UNITED STATES

 

 

SECURITIES AND EXCHANGE COMMISSION

 

 

Washington, D.C. 20549

 

 

 

 

 

SCHEDULE 13D/A

 

 

Under the Securities Exchange Act of 1934
(Amendment No. 2)

 

SINA CORPORATION

(Name of Issuer)

 

Ordinary Shares, par value $0.133

(Title of Class of Securities)

 

G81477104

(CUSIP Number)

 

Charles Chao

New Wave MMXV Limited

7/F Sina Plaza

No. 8 Courtyard 10 West

Xibeiwang East Road

Haidian District, Beijing, 100193

People’s Republic of China

Telephone: +86 10 5898 3007

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

with a copy to:

 

Z. Julie Gao, Esq.

Skadden, Arps, Slate, Meagher & Flom LLP

c/o 42/F, Edinburgh Tower, The Landmark

15 Queen’s Road Central

Hong Kong

+852 3740-4700

 

November 6, 2017

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because § 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g) check the following box. o

 

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (" Act ") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 



 

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1

Name of Reporting Persons

Charles Chao

 

2

Check the Appropriate Box if a Member of a Group (See Instructions)

 

(a)                                  o

(b)                                  o

3

SEC Use Only

 

4

Source of Funds (See Instructions)
PF

 

5

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)      o

 

6

Citizenship or Place of Organization
United States of America

 

Number of
Shares
Beneficially
Owned by Each
Reporting
Person With

7

Sole Voting Power
8,841,456 ordinary shares

 

8

Shared Voting Power
0 ordinary shares

 

9

Sole Dispositive Power
8,841,456 ordinary shares

 

10

Shared Dispositive Power
0 ordinary shares

 

11

Aggregate Amount Beneficially Owned by Each Reporting Person
8,841,456 ordinary shares

 

12

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    o

 

13

Percent of Class Represented by Amount in Row (11)
12.4%

 

14

Type of Reporting Person (See Instructions)
IN

 

 

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CUSIP No.

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1

Name of Reporting Persons

New Wave MMXV Limited

 

2

Check the Appropriate Box if a Member of a Group (See Instructions)

 

(a)                                  o

(b)                                  o

3

SEC Use Only

 

4

Source of Funds (See Instructions)
WC, BK

 

5

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)      o

 

6

Citizenship or Place of Organization
British Virgin Islands

 

Number of
Shares
Beneficially
Owned by Each
Reporting
Person With

7

Sole Voting Power
7,944,386 ordinary shares

 

8

Shared Voting Power
0

 

9

Sole Dispositive Power
7,944,386 ordinary shares

 

10

Shared Dispositive Power

 

11

Aggregate Amount Beneficially Owned by Each Reporting Person
7,944,386 ordinary shares

 

12

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    o

 

13

Percent of Class Represented by Amount in Row (11)
11.1%

 

14

Type of Reporting Person (See Instructions)
CO

 

 

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CUSIP No.

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Item 1. Security and Issuer.

 

This amendment No. 2 to statement on schedule 13D (this “ Statement ”) amends and supplements the statement on Schedule 13D filed by each of Mr. Charles Chao and New Wave MMXV Limited (“ New Wave ,” and together with Mr. Charles Chao, the “ Reporting Persons ”) with the U.S. Securities and Exchange Commission (the “ Commission ”) on November 16, 2015, as amended by amendment No. 1 filed on June 16, 2017 (the “ Original Filing ”), with respect to the ordinary shares, par value $0.133 per share (the “ Ordinary Shares ”), of Sina Corporation, a company organized under the laws of the Cayman Islands (the “ Company ”), whose principal executive offices are located at SINA Plaza, No. 8 Courtyard 10 West, Xibeiwang E. Road, Haidian District, Beijing 100193, People’s Republic of China. Except as amended hereby, the Original Filing remains in full force and effect. Capitalized terms used but not defined in this Statement have the meanings ascribed to them in the Original Filing.

