As filed with the U.S. Securities and Exchange
Commission on August 4, 2023
Registration
No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Baosheng Media Group Holdings Limited
(Exact name of registrant as specified in its
charter)
| Cayman
Islands |
|
Not
Applicable |
(State or other jurisdiction
of
incorporation or organization) |
|
(I.R.S. Employer
Identification Number) |
East Floor 5, Building No. 8, Xishanhui
Shijingshan District, Beijing 100041
People’s Republic of China
+86-010-82088021
(Address and telephone number of Registrant’s
principal executive offices)
Puglisi & Associates
850 Library Avenue, Suite 204
Newark, DE 19711
302-738-6680
(Name, address, and telephone number of agent
for service)
With a Copy to:
Ying Li, Esq.
Guillaume de Sampigny, Esq.
Hunter Taubman Fischer & Li LLC
950 Third Avenue, 19th Floor
New York, NY 10022
212-530-2206
Approximate date of commencement of proposed
sale to the public: From time to time after the effective date of the registration statement.
If only securities
being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following
box. ¨
If any of the securities
being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box. x
If this Form is
filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering. ¨
If this Form is
a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is
a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon
filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this Form is
a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities
or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company
x
If an emerging
growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected
not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant
to Section 7(a)(2)(B) of the Securities Act. ¨
†The term “new or revised financial
accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification
after April 5, 2012.
The Registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
| The
information in this prospectus is not complete and may be changed. Neither we nor the selling shareholders may sell the securities
until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting any offer to buy these securities in any jurisdiction where such offer or sale
is not permitted. |
SUBJECT TO COMPLETION, DATED AUGUST
4, 2023
PRELIMINARY PROSPECTUS
Up to US$100,000,000 of
Ordinary Shares
Debt Securities
Warrants
Rights
Units
and
Up to 447,917 Ordinary Shares Offered by Selling
Shareholders Named Herein
Baosheng Media Group Holdings Limited
Baosheng Media Group Holdings Limited, a Cayman
Islands exempted company with limited liability (the “Company,” “we,” “our,” and “us”)
may, from time to time, in one or more offerings, offer and sell up to US$100,000,000 of any combination, together or separately, of
our ordinary shares, par value US$0.0096 per share (the “Ordinary Shares”), debt securities, warrants, rights, and units,
or any combination thereof as described in this prospectus. In this prospectus, references to the term “securities” refers
collectively to our Ordinary Shares, debt securities, warrants, rights, and units. The prospectus supplement for each offering of securities
will describe in detail the plan of distribution for that offering. For general information about the distribution of the securities
offered, please see “Plan of Distribution” in this prospectus.
This prospectus also relates to the resale by
certain selling shareholders described herein (the “Selling Shareholders”) of up to an aggregate of 447,917 Ordinary Shares.
The Selling Shareholders may, from time to time, sell, transfer, or otherwise dispose of any or all of their Ordinary Shares registered
herein on any stock exchange, market, or trading facility on which the Ordinary Shares are traded or in private transactions. These dispositions
may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying
prices determined at the time of sale, or at negotiated prices. We will not receive any of the proceeds from the sale or other disposition
of the Ordinary Shares by the Selling Shareholders, but we will bear all costs, fees and expenses in connection with the registration
of the Ordinary Shares offered by the Selling Shareholders. The Selling Shareholders will bear all commissions and discounts, if any,
attributable to the sale of the Ordinary Shares offered for resale through this prospectus. For information regarding the Selling Shareholders
and the times and manner in which they may offer or sell Ordinary Shares, see “Selling Shareholders” and “Plan of Distribution.”
Unless otherwise stated, as used in this prospectus,
the terms (i) “we,” “us,” “our,” or the “Company” refer to Baosheng Media Group
Holdings Limited, a Cayman Islands exempted company with limited liability, (ii) “our subsidiaries” or “the subsidiaries”
refer to the Company’s direct and indirect subsidiaries, and (iii) “operating entities” refer to the Company’s
subsidiaries with business activities, namely Beijing Baosheng Technology Company Limited (“Beijing Baosheng”), Horgos Baosheng
Advertising Company Limited (“Horgos Baosheng”), Baosheng Technology (Horgos) Company Limited (“Baosheng Technology”),
Kashi Baosheng Information Technology Company Limited (“Kashi Baosheng”), Beijing Baosheng Network Technology Co., Ltd.
(“Baosheng Network”) and Beijing Xunhuo E-commerce Co., Ltd. (“Beijing Xunhuo”); all are limited liability
companies established in the People’s Republic of China (the “PRC” or “China”) and our indirect wholly
owned subsidiaries.
We are a holding company incorporated in the
Cayman Islands and not a Chinese operating company. As a holding company with no operations of our own, we conduct our operations through
the operating entities in China. We have not adopted a variable interest entity (the “VIE”) structure. Investors in our securities
are not purchasing equity interests in our subsidiaries but instead are purchasing equity interests in the Cayman Islands holding company.
Therefore, investors will not directly hold any equity interests in our operating companies. The Chinese regulatory authorities could
disallow our corporate structure, which would likely result in a material change in our operations and/or a material change in the value
of our securities, including that it could cause the value of such securities to significantly decline or become worthless. For risks
facing our Company and this offering as a result of our organizational structure, see “Item 3. Key Information—D. Risk Factors—Risks
Related to Doing Business in China” in our annual report on Form 20-F for the fiscal year ended December 31, 2022.
We are subject to certain legal and operational
risks associated with being based in China, which could cause the value of our securities to become worthless. PRC laws and regulations
governing our current business operations are sometimes vague and uncertain, and as a result these risks may result in material changes
in the operations of the PRC subsidiaries, significant depreciation of the value of our Ordinary Shares, or a complete hindrance of our
ability to offer, or continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions
and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities
in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly
enforcement. As of the date of this prospectus, neither we nor our subsidiaries have been involved in any investigations on cybersecurity
review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. As confirmed by our
PRC counsel, Beijing Dacheng Law Offices, LLP, we are not subject to cybersecurity review with the Cyberspace Administration of China,
or the CAC, under the Measures for Cybersecurity Censorship which became effective on February 15, 2022, since we currently do not
have over one million users’ personal information and do not anticipate that we will be collecting over one million users’
personal information in the foreseeable future, which we understand might otherwise subject us to the Measures for Cybersecurity Censorship;
we are also not subject to network data security review by the CAC if the draft Regulations on Network Data Security Administration are
enacted as proposed, since we currently do not have over one million users’ personal information and do not collect data that affects
or may affect national security and we do not anticipate that we will be collecting over one million users’ personal information
or data that affects or may affect national security in the foreseeable future, which we understand might otherwise subject us to the
draft Regulations on Network Data Security Administration. See “Risk Factors—Risks Related to Doing Business in China—Recent
greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact
our business and our offering.”
Furthermore, on February 17, 2023, the China
Securities Regulatory Commission (the “CSRC”) released the Trial Administrative Measures of Overseas Securities Offering
and Listing by Domestic Companies (the “Trial Measures”) and five supporting guidelines, which took effect on March 31,
2023. Pursuant to the Trial Measures, if a domestic company fails to complete required filing procedures or conceals any material fact
or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an
order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly
liable persons may also be subject to administrative penalties, such as warnings and fines. On the same day, the CSRC also held a press
conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing
by Domestic Companies, or the CSRC Notice, which, among others, clarifies that PRC domestic companies that have already been listed overseas
before the effective date of the Trial Measures, which is March 31, 2023, shall be deemed as Existing Issuers, and Existing Issuers
are not required to complete the filing procedures with the CSRC immediately, and they shall be required to file with the CSRC for any
subsequent offerings. Based on the foregoing, we are an Existing Issuer, and is required to file with the CSRC for any subsequent offerings
within three (3) working days after the completion of each offering. As confirmed by our PRC legal counsel, Beijing Dacheng Law
Offices, LLP, the Selling Shareholders’ resale of the Ordinary Sales as described hereunder does not constitute a “subsequent
offering” under the CSRC rules and hence we are not required to complete the filing procedures with CSRC for the Selling Shareholders’
resale. See “Risk Factors—Risks Related to Doing Business in China—The Chinese government exerts substantial influence
over the manner in which we must conduct our business, and may intervene or influence our operations at any time, which could result
in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities
to investors and, and cause the value of our Ordinary Shares to significantly decline or be worthless.”
Since 2021, the Chinese government has strengthened
its anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly Bureau; (ii) revising and
promulgating anti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June 24, 2022 and effective
on August 1, 2008), the anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation of the
Fair Competition Review System; and (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises.
As of the date of this prospectus, the Chinese government’s recent statements and regulatory actions related to anti-monopoly concerns
have not impacted our or our subsidiaries’ ability to conduct business, our ability to accept foreign investments or issue our
securities to foreign investors because neither we nor our subsidiaries engage in monopolistic behaviors that are subject to these statements
or regulatory actions.
As of the date of this prospectus, we and our
subsidiaries have received from PRC authorities all requisite licenses, permissions, and approvals needed to engage in the businesses
currently conducted in the PRC, and no permission or approval has been denied. However, we cannot assure you that we will be able to
receive clearance of any compliance requirements imposed on us in a timely manner, or at all. Any failure to fully comply with such compliance
requirements may cause our PRC subsidiaries to be unable to conduct their businesses or operations in the PRC, subject them to fines,
business suspension, or other sanctions. See “Prospectus Summary—Permissions Required from PRC Authorities” of this
prospectus.
In addition, our Ordinary Shares may be prohibited
from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the “HFCA Act”)
if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) is unable to inspect our auditors for two
consecutive years beginning in 2021. Our auditor, YCM CPA INC., has been inspected by the PCAOB on a regular basis and it is not subject
to the determinations announced by the PCAOB on December 16, 2021. If trading in our Ordinary Shares is prohibited under the HFCA
Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may
determine to delist or prohibit the trading of our Ordinary Shares. On June 22, 2021, the U.S. Senate passed the Accelerating Holding
Foreign Companies Accountable Act, and on December 29, 2022, legislation entitled “Consolidated Appropriations Act, 2023”
(the “Consolidated Appropriations Act”) was signed into law by President Biden, which contained, among other things, an identical
provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act by requiring the U.S. Securities and
Exchange Commission (the “SEC”) to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its
auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering
the delisting of our Company and the prohibition of trading in our securities if the PCAOB is unable to inspect our accounting firm at
such future time. If trading in the Ordinary Shares is prohibited under the HFCA Act in the future because the PCAOB determines that
it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist our Ordinary Shares and trading
in our Ordinary Shares could be prohibited. See “Risk Factors—Risks Related to Doing Business in China—The recent joint
statement by the SEC and the PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act and related regulations,
all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their
auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued
listing or future offerings of our securities in the U.S.”
We are a holding company, and we may rely on
dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements, including the furnishing
of funds necessary to pay dividends and other cash distributions to our shareholders or to service any debt we may incur. If any of our
PRC subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends
to us. There have not been any such dividends or other distributions from our PRC subsidiaries to our subsidiaries located outside of
China, as of the date of this prospectus. In addition, as of the date of this prospectus, none of our subsidiaries have ever issued any
dividends or distributions to us or their respective shareholders outside of China, and neither we nor any of our subsidiaries have ever
paid dividends or made distributions to U.S. investors. As of the date of this prospectus, neither we nor any of our subsidiaries have
ever paid dividends or made distributions to U.S. investors. Other than the following transactions, no cash transfers have occurred among
us and our subsidiaries: (i) our Hong Kong subsidiary, Baosheng Media Group (Hong Kong) Holdings Limited, or Baosheng Hong Kong,
received cash of $38.3 million from us, which represented proceeds raised in the initial public offering of our Ordinary Shares in February 2021,
and the private placement of our Ordinary Shares and warrants in March 2021, (ii) on March 16, 2021, Baosheng Hong Kong
transferred cash of $6 million, in the form of shareholder loans, to its wholly owned subsidiary, Beijing Baosheng, and (iii) in
April 2021 and August 2021, Baosheng Hong Kong transferred cash in the aggregate of $30.79 million, in the form of capital
contributions, to its wholly owned subsidiary, Beijing Baosheng Network Technology Co., Ltd., or Baosheng Network. In the future,
cash proceeds raised from overseas financing activities may be transferred by us to our PRC subsidiaries by means of capital contributions
or shareholder loans, as the case may be. Notwithstanding the recent judgment against Beijing Baosheng, described more particularly under
“Item 4. Information on the Company—B. Business Overview—Legal Proceedings” in our annual report on Form 20-F
for the fiscal year ended December 31, 2022, we do not expect that the court’s ruling will impact the cash transferring through
the organization.
According to the Foreign Investment Law of the
People’s Republic of China and its implementing rules, which jointly established the legal framework for the administration of
foreign-invested companies, a foreign investor may, in accordance with other applicable laws, freely transfer into or out of China its
contributions, profits, capital earnings, income from asset disposal, intellectual property rights, royalties acquired, compensation
or indemnity legally obtained, and income from liquidation, made or derived within the territory of China in RMB or any foreign currency,
and any entity or individual shall not illegally restrict such transfer in terms of the currency, amount and frequency. According to
the Company Law of the People’s Republic of China and other Chinese laws and regulations, our PRC subsidiaries may pay dividends
only out of their respective accumulated profits as determined in accordance with Chinese accounting standards and regulations. In addition,
each of our PRC subsidiaries is required to set aside at least 10% of its accumulated after-tax profits, if any, each year to fund a
certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Where the statutory reserve
fund is insufficient to cover any loss the PRC subsidiary incurred in the previous financial year, its current financial year’s
accumulated after-tax profits shall first be used to cover the loss before any statutory reserve fund is drawn therefrom. Such statutory
reserve funds and the accumulated after-tax profits that are used for covering the loss cannot be distributed to us as dividends. At
their discretion, our PRC subsidiaries may allocate a portion of their after-tax profits based on Chinese accounting standards to a discretionary
reserve fund. See “Risk Factors—Risks Related to Doing Business in China—We may rely on dividends paid by our
subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse
effect on our ability to conduct business.”
Renminbi is not freely convertible into other
currencies. As a result, any restriction on currency exchange may limit the ability of our PRC operating subsidiaries to use their potential
future Renminbi revenues to pay dividends to us. The Chinese government imposes controls on the convertibility of Renminbi into foreign
currencies and, in certain cases, the remittance of currency out of China. Shortages in availability of foreign currency may then restrict
the ability of our PRC subsidiaries to remit sufficient foreign currency to our offshore entities for our offshore entities to pay dividends
or make other payments or otherwise to satisfy our foreign-currency-denominated obligations. The Renminbi is currently convertible under
the “current account,” which includes dividends, trade and service-related foreign exchange transactions, but not under the
“capital account,” which includes foreign direct investment and foreign currency debt, including loans we may secure for
our onshore subsidiaries. Currently, our PRC subsidiaries may purchase foreign currency for settlement of “current account transactions,”
including payment of dividends to us, without the approval of SAFE by complying with certain procedural requirements. However, the relevant
Chinese governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account
transactions. The Chinese government may continue to strengthen its capital controls, and additional restrictions and substantial vetting
processes may be instituted by SAFE for cross-border transactions falling under both the current account and the capital account. Any
existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in Renminbi to pay dividends
in foreign currencies to holders of our securities. Foreign exchange transactions under the capital account remain subject to limitations
and require approvals from, or registration with, SAFE and other relevant Chinese governmental authorities. This could affect our ability
to obtain foreign currency through debt or equity financing for our subsidiaries. See “Risk Factors—Risks Related to Doing
Business in China—We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our
subsidiaries to make payments to us could have a material adverse effect on our ability to conduct business” for a detailed discussion
of the Chinese legal restrictions on the payment of dividends and our ability to transfer cash within our group. In addition, holders
of our Ordinary Shares may potentially be subject to Chinese taxes on dividends paid by us in the event we are deemed a Chinese resident
enterprise for Chinese tax purposes. See “Risk Factors—Risks Related to Doing Business in China—You may be subject
to PRC income tax on dividends from us or on any gain realized on the transfer of our Ordinary Shares.”
We are an “emerging growth company”
as that term is used in the Jumpstart Our Business Startups Act of 2012, as amended, or the “JOBS Act,” and, as such, we
have elected to comply with certain reduced public company reporting requirements. See “Prospectus Summary—Implications of
Being an Emerging Growth Company.”
This prospectus provides a general description
of the securities we or the Selling Shareholders may offer. We will provide the specific terms of the securities offered in one or more
supplements to this prospectus. We may also authorize one or more free writing prospectuses to be provided to you in connection with
these offerings. The prospectus supplement and any related free writing prospectus may add, update, or change information contained in
this prospectus. You should read carefully this prospectus, the applicable prospectus supplement, and any related free writing prospectus,
as well as the documents incorporated or deemed to be incorporated by reference, before you invest in any of our securities. The Company
may not use this prospectus to offer or sell any securities unless accompanied by the applicable prospectus supplement.
We may, from time to time, offer and sell these
securities and Selling Shareholders may, from time to time, offer the securities through public or private transactions, directly or
through one or more underwriters, dealers, brokers and agents, on or off the Nasdaq Capital Market, or Nasdaq, at prevailing market prices
or at privately negotiated prices. If any underwriters, dealers, brokers or agents are involved in the sale of any of these securities,
the applicable prospectus supplement will set forth the name of the underwriter, dealer, broker or agent and any applicable commissions
or discounts. The offering price of such securities and the net proceeds we expect to receive from such sale will also be set forth in
a prospectus supplement. See “Plan of Distribution” elsewhere in this prospectus for a more complete description of the ways
in which the securities may be sold.
Our Ordinary Shares are listed on the NASDAQ
Capital Market under the symbol “BAOS.” On July 31, 2023, the closing price for our Ordinary Shares was $7.79 per share.
Unless expressly indicated herein to the contrary, all references to share amounts in this prospectus give retroactive effect to our
share consolidations, the last of which was effective on March 21, 2023. See “Description of Share Capital—History of
Share Capital.”
Investing in our securities involves a high
degree of risk, including, but not limited to, various legal and operational risks as a result of having the majority of our operations
in China. Before making an investment decision, please read the information under the heading “Risk Factors” beginning on
page 25 of this prospectus and risk factors set forth in our annual report on Form 20-F for the fiscal year ended December 31,
2022, in other reports incorporated herein by reference, and in an applicable prospectus supplement.
Neither the U.S. Securities and Exchange Commission
nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is ,
2023.
TABLE OF CONTENTS
Neither we nor the Selling Shareholders have
authorized any other person to provide you with different or additional information other than that contained in this prospectus. We
and the Selling Shareholders take no responsibility for and can provide no assurance as to the reliability of, any other information
that others may provide. We and the Selling Shareholders are not making an offer to sell these securities in any jurisdiction where the
offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date of this prospectus or such
other date stated in this prospectus, and our business, financial condition, results of operations, and/or prospects may have changed
since those dates. You should also read this prospectus together with the additional information described under “Where You Can
Find Additional Information” and “Incorporation of Documents by Reference.”
This prospectus may be supplemented from time
to time to add, update, or change information in this prospectus. Any statement contained in this prospectus will be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement contained in a prospectus supplement modifies or supersedes
such statement. Any statement so modified will be deemed to constitute a part of this prospectus only as so modified, and any statement
so superseded will be deemed not to constitute a part of this prospectus.
For investors outside the United States: we have
not, and the Selling Shareholders have not, taken any action that would permit this offering or possession or distribution of this prospectus
in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who
come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities
covered hereby and the distribution of this prospectus outside the United States.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement
that we filed with the U.S. Securities and Exchange Commission (the “SEC”) utilizing a “shelf” registration process.
Under this shelf registration process, we may, from time to time, sell the securities described in this prospectus in one or more offerings,
up to a total offering amount of US$100,000,000, and the Selling Shareholders referred to in this prospectus and identified in supplements
to this prospectus may sell up to an aggregate amount of 447,917 Ordinary Shares in one or more offerings.
This prospectus provides you with a general description
of the securities we and the Selling Shareholders may offer. This prospectus and any accompanying prospectus supplement do not contain
all of the information included in the registration statement. We have omitted parts of the registration statement in accordance with
the rules and regulations of the SEC. Statements contained in this prospectus and any accompanying prospectus supplement about the
provisions or contents of any agreement or other documents are not necessarily complete. If the SEC rules and regulations require
that an agreement or other document be filed as an exhibit to the registration statement, please see that agreement or document for a
complete description of these matters. This prospectus may be supplemented by a prospectus supplement that may add, update, or change
information contained or incorporated by reference in this prospectus. You should read both this prospectus and any prospectus supplement
or other offering materials together with additional information described under the headings “Where You Can Find Additional Information”
and “Incorporation of Documents by Reference.”
Each time we sell any securities offered by us
under this shelf registration, we will provide a prospectus supplement that will contain certain specific information about the terms
of that offering, including a description of any risks related to the offering. A prospectus supplement may also add, update, or change
information contained in this prospectus (including documents incorporated herein by reference). Notwithstanding the foregoing, the Selling
Shareholders may sell the Ordinary Shares offered by them registered hereby without being accompanied by a prospectus supplement. If
there is any inconsistency between the information in this prospectus and the applicable prospectus supplement, you should rely on the
information in the prospectus supplement. The registration statement we filed with the SEC includes exhibits that provide more details
on the matters discussed in this prospectus. You should read this prospectus and the related exhibits filed with the SEC and the accompanying
prospectus supplement together with additional information described under the headings “Incorporation of Documents by Reference”
before investing in any of the securities offered.
You should rely only on the information provided
or incorporated by reference in this prospectus or in the prospectus supplement. Neither we nor the Selling Shareholders have authorized
anyone to provide you with additional or different information. Neither we nor the Selling Shareholders take responsibility for, nor
can we provide assurance as to the reliability of, any other information that others may provide. Neither we nor the Selling Shareholders
are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the
information in this prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate only as of the
date on the front of the document and that any information incorporated by reference is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of this prospectus, any applicable prospectus supplement or any related
free writing prospectus, or any sale of a security, unless we indicate otherwise. Our business, financial condition, results of operations
and/or prospects may have changed since those dates.
As permitted by SEC rules and regulations,
the registration statement of which this prospectus forms a part includes additional information not contained in this prospectus. You
may read the registration statement and the other reports we file with the SEC at its website or at its offices described below under
“Where You Can Find Additional Information.”
