Exhibit 4.3
Execution Version
SECOND AMENDED AND RESTATED INVESTOR RIGHTS
AGREEMENT
THIS
SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this “
Agreement ”) is made and entered into as of
September 2, 2009, by and among (i) (a) China Security &
Surveillance Technology, Inc., a Delaware corporation (the “
Company ”), (b) China Security &
Surveillance Technology (PRC), Inc., a limited liability company
organized and existing under the laws of the People’s
Republic of China (the “ PRC ”) and a
wholly-owned subsidiary of the Company (“ CSST
PRC ”) and China Safetech Holdings Limited, a
corporation organized and existing under the laws of the British
Virgin Islands and a wholly-owned subsidiary of the Company
(“ Safetech ”, and collectively with the
Company and CSST PRC, the “ Group Companies
”), and (ii) Citadel Equity Fund Ltd. (“
Citadel ”). Capitalized terms used herein but
not otherwise defined herein shall have the respective meanings set
forth in the New Notes Purchase Agreement (as defined
below).
WITNESSETH:
WHEREAS, the Company, Citadel and the other
parties named therein entered into the Investor Rights Agreement,
dated February 16, 2007, as amended by that certain amendment to
the Investor Rights Agreement by and among the same parties, dated
as of March 29, 2007 (the “ Original Investor Rights
Agreement ”), in relation to the purchase from the
Company by Citadel of US$60,000,000 1% Guaranteed Senior Unsecured
Convertible Notes due 2012 (the “ CSST I Notes
”);
WHEREAS, the Company, Citadel and the other
parties named therein entered into the Amended and Restated
Investor Rights Agreement, dated April 24, 2007 (the “
Existing Investor Rights Agreement ”),
which amended and restated the Original Investor Rights Agreement
in its entirety, in relation to the purchase from the Company by
Citadel of US$50,000,000 1% Guaranteed Senior Unsecured Convertible
Notes due 2012 (the “ CSST II Notes
” and, together with the CSST I Notes, the “
Existing Notes ”);
WHEREAS, the Company, Citadel and the other
parties named herein have entered into the Notes Purchase
Agreement, dated August 18, 2009 (the “ New Notes
Purchase Agreement ”), pursuant to which the
Company has agreed to issue to Citadel, and Citadel has agreed to
purchase from the Company, an aggregate of (i) US$50,000,000 Zero
Coupon Guaranteed Senior Unsecured Convertible Notes (the “
Tranche A Notes ”), which are convertible into
the Company’s common stock, par value US$.0001 (the
“Common Stock”), and (ii) US$84,000,000 Zero Coupon
Guaranteed Senior Unsecured Notes (the “ Tranche B
Notes ” and, together with the Tranche A Notes, the
“ New Notes ”), in exchange for
cancellation of the entire Existing Notes;
WHEREAS, the terms and conditions of the Tranche
A Notes will be governed by the Indenture dated as of even date by
and among the Company, The Bank of New York Mellon, as trustee, and
the other parties named therein (the “ Tranche A
Indenture ”), and the terms and conditions of the
Tranche B Notes will be governed by the Indenture dated as of even
date by and among the Company, The Bank of New York Mellon, as
trustee, and the other parties named therein (the “
Tranche B Indenture ” and, together with the
Tranche A Indenture, the “ New Notes
Indentures ”);
1
WHEREAS, in connection with the consummation of
the transactions contemplated by the New Notes Purchase Agreement,
the parties hereto desire to enter into this Agreement to amend and
restate in its entirety the Existing Investor Rights Agreement;
and
WHEREAS, it is a condition to the Closing under
the New Notes Purchase Agreement that the parties hereto shall have
executed this Agreement.
NOW,
THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally
bound by this agreement, agree as follows:
1.
Representations and Warranties of the Group
Companies. Each of the Group Companies, jointly and severally,
represents and warrants that:
1.1
Each of the Group Companies has full power and
authority to make, enter into and carry out the terms of this
Agreement. This Agreement has been duly executed and delivered by
each Group Company and constitutes the legal, valid and binding
obligations of such Group Company enforceable against such Group
Company in accordance with its terms.
1.2
The execution and delivery of this Agreement by
each Group Company do not, and the performance of this Agreement by
such Group Company will not: (i) conflict with or violate any law,
rule, regulation, order, decree or judgment applicable to any Group
Company or by which any Group Company or any of the properties of
any Group Company is or may be bound or affected, or the Charter
Documents of any Group Company; (ii) result in or constitute (with
or without notice or lapse of time) any breach of or default under
any contract to which any Group Company is a party or by which any
Group Company or any of the affiliates or properties of any Group
Company is or may be bound or affected, or (iii) result in the
creation of any encumbrance or restriction on any of the shares of
Common Stock or equity interests in any other Group Company or
properties of any Group Company. The execution and delivery of this
Agreement by each Group Company do not, and the performance of this
Agreement by each Group Company will not, require any consent or
approval of any Person.
2.
Reserved.
3.
Covenants and Agreements.
Unless the context requires
otherwise, each Group Company hereby, jointly and severally,
covenants and agrees as follows:
3.1
FCPA. Each of the Group Companies shall, and
shall cause each of its Subsidiaries and their respective
management to, (i) comply with the U.S. Foreign Corrupt Practices
Act of 1977, as amended, and the rules and regulations thereunder
(the " FCPA "), including, without limitation, not making
use of the mails or any means or instrumentality of interstate
commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of
value to any “foreign official” (as the term is defined
in the FCPA) or any foreign political party or official thereof or
any candidate for foreign political office, in contravention of the
FCPA, (ii) conduct each such company’s respective business in
compliance with the FCPA, and (iii) institute and maintain policies
and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance
therewith.
2
3.2
PFIC .
Each Group Company shall not become, and shall cause its
Subsidiaries not to become, a “passive foreign investment
company” within the meaning of Section 1297 of the U.S.
Internal Revenue Code of 1986.
3.3
OFAC .
Neither any Group Company or any of its Subsidiaries nor, to the
knowledge of any Group Company, any director, officer, agent,
employee, Affiliate or Person acting on behalf of any Group Company
or its Subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“ OFAC ”); and each
Group Company shall not directly or indirectly use, and shall cause
its Subsidiaries not to so use, the proceeds of the sale of the New
Notes, or lend, contribute or otherwise make available such
proceeds to any Subsidiary, joint venture partner or other Person
or entity, towards any sales or operations in Cuba, Iran, Syria,
Sudan, Myanmar or any other country sanctioned by OFAC or for the
purpose of financing the activities of any Person currently subject
to any U.S. sanctions administered by OFAC.
3.4
Money Laundering Laws . Each of the Group Companies shall, and shall
cause its Subsidiaries to, conduct its operations at all times in
compliance with the money laundering statutes of applicable
jurisdictions, the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered
or enforced by any applicable governmental agency.
4.
Limitations on the Conversion of the New Notes
Held by Citadel .
4.1
Notwithstanding any provision in any of the New
Notes Indentures, the Company shall not effect any conversion of
the New Notes, and Citadel shall not have the right to convert any
portion of the New Notes held by it, to the extent that after
giving effect to such conversion, Citadel
