0001193125-15-228989.txt : 20150619 0001193125-15-228989.hdr.sgml : 20150619 20150619170000 ACCESSION NUMBER: 0001193125-15-228989 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20150619 DATE AS OF CHANGE: 20150619 GROUP MEMBERS: NAN PENG SHEN GROUP MEMBERS: SC CHINA HOLDINGS LTD GROUP MEMBERS: SEQUOIA CAPITAL CHINA MANAGEMENT I, L.P. GROUP MEMBERS: SEQUOIA CAPITAL CHINA PARTNERS FUND I, L.P. GROUP MEMBERS: SEQUOIA CAPITAL CHINA PRINCIPALS FUND I, L.P. GROUP MEMBERS: SNP CHINA ENTERPRISES LTD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Bona Film Group Ltd CENTRAL INDEX KEY: 0001504796 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE DISTRIBUTION [7822] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-85987 FILM NUMBER: 15942959 BUSINESS ADDRESS: STREET 1: 11/F, GUAN HU GARDEN 3 STREET 2: 105 YAO JIA YUAN ROAD, CHAOYANG DISTRICT CITY: BEIJING STATE: F4 ZIP: 100025 BUSINESS PHONE: 86 10 5928 3663 MAIL ADDRESS: STREET 1: 11/F, GUAN HU GARDEN 3 STREET 2: 105 YAO JIA YUAN ROAD, CHAOYANG DISTRICT CITY: BEIJING STATE: F4 ZIP: 100025 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SEQUOIA CAPITAL CHINA I LP CENTRAL INDEX KEY: 0001470760 IRS NUMBER: 203514012 STATE OF INCORPORATION: E9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 2800 SAND HILL RD, SUITE 101 CITY: MENLO PARK STATE: CA ZIP: 95025 BUSINESS PHONE: 650-854-3927 MAIL ADDRESS: STREET 1: 2800 SAND HILL RD, SUITE 101 CITY: MENLO PARK STATE: CA ZIP: 95025 SC 13D 1 d945825dsc13d.htm SC 13D SC 13D

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.     )*

 

 

BONA FILM GROUP LIMITED

(Name of Issuer)

ORDINARY SHARES

(Title of Class of Securities)

09777B107

(CUSIP Number)

c/o Nan Peng Shen

Suite 3613, 36/F, Two Pacific Place

88 Queensway Road, Hong Kong

(852) 2501 8989

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

with copies to:

Craig Marcus

Ropes & Gray LLP

800 Boylston Street

Boston, Massachusetts 02199

(617) 951-7802

June 12, 2015

(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.

 

 

 

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

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

 

 

 


SCHEDULE 13D

 

CUSIP No. 09777B107 Page 2 of 15

 

  1. 

Names of reporting persons. I.R.S. Identification Nos. of above persons (entities only)

 

SEQUOIA CAPITAL CHINA I, L.P.

IRS Identification No. 20-3514012

  2.

Check the appropriate box if a member of a group (see instructions)

(a)  ¨        (b)  x

 

  3.

SEC use only

 

  4.

Source of funds (see instructions)

 

    OO

  5.

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)    ¨

 

  6.

Citizenship or place of organization

 

    Cayman Islands

Number of

shares

beneficially

owned by

each

reporting

person

with

 

  7. 

Sole voting power

 

    0

  8.

Shared voting power

 

    1,296,678

  9.

Sole dispositive power

 

    0

10.

Shared dispositive power

 

    1,296,678

11.

Aggregate amount beneficially owned by each reporting person

 

    1,296,678

12.

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)    ¨

 

13.

Percent of class represented by amount in Row (11)

 

    4.0%

14.

Type of reporting person (see instructions)

 

    PN


SCHEDULE 13D

 

CUSIP No. 09777B107 Page 3 of 15

 

  1. 

Names of reporting persons. I.R.S. Identification Nos. of above persons (entities only)

 

SEQUOIA CAPITAL CHINA PARTNERS FUND I, L.P.

I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)

20-4387549

  2.

Check the appropriate box if a member of a group (see instructions)

(a)  ¨        (b)  x

 

  3.

SEC use only

 

  4.

Source of funds (see instructions)

 

    OO

  5.

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)    ¨

 

  6.

Citizenship or place of organization

 

    Cayman Islands

Number of

shares

beneficially

owned by

each

reporting

person

with

 

  7. 

Sole voting power

 

    0

  8.

Shared voting power

 

    148,993

  9.

Sole dispositive power

 

    0

10.

Shared dispositive power

 

    148,993

11.

Aggregate amount beneficially owned by each reporting person

 

    148,993

12.

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)    ¨

 

13.

Percent of class represented by amount in Row (11)

 

    0.5%

14.

Type of reporting person (see instructions)

 

    PN


SCHEDULE 13D

 

CUSIP No. 09777B107 Page 4 of 15

 

  1. 

Names of reporting persons. I.R.S. Identification Nos. of above persons (entities only)

 

SEQUOIA CAPITAL CHINA PRINCIPALS FUND I, L.P.

I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)

20-4887879

  2.

Check the appropriate box if a member of a group (see instructions)

(a)  ¨        (b)  x

 

  3.

SEC use only

 

  4.

Source of funds (see instructions)

 

    OO

  5.

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)    ¨

 

  6.

Citizenship or place of organization

 

    Cayman Islands

Number of

shares

beneficially

owned by

each

reporting

person

with

 

  7. 

Sole voting power

 

    0

  8.

Shared voting power

 

    200,691

  9.

Sole dispositive power

 

    0

10.

Shared dispositive power

 

    200,691

11.

Aggregate amount beneficially owned by each reporting person

 

    200,691

12.

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)    ¨

 

13.

Percent of class represented by amount in Row (11)

 

    0.6%

14.

Type of reporting person (see instructions)

 

    PN


SCHEDULE 13D

 

CUSIP No. 09777B107 Page 5 of 15

 

  1. 

Names of reporting persons. I.R.S. Identification Nos. of above persons (entities only)

 

SEQUOIA CAPITAL CHINA MANAGEMENT I, L.P.

I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)

20-3348112

  2.

Check the appropriate box if a member of a group (see instructions)

(a)  ¨        (b)  x

 

  3.

SEC use only

 

  4.

Source of funds (see instructions)

 

    OO

  5.

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)    ¨

 

  6.

Citizenship or place of organization

 

    Cayman Islands

Number of

shares

beneficially

owned by

each

reporting

person

with

 

  7. 

Sole voting power

 

    0

  8.

Shared voting power

 

    1,646,362

  9.

Sole dispositive power

 

    0

10.

Shared dispositive power

 

    1,646,362

11.

Aggregate amount beneficially owned by each reporting person

 

    1,646,362

12.

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)    ¨

 

13.

Percent of class represented by amount in Row (11)

 

    5.1%

14.

Type of reporting person (see instructions)

 

    PN


SCHEDULE 13D

 

CUSIP No. 09777B107 Page 6 of 15

 

  1. 

Names of reporting persons. I.R.S. Identification Nos. of above persons (entities only)

 

SC CHINA HOLDING LIMITED

I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)

N/A

  2.

Check the appropriate box if a member of a group (see instructions)

(a)  ¨        (b)  x

 

  3.

SEC use only

 

  4.

Source of funds (see instructions)

 

    OO

  5.

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)    ¨

 

  6.

Citizenship or place of organization

 

    Cayman Islands

Number of

shares

beneficially

owned by

each

reporting

person

with

 

  7. 

Sole voting power

 

    0

  8.

Shared voting power

 

    1,646,362

  9.

Sole dispositive power

 

    0

10.

Shared dispositive power

 

    1,646,362

11.

Aggregate amount beneficially owned by each reporting person

 

    1,646,362

12.

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)    ¨

 

13.

Percent of class represented by amount in Row (11)

 

    5.1%

14.

Type of reporting person (see instructions)

 

    OO


SCHEDULE 13D

 

CUSIP No. 09777B107 Page 7 of 15

 

  1. 

Names of reporting persons. I.R.S. Identification Nos. of above persons (entities only)

 

SNP CHINA ENTERPRISES LIMITED

I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)

N/A

  2.

Check the appropriate box if a member of a group (see instructions)

(a)  ¨        (b)  x

 

  3.

SEC use only

 

  4.

Source of funds (see instructions)

 

    OO

  5.

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)    ¨

 

  6.

Citizenship or place of organization

 

    British Virgin Islands

Number of

shares

beneficially

owned by

each

reporting

person

with

 

  7. 

Sole voting power

 

    0

  8.

Shared voting power

 

    1,646,362

  9.

Sole dispositive power

 

    0

10.

Shared dispositive power

 

    1,646,362

11.

Aggregate amount beneficially owned by each reporting person

 

    1,646,362

12.

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)    ¨

 

13.

Percent of class represented by amount in Row (11)

 

    5.1%

14.

Type of reporting person (see instructions)

 

    OO


SCHEDULE 13D

 

CUSIP No. 09777B107 Page 8 of 15

 

  1. 

Names of reporting persons. I.R.S. Identification Nos. of above persons (entities only)

 

NAN PENG SHEN

I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)

  2.

Check the appropriate box if a member of a group (see instructions)

(a)  ¨        (b)  x

 

  3.

SEC use only

 

  4.

Source of funds (see instructions)

 

    OO

  5.

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)    ¨

 

  6.

Citizenship or place of organization

 

    HONG KONG SAR

Number of

shares

beneficially

owned by

each

reporting

person

with

 

  7. 

Sole voting power

 

    0

  8.

Shared voting power

 

    1,646,362

  9.

Sole dispositive power

 

    0

10.

Shared dispositive power

 

    1,646,362

11.

Aggregate amount beneficially owned by each reporting person

 

    1,646,362

12.

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)    ¨

 

13.

Percent of class represented by amount in Row (11)

 

    5.1%

14.

