933, as amended.
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1.1.34. Series A
Preferred Shares. The term “Series A Preferred Shares” shall
mean the 25,000,000 shares of Series A Preferred Shares of the Company
authorized for issuance pursuant to its certificate of
incorporation.
1.1.35. Tax or
Taxes. The term “Tax” or “Taxes” shall mean any federal,
state, local or foreign income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental,
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
1.1.36. Tax
Return. The term “Tax Return” shall mean any return,
declaration, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
1.1.37. Transaction
Expenses. The term “Transaction Expenses” shall mean and
include all reasonable, actual, and documented out-of-pocket expenses
(including, without limitation, all reasonable fees and expenses of
counsel, accountants, and investment bankers to a Party and its Affiliates)
incurred by a Party or on its behalf in connection with or related to:
(i) the authorization, preparation, negotiation, execution, and performance
of this Agreement; (ii) the preparation, printing, filing, and mailing of
any SEC Filings made or contemplated by that Party in connection with this
Agreement and the transactions envisioned hereunder, including, without
limitation, Purchaser’s proxy statement, the Company’s information statement
relating to the Merger and Purchaser’s registration statement on Form S-4 or
Form F-4 to be filed to register the ordinary shares of Purchaser or be issued
in the Merger; and (iii) all other matters related to the consummation of
the transactions contemplated under this Agreement.
1.1.38. WiMAX
License Renewal. The term “WiMAX License Renewal” shall have
the meaning set forth in Section 5.1.6 of this
Agreement.
1.1.39. WiMAX
License Renewal Date. The term “WiMAX License Renewal
Date” shall be the date on which the MII shall have issued (by its official seal
or “chop”) the WiMAX License Renewal.
1.1.40. Accounting
Terms and Determinations. All accounting terms used in this
Agreement and not otherwise defined shall have the meaning accorded to them in
accordance with GAAP and, except as expressly provided herein, all accounting
determinations shall be made in accordance with GAAP, consistently
applied. When used herein, the term “financial statements” shall
include the notes and schedules attached thereto. The term “GAAP”
means generally accepted accounting principles consistently applied as in effect
from time to time.
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1.2. Interpretation.
1.2.1. Provision
Not Construed Against Party Drafting Agreement. This Agreement
is the result of negotiations by and between the Parties, and each Party has had
the opportunity to be represented by independent legal counsel of its
choice. This Agreement is the product of the work and efforts of all
Parties, and shall be deemed to have been drafted by all Parties. In
the event of a dispute, no Party hereto shall be entitled to claim that any
provision should be construed against any other Party by reason of the fact that
it was drafted by one particular Party.
1.2.2. Number
and Gender. Wherever from the context it appears appropriate:
(i) each term stated either in the singular or plural shall include the
singular and plural; and (ii) wherever from the context it appears
appropriate, the masculine, feminine, or neuter gender, shall each include the
others.
1.2.3. Incorporation
of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof as if set out in full herein.
1.2.4. Article
and Section Headings. The article and section headings used in
this Agreement are inserted for convenience and identification only and are not
to be used in any manner to interpret this Agreement.
1.3. Severability. Each
and every provision of this Agreement is severable and independent of any other
term or provision of this Agreement. If any term or provision hereof
is held void or invalid for any reason by a court of competent jurisdiction,
such invalidity shall not affect the remainder of this Agreement.
1.4. Entire
Agreement. This Agreement, and all Exhibits hereto and all
references, documents, or instruments referred to herein, contains the entire
agreement and understanding of the Parties hereto in respect to the subject
matter contained herein. The Parties have expressly not relied upon
any promises, representations, warranties, agreements, covenants, or
undertakings, other than those expressly set forth or referred to in this
Agreement and in the Exhibits hereto. This Agreement and the Exhibits
hereto supersedes any and all prior written or oral agreements, understandings,
and negotiations between the Parties with respect to the subject matter
contained herein or therein.
1.5. Additional
Definitions and Interpretation Provisions. For purposes of
this Agreement: (i) those words, names, or terms which are specifically
defined herein shall have the meaning specifically ascribed to them;
(ii) the words “hereof”, “herein”, “hereunder”, and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole,
and not to any particular provision of this Agreement; (iii) all references
to designated “Articles”, “Sections”, and to other subdivisions are to the
designated Articles, Sections, and other subdivisions of this Agreement as
originally executed; (iv) all references to “Dollars” or “$” shall be
construed as being United States dollars; (v) the term “including” is not
limiting and means “including without limitation”; and (vi) all references
to all statutes, statutory provisions, regulations, or similar administrative
provisions shall be construed as a reference to such statute, statutory
provision, regulation, or similar administrative provision as in force at the
Effective Date and as may be subsequently amended.
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ARTICLE
II
THE PURCHASED
SECURITIES
2.1. The
Purchased Securities, Purchase Price and Post-Closing
Option.
2.1.1 The
Purchased Securities
(a) On
the Closing Date (as hereinafter defined) and subject to the terms
and conditions set forth herein, the Purchaser shall purchase and acquire and
the Company shall sell to the Purchaser the Purchased Securities, including,
without limitation, an aggregate of 120,000,000 Class A Common Shares and
Equivalents. Such Purchased Securities shall be evidenced by the
Company’s delivery to the Purchaser on the Closing Date of:
(i) that
number of Class A Common Shares determined by dividing (i) the Cash Payment (as
defined in Section
2.1.2(a) below) paid at Closing, by (ii) $2.25; and
(ii) that
number of Series A Preferred Shares of the Company determined by dividing (i)
the principal amount of the Purchaser Note (as defined in Section 2.1.2(b)
below) delivered at Closing, by (ii) $10.00.
For the
avoidance of doubt, if the Cash Payment at Closing is $105,000,000 and the
Purchaser Note is $165,000,000, then at Closing the Purchaser shall receive from
the Company an aggregate of 46,666,667 Class A Common Shares and an aggregate of
16,500,000 Series A Preferred Shares, convertible into an additional 73,333,333
Class A Common Shares.
(b) Notwithstanding
the provisions of Section 2.1.1(a)
above, prior to the Closing Date, the Purchaser may elect, by written notice to
the Company, to receive all of the Purchased Securities in the form of
120,000,000 Class A Common Shares; in which event no Series A Preferred Shares
shall be issued under this Agreement by the Company.
(c) To
the extent that the Company does issue Series A Preferred Shares, dividends on
such Purchased Securities shall only be payable, as to those Series A Preferred
Shares which shall have been paid for in cash (at the rate of $10.00 per Series
A Preferred Share) by prepayment or payment of the Purchaser Note.
2.1.2 Purchase
Price. On the Closing Date, the Purchaser shall pay to
the Company a purchase price for the Class A Common Shares and Equivalents equal
to $2.25 per share, or $270,000,000 for all of the Purchased Securities (the
“Purchase
Price”). The Purchase Price shall be paid on the Closing
Date, in the following manner:
(a) by
wire transfer of immediately available funds (the “Cash
Payment”) to an account designated by the Company and approved
by Purchaser such amount, net of all applicable commissions, that shall be not
less than $105,000,000 (the “Minimum
Cash Payment”) and not more than $270,000,000 (the “Maximum
Cash Payment”); and
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(b) to
the extent not paid in cash at Closing in accordance with Section 2.1.2(a),
above, the balance of the Purchase Price shall be paid by the Purchaser’s
delivery to the Company at Closing of the Purchaser’s non-interest bearing
promissory note due March 31, 2009 (the “Purchaser
Note”); which Purchaser Note:
(i) to
the extent not previously prepaid, shall be due and payable on March 31, 2009
(the “Maturity
Date”);
(ii) shall
be secured by a pledge to the Company of that number of shares of the Purchased
Securities which, when divided by the $2.25 per share Purchase Price for Class A
Common Shares and/or the $10.00 per share stated value purchase price for Series
A Preferred Shares, if any, shall equal the principal amount of the Purchaser
Note (the “Pledged
Securities”), and held by ▇▇▇▇▇▇▇, Cron & Jasper, P.L.C., counsel to
the Company, as collateral agent (the “Collateral
Agent”) pursuant to the terms of the pledge agreement annexed hereto as
Exhibit
H and made a part hereof (the “Pledge
Agreement”);
(iii) except
only for the Pledged Securities, shall be non-recourse to the Purchaser and the
assets and properties of the Purchaser;
(iv) shall
be subject to full or partial mandatory prepayment in cash, to the extent of any
and all cash net proceeds received by the Purchaser from the issuance and sale
of any of its securities at any time or from time to time prior to the Maturity
Date;
(v) shall
provide that on any one or more occasion that the outstanding principal amount
of the Purchaser Note is prepaid in part and reduced or paid in full, a
corresponding amount of the Purchased Securities (valued (A) as to the Class A
Common Shares held under the Pledge Agreement at $2.25 per share, and (B) as to
any shares of Series A Preferred Shares held under the Pledge Agreement, at the
$10.00 per share purchase price) shall be released by the Collateral Agent from
the Pledge Agreement and delivered to the Purchaser;
(vi) shall
provide that, to the extent the Purchaser Note has not been paid in full by the
Maturity Date, the amount of the Purchased Securities then being held under the
Pledge Agreement which are not then subject to release and delivery to the
Purchaser pursuant to clause (v) above, shall be returned to the Company for
cancellation and the Purchaser Note shall be returned to the Purchaser for
cancellation, unless the Maturity Date shall have been extended by mutual
agreement of the Parties;
(vii) shall
provide that on the Closing Date, the Purchaser shall deliver to the Collateral
Agent the Pledged Securities, together with not less than twenty stock powers
duly executed by the Purchaser in blank; and
(viii) shall
be in the form of Exhibit
I annexed
hereto and made a part hereof.
