UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED
PURSUANT TO § 240.13d-1(a) AND AMENDMENTS
THERETO FILED PURSUANT TO 240.13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. )*
iSoftStone Holdings Limited
(Name of Issuer)
Ordinary Shares, par value $0.0001 per share
(Title of Class of Securities)
46489B1081
(CUSIP Number)
Mr. Tianwen Liu
Building 16, Dong Qu, 10 Xibeiwang Dong Lu,
Haidian District, Beijing 100193, China
Telephone: +86 10 5874 9000
With a copy to:
Ling Huang, Esq.
Cleary Gottlieb Steen & Hamilton LLP
Twin Towers West (23Fl)
12B Jianguomenwai Avenue
Chaoyang District, Beijing 100022
Peoples Republic of China
Telephone: +86 10 5920 1000
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
July 24, 2013
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
1 | This CUSIP number applies to the Issuers American Depositary Shares, each representing ten Ordinary Shares, par value $0.0001 per share. |
* | The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. 46489B108 | Page 2 of 8 Pages |
1. |
Names of reporting persons
Tianwen Liu | |||||
2. | Check the appropriate box if a member of a group (a) ¨ (b) x
| |||||
3. | SEC use only
| |||||
4. | Source of funds
OO See Item 3 | |||||
5. | Check box if disclosure of legal proceedings is required pursuant to Item 2(e) or 2(f) ¨
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6. | Citizenship or place of organization
Peoples Republic of China | |||||
Number of shares beneficially owned by each reporting person with
|
7. | Sole voting power
0 | ||||
8. | Shared voting power
69,718,450 (See Items 2, 4 and 5)(1)(2) | |||||
9. | Sole dispositive power
0 | |||||
10. | Shared dispositive power
69,718,450 (See Items 2, 4 and 5)(1)(2) | |||||
11. |
Aggregate amount beneficially owned by each reporting person
69,718,450 (1)(2) | |||||
12. | Check box if the aggregate amount in Row (11) excludes certain shares x
| |||||
13. | Percent of class represented by amount in Row (11)
11.93%(3) | |||||
14. | Type of reporting person
IN |
(1) | The Ordinary Shares (as defined below) held directly or indirectly by Mr. Tianwen Liu comprise (i) Ordinary Shares, including Ordinary Shares represented by the ADSs (as defined below), (ii) Ordinary Shares issuable within 60 days after the date hereof upon exercise of certain options of the Issuer (as defined below), and (iii) Ordinary Shares issuable within 60 days after the date hereof pursuant to the terms of certain restricted share units of the Issuer. See Item 5. |
(2) | Mr. Tianwen Liu may also be deemed to beneficially own 36,731,389 Ordinary Shares of the Issuer beneficially owned by the Everbright Entities (as defined below) by reason of the Consortium Agreement, the Proposal Letter and the Framework Agreement (as defined below), which are excluded from the above share amounts and percentages. See Items 2, 4 and 6. |
(3) | Based on a total of 584,489,495 Ordinary Shares, including (i) 568,462,392 Ordinary Shares outstanding as of March 31, 2013 based on the Issuers Annual Report on Form 20-F filed with the SEC (as defined below) on April 24, 2013, (ii) 15,980,833 Ordinary Shares issuable within 60 days after the date hereof upon exercise of certain options of the Issuer held by Mr. Tianwen Liu, and (iii) 46,270 Ordinary Shares issuable within 60 days after the date hereof pursuant to the terms of certain restricted share units of the Issuer held by Mr. Tianwen Liu. |
Page 2 of 8
This Schedule 13D represents the initial statement on Schedule 13D filed by Tianwen Liu (Mr. Liu or the Reporting Person) with respect to iSoftStone Holdings Limited (the Company or the Issuer) with the United States Securities and Exchange Commission (the SEC).
ITEM 1. | SECURITIES AND ISSUER |
This Schedule 13D relates to the ordinary shares, par value $0.0001 per share (the Ordinary Shares), of the Issuer. The address of the Issuers principal executive office is Building 16, Dong Qu, 10 Xibeiwang Dong Lu, Haidian District, Beijing 100193, The Peoples Republic of China.
ITEM 2. | IDENTITY AND BACKGROUND |
(a) (c) and (f) | Mr. Liu is the chairman of the board of directors and the chief executive officer of the Issuer. He is a citizen of the Peoples Republic of China and his principal occupation is the chairman of the board of directors and chief executive officer of the Issuer. Mr. Liu holds certain Ordinary Shares indirectly through Tekventure Limited and Colossal Win Limited, each of which is a British Virgin Islands company. Mr. Liu owns 84.5% of the outstanding shares of Tekventure Limited, with the remaining shares owned by certain management members of the Company, and Colossal Win Limited is wholly owned by Mr. Liu. Mr. Liu is the sole director of each of Tekventure Limited and Colossal Win Limited. See Item 5. |
The business address of the Reporting Person is Building 16, Dong Qu, 10 Xibeiwang Dong Lu, Haidian District, Beijing 100193, The Peoples Republic of China.
The principal business of each of Tekventure Limited and Colossal Win Limited is making investments in public and private companies. The address of the principal office of Tekventure Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. The address of the principal office of Colossal Win Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.
As further described in Item 4 below, the Reporting Person may be deemed to (i) be a group, within the meaning of Rule 13d-5(b) promulgated by the SEC under Section 13 of the Securities Exchange Act of 1934, as amended (the Act), with CSOF Technology Investments Limited, Accurate Global Limited and Advanced Orient Limited, each a company incorporated under the laws of the British Virgin Islands and controlled by China Everbright Limited (collectively, the Everbright Entities), which collectively directly hold 36,731,389 Ordinary Shares of the Issuer, for purposes of Section 13(d) of the Act as a result of the Consortium Agreement, the Proposal Letter and the Framework Agreement; and (ii) beneficially own the 36,731,389 Ordinary Shares held by the Everbright Entities. However, the Reporting Person expressly disclaims beneficial ownership of any Ordinary Shares held by the Everbright Entities, and does not affirm membership in a group (within the meaning of Rule 13d-5(b) of the Act) with the Everbright Entities, and this Schedule 13D shall not be construed as acknowledging that the Reporting Person beneficially owns any Ordinary Shares held by the Everbright Entities or any other person or is a member of a group with the Everbright Entities. The Reporting Person is only responsible for the information contained in this Schedule 13D and assumes no responsibility for information contained in any other Schedules 13D filed by the Everbright Entities.
(d) (e) | During the five years preceding the date of this filing, the Reporting Person has not been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. |
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ITEM 3 | SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION |
The information set forth in or incorporated by reference in Items 4 and 5 of this statement is incorporated by reference in its entirety into this Item 3.
No Ordinary Shares were purchased by the Reporting Person in connection with the Transaction (as defined below) giving rise to the filing of this Schedule 13D and thus no funds were used by the Reporting Person for such purpose.
ITEM 4 | PURPOSE OF TRANSACTION |
The Ordinary Shares currently owned by the Reporting Person were originally acquired for investment purposes.
On June 6, 2013, Mr. Liu and ChinaAMC Capital Management Limited, a company incorporated under the laws of the Cayman Islands (the Sponsor), entered into a consortium agreement (the Consortium Agreement), a copy of which is attached hereto as Exhibit 7.01. Under the Consortium Agreement, each of the Consortium members agreed, among other things, to form a consortium (the Consortium) to (i) jointly deliver a non-binding proposal (the Proposal Letter) to the Issuers board of directors providing for the acquisition of all the Ordinary Shares, including the Ordinary Shares represented by American Depositary Shares (the ADSs), not beneficially owned by the Consortium (the Transaction), (ii) deal exclusively with each other with respect to the Transaction for 12 months after the date thereof (subject to certain exceptions set forth therein), (iii) conduct a joint assessment of the Issuer as promptly as reasonably practicable and share all information reasonably necessary to evaluate the Issuer, (iv) use its reasonable best efforts to work together to structure, negotiate and do all things necessary or desirable, subject to the Issuers approval, to enter into the definitive agreements in respect of the Transaction, (v) incorporate a new company (Parent) and cause Parent to incorporate a wholly-owned subsidiary of Parent under the laws of the Cayman Islands to be merged with and into the Issuer upon consummation of the Transaction, (vi) contribute, or cause to be contributed, to Parent all the Ordinary Shares beneficially owned by such Consortium member or its respective affiliates, or have all the Ordinary Shares beneficially owned by such Consortium member or its respective affiliates cancelled in connection with the Transaction, and (vii) allocate certain costs and expenses related to the Transaction. In addition, the members of the Consortium agreed, among other things, not to (1) make a competing proposal for the acquisition of the Issuer, or (2) acquire or dispose of any Ordinary Shares of the Issuer.