Type of reporting person (see instructions)

 

    IN


PREAMBLE

This Statement on Schedule 13D (this “Schedule 13D”) supersedes the Statement on Schedule 13G, as last amended by Amendment No. 2 on February 12, 2013, filed by Sequoia Capital China I, L.P. (“SCC I”), Sequoia Capital China Partners Fund I, L.P. (“SCC PTRS I”), Sequoia Capital China Principals Fund I, L.P. (“SCC PRIN I”), Sequoia Capital China Management I, L.P. (“SCC MGMT I”), SC China Holding Limited (“SCC HOLD”), SNP China Enterprises Limited (“SNP”) and Nan Peng Shen (“NS”) (collectively, the “Reporting Persons”), relating to ordinary shares of Bona Film Group Limited. This Schedule 13D is being filed as a result of the events described in Item 4 below.

 

ITEM 1. SECURITY AND ISSUER.

The title and class of equity securities to which this Schedule 13D relates are the ordinary shares, par value US$0.0005 per share (the “Ordinary Shares”), of Bona Film Group Limited, a Cayman Islands company (the “Issuer”). The address of the principal executive offices of the Issuer is 18/F, Tower 1, U-town Office Building, No. 1 San Feng Bei Li, Chaoyang District, Beijing 100020, People’s Republic of China.

 

ITEM 2. IDENTITY AND BACKGROUND.

(a) This Statement is being jointly filed by the following persons (each a “Reporting Person” and collectively, the “Reporting Persons”): (1) SCC I; (2) SCC PTRS I; (3) SCC PRIN I; (4) SCC MGMT I; (5) SCC HOLD; (6) SNP; and (7) NS, a Hong Kong SAR citizen. SCC MGMT I is the General Partner of SCC I, SCC PTRS I and SCC PRIN I. SCC HOLD is the General Partner of SCC MGMT I. SNP is the Director of, and wholly owns, SCC HOLD. NS is the Director of, and wholly owns SNP. The agreement among the Reporting Persons relating to the joint filing of this Statement is attached to this Statement as Exhibit 1.

Based on the transactions described in Item 4 below, the Reporting Persons may be deemed to constitute a “group” for purposes of Section 13(d)(3) of the Act with the other members of the Consortium. See Item 4 below.

(b) The business address of the Reporting Persons is Suite 3613, 36/F, Two Pacific Place, 88 Queensway Road, Hong Kong.

(c) The principal occupation or employment of SCC MGMT I is to serve as general partner of SCC I, SCC PTRS I and SCC PRIN I. The principal occupation or employment of each of SCC I, SCC PTRS I and SCC PRIN I is to acquire, hold and dispose of interests in various companies for investment purposes and to take all actions incident thereto. The principal occupation or employment of SCC HOLD is to serve as general partner of SCC MGMT I. The principal occupation or employment of SNP is to serve as the Director and parent company of SCC HOLD. The principal occupation or employment of NS is to serve as the Director and whole owner of SNP.

(d) During the last five years, no Reporting Person has been convicted in any criminal proceeding (excluding traffic violations or other minor offenses).

(e) During the last five years, no Reporting Person has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding has been 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.

(f) SCC MGMT I, SCC I, SCC PTRS I, SCC PRIN I, and SCC HOLD are each organized under the laws of the Cayman Islands. SNP is organized under the laws of the British Virgin Islands. NS is a citizen of Hong Kong SAR.


ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

The information set forth in or incorporated by reference in Items 2, 4 and 5 of this statement is incorporated by reference in its entirety into this Item 3.

The aggregate number of Ordinary Shares beneficially owned by the Reporting Persons is 1,646,362, all of which were issued upon conversion of certain preferred shares of the Issuer purchased prior to the Issuer’s initial public offering, as described below. The source of the funds used to purchase the preferred shares of the Issuer was capital contributions by the partners of such Reporting Persons and the available funds of such entities.

In July 2007, pursuant to a Subscription Agreement dated July 10, 2007, (i) SCC I purchased 196,900 series A preferred shares for an aggregate consideration of $3,150,400; (ii) SCC PTRS I purchased 22,625 series A preferred shares for an aggregate consideration of $362,000; and (iii) SCC PRIN I purchased 30,475 series A preferred shares for an aggregate consideration of $487,600.

In 2009, pursuant to a Subscription Letter, and further pursuant to that certain Secured Convertible Note and Warrant Purchase Agreement dated June 15, 2007, (i) SCC I exercised its warrant to purchase 2,127 series A preferred shares; (ii) SCC PTRS I exercised its warrant to purchase 244 series A preferred shares; and (iii) SCC PRIN I exercised its warrant to purchase 329 series A preferred shares.

The Issuer effected a 1:100 share split in 2010, resulting in the 252,700 aggregate series A preferred shares being split into 25,270,000 aggregate series A preferred shares. Additionally, the Issuer effected a 16:1 reverse share split in 2010, resulting in the 25,270,000 series A preferred shares being converted into 1,579,375 series A preferred shares. All of the series A preferred shares were converted, in connection with the closing of the Issuer’s initial public offering, into an aggregate of 2,909,380 Ordinary Shares on the basis of 1.8421 ordinary shares for each series A preferred share.

In July 2009, pursuant to a Series B Preferred Share Subscription Agreement dated July 7, 2009, (i) SCC I purchased 11,179 series B-1 subscribed shares for an aggregate consideration of $196,900; (ii) SCC PTRS I purchased 1,285 series B-1 subscribed shares for an aggregate consideration of $22,625; and (iii) SCC PRIN I purchased 1,730 series B-1 subscribed shares for an aggregate consideration of $30,475. Additionally, (i) SCC I purchased 8,695 series B-2 subscribed shares for an aggregate consideration of $196,900; (ii) SCC PTRS I purchased 999 series B-2 subscribed shares for an aggregate consideration of $22,625; and (iii) SCC PRIN I purchased 1,346 series B-2 subscribed shares for an aggregate consideration of $30,475. The Issuer effected a 1:100 share split in 2010, resulting in an aggregate of 25,234 aggregate series B preferred shares being split into 2,523,400 series B preferred shares.

In June 2010, pursuant to a Share Subscription Agreement dated June 28, 2010, (i) SCC I purchased 998,902 series B-3 subscribed shares for an aggregate consideration of $393,800; (ii) SCC PTRS I purchased 114,780 series B-3 subscribed shares for an aggregate consideration of $45,250; and (iii) SCC PRIN I purchased 154,604 series B-3 subscribed shares for an aggregate consideration of $60,950.

The Issuer effected a 16:1 reverse share split in 2010, resulting in the aggregate 3,791,686 series B preferred shares being converted into an aggregate of 236,982 series B preferred shares. All of the series B preferred shares were converted, in connection with the closing of the Issuer’s initial public offering, into an aggregate of 236,982 Ordinary Shares on the basis of one ordinary share for each series B preferred share.

In May 2012, pursuant to a Securities Transfer Agreement dated May 11, 2012, SCC I , SCC PTRS I and SCC PRIN I sold an aggregate of 1,500,000 ordinary shares to Skillgreat Limited for an aggregate consideration of $17,100,000.


ITEM 4. PURPOSE OF TRANSACTION.

On June 12, 2015, Mr. Dong Yu, and certain of his affiliated entities (collectively, the “Chairman Parties”), Fosun International Limited, Fosun International Holdings Ltd., Orrick Investments Limited, Peak Reinsurance Company Limited and Fidelidade Companhia Seguros S.A. (collectively, “Fosun Entities”) and SCC I, SCC PTRS I and SCC PRIN I (collectively, the “Sequoia Funds” and together with the Fosun Entities and the Chairman Parties, the “Consortium”) submitted a preliminary, non-binding letter (the “Proposal Letter”) to the Board of Directors of the Issuer (the “Board”). In the Proposal Letter, the Consortium outlined its proposal (“Proposal”) for the Transaction (as defined below). Under the Proposal, members of the Consortium propose to acquire, through an acquisition vehicle to be formed by them, all of the outstanding share capital of the Issuer (other than the Shareholder Shares (as defined below), which will be rolled over in connection with the Transaction, and any other shares that will be rolled over in connection with the Transaction) for US$13.70 in cash per American Depositary Share of the Issuer (“ADS,” with each two ADSs representing one Ordinary Share), or $27.40 in cash per Ordinary Share, as the case may be. In the Proposal Letter, the Consortium stated that it has held discussions with financial institutions that have expressed interests in providing financing in connection with the Transaction. The Proposal also provides that, among other things, (a) the Consortium’s financing providers will need to conduct customary legal, financial and accounting due diligence on the Issuer, and (b) the Consortium will negotiate with the Issuer to agree on, and enter into, definitive agreements with respect to the Transaction.

The Proposal is subject to a number of conditions, including, among other things, the negotiation and execution of a definitive agreement and other related agreements mutually acceptable in form and substance to the Issuer and the Consortium. Neither the Issuer nor any member of the Consortium is obligated to complete the Transaction, 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.

On June 12, 2015, in connection with the Proposal, the Chairman Parties entered into a consortium agreement (the “Consortium Agreement”) with the Fosun Entities and the Sequoia Funds, pursuant to which the Consortium agreed to cooperate in good faith in connection with the Proposal to acquire all of the outstanding share capital of the Issuer, through a going-private transaction (the “Transaction”), other than those shares beneficially owned by the members of the Consortium (the “Shareholder Shares”) or that will be rolled over by other shareholders in connection with the proposed Transaction. The Consortium Agreement provides, among other things, for coordination in (a) the evaluation of the Issuer, including conducting due diligence of the Issuer and its business, (b) discussions regarding the Proposal (as defined below) with the Issuer, and (c) the negotiation of the terms of definitive documentation in connection with the Proposal. The Consortium Agreement also requires the Reporting Persons, for a period beginning on the effective date of the Consortium Agreement and ending on the 9-month anniversary of such date, not to (i) make a competing proposal that involves the direct or indirect acquisition of 10% or more of the Issuer’s Ordinary Shares, a sale of all or any significant amount of the assets of the Issuer, a restructuring or recapitalization of the Issuer, or some other transaction that could adversely affect, prevent or materially reduce the likelihood of the consummation of the Proposed Transaction or (ii) acquire or dispose of any shares, warrants, options or other securities which are convertible into or exercisable for shares in the Issuer, other than through the Proposed Transaction.