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2.1.3 Deliveries. Against
receipt of the Purchase Price, on the Closing Date the Company shall
deliver:
(a) to
the Purchaser, stock certificates evidencing legal and beneficial ownership of
such number of the Purchased Securities equal to the Purchase Price that shall
have been paid at the Closing by the Cash Payment (calculated by dividing the
Cash Payment paid at Closing by $2.25); and
(b) to
the Collateral Agent under the Pledge Agreement, the Purchaser Note and stock
certificates evidencing legal and beneficial ownership of such number of the
Pledged Securities equal to the Purchase Price that shall have been paid as at
the Closing by delivery of the Purchaser Note (calculated by in accordance with
Section
2.1.2(b)(ii) above).
2.1.4 Per Share
Price; Adjustments. It is the mutual intention of the Parties
hereto that the per share purchase price of each of the Class A Common Shares
shall be $2.25 per share (the “Per Share
Price”). Such number of Class A Common Shares and the Per
Share Price shall be subject to equitable adjustment in the event of any stock
splits or recapitalizations by the Company prior to the Closing Date that have
been approved by the Purchaser. In addition, except for the
Convertible Debentures permitted to be issued by the Company prior to the
Closing Date in accordance with Section 3.8 and Section 4.14 below,
in the event that the Company shall, on any one or more occasion, commencing
from and after the date of this Agreement and ending on a date which shall be
the effective time of the Merger, issue or sell for cash any of its Class A
Common Shares or other securities convertible into or exercisable for Class A
Common Shares at a price per share that shall be less than $2.25, the Per Share
Price paid and payable by Purchaser shall be reduced to such lower price, and
the number of Class A Common Shares issued and issuable to the Purchaser shall
be correspondingly increased. Notwithstanding the foregoing,
the provisions of this Section 2.1.4 shall not be applicable to, or subject to
adjustment by, either the transactions contemplated by the Merger Agreement or
the exercise of warrants outstanding as at the date of this Agreement entitling
the holders to purchase ordinary shares of the Purchaser
2.1.5 Closing
Payment and Class A Common Shares and Equivalents. On the
Closing Date, the Purchaser shall pay the $270,000,000 Purchase Price in the
manner set forth in Section 2.1.2 above
and the Company shall deliver to the Purchaser an aggregate of 120,000,000 Class
A Common Shares and Equivalents, after giving effect to the conversion of each
Series A Preferred Share purchased on the Closing Date into 4.4444 Class A
Common Shares, calculated by dividing (a) the $10.00 per share stated
value and purchase price for each Series A Preferred Share, by (b) $2.25 per
share (the “Series A
Preferred Conversion Ratio”).
2.1.6 Minimum
Percentage Ownership. The Parties hereto do hereby acknowledge
and agree that, notwithstanding anything to the contrary, express or implied,
contained in this Agreement, after giving effect to the transactions
contemplated by this Agreement, on the Closing Date the Purchaser shall purchase
and own of record and beneficially that number of Class A Common Shares and
Equivalents and that number of Class B Common Shares as shall represent not less
than fifty-one (51%) of the aggregate voting power of all voting securities of
the Company, after giving effect to the acquisition of the Purchased Securities
by the Purchaser.
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2.2. Composition
of the Purchased Securities. Unless the Purchaser shall
elect, by written notice to the Company given not later than five (5) days prior
to the Closing Date, to purchase all of the Purchased Securities in the form of
120,000,000 Class A Common Shares, the allocation of the Purchased Securities
among the Class A Common Shares and the Series A Preferred Shares shall be as
follows:
(a) a
Minimum Cash Payment of the Purchase Price of $105,000,000, in exchange for an
aggregate of 46,666,667 shares of Class A Common Shares at the Per
Share Price of $2.25 per share;
(b) the
balance of the Purchased Securities to be represented by the purchase of up to
16,500,000 Series A Preferred Shares at a stated value and purchase price of
$10.00 per Series A Preferred Share; with (i) such Series A Preferred Shares
paid by issuance of the Purchaser Note, and (ii) each Series A Preferred Share
convertible by the holder at any time by the holder into 4.4444 Class A Common
Shares, based on the Series A Preferred Conversion Ratio, and shall contain such
other terms and conditions as are set forth on Exhibit
F annexed
hereto and made a part hereof; and
(c) the
issuance of the number of the Class B Common Shares referred to in Section 2.3
below.
2.3. Issuance
of Class B Common Shares. In consideration for its
purchase of the Purchased Securities, on the Closing Date, the Company shall
issue to the Purchaser, for $0.001 per share, that number of the Class B Common
Shares which, when coupled with the number of Class A Shares and any Series A
Preferred Shares purchased by the Purchaser on the Closing Date, shall represent
as of the Closing Date, not less than fifty-one percent (51%) of the aggregate
voting power of the Company, represented by all Class A Shares, Series A
Preferred Shares and Class B Common Shares of the Company, that are or would be
outstanding on a Fully-Diluted Basis after giving effect to such issuance (the
“Purchaser’s Class B
Shares”).
2.4 Failure
to Consummate Purchase. If at any time prior to the Closing,
the Purchaser believes that it is unable to consummate the purchase of the
Purchased Securities, then the Purchaser shall promptly notify the Company in
writing of its intent to terminate this Agreement. Upon receipt of such notice,
this Agreement shall be null and void, and none of the Parties hereto shall have
any further liability to the other.
2.5. Closing. Subject
to the terms and conditions of this Agreement, the closing of the Stock Purchase
(the “Closing”)
shall take place at the law office of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as soon as practicable after all conditions to
Closing under this Agreement are satisfied, but in no event later than a date
which shall be five (5) Business Days following the WiMAX License Renewal Date
(the “Closing
Date”), subject to extension of such Closing Date by mutual agreement of
both Parties. In the event the Closing has not taken place as of the
Closing Date, as the same may be extended, then at the option of the Company,
this Agreement shall terminate and shall thereafter be null and
void.
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ARTICLE
III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY AND TRUSSNET
The
Company and Trussnet hereby do hereby jointly and severally represent and
warrant to the Purchaser that upon execution of this Agreement and at Closing
(each representation as to the Chinacomm Parties is made to the best Knowledge
of the Company and Trussnet):
3.1. Organization
and Good Standing. Each of the Company, Trussnet and the
Chinacomm. Parties are entities duly organized, validly
existing and in good standing under the laws of their respective States or
countries of organization, all as set forth on Schedule 3.1 to this
Agreement.
3.2. Subsidiaries. The
only direct subsidiary of the Company is Trussnet. Trussnet is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada. Schedule 3.2 to
this Agreement sets forth: (a) the names, (b) the authorized, issued
and outstanding shares of capital stock or other equity of Trussnet and of each
of the direct and indirect subsidiaries of Trussnet and all Chinacomm Parties,
and (c) the record and beneficial owners of such capital stock or other
equity.
3.3. Authorization
and Approvals.
(a) Each
of the Company, Trussnet and the Chinacomm Parties have the requisite corporate
power and authority and have obtained all requisite licenses, permits,
franchises, approvals and consents necessary (i) to own and operate its
properties and to carry on its business as now being conducted, and (ii) to
enter into and carry out the terms and conditions of this Agreement, as well as
all transactions contemplated hereunder. All corporate proceedings
have been taken and all corporate authorizations have been secured which are
necessary to authorize the execution, delivery and performance by the Company,
Trussnet and the Chinacomm Parties of this Agreement. This Agreement
has been duly and validly executed and delivered by the Company and Trussnet and
constitutes the valid and binding obligation of the Company and Trussnet,
enforceable against each of them in accordance with its terms.
(b) On
or before the Closing Date, each of the Chinacomm Parties have or shall have
executed an agreement in the form of Exhibit
J annexed hereto
(the “Chinacomm Parties Consent
Agreement”), pursuant to which each of the Chinacomm Parties shall have
approved this Agreement and shall have consented all of the transactions
contemplated hereby.
3.4. Effect of
Agreement. As of the Closing, the consummation by any of the
Company, Trussnet and the Chinacomm Parties of the transactions contemplated
hereby and by the Chinacomm Agreements, including the execution, delivery and
consummation of this Agreement, will comply with all applicable law and will
not:
(a) Violate
any Requirement of Law applicable to or binding upon the Purchaser,
the Company, Trussnet or any of the Chinacomm
Parties;
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(b) Violate:
(i) the terms of the Articles of Incorporation or Bylaws of the Company, Trussnet and the
Chinacomm Parties; or (ii) any material agreement, contract, mortgage,
indenture, ▇▇▇▇, ▇▇▇▇, note, or other material instrument or writing binding
upon the Company,
Trussnet and the Chinacomm Parties or to which any of the Company, Trussnet and the
Chinacomm Parties is subject;
(c) Accelerate
or constitute an event entitling the holder of any indebtedness
of any of the Company, Trussnet and the
Chinacomm Parties to accelerate the maturity of such indebtedness or to
increase the rate of interest presently in effect with respect to such
indebtedness; or
(d) Result
in the breach of, constitute a default under, constitute an event which with
notice or lapse of time, or both, would become a default under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
assets or any other properties of any of the Company, Trussnet and the
Chinacomm Parties under any agreement, commitment, contract (written or
oral) or other instrument to which any of the Company, Trussnet and the
Chinacomm Parties is a party or by which it is bound or
affected.
3.5. Consents
and WiMAX License.
(a) All
consents, approvals or other authorizations or notices, required by any state or
federal regulatory authority or other Person or entity, including all PRC
Regulatory Authorities, in order to permit the Purchaser, the
Company, Trussnet and the Chinacomm Parties to consummate the transactions
contemplated by this Agreement and the Chinacomm Agreements and to enable the
Company, Trussnet and the Chinacomm Parties to operate their respective
businesses, including the construction, installation and operation of the
Wireless Installations under the WiMAX License have been obtained and are in
full force and effect.