COMMONLY USED DEFINED
TERMS
Unless otherwise indicated or the context requires
otherwise, references in this prospectus to:
| · | “An
Rui Tai BVI” are to AnRuiTai Investment Limited, a BVI business company incorporated
in the BVI with limited liability in November 2018, owned as to 90% by Ms. Wenxiu
Zhong and 10% by Mr. Sheng Gong; |
| · | “Baosheng
BVI” are to Baosheng Media Group Limited, a BVI business company incorporated with
limited liability under the laws of the BVI; |
| · | “Baosheng
Group” are to Baosheng Media Group Holdings Limited, an exempted company with limited
liability incorporated under the laws of the Cayman Islands; |
| · | “Baosheng
Hong Kong” are to Baosheng Group’s wholly owned subsidiary, Baosheng Media Group
(Hong Kong) Holdings Limited, a Hong Kong company with limited liability; |
| · | “Baosheng
Network” are to Beijing Baosheng Network Technology Co., Ltd., a limited liability
company established in the PRC and a direct wholly-owned subsidiary of Baosheng Hong Kong; |
| · | “Baosheng
Technology” are to Baosheng Technology (Horgos) Company Limited, a limited liability
company established in the PRC and a direct wholly-owned subsidiary of Beijing Baosheng; |
| · | “Beijing
Baosheng” are to Beijing Baosheng Technology Company Limited, a limited liability company
established in the PRC and a direct wholly-owned subsidiary of Baosheng Hong Kong; |
| · | “Beijing
Xunhuo” are to Beijing Xunhuo E-commerce Co., Ltd., a limited liability company
established in the PRC and a direct wholly-owned subsidiary of Baosheng Network; |
| · | “BVI”
are to the British Virgin Islands; |
| · | “China”
or the “PRC” are to the People’s Republic of China, including the special
administrative regions of Hong Kong and Macau and excluding Taiwan for the purposes of this
prospectus only; |
| · | “Deng
Guan BVI” are to Deng Guan Investment Limited, a BVI business company incorporated
in the BVI with limited liability in November 2019 and is wholly owned by Mr. Hui
Yu; |
| · | “EJAM
BVI” are to EJAM New Media Holdings Limited, a BVI business company incorporated in
the BVI with limited liability in November 2019 and is a direct wholly owned subsidiary
of EJAM International; |
| · | “EJAM
Group” are to EJAM Group Co., Ltd., a joint stock company established in the PRC
with limited liability on November 23, 2010, whose shares are quoted on the National
Equities Exchange and Quotations (全国中小企业股份转让系统)
(stock code: 834498), and is a financial investor of our Company and one of our pre-IPO investors; |
| · | “EJAM
International” are EJAM International Limited, a company formed in Hong Kong with limited
liability in November 2015 and is a direct wholly owned subsidiary of EJAM Group; |
| · | “Etone
Investment” are to Etone Investment Development Limited, a BVI business company incorporated
in the BVI with limited liability in May 2016 and is wholly owned by Mr. Baotian
Guo; |
| · | “Everlasting
Innovation” are to Everlasting Innovation Development Limited, a business company incorporated
in the BVI with limited liability in July 2018 and is wholly owned by Mr. Kei Ming
Wang; |
| · | “Horgos
Baosheng” are to Horgos Baosheng Advertising Company Limited, a limited liability company
established in the PRC and a direct wholly-owned subsidiary of Beijing Baosheng; |
| · | “Kashi
Baosheng” are to Kashi Baosheng Information Technology Company Limited, a limited liability
company established in the PRC and a direct wholly-owned subsidiary of Beijing Baosheng; |
| · | “our
subsidiaries” or “the subsidiaries” are to the Company’s direct and
indirect subsidiaries; |
| · | “operating
entities” are to the Company’s subsidiaries with business activities, namely
Beijing Baosheng, Horgos Baosheng, Baosheng Technology, Kashi Baosheng, Baosheng Network
and Beijing Xunhuo; |
| · | “PBCY
Investment” are to PBCY Investment Limited, a business company incorporated in the
BVI with limited liability in November 2018, and is owned as to 86.35% by Pubang Landscape
through Pubang Hong Kong and 13.65% by Mr. Chan through CYY Holdings; |
| · | “Pubang
Hong Kong” are to Pubang Landscape Architecture (HK) Co., Ltd., a company formed
in Hong Kong with limited liability in September 2013 and is a direct wholly owned subsidiary
of Pubang Landscape; |
| · | “Pubang
Landscape” are to Pubang Landscape Architecture Co., Ltd., a joint stock company
established in the PRC with limited liability on July 19, 1995, whose shares are listed
on the Shenzhen Stock Exchange (stock code: 002663.SZ), and is a financial investor of our
Company and one of our pre-IPO investors; |
| · | “shares,”
“Shares,” or “Ordinary Shares” are to the ordinary shares of the
Company, par value US$0.0096 per share; |
| · | “Warrants”
are to the warrants we issued to the Selling shareholders in a private placement closed on
March 18, 2021. One Warrant includes the right to purchase 5/192 Ordinary Share at an
exercise price of $107.712 per Ordinary Share. However, no fractional shares will be issued
upon the exercise of the Warrants; and |
| · | “we,”
“us,” or the “Company” are to Baosheng Group and when describing
the Company’s consolidated financial information, also include the Company’s
subsidiaries. |
There are certain technical terms used in this
prospectus, references to:
| · | “ad
inventory” are to the space available to advertisers on digital platforms in the online
marketing industry; |
| · | “ad”
are to an advertisement; |
| · | “CPA”
are to cost per acquisition, an online advertising pricing model where the advertiser pays
for a specified acquisition; |
| · | “CPC”
are to cost per click, an online advertising pricing model where an advertiser pays a media
(typically a search engine, website owner, or a network of websites) when the ad is clicked; |
| · | “CPM”
are to cost per mille, an online advertising pricing model where an advertiser pays for one
thousand views or clicks of an advertisement; |
| · | “CPT”
are to cost per time, an online advertising pricing model where an advertiser pays for an
advertisement to be placed for a set amount of time; |
| · | “feed”
are to an internet service in which updates from electronic information sources are presented
in a continuous stream; |
| · | “gross
billing” are to the actual dollar amount of advertising spend of advertisers, net of
any rebates and discounts given to those advertisers; |
| · | “in-feed
ad” are to a form of ads that are typically placed in article and content feeds and
mimic the surrounding site design and aesthetics so that the articles or content feeds are
mixed with the in-feed ads providing the audience an uninterrupted content flow; |
| · | “key
opinion leaders” or “KOL” are to individuals deemed to have the potential
to create engagement, drive conversation or sell products or services with the intended target
audience. These individuals can range from being celebrities to more micro-targeted professional
or nonprofessional “peers”; |
| · | “media
costs” are to the costs for acquisition of ad inventory or other advertising services
from media and other advertising service providers as offset by rebates we receive from the
relevant media and advertising service providers (if any); |
| · | “mobile
app ad” are to a form of ads which are served on apps in various formats such as display
ads and video ads, and for the purpose of this prospectus excluding in-feed ads; |
| · | “mobile
app” are to a computer program or software application designed to run on a mobile
device such as phone, tablet, or watch; |
| · | “SEM”
are to search engine marketing, a form of online marketing that involves the promotion of
websites by increasing their visibility in search engine results pages and search-related
products and services; and |
| · | “social
media marketing” are to the use of social media platforms and websites to promote a
product or service, including the distribution of KOL content which may be framed as testimonial
advertising where they play the role of a potential buyer themselves, or they may be third
parties. |
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus and our SEC filings that are
incorporated by reference into this prospectus contain or incorporate by reference forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements
other than statements of historical fact are “forward-looking statements,” including any projections of earnings, revenue
or other financial items, any statements of the plans, strategies, and objectives of management for future operations, any statements
concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements
of management’s beliefs, goals, strategies, intentions, and objectives, and any statements of assumptions underlying any of the
foregoing. The words “believe,” “anticipate,” “estimate,” “plan,” “expect,”
“intend,” “may,” “could,” “should,” “potential,” “likely,” “projects,”
“continue,” “will,” and “would” and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain these identifying words. Forward-looking statements reflect our current
views with respect to future events, are based on assumptions, and are subject to risks and uncertainties. We cannot guarantee that we
actually will achieve the plans, intentions, or expectations expressed in our forward-looking statements and you should not place undue
reliance on these statements. There are a number of important factors that could cause our actual results to differ materially from those
indicated or implied by forward-looking statements. These important factors include those discussed under the heading “Risk Factors”
contained or incorporated by reference in this prospectus and in the applicable prospectus supplement and any free writing prospectus
we may authorize for use in connection with a specific offering. These factors and the other cautionary statements made in this prospectus
should be read as being applicable to all related forward-looking statements whenever they appear in this prospectus. Except as required
by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future
events, or otherwise.
Prospectus
Summary
Our Corporate Structure
We are an offshore holding company incorporated
in the Cayman Islands and we are not a Chinese operating company. As a holding company with no operations of our own, our operations
are conducted in China through the operating entities. Holders of our Ordinary Shares will not directly hold any equity interests in
the operating entities. The Chinese regulatory authorities could disallow our corporate structure, which could result in a material
change in our operations and the value of our Ordinary Shares could decline or become worthless.
We have not adopted a VIE structure. The following
diagram illustrates our current corporate structure, which includes our significant subsidiaries as of the date of this prospectus:
Notes:
| 1. | “EJAM
Group” represents EJAM Group Co., Ltd., a joint stock company established in the
PRC with limited liability on November 23, 2010, whose shares are quoted on the National
Equities Exchange and Quotations (全国中小企业股份转让系统)
(stock code: 834498), and is a financial investor of our Company and one of our pre-IPO investors. |
| 2. | “EJAM International” represents
EJAM International Limited, a company formed in Hong Kong with limited liability in November 2015
and is a direct wholly owned subsidiary of EJAM Group. |
| 3. | “Pubang Landscape” represents
Pubang Landscape Architecture Co., Ltd., a joint stock company established in the PRC
with limited liability on July 19, 1995, whose shares are listed on the Shenzhen Stock
Exchange (stock code: 002663.SZ), and is a financial investor of our Company and one of our
pre-IPO investors. |
| 4. | “Pubang Hong Kong” represents
Pubang Landscape Architecture (HK) Co., Ltd., a company formed in Hong Kong with limited
liability in September 2013 and is a direct wholly owned subsidiary of Pubang Landscape. |
| 5. | “CYY Holdings” represents
CYY Holdings Limited, a business company formed in the BVI with limited liability in November 2013
and is wholly owned by Mr. Yick Yan Chan. |
For details of each shareholder’s ownership,
please refer to the beneficial ownership table in “Item 6. Directors, Senior Management and Employees—6.E. Share Ownership”
in our annual report on Form 20-F for the fiscal year ended December 31, 2022.
Permissions Required from PRC Authorities
We are subject to certain legal and operational
risks associated with being based in China, which could cause the value of our securities to become worthless. PRC laws and regulations
governing our current business operations are sometimes vague and uncertain, and as a result these risks may result in material changes
in the operations of the PRC subsidiaries, significant depreciation of the value of our Ordinary Shares, or a complete hindrance of our
ability to offer, or continue to offer, our securities to investors. Recently, the PRC government adopted a series of regulatory actions
and issued statements to regulate business operations in China with little advance notice, including cracking down on illegal activities
in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly
enforcement. As of the date of this prospectus, neither we nor our subsidiaries have been involved in any investigations on cybersecurity
review initiated by any PRC regulatory authority, nor has any of them received any inquiry, notice, or sanction. As confirmed by our
PRC counsel, Beijing Dacheng Law Offices, LLP, we are not subject to cybersecurity review with the CAC, under the Measures for Cybersecurity
Censorship which became effective on February 15, 2022, since we currently do not have over one million users’ personal information
and do not anticipate that we will be collecting over one million users’ personal information in the foreseeable future, which
we understand might otherwise subject us to the Measures for Cybersecurity Censorship; we are also not subject to network data security
review by the CAC if the draft Regulations on Network Data Security Administration are enacted as proposed, since we currently do not
have over one million users’ personal information and do not collect data that affects or may affect national security and we do
not anticipate that we will be collecting over one million users’ personal information or data that affects or may affect national
security in the foreseeable future, which we understand might otherwise subject us to the draft Regulations on Network Data Security
Administration. See “Risk Factors—Risks Related to Doing Business in China—Recent greater oversight by the CAC over
data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering.”
Furthermore, on February 17, 2023, the CSRC
released the Trial Measures and five supporting guidelines, which took effect on March 31, 2023. Pursuant to the Trial Measures,
if a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its
filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and
its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject
to administrative penalties, such as warnings and fines. On the same day, the CSRC also held a press conference for the release of the
Trial Measures and issued the CSRC Notice, which, among others, clarifies that PRC domestic companies that have already been listed overseas
before the effective date of the Trial Measures, which is March 31, 2023, shall be deemed as Existing Issuers, and Existing Issuers
are not required to complete the filing procedures with the CSRC immediately, and they shall be required to file with the CSRC for any
subsequent offerings. Based on the foregoing, we are an Existing Issuer, and is required to file with the CSRC for any subsequent offerings
within three (3) working days after the completion of each offering. As confirmed by our PRC legal counsel, Beijing Dacheng Law
Offices, LLP, the Selling Shareholders’ resale of the Ordinary Sales as described hereunder does not constitute a “subsequent
offering” under the CSRC rules and hence we are not required to complete the filing procedures with CSRC for the Selling Shareholders’
resale. See “Risk Factors—Risks Related to Doing Business in China—The Chinese government exerts substantial influence
over the manner in which we must conduct our business, and may intervene or influence our operations at any time, which could result
in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities
to investors and, and cause the value of our Ordinary Shares to significantly decline or be worthless.”
Since 2021, the Chinese government has strengthened
its anti-monopoly supervision, mainly in three aspects: (i) establishing the National Anti-Monopoly Bureau; (ii) revising and
promulgating anti-monopoly laws and regulations, including: the Anti-Monopoly Law of the PRC (amended on June 24, 2022 and effective
on August 1, 2008), the anti-monopoly guidelines for various industries, and the Detailed Rules for the Implementation of the
Fair Competition Review System; and (iii) expanding the anti-monopoly law enforcement targeting Internet companies and large enterprises.
As of the date of this prospectus, the Chinese government’s recent statements and regulatory actions related to anti-monopoly concerns
have not impacted our or our subsidiaries’ ability to conduct business, our ability to accept foreign investments or issue our
securities to foreign investors because neither we nor our subsidiaries engage in monopolistic behaviors that are subject to these statements
or regulatory actions.
As of the date of this prospectus, we and our
subsidiaries have received from PRC authorities all requisite licenses, permissions, and approvals needed to engage in the businesses
currently conducted in the PRC, namely business licenses that provide the scope of business operations, and no permission or approval
has been denied. However, we cannot assure you that we will be able to receive clearance of any compliance requirements imposed on us
in a timely manner, or at all. Any failure to fully comply with such compliance requirements may cause our PRC subsidiaries to be unable
to conduct their businesses or operations in the PRC, subject them to fines, business suspension, or other sanctions. See “Risk
Factors—Risks Related to Doing Business in China” of this prospectus.
In addition, our Ordinary Shares may be prohibited
from trading on a national exchange or over-the-counter under the HFCA Act if the PCAOB is unable to inspect our auditors for three consecutive
years beginning in 2021. Our auditor, YCM CPA INC., has been inspected by the PCAOB on a regular basis and it is not subject to the determinations
announced by the PCAOB on December 16, 2021. If trading in our Ordinary Shares is prohibited under the HFCA Act in the future because
the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist or prohibit
the trading of our Ordinary Shares. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable
Act, and on December 29, 2022, legislation entitled the Consolidated Appropriations Act was signed into law by President Biden,
which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended
the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is
not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the delisting
of our Company and the prohibition of trading in our securities if the PCAOB is unable to inspect our accounting firm at such future
time. If trading in the Ordinary Shares is prohibited under the HFCA Act in the future because the PCAOB determines that it cannot inspect
or fully investigate our auditor at such future time, Nasdaq may determine to delist our Ordinary Shares and trading in our Ordinary
Shares could be prohibited. See “Risk Factors—Risks Related to Doing Business in China—The recent joint statement by
the SEC and the PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act and related regulations, all call
for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors,
especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing
or future offerings of our securities in the U.S.”
Business Overview
Through
the operating entities, we are an online marketing solution provider based in China. The operating entities are dedicated to helping
their advertiser clients manage online marketing activities with a view to achieving the clients’ business goals. The operating
entities advise advertisers on online marketing strategies, offer value-added advertising optimization services and facilitate the deployment
of online ads of various forms such as search ads, in-feed ads, mobile app ads and social media marketing ads. At the same time, as the
authorized agency of some popular online media, such as sm.cn (神马),
UC browsers (UC浏览器), and Today’s Headline
(今日头条), the operating entities help online
media procure advertisers to buy their ad inventory and facilitate ad deployment on their advertising channels.
Relying on our management’s extensive industry
experience, deep industry insights and well-established network of media resources and through the operating entities, we have grown
rapidly from a start-up online marketing agency founded in 2014 to a multi-channel online marketing solution provider.
The operating entities help advertisers formulate
online advertising strategies, optimize ads and run ads on suitable online advertising channels with a view to achieving the clients’
business goals. The operating entities have built a broad and diverse advertiser base across various industries, including ecommerce
and online service platforms, online travel agencies, financial services, online gaming, car services and other advertising agencies.
We believe the operating entities’ ability to attract and retain these advertisers reflects the high level of their services, which
is essential to our business growth.
Business
value chain. As an online advertising service provider, we regard our business values as revolving around the operating entities’
ability to serve the needs of two major business stakeholders: (i) advertisers; and (ii) media (or their authorized agencies).
| · | Value
to advertisers: As an online marketing service provider, through the operating entities,
we connect advertisers and online media, helping advertisers to manage their online marketing
activities in many ways, including, but not limited to, (i) advising on advertising
strategies, budget and choice of advertising channels; (ii) procuring ad inventory;
(iii) offering ad optimization services; and (iv) administrating and fine-tuning
the ad placement process. |
| · | Value
to media: As an authorized agency of media, through the operating entities, we create
value to media businesses in several ways, including, but not limited to, (i) identifying
advertisers to buy their ad inventory, (ii) facilitating payment arrangements with advertisers,
(iii) assisting advertisers in handling ad deployment logistics with media, and (iv) engaging
in other marketing and promotion activities aimed at educating and inducing advertisers to
use online advertising. |
Advertising
services. Through the operating entities, we offer two types of advertising services, SEM services, and Non-SEM services.
SEM services include the deployment of ranked search ads and other display search ads offered by search engine operators. Non-SEM services,
on the other hand, include social media marketing, in-feed advertising, and mobile app advertising through deploying ads on media such
as social media platforms, short-video platforms, news portals and mobile apps. The display forms of Non-SEM ads include in-feed ads,
banner ads, button ads, interstitial ads, and posts on selected social media accounts.
Set forth below is a summary of the relevant
ad formats, the corresponding pricing models generally adopted by media and our revenue model:
| Type |
|
Description |
|
Media’s
principal pricing
model |
|
Our
principal revenue
model |
| SEM
Services |
| Search
ads |
|
Search
ads are normally located at the top, or on the side of the search results page, or the related products of the search engine operators. |
|
Auction-based
ads: mainly CPC
Non-auction-based
ads: mainly CPT |
|
Rebates
and incentives |
| Non-SEM
services |
| In-feed
ads |
|
In-feed
ads are advertisements that match the format, appearance and function of the platform upon which they appear, typically placed on
short video sharing, social media and newsfeed platforms. |
|
Mainly
CPM, CPC |
|
Rebates
and incentives |
| Mobile
app ads |
|
Mobile
app ads are displayed in apps with various formats such as banner ads, button ads, open screen ads, and interstitial ads. |
|
Mainly
CPT, CPA |
|
Net
fees; rebates and incentives |
| Social
media ads |
|
Social
media ads take the form of contents appearing in the designated blogs or social media accounts with suitable target audience. |
|
Mainly
CPT |
|
Net
fees |
Our business experienced substantial growth from
our inception to December 31, 2020, before we experienced negative growth since 2021. Our gross billing decreased from $134.9 million
in 2020 to $54.7 million in 2021, representing a decrease of 59.4%, and decreased to $54.6 million in 2022, representing a decrease of
0.3%. In the meantime, the media costs decreased from $123.0 million in 2020 to $50.8 million in 2021, while increased to $52.2 million
in 2022, representing a decrease of 58.7% and an increase of 2.7%, respectively. Our revenue on a net basis (i.e. difference between
gross billing and media costs) has decreased, in tandem with advertiser base and their advertising spend, from $11.9 million in 2020
to $3.9 million in 2021, and decreased further to $2.4 million in 2022, representing a decrease of 67.2% and a decrease of 38.3%, respectively.
Please see the financial statements and related notes and other information that we incorporate by reference herein, including, but not
limited to, our annual report on Form 20-F for the fiscal year ended December 31, 2022 and our other SEC reports.
Summary of Risk Factors
Investing in our Ordinary Shares involves significant
risks. You should carefully consider all of the information in this prospectus before making an investment in our Ordinary Shares. Below
please find a summary of the principal risks we face, organized under relevant headings. These risks are discussed more fully under “Item
3. Key Information—D. Risk Factors” in our annual report on Form 20-F for the fiscal year ended December 31, 2022
and in the “Risk Factors” section below.
Risks Related to Business and Industry
(for a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry”
in our annual report on Form 20-F for the fiscal year ended December 31, 2022)
Risks and uncertainties related to business and
industry include, but are not limited to, the following:
| · | Cutbacks
on advertising budgets by advertisers, changes in rebate and incentive policies by the media,
failure to maintain and grow our advertiser base and secure emerging media resources could
all materially and adversely affect our business and financial condition. See page 10
of our annual report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | If
we fail to maintain our relationships with our business stakeholders, mainly advertisers
and media, our business, results of operations, financial condition and business prospects
could be materially and adversely affected. See page 11 of our annual report on Form 20-F
for the fiscal year ended December 31, 2022; |
| · | Failure
to appropriately evaluate the credit profile of our advertisers or effectively manage our
credit risk associated with credit terms granted to our advertisers and/or delay in settlement
of accounts receivable from our advertisers could materially and adversely impact our operating
cash flow and may result in significant provisions and impairments on our accounts receivable
which in turn would have a material adverse impact on our business operations, results of
operation, financial condition and our business pursuits and prospects. See page 13
of our annual report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | As
we continue to strive for business growth, we may continue to experience net cash outflow
from operating activities, and we cannot assure you that we can maintain sufficient net cash
inflows from operating activities. See page 13 of our annual report on Form 20-F
for the fiscal year ended December 31, 2022; |
| · | Our
limited operating history in a rapidly evolving industry makes it difficult to accurately
forecast our future operating results and evaluate our business prospects. See page 14
of our annual report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | Certain
customers contributed to a significant percentage of our total revenue during the fiscal
years 2022, 2021, and 2020, and losing one or more of them could result in a material adverse
impact on our financial performance and business prospects. See page 14 of our annual
report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | We
are in the highly competitive online advertising service industry and we may not be able
to compete successfully against existing or new competitors, which could reduce our market
share and adversely affect our competitive position and financial performance. See page 15
of our annual report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | If
we fail to improve our services to keep up with the rapidly changing demands, preferences,
advertising trends or technologies in the online advertising industry, our revenues and growth
could be adversely affected. See page 16 of our annual report on Form 20-F for
the fiscal year ended December 31, 2022; |
| · | Limitations
on the availability of data and our ability to analyze such data could significantly restrict
our optimization capability and cause us to lose advertisers, which may harm our business
and results of operations. See page 16 of our annual report on Form 20-F for the
fiscal year ended December 31, 2022; |
| · | The
regulatory environment of the online advertising industry is rapidly evolving. If we fail
to obtain and maintain the requisite licenses and approvals as applicable to our businesses
in China from time to time, our business, financial condition and results of operations may
be materially and adversely affected. See page 17 of our annual report on Form 20-F
for the fiscal year ended December 31, 2022; and |
| · | The
ongoing effects of COVID-19 in China may have a material adverse effect on our business.
See page 23 of our annual report on Form 20-F for the fiscal year ended December 31,
2022. |
Risks Related to Doing Business in China
(for a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China”
in our annual report on Form 20-F for the fiscal year ended December 31, 2022 and the section titled “Risk Factors”
below)
We face risks and uncertainties related to doing
business in the PRC in general, including, but not limited to, the following:
| · | Adverse
changes in political and economic policies of the PRC government could have a material adverse
effect on the overall economic growth of the PRC, which could reduce the demand for our products
and materially and adversely affect our competitive position. See “Risk Factors—Risks
Related to Doing Business in China—Adverse changes in political and economic policies
of the PRC government could have a material adverse effect on the overall economic growth
of the PRC, which could reduce the demand for our products and materially and adversely affect
our competitive position” on page 25 of this prospectus and page 23 of our
annual report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | Uncertainties
regarding interpretation and enforcement of the laws, rules and regulations in China
may impose adverse impact on our business, operations and profitability. See “Risk
Factors—Risks Related to Doing Business in China—Uncertainties regarding interpretation
and enforcement of the laws, rules and regulations in China may impose adverse impact
on our business, operations and profitability” on page 25 of this prospectus and
page 23 of our annual report on Form 20-F for the fiscal year ended December 31,
2022; |
| · | We
may be adversely affected by the complexity, uncertainties and changes in the regulation
of internet-related businesses and companies in China. See “Risk Factors—Risks
Related to Doing Business in China—We may be adversely affected by the complexity,
uncertainties and changes in the regulation of internet-related businesses and companies
in China” on page 25 of this prospectus and page 24 of our annual report
on Form 20-F for the fiscal year ended December 31, 2022; |
| · | Regulation
and censorship of information disseminated through the Internet in China may adversely affect
our business in China, and we may be liable for content disseminated by us through the Internet.
See “Risk Factors—Risks Related to Doing Business in China—Regulation and
censorship of information disseminated through the Internet in China may adversely affect
our business in China, and we may be liable for content disseminated by us through the Internet”
on page 25 of this prospectus and page 25 of our annual report on Form 20-F
for the fiscal year ended December 31, 2022; |
| · | Changes
in the policies, regulations, rules, and the enforcement of laws of the PRC government may
be quick with little advance notice and could have a significant impact upon our ability
to operate profitably in the PRC. See “Risk Factors—Risks Related to Doing Business
in China—Changes in the policies, regulations, rules, and the enforcement of laws of
the PRC government may be quick with little advance notice and could have a significant impact
upon our ability to operate profitably in the PRC” on page 25 of this prospectus
and page 25 of our annual report on Form 20-F for the fiscal year ended December 31,
2022; |
| · | The
Chinese government exerts substantial influence over the manner in which we must conduct
our business, and may intervene or influence our operations at any time, which could result
in a material change in our operations, significantly limit or completely hinder our ability
to offer or continue to offer securities to investors and, and cause the value of our Ordinary
Shares to significantly decline or be worthless. See “Risk Factors—Risks Related
to Doing Business in China—The Chinese government exerts substantial influence over
the manner in which we must conduct our business, and may intervene or influence our operations
at any time, which could result in a material change in our operations, significantly limit
or completely hinder our ability to offer or continue to offer securities to investors and,
and cause the value of our Ordinary Shares to significantly decline or be worthless”
on page 25 of this prospectus and page 25 of our annual report on Form 20-F
for the fiscal year ended December 31, 2022; |
| · | Recent
greater oversight by the Cyberspace Administration of China, or the CAC, over data security,
particularly for companies seeking to list on a foreign exchange, could adversely impact
our business and our offering. See “Risk Factors—Risks Related to Doing Business
in China—Recent greater oversight by the CAC over data security, particularly for companies
seeking to list on a foreign exchange, could adversely impact our business and our offering”
on page 25 of this prospectus and page 27 of our annual report on Form 20-F
for the fiscal year ended December 31, 2022; |
| · | The
Opinions on Severely Cracking Down on Illegal Securities Activities According to Law recently
issued by the General Office of the Central Committee of the Communist Party of China and
the General Office of the State Council may subject us to additional compliance requirement
in the future. See “Risk Factors—Risks Related to Doing Business in China—The
Opinions on Severely Cracking Down on Illegal Securities Activities According to Law recently
issued by the General Office of the Central Committee of the Communist Party of China and
the General Office of the State Council may subject us to additional compliance requirement
in the future” on page 25 of this prospectus and page 28 of our annual report
on Form 20-F for the fiscal year ended December 31, 2022; |
| · | Labor
Contract Law and other labor-related laws in the PRC may adversely affect our business and
our results of operations. See “Risk Factors—Risks Related to Doing Business
in China—Labor Contract Law and other labor-related laws in the PRC may adversely affect
our business and our results of operations” on page 25 of this prospectus and
page 28 of our annual report on Form 20-F for the fiscal year ended December 31,
2022; |
| · | Failure
to obtain or maintain any preferential tax treatments, or the discontinuation, reduction
or delay of any preferential tax treatments available to us in China could adversely affect
our results of operations and financial condition. See “Risk Factors—Risks Related
to Doing Business in China—Failure to obtain or maintain any preferential tax treatments,
or the discontinuation, reduction or delay of any preferential tax treatments available to
us in China could adversely affect our results of operations and financial condition”
on page 25 of this prospectus and page 29 of our annual report on Form 20-F
for the fiscal year ended December 31, 2022; |
| · | Under
the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise”
of China. Such classification will likely result in unfavorable tax consequences to us and
our non-PRC shareholders. See “Risk Factors—Risks Related to Doing Business in
China—Under the Enterprise Income Tax Law, we may be classified as a ‘Resident
Enterprise’ of China. Such classification will likely result in unfavorable tax consequences
to us and our non-PRC shareholders” on page 25 of this prospectus and page 30
of our annual report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | PRC
regulation of loans to PRC entities by offshore holding companies and governmental control
of currency conversion may delay or prevent us from using proceeds from our future financing
activities to make loans to our PRC operating subsidiaries, which might adversely affect
our liquidity and our ability to fund and expand our business. See “Risk Factors—Risks
Related to Doing Business in China—PRC regulation of loans to PRC entities by offshore
holding companies and governmental control of currency conversion may delay or prevent us
from using proceeds from our future financing activities to make loans to our PRC operating
subsidiaries, which might adversely affect our liquidity and our ability to fund and expand
our business” on page 25 of this prospectus and page 31 of our annual report
on Form 20-F for the fiscal year ended December 31, 2022; |
| · | We
may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on
the ability of our subsidiaries to make payments to us could have a material adverse effect
on our ability to conduct business. See “Risk Factors—Risks Related to Doing
Business in China—We may rely on dividends paid by our subsidiaries for our cash needs,
and any limitation on the ability of our subsidiaries to make payments to us could have a
material adverse effect on our ability to conduct business” on page 25 of this
prospectus and page 31 of our annual report on Form 20-F for the fiscal year ended
December 31, 2022; |
| · | Failure
to comply with PRC regulations relating to the establishment of offshore special purpose
companies by PRC residents may subject our PRC resident Shareholders to personal liability,
may limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries,
may limit the ability of our PRC subsidiaries to distribute profits to us or may otherwise
materially and adversely affect us. See “Risk Factors—Risks Related to Doing
Business in China—Failure to comply with PRC regulations relating to the establishment
of offshore special purpose companies by PRC residents may subject our PRC resident Shareholders
to personal liability, may limit our ability to acquire PRC companies or to inject capital
into our PRC subsidiaries, may limit the ability of our PRC subsidiaries to distribute profits
to us or may otherwise materially and adversely affect us” on page 25 of this
prospectus and page 32 of our annual report on Form 20-F for the fiscal year ended
December 31, 2022; |
| · | You
may be subject to PRC income tax on dividends from us or on any gain realized on the transfer
of our Ordinary Shares. See “Risk Factors—Risks Related to Doing Business in
China—You may be subject to PRC income tax on dividends from us or on any gain realized
on the transfer of our Ordinary Shares” on page 25 of this prospectus and page 33
of our annual report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | We
may be unable to complete a business combination transaction efficiently or on favorable
terms due to complicated merger and acquisition regulations and certain other PRC regulations.