References to each of the Consortium Agreement and the Proposal Letter in this Schedule 13D are qualified in their entirety by reference to the Consortium Agreement or the Proposal Letter, as applicable,, which are attached hereto as exhibits and incorporated herein by reference as if set forth in their entirety herein.

If the Proposed Transaction is completed, the ADSs would be delisted from the NASDAQ Select Global Market, and the Issuer’s obligation to file periodic reports under the Securities Exchange Act of 1934, as amended, would terminate. In addition, consummation of the Proposed Transaction could result in one or more of the actions specified in clauses (a)-(j) of Item 4 of Schedule 13D, including the acquisition or disposition of securities of the Issuer, a merger or other extraordinary transaction involving the Issuer, a change to the Board (as the surviving company in the merger), and a change in the Issuer’s memorandum and articles of association to reflect that the Issuer would become a privately held company.


ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.

The information set forth and/or incorporated by reference in Items 2, 3 and 4 is hereby incorporated by reference into this Item 5.

(a) The aggregate number of Ordinary Shares and the percentage of total outstanding Ordinary Shares beneficially owned by the Reporting Persons is set forth below. References to percentage ownerships of Ordinary Shares are based upon 32,402,346 Ordinary Shares outstanding as of June 12, 2015 relying on information provided by the Issuer). Pursuant to Rule 13d-3 of the Act, the Reporting Persons may be deemed to beneficially own 1,646,362 Ordinary Shares of the Issuer, representing approximately 5.1% of the outstanding Ordinary Shares of the Issuer. The filing of this Statement shall not be construed as an admission that a Reporting Person beneficially owns those shares held by any other Reporting Person.

SCC I beneficially owns 1,296,678 Ordinary Shares, which represents approximately 4.0% of the outstanding Ordinary Shares calculated in accordance with the requirements of Rule 13d-3 under the Act.

SCC PTRS I beneficially owns 148,993 Ordinary Shares, which represents approximately 0.5% of the outstanding Ordinary Shares calculated in accordance with the requirements of Rule 13d-3 under the Act.

SCC PRIN I beneficially owns 200,691 Ordinary Shares, which represents approximately 0.6% of the outstanding Ordinary Shares calculated in accordance with the requirements of Rule 13d-3 under the Act.

SCC MGMT I, as general partner of SCC I, SCC PTRS I and SCC PRIN I, may be deemed to beneficially own an aggregate of 1,646,362 Ordinary Shares, which represents approximately 5.1% of the outstanding Ordinary Shares calculated in accordance with the requirements of Rule 13d-3 under the Act.

SCC HOLD, as the general partner of SCC MGMT, may be deemed to beneficially own an aggregate of 1,646,362 Ordinary Shares, which represents approximately 5.1% of the outstanding Ordinary Shares calculated in accordance with the requirements of Rule 13d-3 under the Act.

SNP, which is the parent company of SCC HOLD, may be deemed to beneficially own an aggregate of 1,646,362 Ordinary Shares, which represents approximately 5.1% of the outstanding Ordinary Shares calculated in accordance with the requirements of Rule 13d-3 under the Act.

NS, who wholly owns and is the sole director of SNP, may be deemed to beneficially own an aggregate of 1,646,362 Ordinary Shares, which represents approximately 5.1% of the outstanding Ordinary Shares calculated in accordance with the requirements of Rule 13d-3 under the Act.

The Reporting Persons may be deemed to be a “group” with the Chairman Parties and the Fosun Entities for purposes of Section 13(d) of the Act as a result of entering into the Consortium Agreement and the submission of the Proposal Letter (each as defined in Item 4). However, each of the Reporting Persons expressly disclaims beneficial ownership for all purposes of the Ordinary Shares and ADSs held by the Chairman Parties and the Fosun Entities. The Reporting Persons are only responsible for the information contained in this Schedule 13D and assume no responsibility for information contained in any other Schedules 13D filed by the Chairman Parties or the Fosun Entities. In addition, the filing of this Schedule 13D shall not be construed as an admission that the Reporting Persons themselves are a group, or have agreed to act as a group. Each Reporting Person expressly disclaims beneficial ownership of the securities reported herein except to the extent such Reporting Person actually exercises voting or dispositive power with respect to such securities.


(b) The number of Ordinary Shares as to which each of the Reporting Persons has sole or shared power to vote, direct the vote, dispose or direct the disposition are as set forth in rows seven through ten of the cover pages hereof. The information set forth in Item 2 is hereby incorporated by reference into this Item 5(b).

(c) To the best knowledge of each of the Reporting Persons, none of the Reporting Persons has effected any transactions relating to the Ordinary Shares during the past 60 days.

(d) To the best knowledge of the Reporting Persons, no person other than the Reporting Persons has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities beneficially owned by the Reporting Persons identified in this Item 5.

(e) Not applicable.

 

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

The information set forth and/or incorporated by reference in Items 2, 3, 4 and 5 is hereby incorporated by reference into this Item 6.

To the best knowledge of the Reporting Persons, except as set forth herein, there are no contracts, arrangements, understandings or relationships (legal or otherwise), including, but not limited to, transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, between the persons enumerated in Item 2, and any other person, with respect to any securities of the Issuer, including any securities pledged or otherwise subject to a contingency the occurrence of which would give another person voting power or investment power over such securities other than standard default and similar provisions contained in loan agreements.

 

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.

 

Exhibit

  

Description

1    Joint Filing Agreement dated as of February 12, 2013, by and among SCC MGMT I, SCC I, SCC PTRS I, SCC PRIN I, SCC HOLD, SNP and NS (previously filed with the Commission as Exhibit 1 to Schedule 13G filed by the Reporting Persons on February 12, 2013).
2    Consortium Agreement, dated as of June 12, 2015, by and among the Chairman Parties (as defined therein), the Fosun Entities (as defined therein) and the Sequoia Entities (as defined therein).
3    Proposal Letter to the Issuer from the Consortium Members (as defined therein), dated June 12, 2015.
4    Subscription Agreement, dated as of July 10, 2007, by and among Tyner Group Limited, Beijing Bona New World Media Technology Co., Ltd., Beijing Polybona Film Distribution Co., Ltd., Beijing Bona Film Culture Communication Co., Ltd., Beijing Bona Advertising Co., Ltd., Yu Dong, Yu Hai, SIG China Investments One, Ltd., SCC I, SCC PTRS I and SCC PRIN I (incorporated by reference to Exhibit 4.4 to the Form F-1filed on November 17, 2010 with the Securities and Exchange Commission).


5 Bona International Film Group Limited Series B Preferred Share Subscription Agreement, dated as of July 7, 2009, by and among Bona International Film Group Limited, Beijing Bona New World Media Technology Co., Ltd., Beijing Polybona Film Distribution Co., Ltd., Beijing Bona Film Culture Communication Co., Ltd., Beijing Bona Advertising Co., Ltd., Beijing Bona Mei Tao Culture Media Co., Ltd., Zhejiang Bona Movie and Television Production Co., Ltd., Yu Dong, Yu Hai, Shi Nansun, Huang Hsin-Mao, Bona Entertainment Company Limited, Distribution Workshop (BVI) Ltd., Matrix Partners China I, L.P., Matrix Partners China I-A, L.P., SCC I, SCC PTRS I, SCC PRIN I, SINA Hong Kong Limited, Zero2IPO China Fund II, L.P. and Wayford Enterprises Limited (incorporated by reference to Exhibit 4.5 to the Form F-1filed on November 17, 2010 with the Securities and Exchange Commission).
6 Bona International Film Group Limited Share Subscription Agreement, dated as of June 28, 2010, by and among Bona International Film Group Limited, Beijing Bona New World Media Technology Co., Ltd., Beijing Baichuan Film Distribution Co., Ltd., Beijing Bona Film Culture Communication Co., Ltd., Beijing Bona Advertising Co., Ltd., Beijing Bona Mei Tao Culture Media Co., Ltd., Zhejiang Bona Movie and Television Production Co., Ltd., Bona Entertainment Company Limited, Distribution Workshop (BVI) Ltd., Yu Dong, Yu Hai, Blooming Capital Limited, Matrix Partners China I, L.P., Matrix Partners China I-A, L.P., SCC I, SCC PTRS I, SCC PRIN I, SIG China Investments One, Ltd., Zero2IPO China Fund II, L.P., Wayford Enterprises Limited and Jeffrey Chan (incorporated by reference to Exhibit 4.6 to the Form F-1filed on November 17, 2010 with the Securities and Exchange Commission).
7 Secured Convertible Note and Warrant Purchase Agreement, dated June 15, 2007, by and among Tyner Group Limited, Ms. SHI, Nan Sun and Mr. YU, Dong, and SCC I, SCC PTRS I and SCC PRIN I.


SIGNATURES

After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this Statement is true, complete and correct.