(b) On
or before the Closing Date, the MII or other applicable PRC Regulatory Authority
shall have renewed the WiMAX license granted to Chinacomm for a minimum of not
less than three years, and such WiMAX License, as so renewed shall be in
compliance with the requirements of the PRC Regulatory Authorities.
3.6. Legal
Proceedings. There are no legal, administrative, arbitral or
other actions, claims, suits or proceedings or investigations instituted or
pending or, to the Knowledge of the Company’s management, threatened against any
of the Company, Trussnet and the Chinacomm Parties, or against any property,
asset, interest or right of any of the Company, Trussnet and the Chinacomm
Parties, that might reasonably be expected to have a Material Adverse Effect or
that might reasonably be expected to threaten or impede the consummation of the
transactions contemplated by this Agreement.
3.7. Regulatory
Compliance. Neither the Company, Trussnet nor, to the best
Knowledge of the Company and Trussnet, any of the Chinacomm Parties have
violated any Requirement of Law, the violation of which would be reasonably
likely to have a Material Adverse Effect. All filings of the Company
with the SEC have been filed in a timely fashion and are accurate and complete
in all material respects.
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3.8. Capitalization;
Transactions with Trussnet Delaware.
(a) The
Company is authorized to issue 500,000,000 Class A Common Shares, 200,000,000
Class B Common Shares and 25,000,000 Series A Preferred
Shares. Immediately prior to the Closing, the Company shall have no
more than 133,485,509 Class A Common Shares issued and outstanding on a Fully
Diluted Basis calculated as follows: (i) 86,117,088 Class A Common Shares
issued and outstanding plus, plus (ii) up to 47,368,421 Class A Common
Shares, issuable in the event the Company issues up to $45,000,000 in
convertible debentures, convertible at $.95 per share (the “Convertible
Debentures”). As of the date of this Agreement, the Company
has issued approximately $27,000,000 of such Convertible
Debentures. The Company and the Purchaser hereby agree that up to and
including the Closing Date, the Company shall have the right to issue up to
$45,000,000, in the aggregate, in Convertible Debentures. The Company
has issued, or immediately prior to Closing the Company shall issue, to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and the other Persons listed on Schedule 3.8(a) to this
Agreement (the “Class
B Holders”) an aggregate of 66,909,088 Class B Common
Shares. All of the issued and outstanding Class A Common Shares,
Class B Common Shares and the Convertible Debentures have been duly authorized
and are validly issued, fully paid, and non-assessable. Other than
the Convertible Debentures and the transactions contemplated hereby, there are
no outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require the Company to issue, sell, or otherwise cause to become
outstanding any of its capital stock.
(b) The
capitalization of each of Trussnet and the Chinacomm Parties is set forth on
Schedule 3.8(b) to this
Agreement. All of the issued and outstanding shares of capital stock
or other securities of Trussnet and, to the Knowledge of the Company and
Trussnet, the Chinacomm Parties have been duly authorized and are validly
issued, fully paid, and non-assessable. Other than the transactions
contemplated hereby and by the Chinacomm Agreements, there are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that could require
Trussnet or any of the Chinacomm Parties to issue, sell, or otherwise cause to
become outstanding any of its capital stock or any other equity.
(c) Annexed
hereto as Schedule
3.8(c) is a description of (i) all of the assets and personnel of
Trussnet Delaware that has heretofore been transferred, or as at the Closing
Date will have been transferred, to Trussnet, (ii) all loans, services and other
products heretofore provided by Trussnet Delaware to Trussnet and/or the Company
for or on behalf of the Company or ChinaComm, and (iii) all accounts payable and
other amounts owing as at the date hereof and as at the Closing Date by the
Company or Trussnet to Trussnet Delaware; all of which amounts and obligations
have been incurred in the Ordinary Course of Business.
3.9. The
Purchased Securities. The Purchased Securities (including the
Class A Common Shares issuable upon conversion of the Series A Preferred Shares)
and the Class B Common Shares will, upon issuance, be duly authorized, legally
and validly issued, fully paid and non-assessable, and free and clear of all
liens, mortgages, pledges, and other encumbrances of any nature, unless
expressly provided herein to the contrary.
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3.10. Employee
Benefit Plans. Neither the Company nor Trussnet have any labor
union contract, bonus, pension, profit-sharing, retirement, deferred
compensation, savings, stock purchase, stock option, hospitalization, insurance
or other plan providing employees benefits, employment, agency, consulting or
similar contract (“Employee Benefit
Plans”) which cannot be terminated in thirty (30) days or less, without
cost, other than the Employment Agreement of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. The
Company and Trussnet reserve the right to establish Employee Benefit Plans in
the future.
3.11. Permits
and Licenses. The Company and Trussnet and to the best
Knowledge of the Company and Trussnet, the Chinacomm Parties have all licenses
and permits (federal, state and local) required by governmental authorities to
own, operate and carry on their respective business as now being conducted, and
such licenses and permits are in full force and effect. No violations
are or have been recorded in respect to the licenses or permits, included but
not limited to fire and health and safety law violations, and no proceeding is
pending or threatened looking toward the revocation or limitation of any of
them.
3.12. Chinacomm
Transaction.
3.12.1. Controlled
Entities. The Chinacomm Agreements require the formation of
certain entities, including Trussnet Gulfstream and Gulfstream Capital and the
formation of two wholly owned foreign investment enterprises or WOFEs (as
previously defined). Trussnet Gulfstream and Gulfstream Capital are
or will be 100% owned subsidiaries of Trussnet, and Chinacomm Cayman, Chinacomm
Shanghai and Yunji are or on the Closing Date shall be partially-owned
subsidiaries of Trussnet. Such Chinacomm Parties are sometimes
collectively referred to herein as the “Trussnet
Subsidiaries”.
3.12.2. Performance. The
Company shall cause $196,000,000 of the proceeds received under this Agreement
to: (i) be used to discharge the obligation of Gulfstream Capital that it
invest $196,000,000 in Chinacomm Cayman; and (ii) assure that upon
completion of this investment by Gulfstream, that these funds be used as
contemplated by the Chinacomm Agreements. The balance of the proceeds
shall be used for the payment of commissions and general working capital, in
such amounts as are set forth on Schedule 3.12.2 annexed to
this Agreement.
3.13. Material
Agreements. Except as otherwise disclosed herein, each of the
Company, Trussnet and, to the best Knowledge of the Company and Trussnet, the
Chinacomm Parties, is not a party to any material agreement, the failure to
perform of which would have a Material Adverse Effect upon any of the Company,
Trussnet or such Chinacomm Parties.
3.14. Insurance
Policies. All insurance policies maintained by each of the
Company, Trussnet and, to the best Knowledge of the Company and Trussnet, the
Chinacomm Parties on its assets, business, officers and personnel provide
adequate and sufficient liability and property damage coverage commensurate with
the business practices of any of the Company, Trussnet and, to the best
Knowledge of the Company and Trussnet, the Chinacomm Parties. To the
best Knowledge of the Company, each of the Company, Trussnet and, to the best
Knowledge of the Company and Trussnet, the Chinacomm Parties does not conduct
any business which would result in the cancellation of, or a material increase
in the premiums, for any of its insurance policies.
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3.15. Environmental
Matters. With regard to matters of environmental compliance:
each of the Company, Trussnet and, to the best Knowledge of the Company and
Trussnet, the Chinacomm Parties has conducted and is conducting its business,
and has used and is using its properties, whether currently owned, operated or
leased or owned, operated or leased by the Company in compliance with all
applicable PRC and United States federal, and state and local environmental laws
and regulations, except where the failure to comply with such laws and
regulations, in the aggregate, has not had and could not have a Material Adverse
Effect on the condition (financial or otherwise), business or properties of the
Company, Trussnet or, to the best Knowledge of the Company and Trussnet, any of
the Chinacomm Parties.
3.16. Undisclosed
Liabilities. Neither the Company, Trussnet nor, to the best
Knowledge of the Company and Trussnet, the Chinacomm Parties have any
liability (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including any liability for
Taxes, except for: (i) liabilities set forth in the Financial Statements,
and (ii) liabilities which have arisen after the date of the Financial
Statements in the Ordinary Course of Business (none of which results from,
arises out of, relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort, infringement, or violation of
law).
3.17. Material
Defaults. Neither the Company, Trussnet nor, to the best
Knowledge of the Company and Trussnet, the Chinacomm Parties is in default, or
alleged to be in default, under any material agreement, contract, lease,
mortgage, commitment, instrument or obligation, and to the best Knowledge of the
Company and Trussnet of no other party to any agreement, contract, lease,
mortgage, commitment, instrument or obligation to which the Company is a party
is in default thereunder, which default would have a Materially Adversely Effect
upon the properties, assets, business or prospects of the Company, Trussnet or
the Chinacomm Parties.
3.18. Tax
Returns and Disputes. The Company and Trussnet, and to the
best Knowledge of the Company and Trussnet, each of the Chinacomm Parties, has:
(a) filed all Tax Returns (PRC and United States federal, state and local)
required to be filed by it, (b) all such Tax Returns filed are complete and
accurate in all material respects, and (c) the applicable taypayer has paid
all Taxes shown to be due and payable on the returns or any assessments or
penalties received by it and all other Taxes (PRC and United States federal,
state and local) due and payable by it. The Company and Trussnet, and
to the best Knowledge of the Company and Trussnet, each of the Chinacomm
Parties, has collected and withheld all Taxes which it has been required to
collect or withhold and has timely submitted all such collected and withheld
amounts to the appropriate authorities. The Company and Trussnet, and
to the best Knowledge of the Company and Trussnet, each of the Chinacomm
Parties, is in compliance with the back-up withholding and information reporting
requirements under the Code and any state, local or foreign laws, and the rules
and regulations thereunder.