 

Item 4. Purpose of Transaction

 

Item 4 of the Original Filing is hereby amended and supplemented by the following:

 

The description of the Share Subscription Agreement under Item 6 is incorporated herein by reference in its entirety.

 

Item 5. Interest in Securities of the Issuer.

 

Item 5(a), (b) and (c) of the Original Filing is hereby amended and restated as follows:

 

The responses of Mr. Charles Chao and New Wave to Rows (7) through (13) of the cover pages of this Statement are hereby incorporated by reference in this Item 5.

 

As of the date of this filing, Mr. Charles Chao beneficially owned 8,841,456 Ordinary Shares, representing approximately 12.4% of the Company’s total issued and outstanding Ordinary Shares. The 8,841,456 Ordinary Shares beneficially owned by Mr. Charles Chao comprise (i) 7,944,386 Ordinary Shares held by New Wave, (ii) 767,070 Ordinary Shares held by Mr. Charles Chao, (iii) 40,000 Ordinary Shares issuable upon exercise of options exercisable within 60 days after the date of this filing, and (iv) 90,000 Ordinary Shares issuable upon vesting of restricted share units within 60 days after the date of this filing.

 

The percentage of Ordinary Shares beneficially owned by each Reporting Person is based on 71,514,660 Ordinary Shares outstanding as of September 15, 2017 (excluding 9,606,576 Ordinary Shares that have been repurchased but not cancelled) disclosed in the Company’s proxy statement furnished to the Commission on Form 6-K on September 25, 2017.

 

Except as disclosed in this statement, none of the Reporting Persons or to the best of their knowledge, any of the persons listed in Schedule A hereto, beneficially owns any Ordinary Shares or has the right to acquire any Ordinary Shares.

 

Except as disclosed in this statement, none of the Reporting Persons or to the best of their knowledge, any of the persons listed in Schedule A hereto, presently has the power to vote or to direct the vote or to dispose or direct the disposition of any of the Ordinary Shares that they may be deemed to beneficially own.

 

Except as disclosed in this statement, none of the Reporting Persons or to the best of their knowledge, any of the persons listed in Schedule A hereto, has effected any transaction in the Ordinary Shares during the past 60 days.

 

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Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

 

Item 6 of the Original Filing is hereby amended and supplemented by the following:

 

On November 6, 2017, the Company and New Wave entered into a share subscription agreement (the “ Share Subscription Agreement ”), pursuant to which the Company issued to New Wave 7,150 newly created Class A Preference Shares with 10,000 votes per share initially (the “ Class A Preference Shares ”), at par value of US$1.00 per share. As a result of the share issuance, New Wave’s aggregate voting power in the Company increased from approximately 11.1% to approximately 55.5%.

 

The following is a summary of the key terms of the Class A Preference Shares:

 

·        The Class A Preference Shares have no economic rights nor any right to any dividend or other distribution by the Company.

 

·        The Class A Preference Shares are entitled to vote on all matters submitted to a general meeting of the Company.  When New Wave sells or otherwise transfers any number of Ordinary Shares held by it to a third party which is not an affiliate of New Wave, the number of votes that each Class A Preference Share is entitled to will be reduced proportionally.

 

·        On any resolution to elect a director where the nominee is an executive officer of the Company, the votes attaching to the Class A Preference Shares on such resolution shall not be counted if a majority of the votes cast by the holders of the Company’s ordinary shares is against the appointment of such nominee.

 

·        For all matters that are required to be subject to shareholder approval under Rule 5635 of the Nasdaq Stock Market Rules, New Wave shall vote the Class A Preference Shares in accordance with the Board’s recommendation to the extent the board determines to submit any such matter to shareholder approval.

 

·        If New Wave transfers the Class A Preference Shares to a third party which is not an affiliate of New Wave, or when New Wave ceases to be controlled by any person holding executive office in the Company, the Class A Preference Shares shall cease to have any voting right.

 

Item 7. Material to be Filed as Exhibits.