Dated: June 19, 2015

 

Sequoia Capital China I, L.P.
Sequoia Capital China Partners Fund I, L.P.
Sequoia Capital China Principals Fund I, L.P.
By: Sequoia Capital China Management I, L.P.,
a Cayman Islands exempted limited partnership
General Partner of Each
By: SC China Holding Limited, a Cayman Islands limited liability company
Its General Partner
By:

/s/ Nan Peng Shen

Nan Peng Shen
Sequoia Capital China Management I, L.P.,
a Cayman Islands exempted limited partnership
By: SC China Holding Limited, a Cayman Islands limited liability company
Its General Partner
By:

/s/ Nan Peng Shen

Nan Peng Shen
SC China Holding Limited, a Cayman Islands limited liability company
By:

/s/ Nan Peng Shen

Nan Peng Shen
SNP China Enterprises Limited
By:

/s/ Nan Peng Shen

Nan Peng Shen, Owner and Director

/s/ Nan Peng Shen

Nan Peng Shen
EX-99.2 2 d945825dex992.htm EX-2 EX-2

Exhibit 2

CONSORTIUM AGREEMENT

THIS CONSORTIUM AGREEMENT is made as of June 12, 2015 (the “Agreement”), by and among Dong Yu (the “Chairman”) and Skillgreat Limited (a British Virgin Islands Company controlled by the Chairman (“Skillgreat”, and together with the Chairman, the “Chairman Parties”), Fosun International Limited (a Hong Kong company) and its affiliates Orrick Investments Limited (a British Virgin Islands company), Peak Reinsurance Company Limited (a Hong Kong company) and Fidelidade Companhia Seguros S.A. (a Portugal company) (collectively, “Fosun Entities”), and Sequoia Capital China I, L.P. (an exempted limited partnership registered in the Cayman Islands), Sequoia Capital China Partners Fund I, L.P. (an exempted limited partnership registered in the Cayman Islands) and Sequoia Capital China Principals Fund I, L.P. (an exempted limited partnership registered in the Cayman Islands) (collectively, “Sequoia Entities”, together with Fosun Entities, the “Investor Entities”). Each of the Investor Entities and the Chairman Parties is referred to herein as a “Party”, and collectively, the “Parties”. Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in Section 10.1 hereof.

WHEREAS, the Parties propose to undertake an acquisition transaction (the “Transaction”) with respect to Bona Film Group Limited, a company incorporated under the laws of the Cayman Islands and listed on the NASDAQ Select Global Market (the “Target”), pursuant to which the Target would be delisted from NASDAQ and deregistered under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”);

WHEREAS, (a) in connection with the Transaction, the Parties propose to form a new company (“Holdco”) under the laws of the Cayman Islands, and to cause Holdco 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 “Closing”), the Parties intend that Merger Sub will be merged with and into the Target, with the Target being the surviving company and becoming a direct, wholly-owned subsidiary of Holdco (the “Surviving Company”);

WHEREAS, on the date hereof, the Parties will submit a joint, non-binding proposal, a copy of which is attached hereto as Schedule A (the “Proposal”), to the board of directors of Target (the “Target Board”) in connection with the Transaction; and

WHEREAS, in accordance with the terms of this Agreement, the Parties will cooperate and participate in (a) the evaluation of the Target, including conducting due diligence of the Target and its business, (b) discussions regarding the Proposal with the Target, and (c) the negotiation of the terms of definitive documentation in connection with the Transaction (in which negotiations the Parties expect that the Target will be represented by a special committee of independent and disinterested directors of the Target Board (the “Special Committee”), including an agreement and plan of merger among Holdco, Merger Sub and the Target in form and substance to be agreed by the Parties (the “Merger Agreement”), which shall be subject to the approval of the shareholders of the Target and debt financing documents in connection with the Transaction.

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. Proposal; Debt Financing; Holdco Ownership

 

1.1. Participation in Transaction. The Parties agree to participate in the Transaction on the terms set forth in this Agreement.

 

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1.2. Proposal. On the date hereof, the Parties shall submit the Proposal to the Target Board. Thereafter, the Parties shall collectively:

(a) undertake further due diligence with respect to the Target and its business; (b) engage in discussions with the Target regarding the Proposal; and (c) negotiate in good faith the terms of definitive documentation in respect of the Transaction, including without limitation the Merger Agreement and the terms of agreements between the Parties required to support the Proposal or to regulate the relationship between the Parties. The Parties further agree to negotiate in good faith to reach agreement on a shareholders agreement that would, among other things, govern the relationship of the shareholders in Holdco following the Closing, and contain provisions customary for transactions of this type.

 

1.3. Debt Financing.

 

  (a) The Parties shall use reasonable efforts and cooperate in good faith to arrange debt financing to support the Transaction (the “Debt Financing”), on terms satisfactory to the Parties.

 

  (b) To the extent practicable and permitted by the Target Board or the Special Committee, each of the Parties shall (i) furnish the financing banks with financial, know-your-client and other pertinent information relevant to the financial condition, business, operations and assets of the Target, as may be reasonably requested by the financing banks, and (ii) take all corporate or other actions reasonably requested by the financing banks to permit the consummation of the Debt Financing, including facilitating the pledging of collateral and, in connection therewith, executing and delivering any pledge and security documents, other definitive financing documents or certificates, or other documents as may be reasonably requested by the financing banks.

 

1.4. Holdco Ownership.

 

  (a) Prior to the execution of the Merger Agreement, the Parties shall (a) incorporate Holdco and shall cause Holdco to incorporate Merger Sub, and (b) negotiate and use reasonable best efforts to agree in good faith the terms of the memorandum and articles of association of each of Holdco and Merger Sub. The Parties agree that the memorandum and articles of association of Merger Sub shall become the memorandum and articles of association of the Surviving Company at the Closing.

 

  (b)

Each Party’s ownership percentage in Holdco shall be based on the amount of cash paid, and the agreed-upon value of any other consideration contributed, by such Party to Holdco relative to the aggregate amount of cash paid, and the aggregate agreed-upon value of any other consideration contributed, by all of the Parties to Holdco in connection with the Transaction (in ease case, from whatever sources derived). Specifically, the Chairman Parities and each of the Investor Entities agrees to contribute to Holdco at the Closing, in exchange for newly issued equity interests in Holdco, all of the Target Ordinary Shares then held by the Chairman Parties and the Investor Entities based on the same per

 

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  share consideration as provided in the Merger Agreement, except as may otherwise be agreed by the Parties. If so agreed, Target Ordinary Shares not contributed by the Chairman Parties and the Investor Entities to Holdco at the Closing pursuant to the preceding sentence shall be paid the per share consideration provided for in the Merger Agreement and cancelled at the Closing. For the avoidance of doubt, the Parties agree that the obligation of the Parties to purchase and pay for any Holdco shares shall be subject to the satisfaction or waiver of the various conditions to the obligations of Holdco and Merger Sub to be set forth in the Merger Agreement.

 

2. Participation in Transaction; Advisors; Approvals

 

2.1. Information Sharing and Roles. Each Party shall cooperate in good faith in connection with the Proposal and the Transaction, including by (a) complying with any information delivery or other requirements entered into by Holdco, a Party or an Affiliate of a Party, and shall not, and shall direct its Representatives not to, whether by their action or omission, breach such arrangements or obligations, (b) participating in meetings and negotiations with the Special Committee and its advisors, (c) executing and complying with any confidentiality agreements reasonably required by the Target, (d) participating in meetings and negotiations with Debt Financing lenders, (e) sharing all information reasonably necessary to evaluate the Target, including technical, operational, legal, accounting and financial materials and relevant consulting reports and studies, (f) providing each other or Holdco with all information reasonably required concerning such Party or any other matter relating to such Party in connection with the Transaction and any other information a Party may reasonably require in respect of any other Party and its Affiliates for inclusion in the definitive documentation, (g) providing timely responses to requests by another Party for information, (h) applying the level of resources and expertise that such Party reasonably considers to be necessary and appropriate to meet its obligations under this Agreement, and (i) consulting with each other Party and otherwise cooperating in good faith on any public statements regarding the Parties’ intentions with respect to the Target, any issuance of which shall be subject to Section 6.1. Unless the Parties otherwise agree, none of the Parties shall commission a report, opinion or appraisal (within the meaning of Item 1015 of Regulation M-A of the Exchange Act). Notwithstanding the foregoing, no Party is required to make available to the other Parties any of their internal investment committee materials or analyses or any information which it considers to be commercially sensitive information or which is otherwise held subject to an obligation of confidentiality. The Chairman Parities agree not to provide any information in breach of any of their obligations or fiduciary duties to the Target.

 

2.2. Appointment of Advisors.

 

  (a) The Parties shall agree to the scope and engagement terms of all joint Advisors to Holdco and/or the Parties in connection with the Transaction. The Parties agree to engage Kirkland & Ellis International LLP as their international legal counsel.

 

  (b) If a Party requires separate representation in connection with specific issues arising out of the Proposal or the Transaction, such Party may retain other Advisors to advise it. Each Party that engages separate Advisors shall (i) provide prior notice to the other Parties of such engagement, and (ii) be solely responsible for the fees and expenses of such separate Advisors.

 

2.3. Approvals. Each Party shall use reasonable best efforts and provide all cooperation as may be reasonably requested by each other Party to obtain all applicable governmental, statutory, regulatory or other approvals, licenses, waivers or exemptions required or, in the reasonable opinion of the Parties, desirable for the consummation of the Transaction.

 

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3. Transaction Costs

 

3.1. Expenses and Fee Sharing.

 

  (a) Upon consummation of the Transaction, the Surviving Company shall reimburse the Parties for, or pay on behalf of the Parties, as the case may be, all of their out-of-pocket costs and expenses incurred in connection with the Transaction, including, without limitation, the reasonable fees, expenses and disbursements of Advisors retained by the Parties (other than fees and costs of any separate Advisors who were retained by the Parties in accordance with Section 2.2(b) unless and only to the extent such appointment and expenses are agreed to in advance by the Parties).

 

  (b) If the Transaction is not consummated (and Section 3.1(c) below does not apply), the Parties agree to share the costs and expenses of Holdco and the Consortium incurred prior to or as a result of the termination of the Transaction, including any fees and expenses payable to Advisors retained by the Parties (other than fees and costs of any separate Advisors who were retained by the Parties in accordance with Section 2.2(b) unless and only to the extent such appointment and expenses are agreed to in advance by the Parties) on a pro rata basis in proportion to their ownership percentage of Holdco. Notwithstanding the foregoing, the fees and expenses of any Advisors to the Chairman Parties shall be borne by the Chairman Parties.

 

  (c) If the Transaction is not consummated due to the unilateral breach of this Agreement by one or more Parties, then such breaching Parties shall reimburse any non-breaching Party for all out-of-pocket costs and expenses, including any fees and expenses of (i) Advisors retained by the Parties (including the fees and costs of any separate Advisors who were retained by the Parties in accordance with Section 2.2(b)) and (ii) financing banks in connection with the Debt Financing, incurred by such non-breaching Party in connection with the Transaction, without prejudice to any rights and remedies otherwise available to such non-breaching Party.