3.19. Financial
Condition. On or before the Closing Date, the Company and
Trussnet shall deliver and cause to be delivered to the Purchaser all of the
Financial Statements. The Financial Statements of the Company and
Trussnet, and to the best Knowledge of the Company and Trussnet, each of the
Chinacomm Parties, present fairly the financial position, results of operations
and cash flows of the Company for the fiscal period then ended and were prepared
in accordance with United States generally accepted accounting principles
(“GAAP”),
except with respect to the Financial Statements of Chinacomm, the same have been
prepared in accordance with either GAAP or auditing standards accepted in the
European Union. The Purchaser acknowledges that the Company and
Trussnet have changed their fiscal year end from June 30th to
December 31st.
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3.20. No
Adverse Change. Since December 31, 2007 there has been no
Material Adverse Change in the business, financial condition, results of
operations, assets, or liabilities of the Company, Trussnet and, to the best
Knowledge of the Company and Trussnet, each of the Chinacomm
Parties.
3.21. Disclosure. The
representations and warranties: (a) of the Company and
Trussnet contained in this Agreement and in any agreement,
certificate, affidavit, statutory declaration or other document delivered or
given by the Company or Trussnet pursuant to this Agreement, and (b) to the
best Knowledge of the Company and Trustnet, of any of the Chinacomm Parties
contained in any of the Chinacomm Agreements or in any other agreement,
certificate, affidavit, statutory declaration or other document delivered or
given by any of the Chinacomm Parties pursuant to this Agreement or any
Chinacomm Agreements are true and correct and do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained in such representations and warranties not misleading
to the Purchaser.
3.22. Advice of
Changes. Between the Effective Date and the Closing Date, the
Company and Trussnet shall promptly advise the Purchaser in writing of any fact,
the occurrence of which would render any representation or warranty contained in
this Agreement to be materially untrue.
ARTICLE
IV
REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER
The
Purchaser hereby represents and warrants to the Company as follows upon
execution of this Agreement and at Closing:
4.1. Organization
and Good Standing. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the Cayman
Islands.
4.2. Authorization. The
Purchaser has full power and authority to execute and deliver this Agreement and
to perform its obligations hereunder. This Agreement constitutes the
valid and legally binding obligation of the Purchaser, enforceable in accordance
with its terms and conditions. The Purchaser need not give any notice
to, make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the transactions
contemplated by this Agreement, other than the Proxy Statement which the
Purchaser shall, prior to the Closing Date, distribute to its sharesholders in
order to obtain the consent of its shareholders to the transactions contemplated
by this Agreement.
4.3. Operation
of Business. The Purchaser has the requisite corporate power
and authority and all requisite licenses, permits and franchises necessary to
own and operate its properties and to carry on its business as now being
conducted.
4.4. Execution
of Agreement. The Purchaser has the requisite corporate power
and authority and (except for approval of Purchaser’s shareholders) has obtained
all approvals and consents necessary to enter into and carry out the terms and
conditions of this Agreement, as well as all transactions contemplated
hereunder. All corporate proceedings have been taken and all
corporate authorizations have been secured which are necessary to authorize the
execution, delivery, and performance by the Purchaser of this
Agreement. This Agreement has been duly and validly executed and
delivered by the Purchaser and constitutes the valid and binding obligations of
the Purchaser, enforceable in accordance with the respective terms.
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4.5. Effect of
Agreement. As of the Closing, the consummation by the
Purchaser of the transactions herein contemplated, including the execution,
delivery and consummation of this Agreement, will comply with all applicable law
and will not:
(a) Violate
any Requirement of Law applicable to or binding upon the Purchaser;
(b) Violate:
(i) the terms of the Articles of Incorporation or Bylaws of the Purchaser; or,
(ii) any material agreement, contract, mortgage, indenture, ▇▇▇▇, ▇▇▇▇, note, or
other material instrument or writing binding upon the Purchaser or to which the
Purchaser is subject;
(c) Result
in the breach of, constitute a default under, constitute an event which with
notice or lapse of time, or both, would become a default under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
assets or any other properties of the Purchaser under any agreement, commitment,
contract (written or oral) or other instrument to which the Purchaser is a party
or by which it is bound or affected.
4.6. Consents. No
consents, approvals or other authorizations or notices, other than those which
have been obtained and are in full force and effect, are required by any state
or federal regulatory authority or other Person or entity in connection with the
execution and delivery of this Agreement and the performance of any
obligations contemplated hereunder.
4.7. Legal
Proceedings. There are no legal, administrative, arbitral or
other actions, claims, suits or proceedings or investigations instituted or
pending or, to the Knowledge of the Purchaser’s management, threatened against
the Purchaser, or against any property, asset, interest or right of the
Purchaser, that might reasonably be expected to have a Material Adverse Effect
or that might reasonably be expected to threaten or impede the consummation of
the transactions contemplated by this Agreement.
4.8. Regulatory
Compliance. To the best Knowledge of the Purchaser, it has not
violated any Requirement of Law, the violation of which would be reasonably
likely to have a Material Adverse Effect. Further, the Purchaser is
not an “investment company” or a company “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940.
4.9. Purchase
for Investment. The Purchaser is not acquiring the Purchased
Securities with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act.
4.10. Disclosure. The
representations and warranties of the Purchaser contained in this Agreement and
in any agreement, certificate, affidavit, statutory declaration or other
document delivered or given pursuant to this Agreement are true and correct and
do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained in such representations
and warranties not misleading to the Company.
4.11. Advice of
Changes. Between the Effective Date and the Closing Date the
Purchaser shall promptly advise the Company in writing of any fact which, if
existing or known at the Effective Date, would have been required to be set
forth or disclosed in or pursuant to this Agreement or of any fact which, if
existing or known at the Effective Date, would have made any of the
representations untrue.
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4.12. Due
Diligence. The Purchaser is an accredited investor within the
meaning of the Securities Act and its management is sophisticated and
experienced in transactions such as the Stock Purchase. The Purchaser
has commenced its Due Diligence Investigation and, as at the date of this
Agreement, but subject at all times to completion of its Due Diligence
Investigation in accordance with the provisions of Section 5.1.8 of this
Agreement, the Purchaser has no reason to believe that any of the
representations and warranties of the Company are misleading or inaccurate in
any material respect. The decision by the Purchaser to execute this
Agreement is based upon the representations and warranties of the Company and
Trussnet set forth in this Agreement being true and correct in all material
respects as at the date of this Agreement and as at the Closing Date, and is not
based upon any verbal statements or representations made by any Person
Affiliated with the Company or Trussnet. The obligations of the
Purchaser to acquire the Purchased Securities or otherwise consummate the
transactions contemplated by this Agreement is and shall at all times be subject
to completion by the Purchaser of a satisfactory Due Diligence
Investigation.
4.13. Restricted
Securities. The Purchaser hereby acknowledges that the
Purchased Securities shall constitute restricted securities within the meaning
of the Securities Act and that all certificates evidencing the Purchased
Securities shall contain a restrictive legend prohibiting transfer without a
legal opinion or the availability of an exemption under the registration
requirements of the Securities Act.
4.14 Sale of
Additional Debentures. The Purchaser acknowledges that between
the date of this Agreement and the Closing Date, the Company shall have the
right (but not the obligation) to issue and sell up to $45,000,000 of
Convertible Debentures (inclusive of all Convertible Debenture previously
issued), as contemplated by Section 3.8(a)
above.
ARTICLE
V
CONDITIONS TO
CLOSING
5.1. The
satisfaction of the following conditions shall be a condition precedent to the
obligation of the applicable Party to consummate the transactions contemplated
by this Agreement:
5.1.1. Purchaser’s
Shareholder Approval; Limited Redemptions. A condition
to the obligation of the Purchaser to consummate the transactions contemplated
by this Agreement shall be both:
(a) the
approval of this Agreement and all of the transactions contemplated hereby and
by the Chinacomm Agreements by the holders of a majority of the issued and
outstanding publicly traded ordinary or common shares of the Purchaser that vote
at an extraordinary general meeting of shareholders of the Purchaser as required
by the Purchaser’s governing documents and applicable United States corporate
and securities laws; and
(b) the
election by holders of not more than the holders of 5% of such publicly traded
ordinary or common shares of the Purchaser to seek rescission or redemption of
their investment in the Purchaser and a return of their allocable portion of the
Purchaser’s trust fund.
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The
Purchaser has represented to the Company that, as a foreign private issuer, it
is not required to comply with the shareholder solicitation and proxy
requirements of Section 14 of the Securities Exchange Act of 1934 (the “Exchange Act”),
however, the Purchaser has further represented that it is the intention of the
Purchaser to solicit its shareholders with proxy materials in substantial
compliance with Section 14 of the Exchange Act.
5.1.2. Employment
Agreement. A condition to the obligation of the Company and
Trussnet to consummate the transactions contemplated by this Agreement shall be
the execution of an Employment Agreement with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President of the
Company. Such agreement shall be in form and substance acceptable to
the Purchaser.
5.1.3. Company,
Trussnet and Chinacomm Parties Representations. A condition to
the obligation of the Purchaser to consummate the transactions contemplated by
this Agreement shall be that all representations and warranties of the Company
and Trussnet contained in this Agreement and in the Chinacomm Agreements shall
be or remain true and correct as of the Closing Date and no Material Adverse
Changes to the Company, Trussnet or any of the Chinacomm Parties shall have
occurred.
5.1.4. Purchaser’s
Representations. A condition to the obligation of the Company
and Trussnet to consummate the transactions contemplated by this Agreement shall
be that all representations and warranties of the Purchaser contained in this
Agreement shall be or remain true and correct as of the Closing Date and there
are no Material Adverse Changes to the Purchaser occurring since the Effective
Date.
5.1.5
Consents. A
condition to the obligation of the Purchaser to consummate the transactions
contemplated by this Agreement shall be the receipt of all required third party
consents and approvals, including, without limitation, all consents and
approvals of PRC Regulatory Authorities. In addition, the Chinacomm
Parties Consent Agreement shall have been duly executed by all Chinacomm Parties
and delivered to the Purchaser.