 

Item 7 of the Original Filing is hereby amended and restated as follows:

 

A (1)               Joint Filing Agreement, dated as of November 16, 2015, between Charles Chao and New Wave XXMV Limited

 

B (1)               Subscription Agreement, dated as of June 1, 2015 between Sina Corporation and Charles Chao

 

C (1) *             Facility Agreement dated November 4, 2015, by and between Credit Suisse AG Hong Kong Branch and New Wave MMXV Limited

 

D (1)            Equitable Share Mortgage in respect of Shares of Sina Corporation dated November 4, 2015, by and between Credit Suisse AG Hong Kong Branch and New Wave MMXV Limited

 

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E (1)                Registration Rights Agreement dated November 6, 2015, by and between Sina Corporation and New Wave XXMV Limited

 

F                   Share Subscription Agreement dated November 6, 2017, by and between Sina Corporation and New Wave XXMV Limited

 


*                  Confidential treatment has been requested. Confidential material has been redacted and separately filed with the SEC.

 

(1)          Filed previously.

 

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SIGNATURE

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Dated: November 15, 2017

 

 

 

CHARLES CHAO

 

 

 

 

 

 

/s/ Charles Chao

 

 

 

 

 

 

NEW WAVE XXMV LIMITED

 

 

 

 

 

 

 

By:

s/ Charles Chao

 

Name: Charles Chao

 

Title: Director

 

[Signature Page to Schedule 13D/A]

 

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SCHEDULE A

 

Directors and Executive Officers of New Wave MMXV Limited

 

The names of the directors and the names and titles of the executive officers of New Wave MMXV Limited and their principal occupations are set forth below.

 

Name

 

Present Principal
Occupation

 

Business Address

 

Citizenship

Director:

 

 

 

 

 

 

Charles Chao

 

Chairman of the board of director and chief executive officer of Sina Corporation

 

7/F SINA Plaza
No. 8 Courtyard 10 West
Xibeiwang East Road
Haidian District, Beijing, 100193, People’s Republic of China

 

United States of America

 

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Exhibit F

 

SHARE SUBSCRIPTION AGREEMENT

 

This Share Subscription Agreement (this “ Agreement ”) is made as of November 6, 2017 by and between Sina Corporation, a company incorporated in the Cayman Islands (the “ Company ”) and New Wave MMXV Limited, a company incorporated in British Virgin Islands and controlled by Mr. Charles Chao, the chairman of board of directors and chief executive officer of the Company (the “ Subscriber ”).

 

The Subscriber and the Company are each referred to herein as a “ Party, ” and collectively as the “ Parties .”

 

W I T N E S S E T H :

 

WHEREAS , upon the terms and conditions of this Agreement, the Company desires to issue to the Subscriber, and the Subscriber wishes to subscribe for, class A preference shares, $1.00 par value per share (the “ Class A Preference Shares ”), of the Company which have the special rights, restrictions, preferences and privileges set forth in Exhibit A hereto, in reliance on an exemption from registration under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”);

 

NOW, THEREFORE , in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the Parties hereto agree as follows:

 

ARTICLE I

 

SUBSCRIPTION OF CLASS A PREFERENCE SHARES

 

Section 1.1                                     Subscription and Issuance of Class A Preference Shares .  Pursuant to the terms and subject to the conditions of this Agreement, the Subscriber agrees to subscribe for, and the Company agrees to issue to the Subscriber, 7,150 Class A Preference Shares with the rights, restrictions, preferences and privileges set forth in Exhibit A hereto (the “ Subscribed Shares ”) at par value of US$1.00 per share.

 

Section 1.2                                     Payment and Delivery .  Upon the receipt of US$7,150 in immediately available cash, the Company shall (i) update the register of members of the Company (the “ Register of Members ”) reflecting the issuance of the Subscribed Shares, and (i) if requested by the Subscriber, deliver a duly executed share certificate in original form, registered in the name of the Subscriber upon request by the Subscriber, together with a true copy of the register of members of the Company, evidencing the Subscribed Shares being issued and sold to the Subscriber.