Pursuant to the Consortium Agreement, on June 6, 2013, the Sponsor and Mr. Liu submitted the non-binding Proposal Letter to the Issuers board of directors, a copy of which is attached hereto as Exhibit 7.02. In the Proposal Letter, the Consortium proposed to acquire (the Acquisition), through an acquisition vehicle to be established by the Consortium, all of the Ordinary Shares and ADSs not already owned by Mr. Liu, his affiliates or certain shareholders that may choose to roll over their Ordinary Shares for cash consideration equal to US$0.585 per Ordinary Share or US$5.85 per ADS, to be funded by a combination of debt and equity capital. The Consortium also stated in the Proposal Letter that they are interested only in acquiring the Ordinary Shares not already owned by Mr. Liu, his affiliates or certain shareholders that may choose to roll over their Ordinary Shares, and that Mr. Liu and his affiliates do not intend to sell their equity in the Issuer to a third party. The Consortium will be in a position to commence the due diligence for the Transaction immediately upon receiving access to the relevant materials. The Proposal Letter constitutes only a preliminary indication of the Consortiums interest, and does not constitute any binding commitment with respect to an Acquisition.
Page 4 of 8
On July 5, 2013, the Sponsor informed Mr. Liu that the Everbright Entities had also expressed an interest in pursuing the Transaction together with the Sponsor, and Mr. Liu consented, pursuant to the terms of the Consortium Agreement, to the Sponsor proceeding together with the Everbright Entities to pursue the Transaction. On July 24, 2013, the Sponsor informed Mr. Liu that the Sponsor and the Everbright Entities had entered into a framework agreement dated as of July 24, 2013 (the Framework Agreement) pursuant to which the Sponsor and the Everbright Entities agreed, among other things, that the Everbright Entities would (i) participate in the Transaction together with the Sponsor, provided that (x) the Everbright Entities acknowledged and agreed that Mr. Liu and the Sponsor shall take the lead in evaluating, structuring and negotiating the Transaction and the terms of the definitive agreements with respect to the Transaction and (y) the Sponsor agreed that the terms of the definitive agreements with respect to the Transaction shall be approved by each of the Sponsor, Mr. Liu and the Everbright Entities; (ii) subject to Everbright Entitiess agreement to the terms of the definitive agreements of the Transaction, transfer, contribute, or cause to be transferred or contributed, to Parent all the Ordinary Shares beneficially owned by the Everbright Entities or their respective affiliates in exchange for equity of Parent, or have all the Ordinary Shares beneficially owned by the Everbright Entities or their respective affiliates cancelled for nil consideration and subscribe, or cause its affiliates to subscribe, for equity of Parent; and (iii) deal exclusively with the Consortium with respect to the Transaction for a period beginning on the date thereof and ending on the earlier of (x) the expiry of the exclusivity period in the Consortium Agreement, and (y) the date that is 12 months thereafter (subject to certain exceptions set forth therein). Under the Framework Agreement, the Sponsor also agreed, subject to the applicable confidentiality agreements with the Company, to share with the Everbright Entities (i) the information reasonably necessary for the Everbright Entities to evaluate their participation in the Transaction, (ii) any material development of the negotiation with the Company in respect of the Transaction and (iii) the drafts of the definitive agreements with respect to the Transaction. Although the Reporting Person is not a party to the Framework Agreement and the Everbright Entities are not parties to the Consortium Agreement, the Reporting Person may be deemed to constitute a group within the meaning of Rule 13d-5(b) under the Act by reason of the Consortium Agreement, the Proposal Letter, the Framework Agreement and the Reporting Persons consent to the Everbright Entities participating in the Transaction together with the Sponsor, and as a result the Reporting Person may be deemed to beneficially own the 36,731,389 Ordinary Shares beneficially owned by the Everbright Entities. The Reporting Person expressly disclaims beneficial ownership of any Ordinary Shares beneficially owned by the Everbright Entities, and does not affirm membership in a group (within the meaning of Rule 13d-5(b) under the Act) with the Everbright Entities, and this Schedule 13D shall not be construed as acknowledging that the Reporting Person beneficially owns any Ordinary Shares directly or indirectly held by the Everbright Entities or is a member of a group with the Everbright Entities.
If the Transaction is completed, the Issuers ADSs would become eligible for termination of registration pursuant to Section 12(g)(4) of the Act and would be delisted from the New York Stock Exchange.
The descriptions of the Consortium Agreement, the Proposal Letter and the Framework Agreement set forth above in this Item 4 do not purport to be complete and are qualified in their entirety by reference to the full text of the Consortium Agreement, the Proposal Letter and the Framework Agreement, which have been filed as Exhibits 7.01 through 7.03, respectively, and are incorporated herein by this reference.
None of the Issuer, the Reporting Person or the Sponsor is obligated to complete the transactions described herein, and a binding commitment with respect to the Transaction will result only from the execution of definitive documents, and then will be on the terms provided in such documentation.
Except as indicated above, the Reporting Person currently has no plan or proposal that relates to or would result in any matters listed in Items 4(a)-(j) of Schedule 13D. The Reporting Person reserves his right to change his plan and intention in connection with any of the actions discussed in this item 4, including, among others, the purchase price and the financing arrangement for the transactions contemplated under the Proposal Letter. Any action taken by the Reporting Person may be effected at any time and from time to time, subject to any applicable limitations imposed by any applicable laws.
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ITEM 5 | INTEREST IN SECURITIES OF THE ISSUER |
The information contained on the cover pages of this Schedule 13D and the information set forth or incorporated in Items 2, 3, 4, and 6 are hereby incorporated herein by reference.
(a) (b) | As of the date hereof, Mr. Liu beneficially owns 69,718,450 Ordinary Shares, comprising (i) 2,733,450 Ordinary Shares, including 2,245,833 Ordinary Shares issuable within 60 days after the date hereof upon exercise of certain options and 46,270 Ordinary Shares issuable within 60 days after the date hereof pursuant to the terms of certain restricted share units of the Issuer, directly held by Mr. Liu, (ii) 53,250,000 Ordinary Shares held by Tekventure Limited, and (iii) 13,735,000 Ordinary Shares issuable upon exercise of options within 60 days of the date hereof held by Colossal Win Limited, which Ordinary Shares in (i), (ii) and (iii) collectively represent 11.93% of the outstanding Ordinary Shares. Mr. Liu holds 84.5% of the outstanding shares of Tekventure Limited, wholly owns Colossal Win Limited, and is the sole director of each Tekventure Limited and Colossal Win Limited. Mr. Liu has voting and dispositive power over these Ordinary Shares. In addition, Mr. Liu directly holds certain unvested options and restricted share units, representing 6,024,167 underlying Ordinary Shares that are issuable more than 60 days after the date hereof. |
The above disclosure of percentage information is based on a total of 584,489,495 Ordinary Shares, including (i) 568,462,392 Ordinary Shares outstanding as of March 31, 2013 based on the Issuers Annual Report on Form 20-F filed with the SEC (as defined below) on April 24, 2013, (ii) 15,980,833 Ordinary Shares issuable within 60 days after the date hereof upon exercise of certain options of the Issuer held by the Reporting Person, and (iii) 46,270 Ordinary Shares issuable within 60 days after the date hereof pursuant to the terms of certain restricted share units of the Issuer held by the Reporting Person.
(c) | On June 3, 2013, the Company issued 46,270 Ordinary Shares to Mr. Liu pursuant to the terms of the outstanding restricted share units of the Issuer held by him, of which 12,100 Ordinary Shares were sold by the Company in the public market at a price of US$0.48485 per Ordinary Share, for the purposes of paying the withholding income taxes and applicable fees payable by Mr. Liu, consistent with the past practice of the Company. |
Except as described above in this Item 5(c), the Reporting Person has not effected any transactions in the Ordinary Shares of the Issuer during the 60 days preceding the filing of this Schedule 13D.
(d) (e) | Not applicable. |
ITEM 6. | CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPSWITH RESPECT TO SECURITIES OF THE ISSUER. |
The information regarding the Consortium Agreement, the Proposal Letter and the Framework Agreement under Item 4 and 5 is incorporated herein by reference in their entirety.