5.1.6. Officers
Certificate. A condition to the obligation of the Purchaser to
consummate the transactions contemplated by this Agreement shall be that an
executive officer of the Company and Trussnet shall deliver a certificate at
Closing to the effect, that to his Knowledge, the conditions set forth in
Section 5.1.3 and Section 5.1.5 have been satisfied. A
condition to the obligation of the Company and Trussnet to consummate the
transactions contemplated by this Agreement shall be that an executive officer
of the Purchaser shall deliver a certificate at Closing to the effect, that to
his Knowledge, the conditions set forth in Section 5.1.1 and
Section 5.1.4 have been satisfied.
5.1.6 WiMAX
License Renewal. A condition to the obligation of the
Purchaser to consummate the transactions contemplated by this Agreement shall be
that on or before the Closing Date: (a) the MII or other applicable PRC
Regulatory Authority shall have renewed the WiMAX License previously granted to
Chinacomm for a minimum of not less than three (3) years, (b) such WiMAX
License, as so renewed shall provide, by its terms, that absent a breach or
default by Chinacomm which is not properly cured, the MII or such other PRC
Regulatory Authority shall automatically renew such WiMAX License at the
expiration of its term for additional successive periods of not less than three
years each, (c) such WiMAX License, as so renewed, shall permit Chinacomm
and the other Chinacomm Parties to install, operate and maintain the Wireless
Installations for the duration of such WiMAX License and all renewal thereof,
and (d) such WiMAX License, as so renewed, contain such other terms and
conditions as shall be acceptable to the Purchaser (collectively, the “WiMAX
License Renewal”).
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5.1.7 Financial
Statements. A condition to the obligation of the Purchaser to
consummate the transactions contemplated by this Agreement shall be that on or
before the date of mailing its Proxy Statement to its shareholders, as
contemplated by Section 5.1.1 above, the Purchaser shall have received all
of the Financial Statements required under Regulation S-X as promulgated under
the Securities Act; all of which Financial Statements shall be included in the
Proxy Statement and all of which shall be satisfactory to Purchaser in the
exercise of its sole discretion.
5.1.8 Due
Diligence Investigation. A condition to the obligation of the
Purchaser to consummate the transactions contemplated by this Agreement shall be
that on or before the date of mailing its Proxy Statement to its shareholders,
as contemplated by Section 5.1.1
above, the Purchaser shall have completed a satisfactory Due Diligence
Investigation.
5.1.9 Legal
Opinions. A condition to the obligation of the Purchaser to
consummate the transactions contemplated by this Agreement shall be that on or
before the Closing Date, the Purchaser shall have received a favorable legal
opinion from:
(a) ▇▇▇▇▇▇▇,
Cron & Jasper, P.L.C., as to matters only with respect to the Company,
Trussnet, Gulfstream Capital, Chinacomm Cayman and Chinacomm Shanghai that are
set forth in Sections 3.1, 3.2, 3.3, 3.4(b), 3.6, 3.8 and 3.9 of this
Agreement, provided, that such counsel may rely upon the separate opinions of
Cayman Island, Seychelles and Hong Kong legal counsel, as
applicable;
(b) Han
Kun Law Offices, Beijing, PRC, counsel to Chinacomm, as to (i) consummation
of all of the Chinacomm transactions contemplated by the Chinacomm Agreements,
(ii) the obtaining by Chinacomm, Trussnet Gulfstream, and Yunji of all
required approvals and consents from all PRC Regulatory Authorities having
jurisdiction over such Chinacomm Parties; and (iii) the validity and
enforceability of the WiMAX License, as so renewed in accordance with Section
5.1.6 above; and
(c) Global
Law Office, Beijing, PRC, counsel to Trussnet, as to the validity and compliance
with Applicable Laws in the PRC of the Chinacomm Agreements and the VIE joint
venture structure contemplated thereby, and such other matters as the Purchaser
may reasonably request.
5.1.10 Purchaser
Legal Opinion. A condition to the obligation of the Company
and Trussnet to consummate the transactions contemplated by this Agreement shall
be that on or before the Closing Date, the Company and Trussnet shall have
received a favorable legal opinion from ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, counsel to the
Purchaser, with respect to the matters set forth in Sections 4.1, 4.2, 4.4
and 4.5(b) of this Agreement provided, that such counsel may rely upon a
separate legal opinion of ▇▇▇▇▇▇ and Calder, Cayman Island counsel to the
Purchaser.
5.1.11 Purchaser
Board Approval. A condition to the obligation of the Company
and Trussnet to consummate the transactions contemplated by this Agreement shall
be that on or before 5:00 P.M. (California time) on a date which shall be not
more than three (3) Business Days following the date of execution of this
Agreement by all of the Parties, the Purchaser or its legal counsel shall have
confirmed in writing to the Company and its counsel by email or facsimile
transmission that the board of directors of the Purchaser shall have approved
this Agreement and the transactions contemplated hereby.
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5.1.12 Minimum
Funding of the Company. A condition to the respective
obligations of each of the Purchaser and the Company to consummate the
transactions contemplated by this Agreement, shall be that on or before the
Closing Date, an aggregate of not less than $210,000,000 paid in cash or by wire
transfer of immediately available funds shall have been invested in the Company,
including, without limitation: (a) additional cash proceeds in excess of the
$105,000,000 Minimum Cash Purchase Price funded by the Purchaser on the Closing
Date as part of the aggregate Purchase Price for the Purchased Securities,
and/or (b) the net proceeds from the Additional Investment, if funded on the
Closing Date on terms and conditions that are acceptable to the Parties
hereto.
5.1.13 The
Merger Agreement. A condition to the obligation of the
Purchaser to consummate the transactions contemplated by this Agreement shall be
that on or before the Closing Date, each of the Company, the Purchaser and the
Company Principal Stockholders shall have executed and delivered the Merger
Agreement.
ARTICLE
VI
COVENANTS OF THE
PARTIES
6.1. Full
Access. During the period from the Effective Date of this
Agreement to the Closing, the Company shall, upon reasonable notice, afford to
the Purchaser and its representatives (including, without limitation, officers
and employees of the Purchaser and counsel, accountants and other professionals
retained by the Purchaser), such access during normal business hours to its
books, records, properties and such other information as the Purchaser may
reasonably request for the purpose of conducting any review or investigation
reasonably related to the transactions contemplated hereby, provided that such
access shall not interfere with the normal business operations of the
Company.
6.2. Disclosure
Assistance. Each Party shall fully cooperate with the other
Party in the preparation of all documentation required to be filed with the SEC
(including all exhibits and amendments thereto) in connection with the Stock
Purchase and to provide all information requested by the SEC or any other
regulatory party. The Parties shall cooperate with one another in
making public announcements concerning the transactions contemplated hereby;
provided, that no such announcements shall be made by any Party until the
condition specified in Section 5.1.12 of
this Agreement shall have been satisfied.. The Purchaser hereby
represents that it has commenced the preparation of proxy materials to be
delivered to its shareholders seeking approval of the Stock
Purchase.
6.3. Confidentiality. Each
Party agrees to keep in confidence any confidential information learned about
the other Party either in the course of negotiating this Agreement or in
conducting the due diligence investigation contemplated hereunder, except for
information which: (i) was public knowledge at the time of the disclosure
of such information; (ii) is required to be disclosed by law; or
(iii) comes into the receiving party’s possession from a source which the
receiving party reasonably believes owes no duty of confidentiality to the
disclosing party.
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6.4. Board of
Directors. No later than five days prior to Closing, the
Purchaser and the Company shall agree upon a list of seven members to comprise
the Board of Directors of the Company as of the Closing Date, a majority of
which members of the Board of Directors shall be selected by or otherwise
acceptable to the Purchaser (the “Initial Board of
Directors”). The Purchaser and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ agree that they
shall vote all Class A Common Shares, Class B Common Shares and Series A
Preferred Shares (if any), in a manner which shall assure the continued election
of each of the Initial Board of Directors. In the event a member of
the Initial Board of Directors resigns or otherwise cannot continue to serve
upon the Board of Directors of the Company, then the approval of both the
Purchaser and the other holder(s) of the Class B Common Shares shall be required
to appoint a new member to the Board of Directors of the Company. The
voting requirements set forth in this Section 6.4 shall
continue so long as the Purchaser continues to own of record eighty percent
(80%) of the aggregate number of Class A Common Shares and Equivalents acquired
under this Agreement or ten (10) years, whichever occurs
first. ill
6.5. Company
Negative Covenants. So long as the Purchaser shall be the
beneficial owner of eighty percent (80%) of the aggregate number of
Class A Common Shares and Equivalents acquired by the Purchaser under this
Agreement, the Company shall not take any of the following actions without the
prior approval or consent of either (i) the Purchaser, or (ii) the holders of at
least 80% of the holders of the Class B Common Shares:
6.5.1. issue,
at an issuance price or conversion or exercise price per Class A Share which
shall be less than
the $2.25 Per Share Price at which the Purchaser acquired its Class A Shares
(subject to adjustments for any stock split or recapitalization of the Company),
any Class A Common Shares, Class B Common Shares, Series A Preferred Shares, or
other securities of the Company convertible into or exercisable for any Class A
Shares;
6.5.2. own
less than 100% of the issued and outstanding equity securities of
Trussnet;
6.5.3 acquire,
for a total consideration in excess of $20,000,000, whether through merger,
stock purchase, asset purchase, tender offer or other means, the stock, assets
or operations of any other entity or business;
6.5.4. cause
or permit the Company, Trussnet or any of the Trussnet Subsidiaries to incur any
purchase money indebtedness, indebtedness for borrowed money , enter into any
leases that would be capital leases under GAAP or guaranty the obligations of
any other Person, including the Chinacomm Parties (collectively, “Indebtedness”) where
the aggregate of any such Indebtedness shall at any time, individually or in the
aggregate, exceed $100 million;
6.5.5. with
the exception of the Chinacomm Agreements and the Employment Agreement, enter
into any agreement with an Affiliate;
6.6.6 revise
or amend any agreement with an Affiliate (including the terms of the Chinacomm
Agreements and the Employment Agreement; or
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6.6.7 until
a date which shall be five (5) years from the Closing Date, any vote or decision
by the Company to effect a Sale of Control of the Company, Trussnet or any
Trussnet Subsidiaries.