 

Section 1.3                                     Legends .  The Register of Members and the share certificate representing the Subscribed Shares shall be endorsed with the following legends:

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (AS AMENDED, THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS SECURITY MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE: (A) IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR (2) AN EXEMPTION OR QUALIFICATION UNDER APPLICABLE SECURITIES LAWS. ANY ATTEMPT TO

 



 

TRANSFER OR SELL THIS SECURITY IN VIOLATION OF THESE RESTRICTIONS SHALL BE VOID.

 

THESE CLASS A PREFERENCE SHARES HAVE NO ECONOMIC RIGHT AND NO RIGHT TO DIVIDEND OR ANY OTHER DISTRIBUTION OF SINA CORPORATION, EXCEPT A RIGHT TO RETURN OF PAR VALUE OF US$1.00 PER SHARE ON A WINDING UP OF SINA CORPORATION PARI PASSU WITH ORDINARY SHARES. THESE CLASS A PREFERENCE SHARES ARE NOT CONVERTIBLE INTO ORDINARY SHARES. THESE CLASS A PREFERENCE SHARES HAVE SPECIAL VOTING RIGHTS AS SET FORTH IN A SHARE SUBSCRIPTION AGREEMENT, DATED NOVEMBER 6, 2017, ENTERED INTO BY AND BETWEEN SINA CORPORATION AND NEW WAVE MMXV LIMITED.”

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES

 

Section 2.1                                     Representations and Warranties of the Subscriber . The Subscriber hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date, as follows:

 

(a)                                  Authority . The Subscriber has full power and authority to enter into, execute and deliver this Agreement and each agreement, certificate, document and instrument to be executed and delivered by the Subscriber pursuant to this Agreement and to perform his obligations hereunder and thereunder.

 

(b)                                  Valid Agreement . This Agreement has been duly executed and delivered by the Subscriber and constitutes the legal, valid and binding obligation of the Subscriber, enforceable against him in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

(c)                                   Noncontravention . Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental entity or court to which the Subscriber is subject, or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of or creation of an encumbrance under, or create in any party the right to accelerate, terminate, modify, or cancel, any agreement, contract, lease, license, instrument, or other arrangement to which the Subscriber is a party or by which the Subscriber is bound or to which any of the Subscriber’s assets are subject. There is no action, suit or proceeding, pending or threatened against the Subscriber that questions the validity of this Agreement or the right of the Subscriber to enter into this Agreement or to consummate the transactions contemplated hereby.

 

(d)                                  Consents and Approvals . Neither the execution and delivery by the Subscriber of this Agreement, nor the consummation by the Subscriber of any of the

 

2



 

transactions contemplated hereby or thereby, nor the performance by the Subscriber of this Agreement in accordance with its terms requires the consent, approval, order or authorization of, or registration with, or the giving of notice to, any governmental or public body or authority or any third party, except such as have been or will have been obtained, made or given on or prior to the Closing Date.

 

(e)                                   Sophisticated Investor (f)           . The Subscriber is a sophisticated investor with knowledge and experience in financial and business matters such that the Subscriber is capable of evaluating the merits and risks of its subscription of the Subscribed Shares. The Subscriber is able to bear the economic risks of the subscription and can afford a complete loss of such subscription. The Subscriber acknowledges and affirms that, with the assistance of its advisors, it has conducted and completed its own investigation, analysis and evaluation related to the subscription of the Subscribed Shares.

 

(g)                                   Restricted Securities (h)                      . The Subscriber acknowledges that the Subscribed Shares are “restricted securities” that have not been registered under the Securities Act or any applicable state securities law. The Subscriber further acknowledges that, absent an effective registration under the Securities Act, the Subscribed Shares may only be offered, sold or otherwise transferred (x) to the Company, or (y) pursuant to an exemption from registration under the Securities Act.