On May 10, 2013, Mr. Liu and the Company entered into a Stock Option Agreement ( Option Agreement) under the Company 2010 Performance Incentive Plan, pursuant to which Mr. Liu was granted options representing an aggregate of 2,200,000 Ordinary Shares, with an exercise price at US$0.423 per Ordinary Share. The options representing 550,000 Ordinary Shares shall become vested on May 10, 2014 and the remaining options representing 1,650,000 Ordinary Shares shall become vested in 36 substantially equal monthly installments, with the first installment vesting on the last day of June 2014. The vesting schedule requires continued employment or service of Mr. Liu through each applicable vesting date as a condition to the vesting. The options, if not exercised, will expire on May 9, 2023.
The description of the Option Agreement set forth above in this Item 6 does not purport to be complete and is qualified in its entirety by reference to the full text of the Option Agreement, which has been filed as Exhibits 7.04, and is incorporated herein by this reference.
Page 6 of 8
To the best knowledge of the Reporting Person, except as disclosed herein, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Person and any other person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities, finders fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies, or a pledge or contingency, the occurrence of which would give another person voting power or investment power over the securities of the Issuer.
ITEM 7. | MATERIAL TO BE FILED AS EXHIBITS. |
Exhibit 7.01: | Consortium Agreement by and between Mr. Liu and ChinaAMC Capital Management Limited, dated as of June 6, 2013. |
Exhibit 7.02: | Proposal Letter from Mr. Liu and ChinaAMC Capital Management Limited to the board of directors of the Issuer, dated as of June 6, 2013. |
Exhibit 7.03: | Framework Agreement by and among ChinaAMC Capital Management Limited, CSOF Technology Investments Limited, Accurate Global Limited and Advanced Orient Limited, dated as of July 24, 2013. |
Exhibit 7.04: | Stock Option Agreement by and between the Company and Mr. Liu, dated as of May 10, 2013. |
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.
Dated: July 26, 2013 | ||
Tianwen Liu | ||
By: | /s/ Tianwen Liu |
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Exhibit 7.01
Execution Version
CONSORTIUM AGREEMENT
THIS CONSORTIUM AGREEMENT (this Agreement) is dated as of June 6, 2013 and is entered into by and among Mr. Tianwen Liu (the Founder) and ChinaAMC Capital Management Limited, a company incorporated under the laws of the Cayman Islands (the Sponsor, together with the Founder and any additional members that may be admitted to the Consortium (as defined below) pursuant to Section 4(b) of this Agreement, the Consortium Members and each, a Consortium Member).
RECITALS
WHEREAS, the Consortium Members propose to form a consortium (the Consortium) to undertake a transaction (the Transaction) to acquire iSoftStone Holdings Limited (the Company), a company incorporated under the laws of the Cayman Islands and listed on the New York Stock Exchange (NYSE), which would result in a delisting of the Company from NYSE and deregistering the Company under the United States Securities Act of 1934, as amended (the Exchange Act);
WHEREAS, (a) in connection with the Transaction, the Consortium Members propose to form a new company (Parent) under the laws of a jurisdiction to be selected by the Consortium Members, and to cause Parent to form a direct, wholly-owned subsidiary (Merger Sub) under the laws of the Cayman Islands, and (b) at the closing of the Transaction, the Consortium Members intend that Merger Sub will be merged with and into the Company, with the Company being the surviving company and becoming a direct, wholly-owned subsidiary of Parent;
WHEREAS, on the date hereof, the Consortium Members will submit a non-binding proposal, a copy of which is attached hereto as Schedule I (the Proposal Letter), to the board of directors of the Company (the Company Board) in connection with the Transaction; and
WHEREAS, in accordance with the terms of this Agreement, the Consortium Members will cooperate and participate in: (a) the evaluation of the Company, including conducting due diligence of the Company and its business; (b) discussions regarding the Proposal Letter with the Company; and (c) the negotiation of the terms of definitive documentation in connection with the Transaction (in which negotiations the Consortium Members expect that the Company will be represented by a special committee of independent and disinterested directors of the Company Board), including an agreement and plan of merger among Parent, Merger Sub and the Company in form and substance to be agreed by the Consortium Members (the Merger Agreement), which shall be subject to the approval of the shareholders of the Company and any financing documents in connection with the Transaction.
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NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual agreements and covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Consortium Members agree as follows:
1. Certain Definitions.
Agreement shall have the meaning in the preamble.
Cleary shall have the meaning in Section 5(a).
Company shall have the meaning in the recitals.
Company Board shall have the meaning in the recitals.
Competing Transaction shall mean (i) any direct or indirect acquisition by any person or entity of any securities representing 5% or more interest in the Company or all or substantially all of its assets or (ii) a recapitalization, restructuring, merger, consolidation or other business combination involving a change in control of the Company or any of its material subsidiaries, in either case other than the Transaction involving all of the Consortium Members.
Consortium shall have the meaning in the recitals.
Consortium Advisors shall have the meaning in Section 5(a).
Consortium Members shall have the meaning in the preamble.
Definitive Agreements shall have the meaning in Section 4(b).
Exchange Act shall have the meaning in the recitals.
Exclusivity Period shall mean the period beginning on the date hereof and ending on the date of termination of this Agreement pursuant to Section 18, provided that if this Agreement is terminated pursuant to clause (ii) under Section 18, the Exclusivity Period shall be extended to the date until the earlier of (a) the consummation of the Transaction and (b) the termination of the Merger Agreement in accordance with the terms thereof.
Founder shall have the meaning in the preamble.
Management Responsible Share shall have the meaning in Section 7(a).
Management Consortium Member shall have the meaning in Section 7(a).
Merger Agreement shall have the meaning in the recitals.
Merger Sub shall have the meaning in the recitals.
NYSE shall have the meaning in the recitals.
Parent shall have the meaning in the recitals.
Proposal Letter shall have the meaning in the recitals.
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Representatives shall mean, with respect to a person, such persons employees, directors, officers, partners, members, affiliates, agents, advisors (including, but not limited to, legal counsel, accountants, consultants and financial advisors), and any representative of the foregoing. For the avoidance of doubt, (i) the Representatives of any Consortium Member shall include the advisors retained to represent solely such Consortium Member pursuant to Section 5(b) and (ii) the Representatives of Sponsor shall include the investors in funds affiliated with Sponsor.
Responsible Share shall have the meaning in Section 7(a).
Rules shall have the meaning in Section 11.
Shareholder Shares shall have the meaning in Section 2(b).
Shares shall mean the ordinary shares of the Company, with par value of US$0.0001 each.
Sponsor shall have the meaning in the preamble.
Transaction shall have the meaning in the recitals.
Transfer shall have the meaning in Section 3(b).
2. Participation in the Transaction.
(a) The Consortium Members agree to participate in the Transaction on the terms of this Agreement.
(b) In connection with the Transaction, each Consortium Member (other than the Sponsor) agrees to either (i) transfer, contribute and deliver, and cause its affiliates to transfer, contribute and deliver, the Shares beneficially owned (as determined pursuant to Rule 13d-3 under the Exchange Act) by such Consortium Member or its affiliates (Shareholder Shares) to Parent in exchange for equity of Parent or (ii) have the Shareholder Shares held by such Consortium Member or its affiliates cancelled in connection with the Transaction.
3. Commitment to the Consortium.
(a) Within the Exclusivity Period, and except for actions taken by the Founder or any Management Members (as defined below) in their respective capacity, and as required by their respective fiduciary duties under the applicable law, as the officers and/or directors of the Company, each Consortium Member will deal exclusively with each other with respect to the Transaction and will not, and will cause its Representatives acting in such capacity not to, without the written consent of the other Consortium Members: (i) directly or indirectly initiate, solicit, encourage or otherwise engage in discussions or negotiations with the Company or any third party with respect to a Competing Transaction; (ii) provide any information to any third party with a view to the third party pursuing a Competing Transaction; or (iii) enter into any written or oral agreement, arrangement or understanding (whether legally binding or not) regarding, or do anything which is directly inconsistent with, or omit to do anything, which omission is directly inconsistent with, the Transaction involving all of the Consortium Members as contemplated under this Agreement.