The
negative covenants set forth in this Section 6.6 shall be
of no further force or effect upon the earlier to occur of (a) the consummation
of the Merger, or (b) in the event of a Sale of Control of the Purchaser to any
unaffiliated Person that is in the telecommunications industry and engaged in
activities that are, or could reasonably be expected to be, competitive with the
business of the Company, the Company Subsidiaries or Chinacomm.
6.7. Adjustments
to Purchaser’s Class B Shares. As of March 31,
2009 Maturity Date of the Purchaser Note, the Parties shall calculate the
aggregate number of Class A Common Shares and Equivalents owned by the Purchaser
and divide this by the aggregate number of Class A Common Shares then issued and
outstanding and the result thereof shall be the “Purchaser’s Class A
Percentage Interest” as at such date (the “Post-Closing Class A
Percentage Interest”). In the event the Purchaser’s
Post Closing Class A Percentage Interest shall thereafter decrease, whether as a
result of either (a) the issuance by the Company of additional Class A Common
Shares or other securities convertible into or exercisable for Class A Common
Shares (not subject to any anti-dilution right) or (b) the sale by the Purchaser
of any Class A Common Shares or Series A Preferred Shares, then and in such
event the Purchaser’s Post-Closing Class A Percentage Interest shall be
recalculated after giving effect to such issuance by the Company or sale by the
Purchaser and the same shall be deemed the “Adjusted Class A Percentage
Interest”. The difference between the Purchaser’s Post-Closing
Class A Percentage Interest and the Adjusted Class A Percentage Interest shall
be referred to herein as the “Purchaser’s Percentage
Decrease”. Upon the occurrence of the Purchaser’s Percentage
Decrease, a number of Class B Common Shares held by the Purchaser as determined
by multiplying the aggregate number of Class B Common Shares then owned by the
Purchaser by the Purchaser’s Percentage Decrease shall be transferred to the
Class B Holders (other than the Purchaser) on a pro rata basis.
The
following is intended as an example by way of illustration only:
Assuming
that at the expiration of the Post-Closing Option Period, the Purchaser is the
holder of 30,000,000 Class B Common Shares and 100,000,000 Class A Common
Shares. Further, the aggregate issued and outstanding Class A Common Shares of
the Company is 220,000,000 Class A Common Shares. The Purchaser’s
Post-Closing Class A Percentage Interest would then be 45.45% of all Class A
Common Shares. The Purchaser thereafter sells 20,000,000 of its Class
A Common Shares, causing the Purchaser’s Adjusted Class A Percentage Interest to
be 36.36% (80.0 million divided by 220.0 million), representing a Purchaser’s
Percentage Decrease of 9.09%. As a result 2,727,000 of the Class B
Common Shares held by the Purchaser would be transferred to the other Class B
Holders on a pro rata basis, calculated as the 9.09% Purchaser’s Percentage
Decrease multiplied by 30,000,000.
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The
foregoing provisions of this Section 6.7 shall
terminate upon consummation of the Merger.
6.8 Conflicting
Commitments.
(a) From
the date of execution of this Agreement and through and including such date
which shall be the earlier to
occur of (a) the five (5) Business Days following the WiMAX License Renewal
Date, or (b) the termination of this Agreement by mutual agreement of the
Parties prior to such WiMAX Renewal Date, except and then only to the extent
otherwise provided in Section 4.14 of this
Agreement, neither the Company, Trussnet, nor any officer, director,
shareholder, financial advisor or other Affiliate of any of the
Company or Trussnet, shall (i) enter into any legally binding agreement,
commitment, or other arrangement that would involve the issuance and sale or
transfer of any securities of the Company or of any of the material assets or
properties of the Company or Trussnet (whether by stock sale, asset sale,
merger, joint venture, consolidation or like combination), or (ii) enter into
any other legally binding arrangements or agreements that could reasonably be
expected to make the transactions contemplated by this Agreement impossible or
impracticable (each a “Conflicting
Commitment”).
(b) The
Company shall notify the Purchaser by fax or email immediately upon receipt of
notice of Chinacomm having obtained the WiMAX License
Renewal. Notwithstanding the provisions of Section 6.8(a) above,
if the Purchaser then advises the Company in writing that (i) it has received a
term sheet or other proposals satisfactory to the Purchaser from one or more
Persons for a minimum amount of the additional financing contemplated by Section 5.1.12 of
this Agreement, and (ii) it will hold its stockholders’ meeting within the next
five (5) Business Days, the Company will not directly or indirectly enter into
any such Conflicting Commitment during such five (5) Business Day
period. In addition, if the Purchaser shall obtain the requisite
shareholder approval contemplated by Section 5.1.1 of this Agreement, the
Company shall not thereafter enter into any Conflicting Commitment.
6.9 Use of
Proceeds. The aggregate proceeds payable by the Purchaser to
the Company in respect of the Purchase Price, shall be used by the Company
solely for the purchase of providing financing to enable ChinaComm or its
Affiliates to construct, install and operate the WiMAX Installations in up to 29
cities in China pursuant to the WiMAX License. The application of
such Purchase Price shall include the purchase of equipment and other capital
assets being leased or subleased to China Comm. The Company shall
provide to the Purchaser a detailed budget as to the application of such
Purchase Price and shall arrange, through the Chinacomm Agreements, to insure in
a manner reasonably acceptable to Purchaser that such proceeds are being used as
intended by the Parties and the budget.
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6.10 Participation
in Future Financings.
(a) In
the event that, on any on or more occasions during the five (5) year period of
time following the Closing Date, the Company shall elect to issue and sell for
cash any additional securities of the Company (each a “Financing”) and shall
receive any proposals for such purchases and Financing(s) from any other Person
(each, a “Financing
Proposal”), it shall promptly provide to the Purchaser a full and
complete copy of each such Financing Proposal and each of the amendments or
modifications thereto The Purchaser shall have the right, but not the
obligation, upon notice to the Company and such Person providing the Financing
Proposal, to participate in such additional Financing (a) initially, in an
amount equal to up to one hundred percent (100%) of the first $200.0 million
dollar amount of securities to be issued in any one or more of such proposed
Financing(s), and (b) thereafter,. in an amount equal to up to fifty percent
(50%) the aggregate dollar amount of securities in excess of $200.0 million that
are to be issued in any such proposed Financing; in each case, all upon the same
terms and conditions set forth in the applicable Financing Proposal and/or in
any definitive financing documentation relating to such Financing.
(b) To
facilitate the foregoing, the Company shall provide the Purchaser or its
representatives with access to the Person or Person providing such Financing
Proposal and full and complete copies of all legal and related documents issued
by the Company or such other Person(s) in connection therewith.
(c) The
foregoing right to participate in future financings shall not be deemed to be or
construed as a “right of first refusal” granted to the Purchaser.
(d) Notwithstanding
the foregoing, the provisions of this Section 6.10 shall no
longer be applicable upon consummation of the Merger.
6.11 Lock-Up
Agreements. On
the Closing Date, each of the Purchaser and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall enter into
agreements with the Company (the “Lockup Agreements”) pursuant
to which such Person shall each agree not to effect any public sale or
distribution of any of their Class A Common Shares or Series A Preferred Shares
for a period equal to twelve (12) months following the Closing Date (the “Restricted
Period”).
6.12 Covenant
to Vote. By their execution of this Agreement, each of the
Company Principal Stockholders do hereby irrevocably and unconditionally agree
to vote all of their shares of Company Class A Common Shares and Company Class B
Common Shares:
(a) IN FAVOR of the consummation
of all of the transactions contemplated by this Agreement, subject to
satisfaction of all conditions to the obligations of the Company and Trussnet to
consummate the transactions contemplated hereby; and
(b) following
the acquisition of the Purchased Securities pursuant to this Agreement, IN FAVOR of consummation of
the Merger and all of the other transactions contemplated by the Merger
Agreement.
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6.13 Securities
Filings. Each of the Parties hereto to hereby covenant and
agree to mutually cooperate with each other and use their individual and
collective best efforts to (a) expeditiously and timely file with the SEC all
Form 10-K Annual Reports, Form 20-F Annual Reports, Form 8-K and Form
6-K Interim Reports, Registration Statement on Form S-4 or F-4, and amendments
thereto, all Schedule 14-C and 14-F Information Statements, all Schedule 13D
filings, and all other documents required to be filed with the SEC, and (b) to
promptly respond to all comments, if any, received from the SEC, in order to (i)
consummate the transactions contemplated by this Agreement, and (ii) consummate
the Merger pursuant to the Merger Agreement.