See “Risk Factors—Risks Related to Doing Business in China—We may be unable
to complete a business combination transaction efficiently or on favorable terms due to complicated
merger and acquisition regulations and certain other PRC regulations” on page 25
of this prospectus and page 33 of our annual report on Form 20-F for the fiscal
year ended December 31, 2022; |
| · | We
face uncertainties with respect to indirect transfers of equity interests in PRC resident
enterprises by their non-PRC holding companies. See “Risk Factors—Risks Related
to Doing Business in China—We face uncertainties with respect to indirect transfers
of equity interests in PRC resident enterprises by their non-PRC holding companies”
on page 25 of this prospectus and page 34 of our annual report on Form 20-F
for the fiscal year ended December 31, 2022; |
| · | You
may have difficulty effecting service of legal process, enforcing judgments or bringing actions
against us and our management. See “Risk Factors—Risks Related to Doing Business
in China—You may have difficulty effecting service of legal process, enforcing judgments
or bringing actions against us and our management” on page 25 of this prospectus
and page 35 of our annual report on Form 20-F for the fiscal year ended December 31,
2022; |
| · | U.S.
regulatory bodies may be limited in their ability to conduct investigations or inspections
of our operations in China. See “Risk Factors—Risks Related to Doing Business
in China—U.S. regulatory bodies may be limited in their ability to conduct investigations
or inspections of our operations in China” on page 25 of this prospectus and page 35
of our annual report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | The
recent joint statement by the SEC and the PCAOB, rule changes by Nasdaq, and the Holding
Foreign Companies Accountable Act and related regulations, all call for additional and more
stringent criteria to be applied to emerging market companies upon assessing the qualification
of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These
developments could add uncertainties to our continued listing or future offerings of our
securities in the U.S. See “Risk Factors—Risks Related to Doing Business in China—The
recent joint statement by the SEC and the PCAOB, rule changes by Nasdaq, and the Holding
Foreign Companies Accountable Act and related regulations, all call for additional and more
stringent criteria to be applied to emerging market companies upon assessing the qualification
of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These
developments could add uncertainties to our continued listing or future offerings of our
securities in the U.S.” on page 25 of this prospectus and page 36 of our
annual report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | We
may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption
law. See “Risk Factors—Risks Related to Doing Business in China—We may
be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption
law” on page 25 of this prospectus and page 37 of our annual report on Form 20-F
for the fiscal year ended December 31, 2022; and |
| · | Because
our business is conducted in RMB and the price of our Ordinary Shares is quoted in the U.S.
dollar, changes in the exchange rate between RMB and the U.S. dollar may affect the value
of your investments. See “Risk Factors—Risks Related to Doing Business in China—Because
our business is conducted in RMB and the price of our Ordinary Shares is quoted in the U.S.
dollar, changes in the exchange rate between RMB and the U.S. dollar may affect the value
of your investments” on page 25 of this prospectus and page 37 of our annual
report on Form 20-F for the fiscal year ended December 31, 2022. |
Risks Related to Our Ordinary Shares (for
a more detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Ordinary Shares”
in our annual report on Form 20-F for the fiscal year ended December 31, 2022)
In addition to the risks described above, we
are subject to general risks and uncertainties related to our Ordinary Shares and the trading market, including, but not limited to,
the following:
| · | Our
share price has recently declined substantially, and our Ordinary Shares could be delisted
from the Nasdaq or trading could be suspended. See page 38 of our annual report on Form 20-F
for the fiscal year ended December 31, 2022; |
| · | We
cannot assure you that we will declare and distribute any dividends in the future. See page 39
of our annual report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | For
as long as we are an emerging growth company, we will not be required to comply with certain
reporting requirements, including those relating to accounting standards and disclosure about
our executive compensation, that apply to other public companies. See page 39 of our
annual report on Form 20-F for the fiscal year ended December 31, 2022; |
| · | If
we fail to establish and maintain proper internal financial reporting controls, our ability
to produce accurate financial statements or comply with applicable regulations could be impaired.
See page 40 of our annual report on Form 20-F for the fiscal year ended December 31,
2022; |
| · | As
a foreign private issuer, we are not subject to certain U.S. securities law disclosure requirements
that apply to a domestic U.S. issuer, which may limit the information publicly available
to our shareholders. See page 40 of our annual report on Form 20-F for the fiscal
year ended December 31, 2022; |
| · | As
a foreign private issuer, we are permitted to adopt certain home country practices in relation
to corporate governance matters that differ significantly from the Nasdaq Stock Market corporate
governance listing standards. These practices may afford less protection to shareholders
than they would enjoy if we complied fully with corporate governance listing standards. See
page 41 of our annual report on Form 20-F for the fiscal year ended December 31,
2022; and |
| · | If
we cannot satisfy, or continue to satisfy, the continued listing requirements and other rules of
the Nasdaq Capital Market, our securities may be delisted, which could negatively impact
the price of our securities and your ability to sell them. See page 42 of our annual
report on Form 20-F for the fiscal year ended December 31, 2022. |
Dividends and other Distributions
We are a holding company, and we may rely on
dividends and other distributions on equity paid by our PRC subsidiaries for our cash and financing requirements, including the furnishing
of funds necessary to pay dividends and other cash distributions to our shareholders or to service any debt we may incur. If any of our
PRC subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends
to us. There have not been any such dividends or other distributions from our PRC subsidiaries to our subsidiaries located outside of
China, as of the date of this prospectus. In addition, as of the date of this prospectus, none of our subsidiaries have ever issued any
dividends or distributions to us or their respective shareholders outside of China, and neither we nor any of our subsidiaries have ever
paid dividends or made distributions to U.S. investors. As of the date of this prospectus, neither we nor any of our subsidiaries have
ever paid dividends or made distributions to U.S. investors. Other than the following transactions, no cash transfers have occurred among
us and our subsidiaries: (i) our Hong Kong subsidiary, Baosheng Hong Kong, received cash of $38.3 million from us, which represented
proceeds raised in the initial public offering of our Ordinary Shares in February 2021, and the private placement of our Ordinary
Shares and warrants in March 2021, (ii) on March 16, 2021, Baosheng Hong Kong transferred cash of $6 million, in the form
of shareholder loans, to its wholly owned subsidiary, Beijing Baosheng, and (iii) in April 2021 and August 2021, Baosheng
Hong Kong transferred cash in the aggregate of $30.79 million, in the form of capital contributions, to its wholly owned subsidiary,
Baosheng Network. In the future, cash proceeds raised from overseas financing activities may be transferred by us to our PRC subsidiaries
by means of capital contributions or shareholder loans, as the case may be. Notwithstanding the recent judgment against Beijing Baosheng,
described more particularly under “Item 4. Information on the Company—B. Business Overview—Legal Proceedings”
in our annual report on Form 20-F for the fiscal year ended December 31, 2022, we do not expect that the court’s ruling
will impact the cash transferring through the organization.
According to the Foreign Investment Law of the
People’s Republic of China and its implementing rules, which jointly established the legal framework for the administration of
foreign-invested companies, a foreign investor may, in accordance with other applicable laws, freely transfer into or out of China its
contributions, profits, capital earnings, income from asset disposal, intellectual property rights, royalties acquired, compensation
or indemnity legally obtained, and income from liquidation, made or derived within the territory of China in RMB or any foreign currency,
and any entity or individual shall not illegally restrict such transfer in terms of the currency, amount and frequency. According to
the Company Law of the People’s Republic of China and other Chinese laws and regulations, our PRC subsidiaries may pay dividends
only out of their respective accumulated profits as determined in accordance with Chinese accounting standards and regulations. In addition,
each of our PRC subsidiaries is required to set aside at least 10% of its accumulated after-tax profits, if any, each year to fund a
certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Where the statutory reserve
fund is insufficient to cover any loss the PRC subsidiary incurred in the previous financial year, its current financial year’s
accumulated after-tax profits shall first be used to cover the loss before any statutory reserve fund is drawn therefrom. Such statutory
reserve funds and the accumulated after-tax profits that are used for covering the loss cannot be distributed to us as dividends. At
their discretion, our PRC subsidiaries may allocate a portion of their after-tax profits based on Chinese accounting standards to a discretionary
reserve fund. See “Risk Factors—Risks Related to Doing Business in China—We may rely on dividends paid by our subsidiaries
for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect
on our ability to conduct business.”
Renminbi is not freely convertible into other
currencies. As result, any restriction on currency exchange may limit the ability of our PRC operating subsidiaries to use their potential
future Renminbi revenues to pay dividends to us. The Chinese government imposes controls on the convertibility of Renminbi into foreign
currencies and, in certain cases, the remittance of currency out of China. Shortages in availability of foreign currency may then restrict
the ability of our PRC subsidiaries to remit sufficient foreign currency to our offshore entities for our offshore entities to pay dividends
or make other payments or otherwise to satisfy our foreign-currency-denominated obligations. The Renminbi is currently convertible under
the “current account,” which includes dividends, trade and service-related foreign exchange transactions, but not under the
“capital account,” which includes foreign direct investment and foreign currency debt, including loans we may secure for
our onshore subsidiaries. Currently, our PRC subsidiaries may purchase foreign currency for settlement of “current account transactions,”
including payment of dividends to us, without the approval of SAFE by complying with certain procedural requirements. However, the relevant
Chinese governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account
transactions. The Chinese government may continue to strengthen its capital controls, and additional restrictions and substantial vetting
processes may be instituted by SAFE for cross-border transactions falling under both the current account and the capital account. Any
existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in Renminbi to pay dividends
in foreign currencies to holders of our securities. Foreign exchange transactions under the capital account remain subject to limitations
and require approvals from, or registration with, SAFE and other relevant Chinese governmental authorities. This could affect our ability
to obtain foreign currency through debt or equity financing for our subsidiaries. See “Risk Factors—Risks Related to Doing
Business in China—We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our
subsidiaries to make payments to us could have a material adverse effect on our ability to conduct business” for a detailed discussion
of the Chinese legal restrictions on the payment of dividends and our ability to transfer cash within our group. In addition, holders
of our Ordinary Shares may potentially be subject to Chinese taxes on dividends paid by us in the event we are deemed a Chinese resident
enterprise for Chinese tax purposes. See “Risk Factors—Risks Related to Doing Business in China—You may be subject
to PRC income tax on dividends from us or on any gain realized on the transfer of our Ordinary Shares.”
Foreign Private Issuer Status
We are a foreign private issuer within the meaning
of the rules under the Exchange Act. As such, we are exempt from certain provisions applicable to United States domestic public
companies. For example:
| · | we
are not required to provide as many Exchange Act reports, or as frequently, as a domestic
public company; |
| · | for
interim reporting, we are permitted to comply solely with our home country requirements,
which are less rigorous than the rules that apply to domestic public companies; |
| · | we
are not required to provide the same level of disclosure on certain issues, such as executive
compensation; |
| · | we
are exempt from provisions of Regulation FD aimed at preventing issuers from making selective
disclosures of material information; |
| · | we
are not required to comply with the sections of the Exchange Act regulating the solicitation
of proxies, consents or authorizations in respect of a security registered under the Exchange
Act; and |
| · | we
are not required to comply with Section 16 of the Exchange Act requiring insiders to
file public reports of their share ownership and trading activities and establishing insider
liability for profits realized from any “short-swing” trading transaction. |
Implications of Being an Emerging Growth Company
As a company with less than US$1.235 billion
in revenue for the last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth
company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies.
These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002,
or Section 404, in the assessment of the emerging growth company’s internal control over financial reporting. The JOBS Act
also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such
date that a private company is otherwise required to comply with such new or revised accounting standards.
We will remain an emerging growth company until
the earliest of (i) the last day of our fiscal year during which we have total annual gross revenues of at least US$1.235 billion;
(ii) the last day of our fiscal year following the fifth anniversary of the completion of our initial public offering; (iii) the
date on which we have, during the previous three year period, issued more than US$1.0 billion in non-convertible debt; or (iv) the
date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which would occur if the market value
of our Ordinary Shares that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed
second fiscal quarter and we have been publicly reporting for at least 12 months. Once we cease to be an emerging growth company, we
will not be entitled to the exemptions provided in the JOBS Act discussed above.
Corporate Information
Our principal executive office is located at
East Floor 5, Building No. 8, Xishanhui, Shijingshan District Beijing, People’s Republic of China. Our telephone number at
this address is +86 010-82088021. Our registered office in the Cayman Islands is located at Harneys Fiduciary (Cayman) Limited, 4th Floor,
Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. We maintain a corporate website at
http://ir.bsacme.com. The information contained in, or accessible from, our website or any other website does not constitute a part of
this prospectus. Our agent for service of process in the United States is Puglisi & Associates located at 850 Library Avenue,
Suite 204, Newark, DE 19711.
RISK FACTORS
Investing in our securities involves risks.
Before making an investment decision, you should carefully consider the risks described under “Risk Factors” in the applicable
prospectus supplement and under the heading “Item 3. Key Information—D. Risk Factors” in our annual report on Form 20-F
for the fiscal year ended December 31, 2022, which is incorporated in this prospectus by reference, as updated by our subsequent
filings under the Exchange Act, together with all of the other information appearing in this prospectus or incorporated by reference
into this prospectus and any applicable prospectus supplement, in light of your particular investment objectives and financial circumstances.
In addition to those risk factors, there may be additional risks and uncertainties of which management is not aware or focused on or
that management deems immaterial. Our business, financial condition, or results of operations could be materially adversely affected
by any of these risks. The trading price of our securities could decline due to any of these risks, and you may lose all or part of your
investment.
We are an offshore holding company incorporated
in the Cayman Islands and we are not a Chinese operating company. As a holding company with no operations of our own, our operations
are conducted in China through our wholly owned PRC subsidiary, Beijing Baosheng, and its subsidiaries. Holders of our Ordinary Shares
will not directly hold any equity interests in our operating subsidiaries. The Chinese regulatory authorities could disallow our corporate
structure, which could result in a material change in our operations and the value of our Ordinary Shares could decline or become worthless.
Risks Related to Doing Business in China
Adverse changes in political and economic
policies of the PRC government could have a material adverse effect on the overall economic growth of the PRC, which could reduce the
demand for our products and materially and adversely affect our competitive position.
All of our business operations are conducted
in China through the operating entities. Accordingly, our business, results of operations, financial condition and prospects are subject
to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRC government
continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax
policies, and a host of other government policies such as those that encourage or restrict investment in certain industries by foreign
investors, control the exchange between RMB and foreign currencies, and regulate the growth of the general or specific market. These
government involvements have been instrumental in China’s significant growth in the past 40 years. If the PRC government’s
current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRC government’s policies
limits the growth of our industry or otherwise negatively affects our business, our growth rate or strategy, our results of operations
could be adversely affected as a result.
Uncertainties regarding interpretation
and enforcement of the laws, rules and regulations in China may impose adverse impact on our business, operations and profitability.
We conduct all of our business through the operating
entities in China. Their operations in China are governed by PRC laws and regulations. Our PRC subsidiaries are generally subject to
laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to wholly foreign-owned
enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential
value.
Since 1979, PRC legislation and regulations have
significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a
fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities
in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions
and their nonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the
PRC legal system is based in part on government policies and internal rules (some of which are not published on a timely basis or
at all) that may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until
sometime after the violation. In addition, any litigation in China may be protracted and result in substantial costs and diversion of
resources and management attention.
PRC regulation of loans and direct investment
by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our future offerings to make loans or
additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to
fund and expand our business.
We may be adversely affected by the complexity,
uncertainties and changes in the regulation of internet-related businesses and companies in China.
The PRC government extensively regulates the
internet industry, including foreign ownership of, and the licensing and permit requirements pertaining to, companies in the internet
industry. These internet-related laws and regulations are relatively new and evolving, and their interpretation and enforcement involve
significant uncertainty. As a result, in certain circumstances some actions or omissions may be deemed to be violations of applicable
laws and regulations. Risks and uncertainties relating to regulation in China of the internet-related business include, but are not limited
to, the following:
| · | There
are uncertainties relating to the regulation of the internet-related business in China, including
evolving licensing practices. This means that some of our permits, licenses or operations
in China may be subject to challenge, or we may fail to obtain permits or licenses that may
be deemed necessary for our operations or we may not be able to obtain or renew certain permits
or licenses. If we fail to maintain any of these required licenses or permits, we may be
subject to various penalties, including fines and discontinuation of or restriction on our
operations in China. Any such disruption in our business operations in China may have a material
and adverse effect on our results of operations in China. |
| · | New
laws and regulations may be promulgated in China to regulate internet activities, including
digital marketing. If these new laws and regulations are promulgated, additional licenses
and/or cost of compliance may be required for our operations. If our operations are not in
compliance with these new laws and regulations after they become effective, or if we fail
to obtain any licenses required under these new laws and regulations, we could be subject
to penalties or restrictions on our operations in China. |
According to our PRC Counsel, Beijing Dacheng
Law Offices, LLP, the operating entities are not required to obtain any other industry-specific qualification, license or permit, including
an Internet Content Provider license, or ICP license, for carrying out their online advertising service business in China. Given that
the interpretation and application of existing PRC laws, regulations and policies and possible new laws, regulations or policies relating
to the internet industry have created substantial uncertainties regarding the legality of existing and future foreign investments in,
and the businesses and activities of, internet-related businesses in China, including the operating entities’ business in China,
there is no assurance that we and the operating entities have obtained all the permits or licenses required for conducting business in
China or will be able to maintain these existing licenses or obtain any new licenses required under any new laws or regulations. There
is also no assurance that the PRC government will not classify the operating entities’ business as one requiring an ICP license
or other licenses in the future. If new regulations in China classify the operating entities’ business as one requiring an ICP
license or other licenses, the operating entities may be prevented from operating in China if they are unable to obtain the required
licenses. If the change in classification of their business were to be retroactively applied, the operating entities might be subject
to sanctions, including payment of taxes and fines. Any change in the PRC laws and regulations may therefore significantly disrupt the
operating entities’ operations in China and materially and adversely affect our business, results of operations and financial conditions
in China.
Regulation and censorship of information
disseminated through the Internet in China may adversely affect our business in China, and we may be liable for content disseminated
by us through the Internet.
The PRC government has enacted laws and regulations
governing internet access and the distribution of products, services, news, information, audio-video programs and other content through
the Internet. The PRC government has prohibited the dissemination of information through the Internet that it deems to be in violation
of PRC laws and regulations. If any internet content disseminated by the operating entities is deemed by the PRC government to violate
any content restrictions, the operating entities would not be able to continue to disseminate such content and could become subject to
penalties, including confiscation of income, fines, suspension of business and revocation of licenses, which could materially and adversely
affect our business, financial conditions and results of operations in China. The operating entities may also be subject to potential
liability for any unlawful actions of their clients or for content they disseminate that is regarded as inappropriate.
The operating entities have implemented measures
to ensure that their ad content does not violate these laws and regulations. After the operating entities receive the ad content from
their advertisers, it will be subject to a compliance review by the operating entities’ experienced employees. If they determine
that the ad content does not violate any applicable laws and regulations, the operating entities will share such ad content with the
relevant media for their internal review. If the operating entities determine that the ad content may be in violation of applicable laws
or regulations, they will provide suggested edits to the ad content and send it back to the advertiser for revision. After both the operating
entities and the media have determined that the ad content is in full compliance with applicable laws and regulations on information
dissemination, the operating entities will confirm with the advertiser on its opinion with respect to the compliance prior to the deployment
of the ad. Despite these efforts, we cannot assure you that the operating entities will be in full compliance with all applicable regulations
on information dissemination. In addition, the operating entities have no control over and are not informed of the specific review standards
applied by the advertisers or the media, and it may be difficult to determine the type of content that may result in liability to
the operating entities. If the operating entities are found to be liable, they may be subject to penalties, fines, suspension of licenses,
or revocation of licenses, which could materially and adversely affect our business, financial conditions and results of operations.
Changes in the policies, regulations, rules,
and the enforcement of laws of the PRC government may be quick with little advance notice and could have a significant impact upon our
ability to operate profitably in the PRC.
We currently conduct all operations through the
operating entities in the PRC and all of our revenue is generated in the PRC. Accordingly, economic, political, and legal developments
in the PRC will significantly affect our business, financial condition, results of operations, and prospects. Policies, regulations,
rules, and the enforcement of laws of the PRC government can have significant effects on economic conditions in the PRC and the ability
of businesses to operate profitably. The operating entities’ ability to operate profitably in the PRC may be adversely affected
by changes in policies, regulations, rules, and the enforcement of laws by the PRC government, which changes may be quick with little
advance notice.
The Chinese government exerts substantial
influence over the manner in which we must conduct our business, and may intervene or influence our operations at any time, which could
result in a material change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities
to investors and, and cause the value of our Ordinary Shares to significantly decline or be worthless.
The Chinese government has exercised and continues
to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. The operating
entities’ ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation,
environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose
new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part
to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision
not to continue to support economic reforms and to return to a more centrally planned economy or regional or local variations in the
implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and
could require us to divest ourselves of any interest we then hold in Chinese properties.
Recent
statements made by the Chinese government have indicated an intent to increase the government’s oversight and control over offerings
of companies with significant operations in the PRC that are to be conducted in foreign markets, as well as foreign investment in China-based
issuers. On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies (the “Trial Measures”), (《境内企业境外发行证券和上市管理试行办法》)
and five supporting guidelines (collectively, the “Overseas Listings Rules”), which took effect on March 31, 2023. On
the same date of the issuance of the Overseas Listings Rules, the CSRC circulated No.1 to No.5 Supporting Guidance Rules, the Notes on
the Overseas Listings Rules, the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and
the relevant CSRC Answers to Reporter Questions on the official website of CSRC, or collectively, the Guidance Rules and Notice.
The Overseas Listing Rules aim to lay out
the filing regulation arrangement for both direct and indirect overseas listing and clarify the determination criteria for indirect overseas
listing in overseas markers. Where an enterprise whose principal business activities are conducted in the PRC seeks to issue and list
its shares in the name of an overseas enterprise based on equity, assets, income, or other similar rights and interests of the relevant
domestic enterprise in the PRC, such activities are deemed an indirect overseas issuance and listing. According to the Overseas Listings
Rules, after the submission of relevant application for initial public offerings or listings in overseas markets, or after the completion
of subsequent securities offerings of an issuer in the same overseas market where it has previously offered and listed, or after the
submission of relevant application for subsequent securities offerings and listings of an issuer in other overseas markets than where
it has offered and listed, all China-based companies shall file the required filing materials with the CSRC within three working days.