 

  (d) The Parties shall be entitled to receive any termination, break-up or other fees or amounts payable to Holdco or Merger Sub by the Target pursuant to the Merger Agreement, to be allocated pro rata among the Parties in proportion to their committed equity ownership in the Holdco or otherwise as may be agreed in writing among the Parties, net of the costs and expenses incurred in connection with the Transaction, including, without limitation, the reasonable fees, expenses and disbursements of Advisors retained by the Parties (other than fees and costs of any separate Advisors who were retained by the Parties in accordance with Section 2.2(b) unless and only to the extent such appointment and expenses are agreed to in advance by the Parties).

 

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4. Exclusivity

 

4.1. Exclusivity Period. During the period beginning on the date hereof and ending on the earlier of (i) the 9-month anniversary of the date hereof and (ii) the termination of this Agreement pursuant to Section 5.2 (the “Exclusivity Period”), each Party shall:

 

  (a) work exclusively with the other Parties to implement the Transaction, including to (i) evaluate the Target and its business, (ii) prepare, negotiate and finalize the definitive documentation in connection with the Transaction, including for the Debt Financing, and (iii) vote, or cause to be voted, at every shareholder or stakeholder meeting (whether by written consent or otherwise) all Securities against any Competing Proposal or matter that would facilitate a Competing Proposal and in favor of the Transaction;

 

  (b) not, directly or indirectly, either alone or with or through any Representatives authorized to act on such Party’s behalf (i) make a Competing Proposal, or solicit, encourage, facilitate or join with any other person in the making of, any Competing Proposal, (ii) provide any information to any third party with a view to the third party or any other person pursuing or considering to pursue a Competing Proposal, (iii) finance or offer to finance any Competing Proposal, including by offering any equity or debt finance, or contribution of Securities or provision of a voting agreement, in support of any Competing Proposal, (iv) enter into any written or oral agreement, arrangement or understanding (whether legally binding or not) regarding, or do, anything that is directly inconsistent with the provisions of this Agreement or the Transaction as contemplated under this Agreement, (v) acquire or dispose of any Securities, including, not, directly or indirectly, to (A) 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 or otherwise transfer or dispose of, an interest in any Securities (“Transfer”) or permit the Transfer by any of its Affiliates of an interest in any Securities, in each case, except as expressly contemplated under this Agreement and the definitive documentation, (B) enter into any contract, option or other arrangement or understanding with respect to a Transfer or limitation on voting rights of any of the Securities, or any right, title or interest thereto or therein, or (C) deposit any Securities into a voting trust or grant any proxies or enter into a voting agreement, power of attorney or voting trust with respect to any Securities, (vi) take any action that would reasonably be expected to have the effect of preventing, disabling or delaying such Party from performing its obligations under this Agreement, or (vii) solicit, encourage, facilitate, induce or enter into any negotiation, discussion, agreement or understanding (whether or not in writing and whether or not legally binding) with any other person regarding the matters described in Sections 4.1(b)(i) to 4.1(b)(vi);

 

  (c) immediately cease and terminate, and cause to be ceased and terminated, all existing activities, discussions, conversations, negotiations and other communications with all persons conducted heretofore with respect to a Competing Proposal; and

 

  (d) promptly notify the other Parties if it or, to its knowledge, any of its Representatives receives any approach or communication with respect to any Competing Proposal, including in such notice the identity of the other persons involved and the nature and content of the approach or communication, and provide the other Parties with copies of any written communication.

 

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Notwithstanding the foregoing provisions of this Section 4.1, to the extent the Company specifically requests that the Chairman cooperate in respect of a bona fide written Competing Proposal that was not initiated, solicited, or encouraged by the Chairman, and the Chairman determines (solely in his capacity as Chief Executive Officer, Chairman or a member of the Board, and not in his capacity as a shareholder) that, based on the written advice of Cayman Islands counsel to the Consortium, that he is obligated in such capacity to cooperate with the Company in order to comply with his fiduciary duties under Cayman Islands law, the Chairman may provide such cooperation but only to the extent required to comply with such fiduciary duties in such capacity and in no event shall this clause be used as a means intended primarily to circumvent the exclusivity provisions thereof. In any event, the Chairman shall not enter into any understanding or arrangement with any party (or Affiliates of such party) to a Competing Proposal (including in respect of such Competing Proposal, holding any employment, consulting, or advisory role with the Target or any successor entity of the Target or its businesses or holding any equity or debt in respect of the same) until the period ending on the 1st anniversary of the date of the completion of the Competing Proposal.

 

5. Termination

 

5.1. Failure to Agree. (a) If the Parties are unable to agree either (i) as between themselves upon the material terms of the Transaction or the Debt Financing for the Transaction, or (ii) with the Special Committee on the material terms of a Transaction which the Special Committee agrees to recommend to the public shareholders of the Target, or (b) a Party is not satisfied with the results of its due diligence investigation, then, subject to Section 5.3(a), (I) a Party may cease its participation in the Transaction by delivery of a written notice to the other Parties and (II) this Agreement shall terminate with respect to such withdrawing Party.

 

5.2. Other Termination Events. Subject to Section 5.3(b), this Agreement shall terminate with respect to all Parties upon the earliest to occur of (a) a written agreement among the Parties to terminate this Agreement, (b) the Closing and (c) termination of this Agreement in accordance with Section 5.1 by written notice.

 

5.3. Effect of Termination.

 

  (a) Upon termination of this Agreement with respect to a Party pursuant to Section 5.1, Section 3 (Transaction Costs), Article 4 (Exclusivity), Section 5 (Termination), Section 6.2 (Confidentiality), Section 7 (Notices) and Section 9 (Miscellaneous) shall continue to bind such Party and such Party shall be liable under Section 3 for its pro rata portion of any costs and expenses incurred by the Parties prior to the termination of this Agreement with respect to such Party, unless there was a breach of this Agreement by such Party prior to the termination, in which case Section 3.1(c) shall apply.

 

  (b) Upon termination of this Agreement pursuant to Section 5.2, Section 3 (Transaction Costs), Section 5 (Termination), Section 6.2 (Confidentiality), Section 7 (Notices) and Section 9 (Miscellaneous) shall continue to bind the Parties and each of the Parties shall be liable under Section 3 for its pro rata portion of any costs and expenses incurred by the Parties prior to the termination of this Agreement, unless there was a breach of this Agreement by such Party prior to the termination, in which case Section 3.1(c) shall apply.

 

  (c) Other than as set forth in Sections 5.3(a) and (b) or in respect of a breach of this Agreement by any Party prior to the termination of this Agreement with respect to such Party, the Parties shall not otherwise be liable to each other in relation to this Agreement.

 

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6. Announcements and Confidentiality

 

6.1. Announcements. No announcements regarding the subject matter of this Agreement shall be issued by any Party without the prior written consent of the other Parties, which consent shall not be unreasonably withheld, delayed or conditioned, except to the extent that any such announcements are required by law, a court of competent jurisdiction, a regulatory body or international stock exchange, and then only after the form and terms of such disclosure have been notified to the other Parties and the other Parties have had a reasonable opportunity to comment thereon, in each case to the extent reasonably practicable. Any announcement to be made by the Parties or their Affiliates (including Holdco) in connection with the Transaction shall be jointly coordinated and agreed by the Parties.

 

6.2. Confidentiality.

 

  (a) Except as permitted under Section 6.3, each Party shall not, and shall direct its Affiliates and Representatives not to, without the prior written consent of the other Parties, disclose any Confidential Information received by it (the “Recipient”) from any other Party (the “Discloser”). Each Party shall not and shall direct its Affiliates and Representatives not to, use any Confidential Information for any purpose other than for the purposes of this Agreement or the Transaction.

 

  (b) Subject to Section 6.2(c), the Recipient shall safeguard and return to the Discloser, on demand, any Confidential Information which falls within clause (a) of the definition of Confidential Information, and in the case of electronic data that constitutes Confidential Information, to return or destroy such Confidential Information (other than any electronic data stored on the back-up tapes of the Recipient’s hardware) at the option of the Recipient.

 

  (c) Each of the Investor Entities may retain in a secure archive a copy of the Confidential Information referred to in Section 6.2(b) if the Confidential Information is required to be retained by the Investor Entities for regulatory purposes or in connection with a bona fide document retention policy.

 

  (d) Each Party acknowledges that, in relation to Confidential Information received from the other Parties, the obligations contained in this Section 6.2 shall continue to apply for a period of 12 months following termination of this Agreement pursuant to Section 5.1 or 5.2, unless otherwise agreed in writing.

 

6.3.

Permitted Disclosures. A Party may make disclosures (a) to those of its Affiliates and Representatives as such Party reasonably deems necessary to give effect to or enforce this Agreement (including potential sources of capital), but only on a confidential basis; (b) if required by law or a court of competent jurisdiction, the United States Securities and Exchange Commission or another regulatory body or international stock exchange

 

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  having jurisdiction over a Party or pursuant to whose rules and regulations such disclosure is required to be made, but only after the form and terms of such disclosure have been notified to the other Parties and the other Parties have had a reasonable opportunity to comment thereon, in each case to the extent reasonably practicable; or (c) if the information is publicly available other than through a breach of this Agreement by such Party or its Affiliates or Representatives.

 

7. Notices

 

7.1. Any notice, request, instruction or other document to be provided hereunder by any Party to another Party shall be in writing and delivered personally or sent by registered or certified mail, postage prepaid, or by facsimile, overnight courier or electronic mail, to the address provided under such other Party’s signature page hereto, or to such other address or facsimile number or electronic mail address as such Party may hereafter specify for the purpose by notice to the other Parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.