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(b) Within the Exclusivity Period, each Consortium Member will not, and will not permit its Representatives to, directly or indirectly: (i) sell, offer to sell, give, pledge, encumber, assign, grant any option for the sale of or otherwise transfer or dispose of, or enter into any agreement, arrangement or understanding to sell, any Shareholder Shares (in each instance a Transfer), or enter into any contract, option or other arrangement or understanding with respect to a Transfer or limitation on voting rights of the Shareholder Shares or any right, title or interest thereto or therein except as contemplated under this Agreement and the Definitive Agreements; (ii) deposit any Shareholder Shares into a voting trust or grant any proxy or enter into a voting agreement, power of attorney or voting trust with respect to any Shareholder Shares; (iii) finance or offer to finance any Competing Transaction, including by offering any equity or debt finance in support of any Competing Transaction; (iv) take any action that would have the effect of preventing, disabling or delaying any Consortium Member or its affiliate from performing its obligations under this Agreement; or (v) agree (whether or not in writing) to take any of the actions referred to in the foregoing clauses (i), (ii), (iii) or (iv) of this Section 3(b). Notwithstanding the foregoing, the Founder may make a Transfer to his spouse, siblings, parents, lineal descendants or antecedents or the estates of or trusts for the benefit of the Founder or his spouse, siblings, parents or lineal descendants or antecedents; provided, however, that in all cases, any such Transfer shall not relieve the transferor of its obligations hereunder, and the transferee or other recipient executes a counterpart copy of this Agreement and becomes bound thereby as is the transferor.
(c) Each Consortium Member shall immediately cease and terminate any existing activities, discussions and negotiations in connection with any Competing Transaction and shall notify the other Consortium Members immediately if such Consortium Member or any of its Representatives receives any approach or communication with respect to any Competing Transaction and shall disclose to the other Consortium Members the identity of any other persons involved and the nature and content of the approach or communication.
(d) Each Consortium Member (other than the Sponsor) shall vote or cause to be voted all of the Shareholder Shares held by such Consortium Member (i) in favor of the adoption of the Merger Agreement and the Transaction and (ii) against any Competing Transaction at any shareholders meeting of the Company.
(e) This Section 3 shall survive the termination of this Agreement pursuant to clause (ii) under Section 18.
4. Process.
(a) Upon signing of this Agreement, the Consortium Members shall immediately deliver the Proposal Letter to the Company Board.
(b) The Sponsor shall take the lead in identifying and admitting any potential additional members and may admit such additional members to the Consortium with the consent of the Founder, which consent shall not be unreasonably withheld or delayed, provided that the Sponsor may admit one or more funds affiliated with the Sponsor to the Consortium as additional members without such consent. Any such additional member of the Consortium shall execute a joinder agreement in a form and substance satisfactory to the Sponsor.
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(c) Within the term of this Agreement and as permitted by the Company Board, the Consortium Members shall as promptly as reasonably practicable conduct a joint assessment of the Company, shall share all information reasonably necessary to evaluate the Company, and shall in good faith and with mutual cooperation use their reasonable best efforts to work together to structure, negotiate and do all things necessary or desirable, subject to the Companys approval, to enter into the Merger Agreement, financing documents and other ancillary documents in connection with the Transaction (the Definitive Agreements). The Consortium Members and their respective Representatives shall coordinate with each other in performing due diligence, securing financing, and structuring and negotiating the Transaction, including establishing appropriate vehicles for the purpose of the Transaction; provided, however, that in no event will any Consortium Member be obligated without its consent to enter into or otherwise be a party to any Definitive Agreements.
5. Appointment of Advisors.
(a) The Consortium Members agree that Cleary Gottlieb Steen & Hamilton LLP (Cleary) shall be engaged as U.S. legal counsel to provide U.S. legal services to the Consortium Members in relation to the Transaction. The Consortium Members may jointly select additional advisors (such advisors, together with Cleary, the Consortium Advisors) and shall (i) agree to the scope and engagement terms of the Consortium Advisors prior to their engagement; and (ii) engage all Consortium Advisors on terms that provide for work undertaken and reports prepared to be for the benefit of (A) the Consortium Members and (B) any vehicle established by the Consortium Members for the purposes of the Transaction (including Parent).
(b) If a Consortium Member requires separate representation in connection with specific issues arising out of the Transaction or other matters contemplated by the Definitive Agreements, it may retain other advisors to advise them. Each Consortium Member which engages separate Advisors will be solely responsible for the fees and expenses of any such advisors.
6. Confidentiality. Each Consortium Member shall, and shall procure its Representatives to, keep this Agreement and the Transaction confidential and shall not make any public statement or announcement concerning or disclose to any third party the fact that discussions or negotiations are taking place concerning the Transaction or any of the terms, conditions or other facts with respect thereto, including the status thereof, other than as mutually agreed in writing by the Consortium Members or as required by applicable laws, rules or regulations. Each Consortium Member shall coordinate in good faith all press releases and regulatory filings (including, to the extent applicable, any Schedule 13D filings to disclose its participation in the Transaction) and other public relation matters relating to the Transaction. Notwithstanding the foregoing, the Sponsor may disclose this Agreement or the status of negotiations between the Consortium Members with respect to the Transaction to any investors in funds affiliated with the Sponsor.
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7. Certain Fees and Expenses.
(a) If the Transaction is not consummated, and the failure for the Transaction to be consummated is not due to the breach of this Agreement by any Consortium Member, the Consortium Members agree that: the Founder and the Sponsor shall share, on an equal basis, all fees and out-of-pocket expenses (i) payable in connection with the Transaction to the Consortium Advisors or any lender or other financing sources or (ii) incurred in the defense, pursuit or settlement of any disputes or litigation relating to the Transaction; provided, however, that each Consortium Member shall bear fees and out-of-pocket expenses payable by it to any advisor retained by it in connection with the Transaction as contemplated by Section 5(b); provided further, if any additional Consortium Member shall join the Consortium pursuant to Section 4(b) of this Agreement and (x) if such Consortium Member is not a management member of the Company, then such additional Consortium Member shall share, ratably based on such additional Consortium Members planned equity participation in the Transaction on a fully diluted basis and assuming the conversion of all convertible securities (such additional Consortium Members share, Responsible Share), all fees and out-of-pocket expenses referred to in clauses (i) and (ii) of this Section 7(a), or (y) if such Consortium Member is a management member of the Company (a Management Consortium Member), then such Management Consortium Member, together with the Founder and any other Management Consortium Members, on the one hand, and the Sponsor, on the other hand, shall share, on an equal basis, all fees and out-of-pocket expenses referred to in clauses (i) and (ii) of this Section 7(a), net of any fees and out-of-pocket expenses payable by any additional Consortium Members pursuant to the preceding clause (x).
(b) If the Transaction is not consummated due to the unilateral breach of this Agreement of one or more Consortium Members, the Consortium Members in breach shall be responsible for all fees and out-of-pocket expenses related to the Transaction (other than fees and costs incurred by a Consortium Member requiring separate representation as contemplated by Section 5(b)).
(c) Subject to Section 7(e) herein, upon consummation of the Transaction, Parent shall reimburse each Consortium Member for all fees and out-of-pocket expenses incurred by it in connection with the Transaction (other than fees and costs incurred by a Consortium Member requiring separate representation as contemplated by Section 5(b)); provided, however, that such reimbursable expenses of each Consortium Member incurred prior to the execution of this Agreement shall be limited to those approved in writing by all Consortium Members prior to the date hereof.
(d) Subject to Section 10, the Consortium Members agree that: the Founder and the Sponsor shall, on an equal basis, (i) pay any termination, break-up or other fees or amounts (including amounts paid in settlement of any disputes or litigation relating to the Transaction) payable by Parent and (ii) receive any termination, break-up or other fees or amounts payable to Parent by the Company, in each case pursuant to the Merger Agreement; provided that (x) if any additional Consortium Member (other than the Management Consortium Members) shall join the Consortium, such additional Consortium Member shall pay or receive its Responsible Share of the fees or amounts referred to in clauses (i) or (ii) of this Section 7(d) and (y) if any Management Consortium Members shall join the Consortium, the Founder and the Management Consortium Members, on the one hand, and the Sponsor, on the other hand, shall pay or receive, on an equal basis, the fees or amounts referred to in clauses (i) or (ii) of this Section 7(d), net of any fees or amounts payable or receivable by any additional Consortium Members pursuant to the preceding clause (x).
(e) This Section 7 shall survive the termination of this Agreement.
