Name
of Beneficial Owner
|
Number
of
Ordinary
Shares
|
Percent
of
Outstanding
Ordinary
Shares
|
||||||
MediaInv
Ltd. (1)
|
7,311,405 | 56.5 | % | |||||
Kerry
Propper
|
2,437,135 | 18.8 | % | |||||
Michael
E. Weksel (2)
|
362,500 | 2.8 | % | |||||
Li
Shuangqing
|
— | — | ||||||
George
Kaufman
|
— | — | ||||||
Donald
Quinby
|
— | — | ||||||
Jian
Ping Huang
|
— | — | ||||||
May
Huang
|
— | — | ||||||
All
Directors and Officers as a Group (7 persons) (3)
|
2,799,635 | 21.6 | % |
Audit
Committee:
|
Jian
Ping Huang (Chairman), Donald Quinby and May Huang.
|
|
Norminating
and
Corporate
Governance
Committee:
|
Donald Quinby (Chairman) and Jian
Ping Huang
|
|
Compensation
Committee:
|
George
Kaufman (Chairman), Jian Ping Huang and Donald
Quinby
|
Exhibit A | Press Release, dated June 25, 2009 |
Exhibit B | Press Release, dated June 30, 2009 |
Exhibit C | Form of Lock-Up Agreement |
Exhibit D | Amended and Restated Memorandum and Articles of Association, as filed June 24, 2009 |
Annex 1 | Unaudited Pro Forma Financial Information |
CHINA
NETWORKS INTERNATIONAL HOLDINGS LTD.
|
|||
|
By:
|
/s/
Michael E. Weksel
|
|
Name:
Michael E. Weksel
|
|||
Title: Chief
Financial Officer
|
|||
|
Re:
|
Agreement
and Plan of Merger, dated August 13, 2008, by and among Alyst Acquisition
Corp. (the “Company”), China Networks International Holdings, Ltd. (“CN
Holdings”), China Networks Media, Ltd., China Networks Merger Co., Ltd.,
Mr. Li Shuangqing, Kerry Propper and MediaInv
Ltd., as amended (the ‘‘Agreement’’)
|
1
|
Company
Name
|
1.1
|
The
name of the Company is China Networks International Holdings
Ltd.
|
1.2
|
The
directors or members may from time to time change the Company's name by
Resolution of Directors or Resolution of Members. The directors
shall give notice of such resolution to the registered agent of the
Company, for the registered agent to file an application for change of
name with the Registrar, and any such change will take effect from the
date of the certificate of change of name issued by the
Registrar.
|
1.3
|
A
change of name of the Company shall constitute an amendment of the
Memorandum and Articles and in the event of a resolution being passed to
change the name of the Company, the provisions below in respect of
amendments to the Memorandum and Articles must be complied
with.
|
2
|
Company
Limited by Shares, Liability of
Members
|
2.1
|
The
Company is a company limited by
shares.
|
2.2
|
The
liability of each member is limited to the amount from time to time unpaid
on that member's shares.
|
3
|
Registered
Office
|
3.1
|
The
first registered office of the Company will be situated at Kingston
Chambers, PO Box 173, Road Town, Tortola, British Virgin
Islands.
|
3.2
|
The
directors or members may from time to time change the Company's registered
office by Resolution of Directors or Resolution of Members, provided that
the Company's registered office shall at all times be the office of the
registered agent. The directors shall give notice of such
resolution to the registered agent of the Company, for the registered
agent to file with the Registrar a notice of change of registered office,
and any such change of registered office will take effect from the date of
the registration by the Registrar of such
notice.
|
4
|
Registered
Agent
|
4.1
|
The
first registered agent of the Company will be Maples Finance BVI Limited
of Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin
Islands.
|
4.2
|
The
directors or members may from time to time change the Company's registered
agent by Resolution of Directors or Resolution of Members. The
directors shall give notice of such resolution to the registered agent of
the Company (meaning the existing registered agent), for the registered
agent to file with the Registrar a notice of change of registered agent,
and any such change of registered agent will take effect from the date of
the registration by the Registrar of such
notice.
|
4.3
|
If
the existing registered agent does not file such notice on instruction by
the directors, the directors shall procure that a notice of change of
registered agent is filed with the Registrar by a legal practitioner in
the British Virgin Islands acting on behalf of the Company, and any such
change of registered agent will take effect from the date of the
registration by the Registrar of such
notice.
|
5
|
General
Objects and Powers
|
5.1
|
Subject
to the following provisions of this Memorandum, the objects for which the
Company is established are unrestricted and the Company shall have full
power and authority to carry out any object not prohibited by the Act or
any other law of the British Virgin
Islands.
|
5.2
|
The
Company has no power to:
|
|
(a)
|
carry
on banking or trust business, unless it is licensed to do so under the
Banks and Trust Companies Act,
1990;
|
|
(b)
|
carry
on business as an insurance or as a reinsurance company, insurance agent
or insurance broker, unless it is licensed or authorised to do so under
the Insurance Act, 1994;
|
|
(c)
|
carry
on the business of company management unless it is licensed to do so under
the Companies Management Act, 1990;
|
|
(d)
|
carry
on the business of providing the registered office or the registered agent
for companies incorporated in the British Virgin Islands unless it is
licensed to do so under the Banks and Trust Companies Act, 1990;
or
|
|
(e)
|
carry
on the business as a mutual fund, mutual fund manager or mutual fund
administrator unless it is licensed to do so under the Mutual Funds Act,
1996.
|
5.3
|
Without
limiting the foregoing, the powers of the Company include the power to do
the following:
|
|
(a)
|
grant
options over unissued shares in the Company and treasury
shares;
|
|
(b)
|
issue
securities that are convertible into
shares;
|
|
(c)
|
give
financial assistance to any person in connection with the acquisition of
the Company's own shares;
|
|
(d)
|
issue
debt obligations of every kind and grant options, warrants and rights to
acquire debt obligations;
|
|
(e)
|
guarantee
a liability or obligation of any person and secure any of its obligations
by mortgage, pledge or other charge, of any of its assets for that
purpose; and
|
|
(f)
|
protect
the assets of the Company for the benefit of the Company, its creditors
and its members and, at the discretion of the directors, for any person
having a direct or indirect interest in the
Company.
|
6
|
Maximum
Number of Authorised Shares
|
6.1
|
The
Company is authorised to issue a maximum of 75,000,000 shares of one class
with a par value of US$0.0001 each divided into the following classes of
shares:
|
|
(a)
|
74,000,000
ordinary shares of US$0.0001 par value each;
and
|
|
(b)
|
1,000,000
preferred shares of US$0.0001 par value
each.
|
6.2
|
The
directors or members may from time to time by Resolution of Directors or
Resolution of Members increase the maximum number of shares the Company is
authorised to issue, by amendment to the Memorandum in accordance with the
provisions below.
|
7
|
Rights
Conferred by Shares
|
7.1
|
Each
share in the Company confers on the
holder:
|
|
(a)
|
the
right to one vote on any Resolution of
Members;
|
|
(b)
|
the
right to an equal share in any dividend paid by the Company in accordance
with the Act; and
|
|
(c)
|
the
right to an equal share in the distribution of the surplus assets of the
Company.
|
7.2
|
If
at any time the Company is authorised to issue shares of more than one
class the rights attached to any class (unless otherwise provided by the
terms of issue of the shares of that class) may, whether or not the
Company is being wound up, be varied only with the consent in writing of
the holders of not less than three-fourths of the issued shares of that
class and the holders of not less than three-fourths of the issued shares
of any other class of shares which may be affected by such
variation.
|
7.3
|
The
rights conferred upon the holders of the shares of any class issued with
preferred or other rights shall not, unless otherwise expressly provided
by the terms of issue of the shares of that class, be deemed to be varied
by the creation or issue of further shares ranking pari passu
therewith.
|
7.4
|
The
directors may, subject to the Act, by amending this Memorandum and/or the
Articles, determine the designations, powers, preferences and relative,
participation, optional and other rights, if any, and the qualifications,
limitations and restrictions thereof, if any, including, without
limitation, dividend rights, conversion rights, redemption privileges,
voting powers and liquidation preferences that any Preferred Share issued
by the Company confers on the
holder.
|
8
|
Registered
Shares Only
|
9
|
Amendments
to the Memorandum and Articles
|
9.1
|
Subject
to the provisions of the Act, the directors or members may from time to
time amend the Memorandum or Articles by Resolution of Directors or
Resolution of Members. The directors shall give notice of such
resolution to the registered agent of the Company, for the registered
agent to file with the Registrar a notice of the amendment to the
Memorandum or Articles, or a restated memorandum and articles of
association incorporating the amendment(s) made, and any such amendment to
the Memorandum or Articles will take effect from the date of the
registration by the Registrar of the notice of amendment or restated
memorandum and articles of association incorporating the amendment(s)
made.
|
9.2
|
The
directors shall not have the power to amend the Memorandum or
Articles:
|
|
(a)
|
to
restrict the rights or powers of the members to amend the Memorandum or
Articles;
|
|
(b)
|
to
change the percentage of members required to pass a resolution to amend
the Memorandum or Articles; or
|
|
(c)
|
in
circumstances where the Memorandum or Articles cannot be amended by the
members.
|
|
(d)
|
A
change of registered office or registered agent shall not constitute an
amendment of the Memorandum or
Articles.
|
|
(e)
|
An
amendment to the Memorandum or Articles which would have the effect of
varying the rights of the holders of a class of shares may only be made in
accordance with the provisions of the Memorandum and Articles relating to
the variation of class rights.
|
10
|
Definitions
and Interpretation
|
10.1
|
In
this memorandum of association and the attached articles of
association:
|
"Act"
|
means
the BVI Business Companies Act, 2004;
|
"Articles"
|
means
the Company's articles of association as attached to this
Memorandum, and "Article" shall be construed
accordingly;
|
"Memorandum"
|
means
this, the Company's memorandum of association;
|
"Registrar"
|
means
the Registrar of Corporate Affairs appointed under the Act;
|
"Resolution of
Directors"
|
means
a resolution by the majority of the directors of the Company passed either
at a meeting of directors, or by way of a Written Resolution, in either
case in accordance with the provisions of the Articles;
|
"Resolution of
Members"
|
means
a resolution by the members holding a majority of the voting rights in
respect of such resolution passed either at a meeting of members, or by
way of a Written Resolution, in either case in accordance with the
provisions of the Articles; and
|
"Written
Resolution"
|
means
a resolution of members or directors (as applicable) consented to in
writing or by telex, telegram, cable or other written electronic
communication, without the need for any notice. A Written
Resolution may consist of several documents, including written electronic
communications, in like form each signed or assented to by one or more
members or directors (including directors' alternates) (as
applicable). A Written Resolution shall be passed if so
consented by a majority of those members or directors (including
directors' alternates) (as applicable) entitled to vote on the
resolution.