 

8. Representations and Warranties

 

8.1. Representations and Warranties. Each Party hereby represents and warrants, on behalf of such Party only, to the other Parties that (a) it has the requisite power and authority to execute, deliver and perform this Agreement; (b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary action on the part of such Party and no additional proceedings are necessary to approve this Agreement; (c) this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of such Party enforceable against it in accordance with the terms hereof; (d) its execution, delivery and performance (including the provision and exchange of information) of this Agreement will not (i) conflict with, require a consent, waiver or approval under, or result in a breach of or default under, any of the terms of any material contract or agreement to which such Party is a party or by which such Party is bound, or any office such Party holds, violate any order, writ, injunction, decree or statute, or any rule or regulation, applicable to such Party or any of its properties and assets, or result in the creation of, or impose any obligation on such Party to create, any lien, charge or other encumbrance of any nature whatsoever upon such Party’s properties or assets; and (e) no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transaction based upon arrangements made by or on behalf of such Party.

 

8.2. Target Ordinary Shares. (A) As of the date of this Agreement, (a) the Chairman Parties hold (i) of record the number of outstanding Target Ordinary Shares set forth under the heading “Shares Held of Record” next to their names on Schedule B, and (ii) the other Securities of Target set forth under the heading “Other Securities” next to their names on Schedule B, in each case free and clear of any encumbrances or restrictions; and (b) none of the Chairman owns, directly or indirectly, any Target Ordinary Shares or other Securities of Target, other than the Securities set forth on Schedule B hereto. For purposes of this Section 8.2(A)(b), “owns” means the Chairman (x) is the record holder of such security or (y) is the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of such security.

 

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(B) As of the date of this Agreement (a) the Investor Entities hold of record the number of outstanding Target Ordinary Shares set forth under the heading “Shares Held of Record” next to their names on Schedule B; and (b) none of the Investor Entities owns, directly or indirectly, any Target Ordinary Shares or other Securities of Target, other than the Securities set forth on Schedule B hereto. For purposes of this Section 8.2(B)(b), “owns” means any of the Investor Entities (x) is the record holder of such security or (y) is the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of such security.

 

8.3. Reliance. Each Party acknowledges that the other Parties have entered into this Agreement on the basis of and reliance upon (among other things) the representations and warranties in Sections 8.1 and 8.2 and have been induced by them to enter into this Agreement.

 

9. Miscellaneous

 

9.1. Entire Agreement. This Agreement constitutes the entire agreement between the Parties and supersedes any previous oral or written agreements or arrangements among them or between any of them relating to its subject matter.

 

9.2. Further Assurances. Each Party shall use all reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable to carry out the intent and purposes of this Agreement.

 

9.3. Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the Parties to the maximum extent possible. In any event, the invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction.

 

9.4. Amendments; Waivers. Neither this Agreement nor any term hereof may be amended or otherwise modified other than by an instrument in writing signed by each of the Parties. No provision of this Agreement may be waived, discharged or terminated other than by an instrument in writing signed by the Party against whom the enforcement of such waiver, discharge or termination is sought. No failure or delay by any Party in exercising any right, power or privilege under this Agreement 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.

 

9.5. Assignment; No Third Party Beneficiaries. Other than as provided herein, the rights and obligations of each Party shall not be assigned without the prior consent of the other Parties; provided, however, each of the Investor Entities may assign its rights and obligations under this Agreement, in whole or in part, to any affiliated investment funds of such Investor Entity or any investment vehicles of such Investor Entity or such funds (other than any portfolio companies of such Investor Entity or such funds) and, subject to the consent of the other Parties, any other co-investors of such Investor Entity (as the case may be). This Agreement shall be binding upon the respective heirs, successors, legal representatives and permitted assigns of the Parties. Nothing in this Agreement shall be construed as giving any person, other than the Parties and their heirs, successors, legal representatives and permitted assigns any right, remedy or claim under or in respect of this Agreement or any provision hereof.

 

9


9.6. No Partnership or Agency. The Parties are independent and nothing in this Agreement constitutes a Party as the trustee, fiduciary, agent, employee, partner or joint venturer of the other Party.

 

9.7. Counterparts. This Agreement may be executed in counterparts and all counterparts taken together shall constitute one document.

 

9.8. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law rules or provisions that would cause the application of the laws of any jurisdiction other than the State of New York.

 

9.9. Dispute Resolution. Any disputes, actions and proceedings against any Party or arising out of or in any way relating to this Agreement shall be submitted to the Hong Kong International Arbitration Centre (“HKIAC”) and resolved in accordance with the Arbitration Rules of HKIAC in force at the relevant time and as may be amended by this Section 9.9. The place of arbitration shall be Hong Kong. The official language of the arbitration shall be English and the tribunal shall consist of three arbitrators (each, an “Arbitrator”). The claimant(s), irrespective of number, shall nominate jointly one Arbitrator; the respondent(s), irrespective of number, shall nominate jointly one Arbitrator; and a third Arbitrator will be nominated jointly by the first two Arbitrators and shall serve as chairman of the tribunal. In the event the claimant(s) or respondent(s) or the first two Arbitrators shall fail to nominate or agree the joint nomination of an Arbitrator or the third Arbitrator within the time limits specified by the Arbitration Rules of HKIAC, such Arbitrator shall be appointed promptly by the HKIAC. The tribunal shall have no authority to award punitive or other punitive-type damages. The award of the arbitration tribunal shall be final and binding upon the disputing parties. Any party to an award may apply to any court of competent jurisdiction for enforcement of such award and, for purposes of the enforcement of such award, the Parties irrevocably and unconditionally submit to the jurisdiction of any court of competent jurisdiction and waive any defenses to such enforcement based on lack of personal jurisdiction or inconvenient forum.

 

9.10. Specific Performance. Each Party acknowledges and agrees that the other Parties would be irreparably injured by a breach of this Agreement by it and that money damages alone are an inadequate remedy for actual or threatened breach of this Agreement. Accordingly, each Party shall be entitled to bring an action for specific performance and/or injunctive or other equitable relief (without posting a bond or other security) to enforce or prevent any violations of any provision of this Agreement, in addition to all other rights and remedies available at law or in equity to such Party, including the right to claim money damages for breach of any provision of this Agreement.

 

9.11. Limitation on Liability. The obligation of each Party under this Agreement is several (and not joint or joint and several), provided that (i) the obligations of the Chairman Parties under this Agreement shall be joint and several as among the Chairman Parties; and (ii) the obligations of the Fosun Entities or the Sequoia Entities under this Agreement shall be joint and several as among the Fosun Entities or the Sequoia Entities, as the case may be.

 

10


10. Definitions and Interpretations

 

10.1. Definitions. In this Agreement, unless the context requires otherwise:

Advisors” means the advisors and/or consultants of Holdco, Merger Sub, and the Parties, in each case appointed in connection with the Transaction.

Affiliate” means, with respect to any person, any other person that, directly or indirectly, Controls, is Controlled by or is under common Control with such specified person and “Affiliates” shall be construed accordingly.

Business Day” means any day (other than a Saturday or a Sunday) on which banks generally are open in the People’s Republic of China, Hong Kong and in New York, New York, for the transaction of normal banking business.

Competing Proposal” means a proposal, offer or invitation to the Target, an Investor Entity, any of the Chairman Parties or any of their respective Affiliates (other than the Proposal), that involves the direct or indirect acquisition of 10% or more of the Target Ordinary Shares, a sale of all or any significant amount of the assets of the Target, a restructuring or recapitalization of the Target, or some other transaction that could adversely affect, prevent or materially reduce the likelihood of the consummation of the Transaction with the Parties.

Confidential Information” includes (a) all written, oral or other information obtained in confidence by one Party from any other Party in connection with this Agreement or the Transaction, unless such information (x) is already known to such Party or to others not known by such Party to be bound by a duty of confidentiality, or (y) is or becomes publicly available other than through a breach of this Agreement by such Party, and (b) the existence or terms of, and any negotiations or discussions relating to, this Agreement, the Proposal and any definitive documentation, including the Merger Agreement.

Control” means the possession, directly or indirectly, of the power to direct the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.

Representative” of a Party means such Party’s employees, directors, officers, partners, members, nominees, agents, advisors (including, but not limited to legal counsel, accountants, consultants and financial advisors), potential sources of equity or debt financing, and any representatives of the foregoing. The Representatives shall include the Advisors.

Securities” means shares, warrants, options and any other securities which are convertible into or exercisable for shares in the Target.

Target Ordinary Shares” means the issued and outstanding ordinary shares, par value 0.0005 per share, of the Target.

 

10.2. Headings. Section and paragraph headings are inserted for ease of reference only and shall not affect construction.

 

11


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

 

CHAIRMAN PARTIES:
Dong Yu
/s/ Dong Yu

 

Skillgreat Limited
By: /s/ Dong Yu
 

 

Name: Dong Yu
Title: Authorized Signatory

 

[Consortium Agreement Signature Page]


Fosun International Limited
Orrick Investments Limited
Peak Reinsurance Company Limited
Fidelidade Companhia Seguros S.A.
By: /s/ Jingyan Huang
 

 

Name: Jingyan Huang
Title: Authorized Signatory

 

[Consortium Agreement Signature Page]


Sequoia Capital China I, L.P.
Sequoia Capital China Partners Fund I, L.P.
Sequoia Capital China Principals Fund I, L.P.
By: /s/ Kok Wai Yee
 

 

Name: Kok Wai Yee
Title: Authorized Signatory

 

[Consortium Agreement Signature Page]


Schedule A

Preliminary Non-binding Proposal to Acquire Bona Film Group Limited


Schedule B

 

     Shares Held of Record         

Party

   Ordinary Shares
(including options to
purchase Ordinary
Shares)
     ADSs      Other Securities  

Chairman Parties

     9,300,812         0         0   

Fosun Entities

     4,165,926         4,702,317         0   

Sequoia Entities

     1,646,362         0         0   
EX-99.3 3 d945825dex993.htm EX-3 EX-3

Exhibit 3

June 12, 2015

The Board of Directors

Bona Film Group Limited

18/F, Tower 1, U-town Office Building, No.1 San Feng Bei Li, Chaoyang District

Beijing 100020, People’s Republic of China

Dear Sirs:

Mr. Dong Yu, and certain of his affiliated entities (collectively, the “Chairman”), Fosun International Limited, Orrick Investments Limited, Peak Reinsurance Company Limited and Fidelidade Companhia Seguros S.A. (collectively, “Fosun”) and Sequoia Capital China I, L.P., Sequoia Capital China Partners Fund I, L.P. and Sequoia Capital China Principals Fund I, L.P. (collectively, “Sequoia”), are pleased to submit this preliminary non-binding proposal to acquire Bona Film Group Limited (the “Company”) in a going private transaction (the “Acquisition”).