ARTICLE
VII
ADDITIONAL RIGHTS AND
OBLIGATIONS
7.1. Termination. This
Agreement may be terminated and the transactions contemplated herein may be
abandoned at any time prior to the Closing:
(a) by
mutual consent of the Purchaser and the Company;
(b) by
the Purchaser or the Company, if the Purchaser board approval condition
specified in Section
5.1.11 hereof shall not have been satisfied by 5:00 P.M. (California
time) on as date which shall be three (3) Business Days following the date of
execution of this Agreement by all Parties hereto;
(c) by
the Purchaser, in the event the results of its Due Diligence Investigation shall
not be satisfactory in the sole judgment and discretion of the
Purchaser;
(c) by
either the Purchaser or the Company, if the additional funding condition
specified in Section
5.1.12 hereof shall not have been satisfied by the Closing
Date;
(d) by
the Purchaser, in the event of the breach of any material representation and
warranty of the Company and Trussnet contained herein or in the Merger
Agreement, or the failure of the Company or Trussnet to perform all material
obligations and conditions on their part to be performed under this Agreement on
or before the Closing Date;
(e) by
the Company, in the event of the breach of any material representation and
warranty of the Purchaser contained herein or in the Merger Agreement, or the
failure of the Purchaser to perform all material obligations and conditions on
its part to be performed under this Agreement on or before the Closing
Date;
(f) by
either the Purchaser or by the Company upon the failure of the satisfaction of a
condition the obligations of the other Party or Parties to consummate the
transactions contemplated hereby, as set forth in Section 5.1 herein on
or prior to the Outside Closing Date; provided,
however, that a Party seeking to so terminate this Agreement pursuant to
this Section
7.1(g) shall have made a good faith effort to satisfy any condition
precedent on its part to be performed;
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(g) by
the Company, in the event the transactions contemplated by this Agreement have
not been consummated on a date which shall be five (5) Business Days following
the WiMAX License Renewal Date (the “Outside Closing
Date”); provided,
however, that the Company reserves the right to extend the
Outside Closing Date to a date which shall be twenty (20) Business Days
following the WiMAX License Renewal Date, or such later date as the Parties
hereto may mutually agree.
A Party
terminating this Agreement pursuant to this Section shall give written notice
thereof to the other Party hereto, whereupon this Agreement shall terminate and
the transactions contemplated hereby shall be abandoned without further action
by any Party; provided, however, that if such termination is the result of a
breach of this Agreement, nothing herein shall affect the non-breaching Party’s
right to damages on account of such other Party’s breach.
7.2 Notwithstanding the provisions of
Section 7.1 above, or any other provisions contained in this Agreement, any
Exhibit or schedule hereto or in any of the Chinacomm Agreements, each of the
Company and Trussnet, on behalf of themselves and each of their Affiliates, does
hereby irrevocably and unconditionally covenant and agree that they shall not
have any right, title, interest or claim of any kind (a “Claim”) in or to any
monies in the $115,000,000 Trust Fund maintained by the Purchaser for the
benefit of its public shareholders. Accordingly, each of the Company
and Trussnet, on behalf of themselves and each of their Affiliates, hereby
waives any Claim that it or they may have in the future as a result of, or
arising out of, this Agreement or any of the transactions contemplated hereby,
and agree that none of them shall seek recourse against such trust fund for any
reason whatsoever.
7.3. Expenses. Each
of the Parties hereto shall pay such Party's Transaction Express in connection
with this Agreement, other than as a result of the breach hereof by any other
party hereto.
7.4. Brokerage
and Banking Commissions. The Purchaser shall be responsible
for any and all fees of Maxim Group LLC, Canaccord Capital Corp. and its
subsidiaries and ▇▇▇▇ Capital Partners LLC arising from transactions
contemplated by this Agreement and the Merger. The Company
acknowledges and agrees that it shall be responsible for any and all fees of
Knight Capital Partners, Inc. arising from the transactions contemplated by this
Agreement and the Merger. Except for the foregoing, each of the
Purchaser and the Company represents that there are no brokerage or similar fees
to be paid in connection with the Stock Purchase and the Merger.
ARTICLE
VIII
ADDITIONAL MISCELLANEOUS
PROVISIONS
8.1. Executed
Counterparts. This Agreement may be executed in any number of
original, fax, electronic, or copied counterparts, and all counterparts shall be
considered together as one agreement.
8.2. Successors
and Assigns. Except as expressly provided in this Agreement,
each and all of the covenants, terms, provisions, conditions and agreements
herein contained shall be binding upon and shall inure to the benefit of the
successors and assigns of the Parties hereto.
-29-
Execution
Copy
8.3. Governing
Law. This Agreement shall be governed by the laws of the State
of New York, without giving effect to any choice or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State
of New York. In the event of a dispute related to or
arising from the terms of this Agreement, such dispute shall be resolved before
the American Arbitration Association in New York City, New York.
8.4. Amendment. This
Agreement may be amended or modified only by a writing signed by all
Parties.
8.5. Waiver. No
failure by any Party to insist on the strict performance of any covenant, duty,
agreement, or condition of this Agreement or to exercise any right or remedy on
a breach shall constitute a waiver of any such breach or of any other covenant,
duty, agreement, or condition. No course of dealing between the
Parties, nor any failure to exercise, nor any delay in exercising, any right,
power or privilege of either Party shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power, or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
8.6. Assignability. This
Agreement is not assignable by either Party without the expressed written
consent of all Parties.
8.7. Notices. All
notices, requests and demands hereunder shall be in writing and delivered by
hand, by facsimile transmission, by E-Mail, by mail, by telegram, or by
recognized commercial over-night delivery service (such as Federal Express, UPS,
or DHL), and shall be deemed given: (a) if by hand delivery, upon such
delivery; (b) if by facsimile transmission, upon telephone confirmation of
receipt of same; (c) if by E-Mail, upon confirmation of receipt of same;
(d) if by mail, forty-eight (48) hours after deposit in the United States mail,
first class, registered or certified mail, postage prepaid; (e) if by
telegram, upon telephone confirmation of receipt of same; or (f) if by
recognized commercial over-night delivery service, upon such
delivery.
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If to the
Purchaser:
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Asia
Special Situation Acquisitions Corp.
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c/o M & C Corporate
Services Limited
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P.O.
Box 309GT, ▇▇▇▇▇▇ House
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South
Church Street
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▇▇▇▇▇▇
Town, Grand Cayman
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Attention: ▇▇▇▇
▇▇▇▇▇, Esq.
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Telephone:
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Facsimile:
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E-Mail: ▇▇▇▇@▇▇▇▇▇.▇▇▇
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With a copy
to:
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, Esq.
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HodgsonRuss
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▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
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Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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E-Mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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-30-
Execution
Copy
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If to the
Company:
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China
Tel Group, Inc.
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▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇▇
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Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
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Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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E-Mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
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With a copy
to:
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▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Esq.
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▇▇▇▇▇▇▇,
CRON & JASPER, P.L.C.
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Four
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
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Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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E-Mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
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8.8. Recitals. The
facts recited under Recitals above, are hereby conclusively presumed to be true
as between and affecting the Parties.
8.9. Consents,
Approvals, and Discretion. Except as herein expressly provided
to the contrary, whenever this Agreement requires consent or approval to be
given by a Party, or a Party must or may exercise discretion, the Parties agree
that such consent or approval shall not be unreasonably withheld, conditioned,
or delayed, and such discretion shall be reasonably exercised. Except
as otherwise provided herein, if no response to a consent or request for
approval is provided within ten (10) days from the receipt of the request, then
the consent or approval shall be presumed to have been given.
8.10.
No
Third Party Beneficiaries. This Agreement has been entered
into solely by and between the Parties, solely for their
benefit. There is no intent by either Party to create or establish a
third party beneficiary to this Agreement, and no such third party shall have
any right to enforce any right, claim, or cause of action created or established
under this Agreement.
8.11. Best
Efforts. The Parties shall use and exercise their best
efforts, taking all reasonable, ordinary and necessary measures to ensure an
orderly and smooth relationship under this Agreement, and further agree to work
together and negotiate in good faith to resolve any differences or problems
which may arise in the future.
8.12 Entire
Agreement. This Agreement and the Merger Agreement,
together with the Exhibits hereto and thereto represents the entire agreement
and understanding of the Parties with respect to the subject matter hereof and
thereof, and supercedes in their entirety all other agreements and
understandings, written or oral, including, without limitation, the Prior
Agreement which shall no longer be of any force or effect.
[The
remainder of this page intentionally left blank. Signature page to
follow.]
-31-
Execution
Copy
IN WITNESS WHEREOF, this
Agreement has been duly executed by the Parties, and shall be effective as of
and on the Effective Date.
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PURCHASER:
|
COMPANY:
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ASIA SPECIAL SITUATION
ACQUISITION CORP., a Cayman Island corporation
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CHINA TEL GROUP, INC., a
Nevada Company
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By /s/ ▇▇▇▇ ▇.
▇▇▇▇▇
▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇, President
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By
/s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇, President
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Dated: August
6, 2008
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Dated:
August 6, 2008
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TRUSSNET:
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TRUSSNET USA, INC, a
Nevada Company
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By /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇, President
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Dated
August 6, 2008
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|||
-32-
Execution
Copy
COMPANY PRINCIPAL
STOCKHOLDERS:
|
With
respect to the provisions of Section 6.4, Section 6.5, Section 6.12 and
Section 7.2 only:
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WESTMOORE
INVESTMENTS, L.P.
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/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇
By /s/ ▇▇▇▇
▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ IRR
TRUST WESTMOORE
MANAGEMENT, LLC
By: /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
By: /s/
▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇, Trustee
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WESTMOORE
CAPITAL
GROUP
WESTMOORE CAPITAL GROUP
SERIES
A
LLC
SERIES B LLC
By:
/s/ ▇▇▇▇
▇▇▇▇▇▇▇▇
BY:
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-33-
Execution
Copy
EXHIBIT A
TECHNICAL
AGREEMENT
Exhibit
A
Page
1 of 1
Execution
Copy
EXHIBIT
B
MANAGEMENT
AGREEMENT
Exhibit
B
Page
1 of 1
Execution
Copy
EXHIBIT
C-1
EQUIPMENT
LEASE AGREEMENT
Exhibit
C-1
Page
1 of 1
Execution
Copy
EXHIBIT
C-2
EQUIPMENT
SUBLEASE AGREEMENT
Exhibit
C-2
Page
1 of 1
Execution
Copy
EXHIBIT
D
SUBSCRIPTION
AGREEMENT
Exhibit
D
Page
1 of 1
Execution
Copy
EXHIBIT
E
DESCRIPTION
OF CLASS B COMMON SHARES OF
The
preferences, voting powers, qualifications and special or relative rights or
privileges of China Tel Group, Inc. (the "Company") shares of Class B Common
Shares, $0.0001 par value per share (the "Class B Common"), shall be as
follows:
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1.