|
10.2
|
In
the Memorandum and Articles:
|
|
(a)
|
words
and expressions defined in the Act shall have the same meaning and, unless
otherwise required by the context, the singular shall include the plural
and vice versa, the masculine shall include the feminine and the neuter
and references to persons shall include corporations and all entities
capable of having a legal
existence;
|
|
(b)
|
reference
to a provision of law is a reference to that provision as extended,
applied, amended or re-enacted and includes any subordinate
legislation;
|
|
(c)
|
the
headings are for convenience only and shall not affect the construction of
the Memorandum or Articles;
|
|
(d)
|
reference
to a thing being "written" or "in writing" includes all
forms of writing, including all electronic records which satisfy the
requirements of the Electronic Transactions Act,
2001;
|
|
(e)
|
reference
to a thing being "signed" or to a person's
"signature" shall
include reference to an electronic signature which satisfies the
requirements of the Electronic Transactions Act, 2001, and reference to
the Company's "seal" shall include
reference to an electronic seal which satisfies the requirements of the
Electronic Transactions Act, 2001.
|
1
|
Share
Certificates
|
1.1
|
Every
person whose name is entered as a member in the share register, being the
holder of registered shares, shall without payment be entitled to a share
certificate in the following
circumstances:
|
|
(a)
|
on
the issuance of such shares to such
member;
|
|
(b)
|
on
the transfer of such shares to such
member;
|
|
(c)
|
on
a re-designation or conversion of such shares with the effect that the
certificate previously issued no longer properly describes such shares;
and
|
|
(d)
|
at
the discretion of the directors (who may levy a reasonable charge), on
notice to the Company of a change of name of the
member.
|
1.2
|
Such
certificate shall be signed by a director or under the common seal of the
Company (which the registered agent of the Company is authorised to affix
to such certificate) with or without the signature of any director or
officer of the Company specifying the share or shares held and the par
value thereof (if the Company is authorised at the relevant time to issue
shares with a par value), provided that in respect of shares held jointly
by several persons, the Company shall not be bound to issue more than one
certificate and delivery of a certificate for a share to one of several
joint holders shall be sufficient delivery to
all
|
1.3
|
If
a certificate is worn out or lost it may, subject to the prior written
consent of any mortgagee or chargee whose interest has been noted on the
register of members, be renewed on production of the worn out certificate,
or on satisfactory proof of its loss together with such indemnity as the
directors may reasonably require. Any member receiving a share
certificate shall indemnify and hold the Company and its officers harmless
from any loss or liability which it or they may incur by reason of
wrongful or fraudulent use or representation made by any person by virtue
of the possession of such a
certificate.
|
2
|
Issue
of Shares
|
2.1
|
Subject
to the provisions of these Articles, the unissued shares of the Company
(whether forming part of the original or any increased authorised shares)
shall be at the disposal of the directors who may offer, allot, grant
options over or otherwise dispose of them to such persons at such times
and for such consideration, being not less than the par value (if any) of
the shares being disposed of, and upon such terms and conditions as the
directors may determine. Such consideration may take any form
acceptable to the directors, including money, a promissory note, or other
written obligation to contribute money or property, real property,
personal property (including goodwill and know-how), services rendered or
a contract for future services. Before issuing shares for a consideration
other than money, the directors shall pass a Resolution of Directors
stating:
|
|
(a)
|
the
amount to be credited for the issue of the
shares;
|
|
(b)
|
their
determination of the reasonable present cash value of the non-money
consideration for the issue; and
|
|
(c)
|
that,
in their opinion, the present cash value of the non-money consideration
for the issue is not less than the amount to be credited for the issue of
the shares.
|
2.2
|
Subject
to the provisions of the Act in this regard, shares may be issued on the
terms that they are redeemable, or at the option of the Company be liable
to be redeemed on such terms and in such manner as the directors before or
at the time of the issue of such shares may determine. At any
time after the consummation of a Business Combination (as defined in these
Articles), the directors may issue options, warrants or convertible
securities or securities of similar nature conferring the right upon the
holders thereof to subscribe for, purchase or receive any class of shares
or securities in the Company on such terms as it may from time to time
determine. Notwithstanding the foregoing, the directors may
issue options, warrants or convertible securities in connection with the
Company’s initial public offering.
|
2.3
|
The
Company may issue bonus shares, partly paid shares and nil paid
shares.
|
2.4
|
The
directors may redeem any share issued by the Company at a
premium.
|
2.5
|
Except
as otherwise expressly provided in the resolution or resolutions providing
for the establishment of any class or series of preferred shares, no vote
of the holders of preferred shares or of the holders of ordinary shares
shall be a prerequisite to the issuance of any shares of any class or
series of the preferred shares authorized by and complying with the
conditions in the Memorandum or these
Articles.
|
2.6
|
Except
as required by the Act, and notwithstanding that a share certificate may
refer to a member holding shares "as trustee" or similar expression, no
person shall be recognised by the Company as holding any share upon any
trust, and the Company shall not be bound by or be compelled in any way to
recognise (even when having notice thereof) any equitable, contingent,
future or partial interest in any share or any interest in any fractional
part of a share or (except as provided by these Articles or by the Act)
any other rights in respect of any share except any absolute right to the
entirety thereof by the registered
holder.
|
3
|
Forfeiture
of Shares
|
3.1
|
The
Company may, at any time after the due date for payment, serve on a member
who has not paid in full for shares registered in the name of that member,
a written notice of call ("Notice of Call")
specifying a date for payment to be made. The Notice of Call
shall name a further date not earlier than the expiration of 14 days from
the date of service of the Notice of Call on or before which the payment
required by the Notice of Call is to be made and shall contain a statement
that in the event of non-payment at or before the time named in the Notice
of Call the shares, or any of them, in respect of which payment is not
made will be liable to be
forfeited.
|
3.2
|
Where
a written Notice of Call has been issued under the foregoing Article and
the requirements of the Notice of Call have not been complied with, the
directors may, at any time before tender of payment, forfeit and cancel
the shares to which the Notice of Call relates. The Company is
under no obligation to refund any moneys to the member whose shares have
been cancelled pursuant to this Article and that member shall be
discharged from any further obligation to the
Company.
|
4
|
Transfer
of Shares
|
4.1
|
Shares
in the Company shall be transferred by a written instrument of transfer
signed by the transferor and containing the name and address of the
transferee. The instrument of transfer shall also be signed by
the transferee if registration as a holder of the shares imposes a
liability to the Company on the transferee. The instrument of
transfer of a registered share shall be sent to the Company for
registration.
|
4.2
|
Subject
to the Memorandum of Association, these Articles and to Section 54(5) of
the Act, the Company shall, on receipt of an instrument of transfer, enter
the name of the transferee of the share in the register of members unless
the directors resolve to refuse or delay the registration of the transfer
for reasons that shall be specified in the resolution. Where
the directors pass such a resolution, the Company shall send to the
transferor and the transferee a notice of the refusal or
delay. Notwithstanding anything contained in the
Memorandum or Articles, the directors shall not decline to register any
transfer of shares, nor may they suspend registration thereof where such
transfer is:
|
|
(a)
|
to
any mortgagee or chargee whose interest has been noted on the register of
members;
|
|
(b)
|
by
any such mortgagee or chargee, pursuant to the power of sale under its
security; or
|
|
(c)
|
by
any such mortgagee or chargee in accordance with the terms of the relevant
security document.
|
4.3
|
The
transfer of a registered share is effective when the name of the
transferee is entered in the register of
members.
|
5
|
Mortgages
of Shares and Charges over Shares
|
5.1
|
Members
may mortgage or create a charge or other form of security over their
shares.
|
5.2
|
The
directors shall, at the written request of a member who has mortgaged or
created a charge over his shares, enter in the register of members of the
Company:
|
|
(a)
|
a
statement that such shares are mortgaged or
charged;
|
|
(b)
|
the
name of the mortgagee or chargee (where such information has been stated
by the member); and
|
|
(c)
|
the
date on which the statement and name are entered in the register of
members.
|
6
|
Transmission
of Shares
|
6.1
|
Subject
to Sections 52(2) and 53 of the Act, the executor or administrator of a
deceased member, the guardian of an incompetent member or the trustee of a
bankrupt member shall be the only person recognised by the Company as
having any title to his share, save that and only in the event of death,
incompetence or bankruptcy of any member or members of the Company as a
consequence of which the Company no longer has any directors or members,
then upon the production of any documentation which is reasonable evidence
of the applicant being entitled to:
|
|
(a)
|
a
grant of probate of the deceased's will, or grant of letters of
administration of the deceased's estate, or confirmation of the
appointment as executor or administrator (as the case may be, or analogous
position in the relevant jurisdiction), of a deceased member's
estate;
|
|
(b)
|
the
appointment of a guardian (or analogous position in the relevant
jurisdiction) of an incompetent
member;
|
|
(c)
|
the
appointment as trustee (or analogous position in the relevant
jurisdiction) of a bankrupt member;
or
|
|
(d)
|
upon
production of any other reasonable evidence of the applicant's beneficial
ownership of, or entitlement to the
shares,
|
to
the Company's registered agent in the British Virgin Islands together with
(if so requested by the registered agent) a notarised copy of the share
certificate(s) of the deceased, incompetent or bankrupt member, an
indemnity in favour of the registered agent and/or appropriate legal
advice in respect of any document issued by a foreign court, then the
administrator, executor, guardian or trustee in bankruptcy (as the case
may be) notwithstanding that their name has not been entered in the share
register of the Company, may by written resolution of the applicant,
endorsed with written approval by the registered agent, be appointed a
director of the Company and/or entered in the share register as the legal
and/or beneficial owner of the
shares.
|
6.2
|
Without
limiting the foregoing, the production to the Company of any document
which is reasonable evidence of:
|
|
(a)
|
a
grant of probate of the will, or grant of letters of administration of the
estate, or confirmation of the appointment as executor (or analogous
position in the relevant jurisdiction), of a deceased
member;
|
|
(b)
|
the
appointment of a guardian (or analogous position in the relevant
jurisdiction) of an incompetent
member;
|
|
(c)
|
the
trustee (or analogous position in the relevant jurisdiction) of a bankrupt
member; or
|
|
(d)
|
the
applicant's legal and/or beneficial ownership of the
shares,
|
6.3
|
Any
person becoming entitled by operation of law or otherwise to a share or
shares in consequence of the death, incompetence or bankruptcy of any
member may be registered as a member upon such evidence being produced as
may reasonably be required by the directors. An application by
any such person to be registered as a member shall for all purposes be
deemed to be a transfer of shares of the deceased, incompetent or bankrupt
member and the directors shall treat it as
such.
|
6.4
|
Any
person who has become entitled to a share or shares in consequence of the
death, incompetence or bankruptcy of any member may, instead of being
registered himself, request in writing that some person to be named by him
be registered as the transferee of such share or shares and such request
shall likewise be treated as if it were a
transfer.