We believe that our proposal provides a very attractive opportunity to the Company’s shareholders. Our proposal represents a premium of 23.6% to the volume-weighted average closing price during the last 30 trading days.

 

1. Consortium. The Chairman, together with Fosun and Sequoia and together with the Chairman, the “Consortium Members”), have entered into a consortium agreement dated as of the date hereof, pursuant to which we will form an acquisition company for the purpose of implementing the Acquisition, and have agreed to work with each other exclusively in pursuing the Acquisition.

 

2. Purchase Price. The consideration payable for each American Depositary Share of the Company (“ADS”, each two representing one ordinary share of the Company) will be US$13.70 in cash, or US$27.40 in cash per ordinary share (in each case other than those ADSs or ordinary shares held by the Chairman, Fosun and Sequoia that may be rolled over in connection with the Acquisition).

 

3. Funding. We intend to finance the Acquisition with a combination of debt and/or equity capital. Equity financing will be provided by the Consortium in the form of cash and rollover equity in the Company. Debt financing is expected to be provided by loans from third party financial institutions. We are confident that we can timely secure adequate financing to consummate the Acquisition.

 

4. Due Diligence. We have engaged Kirkland & Ellis International LLP as our international legal counsel. We believe that we will be in a position to complete customary legal, financial and accounting due diligence for the Acquisition in a timely manner and in parallel with discussions on the definitive agreements.

 

1


5. Definitive Agreements. We are prepared to promptly negotiate and finalize definitive agreements (the “Definitive Agreements”) providing for the Acquisition and related transactions. These documents will provide for representations, warranties, covenants and conditions which are typical, customary and appropriate for transactions of this type.

 

6. Process. We believe that the Acquisition will provide superior value to the Company’s shareholders. We recognize that the Company’s Board of Directors (the “Board”) will evaluate the Acquisition independently before it can make its determination to endorse it. Given the involvement of the Chairman in the Acquisition, we appreciate that the independent members of the Board will proceed to consider the proposed Acquisition and that the Chairman will recuse himself from participating in any Board deliberations and decisions related to the Acquisition.

 

7. Confidentiality. The Chairman will, as required by law, promptly file an amendment to its Schedule 13D to disclose this letter and its agreement with the other Consortium Members. However, we are sure you will agree with us that it is in all of our interests to ensure that we proceed in a strictly confidential manner, unless otherwise required by law, until we have executed Definitive Agreements or terminated our discussions.

 

8. No Binding Commitment. This letter constitutes only a preliminary indication of our interest, and does not constitute any binding commitment with respect to the Acquisition. A binding commitment will result only from the execution of Definitive Agreements, and then will be on terms and conditions provided in such documentation.

In closing, we would like to 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. We look forward to hearing from you.

*    *    *

 

2


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

 

CHAIRMAN PARTIES:
Dong Yu
/s/ Dong Yu

 

Skillgreat Limited
By: /s/ Dong Yu
 

 

Name: Dong Yu
Title: Authorized Signatory

 

[Proposal Letter Signature Page]


Fosun International Limited
Orrick Investments Limited
Peak Reinsurance Company Limited
Fidelidade Companhia Seguros S.A.
By: /s/ Jingyan Huang
 

 

Name: Jingyan Huang
Title: Authorized Signatory

 

[Proposal Letter Signature Page]


Sequoia Capital China I, L.P.
Sequoia Capital China Partners Fund I, L.P.
Sequoia Capital China Principals Fund I, L.P.
By: /s/ Kok Wai Yee
 

 

Name: Kok Wai Yee
Title: Authorized Signatory

 

[Proposal Letter Signature Page]

EX-99.7 4 d945825dex997.htm EX-7 EX-7

Exhibit 7

EXECUTION COPY

TYNER GROUP LIMITED

 

 

SECURED CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT

 

 


SECURED CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT

This Secured Convertible Note and Warrant Purchase Agreement (the “Agreement”) is entered into on June 15, 2007 by and among Tyner Group Limited, a company limited by shares organized and existing under the laws of the British Virgin Islands (the “Company”), Ms. SHI, Nan Sun and Mr. YU, Dong (each, a “Founder” and collectively the “Founders”), and Sequoia Capital China I, L.P., Sequoia Capital China Partners Fund I, L.P. and Sequoia Capital China Principals Fund I, L.P. (collectively the “Purchaser”).

RECITALS

A. The Company desires to issue and sell and the Purchaser desires to purchase a convertible promissory note in substantially the form attached to this Agreement as Exhibit A (the “Note”) which shall be convertible under certain circumstances on the terms stated therein into equity securities of the Company. The Company also desires to issue to the Purchaser a warrant in substantially the form attached to this Agreement as Exhibit B (the “Warrant”). The Note, the Warrant and the equity securities issuable upon conversion or exercise thereof (and the securities issuable upon conversion of such equity securities) are collectively referred to herein as the “Securities.”

AGREEMENT

In consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties to this Agreement agree as follows:

1. Sale and Issuance of Note and Warrant.

(a) Sale and Issuance of the Note. Subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase at the Closing (as defined below) and the Company agrees to sell and issue to the Purchaser, a Note in the form attached hereto as Exhibit A, in an aggregate principal amount of one and a half million United States dollars (US$1,500,000) (the “Purchase Price”). Subject to, and in accordance with, the terms and conditions of the Note, any repayment of the outstanding principal amount of the Note and all unpaid accrued interest thereon shall be payable in immediately available funds in United States dollars on demand at the election of the Purchaser, at any time on or after the Maturity Date of the Note (as defined in the Note).

(b) Issuance of Warrant. Subject to the terms and conditions of this Agreement, the Company agrees to issue to the Purchaser a warrant (the “Warrant”), in the form of Exhibit B attached hereto, representing the right to purchase up to that number of equity securities of the Company specified in the Warrant. The Warrant shall, unless sooner terminated as provided therein, have a term of five (5) years from the date hereof and shall be exercisable at the price per share as set forth in the Warrant.


(c) Closing; Delivery.

(i) The purchase and sale of the Note shall take place at the offices of Paul, Hastings, Janofsky & Walker LLP, 21-22/F, Bank of China Tower, 1 Garden Road, Central, Hong Kong, on June 11, 2007, or at such other time and place as the Company and the Purchaser mutually agree upon in writing (which time and place are designated as the “Closing”).

(ii) At the Closing, the Company and the Founders shall deliver to the Purchaser the Note, the Warrant, the Mortgage Over Shares and the Debenture against (A) payment to bank accounts designated by the Company (the “Bank Accounts”) by the Purchaser of the Purchase Price by wire transfer of immediately available funds in United States dollars, and (B) delivery by the Purchaser of executed counterpart signature pages to the Transaction Documents (as defined below).

2. Representations and Warranties of the Company and of the Founders. Each of the Founders and the Company hereby jointly and severally represents and warrants to the Purchaser as at the date of this Agreement and as at the date of the Closing that:

(a) Organization, Good Standing and Qualification. The Company is a company limited by shares duly organized, validly existing and in good standing under the laws of the British Virgin Islands and has all requisite corporate power and authority to carry on its business as now conducted and as currently proposed to be conducted. The Company has not and is not conducting any business.

(b) Capitalization. The authorized capital of the Company consists of:

(i) 50,000 shares, par value US$1.00 per share, of which 1 share is issued and outstanding.

(ii) Except as contemplated hereby, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholders agreements or agreements of any kind for the purchase or acquisition from the Company of any of its securities.

(c) Authorization; Compliance. Each of this Agreement, the Note, the Warrant, the Side Letter with SIG attached hereto as Exhibit C, the Debenture attached hereto as Exhibit D and the Guarantee attached hereto as Exhibit E (collectively, the “Transaction Documents”) to which the Company is a party and the transactions contemplated hereby and thereby, have been duly authorized by the Company. The Transaction Documents, when executed and delivered by the Company and the Founders as applicable, shall constitute valid and legally binding obligations of the Company and the Founders as applicable, enforceable against the Company and the Founders as applicable in accordance with their respective terms. The execution, delivery and performance of the Transaction Documents will not result in any violation or breach of any provision of the Company’s constitutional documents nor in any material respect of any instrument, note indenture or agreement to which the Company is subject.

(d) Valid Offering and Issuance. Subject in part to the truth and accuracy of the representations and warranties of the Purchaser, the offer, sale and issuance of the Securities are and will be exempt from the registration requirements of the Securities Act of 1933, as

 

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amended (the “Act”), and the qualification or registration requirements of applicable securities laws. The shares issuable upon conversion of the Note and upon exercise of the Warrant, and the shares of capital stock of the Company issuable upon conversion thereof (collectively, the “Shares”), have been duly and validly reserved for issuance and, when issued, sold and delivered in accordance with the terms of the Note and the Warrant, will be duly and validly issued, fully paid and nonassessable.

(e) Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the issuance of the Securities, except for such filings required pursuant to applicable national, provincial and local securities laws, which filings will be effected within the required statutory periods.

(f) No Violation. The Company is not in violation of or default under any provision of its constitutional documents, or in any material respect of any instrument, judgment, order, writ, decree or contract to which it is a party or by which it is bound, or, to the best of its knowledge, of any provision of any national, provincial or local statute, rule or regulation which is applicable to it.

(g) Assets. The Company does not have any assets except for its ownership of the Bank Accounts.