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Authorized
Amount.
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There are
hereby authorized 200,000,000 shares of Series B Common Stock, subject to this
Description. The authorized shares of Class B Common Shares shall not
be increased unless the holders of Eighty-Five Percent (85%) of the issued and
outstanding shares of Class B Common Shares vote in favor of increasing the
number of authorized Class B Common Shares.
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2.
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Voting.
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Each
holder of a share of Class B Common Shares shall have the right to cast ten (10)
votes for each share of Class B Common Shares held by such shareholder at any
duly called meeting of shareholders or pursuant to a written consent of
shareholders
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3.
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No Economic Interest
or Right to Dividends.
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(a) The
Class B Common Shares shall have no economic interest in the assets or
properties of the Company, nor shall the holders of any shares of Class B Common
Shares be entitled to receive any consideration, or share in the receipt of any
consideration, available to other holders of securities of the Company in
connection with (i) the sale or transfer of any securities or assets of the
Company (whether through stock sale, asset sale, merger, tender offer,
consolidation or like combination), or (ii) the transfer of any shares of Class
B Common Shares to any other Person.
(b) The
holders of Class B Common Shares shall not be entitled to the payment of any
dividends payable by the Company, in cash or in kind.
4.
No Rights on
Liquidation.
In the
event of any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, the holders of shares of Class B Common Shares shall
not be entitled to receive any cash, cash-in-kind or assets whatsoever of the
Company.
5.
Conversion.
The Class
B Common Shares shall have no rights to convert into any other authorized shares
of the Company.
Exhibit
E
Page
1 of 2
Execution
Copy
6. Transferability.
The
consent of Eighty-One Percent (81%) of the issued and outstanding shares
of Class B Common Shares shall be required for any holder
of Class B Common Shares to sell, assign, or transfer any shares of
Class B Common Shares to any third party, or to grant proxies or voting rights
with respect to any shares of Class B Common Shares, except for any proxies
granted to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ relating to the Class B Common Shares.
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7.
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Redemption
Rights.
|
The
Company shall redeem the Class B Common Shares on July 1, 2023 (the
“Redemption Date”). On the Redemption Date each share of Class B
Common Shares shall be redeemed by the Company at the par value ($0.0001) of the
shares of Class B Common Shares.
Exhibit
E
Page 2
of 2
Execution
Copy
EXHIBIT
F
DESCRIPTION
OF SERIES A PREFERRED SHARES OF
The
preferences, voting powers, qualifications and special or relative rights or
privileges of China Tel Group, Inc. (the "Company") shares of Series A Preferred
Shares, $0.0001 par value per share (the "Series A Preferred Shares"), shall be
as follows:
1.
Authorized
Amount.
There are
hereby authorized 25,000,000 shares of Series A Preferred Shares, subject to
this Description. The Series A Preferred shall have a $0.0001 par
value per share and a $10.00 liquidation or stated value per share (the “Stated
Value”).
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2.
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Voting.
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Each
share of Series A Preferred Shares shall have the right to cast votes at any
duly called meeting of shareholders or pursuant to a written consent of
shareholders. Each share of Series A Preferred Shares shall be
entitled to vote as if the Series A Preferred Shares were converted into
Class A Common Shares in accordance with Section 5 herein.
3.
Dividends.
The
holders of Series A Preferred Shares shall be entitled to receive a quarterly
cash dividend in respect of the Stated Value of each share of Series A Preferred
held (payable in equal quarterly amounts) as shall be equal to the same rate of
any annual interest or annual dividends payable by Asia Special Situation
Acquisition Corp. (“ASSAC”) in connection with obtaining of up to $165,000,000
of additional financing through the sale by ASSAC of notes, debentures or
preferred shares of ASSAC (the “ASSAC Senior Securities”), as contemplated by
that certain Amended and Restated Stock Purchase Agreement dated July _, 2008
among the Company, Trussnet USA, Inc. and ASSAC (the “Stock Purchase
Agreement”), to which this Description is an exhibit. The
dividend shall be paid by the Company to the holders of the Series A Preferred
Shares on September 30, December 31, March 31 and June 30 each
year. The dividend shall be cumulative in the event the Company is
without sufficient funds to pay the dividend when
due. Notwithstanding the foregoing, unless otherwise agreed to by the
Company, the annual dividend on the Series A Preferred Shares shall not be in
excess of 10% per annum.
4.
Rights on
Liquidation.
In the
event of any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, the holders of shares of Series A Preferred Shares
shall be entitled to a liquidation preference over the holders of all classes or
series of the common stock of the Company in the sum of par value ($10.00) for
each share of Series A Preferred Shares issued and outstanding plus any unpaid
or accrued dividends owing to the holders of the Series A Preferred
Shares.
Exhibit
F
Page
1 of 3
Execution
Copy
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5.
|
Conversion.
|
(a) The
Series A Preferred Shares shall be convertible at the option of the holder,
unless otherwise set forth herein. In the event of a conversion, each
Series A Preferred Shares share shall convert into shares of Class A Common
Shares of the Company at the Conversion Rate. The Conversion Rate per
share of Series A Preferred shall be $10.00 divided by the $2.25 Purchase Price
per share of Class A Common Shares paid by ASSAC pursuant to the Stock Purchase
Agreement, to which this Description is an Exhibit (the "Conversion
Rate").
(b) Subject
at all times to ASSAC’s right to retain shares of Series A Preferred in
aggregate dollar Stated Amount equal to the then aggregate outstanding principal
or stated amount of any ASSAC Senior Securities, all or an applicable portion of
the Series A Preferred Shares shares shall automatically convert into shares of
CHTL Class A Common Shares at the Conversion Rate, in the event
that:
(i) the
weighted average trading price of CHTL Class A Common Shares exceeds five (5)
times the per share Purchase Price of the Class A Common Shares for twenty (20)
consecutive trading days;
(ii) the
Class A Common Shares of the Company is traded on the NASDAQ Stock Exchange, the
American Stock Exchange or the New York Stock Exchange;
(iii) the
Class A Common Shares into which any shares of Series A Preferred Shares
shall be converted have been registered for resale under the Securities Act of
1933, as amended, or may be immediately sold without volume or other limitations
pursuant to Rule 144, as promulgated under the Securities Act; and
(iv) the
average weekly trading volume of the CHTL Class A Common Shares for four
consecutive weeks shall be not less than 1,000,000 shares per week.
(c) Anti-Dilution
Provisions. In the event the Company shall reclassifies its
Class A Common Shares or effect any split of or otherwise recapitalizes its
Class A Common Shares, the number of shares into which the holder of Series A
Preferred convert shall be adjusted, so that the aggregate outstanding shares
before and after such transaction shall have the same value as before the
transaction.
(d) Sale of
Control. In the event of a Sale of Control, as defined in the
Stock Purchase Agreement, each share of Series A Preferred Shares shall
automatically convert into shares of Class A Common Shares of the Company in
accordance with this Description.
(e) Definition. The
term "Class A Common Shares" as used in this Section shall mean the shares of
the Class A Common Shares of the Company, authorized at the date of the initial
issuance of the Series A Preferred Shares or, in case of a reclassification or
exchange of such Class A Common Shares, shares of the stock into or for which
such Class A Common Shares shall be reclassified or exchanged and all provisions
of this Section 5 shall be applied appropriately thereto and to any stock
resulting from any subsequent reclassification or exchange thereof.
6. Transferability.
The
shares of Series A Preferred Shares shall not be sold, transferred or encumbered
unless and until converted into Class A Common Shares.
Exhibit
F
Page 2
of 3
Execution
Copy
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7.
|
Redemption of Series A
Preferred Shares.
|
(a) Optional
Redemption Upon not less than 90 days prior written notice to
the holders, the Company shall have the right (but not the obligation) to redeem
the Series A Preferred Shares shares on a date which shall be on or after seven
(7) years after the issuance of the Series A Preferred Shares shares (the
“Optional Redemption Date”). On the Optional Redemption Date, unless
previously converted by the holder into Class A Common Shares, each share of
Series A Preferred Shares may be redeemed by the Company at a cash price of Ten
Dollars ($10.00) plus any accumulated dividend owing to the holders of the
Series A Preferred Shares by the Company as of the Optional Redemption
Date.
(b) Mandatory
Redemption. It is understood that ASSAC shall have issued the
ASSAC Senior Securities in order to obtain the financing necessary to acquire
the Series A Preferred Shares. The terms and conditions of the ASSAC
Senior Securities shall have been disclosed to and approved by the Company prior
to the issuance of the ASSAC Senior Securities. The
Company shall be obligated to redeem the Series A Preferred Shares
shares on the date and in the amount that ASSAC is required to redeem, payoff or
otherwise liquidate all or a portion of the ASSAC Senior
Securities. Upon a determination of the exact terms of the ASSAC
Senior Securities, the Company shall amend this Description to the satisfaction
of ASSAC in order to provide assurances to ASSAC that the Company shall be
obligated to provide funds to ASSAC for the purpose of ASSAC discharging its
obligations under the ASSAC Senior Securities.
Exhibit
F
Page 3
of 3
Execution
Copy
EXHIBIT
G
MERGER
AGREEMENT
Exhibit
G
Page
1 of 1
Execution
Copy
EXHIBIT
H
FORM
OF PLEDGE AGREEMENT
Exhibit
H
Page
1 of 1
Execution
Copy
EXHIBIT
I
FORM
OF PURCHASER NOTE
Exhibit
I
Page
1 of 1
Execution
Copy
EXHIBIT
J
CHINACOMM
PARTIES CONSENT
Exhibit J
Page 1 of 1