|
6.5
|
What
amounts to incompetence on the part of a person is a matter to be
determined by the court having regard to all the relevant evidence and the
circumstances of the case.
|
7
|
Acquisition
of Own Shares
|
7.1
|
Subject
to Article 27 of these Articles, the directors may, on behalf of the
Company, purchase, redeem or otherwise acquire any of the Company's own
shares for such consideration as the directors consider fit, and either
cancel or hold such shares as treasury shares. Shares may be
purchased or otherwise acquired in exchange for newly issued shares in the
Company.
|
7.2
|
The
directors shall not, unless permitted pursuant to the Act, purchase,
redeem or otherwise acquire any of the Company's own shares unless
immediately after such purchase, redemption or other
acquisition:
|
|
(a)
|
the
value of the Company's assets exceeds it liabilities;
and
|
|
(b)
|
the
Company is able to pay its debts as they fall
due.
|
7.3
|
Sections
60 and 61 of the Act shall not apply to the
Company.
|
8
|
Treasury
Shares
|
8.1
|
Shares
may only be held as treasury shares by the Company to the extent that the
number of treasury shares does not exceed 50% of the shares of that class
previously issued by the Company, excluding shares that have been
cancelled.
|
8.2
|
The
directors may dispose of any shares held as treasury shares on such terms
and conditions as they may from time to time
determine.
|
9
|
Notice
of Meetings of Members
|
9.1
|
The
directors may convene meetings of the members of the Company at such times
and in such manner and places (within or outside the British Virgin
Islands) as the directors consider necessary or desirable, and they shall
convene such a meeting upon the written request of members entitled to
exercise at least thirty (30) percent of the voting rights in respect of
the matter for which the meeting is requested. Meetings of members shall
take place at least annually (the “Annual
Meeting”).
|
9.2
|
Not
less than seven (7) days' notice specifying at least the place, the day
and the hour of the meeting and general nature of the business to be
conducted shall be given in the manner hereinafter mentioned to such
persons whose names on the date the notice is given appear as members in
the share register of the Company and are entitled to vote at the
meeting. Notwithstanding the foregoing, a meeting of members
held in contravention of the requirement to give notice is valid if
members holding a ninety (90) percent majority
of:
|
|
(a)
|
the
total voting rights on all the matters to be considered at the meeting;
or
|
|
(b)
|
the
votes of each class or series of shares where members are entitled to vote
thereon as a class or series together with an absolute majority of the
remaining votes,
|
9.3
|
The
inadvertent failure of the directors to give notice of a meeting to a
member or the fact that a member has not received a notice that has been
properly given, shall not invalidate the
meeting.
|
10
|
Proceedings
at Meetings of Members
|
10.1
|
No
business shall be transacted at any meeting of members unless a quorum of
members is present at the time when the meeting proceeds to
business. A quorum shall consist of the holder or holders
present in person or by proxy entitled to exercise at least fifty (50)
percent of the voting rights of the shares of each class or series of
shares entitled to vote as a class or series thereon and the same
proportion of the votes of the remaining shares entitled to vote
thereon.
|
10.2
|
A
member of the Company shall be deemed to be present at a meeting of
members if:
|
|
(a)
|
he
or his proxy participates by telephone or other electronic means;
and
|
|
(b)
|
all
members and proxies participating in the meeting are able to hear each
other.
|
10.3
|
If,
within half an hour from the time appointed for the meeting, a quorum is
not present, the meeting shall be
dissolved.
|
10.4
|
A
member may attend a meeting of members personally or be represented by a
proxy who may speak and vote on behalf of the
member.
|
10.5
|
The
instrument appointing a proxy shall be produced at the place appointed for
the meeting before the time for holding the meeting at which the person
named in such instrument proposes to vote. An instrument
appointing a proxy shall be in such form as the Chairman of the meeting
shall accept as properly evidencing the wishes of the member appointing
the proxy, but must be in writing under the hand of the appointer unless
the appointer is a corporation or other form of legal entity (other than
one or more individuals holding as joint owner) in which case the
instrument appointing a proxy shall be in writing under the hand of an
individual duly authorised by such corporation or legal entity to execute
the same.
|
10.6
|
At
every meeting the members present shall choose someone of their number to
be the chairman (the "Chairman"). If
the members are unable to choose a Chairman for any reason, then the
person representing the greatest number of voting shares present at the
meeting shall preside as Chairman.
|
10.7
|
The
Chairman may, with the consent of the meeting, adjourn any meeting from
time to time, and from place to place, but no business shall be transacted
at any adjourned meeting other than the business left unfinished at the
meeting from which the adjournment took
place.
|
10.8
|
At
any meeting a resolution put to the vote of the meeting shall be decided
on a show of hands by a simple majority of those members (or their duly
appointed proxies) entitled to vote and voting on the resolution, unless a
poll is (before or on the declaration of the result of the show of hands)
demanded:
|
|
(a)
|
by
the Chairman; or
|
|
(b)
|
by
any member present in person or by proxy and holding not less than one
tenth of the total voting shares issued by the Company and having the
right to vote on such resolution.
|
10.9
|
Unless
a poll be so demanded, a declaration by the Chairman that a resolution
has, on a show of hands been carried, and an entry to that effect in the
book containing the minutes of the proceedings
of the Company, shall be sufficient evidence of the fact, without proof of
the number or proportion of the votes recorded in favour of or against
such resolution.
|
10.10
|
If
a poll is duly demanded it shall be taken in such manner as the Chairman
directs, and the result of the poll shall be deemed to be the resolution
of the meeting at which the poll
was demanded. The demand for a poll may be withdrawn, at the
discretion of the Chairman.
|
10.11
|
On
a poll, every holder of a voting share present in person or by proxy shall
have one vote for every voting share of which he is the holder which
confers the right to a vote on the
resolution.
|
10.12
|
In
the case of an equality of votes, whether on a show of hands or on a poll, the
Chairman of
the meeting at which the show of hands takes place, or at which the poll
is demanded, shall be entitled to a second or casting
vote.
|
10.13
|
Subject
to the Memorandum or these Articles, an action that may be taken by
members of the Company at a meeting of members may also be taken by
Written Resolution.
|
10.14
|
If
a committee is appointed for any member who is of unsound mind, that
member may vote by such committee.
|
11
|
Jointly
Held Shares
|
11.1
|
Where
shares are registered in the names of joint
owners:
|
|
(a)
|
each
registered owner may be present in person or by proxy at a meeting of
members and may speak as a member;
|
|
(b)
|
if
only one of them is present in person or by proxy, he may vote on behalf
of all of them; and
|
|
(c)
|
if
two or more are present in person or by proxy, they must vote as
one. If more than one joint owner votes in person or by proxy
at any meeting of members or by Written Resolution, the vote of the joint
owner whose name appears first among such voting joint holders in the
share register shall alone be
counted.
|
12
|
Corporations
Acting by Representatives at
Meetings
|
13
|
Appointment
and Removal of Directors
|
13.1
|
The
first director or directors shall be appointed by the registered agent of
the Company. Thereafter, the directors shall be appointed as
follows:
|
|
(a)
|
subject
to the provisions of Article 27, any existing director(s) shall be
designated as a Class C Director for a term expiring at the Company's
third Annual Meeting of Members. The Class C director shall then appoint
additional Class A, Class B and Class C directors, as necessary. The
directors in Class A shall be elected for a term expiring at the first
Annual Meeting of Members, the directors in Class B shall be elected for a
term expiring at the second Annual Meeting of Members and the directors in
Class C shall be elected for a term expiring at the third Annual Meeting
of Members. Commencing at the first Annual Meeting of Members, and at each
annual meeting thereafter, directors elected to succeed those directors
whose terms expire shall be elected for a term of office to expire at the
third succeeding annual meeting of members after their election. Except as
the Act may otherwise require, in the interim between annual meetings of
members or special meetings of members called for the election of
directors and/or the removal of one or more directors and the filling of
any vacancy in that connection, newly created directorships and any
vacancies in the Board of Directors, including unfilled vacancies
resulting from the removal of directors for cause, may be filled by the
vote of a majority of the remaining directors then in office, although
less than a quorum, or by the sole remaining
director;
|
|
(b)
|
all
directors shall hold office until the expiration of their respective terms
of office and until their successors shall have been elected and
qualified. A director elected to fill a vacancy resulting from the death,
resignation or removal of a director shall serve for the remainder of the
full term of the director whose death, resignation or removal shall have
created such vacancy and until his successor shall have been elected and
qualified; and
|
|
(c)
|
following
the consummation of a Business Combination, the directors shall be
appointed and removed by resolution of directors or resolution of members
for such terms as the directors or members may so
determine. Sections 114(2) and 114(3) of the Act shall not
apply to the Company.
|
13.2
|
Except
as the Act may otherwise require, newly created directorships and any
vacancies in the board of directors, including unfilled vacancies
resulting from the removal of directors for cause, may be filled by the
vote of a majority of the remaining directors then in office, although
less than a quorum (as defined in these Articles), or by the sole
remaining director.
|
13.3
|
A
director elected to fill a vacancy resulting from the death, resignation
or removal of a director shall serve for the remainder of the full term of
the director whose death, resignation or removal shall have created such
vacancy and until his successor shall have been elected and
qualified.
|
13.4
|
A
person shall not be appointed as a director of the Company unless he has
consented in writing to be a
director.
|
13.5
|
Each
director holds office until:
|
|
(a)
|
his
disqualification to act as a director under Section 111 of the Act (on
which his office as director shall be automatically terminated if he has
not resigned in accordance with section 115(2) of the
Act);
|
|
(b)
|
his
death;
|
|
(c)
|
his
resignation; or
|
|
(d)
|
the
effective date of his removal by Resolution of Directors or Resolution of
Members.
|
13.6
|
The
following are disqualified for appointment as the director of the
Company:
|
|
(a)
|
an
individual who is under 18 years of
age;
|
|
(b)
|
a
person who is a disqualified person within the meaning of section 260(4)
of the Insolvency Act, 2003;
|
|
(c)
|
a
person who is a restricted person within the meaning of section 409 of the
Insolvency Act, 2003; and
|
|
(d)
|
an
undischarged bankrupt.
|
13.7
|
A
director shall not require a share qualification, but nevertheless shall
be entitled to attend and speak at any meeting of the directors and
meeting of the members and at any separate meeting of the holders of any
class of shares in the Company.
|
13.8
|
The
remuneration of directors (whether by way of salary, commission,
participation in profits or otherwise) in respect of services rendered or
to be rendered in any capacity to the Company (including to any company in
which the Company may be interested) shall be fixed by Resolution of
Directors or Resolution of Members. The directors may also be
paid such travelling, hotel and other expenses properly incurred by them
in attending and returning from meetings of the directors, or any
committee of the directors or meetings of the members, or in connection
with the business of the Company as shall be approved by Resolution of
Directors or Resolution of Members.