In addition, overseas offerings and listings will be prohibited for such China-based companies when any of the following applies: (i) where
such securities offerings and listings are explicitly prohibited by the PRC laws and regulations; (ii) where the intended securities
offerings and listings may endanger national security as reviewed and determined by competent authorities under the State Council in
accordance with laws; (iii) where the domestic company intending to make the securities offering and listing, or its controlling
shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property
or undermining the order of the socialist market economy during the latest three years; (iv) where the domestic company intending
to make the securities offering and listing is suspected of committing crimes or major violations of laws and regulations, and is under
investigation according to law, and no conclusion has yet been made thereof; (v) where there are material ownership disputes over
equity held by the domestic company’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder
and/or actual controller. The Administrative Provisions further stipulate that a fine between RMB1 million (approximately $157,255) and
RMB10 million (approximately $1,572,550) may be imposed if an applicant fails to fulfill the filing requirements with the CSRC or conducts
an overseas offering or listing in violation of the Overseas Listings Rules.
Under the Overseas Listings Rules and the
Guidance Rules and Notice, domestic companies conducting overseas securities offering and listing activities, either in direct or
indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working
days following their submissions of initial public offerings or listing applications. The companies that have already been listed on
overseas stock exchanges or have obtained the approval from overseas supervision administrations or stock exchanges for their offerings
and listings and will complete their overseas offering and listing prior to September 30, 2023 are not required to make immediate
filings for its listing yet but need to make filings for subsequent offerings in accordance with the Overseas Listings Rules. The companies
that have already submitted an application for an initial public offering to overseas supervision administrations prior to the effective
date of the Overseas Listings Rules but have not yet obtained the approval from overseas supervision administrations or stock exchanges
for the offering and listing may arrange for the filing within a reasonable time period and should complete the filing procedure before
such companies’ overseas issuance and listing.
As of the date of this prospectus, we have not
received any formal inquiry, notice, warning, sanction, or any regulatory objection from the CSRC with respect to our listing or subsequent
offerings. As confirmed by our PRC legal counsel, Beijing Dacheng Law Offices, LLP, the Selling Shareholders’ resale of the Ordinary
Sales as described hereunder does not constitute a “subsequent offering” under the CSRC rules and hence we are not required
to complete the filing procedures with CSRC for the Selling Shareholders’ resale. However, if we decide to conduct offerings in
the future, we will be required to complete filings under the Overseas Listings Rules with the CSRC. As the Overseas Listings Rules were
newly published and there exists uncertainty with respect to the filing requirements and its implementation, if we are required to submit
to the CRSC and complete the filing procedure of our subsequent overseas public offerings, we cannot be sure that we will be able to
complete such filings in a timely manner. Any failure or perceived failure by us to comply with such filing requirements under the Overseas
Listings Rules may result in forced corrections, warnings and fines against us and could materially hinder our ability to offer
or continue to offer our securities.
Notwithstanding the above, our PRC counsel has
further advised us that uncertainties still exist as to whether we or any of our subsidiaries are required to obtain permissions from
the CSRC, or any other governmental agency that is required to approve our operations and/or offering. We have been closely monitoring
the development in the regulatory landscape in the PRC, particularly regarding the requirement of approvals, including on a retrospective
basis, from the CSRC, or other PRC authorities with respect to this offering, as well as other procedures that may be imposed on us.
In the event that we, our subsidiaries, or any of its subsidiaries are subject to the compliance requirements, we cannot assure you that
any of these entities will be able to receive clearance of such compliance requirements in a timely manner, or at all. Any failure of
our Company or any of our subsidiaries to fully comply with new regulatory requirements may subject us to regulatory actions, such as
fines, relevant businesses or operations suspension for rectification, revocation of relevant business permits or operational license,
or other sanctions, which may significantly limit or completely hinder our ability to offer or continue to offer our securities, cause
significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition
and results of operations and cause our securities to significantly decline in value or become worthless.
Recent greater oversight by the CAC over
data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering.
On
July 7, 2022, the CAC published the Measures for the Security Assessment of Outbound Data Transfer (《数据出境安全评估办法》),
effective on September 1, 2022. The measures apply to the security assessment of important data and personal information collected
and generated during operation within the territory of the People’s Republic of China and transferred abroad by a data handler.
According to the Measures, if a data processor transfers data abroad under any of the following circumstances, it shall file to the State
Cyberspace Administration for security assessment via the Province Cyberspace Administration: (i) a data handler who transfers important
data to abroad; (ii) a critical information infrastructure operator, or a data handler processing the personal information of more
than 1 million individuals transfers personal information to abroad; (iii) since January 1 of the previous year, a data handler
cumulatively transferred abroad the personal information of more than 100,000 individuals, or the sensitive personal information of more
than 10,000 individuals, or; (iv) other circumstances where the security assessment for the outbound data transfer is required by
the State Cyberspace Administration.
On
December 28, 2021, the CAC and other relevant PRC governmental authorities jointly promulgated the Cybersecurity Review Measures
Transfer (《网络安全审查办法》),
which took effect on February 15, 2022. The Cybersecurity Review Measures provide that, in addition to “critical information
infrastructure operators” (CIIOs) that intend to purchase Internet products and services, online platform operators engaging in
data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review
Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks
that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that an
online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review
by the CAC if it intends to be listed in foreign countries.
On
November 14, 2021, the CAC published the Network Internet Data Protection Draft Regulations (draft for comments), (《网络数据安全管理条例（征求意见稿）》),
and accepted public comments until December 13, 2021. The Network Internet Data Protection Draft Regulations provides that data
processors refer to individuals or organizations that autonomously determine the purpose and the manner of processing data. If a data
processor that processes the personal data of more than one million users intends to list overseas, it shall apply for a cybersecurity
review. In addition, data processors that process important data or are listed overseas shall carry out an annual data security assessment
on their own or by engaging a data security services institution, and the data security assessment report for the prior year should be
submitted to the local cyberspace affairs administration department before January 31 of each year.
As advised by our PRC counsel, based on our aforementioned
business operation, we are not a CIIO nor an internet platform operator as mentioned above. However, it remains unclear on how the aforementioned
rule will be interpreted, amended and implemented by the relevant PRC governmental authorities. If the implementation of the Cybersecurity
Review Measures (2021 version), the Measures for the Security Assessment of Outbound Data Transfer, and/or the Network Internet Data
Protection Draft Regulations (draft for comments) mandates clearance of cybersecurity review and other specific actions to be completed
by companies like us, we will face uncertainties as to whether such clearance can be timely obtained, or at all.
As of the date of this prospectus, we do not
expect that the current PRC laws on cybersecurity or data security would have a material adverse impact on the operating entities’
business operations. However, as uncertainties remain regarding the interpretation and implementation of these laws and regulations,
we cannot assure you that the operating entities will comply with such regulations in all respects, and they may be ordered to rectify
or terminate any actions that are deemed illegal by regulatory authorities. The operating entities may also become subject to fines and/or
other sanctions and the costs of compliance with, and other burdens imposed by such laws and regulations may limit the use and adoption
of their services, which may have material adverse effects on our business, operations, and financial condition.
The Opinions on Severely Cracking Down
on Illegal Securities Activities According to Law recently issued by the General Office of the Central Committee of the Communist Party
of China and the General Office of the State Council may subject us to additional compliance requirement in the future.
Recently,
the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued
the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law (《关于依法从严打击证券违法活动的意见》),
or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration
over illegal securities activities and the supervision on overseas listings by China-based companies. These opinions proposed to take
effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based
overseas-listed companies and the demand for cybersecurity and data privacy protection. The aforementioned policies and any related implementation
rules to be enacted may subject the operating entities to additional compliance requirements in the future that may be onerous.
Official guidance and interpretation of the Opinions remain unclear in several respects at this time. Therefore, we cannot assure you
that the operating entities will remain fully compliant with all new regulatory requirements of the Opinions or any future implementation
rules on a timely basis, or at all.
Labor Contract Law and other labor-related
laws in the PRC may adversely affect our business and our results of operations.
On
December 28, 2012, the PRC government released the revision of the Labor Contract Law of the PRC (《中华人民共和国劳动合同法》),
which became effective on July 1, 2013. Pursuant to the Labor Contract Law of the PRC, employers are subject to stricter requirements
in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees’ probation and unilaterally
terminating labor contracts. In the event that the operating entities decide to terminate some of their employees or otherwise change
their employment or labor practices, the Labor Contract Law of the PRC and its implementation rules may limit the operating entities’
ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations.
According to the PRC Social Insurance Law (《中华人民共和国社会保险法》),
employees must participate in pension insurance, work-related injury insurance, medical insurance, unemployment insurance and maternity
insurance and the employers must, together with their employees or separately, pay the social insurance premiums for such employees.
As of the date of this prospectus, the operating
entities comply with labor-related laws and regulations in China in material aspects, including those relating to obligations to make
social insurance payments and contribute to the housing provident fund. From July 2018 to March 2019, the operating entities
had not made adequate contributions to social insurance and other employee benefits for their employees. We have recorded accruals for
the estimated amount of underpayment in our financial statements. Pursuant to the PRC Social Insurance Law, if an employer fails to make
full and timely contributions to social insurance, the relevant enforcement agency shall order the employer to make all outstanding contributions
within five days of such order and impose penalties equal to 0.05% of the total outstanding amount for each additional day such contributions
are overdue. If the employer fails to make all outstanding contributions within five days of such order, the relevant enforcement agency
may impose penalties equal to one to three times the amount overdue. We estimate the amount of outstanding contributions from July 2018
to December 2018 to be approximately $0.1 million, and the amount of outstanding contributions from January 2019 to March 2019
to be approximately $0.09 million. As of the date of this prospectus, the operating entities have not received any employee complaint
or any government audit request, or penalty orders for these outstanding contributions.
Ms. Wenxiu Zhong, our founder, through a
guarantee letter dated April 29, 2020 (the “Guarantee Letter”), promised to unconditionally, irrevocably and personally
bear any and all the economic losses and expenses actually incurred by our Company and the operating entities if the operating entities
are subject to any payment or penalty in relation to the outstanding social insurance contributions from July 2018 to April 2019.
As of the date of this prospectus, the operating
entities have not received any notice from relevant government authorities or any claim or request from their employees in this regard.
However, we cannot assure you that the relevant government authorities will not require the operating entities to pay the outstanding
amount and impose late fees or fines on them. If the operating entities are otherwise subject to investigations related to non-compliance
with labor laws and are imposed severe penalties or incur significant legal fees in connection with labor disputes or investigations,
our business, financial condition and results of operations may be adversely affected.
As the interpretation and implementation of labor-related
laws and regulations are still evolving, we cannot assure you that the operating entities’ employment practices will not violate
PRC labor-related laws and regulations in the future, which may subject them to labor disputes or government investigations. We cannot
assure you that the operating entities will be able to comply with all labor-related law and regulations regarding including those relating
to obligations to make social insurance payments and contribute to the housing provident fund. If the operating entities are deemed to
violate relevant labor laws and regulations, they could be required to provide additional compensation to their employees and our business,
financial condition and results of operations will be adversely affected.
Failure to obtain or maintain any preferential
tax treatments, or the discontinuation, reduction or delay of any preferential tax treatments available to us in China could adversely
affect our results of operations and financial condition.
Under
the Enterprise Income Tax Law (《中华人民共和国企业所得税法》)
(the “EIT Law”), foreign-invested companies, such as wholly foreign-owned enterprises, and domestic companies, such as our
PRC subsidiaries, are subject to a unified income tax rate of 25%. Various favorable income tax rates are, however, available to qualified
enterprises in certain encouraged sectors of the economy.
Pursuant
to the Notice on Preferential EIT Policies for Two Special Economic Development Zones of Kashi and Horgos in Xinjiang Uygur Autonomous
Region (《关于新疆喀什霍尔果斯两个特殊经济开发区企业所得税优惠政策的通知》),
and the Implementation Opinions on Accelerating the Construction of Kashi and Horgos Economic Development Zones (《关于加快喀什、霍尔果斯经济开发区建设的实施意见》)
(together the “Xinjiang EIT Exemption Policies”), an enterprise established in Horgos or Kashi between January 1, 2010
and December 31, 2020 and falling within the scope of the Catalogue of EIT Incentives for Industries Particularly Encouraged for
Development by Poverty Areas of Xinjiang (《新疆困难地区重点鼓励发展产业企业所得税优惠目录》)
are exempted from enterprise income tax, or EIT, for five years beginning from the first year in which the manufacturing or business
operational revenue is earned. After the initial EIT exemption period, the enterprise is entitled to another five-year exemption on the
local portion of its EIT.
Historically, several of our PRC subsidiaries
benefited from preferential tax treatments from the PRC government. Horgos Baosheng enjoyed EIT exemption from 2016 to 2020, Kashi Baosheng
enjoyed EIT exemption from 2018 to 2022, and Baosheng Technology has enjoyed EIT exemption since 2020 and is expected to continue enjoying
the exemption until 2024.
Although several of our PRC subsidiaries had
been or are now eligible for the foregoing preferential tax treatments, these preferential tax treatments are subject to uncertainties
as to their interpretation, administrative implementation, changes and amendments from time to time, or even suspension and termination
by relevant authorities. In particular, we cannot assure you that the Xinjiang EIT Exemption Policies will continue to be applied in
such a way that will entitle Baosheng Technology to continue to enjoy full EIT exemption in accordance with the existing applicable provisions,
or that Baosheng Technology will continue to be able to satisfy the qualifications provided for in the Xinjiang EIT Exemption Policies,
the failure of which may render us no longer entitled to such EIT exemption. In the fiscal year 2020, Horgos Baosheng, Kashi Baosheng
and Baosheng Technology all enjoyed the effective tax rate under the Xinjiang EIT Exemption Policies at 0%. In the fiscal years 2021
and 2022, Kashi Baosheng and Baosheng Technology enjoyed the effective tax rate under the Xinjiang EIT Exemption Policies at 0%, while
Horgos Baosheng enjoyed the standard tax rate at 25%. Had a standard EIT rate of 25% been applied to us in these fiscal years, we would
have reported net profit (loss) of $(23.7) million, $(6.7) million and $4.4 million in the fiscal years 2022, 2021 and 2020, respectively,
representing a reduction of $nil (or 0%), $nil (or 0)%, and $2.7 million (or 38.2)% in our net profit, respectively.
Any changes in tax laws, regulations, rules,
policies, administrative measures or their interpretation or administrative implementation which are applicable to our PRC subsidiaries,
or any change in our EIT exemption or any other preferential tax treatment status our PRC subsidiaries may enjoy, could result in a significant
increase in their tax obligations and tax payments, which in turn will have a material and adverse impact on our financial results and
financial condition.
Under the Enterprise Income Tax Law, we
may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences
to us and our non-PRC shareholders.
Under the EIT Law, an enterprise established
outside of China with “de facto management bodies” within China is considered a “resident enterprise”, meaning
that it can be subject to an EIT rate of 25.0% on its global income. In April 2009, the State Administration of Taxation (“SAT”)
promulgated a circular, known as Circular 82, and partially amended by Circular 9 promulgated in January 2014, to clarify the certain
criteria for the determination of the “de facto management bodies” for foreign enterprises controlled by PRC enterprises
or PRC enterprise groups. Under Circular 82, a foreign enterprise is considered a PRC resident enterprise if all of the following apply:
(1) the senior management and core management departments in charge of daily operations are located mainly within China; (2) decisions
relating to the enterprise’s financial and human resource matters are made or subject to approval by organizations or personnel
in China; (3) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholders’
meeting minutes are located or maintained in China; and (4) 50.0% or more of voting board members or senior executives of the enterprise
habitually reside in China. Further to Circular 82, SAT issued a bulletin, known as Bulletin 45, effective in September 2011 and
amended on June 1, 2015 and October 1, 2016 to provide more guidance on the implementation of Circular 82 and clarify the reporting
and filing obligations of such “Chinese controlled offshore incorporated resident enterprises.” Bulletin 45 provides for,
among other matters, procedures for the determination of resident status and administration of post-determination matters. Although Circular
82 and Bulletin 45 explicitly provide that the above standards apply to enterprises that are registered outside China and controlled
by PRC enterprises or PRC enterprise groups, Circular 82 may reflect SAT’s criteria for determining the tax residence of foreign
enterprises in general.
If the PRC tax authorities determine that we
are a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow.
First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income
tax reporting obligations. In our case, this would mean that income such as non-China source income would be subject to PRC enterprise
income tax at a rate of 25%. Currently, we do not have any non-China source income, as we conduct our operations in China through the
operating entities. Second, under the EIT Law and its implementing rules, dividends paid to us from our PRC subsidiaries would be deemed
as “qualified investment income between resident enterprises” and therefore qualify as “tax-exempt income” pursuant
to the clause 26 of the EIT Law. Finally, it is possible that future guidance issued with respect to the new “resident enterprise”
classification could result in a situation in which the dividends we pay with respect to our Ordinary Shares, or the gain our non-PRC
shareholders may realize from the transfer of our Ordinary Shares, may be treated as PRC-sourced income and may therefore be subject
to a 10% PRC withholding tax. The EIT Law and its implementing regulations are, however, relatively new and ambiguities exist with respect
to the interpretation and identification of PRC-sourced income, and the application and assessment of withholding taxes. If we are required
under the EIT Law and its implementing regulations to withhold PRC income tax on dividends payable to our non-PRC shareholders, or if
non-PRC shareholders are required to pay PRC income tax on gains on the transfer of their Ordinary Shares, our business could be negatively
impacted and the value of your investment may be materially reduced. Further, if we were treated as a “resident enterprise”
by PRC tax authorities, we would be subject to taxation in both China and such countries in which we have taxable income, and our PRC
tax may not be creditable against such other taxes.
PRC
regulation of loans to PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent
us from using proceeds from our future financing activities to make loans to our PRC subsidiaries, which might adversely affect our liquidity
and our ability to fund and expand our business.
Any foreign loan provided by us to our PRC operating
subsidiaries is required to be registered or filed with the State Administration of Foreign Exchange, or SAFE, or the authorized local
banks, and our PRC subsidiaries may not procure foreign loans which exceed the difference between its total investment amount and registered
capital (the “Current Foreign Debt Mechanism”) or, as an alternative, only procure loans subject to the calculation approach
and limitations as provided in the People’s Bank of China (“PBOC”) Circular on Matters concerning the Macro-Prudential
Management of Full-Covered Cross-Border Financing (银发〔2017〕9号《中国人民银行关于全口径跨境融资宏观审慎管理有关事宜的通知》),
or “PBOC Notice No. 9” (the “PBOC Notice No. 9 Mechanism”), which shall not exceed 200% of the net
asset of the relevant PRC subsidiary. According to PBOC Notice No. 9, after a transition period of one year since its promulgation,
PBOC and SAFE will determine the cross-border financing administration mechanism for the foreign-invested enterprises after evaluating
the overall implementation of PBOC Notice No. 9. On March 11, 2020, Notice of PBOC and SAFE on the Adjustment of Macro-Prudential
Adjustment Parameters for Full-Covered Cross-border Financing was issued, according to which, the Macro-Prudential Adjustment Parameters
provided in the PBOC Notice No. 9 was adjusted from 1 to 1.25. On January 7, 2021, Notice of People’s Bank of China and
State Administration of Foreign Exchange on the Adjustment of Macro-Prudential Adjustment Parameters for Cross-border Financing of Enterprises
(《中国人民银行、国家外汇管理局关于调整企业跨境融资宏观审慎调节参数的通知》)
was issued, according to which, the Macro-Prudential Adjustment Parameters provided in the PBOC Notice No. 9 was adjusted from 1.25
to 1. On October 25, 2022, the PBOC and SAFE further adjusted the Macro-Prudential Adjustment Parameters from 1 to 1.25. As of the
date hereof, neither PBOC nor SAFE has promulgated and made public any further rules, regulations, notices, or circulars in this regard.
It is uncertain which mechanism will be adopted by PBOC and SAFE in the future and what statutory limits will be imposed on us when providing
loans to our PRC operating subsidiaries. Currently, our PRC subsidiaries have the flexibility to choose between the Current Foreign Debt
Mechanism and the PBOC Notice No. 9 Mechanism. However, if a more stringent foreign debt mechanism becomes mandatory, our ability
to provide loans to our PRC subsidiaries may be significantly limited, which may adversely affect our business, financial condition,
and results of operations.
If we seek to provide any loans to our PRC subsidiaries
in the future, we may not be able to obtain the required government approvals or complete the required registrations on a timely basis,
if at all. If we fail to receive such approvals or complete such registrations, our ability to capitalize our PRC operations may be negatively
affected, which could adversely affect our liquidity and our ability to fund and expand our business.
We may rely on dividends paid by our subsidiaries
for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect
on our ability to conduct business.
As a holding company, we conduct substantially
all of our business through the operating entities incorporated in China. We may rely on dividends paid by our PRC subsidiaries for our
cash needs, including the funds necessary to pay any dividends and other cash distributions to our shareholders, to service any debt
we may incur and to pay our operating expenses.
According to the Foreign Investment Law of the
PRC and its implementing rules, which jointly established the legal framework for the administration of foreign-invested companies, a
foreign investor may, in accordance with other applicable laws, freely transfer into or out of China its contributions, profits, capital
earnings, income from asset disposal, intellectual property rights, royalties acquired, compensation or indemnity legally obtained, and
income from liquidation, made or derived within the territory of China in RMB or any foreign currency, and any entity or individual shall
not illegally restrict such transfer in terms of the currency, amount and frequency. According to the Company Law of the PRC and other
Chinese laws and regulations, our PRC subsidiaries may pay dividends only out of their respective accumulated profits as determined in
accordance with Chinese accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least
10% of its accumulated after-tax profits, if any, each year to fund a certain statutory reserve fund, until the aggregate amount of such
fund reaches 50% of its registered capital. Where the statutory reserve fund is insufficient to cover any loss the PRC subsidiary incurred
in the previous financial year, its current financial year’s accumulated after-tax profits shall first be used to cover the loss
before any statutory reserve fund is drawn therefrom. Such statutory reserve funds and the accumulated after-tax profits that are used
for covering the loss cannot be distributed to us as dividends. At their discretion, our PRC subsidiaries may allocate a portion of their
after-tax profits based on Chinese accounting standards to a discretionary reserve fund.
Renminbi is not freely convertible into other
currencies. As result, any restriction on currency exchange may limit the ability of our PRC subsidiaries to use any future Renminbi
revenues to pay dividends to us. The Chinese government imposes controls on the convertibility of Renminbi into foreign currencies and,
in certain cases, the remittance of currency out of China. Shortages in availability of foreign currency may then restrict the ability
of our PRC subsidiaries to remit sufficient foreign currency to our offshore entities for our offshore entities to pay dividends or make
other payments or otherwise to satisfy our foreign-currency-denominated obligations. The Renminbi is currently convertible under the
“current account transactions,” which includes dividends, trade and service-related foreign exchange transactions, but not
under the “capital account,” which includes foreign direct investment and foreign currency debt, including loans we may secure
for our onshore subsidiaries. Currently, our PRC subsidiaries may purchase foreign currency for settlement of “current account
transactions,” including payment of dividends to us, without the approval of SAFE by complying with certain procedural requirements.
However, the relevant Chinese governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future
for current account transactions. Any existing and future restrictions on currency exchange may limit our ability to utilize revenue
generated in Renminbi to fund our business activities outside of China or pay dividends in foreign currencies to holders of our Ordinary
Shares. Foreign exchange transactions under the capital account remain subject to limitations and require approvals from, or registration
with, SAFE and other relevant Chinese governmental authorities. This could affect our ability to obtain foreign currency through debt
or equity financing for our subsidiaries.
In response to the persistent capital outflow
in China and Renminbi’s depreciation against the U.S. dollar in the fourth quarter of 2016, PBOC and SAFE have promulgated a series
of capital controls in early 2017, including stricter vetting procedures for domestic companies to remit foreign currency for overseas
investments, dividends payments and shareholder loan repayments.
The Chinese government may continue to strengthen
its capital controls, and more restrictions and substantial vetting processes may be put forward by SAFE for cross-border transactions
falling under both the current account and the capital account. Any limitation on the ability of our PRC subsidiaries to pay dividends
or make other kinds of payments to us could materially and adversely limit our ability to grow, make investments or acquisitions that
could be beneficial to our business, pay dividends or otherwise fund and conduct our business.
Failure to comply with PRC regulations
relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident Shareholders to personal
liability, may limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, may limit the ability of our
PRC subsidiaries to distribute profits to us or may otherwise materially and adversely affect us.
Pursuant
to the Circular on relevant issues concerning Foreign Exchange Administration of Overseas Investment and Financing and Return Investments
Conducted by Domestic Residents through Overseas Special Purpose Vehicle (《关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知》)
(“Circular 37”), which was promulgated by SAFE, and became effective on July 4, 2014, (1) a PRC resident must register
with the local SAFE branch before he or she contributes assets or equity interests in an overseas special purpose vehicle, or an Overseas
SPV, that is directly established or indirectly controlled by the PRC resident for the purpose of conducting investment or financing;
and (2) following the initial registration, the PRC resident is also required to register with the local SAFE branch for any major
change, in respect of the Overseas SPV, including, among other things, a change in the Overseas SPV’s PRC resident shareholder,
name of the Overseas SPV, term of operation, or any increase or reduction of the contributions by the PRC resident, share transfer or
swap, and merger or division. Additionally, pursuant to the Circular of SAFE on Further Simplifying and Improving the Direct Investment-related
Foreign Exchange Administration Policies (《关于进一步简化和改进直接投资外汇管理政策的通知》)
(“Circular 13”), which was promulgated on February 13, 2015 and became effective on June 1, 2015, the aforesaid
registration shall be directly reviewed and handled by qualified banks in accordance with the Circular 13, and SAFE and its branches
shall perform indirect regulation over the foreign exchange registration via qualified banks.