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8. Warranties. Each Consortium Member represents and warrants in respect of itself to each other Consortium Member, as an inducement to that Consortium Member to enter into this Agreement, that (a) it has full power and authority to execute, and perform its obligations under, this Agreement and to proceed with the Transaction; (b) the execution, delivery and performance of this Agreement has been properly authorized by all required corporate action of such Consortium Member; (c) the execution, delivery and performance of this Agreement will not violate, to the extent applicable, the provisions of the charter or bylaws, memorandum or articles of association or other constituent document of such Consortium Member or conflict with or constitute a breach of or default under any agreement to which a Consortium Member or by which or any of its assets or property is bound; (d) this Agreement constitutes a valid and binding obligation on it in accordance with its terms; and (e) it has made adequate arrangements to ensure that the required funds are available to effect payment in full for its share of the fees and expenses of the Transaction.
9. Remedies. It is understood and agreed that money damages may not be a sufficient remedy for a breach of this Agreement by any Consortium Member and that each Consortium Member shall be entitled to seek equitable relief, including injunction and specific performance, as a remedy of any such breach by the other Consortium Members. Such remedies shall not be deemed to be the exclusive remedies for a breach by a Consortium Member but shall be in addition to all other remedies available at law or in equity to the other Consortium Members. Each Consortium Member further agrees not to raise as a defense or objection to the request or granting of such relief that any breach of this Agreement is or would be compensable by an award of money damages, and each Consortium Member agrees to waive any requirements for the securing or posting of any bond in connection with such remedy.
10. Limitation on Liabilities. The obligation of each Consortium Member under this Agreement is several (and not joint or joint and several).
11. Governing Law; Arbitration. This letter agreement and all matters arising out of or relating to this letter agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to conflict of laws principles. Any dispute, controversy or claim arising out of or relating to this letter agreement, including the validity, invalidity, breach or termination thereof, shall be settled by arbitration in Hong Kong under the Hong Kong International Arbitration Centre Administered Arbitration Rules (the Rules) in force when the notice of arbitration is submitted in accordance with these Rules. There shall be three arbitrators, one to be appointed by the claimant, one to be appointed by the respondent and the third to be appointed by the secretary general of the Hong Kong International Arbitration Centre. The arbitration proceedings shall be conducted in English.
12. No Modification. No provision in this Agreement can be waived, modified or amended except by written consent of the Consortium Members, which consent shall specifically refer to the provision to be waived, modified or amended and shall explicitly make such waiver, modification or amendment.
13. No Waiver of Rights. It is understood and agreed that no failure or delay by any Consortium Member in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.
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14. Counterparts; Entire Agreement. This Agreement may be signed and delivered by facsimile or portable document format via electronic mail and in one or more counterparts, each of which shall be deemed an original but all of which shall be deemed to constitute a single instrument. This Agreement sets forth the entire agreement and understanding among the Consortium Members and supersedes all prior agreements, discussions or documents relating thereto. No Consortium Member shall be entitled to punitive, exemplary, special, unforeseen, incidental, indirect or other consequential damages.
15. Severability. If any provision of this Agreement is found to violate any statute, regulation, rule, order or decree of any governmental authority, court, agency or exchange, such invalidity shall not be deemed to affect any other provision hereof or the validity of the remainder of this Agreement, and such invalid provision shall be deemed deleted herefrom to the minimum extent necessary to cure such violation.
16. Successors. This Agreement shall inure to the benefit of, and be binding upon, the Consortium Members and their respective successors and assigns. No Consortium Member may assign or transfer, directly or indirectly, its rights or obligations hereunder without the prior written consent of the other Consortium Members except as provided herein; provided that the Sponsor may assign its rights under this Agreement to one or more funds affiliated with the Sponsor without the prior written consent of the other Consortium Members. No assignment will relieve the assignor of its obligations hereunder.
17. No Third Party Beneficiaries. Unless otherwise specifically provided herein, each Consortium Member agrees and acknowledges that nothing herein expressed or implied is intended to confer upon or give any rights or remedies to persons who are not a party to this Agreement under or by reason of this Agreement.
18. Term. This Agreement shall terminate upon the earlier of: (i) the mutual written agreement by the Consortium Members; (ii) the execution and delivery of the Definitive Agreements; and (iii) by any Consortium Member after the date 12 months after the date hereof; provided, that in case of the foregoing clause (iii), the right to terminate this Agreement under this Section 18 shall not be available to any Consortium Member whose breach of any of its obligations under this Agreement results in, or has been a material cause of, the failure of the execution of the Definitive Agreements prior to such date.
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IN WITNESS WHEREOF, the Consortium Members have caused this Agreement to be executed and delivered as of the date first written above.
Tianwen Liu | ||
By: | /s/ Tianwen Liu |
ChinaAMC Capital Management Limited | ||||
By: | /s/ Haiyong Cheng | |||
Name: | Haiyong Cheng | |||
Title: | Authorized Signatory |
Consortium Agreement
Signature Page
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Schedule I
10
Exhibit 7.02
Execution Version
The Board of Directors
iSoftStone Holdings Limited
Building 9 Zhongguancun Software Park
No. 8 West Dongbeiwang Road, Haidian District
Beijing 100193
Peoples Republic of China
June 6, 2013
Dear Sirs:
Mr. Tianwen Liu (Mr. Liu), chairman of the board of directors and CEO of the Company, and ChinaAMC Capital Management Limited (ChinaAMC, together with Mr. Liu, the Buyer Parties) are pleased to submit this preliminary non-binding proposal to acquire all outstanding ordinary shares (the Shares) and the American Depositary Shares (ADSs, each representing ten Shares) of iSoftStone Holdings Limited (the Company), in both cases, that are not beneficially owned by Mr. Liu, his affiliates or certain shareholders that may choose to roll over their Shares (the Acquisition).
We believe that our proposal of US$0.585 in cash per Share, or US$5.85 in cash per ADS, will provide an attractive opportunity to the Companys shareholders. This price represents a premium of approximately 20.9% to the Companys closing price on June 5, 2013 and a premium of approximately 32.7% to the average closing price for the last 30 trading days.
The terms and conditions upon which we are prepared to pursue the Acquisition are set forth below. We are confident in our ability to consummate an Acquisition as outlined in this letter.
1. Buyer. The Buyer Parties have entered into an agreement dated June 6, 2013 (the Consortium Agreement), pursuant to which the Buyer Parties will form an acquisition vehicle for the purpose of pursuing the Acquisition (Acquisition Vehicle), and the Buyer Parties will work with each other on an exclusive basis in pursuing the Acquisition during the term of the Consortium Agreement.
2. Purchase Price. The Buyer Parties are prepared to pay for the Shares and ADSs acquired in the Acquisition at a price of US$0.585 per Share and US$5.85 per ADS, as the case may be, in cash.
3. Financing. We intend to finance the Acquisition with a combination of debt and equity capital. We are confident that we will secure adequate financing to consummate the Acquisition.
4. Due Diligence. We will be in a position to commence our due diligence for the Acquisition immediately upon receiving access to the relevant materials.
5. Definitive Agreements. We are prepared to negotiate and finalize definitive agreements (the Definitive Agreements) providing for the Acquisition and related transactions promptly. This proposal is subject to execution of the Definitive Agreements. These documents will include provisions typical for transactions of this type.
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6. Confidentiality. We are sure you will agree with us that it is in all of our interests to ensure that we proceed in a confidential manner, unless otherwise required by law, until we have executed the Definitive Agreements or terminated our discussions.
7. Process. We believe that the Acquisition will provide superior value to the Companys shareholders. We recognize of course that the Companys Board of Directors will, through a committee of independent directors, evaluate the proposed Acquisition before it can make its determination whether to endorse it. In considering the proposed Acquisition, you should be aware that we are interested only in acquiring the outstanding shares that Mr. Liu, his affiliates and certain shareholders who may choose to roll over their Shares do not already own, and that Mr. Liu and his affiliates do not intend to sell their stake in the Company to a third party.
8. Advisors. The Buyer Parties have retained Cleary Gottlieb Steen & Hamilton LLP as U.S. legal counsel in connection with the Acquisition.