|
14
|
Alternate
and Reserve Directors
|
14.1
|
A
director, by written instrument deposited at the registered office of the
Company, may from time to time appoint another director or another person
to be his alternate. Every such alternate shall be entitled to
be given notice of meetings of the directors and to attend and vote as a
director at any such meeting at which the director appointing him is not
personally present (and to vote on a Written Resolution) and generally at
such meeting (or in connection with such Written Resolution) to have and
exercise all the powers, rights, duties and authorities of the director
appointing him. Every such alternate shall be deemed to be an
officer of the Company and shall not be deemed to be an agent of the
director appointing him. Unless stated otherwise in the notice
of the appointment of the alternate, if undue delay or difficulty would be
occasioned by giving notice to a director of a resolution of which his
approval is sought in accordance with these Articles his alternate (if
any) shall be entitled to signify approval of the same on behalf of that
director. The remuneration of an alternate shall be payable out
of the remuneration payable to the director appointing him, as agreed
between such alternate and the director appointing him. A
director, by writing under his hand deposited at the registered office of
the Company, may at any time vary or revoke the appointment of an
alternate appointed by him. If a director shall die or cease to
hold the office of director, the appointment of his alternate shall
thereupon cease and terminate.
|
14.2
|
Where
the Company has only one member with voting rights who is an individual
and that member is also the sole director of the Company (the "sole member/director"),
that sole member/director may, by instrument in writing, nominate a person
who is not disqualified from being a director of the Company under section
111(1) of the Act as a reserve director of the Company to act in the place
of the sole director in the event of his death.A person shall not be
nominated as a reserve director unless he has consented in writing to be
nominated as a reserve director. The nomination of a person as a reserve
director of the Company ceases to have effect
if:
|
|
(a)
|
before
the death of the sole member/director who nominated
him:
|
|
(i)
|
he
resigns as reserve director, or
|
|
(ii)
|
the
sole member/director revokes the nomination in writing;
or
|
|
(b)
|
the
sole member/director who nominated him ceases to be the sole
member/director of the company for any reason other than his
death.
|
15
|
Duties
of Directors and Conflicts of
Interests
|
15.1
|
A
director of the Company, in exercising his powers or performing his
duties, shall act honestly and in good faith and in what the director
believes to be in the best interests of the
Company.
|
15.2
|
Notwithstanding
the foregoing Article, if the Company is a wholly-owned subsidiary, a
director of the Company may, when exercising powers or performing duties
as a director, act in a manner which he believes is in the best interests
of that Company’s holding company (as defined in the Act) even though it
may not be in the best interests of the
Company.
|
15.3
|
A
director shall exercise his powers as a director for a proper purpose and
shall not act, or agree to the Company acting, in a manner that
contravenes the Act or the Memorandum or
Articles.
|
15.4
|
A
director, when exercising powers or performing duties as a director, shall
exercise the care, diligence, and skill that a reasonable director would
exercise in the same circumstances taking into account, but
without limitation:
|
|
(a)
|
the
nature of the Company;
|
|
(b)
|
the
nature of the decision; and
|
|
(c)
|
the
position of the director and the nature of the responsibilities undertaken
by him.
|
15.5
|
A
director of the Company, when exercising his powers or performing his
duties as a director, is entitled to rely upon the register of members and
upon books, records, financial statements and other information prepared
or supplied, and on professional or expert advice given,
by:
|
|
(a)
|
an
employee of the Company whom the director believes on reasonable grounds
to be reliable and competent in relation to the matters
concerned;
|
|
(b)
|
a
professional adviser or expert in relation to matters which the director
believes on reasonable grounds to be within the person’s professional or
expert competence; and
|
|
(c)
|
any
other director, or committee of directors upon which the director did not
serve, in relation to matters within the director’s or committee’s
designated authority,
|
|
(d)
|
acts
in good faith;
|
|
(e)
|
makes
proper inquiry where the need for the inquiry is indicated by the
circumstances; and
|
|
(f)
|
has
no knowledge that his reliance on the register of members or the books,
records, financial statements and other information or expert advice is
not warranted.
|
15.6
|
A
director may hold any other office or position of profit under the Company
(except that of auditor) in conjunction with his office of director, and
may act in a professional capacity to the Company on such terms as to
remuneration and otherwise as the directors shall
approve.
|
15.7
|
A
director may be or become a director or officer of, or otherwise be
interested in any company promoted by the Company, or in which the Company
may be interested, as a member or otherwise and no such director shall be
accountable for any remuneration or other benefits received by him as
director or officer or from his interest in such other
company. The directors may also exercise the voting powers
conferred by the shares in any other company held or owned by the Company
in such manner in all respects as they think fit, including the exercise
thereof in favour of any resolutions appointing them, or of their number,
directors or officers of such other company, or voting or providing for
the payment of remuneration to the directors or officers of such other
company. A director may vote in favour of the exercise of such
voting rights in the manner aforesaid notwithstanding that he may be, or
be about to become, a director or officer of such other company, and as
such in any other manner is, or may be, interested in the exercise of such
voting rights in the manner
aforesaid.
|
15.8
|
No
director shall be disqualified by his office from contracting with the
Company either as a buyer, seller or otherwise, nor shall any such
contract or arrangement entered into by or on behalf of the Company in
which any director shall be in any way interested be voided, nor shall any
director so contracting or being so interested be liable to account to the
Company for any profit realised by any such contract or arrangement, by
reason of such director holding that office or by reason of the fiduciary
relationship thereby established, provided such director shall,
immediately after becoming aware of the fact that he is interested in a
transaction entered into or to be entered into by the Company, disclose
such interest to the board of directors. For the purposes of
this Article:
|
|
(a)
|
A
director of the Company is not required to make such a disclosure
if:
|
|
(i)
|
the
transaction or proposed transaction is between the director and the
Company; and
|
|
(ii)
|
the
transaction or proposed transaction is or is to be entered into in the
ordinary course of the Company's business and on usual terms and
conditions.
|
|
(b)
|
A
disclosure to the board to the effect that a director is a member,
director, officer or trustee of another named company or other person and
is to be regarded as interested in any transaction which may, after the
date of the entry or disclosure, be entered into with that company or
person, is a sufficient disclosure of interest in relation to that
transaction. Such a disclosure is not made to the board unless
it is made or brought to the attention of every director on the
board.
|
|
(c)
|
Subject
to Section 125(1) of the Act, the failure by a director to comply with
this Article does not affect the validity of a transaction entered into by
the director or the Company.
|
15.9
|
A
director of the Company who is interested in a transaction entered into or
to be entered into by the Company
may:
|
|
(a)
|
vote
on a matter relating to the
transaction;
|
|
(b)
|
attend
a meeting of directors at which a matter relating to the transaction
arises and be included among the directors present at the meeting for the
purposes of a quorum; and
|
|
(c)
|
sign
a document on behalf of the Company, or do any other thing in his capacity
as a director, that relates to the
transaction.
|
16
|
Powers
of Directors
|
16.1
|
The
business of the Company shall be managed by the directors who may pay all
expenses incurred preliminary to and in connection with the formation and
registration of the Company, and may exercise all such powers of the
Company necessary for managing and for directing and supervising, the
business and affairs of the Company as are not by the Act or by the
Memorandum or these Articles required to be exercised by the members,
subject to any delegation of such powers as may be authorised by these
Articles and permitted by the Act and to such requirements as may be
prescribed by Resolution of the Members, but no requirement made by
Resolution of the Members shall prevail if it be inconsistent with these
Articles nor shall such requirement invalidate any prior act of the
directors which would have been valid if such requirement had not been
made.
|
16.2
|
If
the number of directors shall have been fixed at two or more persons and
by reason of vacancies having occurred in the board of directors there
shall be only one continuing director, he shall be authorised to act alone
only for the purpose of appointing another
director.
|
17
|
Delegation
by the Board to Directors, Committees, Officers, Attorneys and
Agents
|
17.1
|
The
board of directors may entrust to and confer upon any director or officer
any of the powers exercisable by it upon such terms and conditions and
with such restrictions as it thinks fit, and either collaterally with, or
to the exclusion of, its own powers, and may from time to time revoke,
withdraw, alter or vary all or any of such powers. Subject to
the provisions of Section 110 of the Act, the directors may delegate any
of their powers to committees consisting of such member or members of
their body as they think fit. Any committees so formed shall in
the exercise of powers so delegated conform to any regulations that may be
imposed on it by the directors or the provisions of the
Act.
|
17.2
|
The
directors have no power to delegate the following powers to a committee of
directors:
|
|
(a)
|
to
amend the Memorandum or Articles;
|
|
(b)
|
to
designate committees of directors;
|
|
(c)
|
to
delegate powers to a committee of directors; (This and the preceding
sub-Article do not prevent a committee of directors, where authorised by
the directors, from appointing a sub-committee and delegating powers
exercisable by the committee to the
sub-committee);
|
|
(d)
|
to
appoint or remove directors;
|
|
(e)
|
to
appoint or remove an agent;
|
|
(f)
|
to
approve a plan or merger, consolidation or
arrangement;
|
|
(g)
|
to
make a declaration of solvency for the purposes of section 198(1)(a) of
the Act or approve a liquidation plan;
or
|
|
(h)
|
to
make a determination under section 57(1) of the Act that the Company will,
immediately after a proposed distribution, satisfy the solvency
test.
|
17.3
|
Where
the directors of the Company delegate their powers to a committee of
directors, they remain responsible for the exercise of that power by the
committee, unless they believed on reasonable grounds that at all times
before the exercise of the power that the committee would exercise the
power in conformity with the duties imposed on directors of the Company by
the Act.
|
17.4
|
The
directors of the Company may, by Resolution of Directors, appoint officers
of the Company at such times as shall be considered necessary or
expedient. The officers shall perform such duties as shall be
prescribed at the time of their appointment subject to any modifications
in such duties as may be prescribed by the directors
thereafter.
|
17.5
|
Any
person may hold more than one office and no officer need be a director or
member of the Company. The officers shall remain in office
until removed from office by the directors, whether or not a successor is
appointed.
|
17.6
|
Any
officer who is a body corporate may appoint any person as its duly
authorised representative for the purpose of representing it and of
transacting any of the business of the
officers.
|
17.7
|
The
directors may from time to time by power of attorney appoint any company,
firm or person or body of persons to be the attorney or attorneys of the
Company for such purposes and with such powers, authorities and
discretions (not exceeding those vested in or exercisable by the directors
under these Articles) and for such period and subject to such conditions
as the directors think fit.