Ms. Wenxiu Zhong, Mr. Sheng Gong and
Mr. Hui Yu completed the initial foreign exchange registration on January 9, 2019. As it remains unclear how Circular 37 and
Circular 13 will be interpreted and implemented, and how or whether SAFE will apply them to us. Therefore, we cannot predict how they
will affect our business operations or future strategies. For example, the ability of our present and prospective PRC subsidiaries to
conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject
to compliance with Circular 37 and Circular 13 by our PRC resident beneficial holders. In addition, as we have little control over either
our present or prospective, direct or indirect shareholders or the outcome of such registration procedures, we cannot assure you that
these shareholders who are PRC residents will amend or update their registration as required under Circular 37 and Circular 13 in a timely
manner or at all. Failure of our present or future shareholders who are PRC residents to comply with Circular 37 and Circular 13 could
subject these shareholders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit the ability
of our PRC subsidiaries to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business
and prospects.
You may be subject to PRC income tax on
dividends from us or on any gain realized on the transfer of our Ordinary Shares.
Under
the EIT Law and its implementation rules, subject to any applicable tax treaty or similar arrangement between the PRC and your jurisdiction
of residence that provides for a different income tax arrangement, PRC withholding tax at the rate of 10.0% is normally applicable to
dividends from PRC sources payable to investors that are non-PRC resident enterprises, which do not have an establishment or place of
business in China, or which have such establishment or place of business if the relevant income is not effectively connected with the
establishment or place of business. Any gain realized on the transfer of shares by such investors is subject to 10.0% PRC income tax
if such gain is regarded as income derived from sources within China unless a treaty or similar arrangement otherwise provides. Under
the Individual Income Tax Law of the PRC (《中华人民共和国个人所得税法》)
and its implementation rules, dividends from sources within China paid to foreign individual investors who are not PRC residents are
generally subject to a PRC withholding tax at a rate of 20% and gains from PRC sources realized by such investors on the transfer of
shares are generally subject to 20% PRC income tax, in each case, subject to any reduction or exemption set forth in applicable tax treaties
and PRC laws.
There is a risk that we will be treated by the
PRC tax authorities as a PRC tax resident enterprise. In that case, any dividends we pay to our shareholders may be regarded as income
derived from sources within China and we may be required to withhold a 10.0% PRC withholding tax for the dividends we pay to our investors
who are non-PRC corporate shareholders, or a 20.0% withholding tax for the dividends we pay to our investors who are non-PRC individual
shareholders, including the holders of our Ordinary Shares. In addition, our non-PRC shareholders may be subject to PRC tax on gains
realized on the sale or other disposition of our Ordinary Shares, if such income is treated as sourced from within China. It is unclear
whether our non-PRC shareholders would be able to claim the benefits of any tax treaties between their tax residence and China in the
event that we are considered as a PRC resident enterprise. If PRC income tax is imposed on gains realized through the transfer of our
Ordinary Shares or on dividends paid to our non-resident investors, the value of your investment in our Ordinary Shares may be materially
and adversely affected. Furthermore, our shareholders whose jurisdictions of residence have tax treaties or arrangements with China may
not qualify for benefits under such tax treaties or arrangements.
We may be unable to complete a business
combination transaction efficiently or on favorable terms due to complicated merger and acquisition regulations and certain other PRC
regulations.
On
August 8, 2006, six PRC regulatory authorities, including the Ministry of Commerce of the PRC (“MOFCOM”), the State
Assets Supervision and Administration Commission, SAT, the Administration for Industry and Commerce (“SAIC”), the China Securities
Regulatory Commission (“CSRC”) and SAFE, jointly issued the Regulations on Mergers and Acquisitions of Domestic Enterprises
by Foreign Investors (《关于外国投资者并购境内企业的规定》)
(the “M&A Rules”), which became effective on September 8, 2006 and was amended in June 2009. The M&A Rules,
governing the approval process by which a PRC company may participate in an acquisition of assets or equity interests by foreign investors,
require the PRC parties to make a series of applications and supplemental applications to the government agencies, depending on the structure
of the transaction. The M&A Rules also prohibit a transaction at an acquisition price obviously lower than the appraised value
of the business or assets in China and in certain transaction structures, require that consideration must be paid within defined periods,
generally not in excess of a year. In addition, the M&A Rules also limit our ability to negotiate various terms of the acquisition,
including aspects of the initial consideration, contingent consideration, holdback provisions, indemnification provisions and provisions
relating to the assumption and allocation of assets and liabilities.
Following the promulgation of the Foreign Investment
Law, the Measures on Reporting of Foreign Investment Information (effective from January 1, 2020) and other relevant regulations
recently in China, certain provisions of the M&A Rules, which are in conflict with the new foreign investment rules, are no longer
enforceable. For example, mergers and acquisitions by foreign investor of a PRC entity which is not an affiliate to the foreign investor
and does not engage in any business on the special administrative measures for access of foreign investment (the “Negative List”)
for foreign investment, will not be subject to the approval process as prescribed by the M&A Rules. However, given the M&A Rules are
not officially abolished and due to lack of official interpretation and guidance, the M&A Rules might still be enforceable against
the transaction parties in terms of price evaluation, payment terms, and certain other aspects that the new foreign investment rules are
silent on. Therefore, the M&A Rules may impede our ability to negotiate and complete a business combination transaction on legal
and/or financial terms that satisfy our investors and protect our shareholders’ economic interests.
We face uncertainties with respect to indirect
transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.
SAT released a circular on December 15,
2009 that addresses the transfer of shares by nonresident companies, generally referred to as Circular 698. Circular 698, which became
effective retroactively to January 1, 2008, may have a significant impact on many companies that use offshore holding companies
to invest in China. Circular 698 has the effect of taxing foreign companies on gains derived from the indirect sale of a PRC company.
Where a foreign investor indirectly transfers equity interests in a PRC resident enterprise by selling the shares in an offshore holding
company, and the latter is located in a country or jurisdiction that has an effective tax rate less than 12.5% or does not tax foreign
income of its residents, the foreign investor must report this indirect transfer to the tax authority in charge of that PRC resident
enterprise. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding
company if it lacks a reasonable commercial purpose and was established for the purpose of avoiding PRC tax. As a result, gains derived
from such indirect transfer may be subject to PRC withholding tax at a rate of up to 10.0%.
SAT
subsequently released public notices to clarify issues relating to Circular 698, including the Announcement on Several Issues concerning
the EIT on the Indirect Transfers of Properties by Nonresident Enterprises (《关于非居民企业间接转让财产企业所得税若干问题的公告》)
(the “SAT Notice 7”), which became effective on February 3, 2015. SAT Notice 7 abolished the compulsive reporting obligations
originally set out in Circular 698. Under SAT Notice 7, if a non-resident enterprise transfers its shares in an overseas holding company,
which directly or indirectly owns PRC taxable properties, including shares in a PRC company, via an arrangement without reasonable commercial
purpose, such transfer shall be deemed as indirect transfer of the underlying PRC taxable properties. Accordingly, the transferee shall
be deemed as a withholding agent with the obligation to withhold and remit the EIT to the competent PRC tax authorities. Factors that
may be taken into consideration when determining whether there is a “reasonable commercial purpose” include, among other
factors, the economic essence of the transferred shares, the economic essence of the assets held by the overseas holding company, the
taxability of the transaction in offshore jurisdictions, and economic essence and duration of the offshore structure. SAT Notice 7 also
sets out safe harbors for the “reasonable commercial purpose” test.
On
October 17, 2017, SAT released the Notice on Several Issues concerning the Withholding and Collection of Income Tax of Non-resident
Enterprises from the Source (《关于非居民企业所得税源泉扣缴有关问题的公告》)
(“SAT Notice 37”). SAT Notice 37 clarifies: (1) matters concerning the withholding and collection of corporate income
tax, and property transfer of non-resident enterprises based on the EIT Law; (2) the currencies required to be used by the withholding
agents (when the payments is made in a currency rather than RMB), as well as the time, venue and business for the performance of the
withholding and collection obligations; and (3) the abolishment of Circular 698.
There is little guidance and practical experience
regarding the application of SAT Notice 7 and SAT Notice 37 and the related SAT notices. Moreover, the relevant authority has not yet
promulgated any formal provisions or formally declared or stated how to calculate the effective tax rates in foreign tax jurisdictions.
As a result, due to our complex offshore restructuring, we may become at risk of being taxed under SAT Notice 7 and SAT Notice 37 and
we may be required to expend valuable resources to comply with SAT Notice 7 and SAT Notice 37 or to establish that we should not be taxed
under SAT Notice 7 and SAT Notice 37, which could have a material adverse effect on our financial condition and results of operations.
You may have difficulty effecting service
of legal process, enforcing judgments or bringing actions against us and our management.
We are an exempted Cayman Islands holding company.
In addition, substantially all of our assets and substantially all of the assets of our directors and executive officers are located
in the PRC. As a result, investors may not be able to effect service of process upon us or our directors and executive officers.
Further, China has not entered into treaties
or arrangements providing for the recognition and enforcement of judgments made by courts of most other jurisdictions. Any final judgment
obtained against us in any court other than the courts of the PRC in connection with any legal suit or proceeding arising out of or relating
to our Ordinary Shares will be enforced by the courts of the PRC without further review of the merits only if the court of the PRC in
which enforcement is sought is satisfied that:
| · | the
court rendering the judgment has jurisdiction over the subject matter according to the laws
of the PRC; |
| · | the
judgment and the court procedure resulting in the judgment are not contrary to the public
order or good morals of the PRC; |
| · | if
the judgment was rendered by default by the court rendering the judgment, we, or the above-mentioned
persons, were duly served within a reasonable period of time in accordance with the laws
and regulations of the jurisdiction of the court or process was served on us with judicial
assistance of the PRC; and |
| · | judgments
at the courts of the PRC are recognized and enforceable in the court rendering the judgment
on a reciprocal basis. |
If you fail to establish the foregoing to the
satisfaction of the courts in the PRC, you may not be able to enforce a judgment against us rendered by a court in the United States.
Further, pursuant to the Civil Procedures Law
of the PRC, any matter, including matters arising under U.S. federal securities laws, in relation to assets or personal relationships
may be brought as an original action in China, only if the institution of such action satisfies the conditions specified in the Civil
Procedures Law of the PRC. As a result of the conditions set forth in the Civil Procedures Law and the discretion of the PRC courts to
determine whether the conditions are satisfied and whether to accept action for adjudication, there remains uncertainty as to whether
an investor will be able to bring an original action in a PRC court based on U.S. federal securities laws.
U.S. regulatory bodies may be limited in
their ability to conduct investigations or inspections of our operations in China.
We are incorporated in the Cayman Islands and
conduct our operations in China through the operating entities. Substantially all of our assets are located outside of the United States.
In addition, all of our directors and officers reside in China, including our chief executive officer and chairperson of the board, Shasha
Mi, our chief financial officer, Yue Jin, and our directors, Sheng Gong, Kun Zhang, Guangyao Zhu, and Changhong Jiang. As a result, it
may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that
you believe we have violated your rights, either under United States federal or state securities laws or otherwise, or if you have a
claim against us. Even if you are successful in bringing an action of this kind, the laws of the Cayman Island and of China may render
you unable to enforce a judgment against our assets or the assets of our directors and officers.
The SEC, the U.S. Department of Justice and other
U.S. authorities may also have difficulties in bringing and enforcing actions against us or our directors or executive officers in the
PRC. The SEC has stated that there are significant legal and other obstacles to obtaining information needed for investigations or litigation
in China. China has adopted a revised securities law that became effective on March 1, 2020, Article 177 of which provides,
among other things, that no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities
within the territory of the PRC. Accordingly, without governmental approval in China, no entity or individual in China may provide documents
and information relating to securities business activities to overseas regulators when it is under direct investigation or evidence discovery
conducted by overseas regulators, which could present significant legal and other obstacles to obtaining information needed for investigations
and litigation conducted in China.
The recent joint statement by the SEC and
the PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act and related regulations, all call for additional
and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially
the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing or future
offerings of our securities in the U.S.
On April 21, 2020, SEC Chairman Jay Clayton
and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated
with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized
the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in
emerging markets.
On May 18, 2020, Nasdaq filed three proposals
with the SEC to (i) apply a minimum offering size requirement for companies primarily operating in a “Restrictive Market,”
(ii) adopt a new requirement relating to the qualification of management or the board of directors for Restrictive Market companies,
and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s
auditor. On October 4, 2021, the SEC approved Nasdaq’s revised proposal for the rule changes.
On May 20, 2020, the U.S. Senate passed
the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government
if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the
PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited to
trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable
Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.
On March 24, 2021, the SEC adopted interim
final rules relating to the implementation of certain disclosure and documentation requirements of the Holding Foreign Companies
Accountable Act.
On September 22, 2021, the PCAOB adopted
a final rule implementing the Holding Foreign Companies Accountable Act, which provides a framework for the PCAOB to use when determining,
as contemplated under the Holding Foreign Companies Accountable Act, whether the board of directors of a company is unable to inspect
or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or
more authorities in that jurisdiction.
On December 2, 2021, the SEC adopted amendments
to finalize rules implementing the submission and disclosure requirements in the Holding Foreign Companies Accountable Act.
On December 16, 2021, the PCAOB issued a
Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public
accounting firms headquartered in: (1) mainland China of the People’s Republic of China because of a position taken by one
or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of
a position taken by one or more authorities in Hong Kong. In addition, the PCAOB’s report identified the specific registered public
accounting firms which are subject to these determinations.
On August 26, 2022, the China Securities
Regulatory Commission (the “CSRC”), the Ministry of Finance of the PRC (the “MOF”), and the PCAOB signed a Statement
of Protocol (the “Protocol”) governing inspections and investigations of audit firms based in mainland China and Hong Kong,
taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered
in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent
discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the
SEC.
On December 15, 2022, the PCAOB determined
that it was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China
and Hong Kong and vacated its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to
facilitate the PCAOB’s access in the future, the PCAOB may consider the need to issue a new determination.
On June 22, 2021, the U.S. Senate passed
the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022, the Consolidated Appropriations Act 2023 was
signed into law, which contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable
Act, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the Holding Foreign
Companies Accountable Act from three years to two years.
Our auditor, YCM CPA INC., the independent registered
public accounting firm that issues the audit report included elsewhere in this prospectus, as an auditor of companies that are traded
publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB
conducts regular inspections to assess its compliance with the applicable professional standards and was not identified in the Determination
Report as a firm subject to the PCAOB’s determination. YCM CPA INC. is headquartered in Irvine, California, and has been inspected
by the PCAOB on a regular basis.
However, we cannot assure you whether the national
securities exchange we are listed on or regulatory authorities would apply additional and more stringent criteria to us after considering
the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency
of resources, geographic reach, or experience as it relates to our audit. In addition, our Ordinary Shares may be delisted in the future
if the PCAOB is unable to inspect our accounting firm within two years.
We may be exposed to liabilities under
the Foreign Corrupt Practices Act and Chinese anti-corruption law.
We are subject to the U.S. Foreign Corrupt Practices
Act (the “FCPA”), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials
and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We are
also subject to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials. Through the operating
entities, we have operations, agreements with third parties, and provide services in China, which may experience corruption. Our activities
in China create the risk of unauthorized payments or offers of payments by one of the employees, consultants or distributors of our Company,
because these parties are not always subject to our control.
Although we believe to date we have complied
in all material respects with the provisions of the FCPA and Chinese anti-corruption law, our existing safeguards and any future improvements
may prove to be less than effective, and the employees, consultants or distributors of our Company may engage in conduct for which we
might be held responsible. Violations of the FCPA or Chinese anti-corruption law may result in severe criminal or civil sanctions, and
we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition,
the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest
or that we acquire.
Because our business is conducted in RMB
and the price of our Ordinary Shares is quoted in the U.S. dollar, changes in the exchange rate between RMB and the U.S. dollar may affect
the value of your investments.
Our business is conducted in the PRC through
the operating entities with books and records maintained in RMB. However, the financial statements that we file with the SEC and provide
to our shareholders are presented in the U.S. dollar. Changes in the exchange rate between RMB and the U.S. dollar affect the value of
our assets and the results of our operations in the U.S. dollar. The exchange rate between RMB and the U.S. dollar is affected by, among
other things, changes in the PRC’s political and economic conditions and perceived changes in the economy of the PRC and the United
States. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenue and financial condition.
OFFER STATISTICS AND EXPECTED
TIMETABLE
We may from time to time, offer and sell any
combination of the securities described in this prospectus (as may be detailed in a prospectus supplement) up to a total dollar amount
of US$100,000,000 in one or more offerings. The Selling Shareholders may, from time to time, offer and sell any or all of their Ordinary
Shares in one or more offerings. The Ordinary Shares offered under this prospectus may be offered in amounts, at prices, and on terms
to be determined at the time of sale. See “Plan of Distribution.” We will keep the registration statement of which this prospectus
is a part effective until such time as all of the securities covered by this prospectus have been disposed of pursuant to and in accordance
with such registration statement.
CAPITALIZATION AND INDEBTEDNESS
Our capitalization will be set forth in the applicable
prospectus supplement or in a report on Form 6-K subsequently furnished to the SEC and specifically incorporated by reference into
this prospectus.
DILUTION
Because the Selling Shareholders who offer and
sell Ordinary Shares covered by this prospectus may do so at various times, at prices and at terms then prevailing or at prices related
to the then current market price, or in negotiated transactions, we have not included in this prospectus information about the dilution
(if any) to the public arising from these sales.
If required, we will set forth in a prospectus
supplement the following information regarding any material dilution of the equity interests of investors purchasing securities in an
offering under this prospectus:
| |
¨ |
the
net tangible book value per share of our equity securities before and after the offering; |
| |
|
|
| |
¨ |
the
amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in the offering;
and |
| |
|
|
| |
¨ |
the
amount of the immediate dilution from the public offering price which will be absorbed by such purchasers. |
USE
OF PROCEEDS
We will retain broad discretion over the use
of the net proceeds from the sale of the securities we offer hereby. Unless otherwise specified in any prospectus supplement, we currently
intend to use the net proceeds from the sale of securities offered by us under this prospectus for general corporate purposes, which
may include capital expenditures, working capital, and other business opportunities.
We will not receive any proceeds from the sale
of any of Ordinary Shares by the Selling Shareholders. The Selling Shareholders will pay any brokerage commissions and/or similar charges
incurred in connection with the sale of the Ordinary Shares covered hereby.
We will bear all other costs, fees and expenses
incurred in effecting the registration of the securities covered by this prospectus.
DESCRIPTION OF SHARE CAPITAL
The following description of our share capital
and provisions of our amended and restated memorandum and articles of association are summaries and do not purport to be complete. References
are made to our amended and restated memorandum and articles of association, which are filed as an exhibit to the registration statement
of which this prospectus is a part.
We are an exempted company with limited liability
incorporated under the laws of the Cayman Islands and our affairs are governed by our Amended and Restated Memorandum and Articles of
Association, as amended and restated from time to time, and Companies Act (As Revised) of the Cayman Islands, which we refer to as the
Companies Act or the Cayman Companies Act below, and the common law of the Cayman Islands. Our shareholders adopted our Amended and Restated
Memorandum and Articles of Association by a special resolution on July 20, 2020 and effective on February 10, 2021.
The following are summaries of material provisions
of our Amended and Restated Memorandum and Articles of Association and the Companies Act insofar as they relate to the material terms
of our Ordinary Shares.
Ordinary Shares
Our authorized share capital is US$60,000 divided
into 6,250,000 Ordinary Shares, par value $0.0096 per share. All of our issued and outstanding Ordinary Shares are fully paid and non-assessable. Certificates
representing the Ordinary Shares are issued in registered form. Our shareholders who are non-residents of the Cayman Islands may freely
hold and vote their Ordinary Shares.
Dividends
Subject to the provisions of the Cayman Companies
Act and any rights attaching to any class or classes of shares under and in accordance with the articles:
| (a) | the directors may declare dividends or distributions
out of our funds which are lawfully available for that purpose; and |
| (b) | the Company’s shareholders may, by
ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended
by the directors. |
Subject to the requirements of the Cayman Companies
Act regarding the application of a company’s share premium account and with the sanction of an ordinary resolution, dividends may
also be declared and paid out of the funds of our Company lawfully available therefor. The directors when paying dividends to shareholders
may make such payment either in cash or in specie.
Unless provided by the rights attached to a share,
no dividend shall bear interest.
Voting Rights
Subject to any rights or restrictions as to voting
attached to any shares, unless any share carries special voting rights, on a show of hands every shareholder who is present in person
and every person representing a shareholder by proxy shall have one vote per Ordinary Share. On a poll, every shareholder who is present
in person and every person representing a shareholder by proxy shall have one vote for each share of which he or the person represented
by proxy is the holder. In addition, all shareholders holding shares of a particular class are entitled to vote at a meeting of the holders
of that class of shares. Votes may be given either personally or by proxy.
Variation of Rights of Shares
Whenever our capital is divided into different
classes of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares of that
class) may be varied with the consent in writing of all of the holders of the issued shares of that class or with the sanction of a special
resolution passed at a separate meeting of the holders of the shares of that class. The necessary quorum shall be one or more persons
holding or representing by proxy at least one-third in nominal or par value amount of the issued shares of the relevant class (but so
that if at any adjourned meeting of such holders a quorum as above defined is not present, those shareholders who are present shall form
a quorum).
Unless the terms on which a class of shares was
issued state otherwise, the rights conferred on the shareholder holding shares of any class shall not be deemed to be varied by the creation
or issue of further shares ranking pari passu with the existing shares of that class or subsequent to them or the redemption or
purchase of any shares of any class by our company. The rights conferred upon the holders of the shares of any class issued shall not
be deemed to be varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation
of shares with enhanced or weighted voting rights.
Alteration of Share Capital
Subject to the Cayman Companies Act, our shareholders
may, by ordinary resolution:
| (a) | increase our share capital by new shares
of the amount fixed by that ordinary resolution and with the attached rights, priorities
and privileges set out in that ordinary resolution; |
| (b) | consolidate and divide all or any of
our share capital into shares of larger amount than our existing shares; |
| (c) | convert all or any of our paid-up shares
into stock, and reconvert that stock into paid up shares of any denomination; |
| (d) | sub-divide our shares or any of them
into shares of an amount smaller than that fixed, so, however, that in the sub-division,
the proportion between the amount paid and the amount, if any, unpaid on each reduced share
shall be the same as it was in case of the share from which the reduced share is derived;
and |
| (e) | cancel shares which, at the date of
the passing of that ordinary resolution, have not been taken or agreed to be taken by any
person and diminish the amount of our share capital by the amount of the shares so cancelled
or, in the case of shares without nominal par value, diminish the number of shares into which
our capital is divided. |
Subject to the Cayman Companies Act and to any
rights for the time being conferred on the shareholders holding a particular class of shares, our shareholders may, by special resolution,
reduce its share capital in any way.
Liquidation
If we are wound up, the shareholders may, subject
to the articles and any other sanction required by the Cayman Companies Act, pass a special resolution allowing the liquidator to do
either or both of the following:
| (a) | to divide in specie among the shareholders
the whole or any part of our assets and, for that purpose, to value any assets and to determine
how the division shall be carried out as between the shareholders or different classes of
shareholders; and |
| (b) | to vest the whole or any part of the assets
in trustees for the benefit of shareholders and those liable to contribute to the winding
up. |
The directors have the authority to present a
petition for our winding up to the Grand Court of the Cayman Islands on our behalf without the sanction of a resolution passed at a general
meeting.
Calls on Shares and Forfeiture
Subject to the terms of allotment, the directors
may make calls on the shareholders in respect of any monies unpaid on their shares including any premium and each shareholder shall (subject
to receiving at least 14 calendar days’ notice specifying when and where payment is to be made), pay to us the amount called on
his shares. Shareholders registered as the joint holders of a share shall be jointly and severally liable to pay all calls in respect
of the share. If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom
the sum is due shall pay interest upon the sum at the rate of eight percent per annum from the day appointed for the payment thereof
to the time of the actual payment The directors may, at their discretion, waive payment of the interest wholly or in part.
The shares that have been called upon and remain
unpaid are subject to forfeiture.
Unclaimed Dividend
A dividend that remains unclaimed for a period
of six years after it became due for payment shall be forfeited to, and shall cease to remain owing by, the company.
Forfeiture or Surrender of Shares
If a shareholder fails to pay any capital call,
the directors may give to such shareholder not less than 14 clear days’ notice requiring payment and specifying the amount unpaid
including any interest which may have accrued, any expenses which have been incurred by us due to that person’s default and the
place where payment is to be made. The notice shall also contain a warning that if the notice is not complied with, the shares in respect
of which the call is made will be liable to be forfeited.
If such notice is not complied with, the directors
may, before the payment required by the notice has been received, resolve that any share the subject of that notice be forfeited (which
forfeiture shall include all dividends or other monies payable in respect of the forfeited share and not paid before such forfeiture).
A forfeited share may be sold, re-allotted or
otherwise disposed of on such terms and in such manner as the directors determine and at any time before a sale, re-allotment or disposition
the forfeiture may be cancelled on such terms as the directors think fit.
A person whose shares have been forfeited shall
cease to be a shareholder in respect of the forfeited shares, but shall, notwithstanding such forfeiture, remain liable to pay to us
all monies which at the date of forfeiture were payable by him to us in respect of the shares, together with all expenses and interest
from the date of forfeiture or surrender until payment, but his liability shall cease if and when we receive payment in full of the unpaid
amount.
A declaration, whether statutory or under oath,
made by a director or the secretary shall be conclusive evidence that the person making the declaration is our director or secretary
and that the particular shares have been forfeited or surrendered on a particular date.
Subject to the execution of an instrument of
transfer, if necessary, the declaration shall constitute good title to the shares.
Share Premium Account
The directors shall establish a share premium
account and shall carry the credit of such account from time to time to a sum equal to the amount or value of the premium paid on the
issue of any share or capital contributed or such other amounts required by the Cayman Companies Act.