 

Section 2.2                                     Representations and Warranties of the Company . The Company hereby represents and warrants to the Subscriber, as of the date hereof and as of the Closing Date, as follows:

 

(a)                                  Due Formation . The Company is a company duly incorporated as an exempted company with limited liability, validly existing and in good standing under the laws of the Cayman Islands. The Company has all requisite power and authority to carry on its business as it is currently being conducted.  Each Subsidiary (as defined below) has been duly organized, is validly existing and in good standing under the laws of its jurisdiction of organization, and has the requisite corporate power and authorization to own, lease and operate its properties and to carry on its business as now being conducted and as described in the SEC Documents (as defined below).

 

(b)                                  Authority . The Company has full power and authority to enter into, execute and deliver this Agreement and each agreement, certificate, document and instrument to be executed and delivered by the Company pursuant to this Agreement and to perform its obligations hereunder and thereunder. The execution and delivery by the Company of this Agreement and the performance by the Company of its obligations has been duly authorized by all requisite actions on its part.

 

(c)                                   Valid Agreement . This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligations of the Company, enforceable against it in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

(d)                                  Due Issuance of the Subscribed Shares . The Subscribed Shares have been duly authorized and, when issued and delivered to and paid for by the Subscriber

 

3



 

pursuant to this Agreement, will be validly issued, fully paid and non-assessable and free and clear of any pledge, mortgage, security interest, encumbrance, lien, charge, assessment, title defect, right of first refusal, right of pre-emption, third party right or interest, claim or restriction of any kind or nature (collectively the “ Encumbrances ”), except for restrictions arising under the Securities Act or created by virtue of this Agreement, and upon delivery and entry into the register of members of the Company will transfer to the Subscriber good and valid title to the Subscribed Shares.

 

(e)                                   Noncontravention . Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby and thereby, will (i) violate any provision of the organizational documents of the Company or violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental entity or court to which the Company is subject, or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of or creation of an Encumbrance under, or create in any party the right to accelerate, terminate, modify, or cancel, any agreement, contract, lease, license, instrument, or other arrangement to which the Company is a party or by which the Company is bound or to which any of the Company’s assets is subject. There is no action, suit or proceeding, pending or threatened against the Company that questions the validity of this Agreement or the right of the Company to enter into this Agreement or to consummate the transactions contemplated hereby.

 

(f)                                    Consents and Approvals . Neither the execution and delivery by the Company of this Agreement, nor the consummation by the Company of any of the transactions contemplated hereby and thereby, nor the performance by the Company of this Agreement in accordance with its terms requires the consent, approval, order or authorization of, or registration with, or the giving notice to, any governmental or public body or authority or any third party, except such as have been or will have been obtained, made or given on or prior to the Closing Date.

 

ARTICLE III

 

MISCELLANEOUS

 

Section 3.1                                     Governing Law; Arbitration .  This Agreement shall be governed and interpreted in accordance with the laws of the Cayman Islands.  Any dispute arising out of or relating to this Agreement, including any question regarding its existence, validity or termination (“ Dispute ”) shall be referred to and finally resolved by arbitration at the Hong Kong International Arbitration Centre in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules then in force.  There shall be three arbitrators.  Each Party has the right to appoint one arbitrator and the third arbitrator shall be appointed by the Hong Kong International Arbitration Centre. The language to be used in the arbitration proceedings shall be English.  Each of the Parties irrevocably waives any immunity to jurisdiction to which it may be entitled or become entitled (including without limitation sovereign immunity, immunity to pre-award attachment, post-award attachment or otherwise) in any arbitration proceedings and/or enforcement proceedings against it arising out of or based on this Agreement or the transactions contemplated hereby.

 

Section 3.2                                     Amendment . This Agreement shall not be amended, changed or modified, except by another agreement in writing executed by the Parties hereto.

 

4



 

Section 3.3                                     Binding Effect . This Agreement shall inure to the benefit of, and be binding upon, each of the Company and the Subscriber and their respective heirs, successors and permitted assigns and legal representatives.