|
17.8
|
The
directors may appoint any person, including a person who is a director, to
be an agent of the company. An agent of the Company has such
powers and authority of the directors, including the power and authority
to affix the common seal of the Company, as are set forth in the
Resolution of Directors appointing the agent, except that no agent has any
power or authority with respect to the
following:
|
|
(a)
|
to
amend the Memorandum or Articles;
|
|
(b)
|
to
change the registered office or registered
agent;
|
|
(c)
|
to
designate committees of directors;
|
|
(d)
|
to
delegate powers to a committee of
directors;
|
|
(e)
|
to
appoint or remove directors;
|
|
(f)
|
to
appoint or remove an agent;
|
|
(g)
|
to
fix emoluments of directors;
|
|
(h)
|
to
approve a plan of merger, consolidation or
arrangement;
|
|
(i)
|
to
make a declaration of solvency for the purposes of section 198(1)(a) of
the Act or to approve a liquidation
plan;
|
|
(j)
|
to
make a determination under section 57(1) of the Act that the Company will,
immediately after a proposed distribution, satisfy the solvency test as
stipulated in Section 56 of the Act;
or
|
|
(k)
|
to
authorise the Company to continue as a company incorporated under the laws
of a jurisdiction outside the British Virgin
Islands.
|
17.9
|
Where
the directors appoint any person to be an agent of the Company, they may
authorise the agent to appoint one or more substitutes or delegates to
exercise some or all of the powers conferred on the agent by the
Company.
|
17.10
|
The
directors may at any time remove an agent and may revoke or vary a power
conferred on him.
|
18
|
Proceedings
of Directors
|
18.1
|
The
directors may meet together for the dispatch of business, adjourn and
otherwise regulate their meetings as they think fit. The
meetings of the board of directors and any committee thereof shall be held
at such place or places (within or outside the British Virgin Islands) as
the directors shall decide.
|
18.2
|
A
director may at any time summon a meeting of the directors. A
director shall be given not less than three (3) business days' (being full
business days in the place of the director's residence) notice of a
meeting of the directors, save that a meeting of directors held on less
notice is valid if a majority of the directors entitled to vote at the
meeting have waived the notice of the meeting; and, for this purpose, the
presence of a director at the meeting shall be deemed to constitute waiver
on his part (unless he objects in writing before or at the
meeting).
|
18.3
|
The
inadvertent failure to give notice of a meeting to a director, or the fact
that a director has not received the notice shall not invalidate the
meeting.
|
18.4
|
Any
director who is a body corporate may appoint any person its duly
authorised representative for the purpose of representing it at meetings
of the directors and of transacting any of the business of the
directors.
|
18.5
|
A
meeting of the directors is duly constituted for all purposes if at the
commencement of the meeting there are present in person or by alternate
not less than one-third of the total number of directors with a minimum of
two (2).
|
18.6
|
If
within half an hour from the time appointed for the meeting a quorum is
not present, the meeting shall be
dissolved.
|
18.7
|
A
director of the Company shall be deemed to be present at a meeting of the
board if:
|
|
(a)
|
he
or his alternate participates by telephone or other electronic means;
and
|
|
(b)
|
all
directors and alternates participating in the meeting are able to hear
each other.
|
18.8
|
The
directors may elect a chairman (the "Chairman of the Board")
of their meeting and determine the period for which he is to hold
office. If no such Chairman of the Board is elected, or if at
any meeting the Chairman of the Board is not present at the time appointed
for holding the meeting, the directors present may choose one of their
number to be Chairman of the Board for the meeting. If the
directors are unable to choose a Chairman of the Board, for any reason,
then the longest serving director present at the meeting shall preside as
the Chairman of the Board.
|
18.9
|
Questions
arising at any meeting of directors shall be decided by a majority of
votes. In case of an equality in votes the Chairman of the
Board shall have a second or casting
vote.
|
18.10
|
A
resolution approved by a majority of the directors for the time being
entitled to receive notice of a meeting of the directors or of a committee
of the directors and taking the form of a Written Resolution shall be as
valid and effectual as if it had been passed at a meeting of the directors
or of such committee duly convened and held, without the need for any
notice.
|
18.11
|
If
the Company shall have only one director, the foregoing provisions for
meetings of the directors shall not apply but such sole director shall
have full power to represent and act for the Company in all matters and in
lieu of minutes of a meeting shall record in writing and sign a note of
memorandum of all matters requiring a resolution of the
directors. Such note or memorandum shall constitute sufficient
evidence of such resolution for all
purposes.
|
19
|
Indemnification
and Insurance
|
19.1
|
Subject
to the provisions of the Act and the subsequent provisions of this
Article, the Company may indemnify against all expenses, including legal
fees, and against all judgments, fines and amounts paid in settlement and
reasonably incurred in connection with legal, administrative or
investigative proceedings any person
who:
|
|
(a)
|
is
or was a party or is threatened to be made a party to any threatened,
pending or completed proceedings, whether civil, criminal, administrative
or investigative, by reason of the fact that the person is or was a
director of the
Company; or
|
|
(b)
|
is
or was, at the request of the Company, serving as a director of, or in any
other capacity is or was acting for, another company or a partnership,
joint venture, trust or other
enterprise.
|
19.2
|
This
Article applies only to a person who has acted honestly and in good faith
and in what he believed to be the best interests of the Company and, in
the case of criminal proceedings, the person had no reasonable cause to
believe that his conduct was unlawful. The Company shall not indemnify a
person who has not so acted, and any indemnity given to such a person is
void and of no effect. A director acts in the best interests of the
Company if he acts in the best interests
of:
|
|
(a)
|
the
Company’s holding company; or
|
|
(b)
|
a
shareholder or shareholders of the
Company;
|
19.3
|
The
termination of any proceedings by any judgement, order, settlement,
conviction or the entering of a nolle prosequi does
not, by itself, create a presumption that the person did not act honestly
and in good faith and with a view to the best interests of the Company or
that the person had reasonable cause to believe that his conduct was
unlawful.
|
19.4
|
Expenses,
including legal fees, incurred by a director in defending any legal,
administrative or investigative proceedings may be paid by the Company in
advance of the final disposition of such proceedings upon receipt of an
undertaking by or on behalf of the director to repay the amount if it
shall ultimately be determined that the director is not entitled to be
indemnified by the Company in accordance with this
Article.
|
19.5
|
Expenses,
including legal fees, incurred by a former director in defending any
legal, administrative or investigative proceedings may be paid by the
Company in advance of the final disposition of such proceedings upon
receipt of an undertaking by or on behalf of the former director to repay
the amount if it shall ultimately be determined that the former director
is not entitled to be indemnified by the Company in accordance with this
Article and upon such other terms and conditions, if any, as the Company
deems appropriate.
|
19.6
|
The
indemnification and advancement of expenses provided by, or granted
pursuant to, this Article is not exclusive of any other rights to which
the person seeking indemnification or advancement of expenses may be
entitled under any agreement, resolution of members, resolution of
disinterested directors or otherwise, both as to acting in the person’s
official capacity and as to acting in another capacity while serving as a
director of the Company.
|
19.7
|
The
Company may purchase and maintain insurance in relation to any person who
is or was a director of the Company, or who at the request of the Company
is or was serving as a director of, or in any other capacity is or was
acting for, another body corporate or a partnership, joint venture, trust
or other enterprise, against any liability asserted against the person and
incurred by the person in that capacity, whether or not the Company has or
would have had the power to indemnify the person against the liability
under the foregoing Article.
|
20
|
Company
Seal and Entry into Contracts and
Deeds
|
20.1
|
The
directors shall provide for the safe custody of the common seal of the
Company. The common seal when affixed to any instrument (save
for a share certificate in accordance with these Articles) shall be
witnessed by a director or officer of the Company or any other person so
authorised from time to time by the
directors.
|
20.2
|
A
contract may be entered into by the Company as
follows:
|
|
(a)
|
a
contract that, if entered into by an individual, would be required by law
to be in writing and under seal, may be entered into by or on behalf of
the Company in writing under the common seal of the Company, or executed
by or on behalf of the Company by a director or an authorised agent of the
Company, and may be varied or discharged in the same
manner;
|
|
(b)
|
a
contract that, if entered into by an individual, would be required by law
to be in writing and signed, may be entered into by or on behalf of the
Company in writing and signed by a person acting under the express or
implied authority of the company, and may be varied or discharged in the
same manner; and
|
|
(c)
|
a
contract that, if entered into by an individual, would be valid although
entered into orally, and not reduced to writing, may be entered into
orally by or on behalf of the Company by a person acting under the express
or implied authority of the Company, and may be varied or discharged in
the same manner.
|
20.3
|
Notwithstanding
the foregoing Article, an instrument is validly executed by the Company as
a deed, or an instrument under seal, if it is
either:
|
|
(a)
|
sealed
with the common seal of the Company and witnessed by a director of the
Company and/or such other person who is authorised by the Memorandum or
Articles to witness the application of the Company’s seal;
or
|
|
(b)
|
expressed
to be, or is expressed to be executed as, or otherwise makes clear on its
face that it is intended to be, a deed and it is signed by a director
and/or by a person acting under the express or implied authority of the
Company.
|
21
|
Distributions
|
21.1
|
Subject
to the provisions of the Act, the directors of a Company may, by
Resolution of Directors, authorise a distribution by the Company at a
time, and of an amount, and to any members they think fit if they are
satisfied, on reasonable grounds that, immediately after the distribution,
the value of the Company's assets will exceed the Company's liabilities
and the Company is able to pay its debts as they fall
due.
|
21.2
|
No
distribution shall be paid on those shares which are held by the Company
as treasury shares at the date of declaration of the
distribution.
|
21.3
|
The
directors may, before recommending any distribution, set aside out of the
profits of the Company such sums as they think proper as a reserve or
reserves which shall, at their discretion, either be employed in the
business of the Company or be invested in such investments as the
directors may from time to time think
fit.
|
21.4
|
If
several persons are registered as joint holders of any share, any of them
may give effectual receipt for any distribution or other monies payable on
or in respect of the share.
|
21.5
|
Notice
of any distribution that may have been declared shall be given to each
member in manner hereinafter mentioned and all distributions unclaimed for
three years after having been declared may be forfeited by the directors
for the benefit of the Company.
|
21.6
|
No
distribution shall bear interest against the
Company.
|
22
|
Company
Records
|
22.1
|
The
Company shall keep records that:
|
|
(a)
|
are
sufficient to show and explain the Company's transactions;
and
|
|
(b)
|
will,
at any time, enable the financial position of the Company to be determined
with reasonable accuracy.
|
22.2
|
The
Company shall keep the following records at the office of its registered
agent or at such other place or places, within or outside the British
Virgin Islands, as the directors may
determine:
|
|
(a)
|
minutes
of all meetings and all resolutions of members and of classes of members;
and
|
|
(b)
|
minutes
of all meetings and all resolutions of directors and committees of
directors.
|
22.3
|
The
Company shall keep a register to be known as a register of directors
containing the names and addresses of the persons who are directors of the
Company, the date on which each person whose name is entered in the
register was appointed as a director of the Company, the date on which
each person named as a director ceased to be a director of the Company,
and such other information as may be prescribed from time to time by
law.
|
22.4
|
The
Company shall maintain an accurate and complete register of members
showing the full names and addresses of all persons holding registered
shares in the Company, the number of each class and series of registered
shares held by such person, the date on which the name of each member was
entered in the register of members and where applicable, the date such
person ceased to hold any registered shares in the
Company.