9. About ChinaAMC. ChinaAMC Capital Management Limited is an alternative investment platform and an affiliate of China Asset Management (Hong Kong) Limited. China Asset Management (Hong Kong) Limited is a wholly-owned subsidiary of China Asset Management Co., Ltd. and strategically develops the international investment business, offering a range of both traditional and alternative investment products. China Asset Management Co., Ltd. is one of the leading asset management firms in China, with total assets under management and advisory amounted to US$56.71 billion as of March 31, 2013. China Asset Management Co., Ltd. has a highly skilled and experienced team of more than 150 investment and research professionals focusing on China and acts as investment manager for various clients and funds, including mutual funds, National Social Securities Fund, corporate annuities, QDII (Qualified Domestic Institutional Investor) funds and Exchange Traded Funds in China.
10. No Binding Commitment. This letter constitutes only a preliminary indication of our interest, and does not constitute any binding commitment with respect to an Acquisition. Such a commitment will result only from the execution of Definitive Agreements, and then will be on the terms provided in such documentation.
In closing, each of us would like to personally express our commitment to working together to bring this Acquisition to a successful and timely conclusion. Should you have any questions regarding this proposal, please do not hesitate to contact us at any time. We look forward to speaking with you.
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Sincerely,
Mr. Tianwen Liu | ||||
By: | /s/ Tianwen Liu | |||
ChinaAMC Capital Management Limited | ||||
By: | /s/ Haiyong Cheng | |||
Name: | Haiyong Cheng | |||
Title: | Authorized Signatory |
Proposal Letter
Signature Page
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Exhibit 7.03
Execution Version
FRAMEWORK AGREEMENT
THIS FRAMEWORK AGREEMENT (this Agreement) is made as of July 24, 2013, among ChinaAMC Capital Management Limited, a company incorporated under the laws of the Cayman Islands, having its registered office at 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands (the Sponsor), Accurate Global Limited (Accurate), Advanced Orient Limited (Advanced) and CSOF Technology Investments Limited (CSOF, Accurate and Advanced, each a company incorporated under the laws of the British Virgin Islands, each having its registered office at Offshore Incorporations Centre, P.O. Box 957 Road Town, Tortola, British Virgin Islands, together, the Existing Shareholders). Each of the Sponsor and the Existing Shareholders is referred to herein as a Party and collectively, the Parties.
WHEREAS, on June 6, 2013, the Sponsor and Mr. Tianwen Liu (the Founder) entered into a Consortium Agreement (the Consortium Agreement), pursuant to which the Sponsor and the Founder formed a consortium to undertake a transaction (the Transaction) to acquire iSoftStone Holdings Limited (the Company);
WHEREAS, the Existing Shareholders have expressed interest in joining the Sponsor to pursue the Transaction, and the Sponsor has agreed to pursue the Transaction together with the Existing Shareholders, subject to the terms set forth herein;
WHEREAS, the Founder has consented to the Sponsor proceeding together with the Existing Shareholders to pursue the Transaction; and
WHEREAS, terms used in this Agreement which are defined in the Consortium Agreement shall have the meanings specified therein, as applicable (unless otherwise defined herein).
NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual agreements and covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
1. Participation in the Transaction; Information Sharing.
(a) Each of the Existing Shareholders agrees with the Sponsor to participate in the Transaction on the terms set forth in this Agreement; provided, that each of the Existing Shareholder acknowledges and agrees that the Founder and the Sponsor shall in good faith take the lead in evaluating, structuring and negotiating the Transaction, and the terms of the Definitive Agreements. The Sponsor agrees that the terms of the Definitive Agreements shall be approved by each of the Sponsor, the Founder and the Existing Shareholders.
(b) Subject to its agreement of the terms of the Definitive Agreements, in connection with the Transaction, each of the Existing Shareholders agrees to either (i) transfer, contribute and deliver, and cause its affiliates to transfer, contribute and deliver, the Shares beneficially owned (as determined pursuant to Rule 13d-3 under the Exchange Act) by such Existing Shareholder or its affiliates (Existing Shareholders Shares) to Parent in exchange for equity of Parent or (ii) (x) have the Existing Shareholders Shares held by such Existing Shareholder or its affiliates cancelled for nil consideration and (y) subscribe, or cause its affiliates to subscribe, for equity of Parent.
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(c) Subject to the confidentiality agreements between the Company and each of (i) the Sponsor and (ii) the Existing Shareholders, the Sponsor agrees to share with the Existing Shareholders (x) the information reasonably necessary for the Existing Shareholders to evaluate their participation in the Transaction, (y) any material development of the negotiation with the Company in respect of the Transaction and (z) the drafts of the Definitive Agreements.
2. Commitment of the Existing Shareholders.
(a) During the Exclusivity Period, each of the Existing Shareholders agrees that it will deal exclusively with the Consortium (including the Founder) with respect to the Transaction and will not, and will cause its Representatives acting in such capacity not to, without the written consent of the other Parties: (i) directly or indirectly initiate, solicit, encourage or otherwise engage in discussions or negotiations with the Company or any third party with respect to a Competing Transaction; (ii) provide any information to any third party with a view to the third party pursuing a Competing Transaction; or (iii) enter into any written or oral agreement, arrangement or understanding (whether legally binding or not) in connection with a Competing Transaction.
(b) During the Exclusivity Period, each of the Existing Shareholders will not, and will not permit its Representatives to, directly or indirectly: (i) sell, offer to sell, give, pledge, encumber, assign, grant any option for the sale of or otherwise transfer or dispose of, or enter into any agreement, arrangement or understanding to sell, any Existing Shareholders Shares (in each instance a Transfer), or enter into any contract, option or other arrangement or understanding with respect to a Transfer or limitation on voting rights of the Existing Shareholders Shares or any right, title or interest thereto or therein except as contemplated under this Agreement and the Definitive Agreements, or agree (whether or not in writing) to take any of the foregoing actions in this clause (i); (ii) deposit any Existing Shareholders Shares into a voting trust or grant any proxy or enter into a voting agreement, power of attorney or voting trust with respect to any Existing Shareholders Shares; (iii) finance or offer to finance any Competing Transaction, including by offering any equity or debt finance in support of any Competing Transaction; (iv) take any action that would have the effect of preventing, disabling or delaying any of the Consortium Members (including the Founder) or their affiliates from performing their obligations under this Agreement or the Consortium Agreement; or (v) agree (whether or not in writing) to take any of the actions referred to in the foregoing clauses (ii), (iii) or (iv) of this Section 2(b).
(c) Each of the Existing Shareholders shall (i) immediately cease and terminate any existing activities, discussions and negotiations in connection with any Competing Transaction; and (ii) shall notify the Sponsor immediately if such Existing Shareholder or any of its Representatives receives any approach or communication with respect to any Competing Transaction and shall disclose to the Sponsor the identity of any other persons involved and the nature and content of the approach or communication during the Exclusivity Period.
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(d) During the Exclusivity Period, each of the Existing Shareholders shall vote or cause to be voted all of the Existing Shareholders Shares held by such Existing Shareholder (i) in favor of the adoption of the Merger Agreement and the Transaction, and (ii) against any Competing Transaction at any shareholders meeting of the Company.
For purposes of this Section 2, Exclusivity Period shall mean the period beginning on the date hereof and ending on the earlier of (a) the expiry of the Exclusivity Period in the Consortium Agreement, and (b) the date that is 12 months after the date hereof; provided that if the Definitive Agreements are executed by the Sponsor, the Founder and the Existing Shareholders within 12 months after the date hereof, the Exclusivity Period shall be extended to the date until the earlier of (a) the consummation of the Transaction and (b) the termination of the Merger Agreement in accordance with the terms thereof.
3. Expenses and Fees.
(a) Each of the Existing Shareholders agrees to bear the out-of-pocket costs and expenses in connection with the Transaction incurred prior to the termination of this Agreement that are payable by the Consortium as if it were an additional Consortium Member as provided in Section 7 of the Consortium Agreement.
(b) Each of the Existing Shareholders shall be responsible for the fees and costs incurred by such Existing Shareholder, including fees and costs for separate Advisors retained by such Existing Shareholder.
4. Warranties.
(a) Each Parties represents and warrants in respect of itself to each other Parties, as an inducement to that Party to enter into this Agreement, that (i) it has full power and authority to execute, and perform its obligations under, this Agreement and to proceed with the Transaction; (ii) the execution, delivery and performance of this Agreement has been properly authorized by all required corporate action of such Party; (iii) the execution, delivery and performance of this Agreement will not violate, to the extent applicable, the provisions of the charter or bylaws, memorandum or articles of association or other constituent document of such Party or conflict with or constitute a breach of or default under any agreement to which a Party or by which or any of its assets or property is bound; (iv) this Agreement constitutes a valid and binding obligation on it in accordance with its terms; and (v) it has made adequate arrangements to ensure that the required funds are available to effect payment in full for its share of the fees and expenses of the Transaction.