Redemption and Purchase of Own Shares
Subject to the Cayman Companies Act and any rights
for the time being conferred on the shareholders holding a particular class of shares, we may by action of our directors:
| (a) | issue shares that are to be redeemed or liable
to be redeemed, at our option or the shareholder holding those redeemable shares, on the
terms and in the manner our directors determine before the issue of those shares; |
| (b) | with the consent by special resolution of
the shareholders holding shares of a particular class, vary the rights attaching to that
class of shares so as to provide that those shares are to be redeemed or are liable to be
redeemed at our option on the terms and in the manner which the directors determine at the
time of such variation; and |
| (c) | purchase all or any of our own shares of
any class including any redeemable shares on the terms and in the manner which the directors
determine at the time of such purchase. |
We may make a payment in respect of the redemption
or purchase of its own shares in any manner authorized by the Cayman Companies Act, including out of any combination of capital, our
profits and the proceeds of a fresh issue of shares.
When making a payment in respect of the redemption
or purchase of shares, the directors may make the payment in cash or in specie (or partly in one and partly in the other) if so authorized
by the terms of the allotment of those shares or by the terms applying to those shares, or otherwise by agreement with the shareholder
holding those shares.
Transfer of Shares
Provided that a transfer of Ordinary Shares complies
with applicable rules of Nasdaq, a shareholder may transfer Ordinary Shares to another person by completing an instrument of transfer
in a common form or in a form prescribed by Nasdaq or in any other form approved by the directors, executed:
| (a) | where the Ordinary Shares are fully paid,
by or on behalf of that shareholder; and |
| (b) | where the Ordinary Shares are partly paid,
by or on behalf of that shareholder and the transferee. |
The transferor shall be deemed to remain the
holder of an Ordinary Share until the name of the transferee is entered into the register of members of the Company.
Where the Ordinary Shares in question are not
listed on or subject to the rules of Nasdaq, our board of directors may, in its absolute discretion, decline to register any transfer
of any Ordinary Share that has not been fully paid up or is subject to a company lien. Our board of directors may also decline to register
any transfer of such Ordinary Share unless:
| (a) | the instrument of transfer is lodged with
us, accompanied by the certificate for the Ordinary Shares to which it relates and such other
evidence as our board of directors may reasonably require to show the right of the transferor
to make the transfer; |
| (b) | the instrument of transfer is in respect
of only one class of Ordinary Shares; |
| (c) | the instrument of transfer is properly stamped,
if required; |
| (d) | in the case of a transfer to joint holders,
the number of joint holders to whom the Ordinary Shares are to be transferred does not exceed
four; and |
If our directors refuse to register a transfer,
they are required, within one month after the date on which the instrument of transfer was lodged, to send to each of the transferor
and the transferee notice of such refusal.
The registration of transfers may, on prior notice
being given by advertisement in such one or more newspapers or by electronic means, be suspended and our register of members closed at
such times and for such periods as our board of directors may from time to time determine. The registration of transfers, however, may
not be suspended, and the register of members may not be closed, for more than 30 calendar days in any year.
Inspection of Books and Records
Holders of our Ordinary Shares will have no general
right under the Cayman Companies Act to inspect or obtain copies of our register of members or our corporate records (other than the
memorandum and articles of association, any special resolutions passed by such companies, the registers of mortgages and charges of such
companies and a list of current directors of such companies). Under Cayman Islands law, the names of our current directors can be obtained
from a search conducted at the Registrar of Companies.
General Meetings
As a Cayman Islands exempted company, we are
not obligated by the Cayman Companies Act to call annual general meetings; accordingly, we may, but shall not be obliged to, in each
year hold a general meeting as an annual general meeting. Any annual general meeting held shall be held at such time and place as may
be determined by our board of directors. All general meetings other than annual general meetings shall be called extraordinary general
meetings.
The directors may convene general meetings whenever
they think fit. General meetings shall also be convened on the written requisition of one or more of the shareholders entitled to attend
and vote at our general meetings who (together) hold not less than one-third (1/3) of the rights to vote at such general meeting in accordance
with the notice provisions in the articles, specifying the purpose of the meeting and signed by each of the shareholders making the requisition.
If the directors do not convene such meeting for a date not later than 21 clear days’ after the date of receipt of the written
requisition, those shareholders who requested the meeting may convene the general meeting themselves within three months after the end
of such period of 21 clear days in which case reasonable expenses incurred by them as a result of the directors failing to convene a
meeting shall be reimbursed by us.
At least 7 calendar days’ notice of general
meetings shall be given to shareholders entitled to attend and vote at such meeting. The notice shall specify the place, the day and
the hour of the meeting and the general nature of that business. In addition, if a resolution is proposed as a special resolution, the
text of that resolution shall be given to all shareholders. Notice of every general meeting shall also be given to the directors and
our auditors.
Subject to the Cayman Companies Act and with
the consent of the shareholders who, individually or collectively, hold at least two-thirds (2/3rd) of the voting rights of all those
who have a right to vote in the case of an extraordinary general meeting, and by all the shareholders in the case of an annual general
meeting, a general meeting may be convened on shorter notice.
A quorum shall consist of the presence (whether
in person or represented by proxy) of one or more shareholders holding shares that represent not less than one-third of the outstanding
shares carrying the right to vote at such general meeting.
If, within 15 minutes from the time appointed
for the general meeting, or at any time during the meeting, a quorum is not present, the meeting, if convened upon the requisition of
shareholders, shall be cancelled. In any other case it shall stand adjourned to the same time and place seven days or to such other time
or place as is determined by the directors.
The chairman may, with the consent of a meeting
at which a quorum is present, adjourn the meeting. When a meeting is adjourned for seven days or more, notice of the adjourned meeting
shall be given in accordance with the articles.
At any general meeting a resolution put to the
vote of the meeting shall be decided on a show of hands, unless a poll is (before, or on, the declaration of the result of the show of
hands) demanded by the chairman of the meeting or by at least two shareholders having the right to vote on the resolutions or one or
more shareholders present who together hold not less than ten percent of the voting rights of all those who are entitled to vote on the
resolution. Unless a poll is so demanded, a declaration by the chairman as to the result of a resolution and an entry to that effect
in the minutes of the meeting, shall be conclusive evidence of the outcome of a show of hands, without proof of the number or proportion
of the votes recorded in favor of, or against, that resolution.
If a poll is duly demanded it shall be taken
in such manner as the chairman directs and the result of the poll shall be deemed to be the resolution of the meeting at which the poll
was demanded.
In the case of an equality of votes, whether
on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded,
shall not be entitled to a second or casting vote.
Anti-Takeover Provisions
Some provisions of our Amended and Restated Memorandum
and Articles of Association may discourage, delay or prevent a change of control of our company or management that shareholders may consider
favorable, including provisions that authorize our board of directors to issue preference shares in one or more series and to designate
the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders.
However, under Cayman Islands law, our directors
may only exercise the rights and powers granted to them under our Amended and Restated Memorandum and Articles of Association for a proper
purpose and for what they believe in good faith to be in the best interests of our company.
Exempted Company
We are an exempted company with limited liability
incorporated under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any
company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered
as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except that an exempted
company:
| · | does
not have to file an annual return of its shareholders with the Registrar of Companies; |
| · | is
not required to open its register of members for inspection; |
| · | does
not have to hold an annual general meeting; |
| · | may
issue shares with no par value; |
| · | may
obtain an undertaking against the imposition of any future taxation (such undertakings are
usually given for 20 years in the first instance); |
| · | may
register by way of continuation in another jurisdiction and be deregistered in the Cayman
Islands; |
| · | may
register as a limited duration company; and |
| · | may
register as a segregated portfolio company. |
“Limited liability” means that the
liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional
circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances
in which a court may be prepared to pierce or lift the corporate veil).
Transfer Agent and Registrar
The transfer agent and registrar for the Ordinary
Shares is Transhare Corporation.
Listing
Our Ordinary Shares are listed on Nasdaq under
the symbol “BAOS”.
Directors
We may by ordinary resolution, from time to time,
fix the maximum and minimum number of directors to be appointed. Under the Articles, we are required to have a minimum of one director
and the maximum number of Directors shall be unlimited.
A director may be appointed by ordinary resolution
or by the directors. Any appointment may be to fill a vacancy or as an additional director.
Unless the remuneration of the directors is determined
by the shareholders by ordinary resolution, the directors shall be entitled to such remuneration as the directors may determine.
The shareholding qualification for directors
may be fixed by our shareholders by ordinary resolution and unless and until so fixed no share qualification shall be required.
Unless removed or re-appointed, each director
shall be appointed for a term expiring at the next-following annual general meeting, if one is held. At any annual general meeting held,
our directors will be elected by an ordinary resolution of our shareholders. At each annual general meeting, each director so elected
shall hold office until the expiration of his or her term or until the election of their respective successors in office or removed.
A director may be removed by ordinary resolution.
A director may at any time resign or retire from
office by giving us notice in writing. Unless the notice specifies a different date, the director shall be deemed to have resigned on
the date that the notice is delivered to us.
Subject to the provisions of the articles, the
office of a director may be terminated forthwith if:
| |
(a) |
he/she is prohibited by the laws of the Cayman Islands
from acting as a director; |
| |
(b) |
he/she is made bankrupt or makes an arrangement or
composition with his/her creditors generally; |
| |
(c) |
he/she resigns his/her office by notice to us; |
| |
(d) |
He/she only held office as a director for a fixed term
and such term expires; |
| |
(e) |
in the opinion of a registered medical practitioner
by whom he/she is being treated he becomes physically or mentally incapable of acting as a director; |
| |
(f) |
He/she is removed from
office pursuant to the articles; |
| |
(g) |
He/she is made subject to any law relating to mental
health or incompetence, whether by court order or otherwise; or |
| |
(h) |
without the consent of the other directors, he/she
is absent from meetings of directors for three consecutive meetings. |
Powers and Duties of Directors
Subject to the provisions of the Cayman Companies
Act and our Amended and Restated Memorandum and Articles of Association, our business shall be managed by the directors, who may exercise
all our powers. No prior act of the directors shall be invalidated by any subsequent alteration of our memorandum or articles of association.
To the extent allowed by the Cayman Companies Act, however, shareholders may by special resolution validate any prior or future act of
the directors which would otherwise be in breach of their duties.
The directors may delegate any of their powers
to any committee consisting of one or more persons who need not be shareholders and may include non-directors so long as the majority
of those persons are directors; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that
may be imposed on it by the directors. Our board of directors has established an audit committee, compensation committee, and nomination
and corporate governance committee.
The board of directors may establish any local
or divisional board of directors or agency and delegate to it its powers and authorities (with power to sub-delegate) for managing any
of our affairs whether in the Cayman Islands or elsewhere and may appoint any persons to be members of a local or divisional board of
directors, or to be managers or agents, and may fix their remuneration.
The directors may from time to time and at any
time by power of attorney or in any other manner they determine appoint any person, either generally or in respect of any specific matter,
to be our agent with or without authority for that person to delegate all or any of that person’s powers.
The directors may from time to time and at any
time by power of attorney or in any other manner they determine appoint any person, whether nominated directly or indirectly by the directors,
to be our attorney or our authorized signatory and for such period and subject to such conditions as they may think fit. The powers,
authorities and discretions, however, must not exceed those vested in, or exercisable, by the directors under the articles.
The board of directors may remove any person
so appointed and may revoke or vary the delegation.
The directors may exercise all of our powers
to borrow money and to mortgage or charge its undertaking, property and assets both present and future and uncalled capital or any part
thereof, to issue debentures and other securities whether outright or as collateral security for any debt, liability or obligation of
ours or our parent undertaking (if any) or any subsidiary undertaking of us or of any third party.
A director shall not, as a director, vote in
respect of any contract, transaction, arrangement or proposal in which he has an interest which (together with any interest of any person
connected with him) is a material interest (otherwise than by virtue of his interests, direct or indirect, in shares or debentures or
other securities of, or otherwise in or through, us) and if he shall do so his vote shall not be counted, nor in relation thereto shall
he be counted in the quorum present at the meeting, but (in the absence of some other material interest than is mentioned below) none
of these prohibitions shall apply to:
| |
(a) |
the giving of any security,
guarantee or indemnity in respect of: |
| |
(i) |
money lent or obligations
incurred by him or by any other person for our benefit or any of our subsidiaries; or |
| |
(ii) |
a debt or obligation of
ours or any of our subsidiaries for which the director himself has assumed responsibility in whole or in part and whether alone or
jointly with others under a guarantee or indemnity or by the giving of security; |
| |
(b) |
where we or any of our
subsidiaries is offering securities in which offer the director is or may be entitled to participate as a holder of securities or
in the underwriting or sub-underwriting of which the director is to or may participate; |
| |
(c) |
any contract, transaction,
arrangement or proposal affecting any other body corporate in which he is interested, directly or indirectly and whether as an officer,
shareholder, creditor or otherwise howsoever, provided that he (together with persons connected with him) does not to his knowledge
hold an interest representing one percent or more of any class of the equity share capital of such body corporate (or of any third
body corporate through which his interest is derived) or of the voting rights available to shareholders of the relevant body corporate; |
| |
(d) |
any act or thing done or
to be done in respect of any arrangement for the benefit of the employees of us or any of our subsidiaries under which he is not
accorded as a director any privilege or advantage not generally accorded to the employees to whom such arrangement relates; or |
| |
(e) |
any matter connected with
the purchase or maintenance for any director of insurance against any liability or (to the extent permitted by the Cayman Companies
Act) indemnities in favor of directors, the funding of expenditure by one or more directors in defending proceedings against him
or them or the doing of anything to enable such director or directors to avoid incurring such expenditure. |
A director may, as a director, vote (and be counted
in the quorum) in respect of any contract, transaction, arrangement or proposal in which he has an interest which is not a material interest
or as described above.
Capitalization of Profits
The directors may resolve to capitalize:
| |
(a) |
any part of our profits not required for paying any
preferential dividend (whether or not those profits are available for distribution); or |
| |
(b) |
any sum standing to the credit of our share premium
account or capital redemption reserve, if any. |
The amount resolved to be capitalized must be
appropriated to the shareholders who would have been entitled to it had it been distributed by way of dividend and in the same proportions.
Register of Members
Under the Cayman Companies Act, we must keep
a register of members and there should be entered therein:
| |
● |
the names and
addresses of our shareholders, together with a statement of the shares held by each shareholder, and such statement shall confirm
(i) the amount paid or agreed to be considered as paid, on the shares of each shareholder; (ii) the number and category
of shares held by each member, and (iii) whether each relevant category of shares held by a member carries voting rights under
the articles of association of the company, and if so, whether such voting rights are conditional; |
| |
|
|
| |
● |
the date on which the name
of any person was entered on the register as a shareholder; and |
| |
|
|
| |
● |
the date on which any person
ceased to be a shareholder. |
Under the Cayman Companies Act, the register
of members of our company is prima facie evidence of the matters set out therein (that is, the register of members will raise a presumption
of fact on the matters referred to above unless rebutted) and a shareholder registered in the register of members is deemed as a matter
of the Cayman Companies Act to have legal title to the shares as set against its name in the register of members.
If the name of any person is incorrectly entered
in or omitted from our register of members, or if there is any default or unnecessary delay in entering on the register the fact of any
person having ceased to be a shareholder of our company, the person or shareholder aggrieved (or any shareholder of our company or our
company itself) may apply to the Grand Court of the Cayman Islands for an order that the register be rectified, and the Court may either
refuse such application or it may, if satisfied of the justice of the case, make an order for the rectification of the register.
Differences in Corporate Law
The Cayman Companies Act is derived, to a large
extent, from the older Companies Acts of England and Wales but does not follow recent United Kingdom statutory enactments, and accordingly
there are significant differences between the Cayman Companies Act and the current Companies Act of England. In addition, the Cayman
Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of certain
significant differences between the provisions of the Cayman Companies Act applicable to us and the comparable laws applicable to companies
incorporated in the State of Delaware in the United States.
| |
|
Delaware
|
|
Cayman
Islands |
| Title of Organizational Documents |
|
Certificate of Incorporation
and Bylaws |
|
Certificate of Incorporation
and Memorandum and Articles of Association |
| Duties of Directors |
|
Under Delaware
law, the business and affairs of a corporation are managed by or under the direction of its board of directors. In exercising their
powers, directors are charged with a fiduciary duty of care to protect the interests of the corporation and a fiduciary duty of loyalty
to act in the best interests of its shareholders. The duty of care requires that directors act in an informed and deliberative manner
and inform themselves, prior to making a business decision, of all material information reasonably available to them. The duty of
care also requires that directors exercise care in overseeing and investigating the conduct of the corporation’s employees.
The duty of loyalty may be summarized as the duty to act in good faith, not out of self-interest, and in a manner which the director
reasonably believes to be in the best interests of the shareholders. |
|
As a matter
of Cayman Islands law, a director owes three types of duties to the company: (i) statutory duties, (ii) fiduciary duties,
and (iii) common law duties. The Cayman Companies Act imposes a number of statutory duties on a director. A Cayman Islands director’s
fiduciary duties are not codified, however the courts of the Cayman Islands have held that a director owes the following fiduciary
duties (a) a duty to act in what the director bona fide considers to be in the best interests of the company, (b) a duty
to exercise their powers for the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future
and (d) a duty to avoid conflicts of interest and of duty. The common law duties owed by a director are those to act with skill,
care and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director
in relation to the company and, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with
any particular skill they have which enables them to meet a higher standard than a director without those skills. In fulfilling their
duty of care to us, our directors must ensure compliance with our amended articles of association, as amended and restated from time
to time. We have the right to seek damages if a duty owed by any of our directors is breached.’ |
| Limitations on Personal Liability
of Directors |
|
Subject to
the limitations described below, a certificate of incorporation may provide for the elimination or limitation of the personal liability
of a director to the corporation or its shareholders for monetary damages for a breach of fiduciary duty as a director. Such provision
cannot limit liability for breach of loyalty, bad faith, intentional misconduct, unlawful payment of dividends or unlawful share
purchase or redemption. In addition, the certificate of incorporation cannot limit liability for any act or omission occurring prior
to the date when such provision becomes effective. |
|
The Cayman
Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of Officers
and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy,
such as to provide indemnification against civil fraud or the consequences of committing a crime. |
| Indemnification of Directors,
Officers, Agents, and Others |
|
A corporation
has the power to indemnify any director, officer, employee, or agent of corporation who was, is, or is threatened to be made a party
who acted in good faith and in a manner he believed to be in the best interests of the corporation, and if with respect to a criminal
proceeding, had no reasonable cause to believe his conduct would be unlawful, against amounts actually and reasonably incurred. |
|
Cayman Islands law does not limit the extent
to which a company’s memorandum and articles of association may provide for indemnification of directors and officers, except
to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against the consequences of committing a crime, or against the indemnified person’s own fraud or dishonesty.
Our amended and restated articles of association
provide to the extent permitted by law, we shall indemnify each existing or former secretary, director (including alternate director),
and any of our other officers (including an investment adviser or an administrator or liquidator) and their personal representatives
against: (a) all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by the
existing or former director (including alternate director), secretary or officer in or about the conduct of our business or affairs
or in the execution or discharge of the existing or former director (including alternate director), secretary’s or officer’s
duties, powers, authorities or discretions; and (b) without limitation to paragraph (a) above, all costs, expenses, losses
or liabilities incurred by the existing or former director (including alternate director), secretary or officer in defending (whether
successfully or otherwise) any civil, criminal, administrative or investigative proceedings (whether threatened, pending or completed)
concerning us or our affairs in any court or tribunal, whether in the Cayman Islands or elsewhere.
|
|
|
|
|
No such existing or former director
(including alternate director), secretary or officer, however, shall be indemnified in respect of any matter arising out of his own
dishonesty.
To the extent permitted by law, we may make
a payment, or agree to make a payment, whether by way of advance, loan or otherwise, for any legal costs incurred by an existing
or former director (including alternate director), secretary or any of our officers in respect of any matter identified in above
on condition that the director (including alternate director), secretary or officer must repay the amount paid by us to the extent
that it is ultimately found not liable to indemnify the director (including alternate director), the secretary or that officer for
those legal costs. |
| Interested Directors |
|
Under Delaware
law, a transaction in which a director who has an interest in such transaction would not be voidable if (i) the material facts
as to such interested director’s relationship or interests are disclosed or are known to the board of directors and the board
in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested
directors are less than a quorum, (ii) such material facts are disclosed or are known to the shareholders entitled to vote on
such transaction and the transaction is specifically approved in good faith by vote of the shareholders, or (iii) the transaction
is fair as to the corporation as of the time it is authorized, approved or ratified. Under Delaware law, a director could be held
liable for any transaction in which such director derived an improper personal benefit. |
|
Interested
director transactions are governed by the terms of a company’s memorandum and articles of association. |
| Voting Requirements |
|
The certificate of incorporation may include
a provision requiring supermajority approval by the directors or shareholders for any corporate action.
In addition, under Delaware law, certain
business combinations involving interested shareholders require approval by a supermajority of the non-interested shareholders. |
|
For the protection of shareholders, certain
matters must be approved by special resolution of the shareholders as a matter of Cayman Islands law, including alteration of the
memorandum or articles of association, appointment of inspectors to examine company affairs, reduction of share capital (subject,
in relevant circumstances, to court approval), change of name, authorization of a plan of merger or transfer by way of continuation
to another jurisdiction or consolidation or voluntary winding up of the company.
Cayman Companies Act requires that a special
resolution be passed by a majority of at least two-thirds or such higher percentage as set forth in the memorandum and articles of
association, of shareholders being entitled to vote and do vote in person or by proxy at a general meeting, or by unanimous written
consent of shareholders entitled to vote at a general meeting. |
| Voting for Directors |
|
Under Delaware
law, unless otherwise specified in the certificate of incorporation or bylaws of the corporation, directors shall be elected by a
plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election
of directors. |
|
Cayman Companies
Act defines “special resolutions” only. A company’s memorandum and articles of association can therefore tailor
the definition of “ordinary resolutions” as a whole, or with respect to specific provisions. |
| |
|
|
|
|
| Cumulative Voting |
|
No cumulative voting for
the election of directors unless so provided in the certificate of incorporation. |
|
No cumulative voting for
the election of directors unless so provided in the memorandum and articles of association. |
| |
|
|
|
|
| Directors’ Powers Regarding Bylaws |
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The certificate of incorporation
may grant the directors the power to adopt, amend or repeal bylaws. |
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The memorandum and articles
of association may only be amended by a special resolution of the shareholders. |
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| Nomination and Removal of Directors and Filling
Vacancies on Board |
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Shareholders may generally
nominate directors if they comply with advance notice provisions and other procedural requirements in company bylaws. Holders of
a majority of the shares may remove a director with or without cause, except in certain cases involving a classified board or if
the company uses cumulative voting. Unless otherwise provided for in the certificate of incorporation, directorship vacancies are
filled by a majority of the directors elected or then in office. |
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Nomination and removal
of directors and filling of board vacancies are governed by the terms of the memorandum and articles of association. |
| Mergers and Similar Arrangements |
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Under Delaware law, with certain exceptions,
a merger, consolidation, exchange or sale of all or substantially all the assets of a corporation must be approved by the board of
directors and a majority of the outstanding shares entitled to vote thereon. Under Delaware law, a shareholder of a corporation participating
in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which such
shareholder may receive cash in the amount of the fair value of the shares held by such shareholder (as determined by a court) in
lieu of the consideration such shareholder would otherwise receive in the transaction.
Delaware law also provides that a parent
corporation, by resolution of its board of directors, may merge with any subsidiary, of which it owns at least 90% of each class
of capital stock without a vote by shareholders of such subsidiary. Upon any such merger, dissenting shareholders of the subsidiary
would have appraisal rights. |
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Cayman Companies Act permits mergers
and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these
purposes, (a) “merger” means the merging of two or more constituent companies and the vesting of their undertaking,
property and liabilities in one of such companies as the surviving company, and (b) a “consolidation” means the
combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities
of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent
company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of
the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent
company’s articles of association. The plan must be filed with the Registrar of Companies together with a declaration as to
the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking
that a copy of the certificate of merger or consolidation will be given to the shareholders and creditors of each constituent company
and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required
for a merger or consolidation which is effected in compliance with these statutory procedures.
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A merger between a Cayman Islands
parent company and its Cayman Islands subsidiary or subsidiaries does not require authorization by a resolution of shareholders.
For this purpose a subsidiary is a company of which at least 90% of the issued shares entitled to vote are owned by the parent company.
The consent of each holder of a fixed or
floating security interest of a constituent company is required unless this requirement is waived by a court in the Cayman Islands.
Except in certain limited circumstances,
a dissenting shareholder of a Cayman Islands constituent company is entitled to payment of the fair value of his or her shares upon
dissenting from a merger or consolidation. The exercise of such dissenter rights will preclude the exercise by the dissenting shareholder
of any other rights to which he or she might otherwise be entitled by virtue of holding shares, except for the right to seek relief
on the grounds that the merger or consolidation is void or unlawful. |
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In addition, there are statutory provisions
that facilitate the reconstruction and amalgamation of companies, provided that the arrangement is approved by (a) 75% in value
of the shareholders or class of shareholders, as the case may be, or (b) a majority in number representing 75% in value of the
creditors or each class of creditors, as the case may be, with whom the arrangement is to be made, that are, in each case, present
and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently
the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express
to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines
that: (a) the statutory provisions as to the required majority vote have been met; (b) the shareholders have been fairly
represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote
interests adverse to those of the class; (c) the arrangement is such that may be reasonably approved by an intelligent and honest
man of that class acting in respect of his interest; and (d) the arrangement is not one that would more properly be sanctioned
under some other provision of the Cayman Companies Act.
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When a takeover offer is made and accepted by holders of 90% of the shares
affected within four months the offeror may, within a two-month period commencing on the expiration of such four month period, require
the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court
of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence
of fraud, bad faith or collusion.