|
22.5
|
The
Company shall keep the following at the office of its registered
agent:
|
|
(a)
|
the
Memorandum and Articles of the
Company;
|
|
(b)
|
the
register of members maintained in accordance with these Articles or a copy
of the register of members;
|
|
(c)
|
the
register of directors maintained in accordance with these Articles or a
copy of the register of directors;
|
|
(d)
|
copies
of all notices and other documents filed by the Company in the previous
ten years;
|
|
(e)
|
a
copy of the register of charges kept by the Company pursuant to Section
162(1) of the Act; and
|
|
(f)
|
an
imprint of the common seal.
|
22.6
|
Where
the Company keeps a copy of the register of members or the register of
directors at the office of its registered agent, it
shall:
|
|
(a)
|
within
15 days of any change in the register, notify the registered agent,
in writing, of the change; and
|
|
(b)
|
provide
the registered agent with a written record of the physical
address of the place or places at which the original register of members
or the original register of directors is
kept.
|
|
(c)
|
Where
the place at which the original register of members or the original
register of directors is changed, the Company shall provide the registered
agent with the physical address of the new location of the records within
14 days of the change of location.
|
22.7
|
The
records, documents and registers required by these Articles shall be open
to the inspection of the directors at all
times.
|
22.8
|
The
directors shall from time to time determine whether and to what extent and
at what times and places and under what conditions the records, documents
and registers of the Company or any of them shall be open to the
inspection of members not being directors, and no member (not being a
director) shall have any right to inspect any records, documents or
registers of the Company except as conferred by the Act or authorised by a
Resolution of Directors.
|
23
|
Audit
|
23.1
|
The
directors may by a Resolution of Directors call for the accounts of the
Company to be examined by an auditor or auditors to be appointed by them
at such remuneration as may from time to time be
agreed.
|
23.2
|
The
auditor may be a member of the Company but no director or officer shall be
eligible during his continuance in
office.
|
23.3
|
Every
auditor of the Company shall have a right of access at all times to the
books of accounts of the Company, and shall be entitled to require from
the officers of the Company such information and explanations as he thinks
necessary for the performance of his
duties.
|
23.4
|
The
report of the auditor shall be annexed to the accounts upon which he
reports, and the auditor shall be entitled to receive notice of, and to
attend, any meeting at which the Company's audited profit and loss account
and/or balance sheet is to be
presented.
|
24
|
Notices
|
24.1
|
Any
notice, information or written statement required to be given to members
shall be served by mail (air-mail service if available) addressed to each
member at the address shown in the share
register.
|
24.2
|
All
notices directed to be given to the members shall, with respect to any
registered shares to which persons are jointly entitled, be given to
whichever of such persons is named first in the share register, and notice
so given shall be sufficient notice to all the holders of such
shares.
|
24.3
|
Any
notice, if served by post, shall be deemed to have been served within ten
days of posting, and in proving such service it shall be sufficient to
prove that the letter containing the notice was properly addressed and
mailed with the postage prepaid.
|
25
|
Continuation
|
26
|
Winding
Up
|
26.1
|
The
Company may be voluntarily liquidated under Part XII of the Act if it has
no liabilities and it is able to pay its debts as they become
due. A liquidator may, subject to the terms of the Act, be
appointed by a Resolution of Directors or by a Resolution of
Members.
|
26.2
|
If
the Company shall be wound up, the liquidator may, in accordance with a
Resolution of Members, divide amongst the members in specie or in kind the
whole or any part of the assets of the Company (whether they shall consist
of property of the same kind or not) and may for such purpose set such
value as he deems fair upon any such property to be divided as aforesaid
and may determine how such division shall be carried out as between the
members or different classes of members. The liquidator may
vest the whole or any part of such assets in trustees upon such trust for
the benefit of the contributors as the liquidator shall think fit, but so
that no member shall be compelled to accept any shares or other securities
whereon there is any liability.
|
27
|
Business
Combination
|
27.1
|
The
following provisions 27.2 through 27.5 and Article 13.1(a) and (b) shall
terminate upon the consummation of any "Business Combination," and may not
be amended during the "Target Business Acquisition Period." A
"Business Combination" shall mean the acquisition by the Company, whether
by merger, share capital exchange, asset or share acquisition or other
similar type of transaction, of an operating business ("Target Business").
The "Target Business Acquisition Period" shall mean the period commencing
from the effectiveness of the registration statement filed in connection
with the initial public offering ("IPO") of the Company’s parent
corporation, Alyst Acquisition Corporation, a Delaware corporation
(“Alyst”) up to and including the first to occur of (a) a Business
Combination; or (b) the Termination Date (defined
below).
|
27.2
|
Prior
to the consummation of any Business Combination, the Company shall submit
such Business Combination to its shareholders for approval regardless of
whether the Business Combination is of a type which normally would require
such shareholder approval under the Act. In the event that a majority of
the IPO Shares (defined below) cast at the meeting to approve the Business
Combination are voted for the approval of such Business Combination, the
Company shall be authorized to consummate the Business Combination;
provided that the Company shall not consummate any Business Combination if
the holders of 30% or more of the IPO Shares exercise their redemption
rights described in Article 27.3
below.
|
27.3
|
In
the event that a Business Combination is approved in accordance with the
above Article 27.2 and is consummated by the Company, any shareholder of
the Company holding Ordinary Shares in the IPO ("IPO Shares") who voted
against the Business Combination may, contemporaneously with such vote,
demand that the Company redeem his IPO Shares into cash. If so demanded,
the Company shall, promptly after consummation of the Business
Combination, redeem such shares into cash at a per share redemption price
equal to the quotient determined by dividing (i) the amount in the Trust
Fund (as defined below), inclusive of any interest thereon, calculated as
of two business days prior to the consummation of the Business
Combination, by (ii) the total number of IPO Shares. "Trust Fund" shall
mean the trust account established by Alyst at the consummation of Alyst's
IPO and into which a certain amount of the net proceeds of the IPO are
deposited.
|
27.4
|
In
the event that the Company does not consummate a Business Combination by
29 June 2009 (the "Termination Date"), the officers of the Company shall
take all such action necessary to liquidate and dissolve the Company as
soon as reasonably practicable. In the event that the Company is so
wound-up and subsequently liquidated, only the holders of IPO Shares shall
be entitled to receive pro rata liquidating distributions and the Company
shall pay no liquidating distributions with respect to any other shares of
the Company.
|
27.5
|
A
holder of IPO Shares shall be entitled to receive distributions from the
Trust Fund only in the event of a liquidation of the Company or in the
event he demands redemption of his shares in accordance with Article 27.3
above. In no other circumstances shall a holder of IPO Shares have any
right or interest of any kind in or to the Trust
Fund.
|
A
|
B
|
C
|
A+B-C
|
|||||||||||||
Six months
ended June
30,
2008
|
Year ended
December 31,
2007
|
Six months
ended June
30,
2007
|
Year ended
June 30, 2008
|
|||||||||||||
Historical
|
Historical
|
Historical
|
Derived
|
|||||||||||||
Revenues
|
$ | 8,772,248 | $ | 18,987,149 | $ | 9,664,794 | $ | 18,094,603 | ||||||||
Cost
or revenue
|
3,037,439 | 4,844,541 | 1,948,853 | 5,933,127 | ||||||||||||
General
and administrative
|
1,032,904 | 1,712,931 | 818,524 | 1,927,311 | ||||||||||||
Operating
income (loss)
|
4,701,905 | 12,429,677 | 6,897,417 | 10,234,165 | ||||||||||||
Other
income
|
- | 28,802 | - | 28,802 | ||||||||||||
NET
INCOME
|
$ | 4,701,905 | $ | 12,458,479 | $ | 6,897,417 | $ | 10,262,967 |
Payment
to be issued upon closing:
|
|||
Cash
– CN Network Preferred Shareholders
|
$
|
7,000,000
|
|
980,000
shares of Alyst/CN Holdings common stock ($7.86 per share) issuable to CN
Network Preferred Shareholders, reflected at par value given the reverse
merger
|
98
|
||
1,900,000
shares of Alyst/CN Holdings common stock ($7.86 per share) issuable to CN
Network Common Shareholders, reflected at par value given the reverse
merger
|
190
|
||
Consideration
to selling stockholders on closing
|
7,000,288
|
||
Acquisition
and closing costs
|
2,902,000
|
||
Total
Purchase Price
|
9,902,288
|
||
Assumption
of Bridge Loan Indebtedness
|
27,991,000
|
||
Total Purchase
Price, including assumption of indebtedness
|
$
|
37,893,288
|
Total
|
Year
1
|
Year
2
|
Year
3
|
|||||||||||||
Cash
|
$
|
6,000,000
|
$
|
3,000,000
|
$
|
3,000,000
|
$
|
—
|
||||||||
Issuance
of shares to CN Network holders
|
70,783,000
|
22,415,000
|
24,184,000
|
24,184,000
|
||||||||||||
Amount
|
$
|
76,783,000
|
$
|
25,415,000
|
$
|
27,184,000
|
$
|
24,184,000
|
||||||||
Shares
of common stock
|
9,000,000
|
2,850,000
|
3,075,000
|
3,075,000
|
Alyst
Acquisition Corp./China Networks International Holdings
LTD.
|
China
Networks Media, LTD. (CN BVI Company)
|
Pro
Forma Adjustments - actual conversion and transaction
|
Notes
|
Pro
Forma Combined based upon actual transaction
|
||||||||||||||||||||
Assets
|
Dr | Cr | ||||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||||||
Cash
and cash equivalents
|
$ | 716,618 | $ | 12,941,200 | $ | 63,518,925 | $ | 71,777,235 |
1,
3, 4, 5,6, 7
|
$ | 5,399,508 | |||||||||||||
Cash
held in trust account, interest available for working capital and
taxes
|
251,733 | - | - | 251,733 |
1
|
|
- | |||||||||||||||||
Accounts
receivable, net
|
1,447,037 | - | - | 1,447,037 | ||||||||||||||||||||
Receivable
from television stations
|
906,531 | - | - | 906,531 | ||||||||||||||||||||
Other
receivables and prepaid expenses
|
13,807 | 749,734 | - | - | 763,541 | |||||||||||||||||||
Loan
receivable from related party
|
- | 1,311,111 | - | - | 1,311,111 | |||||||||||||||||||
Total
current assets
|
982,158 | 17,355,613 | 63,518,925 | 72,028,968 | 9,827,728 | |||||||||||||||||||
Trust
Account:
|
||||||||||||||||||||||||
Cash held in trust account,
restricted
|
63,267,192 | - | 63,267,192 |
1
|
- | |||||||||||||||||||
Property
and equipment, net
|
- | 132,988 | - | - | 132,988 | |||||||||||||||||||
Intangible
assets - Program and Contractual rights
|
- | 27,307,154 | - | - | 27,307,154 | |||||||||||||||||||
Film
library and program inventory
|
- | 2,543,579 | - | - | 2,543,579 | |||||||||||||||||||
Deferred
target acquisition and financing costs
|
896,861 | 1,146,886 | - | 896,861 |
5
|
1,146,886 | ||||||||||||||||||
Total
assets
|
$ | 65,146,211 | $ | 48,486,220 | $ | 63,518,925 | $ | 136,193,021 | $ | 40,958,335 |
Alyst
Acquisition Corp./China Networks International Holdings
LTD.