3. Conditions of the Purchaser’s Obligations at Closing. The obligations of the Purchaser to the Company under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Purchasers:

(a) Representations and Warranties. The representations and warranties of the Company and the Founders contained in Section 2 hereof shall be true, correct and complete on and as at the Closing with the same effect as though such representations and warranties had been made on and as at the date of hereof.

(b) Performance. The Company and the Founders shall have performed and complied with all agreements, obligations, and conditions contained in the Transaction Documents that are required to be performed or complied with by it on or before the Closing.

(c) Execution of Transaction Documents. Each of the Transaction Documents shall have been duly executed by the parties thereto.

(d) Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Purchasers’ counsel, who shall have received all such counterpart original and certified copies of such documents as it may reasonably request.

(e) Bank Accounts Control. A nominee of the Purchaser shall have been added as a required signatory of the Bank Accounts, as a result of which no withdrawal of funds from the Bank Accounts can be made without the signature of such nominee of the Purchaser.

 

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(f) Governmental Approval. Except for the notices required or permitted to be filed after the date of Closing with certain securities commissions, the Company shall have obtained all governmental approvals required in connection with the lawful sale and issuance of the Securities.

(g) Legally Permitted. At the Closing, the sale and issuance by the Company, and the purchase by the Purchaser, of the Securities shall be legally permitted by all laws and regulations to which the Purchaser or the Company is subject.

4. Continuing Covenants of the Company.

(a) Authorization of Preferred Shares. As soon as practicable after receipt by the Company of any Conversion Notice (as defined in the Note) or any Form of Subscription (as defined in the Warrant), and in any case prior to the Conversion Date (as set forth in such Conversion Notice), the Company shall do and perform, or cause to be done and performed, all such acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as are necessary to authorize and issue a sufficient number of preferred shares of the Company (the “Preferred Shares”) to effect the conversion demanded in such Conversion Notice or exercise demanded in such Form of Subscription. The foregoing obligation of the Company shall include, without limitation, the prompt solicitation of requisite approval from its Board of Directors and shareholders and the filing of an amendment to its Memorandum of Association and/or Articles of Association, as applicable. The Preferred Shares that are authorized and issued pursuant to this Section 4, the Note and the Warrant, when issued and delivered in accordance with the terms of the Note or the Warrant, will be duly and validly issued, fully paid and non-assessable, and free and clear of any liens, charges or mortgages.

(b) Consultation with the Investor. So long as the Note issued pursuant to this Agreement is outstanding, the Company shall timely inform the Purchaser of and discuss with the Purchaser on a regular and ongoing basis any material developments or decisions with respect to the management of the businesses and assets of the Company, including, without limitation, any significant new agreements or transactions proposed to be entered into or persons proposed to be employed or terminated in executive management positions, and any other significant developments relating to the business or assets of the Company.

(c) Access to Information. So long as the Note issued pursuant to this Agreement is outstanding, the Company shall: (i) give the Purchaser (and its legal and financial advisors) access to its lenders, financial advisors, accountants and other advisors, and shall assist the Purchaser in obtaining any information reasonably requested and (ii) cause its officers to furnish the Purchaser with financial operating data and other information reasonably requested with respect to the business of the Company. No access provided to, or review undertaken by, the Purchaser hereunder shall, however, affect or limit in any respect the representations and warranties of the Company or Founders as set forth herein or provided hereunder.

(d) Future Indebtedness. From the date hereof until the date on which there is no outstanding unpaid principal, accrued interest or any other amounts owing under the Note

 

-4-


and Warrant, the Company shall not, and shall not permit any entity over which the Company has the power to direct or cause the direction of the management and policies (each, a “Subsidiary”) to, without the prior written consent of the Purchaser, incur indebtedness for money borrowed (including without limitation any trade or capital debt) or borrow or reborrow any amounts under any outstanding lines of credit, without the aforesaid approval.

(e) Restrictions on Dividends. From the date hereof until the date on which there is no outstanding unpaid principal, accrued interest or any other amounts owing under the Notes, the Company shall not, without the prior written consent of the Purchaser, declare or pay any dividend or other distribution on any series or class of capital stock of the Company.

(f) Further Covenants. From the date hereof until the date on which there is no outstanding unpaid principal, accrued interest or any other amounts owing under the Note and Warrant, the Company shall not, and shall not permit any Subsidiary to, without the prior written consent of the Purchaser:

(i) take any action that authorizes, creates, issues or sells shares of any class or equity interests or securities convertible into shares or instruments or warrants, options or other rights to purchase any equity security or instrument, or other equity interests therein;

(ii) take any action that results in the redemption or repurchase of any equity security thereof;

(iii) engage in any business;

(iv) purchase or sell any assets;

(v) pass any board resolution or shareholder resolution; or

(vi) enter into, adopt, amend or waive any provision of its constitutional documents or any agreement or contract to which it is a party or by which it is bound;

(vii) modify, amend or waive the co-signatory arrangements of the Bank Accounts in any manner; or

(viii) agree or commit to do any of the things described in this Section 4(f).

5. Events of Default/Remedies.

(a) Events of Default. Each of the following shall constitute an event of default (each, an “Event of Default”) under this Agreement:

(i) The Company fails to pay upon demand made by the Purchaser, at any time on or after the Maturity Date, any and all unpaid principal, accrued interest and all other amounts owing under the Note in accordance with the terms thereof;

 

-5-


(ii) Any representation or warranty made by the Company or the Founders in any of the Transaction Documents shall prove, when given, to be false or misleading;

(iii) The Company or the Founders breaches any covenant in, or fails to perform any obligation under, any Transaction Document, including, without limitation, any failure to perform under Section 2 of the Note and Section 1 of the Warrant;

(iv) The Company is in breach of any of its obligations under any material contract, or is in default under any such contract, and such breach or default is not cured within any reasonable applicable curing period specified by the Purchaser;

(v) The Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any general assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing;

(vi) An involuntary petition is filed against the Company (unless such petition is dismissed or discharged within thirty (30) days) under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of the Company; and

(vii) The Company’s shareholders or board of directors affirmatively vote to liquidate, dissolve, or wind up the Company or the Company otherwise ceases to carry on its ongoing business operations; and

(viii) If (A) a material portion of the Company’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver and the attachment, seizure or levy is not removed in ten (10) days, (B) the Company is enjoined, restrained, or prevented by a court order or other order of a governmental body from conducting its business, or (C) notice of lien, levy, or assessment is filed against any of the Company’s assets by any court order or other order of any governmental body and it is not paid within thirty (30) days after the Company received notice thereof.

(b) Remedies. Upon the occurrence of any Event of Default and while it is continuing, all unpaid principal and interest and all other amounts owing under any of the Transaction Documents shall, at the election of the Purchaser, and, upon the occurrence of any Event of Default pursuant to Section 5(a)(v) or (vi) above, automatically, be immediately due, payable and collectible by the Purchaser pursuant to applicable law. In the event of any Event of Default, the Company shall pay all reasonable attorneys’ fees and costs incurred by the Purchaser in enforcing the Transaction Documents and collecting amounts payable thereunder. No right or remedy conferred upon or reserved to the Purchaser under this Agreement or any of the Transaction Documents is intended to be exclusive of any other right or remedy, and every right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now and hereafter existing under applicable law.

 

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6. Miscellaneous.

(a) Survival of Representations, Warranties and Covenants. The warranties, representations and covenants of the Company and Purchaser contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Purchaser or the Company.

(b) Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto. This Agreement is assignable by the Purchaser to an affiliate of the Purchaser. This Agreement is not assignable by the Company or the Founders without the express prior written consent of the Purchaser. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

(c) Governing Law and Jurisdiction. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the Hong Kong, SAR, without giving effect to principles of conflicts of law thereunder. The parties agree that the courts of Hong Kong have jurisdiction to settle any disputes arising out of or in connection with this Agreement.

(d) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(e) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

(f) Notices. Any notice required or permitted pursuant to this Agreement shall be given in writing and shall be given either personally or by sending it by next-day or second-day courier service, fax, electronic mail or similar means to the address as shown below the signature of such party on the signature page of this Agreement (or at such other address as such party may designate by fifteen (15) days’ advance written notice to the other parties to this Agreement given in accordance with this Section 6(f). Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognized courier a letter containing the notice, with a confirmation of delivery, and to have been effected at the expiration of two days after the letter containing the same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organization, with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid.

 

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(g) Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Company and the Purchaser. Any amendment or waiver effected in accordance with this Section 6(g) shall be binding upon the Purchaser, each transferee of the Securities, each future holder of all such Securities, and the Company.

(h) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(i) Entire Agreement. The Transaction Documents and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto are expressly canceled.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have executed this SECURED CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT on the date first above written.

 

THE COMPANY:
TYNER GROUP LIMITED

/s/ Yu Dong

Name:

Yu Dong

Title:

Director

Address:

 

 

 

 

Facsimile Number:

 

 

THE FOUNDERS

/s/ SHI, Nan Sun

Name: SHI, Nan Sun
Address:

 

 

 

 

Facsimile Number:

852-2712-8200

/s/ Yu Dong

Name: YU, Dong
Address:

 

 

 

 

Facsimile Number:

 

 

S-1


IN WITNESS WHEREOF, the parties have executed this SECURED CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT on the date first above written.

 

THE PURCHASER:
SEQUOIA CAPITAL CHINA I, L.P.
SEQUOIA CAPITAL CHINA PARTNERS FUND I, L.P.
SEQUOIA CAPITAL CHINA PRINCIPALS FUND I, L.P.
By: Sequoia Capital China Management I, L.P.
A Cayman Islands exempted limited partnership
General Partner of Each
By: SC China Holding Limited
A Cayman Islands limited liability company
Its General Partner
By: Max Wealth Enterprises Limited, Director

/s/ Neil Shen

Name: Neil Shen
Title: Director

 

S-2


EXHIBIT A

FORM OF CONVERTIBLE PROMISSORY NOTE


EXHIBIT B

FORM OF WARRANT


EXHIBIT C

SIDE LETTER WITH SIG