If an arrangement and reconstruction
is thus approved, or if a takeover offer is made and accepted, a dissenting shareholder would
have no rights comparable to appraisal rights, which would otherwise ordinarily be available
to dissenting shareholders of Delaware corporations, providing rights to receive payment
in cash for the judicially determined value of the shares. |
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| Shareholder Suits |
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Class actions
and derivative actions generally are available to shareholders under Delaware law for, among other things, breach of fiduciary duty,
corporate waste and actions not taken in accordance with applicable law. In such actions, the court generally has discretion to permit
the winning party to recover attorneys’ fees incurred in connection with such action. |
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In
principle, we will normally be the proper plaintiff and as a general rule a derivative action may not be brought by a minority
shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands,
the Cayman Islands courts can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle
and the exceptions thereto) so that a non-controlling shareholder may be permitted to commence a class action against or derivative
actions in the name of the company to challenge: (a) an act which is illegal or ultra vires with respect to the company and
is therefore incapable of ratification by the shareholders; (b) an act which, although not ultra vires, requires authorization
by a qualified (or special) majority (that is, more than a simple majority) which has not been obtained; and (c) an act which
constitutes a “fraud on the minority” where the wrongdoers are themselves in control of the company. |
| Inspection of Corporate Records |
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Under Delaware
law, shareholders of a Delaware corporation have the right during normal business hours to inspect for any proper purpose, and to
obtain copies of list(s) of shareholders and other books and records of the corporation and its subsidiaries, if any, to the
extent the books and records of such subsidiaries are available to the corporation. |
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Shareholders
of a Cayman Islands exempted company have no general right under Cayman Islands law to inspect or obtain copies of a list of shareholders
or other corporate records (other than the memorandum and articles of association and any special resolutions passed by such companies,
and the registers of mortgages and charges of such companies and a list of current directors of such companies) of the company. However,
these rights may be provided in the company’s memorandum and articles of association. |
| Shareholder Proposals |
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Unless provided in the
corporation’s certificate of incorporation or bylaws, Delaware law does not include a provision restricting the manner in which
shareholders may bring business before a meeting. |
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The
Cayman Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders
with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles
of association. Our articles provide that general meetings shall be convened on the written requisition of one or more of the shareholders
entitled to attend and vote at our general meetings who (together) hold not less than 10 percent of the rights to vote at such general
meeting in accordance with the notice provisions in the articles, specifying the purpose of the meeting and signed by each of the
shareholders making the requisition. If the directors do not convene such meeting for a date not later than twenty-one clear days’
after the date of receipt of the written requisition, those shareholders who requested the meeting may convene the general meeting
themselves within three months after the end of such period of twenty-one clear days in which case reasonable expenses incurred by
them as a result of the directors failing to convene a meeting shall be reimbursed by us. Our articles provide no other right to
put any proposals before annual general meetings or extraordinary general meetings. As a Cayman Islands exempted company, we are
not obligated by law to call shareholders’ annual general meetings. However, our corporate governance guidelines require us
to call such meetings every year. |
| Approval of Corporate Matters
by Written Consent |
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Delaware law
permits shareholders to take action by written consent signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such action at a meeting of shareholders. |
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Cayman
Companies Act allows a special resolution to be passed in writing if signed by all the voting shareholders (if authorized by the
memorandum and articles of association). |
| Calling of Special Shareholders
Meetings |
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Delaware law
permits the board of directors or any person who is authorized under a corporation’s certificate of incorporation or bylaws
to call a special meeting of shareholders. |
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Cayman
Companies Act does not have provisions governing the proceedings of shareholders meetings which are usually provided in the memorandum
and articles of association. Please see above. |
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| Restructuring |
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A company may present a petition to the Grand
Court of the Cayman Islands for the appointment of a restructuring officer on the grounds that the company:
(a) is or is likely to become unable
to pay its debts; and
(b) intends to present a compromise
or arrangement to its creditors (or classes thereof) either pursuant to the Companies Act, the law of a foreign country or by way
of a consensual restructuring.
The Grand Court may, among other things,
make an order appointing a restructuring officer upon hearing of such petition, with such powers and to carry out such functions
as the court may order. At any time (i) after the presentation of a petition for the appointment of a restructuring officer
but before an order for the appointment of a restructuring officer has been made, and (ii) when an order for the appointment
of a restructuring officer is made, until such order has been discharged, no suit, action or other proceedings (other than criminal
proceedings) shall be proceeded with or commenced against the company, no resolution to wind up the company shall be passed, and
no winding up petition may be presented against the company, except with the leave of the court. However, notwithstanding the presentation
of a petition for the appointment of a restructuring officer or the appointment of a restructuring officer, a creditor who has security
over the whole or part of the assets of the company is entitled to enforce the security without the leave of the court and without
reference to the restructuring officer appointed
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| Dissolution; Winding Up |
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Under the Delaware General
Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding
100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved
by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its
certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board of directors. |
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Under
the Cayman Companies Act and our articles, the Company may be wound up by a special resolution of our shareholders, or if the winding
up is initiated by our board of directors, by either a special resolution of our members or, if our company is unable to pay its
debts as they fall due, by an ordinary resolution of our members. In addition, a company may be wound up by an order of the courts
of the Cayman Islands. The court has authority to order winding up in a number of specified circumstances including where it is,
in the opinion of the court, just and equitable to do so. |
Anti-money Laundering—Cayman Islands
In order to comply with legislation or regulations
aimed at the prevention of money laundering, we may be required to adopt and maintain anti-money laundering procedures, and may require
subscribers to provide evidence to verify their identity. Where permitted, and subject to certain conditions, we may also delegate the
maintenance of our anti-money laundering procedures (including the acquisition of due diligence information) to a suitable person.
We reserve the right to request such information
as is necessary to verify the identity of a subscriber. In the event of delay or failure on the part of the subscriber in producing any
information required for verification purposes, we may refuse to accept the application, in which case any funds received will be returned
without interest to the account from which they were originally debited.
We also reserve the right to refuse to make any
redemption payment to a shareholder if our directors or officers suspect or are advised that the payment of redemption proceeds to such
shareholder might result in a breach of applicable anti-money laundering or other laws or regulations by any person in any relevant jurisdiction,
or if such refusal is considered necessary or appropriate to ensure our compliance with any such laws or regulations in any applicable
jurisdiction.
If any person resident in the Cayman Islands
knows or suspects or has reason for knowing or suspecting that another person is engaged in criminal conduct or is involved with terrorism
or terrorist property and the information for that knowledge or suspicion came to their attention in the course of their business in
the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion
to (i) a nominated officer (appointed in accordance with the Proceeds of Crime Law (Revised) of the Cayman Islands) or the Financial
Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (As Revised), if the disclosure relates to criminal
conduct or money laundering or (ii) to a police constable or a nominated officer (pursuant to the Terrorism Act (As Revised) of
the Cayman Islands) or the Financial Reporting Authority, pursuant to the Terrorism Act (As Revised), if the disclosure relates to involvement
with terrorism or terrorist financing and terrorist property. Such a report shall not be treated as a breach of confidence or of any
restriction upon the disclosure of information imposed by any enactment or otherwise.
History of Share Capital
Unless expressly indicated herein to the contrary,
the share and pricing information under “History of Share Capital” reflects the actual share and pricing information at the
time of the events in chronological order, without taking retroactive effect of subsequent share consolidations.
We were incorporated in the Cayman Islands as
an exempted company with limited liability on December 4, 2018. We have issued the following Ordinary Shares to certain founding
shareholders.
| Purchaser |
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Date
of Issuance |
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Securities |
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Consideration |
| An
Rui Tai BVI |
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December 4, 2018 |
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660 Ordinary Shares |
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US$0.33 |
| Deng
Guan BVI |
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December 4, 2018 |
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460 Ordinary Shares |
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US$0.23 |
| PBCY
Investment |
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December 4, 2018 |
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600 Ordinary Shares |
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US$0.30 |
| EJAM
BVI |
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December 4, 2018 |
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200 Ordinary Shares |
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US$0.10 |
| Everlasting
Innovation |
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December 4, 2018 |
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80 Ordinary Shares |
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US$0.04 |
| Etone
Investment |
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May 13, 2019 |
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40 Ordinary Shares |
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HK$14 million (US$1,797,731) |
| An
Rui Tai BVI |
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July 6, 2020 |
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6,599,340 Ordinary Shares |
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US$3,299.67 |
| Deng
Guan BVI |
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July 6, 2020 |
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4,599,540 Ordinary Shares |
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US$2,299.77 |
| PBCY
Investment |
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July 6, 2020 |
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5,999,400 Ordinary Shares |
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US$2,999.70 |
| EJAM
BVI |
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July 6, 2020 |
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1,999,800 Ordinary Shares |
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US$999.90 |
| Everlasting
Innovation |
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July 6, 2020 |
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799,920 Ordinary Shares |
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US$399.96 |
| Etone
Investment |
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July 6, 2020 |
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399,960 Ordinary Shares |
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US$199.98 |
| Orient
Plus International Limited |
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March 18, 2021 |
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784,314 Ordinary Shares
and 784,314 Warrants |
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US$4,000,000 |
| Union
Hi-Tech Development Limited |
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March 18, 2021 |
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1,176,470 Ordinary Shares
and 1,176,470 Warrants |
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US$6,000,000 |
On July 6, 2020, our shareholders and board
of directors approved (i) a forward split of our outstanding Ordinary Shares at a ratio of 20-for-1 share, and (ii) an increase
in our authorized shares to 100 million Ordinary Shares. Unless otherwise indicated, all references to Ordinary Shares, options to purchase
Ordinary Shares, share data, per share data, and related information have been retroactively adjusted, where applicable, in this prospectus
to reflect the forward split of our Ordinary Shares as if it had occurred at the beginning of the earlier period presented.
On July 6, 2020, we issued 6,599,340 Ordinary
Shares to An Rui Tai BVI for a consideration of $3,299.67, 4,599,540 Ordinary Shares to Deng Guan BVI for a consideration of $2,299.77,
5,999,400 Ordinary Shares to PBCY Investment for a consideration of $2,999.70, 1,999,800 Ordinary Shares to EJAM BVI for a consideration
of $999.90, 799,920 Ordinary Shares to Everlasting Innovation for a consideration of $399.96, and 399.960 Ordinary Shares to Etone Investment
for a consideration of $199.98.
On March 18, 2021, pursuant to a Securities
Purchase Agreement dated March 17, 2021, we issued 784,314 Ordinary Shares and 784,314 Warrants for a consideration of $4,000,000
to Orient Plus International Limited, and 1,176,470 Ordinary Shares and 1,176,470 Warrants for a consideration of $6,000,000 to Union
Hi-Tech Development Limited. One Warrant included the right to purchase one half of one Ordinary Share at an exercise price of $5.61
per Ordinary Share. A Warrant may be exercised at any time on or after March 18, 2021 and on or prior to 5:00 p.m. (New York
City time) on September 18, 2026 but not thereafter. Giving effect to a share consolidation at a ratio of one-for-three and one
fifth (3.2) ordinary shares effective on May 24, 2022 and a share consolidation at a ratio of one-for-six (6) ordinary shares
effective on March 21, 2023, the 1,960,784 Warrants were consolidated to 112,610 Warrants with each to purchase one half of one
ordinary share at an exercise price of $107.71 per ordinary share. The holders of Warrants are granted with registration rights. If at
any time after the six-month anniversary of March 18, 2021, there is no effective registration statement registering, or no current
prospectus available for the issuance of the warrant shares to the holder and the resale of the warrant shares, then the Warrants may
also be exercised, in whole or in part, at such time by means of “cashless exercise”. The Warrants are subject to adjustments
in the event of 1) stock dividends and splits, 2) subsequent right offerings, 3) pro rata dilutions and 4) fundamental transactions.
No fractional shares or scrip representing fractional shares shall be issued upon the exercise of the Warrants. As of the date of this
prospectus, no Warrants have been exercised.
As of the March 18, 2021, our authorized
share capital consisted of $50,000 divided into 100,000,000 Ordinary Shares, par value $0.0005 per share.
On April 28, 2022, we held an annual general
meeting of shareholders, during which the shareholders approved a proposal to effect a share consolidation of the Company’s 100,000,000
ordinary shares, par value US$0.0005 per share, in the Company’s issued and unissued share capital at a ratio of one-for-three
and one fifth such that each 3.2 ordinary shares were combined into one ordinary share of the Company with a par value of US$0.0016.
As a result of such share consolidation effective on May 24, 2022, our authorized share capital was US$50,000 divided into 31,250,000
ordinary shares of par value of US$0.0016 each.
On March 6, 2023, we held an annual general
meeting of shareholders, during which the shareholders approved the proposals: (i) to approve an increase of authorized share capital
of the Company from US$50,000 divided into 31,250,000 ordinary shares of a par value US$0.0016 each to US$60,000 divided into 37,500,000
ordinary shares of a par value US$0.0016 each; and (ii) to effect a share consolidation of each six ordinary shares with par value
of US$0.0016 each in our issued and unissued share capital into one ordinary share with par value of US$0.0096 each. Such share consolidation
became effective on March 21, 2023, and the ordinary shares began trading on a post-share consolidation basis on the Nasdaq Capital
Market when the market opened on March 22, 2023 under the same symbol “BAOS” but under a new CUSIP number of G08908
124. Immediately following the share consolidation, the authorized share capital of the Company became US$60,000.00 divided into 6,250,000
ordinary shares of par value of US$0.0096 each.
We are not aware of any arrangement that may,
at a subsequent date, result in a change of control of the Company.
DESCRIPTION OF ORDINARY
SHARES
We may issue our Ordinary Shares either alone
or underlying other securities convertible into or exercisable or exchangeable for our Ordinary Shares.
Holders of our Ordinary Shares are entitled to
certain rights and subject to certain conditions as set forth in our amended and restated memorandum and articles of association and
the Companies Act. See “Description of Share Capital.”
DESCRIPTION OF DEBT SECURITIES
General
We may issue debt securities which may or may
not be converted into our Ordinary Shares. We may issue the debt securities independently or together with any underlying securities,
and debt securities may be attached or separate from the underlying securities. In connection with the issuance of any debt securities,
we do not intend to issue them pursuant to a trust indenture upon reliance of Section 304(a)(8) of the Trust Indenture Act
and Rule 4a-1 promulgated thereunder.
The following description is a summary of selected
provisions relating to the debt securities that we may issue. The summary is not complete. When debt securities are offered in the future,
a prospectus supplement, information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular
terms of those securities and the extent to which these general provisions may apply. The specific terms of the debt securities as described
in a prospectus supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may
modify or replace the general terms described in this section.
This summary and any description of debt securities
in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified
in its entirety by reference to all the provisions of any specific debt securities document or agreement. We will file each of these
documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this prospectus
is a part on or before the time we issue a series of warrants. See “Where You Can Find Additional Information” and “Incorporation
of Documents by Reference” below for information on how to obtain a copy of a debt securities document when it is filed.
When we refer to a series of debt securities,
we mean all debt securities issued as part of the same series under the applicable indenture.
Terms
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus, may describe the terms of any debt securities that we may offer, including, but
not limited to, the following:
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the title of the debt securities; |
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the total amount of the
debt securities; |
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the amount or amounts of
the debt securities will be issued and interest rate; |
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the conversion price at
which the debt securities may be converted; |
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the date on which the right
to convert the debt securities will commence and the date on which the right will expire; |
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if applicable, the minimum
or maximum amount of debt securities that may be converted at any one time; |
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if applicable, a discussion
of material federal income tax consideration; |
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if applicable, the terms
of the payoff of the debt securities; |
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the identity of the indenture
agent, if any; |
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the procedures and conditions
relating to the conversion of the debt securities; and |
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any other terms of the
debt securities, including terms, procedure and limitation relating to the exchange or conversion of the debt securities. |
Form, Exchange, and Transfer
We may issue the debt securities in registered
form or bearer form. Debt securities issued in registered form, i.e., book-entry form, will be represented by a global security registered
in the name of a depository, which will be the holder of all the debt securities represented by the global security. Those investors
who own beneficial interests in global debt securities will do so through participants in the depository’s system, and the rights
of these indirect owners will be governed solely by the applicable procedures of the depository and its participants. In addition, we
may issue debt securities in non-global form, i.e., bearer form. If any debt securities are issued in non-global form, debt securities
certificates may be exchanged for new debt securities certificates of different denominations, and holders may exchange, transfer, or
convert their debt securities at the debt securities agent’s office or any other office indicated in the applicable prospectus
supplement, information incorporated by reference or free writing prospectus.
Prior to the conversion of their debt securities,
holders of debt securities convertible for Ordinary Shares will not have any rights of holders of Ordinary Shares, and will not be entitled
to dividend payments, if any, or voting rights of the Ordinary Shares.
Conversion of Debt Securities
A debt security may entitle the holder to purchase,
in exchange for the extinguishment of debt, an amount of securities at a conversion price that will be stated in the debt security. Debt
securities may be converted at any time up to the close of business on the expiration date set forth in the terms of such debt security.
After the close of business on the expiration date, debt securities not exercised will be paid in accordance with their terms.
Debt securities may be converted as set forth
in the applicable offering material. Upon receipt of a notice of conversion properly completed and duly executed at the corporate trust
office of the indenture agent, if any, or to us, we will forward, as soon as practicable, the securities purchasable upon such exercise.
If less than all of the debt security represented by such security is converted, a new debt security will be issued for the remaining
debt security.
DESCRIPTION OF WARRANTS
General
We may issue warrants to purchase our securities.
We may issue the warrants independently or together with any underlying securities, and the warrants may be attached or separate from
the underlying securities. We may also issue a series of warrants under a separate warrant agreement to be entered into between us and
a warrant agent. The warrant agent will act solely as our agent in connection with the warrants of such series and will not assume any
obligation or relationship of agency for or with holders or beneficial owners of warrants.
The following description is a summary of selected
provisions relating to the warrants that we may issue. The summary is not complete. When warrants are offered in the future, a prospectus
supplement, information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular terms of
those securities and the extent to which these general provisions may apply. The specific terms of the warrants as described in a prospectus
supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace
the general terms described in this section.
This summary and any description of warrants
in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified
in its entirety by reference to all the provisions of any specific warrant document or agreement, if applicable. We will file each of
these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this
prospectus is a part on or before the time we issue a series of warrants. See “Where You Can Find Additional Information”
and “Incorporation of Documents by Reference” below for information on how to obtain a copy of a warrant document when it
is filed.
When we refer to a series of warrants, we mean
all warrants issued as part of the same series under the applicable warrant agreement.
Terms
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus, may describe the terms of any warrants that we may offer, including, but not limited
to, the following:
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the
title of the warrants; |
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the
total number of warrants; |
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the
price or prices at which the warrants will be issued; |
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the
price or prices at which the warrants may be exercised; |
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the
currency or currencies that investors may use to pay for the warrants; |
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the
date on which the right to exercise the warrants will commence and the date on which the right will expire; |
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whether
the warrants will be issued in registered form or bearer form; |
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information
with respect to book-entry procedures, if any; |
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if
applicable, the minimum or maximum amount of warrants that may be exercised at any one time; |
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if
applicable, the designation and terms of the underlying securities with which the warrants are issued and the number of warrants
issued with each underlying security; |
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if
applicable, the date on and after which the warrants and the related underlying securities will be separately transferable; |
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if
applicable, a discussion of material federal income tax considerations; |
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if
applicable, the terms of redemption of the warrants; |
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the
identity of the warrant agent, if any; |
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the
procedures and conditions relating to the exercise of the warrants; and |
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any
other terms of the warrants, including terms, procedures, and limitations relating to the exchange and exercise of the warrants. |
Warrant Agreement
We may issue the warrants in one or more series
under one or more warrant agreements, each to be entered into between us and a bank, trust company, or other financial institution as
warrant agent. We may add, replace, or terminate warrant agents from time to time. We may also choose to act as our own warrant agent
or may choose one of our subsidiaries to do so.
The warrant agent under a warrant agreement will
act solely as our agent in connection with the warrants issued under that agreement. Any holder of warrants may, without the consent
of any other person, enforce by appropriate legal action, on its own behalf, its right to exercise those warrants in accordance with
their terms.
Form, Exchange, and Transfer
We may issue the warrants in registered form
or bearer form. Warrants issued in registered form, i.e., book-entry form, will be represented by a global security registered in the
name of a depository, which will be the holder of all the warrants represented by the global security. Those investors who own beneficial
interests in a global warrant will do so through participants in the depository’s system, and the rights of these indirect owners
will be governed solely by the applicable procedures of the depository and its participants. In addition, we may issue warrants in non-global
form, i.e., bearer form. If any warrants are issued in non-global form, warrant certificates may be exchanged for new warrant certificates
of different denominations, and holders may exchange, transfer, or exercise their warrants at the warrant agent’s office or any
other office indicated in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus.
Prior to the exercise of their warrants, holders
of warrants exercisable for Ordinary Shares will not have any rights of holders of Ordinary Shares and will not be entitled to dividend
payments, if any, or voting rights of the Ordinary Shares.
Exercise of Warrants
A warrant will entitle the holder to purchase
for cash an amount of securities at an exercise price that will be stated in, or that will be determinable as described in, the applicable
prospectus supplement, information incorporated by reference, or free writing prospectus. Warrants may be exercised at any time up to
the close of business on the expiration date set forth in the applicable offering material. After the close of business on the expiration
date, unexercised warrants will become void. Warrants may be redeemed as set forth in the applicable offering material.
Warrants may be exercised as set forth in the
applicable offering material. Upon receipt of payment and the warrant certificate properly completed and duly executed at the corporate
trust office of the warrant agent or any other office indicated in the applicable offering material, we will forward, as soon as practicable,
the securities purchasable upon such exercise. If less than all of the warrants represented by such warrant certificate are exercised,
a new warrant certificate will be issued for the remaining warrants.
DESCRIPTION OF RIGHTS
We may issue rights to purchase our securities.
The rights may or may not be transferable by the persons purchasing or receiving the rights. In connection with any rights offering,
we may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters
or other persons would purchase any offered securities remaining unsubscribed for after such rights offering. Each series of rights will
be issued under a separate rights agent agreement to be entered into between us and one or more banks, trust companies, or other financial
institutions, as rights agent, which we will name in the applicable prospectus supplement. The rights agent will act solely as our agent
in connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders of rights
certificates or beneficial owners of rights.
The prospectus supplement relating to any rights
that we offer will include specific terms relating to the offering, including, among other matters:
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the
date of determining the security holders entitled to the rights distribution; |
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the
aggregate number of rights issued and the aggregate amount of securities purchasable upon exercise of the rights; |
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the
exercise price; |
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the
conditions to completion of the rights offering; |
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the
date on which the right to exercise the rights will commence and the date on which the rights will expire; and |
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any
applicable federal income tax considerations. |
Each right would entitle the holder of the rights
to purchase for cash the principal amount of securities at the exercise price set forth in the applicable prospectus supplement. Rights
may be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable prospectus
supplement. After the close of business on the expiration date, all unexercised rights will become void.
If less than all of the rights issued in any
rights offering are exercised, we may offer any unsubscribed securities directly to persons other than our security holders, to or through
agents, underwriters, or dealers, or through a combination of such methods, including pursuant to standby arrangements, as described
in the applicable prospectus supplement.
DESCRIPTION OF UNITS
We may issue units composed of any combination
of our securities. We will issue each unit so that the holder of the unit is also the holder of each security included in the unit. As
a result, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which
a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any
time before a specified date.
The following description is a summary of selected
provisions relating to units that we may offer. The summary is not complete. When units are offered in the future, a prospectus supplement,
information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular terms of those securities
and the extent to which these general provisions may apply. The specific terms of the units as described in a prospectus supplement,
information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace the general
terms described in this section.
This summary and any description of units in
the applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified
in its entirety by reference to the unit agreement, collateral arrangements, and depositary arrangements, if applicable. We will file
each of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of
which this prospectus is a part on or before the time we issue a series of units. See “Where You Can Find Additional Information”
and “Incorporation of Documents by Reference” below for information on how to obtain a copy of a document when it is filed.
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus may describe:
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the
designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those
securities may be held or transferred separately; |
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any
provisions for the issuance, payment, settlement, transfer, or exchange of the units or of the securities composing the units; |
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whether
the units will be issued in fully registered or global form; and |
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any
other terms of the units. |
The applicable provisions described in this section,
as well as those described under “Description of Share Capital,” “Description of Ordinary Shares,” “Description
of Debt Securities,” “Description of Warrants,” and “Description of Rights” above, will apply to each unit
and to each security included in each unit, respectively.
SELLING
SHAREHOLDERS
This prospectus in part covers the resale of
up to an aggregate of 447,917 Ordinary Shares. We will not receive any of the proceeds from the sale of Ordinary Shares by the Selling
Shareholders. Except as disclosed herein, the Selling Shareholder have not had any material relationship with us within the past three
years.
The following table sets forth (a) the name
and position or positions with the Company of each Selling Shareholder; (b) the aggregate of (i) the number of Ordinary Shares
held by each Selling Shareholder as of the date of this prospectus, and (ii) the number of shares issuable upon the exercise of
the warrants held by such Selling Shareholder that are being registered pursuant to this Registration Statement for resale by each Selling
Shareholder as of the date of this prospectus; (c) the number of Ordinary Shares that each Selling Shareholder may offer for sale
from time to time pursuant to this prospectus, whether or not such Selling Shareholder has a present intention to do so; and (d) the
number of Ordinary Shares to be beneficially owned by each Selling Shareholder following the sale of all shares that may be so offered
pursuant to this prospectus, assuming no other change in ownership of Ordinary Shares by such Selling Shareholder after the date of this
prospectus. Unless otherwise indicated, beneficial ownership is direct and the person indicated has sole voting and investment power.