|
China
Networks Media, LTD and Subsidiaries
|
Pro
Forma Adjustments - no conversion
|
Notes
|
Pro
Forma Combined-no conversion
|
||||||||||||||||||||
Liailities
and Stockholders' Equity (Deficit)
|
Dr
|
Cr
|
||||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||||||
Accounts
payable
|
- | 598,694 | - | - | $ | 598,694 | ||||||||||||||||||
Due
to television stations
|
- | 15,210,862 | - | - | 15,210,862 | |||||||||||||||||||
Customer
deposits
|
- | 292,047 | - | - | 292,047 | |||||||||||||||||||
Accrued
and other expenses
|
741,483 | 3,261,760 | 960,000 | - |
4
|
3,043,243 | ||||||||||||||||||
Accrued
interest
|
- | 1,791,468 | 1,791,468 | |||||||||||||||||||||
Due
to related party
|
- | 503,442 | - | 503,442 | ||||||||||||||||||||
Notes
payable, net
|
- | - | - | - | - | |||||||||||||||||||
Total
current liabilities
|
741,483 | 21,658,273 | 960,000 | - | 21,439,756 | |||||||||||||||||||
Notes
payable, net
|
- | 23,231,039 | 23,231,039 | |||||||||||||||||||||
Deferred
tax liabilities
|
- | 678,374 | 678,374 | |||||||||||||||||||||
Common
stock, subject to possible conversion, 2,413,319
shares at conversion
value
|
18,980,148 | - | 18,980,148 | - |
2
|
- | ||||||||||||||||||
Total
liabilities
|
19,721,631 | 45,567,686 | 19,940,148 | - | 45,349,169 | |||||||||||||||||||
Non-Controlling
Interest
|
- | 3,492,052 | - | - | 3,492,052 | |||||||||||||||||||
Stockholders’
equity:
|
||||||||||||||||||||||||
Preferred
stock
|
- | 490 | 490 | - |
|
5
|
- | |||||||||||||||||
Common
stock
|
738 | 950 | 950 | 554 |
2,3,5,6
|
1,292 | ||||||||||||||||||
Additional
paid-in capital
|
44,246,378 | 3,951,599 | 11,168,861 | 21,425,498 |
2,3,5,6
|
58,454,614 | ||||||||||||||||||
Retained
earnings (deficit)
|
1,177,464 | (4,470,210 | ) | 1,177,464 | - |
5
|
(4,470,210 | ) | ||||||||||||||||
Treasury
stock
|
- | - | 61,812,235 | - |
2,6
|
(61,812,235 | ) | |||||||||||||||||
Accumulated
other comprehensive income
|
- | (56,347 | ) | - | - | (56,347 | ) | |||||||||||||||||
Total
stockholders’ equity
|
45,424,580 | (573,518 | ) | 74,160,000 | 21,426,052 | (7,882,886 | ) | |||||||||||||||||
Total
liabilities and stockholders’ equity
|
$ | 65,146,211 | $ | 48,486,220 | $ | 94,100,148 | $ | 21,426,052 | $ | 40,958,335 |
Note
1
|
To
reflect release of cash held in trust
|
|||||
Increase
|
Cash
and cash equivalents
|
$
|
63,518,925
|
|||
Decrease
|
Cash
held in trust account, interest available for working capital and
taxes
|
(251,733
|
)
|
|||
Decrease
|
Cash
held in trust account- restricted
|
(63,267,192
|
)
|
|||
Note
2
|
To
reinstate coversion liability upon merger consummation and record payment
to converting shareholders
|
|||||
Increase
|
Treasury
stock
|
$
|
16,850,235
|
|||
Decrease
|
Cash
|
(16,850,235
|
)
|
|||
Decrease
|
Common
stock subject to conversion
|
18,980,148
|
||||
Increase
|
Par
Value
|
(241
|
)
|
|||
Increase
|
Additional
paid-in capital (“APIC”)
|
(18,979,907
|
)
|
|||
Note
3
|
To
record additional underwriters compensation payable in 253,488 common
shares upon consummation of merger
|
|||||
Decrease
|
APIC
|
$
|
1,267,000
|
|||
Increase
|
Par
Value
|
(25
|
)
|
|||
Increase
|
APIC
|
(1,266,975
|
)
|
|||
Note
4
|
To
record contractual payment of bridge loan placement fee for CN Network on
consummation of merger
|
|||||
Decrease
|
Accrued
expenses
|
$
|
960,000
|
|||
Decrease
|
Cash
|
(960,000
|
)
|
|||
Note
5
|
To
record Purchase Price consideration to be paid on closing and
recapitalization:
|
|||||
Decrease
|
Retained
earnings
|
$
|
1,177,464
|
|||
Increase
|
APIC
|
7,000,000
|
||||
Decrease
|
Cash
|
(7,000,000
|
)
|
|||
Increase
|
Common
Stock – CN Holdings
|
(288
|
)
|
|||
Decrease
|
Common
Stock - China Networks Media
|
950
|
||||
Decrease
|
Preferred
Stock – China Networks Media
|
490
|
||||
Increase
|
APIC
|
(1,178,616
|
)
|
|||
Decrease
|
APIC
|
896,861
|
||||
Decrease
|
Deferred
fees target acquisition costs
|
(896,861
|
)
|
|||
Note
6
|
Repurchase
subsequent to merger consummation of 5,702,384 IPO common shares as agreed
upon prior to merger, and issuance of an
|
|||||
Equal
number of shares at par to China Networks original holders
|
||||||
Increase
|
Treasury
shares
|
$
|
44,962,000
|
|||
Decrease
|
Cash
|
(44,961,430
|
)
|
|||
Increase
|
Par
value
|
(570
|
)
|
|||
Note
7
|
To
record estimated contractual additional deal costs to be incurred in
the period from November 1, 2008 to the merger closing
date
|
|||||
Decrease
|
APIC
|
2,005,000
|
||||
Decrease
|
Cash
|
(2,005,000
|
)
|
|||
(a)
|
These
estimated additional deal costs include legal and accounting - $1,000,000;
investment banking fees - $880,000; and printing and other -
$125,000.
|
Alyst
Acquisition Corp./China Networks International Holdings
LTD.
|
China
Networks Media, LTD. (CN BVI Company)
|
China
Networks Media, LTD. (Carve-Out)
|
Pro
Forma Adjustments - no conversion
|
Notes
|
Pro
Forma Combined-no conversion
|
|||||||||||||||||||||||
Dr
|
Cr
|
|||||||||||||||||||||||||||
Revenue,
net
|
$ | - | $ | 9,306,695 | $ | 4,890,942 | $ | - | $ | - | $ | 14,197,637 | ||||||||||||||||
Cost
or revenue
|
- | 1,916,096 | 1,060,955 | - | - | 2,977,051 | ||||||||||||||||||||||
General
and administrative - including transation costs
|
537,452 | 4,434,304 | 1,435,412 | - | 14,281 |
F
|
6,392,887 | |||||||||||||||||||||
Operating
income (loss)
|
(537,452 | ) | 2,956,295 | 2,394,575 | - | (14,281 | ) | 4,827,699 | ||||||||||||||||||||
Other
income (expense):
|
||||||||||||||||||||||||||||
Interest income - | 567,272 | 146,767 | - | 567,272 | - |
|
C
|
146,767 | ||||||||||||||||||||
Interest
(expense)
|
(4,728,620 | ) | - | - | - | (4,728,620 | ) | |||||||||||||||||||||
Other
|
- | (34,966 | ) | - | - | - | (34,966 | ) | ||||||||||||||||||||
Total
other income (expense), net
|
567,272 | (4,616,819 | ) | - | (567,272 | ) | - | (4,616,819 | ) | |||||||||||||||||||
Income
(loss) before noncontrolling interest
|
29,820 | (1,660,524 | ) | 2,394,575 | (567,272 | ) | (14,281 | ) | 210,880 | |||||||||||||||||||
Non-controlling
interest
|
- | (2,543,555 | ) | (1,197,288 | ) | - | 387,517 |
G
|
(3,353,326 | ) | ||||||||||||||||||
Net
income (loss) before income taxes
|
29,820 | (4,204,079 | ) | 1,197,287 | (567,272 | ) | (401,798 | ) | (3,142,446 | ) | ||||||||||||||||||
Benefit
(provision) for income taxes
|
(38,848 | ) | (1,466,841 | ) | - | 599,000 | 38,848 |
B,F
|
(2,065,841 | ) | ||||||||||||||||||
Total
income tax benefit (expense)
|
||||||||||||||||||||||||||||
NET
INCOME (LOSS)
|
$ | (9,028 | ) | $ | (5,670,920 | ) | $ | 1,197,287 | $ | (1,166,272 | ) | $ | 440,646 | $ | (5,208,287 | ) | ||||||||||||
Pro
forma weighted average common shares outstanding:
|
||||||||||||||||||||||||||||
Basic
|
7,381,081 | 2,146,156 | 7,692,963 |
2,
H
|
12,927,888 | |||||||||||||||||||||||
Diluted
|
7,381,081 | 2,146,156 | 11,135,228 |
H
|
16,370,153 | |||||||||||||||||||||||
Pro
forma income per common share:
|
||||||||||||||||||||||||||||
Basic
|
$ | (0.40 | ) | |||||||||||||||||||||||||
Diluted
|
$ | (0.32 | ) | |||||||||||||||||||||||||
Pro
forma book value per common share
|
$ | 0.16 |
Alyst
Acquisition Corp.
