Item 4 is amended and restated as follows.
The shares of Common Stock currently beneficially owned by the Reporting Persons were originally acquired for investment purposes.
On June 2,2018, Mr. Dang Yu (George) Pan submitted a preliminary nonbinding proposal letter (the “Proposal Letter”) to the Issuer’s board of directors, a copy of which was filed as Exhibit 7.02 to the Schedule 13D. In the Proposal Letter, Mr. Pan proposed to acquire (the “Acquisition”), through an acquisition vehicle to be formed by Mr. Pan, all of the outstanding shares of Common Stock that are not already directly or indirectly beneficially owned by Mr. Pan for cash consideration equal to US$4.80 per share of Common Stock to be funded by a combination of debt and equity capital arranged by Mr. Pan. It is anticipated Mr. Pan will roll over his equity interests in the Issuer to such acquisition vehicle. The Proposal Letter stated that Mr. Pan expects commitments for the debt financing, subject to terms and conditions set forth therein, to be in place when the definitive agreements for the Acquisition are executed. Mr. Pan also stated in the Proposal Letter that he is only interested in pursuing the Acquisition and does not intend to sell his stake in the Issuer to a third party. Mr. Pan expects to complete due diligence of the Issuer in parallel with discussions of the definitive agreements with respect to the Acquisition. The Proposal Letter constitutes only a preliminary indication of Mr. Pan’s interest, and does not constitute any binding commitment with respect to the Acquisition.
On March 13,2019, Mr. Dang Yu (George) Pan, Mr. Wen Liang Li, Mr. Wen Wei Ma (collectively, the “Founders”), and Essence International Financial Holdings (Hong Kong) Limited (“Essence”, together with the Founders, the “Consortium”) entered into a consortium agreement (the “Consortium Agreement”), a copy of which is attached hereto as Exhibit 7.03. Under the Consortium Agreement, the members of the Consortium agreed, among other things, to form a consortium to (i) participate in a transaction (the “Transaction”) to acquire the Issuer, which would result in a delisting of the Issuer from the Nasdaq Global Market and deregistering the Issuer under the Act, (ii) work exclusively with each other with respect to the Transaction for six months after the date of the Consortium Agreement, or nine months after the date of the Consortium Agreement if the Consortium is still in bona fide negotiation with the special committee of the board of directors of the Issuer on the Transaction following six months after the date of the Consortium Agreement (subject to certain exceptions and possible extension as set forth in the Consortium Agreement), (iii) cooperate with each other in connection with the Transaction, (iv) incorporate a holding company (“Holdco”) under the laws of the Cayman Islands and cause Holdco to incorporate a whollyowned subsidiary of Holdco under the laws of the State of Delaware to be merged with and into the Issuer upon consummation of the Transaction, unless agreed otherwise, (v) vote, or cause to be voted, at every shareholder or stakeholder meeting all securities beneficially owned by such party and which have voting rights in favor of the Transaction and against any competing proposal or matter that would facilitate a competing proposal, (vi) contribute to Holdco all the Common Stock of the Issuer held by the Founders as set forth in the Consortium Agreement (subject to mutually agreed rollover agreement to be entered into by each Founder), (vii) finance the cash needed for payment of the consideration in the Transaction through equity commitment letter to be delivered by Essence or its affiliate(s), subject to certain conditions provided in the Consortium Agreement, and (viii) allocate certain costs and expenses related to the Transaction. In addition, the members of the Consortium have agreed during the exclusivity period, among other things, not to (1) make a competing proposal or join with, or solicit, encourage, facilitate or invite any other person in the making of any competing proposal, or (2) acquire (other than pursuant to equity incentive plans of the Issuer) or dispose of any Common Stock or other securities of the Issuer (subject to certain exceptions set forth therein). The Founders have also irrevocably appointed Mr. Dang Yu (George) Pan as the representative (the “Founder Representative”) to act on behalf of the Founders in respect of all matters arising from or in connection with the Proposal Letter, the Transaction and the Consortium Agreement. Subject to the survival of certain provisions set forth in the Consortium Agreement, if Essence and the Founder Representative are unable to agree (after good faith endeavors to pursue the Transaction) upon the material terms of the Transaction or the shareholders’ agreement among the members of the Consortium, or with the special committee of the board of directors of the Issuer on the material terms of the Transaction which the special committee agrees to recommend to the public shareholders of the Issuer, then either Essence or the Founder Representative may cease the participation in the Transaction and the Consortium Agreement will terminate thereafter.
CUSIP No. 43113X101 Page 8 of 10
If the Acquisition is completed, the Issuer’s Common Stock would become eligible for termination of registration pursuant to Section 12(g)(4) of the Act and would be delisted from the Nasdaq Stock Market LLC (Nasdaq Global Market).
The descriptions of the Proposal Letter and the Consortium Agreement set forth above in this Item 4 do not purport to be complete and are qualified in their entirety by reference to the full text of the Proposal Letter and the Consortium Agreement, which have been filed as Exhibits 7.02 and 7.03 respectively and are incorporated herein by this reference.
None of the Issuer, any of the Reporting Persons or Essence is obligated to complete the transactions described herein, and a binding commitment with respect to the Acquisition will result only from the execution of definitive documents, and then will be on the terms provided in such documentation.
Except as indicated above, the Reporting Persons currently do not have any plans or proposals that relate to or would result in any matters listed in Items 4(a)(j) of Schedule 13D. Consummation of the Acquisition could result in one or more of the actions specified in Items 4(a)(j) 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 of directors of the Issuer to consist solely of persons to be designated by the acquisition vehicle to be formed by the Consortium, and a change in the Issuer’s certificate of incorporation to reflect that the Issuer would become a privately held company. In addition, the Reporting Persons reserve their right to change their plans and intentions in connection with any of the actions discussed in this item 4, including, among others, the purchase price and the financing arrangements for the Acquisition. Any action taken by the Reporting Persons may be effected at any time and from time to time, subject to any applicable limitations imposed by any applicable laws. No assurance can be given that any proposal, any definitive agreement or any transaction relating to the Acquisition will be entered into or be consummated.