 

Section 3.4                                     Assignment . Neither this Agreement nor any of the rights, duties or obligations hereunder may be assigned by the Company or the Subscriber without the express written consent of the other Party, except that the Subscriber may assign all or any part of his rights and obligations hereunder to any affiliate controlled by the Subscriber without the consent of the Company, provided that no such assignment shall relieve the Subscriber of its obligations hereunder if such assignee does not perform such obligations. Any purported assignment in violation of the foregoing sentence shall be null and void.

 

Section 3.5                                     Entire Agreement . This Agreement constitutes the entire understanding and agreement between the Parties with respect to the matters covered hereby, and all prior agreements and understandings, oral or in writing, if any, between the Parties with respect to the matters covered hereby are merged and superseded by this Agreement.

 

Section 3.6                                     Severability . If any provisions of this Agreement shall be adjudicated to be illegal, invalid or unenforceable in any action or proceeding whether in its entirety or in any portion, then such provision shall be deemed amended, if possible, or deleted, as the case may be, from the Agreement in order to render the remainder of the Agreement and any provision thereof both valid and enforceable, and all other provisions hereof shall be given effect separately therefrom and shall not be affected thereby.

 

Section 3.7                                     Execution in Counterparts .  For the convenience of the Parties and to facilitate execution, this Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

5



 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the day and year first above written.

 

 

 

COMPANY:

 

 

 

 

 

SINA CORPORATION

 

 

 

 

 

 

 

By:

/s/ Bonnie Yi Zhang

 

 

Name:

Bonnie Yi Zhang

 

 

Title:

Chief Financial Officer

 

[Signature Page to Share Subscription Agreement]

 



 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the day and year first above written.

 

 

 

SUBSCRIBER:

 

 

 

 

 

NEW WAVE MMXV LIMITED

 

 

 

 

 

 

 

By:

/s/ Charles Chao

 

 

Name:

Charles Chao

 

 

Title:

Director

 

[Signature Page to Share Subscription Agreement]

 



 

EXHIBIT A

 

Class A Preference Shares

 

1.               No economic right and no right to dividend or any other distribution of the Company (except a right to return of par value of US$1.00 per share on a winding up of the Company pari passu with Ordinary Shares).

 

2.               Class A Preference Shares are not convertible into Ordinary Shares.

 

3.               Special voting rights:

 

(i)                                      Class A Preference Shares are entitled to vote on all matters submitted to a general meeting of the Company.  Each Class A Preference Share is entitled to 10,000 votes initially.  When New Wave MMXV Limited (“ New Wave ”) sells or otherwise transfers any number of Ordinary Shares to a third party which is not an affiliate of New Wave, the number of votes that each Class A Preference Share is entitled to shall be reduced by a ratio that equals to the number of Ordinary Shares sold or transferred divided by 7,944,386 1 .  For illustration purpose, if New Wave sells 1,000,000 Ordinary Shares, each Class A Preference Shares shall be entitled to 8,741 votes (being the result of 10,000 x (1 - 1,000,000 / 7,944,386)).

 

(ii)                                   On any resolution to elect a Director where the nominee is a person holding executive office in the Company, then if a majority of the votes cast by the holders of the Ordinary Shares is against the appointment of such nominee, then the votes attaching to the Class A Preference Shares on such resolution shall not be counted and the Class A Preference Shares shall be disenfranchised on such resolution in this circumstance.

 

(iii)                                For all matters that are required to be subject to shareholder approval under Rule 5635 of the Nasdaq Stock Market Rules, New Wave shall vote Class A Preference Shares in accordance with the Company board’s recommendation to the extent the board determines to submit any such matter to a general meeting of the Company to seek shareholder approval.

 

(iv)                               If New Wave transfers the Class A Preference Shares to a third party which is not an affiliate of New Wave, or when New Wave ceases to be controlled by any person holding executive office in the Company, Class A Preference Shares shall cease to have any voting right.

 

(v)                                  Determination as to whether an entity is an “affiliate” of New Wave or is controlled by any person holding executive office in the Company shall be made in accordance with the definition of “affiliate” under relevant US securities law and rules promulgated thereunder as well as related cases.

 


1   Represent the number of ordinary shares of the Company held by New Wave as of the date hereof.