|
China
Networks Media, LTD. (CN BVI Company)
|
China
Networks Media, LTD. (Carve-Out)
|
Pro
Forma Adjustments - no conversion
|
Notes
|
Pro
Forma Combined-no conversion
|
|||||||||||||||||||||||
Dr
|
Cr
|
|||||||||||||||||||||||||||
Revenues,
net
|
$ | - | $ | - | $ | 18,094,603 | $ | - | $ | - | $ | 18,094,603 | ||||||||||||||||
Cost
or revenue
|
5,933,127 | 896,000 | - |
A
|
6,829,127 | |||||||||||||||||||||||
General
and administrative and amortization
|
319,003 | 128,152 | 1,927,311 | - | 52,175 |
F
|
2,322,291 | |||||||||||||||||||||
Operating
income (loss)
|
(319,003 | ) | (128,152 | ) | 10,234,165 | (896,000 | ) | (52,175 | ) | 8,943,185 | ||||||||||||||||||
Other
income (expense):
|
||||||||||||||||||||||||||||
Interest
income
|
2,426,933 | - | - | 2,426,933 | - |
C
|
- | |||||||||||||||||||||
Interest
(expense)
|
- | - | - | 3,535,000 | - |
|
C
|
(3,535,000 | ) | |||||||||||||||||||
Other
|
- | - | 28,802 | - | - | 28,802 | ||||||||||||||||||||||
Total
other income (expense), net
|
2,426,933 | - | 28,802 | (5,961,933 | ) | - | (3,506,198 | ) | ||||||||||||||||||||
Income
(loss) before non-controlling interest
|
2,107,930 | (128,152 | ) | 10,262,967 | (6,857,933 | ) | (52,175 | ) | 5,436,987 | |||||||||||||||||||
Non-controlling
interest
|
- | - | - | 3,848,000 | - |
D
|
(3,848,000 | ) | ||||||||||||||||||||
Net
income (loss) before income taxes
|
2,107,930 | (128,152 | ) | 10,262,967 | (3,009,933 | ) | (52,175 | ) | 1,588,987 | |||||||||||||||||||
Benefit
(provision) for income taxes
|
(951,394 | ) | - | - | 2,566,000 | 951,394 |
F
|
(2,566,000 | ) | |||||||||||||||||||
NET
INCOME (LOSS)
|
$ | 1,156,536 | $ | (128,152 | ) | $ | 10,262,967 | $ | (443,933 | ) | $ | 899,219 | $ | (977,013 | ) | |||||||||||||
Pro
forma weighted average common shares outstanding:
|
||||||||||||||||||||||||||||
Basic
|
7,381,081 | 2,146,156 | 7,692,963 |
2,
H
|
12,927,888 | |||||||||||||||||||||||
Diluted
|
7,381,081 | 2,146,156 | 11,007,297 |
2,
H
|
16,242,222 | |||||||||||||||||||||||
Pro
forma income per common share:
|
||||||||||||||||||||||||||||
Basic
|
$ | (0.08 | ) | |||||||||||||||||||||||||
Diluted
|
$ | (0.06 | ) |
Nine months ended
March
31, 2009
|
Year ended
June 30, 2008
|
|||||||||
Note
A
|
To
record amortization – program and contract rights
|
|||||||||
Expense
|
General
and administrative and amortization
|
$
|
0
|
$
|
896,000
|
|||||
Note
B
|
To
record estimated PRC income tax provision on carve-outs
|
|||||||||
Expense
|
Income
tax expense
|
$
|
599,000
|
$
|
2,566,000
|
|||||
Note
C
|
To
adjust interest income for impact on application towards
merger
|
|||||||||
Expense
|
Interest
income
|
$
|
*567,272
|
$
|
**2,426,933
|
|||||
Expense
|
Interest
expense and loan cost amort
|
***3,535,000
|
Nine
months ended
March
31, 2009
|
Year
ended
June
30, 2008
|
||||||||||||
*
|
Reduction
of interest income on trust account for the period per Alyst historical
financial statements
|
||||||||||||
Interest
income on trust account for the period per Alyst historical financial
statements
|
$
|
567,272
|
$
|
2,426,933
|
|||||||||
Cash
assumed to be expended on Business Combination -
|
|||||||||||||
Contractual
payment to sellers - assumed at beginning of period
|
$
|
7,000,000
|
|||||||||||
Redemption
of converting shares
|
16,878,978
|
||||||||||||
Repurchase
of NVBO shares
|
44,962,000
|
||||||||||||
Bridge
Loan Payment - fees on closing
|
960,000
|
||||||||||||
Closing
costs and fees
|
2,005,000
|
||||||||||||
$
|
71,805,978
|
||||||||||||
Approximate
trust account balance
|
$
|
63,267,000
|
|||||||||||
%
of total trust account allocated to Business Combination
|
100
|
%
|
|||||||||||
Estimated
reduction to interest income resulting from payment of purchase
price
|
$
|
567,272
|
$
|
2,426,933
|
**
|
Assumed
interest expense and loan costs, if Bridge Loan was consummated at
beginning of earliest period, July 1, 2007
|
||||||||||||||||
Nine
months ended
March
31, 2009
|
Year
ended
June
30, 2008
|
||||||||||||||||
Interest
rate
|
10
|
%
|
|||||||||||||||
Loan
|
$
|
27,990,200
|
|||||||||||||||
Per
annum interest (including estimate of accretion of debt
discount)
|
2,799,000
|
||||||||||||||||
Debt
Issuance costs assuming closing of Business Combination
|
$
|
2,613,765
|
|||||||||||||||
Amount
allocated to preferred shares and charged to Additional paid-in
capital
|
(406,902
|
)
|
|||||||||||||||
Deferred
loan costs to be amortized to expense
|
$
|
2,206,863
|
|||||||||||||||
Contractual
life of loan in years
|
3
|
||||||||||||||||
Annual
estimated amortization
|
736,000
|
||||||||||||||||
Interest
expense and financing cost
|
(a)
|
$
|
3,535,000
|
||||||||||||||
(a)
No adjustment required - actual amounts included in historical results of
operations.
|
|||||||||||||||||
Note
D
|
To
reflect Non Controlling interest expense associated
with carved out entities on earnings of merger
|
Expense
|
Non
controlling interest expense
|
$
|
$
|
3,848,000
|
Note
D - details of calculation:
|
|||||||||||||||||
***
|
Calculation
of Non controlling interest expense
|
||||||||||||||||
China Networks
Media, LTD (Carve out) Operating income before non controlling
interest expense
|
$
|
10,262,967
|
|||||||||||||||
Less:
PRC Enterprise income tax expense at 25%
|
(2,566,000
|
)
|
|||||||||||||||
Net
income pre non controlling interest
|
$
|
7,696,967
|
|||||||||||||||
Non
controlling interest associated with joint ventures at 50%
|
(a)
|
$
|
3,848,000
|
||||||||||||||
(a)
No adjustment required - actual amounts included in historical results of
operations.
|
Note
E
|
Not
used
|
|||||||||
Note
F
|
To
eliminate income tax provision assuming status BVI entity
|
|||||||||
Income
|
General
and Administrative
|
$
|
(14,281
|
)
|
$
|
(52,175
|
)
|
|||
Income
|
Income
Tax Provision
|
$
|
(38,848
|
)
|
$
|
(951,394
|
)
|
A
|
B
|
C
|
A+B+C=D
|
E
|
||||||||||||||||
China
Networks Media LTD. (CN BVI Company and non-joint venture
entities)
|
CN
Joint Ventures (Ad Cos. and Tech Cos.) Actual results 9 mos ended
3.31.09
|
Trustee
company Actual results 9 mos ended 3.31.09
|
Consolidated
China Networks Media, LTD. 9 mos ended 3.31.09
|
Carve-out
results of Kunming and Yellow River TV Stations Advertising Centers 7.1.08
– 12.31.08
|
||||||||||||||||
Income
(loss) before non-controlling interest
|
$
|
(5,786,866
|
)
|
$
|
4,312,075
|
$
|
(185,733
|
)
|
$
|
(1,660,524
|
)
|
$
|
2,394,575
|
|||||||
Percentage
of Non-Controlling interest
|
0
|
%
|
50
|
%
|
0
|
%
|
50
|
%
|
||||||||||||
Non-controlling
interest – proforma basis
|
$
|
0
|
$
|
(2,156,038
|
)
|
$
|
0
|
$
|
(2,156,038
|
)
|
$
|
(1,197,288
|
)
|
|||||||
Non-controlling
interest – historical basis
|
$
|
0
|
$
|
(2,543,555
|
)
|
$
|
0
|
$
|
(2,543,555
|
)
|
$
|
(1,197,288
|
)
|
|||||||
Note
G – Proforma reduction of non-controlling interest
|
$
|
387,517
|
$
|
0
|
$
|
387,517
|
$
|
0
|
Without Contingent Consideration
|
With Contingent Consideration
|
|||||||||||||||
Basic
|
Diluted
|
Basic
|
Diluted
|
|||||||||||||
Shares
outstanding, June 30, 2008
|
9,794,400
|
9,794,400
|
9,794,400
|
9,794,400
|
||||||||||||
Less:conversion
actual conversion shares
|
(2,146,156
|
)
|
(2,146,156
|
)
|
(2,146,156
|
)
|
(2,146,156
|
)
|
||||||||
Add:
shares issuable to CN Media interests
|
2,146,156
|
2,146,156
|
2,146,156
|
2,146,156
|
||||||||||||
Shares
issued – underwriter’s deferred compensation
|
253,488
|
253,488
|
253,488
|
253,488
|
||||||||||||
Shares
issued - merger consideration on closing
|
2,880,000
|
2,880,000
|
2,880,000
|
2,880,000
|
||||||||||||
Fully
diluted - before contingent consideration
|
12,927,888
|
12,927,888
|
12,927,888
|
12,927,888
|
||||||||||||
Dilutive
shares issuable based upon the application of the treasury stock method
with respect to dilutive Alyst warrants outstanding
|
3,314,334
|
3,314,334
|
||||||||||||||
Shares
issued - purchase price - contingent consideration
|
9,000,000
|
9,000,000
|
||||||||||||||
Assuming
no conversion
|
12,927,888
|
16,242,222
|
21,927,888
|
25,242,222
|
||||||||||||
Note
Reference
|
H
|
H
|
||||||||||||||
Without Contingent Consideration
|
With Contingent Consideration
|
|||||||||||||||
Basic
|
Diluted
|
Basic
|
Diluted
|
|||||||||||||
Shares
outstanding, June 30, 2008
|
9,794,400
|
9,794,400
|
9,794,400
|
9,794,400
|
||||||||||||
Less:conversion
actual conversion shares
|
(2,146,156
|
)
|
(2,146,156
|
)
|
(2,146,156
|
)
|
(2,146,156
|
)
|
||||||||
Add:
shares issuable to CN Media interests
|
2,146,156
|
2,146,156
|
2,146,156
|
2,146,156
|
||||||||||||
Shares
issued – underwriter’s deferred compensation
|
253,488
|
253,488
|
253,488
|
253,488
|
||||||||||||
Shares
issued - merger consideration on closing
|
2,880,000
|
2,880,000
|
2,880,000
|
2,880,000
|
||||||||||||
Fully
diluted - before contingent consideration
|
12,927,888
|
12,927,888
|
12,927,888
|
12,927,888
|
||||||||||||
Dilutive
shares issuable based upon the application of the treasury stock method
with respect to dilutive Alyst warrants outstanding
|
3,442,265
|
3,442,265
|
||||||||||||||
Shares
issued - purchase price - contingent consideration
|
9,000,000
|
9,000,000
|
||||||||||||||
Assuming
no conversion
|
12,927,888
|
16,370,153
|
21,927,888
|
25,370,153
|
||||||||||||
Note
Reference
|
H
|
H
|
||||||||||||||