(b) Each of the Existing Shareholders represents and warrants that (i) as of the date of this Agreement, it holds of record the Existing Shareholders Shares free and clear of any encumbrances or restrictions, (ii) it has the sole right to control the voting and disposition of the Existing Shareholders Shares, and (iii) as of the date of this Agreement, it does not directly or indirectly own any Shares or other securities of the Company, other than the Existing Shareholders Shares.
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5. Confidentiality. No announcement regarding the subject matter of this Agreement shall be made (i) by the Sponsor without the prior written consent of the Existing Shareholders, but only to the extent such announcement specifically includes or refers to the Existing Shareholders, or (ii) by the Existing Shareholders without the prior written consent of the Sponsor, in each case except to the extent that any such announcements are required by law, a court of competent jurisdiction, a regulatory body or international stock exchange (but only as far as practicable and lawful after the form and terms of that announcement have been provided to the Sponsor or the Existing Shareholders, as applicable, and the Sponsor or the Existing Shareholders, as applicable, have had a reasonable opportunity to comment on the form and terms of such announcement, in each case, to the extent reasonably practicable). The consents required by this Section 5 shall not be unreasonably withheld or delayed.
6. Provisions Incorporated by Reference. Sections 9 (Remedies), 10 (Limitation on Liabilities), 11 (Governing Law; Arbitration), 12 (No Modification), 13 (No Waiver of Rights), 14 (Counterparts; Entire Agreement), 15 (Severability), 16 (Successors) and 17 (No Third Party Beneficiaries) of the Consortium Agreement shall apply in this Agreement as if incorporated herein mutatis mutandis, on the basis that the references to the Consortium Members in such sections shall be deemed for purposes of this Section 6 to be a reference to the Parties, and references in such sections to this Agreement shall be deemed to mean this Agreement.
7. Termination.
(a) This Agreement shall terminate upon the earlier of: (i) delivery of a written notice of termination by the Sponsor to the Existing Shareholders, which notice shall be delivered upon the good faith determination of the Sponsor that the Existing Shareholders will not agree to any proposed material term of the Definitive Agreements; (ii) the mutual written agreement by the Parties; (iii) the execution and delivery of the Definitive Agreements by the Sponsor, the Founder and the Existing Shareholders; and (iv) by any Party after the date 12 months after the date hereof; provided, that a termination of this Agreement under this Section 7 shall not release any Party from its obligations or liabilities incurred prior to such termination.
(b) Notwithstanding anything to the contrary herein, (i) if this Agreement is terminated pursuant to clause (i) of Section 7(a), each of the Existing Shareholders agrees that during the Exclusivity Period, it will not deal with any third party other than the Consortium (including the Founder) with a view to pursue a Competing Transaction and accordingly will not take any of the actions described in Section 2(a) and clauses (ii) (iii), (iv) and (v) of Section 2 (b), provided, that for purposes of this clause (i) of Section 7(b), the reference to 5% in the definition of Competing Transaction shall be deemed to be the reference to 8%, (ii) if this Agreement is terminated pursuant to clause (iii) of Section 7(a), Section 2 shall survive the termination of this Agreement and shall continue to be binding upon the Existing Shareholders, and (iii) Sections 5, 6 and 7 shall survive the termination of this Agreement for any reason.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered as of the date first written above.
Accurate Global Limited | ||
By: | /s/ Kiril Ip | |
Name: | Kiril Ip | |
Title: | Director | |
Advance Orient Limited | ||
By: | /s/ Richard Tang | |
Name: | Richard Tang | |
Title: | Director | |
CSOF Technology Investments Limited | ||
By: | /s/ Kiril Ip | |
Name: | Kiril Ip | |
Title: | Director |
Framework Agreement
Signature Page
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered as of the date first written above.
ChinaAMC Capital Management Limited | ||
By: | /s/ Haiyong Cheng | |
Name: | Haiyong Cheng | |
Title: | Authorized Person |
Framework Agreement
Signature Page
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Exhibit 7.04
No. 010089
ISOFTSTONE HOLDINGS LIMITED
2010 PERFORMANCE INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION
AGREEMENT (this Option Agreement) dated May 10, 2013 by and between iSoftStone Holdings Limited, a Cayman Islands company (the Company), and
(the Grantee) evidences the nonqualified stock option (the Option) granted by the Company to the Grantee as to the number of the Companys Ordinary Shares first set forth
below.
Number of Ordinary Shares:1 | 2,200,000 | Award Date: May 10, 2013 | ||||||
Exercise Price per Share:1 | $ 0.423 | Expiration Date:1,2 May 9, 2023 |
Vesting1,2 [The Option shall become vested as to 25% of the total number of Ordinary Shares subject to the Option on the first anniversary of the Award Date. The remaining 75% of the total number of Ordinary Shares subject to the Option shall become vested in 36 substantially equal monthly installments, with the first installment vesting on the last day of the month following the month in which the first anniversary of the Award Date occurs and an additional installment vesting on the last day of each of the 35 months thereafter.]
The Option is granted under the iSoftStone Holdings Limited 2010 Performance Incentive Plan (the Plan) and is subject to the Terms and Conditions of Nonqualified Stock Option (the Terms) attached to this Option Agreement (incorporated herein by this reference) and to the Plan. The Option has been granted to the Grantee in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Grantee. Capitalized terms are defined in the Plan if not defined herein. The parties agree to the terms of the Option set forth herein. The Grantee acknowledges receipt of a copy of the Terms, the Plan and the Prospectus for the Plan.
GRANTEE | ISOFTSTONE HOLDINGS LIMITED | |||||
a Cayman Islands Company | ||||||
/s/ Tianwen Liu |
||||||
Signature | By: | /s/ Tianwen Liu | ||||
Tianwen Liu |
Print Name: | Tianwen Liu | ||||
Print Name | ||||||
Title: | Chairman and Chief Executive Officer |
1 | Subject to adjustment under Section 7.1 of the Plan. |
2 | Subject to early termination under Section 4 of the Terms and Section 7.2 of the Plan. |
CONSENT OF SPOUSE
In consideration of the Companys execution of this Option Agreement, the undersigned spouse of the Grantee agrees to be bound by all of the terms and provisions hereof and of the Plan.
/s/ Hanhui Zhu |
| |||
Signature of Spouse | Date |
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TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION
1. | Vesting; Limits on Exercise; Incentive Stock Option Status. |
The Option shall vest and become exercisable in percentage installments of the aggregate number of shares subject to the Option as set forth on the cover page of this Option Agreement. The Option may be exercised only to the extent the Option is vested and exercisable.
| Cumulative Exercisability. To the extent that the Option is vested and exercisable, the Grantee has the right to exercise the Option (to the extent not previously exercised), and such right shall continue, until the expiration or earlier termination of the Option. |
| No Fractional Shares. Fractional share interests shall be disregarded, but may be cumulated. |
| Minimum Exercise. No fewer than 100 Ordinary Shares (subject to adjustment under Section 7.1 of the Plan) may be purchased at any one time, unless the number purchased is the total number at the time exercisable under the Option. |
| Nonqualified Stock Option. The Option is a nonqualified stock option and is not, and shall not be, an incentive stock option within the meaning of Section 422 of the Code. |
2. | Continuance of Employment/Service Required; No Employment/Service Commitment. |
The vesting schedule applicable to the Option requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Option and the rights and benefits under this Option Agreement. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 4 below or under the Plan.
Nothing contained in this Option Agreement or the Plan constitutes a continued employment or service commitment by the Company or any of its Subsidiaries, confers upon the Grantee any right to remain employed by or in service to the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate such employment or service, or affects the right of the Company or any Subsidiary to increase or decrease the Grantees other compensation.
3. | Method of Exercise of Option. |
The Option shall be exercisable by the delivery to the Secretary of the Company (or such other person as the Administrator may require pursuant to such administrative exercise procedures as the Administrator may implement from time to time) of:
| a written notice stating the number of Ordinary Shares to be purchased pursuant to the Option or by the completion of such other administrative exercise procedures as the Administrator may require from time to time, |
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| payment in full for the Exercise Price of the shares to be purchased in cash, check or by electronic funds transfer to the Company, or (subject to compliance with all applicable laws, rules, regulations and listing requirements and further subject to such rules as the Administrator may adopt as to any non-cash payment) in Ordinary Shares already owned by the Grantee, valued at their fair market value (as determined under the Plan) on the exercise date; |
| any written statements or agreements required pursuant to Section 8.1 of the Plan; and |
| satisfaction of the tax withholding provisions of Section 8.5 of the Plan. |
The Administrator also may, but is not required to, authorize a non-cash payment alternative by notice and third party payment in such manner as may be authorized by the Administrator, or, subject to such procedures as the Administrator may adopt, authorize a cashless exercise with a third party who provides simultaneous financing for the purposes of (or who otherwise facilitates) the exercise of the Option.
4. | Early Termination of Option. |
4.1 Expiration Date. Subject to earlier termination as provided below in this Section 4, the Option will terminate on the Expiration Date set forth on the cover page of this Option Agreement (the Expiration Date).
4.2 Possible Termination of Option upon Certain Corporate Events. The Option is subject to termination in connection with certain corporate events as provided in Section 7.2 of the Plan.
4.3 Termination of Option upon a Termination of Grantees Employment or Services. Subject to earlier termination on the Expiration Date of the Option or pursuant to Section 4.2 above, if the Grantee ceases to be employed by or ceases to provide services to the Company or a Subsidiary, the following rules shall apply (the last day that the Grantee is employed by or provides services to the Company or a Subsidiary is referred to as the Grantees Severance Date):
| other than as expressly provided below in this Section 4.3, (a) the Grantee will have until the date that is 60 days after his or her Severance Date to exercise the Option (or portion thereof) to the extent that it was vested on the Severance Date, (b) the Option, to the extent not vested on the Severance Date, shall terminate on the Severance Date, and (c) the Option, to the extent exercisable for the 60-day period following the Severance Date and not exercised during such period, shall terminate at the close of business on the last day of the 60-day period; |
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| if the termination of the Grantees employment or services is the result of the Grantees death or Total Disability (as defined below), (a) the Grantee (or his beneficiary or personal representative, as the case may be) will have until the date that is 12 months after the Grantees Severance Date to exercise the Option (or portion thereof) to the extent that it was vested on the Severance Date, (b) the Option, to the extent not vested on the Severance Date, shall terminate on the Severance Date, and (c) the Option, to the extent exercisable for the 12-month period following the Severance Date and not exercised during such period, shall terminate at the close of business on the last day of the 12-month period; |
| if the Grantees employment or services are terminated by the Company or a Subsidiary for Cause (as defined below), the Option (whether vested or not) shall terminate on the Severance Date. |
For purposes of the Option, Total Disability means a permanent and total disability (within the meaning of Section 22(e)(3) of the Code or as otherwise determined by the Administrator).
For purposes of the Option, Cause means that the Grantee:
(1) | has been negligent in the discharge of his or her duties to the Company or any of its Subsidiaries, has refused to perform stated or assigned duties or is incompetent in or (other than by reason of a disability or analogous condition) incapable of performing those duties; |
(2) | has been dishonest or committed or engaged in an act of theft, embezzlement or fraud, a breach of confidentiality, an unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information; has breached a fiduciary duty, or willfully and materially violated any other duty, law, rule, regulation or policy of the Company, any of its Subsidiaries or any affiliate of the Company or any of its Subsidiaries; or has been convicted of a felony or misdemeanor (other than minor traffic violations or similar offenses); |
(3) | has materially breached any of the provisions of any agreement with the Company, any of its Subsidiaries or any affiliate of the Company or any of its Subsidiaries; or |
(4) | has engaged in unfair competition with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of, the Company, any of its Subsidiaries or any affiliate of the Company or any of its Subsidiaries; has improperly induced a vendor or customer to break or terminate any contract with the Company, any of its Subsidiaries or any affiliate of the Company or any of its Subsidiaries; or has induced a principal for whom the Company, any of its Subsidiaries or any affiliate of the Company or any of its Subsidiaries acts as agent to terminate such agency relationship. |
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In all events the Option is subject to earlier termination on the Expiration Date of the Option or as contemplated by Section 4.2. The Administrator shall be the sole judge of whether the Grantee continues to render employment or services for purposes of this Option Agreement.
5. | Non-Transferability. |
The Option and any other rights of the Grantee under this Option Agreement or the Plan are nontransferable and exercisable only by the Grantee, except as set forth in Section 5.7 of the Plan.
6. | Notices. |
Any notice to be given under the terms of this Option Agreement shall be in writing and addressed to the Company at its principal office to the attention of the Secretary, and to the Grantee at the address last reflected on the Companys payroll records, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be given in writing and shall be delivered in person or shall be enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) through an internationally-recognized express courier service. Any such notice shall be given only when received, but if the Grantee is no longer employed by the Company or a Subsidiary, shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 6.
7. | Plan. |
The Option and all rights of the Grantee under this Option Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference. The Grantee agrees to be bound by the terms of the Plan and this Option Agreement (including these Terms). The Grantee acknowledges having read and understanding the Plan, the Prospectus for the Plan, and this Option Agreement. Unless otherwise expressly provided in other sections of this Option Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not and shall not be deemed to create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.
8. | Entire Agreement. |
This Option Agreement (including these Terms) and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan and this Option Agreement may be amended pursuant to Section 8.6 of the Plan. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.
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9. | Governing Law; Limited Rights; Severability. |
9.1 Cayman Islands Laws; Construction. This Option Agreement shall be governed by and construed and enforced in accordance with the laws of the Cayman Islands without regard to conflict of law principles thereunder. The terms of the Option grant have resulted from the negotiations of the parties and each of the parties has had an opportunity to obtain and consult with its own counsel. The language of all parts of the Plan and this Option Agreement (including these Terms) shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against either of the parties.
9.2 Limited Rights. The Grantee has no rights as a shareholder of the Company with respect to the Option as set forth in Section 8.7 of the Plan. The Option does not place any limit on the corporate authority of the Company as set forth in Section 8.12 of the Plan.
9.3 Severability. If the arbitrator selected in accordance with this Option Agreement or a court of competent jurisdiction determines that any portion of this Option Agreement or the Plan is in violation of any statute or public policy, then only the portions of this Option Agreement and the Plan, as applicable, which violate such statute or public policy shall be stricken, and all portions of this Option Agreement and the Plan which do not violate any public policy or statute shall continue in full force and effect. Furthermore, it is the parties intent that any court order striking any portion of this Option Agreement and/or the Plan should modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties hereunder.
10. | Arbitration. |
10.1 Any dispute, controversy or claim (each, a Dispute) arising out of, in connection with or relating to this Option Agreement, including the interpretation, validity, invalidity, breach or termination thereof, shall be settled by arbitration.
10.2 The arbitration shall be conducted in Hong Kong under the Hong Kong International Arbitration Centre Administered Arbitration Rules in force when the Notice of Arbitration is submitted in accordance with the said Rule. There shall be one (1) arbitrator who shall be selected by the Hong Kong International Arbitration Centre.
10.3 The arbitrator shall decide any Dispute submitted by the parties strictly in accordance with the substantive laws of the Cayman Islands and shall not apply any other substantive law.
10.4 The arbitration proceedings shall be conducted in English.
10.5 Each party shall cooperate with the other in making full disclosure of and providing complete access to all information and documents requested by the other in connection with such arbitration proceedings, subject only to any doctrine of legal privilege or any confidentiality obligations binding on such party.
10.6 The costs of arbitration shall be borne by the losing party, unless otherwise determined by the arbitration tribunal.
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10.7 When any Dispute occurs and when any Dispute is under arbitration, except for the matters in Dispute, the parties shall continue to fulfill their respective obligations and shall be entitled to exercise their rights under this Option Agreement.
10.8 The award of the arbitration tribunal shall be final and binding upon the parties, and the prevailing party may apply to a court of competent jurisdiction for enforcement of such award.
10.9 Either party shall be entitled to seek preliminary injunctive relief from any court of competent jurisdiction pending the constitution of the arbitration tribunal.
11. | Effect of this Agreement. |
Subject to the Companys right to terminate the Option pursuant to Section 7.2 of the Plan, this Option Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors to the Company.
12. | Counterparts. |
This Option Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
13. | Section Headings. |
The section headings of this Option Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.
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