Inclusion of an individual’s name in the
table below does not constitute an admission that such individual is an “affiliate” of the Company.
| | |
Shares
Owned Prior to
Resale(1) | | |
Number of
Shares Offered
for | | |
Shares
Beneficially Owned After Resale(1) | |
| Selling Shareholders | |
Number | | |
Percent | | |
Resale | | |
Number | | |
Percent | |
| An
Rui Tai BVI(2) | |
| 343,750 | | |
| 22.40 | % | |
| 171,875 | | |
| 171,875 | | |
| 11.20 | % |
| Deng
Guan BVI(3) | |
| 217,189 | | |
| 14.15 | % | |
| 119,792 | | |
| 97,397 | | |
| 6.35 | % |
| PBCY
Investment(4) | |
| 312,500 | | |
| 20.37 | % | |
| 156,250 | | |
| 156,250 | | |
| 10.18 | % |
| (1) | Percentage is computed with reference
to 1,534,487 Ordinary Shares issued as of August 1, 2023 and assumes for each Selling
Shareholder the sale of all shares offered by that particular Selling Shareholder under this
prospectus. In computing the percentage ownership of each Selling Shareholder, shares that
such Selling Shareholder has the right to acquire within 60 days, including through the exercise
of any option, warrant, or other right or the conversion of any other security, after the
date of this prospectus, are included. |
| (2) | Represents the number of Ordinary Shares
beneficially owned by An Rui Tai BVI, a business company incorporated under the laws of the
BVI, which is owned as to 90% by Ms. Wenxiu Zhong and 10% by Mr. Sheng Gong. The
registered address of An Rui Tai BVI is Craigmuir Chambers, Road Town, Tortola, VG 1110,
British Virgin Islands. |
| (3) | Represents the number of Ordinary Shares
beneficially owned by Deng Guan BVI, a business company incorporated under the laws of the
BVI and is wholly owned by Mr. Hui Yu. The registered address of Deng Guan BVI is Craigmuir
Chambers, Road Town, Tortola VG 1110, British Virgin Islands. |
| (4) | Represents the number of Ordinary Shares
beneficially owned by PBCY Investment, a business company incorporated under the laws of
the BVI and is owned as to 86.35% by Pubang Landscape through Pubang Hong Kong and 13.65%
by CYY Holdings. The registered address of PBCY Investment is Craigmuir Chambers, Road Town,
Tortola VG 1110, British Virgin Islands. |
The Company may supplement this prospectus from
time to time as required by the rules of the SEC to include certain information concerning the security ownership of the Selling
Shareholders or any new Selling Shareholders, the number of securities offered for resale and the position, office, or other material
relationship which a Selling Shareholder has had within the past three years with the Company or any of its predecessors or affiliates.
PLAN OF DISTRIBUTION
In this section of the prospectus, the term “Selling
Shareholders” means and includes:
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the persons identified
in the table above as the Selling Shareholders; and |
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any of the donees, pledgees,
distributees, transferees, or other successors in interest of those persons referenced above who may: (a) receive any of the
Ordinary Shares offered hereby after the date of this prospectus and (b) offer or sell those shares hereunder. |
We and the Selling Shareholders may sell the
securities offered by this prospectus from time to time in one or more transactions, including, without limitation:
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through
agents; |
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to
or through underwriters; |
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through
broker-dealers (acting as agent or principal); |
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directly
to purchasers (including our affiliates and shareholders), through a specific bidding or auction process, a rights offering, or other
method; |
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through
a combination of any such methods of sale; or |
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through
any other methods described in a prospectus supplement. |
The distribution of securities may be effected,
from time to time, in one or more transactions, including:
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block
transactions (which may involve crosses) and transactions on Nasdaq or any other organized market where the securities may be traded; |
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to a prospectus supplement; |
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ordinary
brokerage transactions and transactions in which a broker-dealer solicits purchasers; |
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sales
“at the market” to or through a market maker or into an existing trading market, on an exchange or otherwise; and |
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sales
in other ways not involving market makers or established trading markets, including direct sales to purchasers. |
The securities may be sold at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of sale, at prices relating to the prevailing market prices
or at negotiated prices. The consideration may be cash, extinguishment of debt, or another form negotiated by the parties. Agents, underwriters,
or broker-dealers may be paid compensation for offering and selling the securities. That compensation may be in the form of discounts,
concessions, or commissions to be received from us or from the purchasers of the securities. Dealers and agents participating in the
distribution of the securities may be deemed to be underwriters, and compensation received by them on resale of the securities may be
deemed to be underwriting discounts and commissions under the Securities Act. If such dealers or agents were deemed to be underwriters,
they may be subject to statutory liabilities under the Securities Act.
We may also make direct sales through subscription
rights distributed to our existing shareholders on a pro rata basis, which may or may not be transferable. In any distribution of subscription
rights to our shareholders, if all of the underlying securities are not subscribed for, we may then sell the unsubscribed securities
directly to third parties or may engage the services of one or more underwriters, dealers, or agents, including standby underwriters,
to sell the unsubscribed securities to third parties.
Some or all of the securities that we offer through
this prospectus may be new issues of securities with no established trading market. Any underwriters to whom we sell our securities for
public offering and sale may make a market in those securities, but they will not be obligated to do so and they may discontinue any
market making at any time without notice. Accordingly, we cannot assure you of the liquidity of, or continued trading markets for, any
securities that we offer.
Agents may, from time to time, solicit offers
to purchase the securities. If required, we will name in the applicable prospectus supplement, document incorporated by reference, or
free writing prospectus, as applicable, any agent involved in the offer or sale of the securities and set forth any compensation payable
to the agent. Unless otherwise indicated, any agent will be acting on a best efforts basis for the period of its appointment. Any agent
selling the securities covered by this prospectus may be deemed to be an underwriter of the securities.
If underwriters are used in an offering, securities
will be acquired by the underwriters for their own account and may be resold, from time to time, in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale, or under delayed delivery
contracts or other contractual commitments. Securities may be offered to the public either through underwriting syndicates represented
by one or more managing underwriters or directly by one or more firms acting as underwriters. If an underwriter or underwriters are used
in the sale of securities, an underwriting agreement will be executed with the underwriter or underwriters at the time an agreement for
the sale is reached. The applicable prospectus supplement will set forth the managing underwriter or underwriters, as well as any other
underwriter or underwriters, with respect to a particular underwritten offering of securities, and will set forth the terms of the transactions,
including compensation of the underwriters and dealers and the public offering price, if applicable. This prospectus, the applicable
prospectus supplement and any applicable free writing prospectus will be used by the underwriters to resell the securities.
If a dealer is used in the sale of the securities,
we, or an underwriter, will sell the securities to the dealer, as principal. The dealer may then resell the securities to the public
at varying prices to be determined by the dealer at the time of resale. To the extent required, we will set forth in the prospectus supplement,
document incorporated by reference, or free writing prospectus, as applicable, the name of the dealer and the terms of the transactions.
We may directly solicit offers to purchase the
securities and may make sales of securities directly to institutional investors or others. These persons may be deemed to be underwriters
with respect to any resale of the securities. To the extent required, the prospectus supplement, document incorporated by reference,
or free writing prospectus, as applicable, will describe the terms of any such sales, including the terms of any bidding or auction process,
if used.
Agents, underwriters, and dealers may be entitled
under agreements which may be entered into with us to indemnification by us against specified liabilities, including liabilities incurred
under the Securities Act, or to contribution by us to payments they may be required to make in respect of such liabilities. If required,
the prospectus supplement, document incorporated by reference, or free writing prospectus, as applicable, will describe the terms and
conditions of such indemnification or contribution. Some of the agents, underwriters, or dealers, or their affiliates may be customers
of, engage in transactions with or perform services for us or our subsidiaries or affiliates in the ordinary course of business.
Under the securities laws of some states, the
securities offered by this prospectus may be sold in those states only through registered or licensed brokers or dealers.
Any person participating in the distribution
of securities registered under the registration statement that includes this prospectus will be subject to applicable provisions of the
Exchange Act, and the applicable SEC rules and regulations, including, among others, Regulation M, which may limit the timing of
purchases and sales of any of our securities by any such person. Furthermore, Regulation M may restrict the ability of any person engaged
in the distribution of our securities to engage in market-making activities with respect to our securities.
These restrictions may affect the marketability
of our securities and the ability of any person or entity to engage in market-making activities with respect to our securities.
Certain persons participating in an offering
may engage in over-allotment, stabilizing transactions, short-covering transactions, and penalty bids in accordance with Regulation M
under the Exchange Act that stabilize, maintain, or otherwise affect the price of the offered securities. If any such activities will
occur, they will be described in the applicable prospectus supplement.
In order to comply with certain state securities
or blue sky laws and regulations, if applicable, the securities offered hereby will be sold in such jurisdictions only through registered
or licensed brokers or dealers. In certain states, the securities may not be sold unless they are registered or qualified for sale in
such state, or unless an exemption from registration or qualification is available and is obtained.
The Selling Shareholders have advised us that
they have not entered into any agreements, understandings, or arrangements with any underwriters or broker-dealers regarding the sale
of their securities. There is no underwriter or coordinating broker acting in connection with the proposed sale of Ordinary Shares by
the Selling Shareholders.
We will bear all costs, expenses, and fees in
connection with the registration of the Ordinary Shares offered hereby. The Selling Shareholders, however, will bear any brokerage or
underwriting commissions and similar selling expenses, if any, attributable to the sale of the Ordinary Shares offered pursuant to this
prospectus. We have agreed to indemnify the Selling Shareholders against certain liabilities, including liabilities under the Securities
Act, or to contribute to payments to which any of those security holders may be required to make in respect thereof.
There can be no assurance that the Selling Shareholders
will sell any or all of the securities offered by them hereby.
To the extent required, this prospectus may be
amended or supplemented from time to time to describe a specific plan of distribution.
TAXATION
Material income tax consequences relating to
the purchase, ownership, and disposition of the securities offered by this prospectus are set forth in “Item 10. Additional Information—E.
Taxation” in our annual report on Form 20-F for the year ended December 31, 2022, which is incorporated herein by reference,
as updated by our subsequent filings under the Exchange Act that are incorporated by reference and, if applicable, in any accompanying
prospectus supplement or relevant free writing prospectus.
EXPENSES
The following table sets forth the aggregate
expenses in connection with this offering, all of which will be paid by us. All amounts shown are estimates, except for the SEC registration
fee.
| SEC registration fee | |
$ | 11,415.13 | |
| Financial Industry Regulatory Authority fees | |
$ | 16,037.84 | |
| Legal fees and expenses | |
| $* | |
| Accounting fees and expenses | |
| $* | |
| Printing expenses | |
| $* | |
| Miscellaneous expenses | |
| $* | |
| Total | |
| $* | |
| * |
To be provided by a prospectus
supplement or as an exhibit to a report of foreign private issuer on Form 6-K that is incorporated by reference into this registration
statement. Estimated solely for this item. Actual expenses may vary. |
MATERIAL CONTRACTS
Our material contracts are described in the documents
incorporated by reference into this prospectus. See “Incorporation of Documents by Reference” below.
MATERIAL CHANGES
Except as otherwise described in our annual report
on Form 20-F for the fiscal year ended December 31, 2022, in our reports of foreign issuer on Form 6-K filed or submitted
under the Exchange Act and incorporated by reference herein, and as disclosed in this prospectus or the applicable prospectus supplement,
no reportable material changes have occurred since December 31, 2022.
LEGAL MATTERS
We are being represented by Hunter Taubman Fischer&
Li LLC with respect to certain legal matters as to United States federal securities and New York State law. The validity of the securities
offered in this offering and certain other legal matters as to Cayman Islands law are passed upon for us by Maples and Calder (Hong Kong)
LLP, our counsel as to Cayman Islands law. Legal matters as to PRC law are passed upon for us by Beijing Dacheng Law Offices, LLP. If
legal matters in connection with offerings made pursuant to this prospectus are passed upon by counsel to underwriters, dealers, or agents,
such counsel will be named in the applicable prospectus supplement relating to any such offering.
EXPERTS
The financial statements incorporated by reference
in this prospectus for the fiscal year ended December 31, 2022 have been audited by YCM CPA INC., an independent registered public
accounting firm, as set forth in their report thereon included therein, and incorporated herein by reference, and are included in reliance
upon such report given on the authority of such firm as experts in accounting and auditing. The office of YCM CPA INC. is located at
2400 Barranca Pkwy, Suite 300, Irvine, California.
The financial statements incorporated by reference
in this prospectus for the fiscal years ended December 31, 2020 and 2021 have been audited by Friedman LLP, an independent registered
public accounting firm, as set forth in their report thereon included therein, and incorporated herein by reference, and are included
in reliance upon such report given on the authority of such firm as experts in accounting and auditing. Friedman LLP was merged with
Marcum LLP on September 1, 2022 and filed its application to withdraw the PCAOB registration on December 30, 2022. The office
of Friedman LLP was located at One Liberty Plaza, 165 Broadway 21st Floor, New York, NY 10006.
INCORPORATION OF DOCUMENTS
BY REFERENCE
The SEC allows us to “incorporate by reference”
into this prospectus certain information we file with the SEC. This means that we can disclose important information to you by referring
you to those documents. Any statement contained in a document incorporated by reference in this prospectus shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement contained herein, or in any subsequently filed document,
which also is incorporated by reference herein, modifies or supersedes such earlier statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We hereby incorporate by reference into this
prospectus the following documents:
| (4) | any future annual reports on Form 20-F
filed with the SEC after the date of this prospectus and prior to the termination of the
offering of the securities offered by this prospectus; and |
| (5) | any future reports of foreign private
issuer on Form 6-K that we furnish to the SEC after the date of this prospectus that
are identified in such reports as being incorporated by reference into the registration statement
of which this prospectus forms a part. |
Our annual report on Form 20-F for the fiscal
year ended December 31, 2022 filed with the SEC on May 8, 2023 contains a description of our business and audited consolidated
financial statements with a report by our independent auditors. These statements were prepared in accordance with U.S. GAAP.
Unless expressly incorporated by reference, nothing
in this prospectus shall be deemed to incorporate by reference information furnished to, but not filed with, the SEC. Copies of all documents
incorporated by reference in this prospectus, other than exhibits to those document unless such exhibits are specially incorporated by
reference in this prospectus, will be provided at no cost to each person, including any beneficial owner, who receives a copy of this
prospectus on the written or oral request of that person made to:
Baosheng Media Group Holdings Limited
East Floor 5, Building No. 8, Xishanhui
Shijingshan District, Beijing 100041
People’s Republic of China
+86-010-82088021
You should rely only on the information that
we incorporate by reference or provide in this prospectus. We have not authorized anyone to provide you with different information. We
are not making any offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume
that the information contained or incorporated in this prospectus by reference is accurate as of any date other than the date of the
document containing the information.
Where
You Can Find ADDITIONAL Information
As permitted by SEC rules, this prospectus omits
certain information and exhibits that are included in the registration statement of which this prospectus forms a part. Since this prospectus
may not contain all of the information that you may find important, you should review the full text of these documents. If we have filed
a contract, agreement, or other document as an exhibit to the registration statement of which this prospectus forms a part, you should
read the exhibit for a more complete understanding of the document or matter involved. Each statement in this prospectus, including statements
incorporated by reference as discussed above, regarding a contract, agreement, or other document is qualified in its entirety by reference
to the actual document.
We are subject to periodic reporting and other
informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports,
including annual reports on Form 20-F, and other information with the SEC. All information electronically filed with the SEC can
be inspected over the Internet at the SEC’s website at www.sec.gov.
As a foreign private issuer, we are exempt under
the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive
officers, directors, and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in
Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic or current reports
and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange
Act.
ENFORCEABILITY OF CIVIL
LIABILITIES
We were incorporated under the laws of the Cayman
Islands as an exempted company with limited liability. We incorporated under the laws of the Cayman Islands because of certain benefits
associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax
system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. The
Cayman Islands, however, has a less developed body of securities laws as compared to the United States and provides significantly less
protection for investors than the United States. Additionally, Cayman Islands companies may not have standing to sue in the Federal courts
of the United States.
Substantially all of our assets are located in
the PRC. In addition, all of our directors and officers reside in China, including our chief executive officer and chairperson of the
board, Shasha Mi, our chief financial officer, Yue Jin, and our directors, Sheng Gong, Kun Zhang, Guangyao Zhu, and Changhong Jiang,
and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors
to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in
United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States
or any state in the United States.
We have appointed Puglisi & Associates
as our agent to receive service of process with respect to any action brought against us in the United States District Court for the
Southern District of New York under the federal securities laws of the United States or of any state in the United States or any action
brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of
New York.
Maples and Calder (Hong Kong) LLP, our counsel
with respect to the laws of the Cayman Islands, and Beijing Dacheng Law Offices, LLP, our counsel with respect to PRC law, have advised
us that there is uncertainty as to whether the courts of the Cayman Islands or the PRC would (i) recognize or enforce judgments
of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities
laws of the United States or any state in the United States or (ii) entertain original actions brought in the Cayman Islands or
the PRC against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.
Maples and Calder (Hong Kong) LLP has further
advised us that there is currently no statutory enforcement or treaty between the United States and the Cayman Islands providing for
enforcement of judgments. A judgment obtained in the United States, however, may be recognized and enforced in the courts of the Cayman
Islands at common law, without any re-examination on the merits of the underlying dispute, by an action commenced on the foreign judgment
debt in the Grand Court of the Cayman Islands, provided such judgment: (i) is given by a foreign court of competent jurisdiction;
(ii) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given; (iii) is final;
(iv) is not in respect of taxes, a fine or a penalty; and (v) was not obtained in a manner and is not of a kind the enforcement
of which is contrary to natural justice or the public policy of the Cayman Islands. Furthermore, it is uncertain that Cayman Islands
courts would enforce: (1) judgments of U.S. courts obtained in actions against us or other persons that are predicated upon the
civil liability provisions of the U.S. federal securities laws; or (2) original actions brought against us or other persons predicated
upon the Securities Act. Maples and Calder (Hong Kong) LLP has informed us that there is uncertainty with regard to Cayman Islands law
relating to whether a judgment obtained from the U.S. courts under civil liability provisions of the securities laws will be determined
by the courts of the Cayman Islands as penal or punitive in nature.
Beijing Dacheng Law Offices, LLP, our counsel
with respect to PRC laws, has further advised us that the recognition and enforcement of foreign judgments are provided for under the
PRC Civil Procedure Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil
Procedure Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions.
There are no treaties or other forms of reciprocity between China and the United States for the mutual recognition and enforcement of
court judgments. Beijing Dacheng Law Offices, LLP has further advised us that under PRC law, PRC courts will not enforce a foreign judgment
against us or our officers and directors if the court decides that such judgment violates the basic principles of PRC law or national
sovereignty, security or public interest, thus making the recognition and enforcement of a U.S. court judgment in China difficult.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
Cayman Islands law does not limit the extent
to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any
such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil
fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association provide that, to the
extent permitted by law, we shall indemnify every director (including any alternate director), secretary, assistant secretary, or other
officer for the time being and from time to time (but not including our auditors) and the personal representatives of the same against:
| (a) | all
actions, proceedings, costs, charges, expenses, losses, damages, or liabilities incurred
or sustained by every director (including any alternate director), secretary, assistant secretary,
or other officer for the time being and from time to time (but not including our auditors)
or the personal representatives of the same in or about the conduct of our business
or affairs (including as a result of any mistake of judgment) or in the execution or discharge
of his/her duties, powers, authorities or discretions; and |
| (b) | without limitation to paragraph (a) above,
all costs, expenses, losses, or liabilities incurred by every director (including any alternate
director), secretary, assistant secretary, or other officer for the time being and from time
to time (but not including our auditors) or the personal representatives of the same in defending
(whether successfully or otherwise) any civil proceedings concerning us or our affairs in
any court whether in the Cayman Islands or elsewhere. |
No such director (including any alternate director),
secretary, assistant secretary, or other officer for the time being and from time to time (but not including our auditors) or the personal
representatives of the same, however, shall be indemnified in respect of any matter arising out of his own dishonesty, willful default
or fraud.
To the extent permitted by law, we may make a
payment, or agree to make a payment, whether by way of advance, loan or otherwise, for any legal costs incurred by an existing secretary,
or any of our officers in respect of any matter identified in above on condition that the secretary, or officer must repay the amount
paid by us to the extent that it is ultimately found not liable to indemnify the secretary or that officer for those legal costs.
Pursuant to the indemnification agreements, the
form of which is filed as Exhibit 10.2 to the Registrant’s Registration Statement on Form F-1 (file No. 333-239800),
initially filed with the Commission on July 10, 2020, we have agreed to indemnify our directors and executive officers against certain
liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our
company.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have
been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is
therefore unenforceable.
Item 9. Exhibits
| * |
To be filed, if applicable,
by amendment or as an exhibit to a report filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended, and incorporated herein by reference. |
| |
|
| ** |
To be filed, if necessary,
on electronic Form 305b2 pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939. |
Item 10 Undertakings
| |
(a) |
The undersigned registrant
hereby undertakes: |
| |
(1) |
To file, during any period
in which offers or sales are being made, a post-effective amendment to this registration statement: |
| |
(i) |
To include any prospectus
required by Section 10(a)(3) of the Securities Act of 1933; |
| |
(ii) |
To reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee” table in the effective registration statement. |
| |
(iii) |
To include any material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change
to such information in the registration statement. |
provided,
however, that paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii) of this section do not apply if the information required
to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and
Exchange Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b).
| |
(2) |
That, for the purpose of
determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof. |
| |
(3) |
To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| |
(4) |
To file a post-effective
amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start
of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of
the Securities Act of 1933 need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective
amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, a
post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of
the Securities Act of 1933 or Rule 3-19 of Regulation S-K if such financial statements and information are contained in periodic
reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration statement. |
| |
|
|
| |
(5) |
That, for the purpose of
determining liability under the Securities Act of 1933 to any purchaser: |
| |
(i) |
Each prospectus filed by
the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement; and |
| |
(ii) |
Each prospectus required
to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract
of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in
a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
| |
(6) |
That, for the purpose of
determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold
to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and
will be considered to offer or sell such securities to such purchaser: |
| |
(i) |
Any preliminary prospectus
or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| |
(ii) |
Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| |
(iii) |
The portion of any other
free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities
provided by or on behalf of the undersigned registrant; and |
| |
(iv) |
Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser. |
| |
(b) |
That, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s
annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof. |
| |
(c) |
Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication
of such issue. |
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3
and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Beijing, China, on August 4, 2023.
| |
Baosheng Media Group Holdings Limited |
| |
|
| |
By: |
/s/
Shasha Mi |
| |
|
Name: |
Shasha Mi |
| |
|
Title: |
Chief Executive Officer and Chairperson of the Board
of Directors |
POWERS OF ATTORNEY
Each person whose signature appears below hereby
constitutes and appoints Shasha Mi and Yue Jin, and each of them, individually, his or her true and lawful attorneys-in-fact and agents,
with full power of substitution and re-substitution, in his or her name, place and stead, in any and all capacities (including his/her
capacity as a director and/or officer of the registrant), to sign any and all amendments and post-effective amendments and supplements
to this registration statement, and including any registration statement for the same offering that is to be effective upon filing pursuant
to Rule 462(b) under the U.S. Securities Act of 1933, as amended, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| Name |
|
Title |
|
Date |
| |
|
|
|
|
| /s/
Shasha Mi |
|
Chief Executive Officer,
Chairman of the Board of Directors |
|
August 4,
2023 |
| Shasha Mi |
|
(Principal Executive Officer) |
|
|
| |
|
|
|
|
| /s/
Yue Jin |
|
Chief Financial Officer |
|
August 4,
2023 |
| Yue Jin |
|
(Principal Accounting and Financial Officer) |
|
|
| |
|
|
|
|
| /s/
Sheng Gong |
|
Director |
|
August 4,
2023 |
| Sheng Gong |
|
|
|
|
| |
|
|
|
|
| /s/
Kun Zhang |
|
Independent Director |
|
August 4,
2023 |
| Kun Zhang |
|
|
|
|
| |
|
|
|
|
| /s/
Guangyao Zhu |
|
Independent Director
|
|
August 4,
2023 |
| Guangyao Zhu |
|
|
|
|
| |
|
|
|
|
| /s/
Changhong Jiang |
|
Independent Director |
|
August 4,
2023 |
| Changhong Jiang |
|
|
|
|
| |
|
|
|
|
SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE
UNITED STATES
Pursuant to the Securities Act of 1933, as amended,
the undersigned, the duly authorized representative in the United States of America of Baosheng Media Group Holdings Limited, has signed
this registration statement thereto in New York, NY on August 4, 2023.
| |
Puglisi & Associates |
| |
|
|
| |
By: |
/s/
Donald J. Puglisi |
| |
|
Name: |
Donald J. Puglisi |
| |
|
Title: |
Managing Director |
Exhibit 4.6
BAOSHENG MEDIA GROUP HOLDINGS LIMITED
(the “Issuer”)
AND
[TRUSTEE]
(the “Trustee”)
INDENTURE
Dated as of [●], 20[●]
Senior Debt Securities
TABLE OF CONTENTS
| |
|
Page |
| |
|
|
| ARTICLE 1 DEFINITIONS |
1 |
| |
|
|
| Section 1.01 |
Definitions of Terms |
1 |
| |
|
|
| ARTICLE 2 ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES |
5 |
| |
|
|
| Section 2.01 |
Designation and Terms of Securities |
5 |
| |
|
|
| Section 2.02 |
Form of Securities and Trustee’s Certificate |
7 |
| |
|
|
| Section 2.03 |
Denominations: Provisions for Payment |
7 |
| |
|
|
| Section 2.04 |
Execution and Authentication |
9 |
| |
|
|
| Section 2.05 |
Registration of Transfer and Exchange |
10 |
| |
|
|
| Section 2.06 |
Temporary Securities |
11 |
| |
|
|
| Section 2.07 |
Mutilated, Destroyed, Lost or Stolen Securities |
11 |
| |
|
|
| Section 2.08 |
Cancellation |
12 |
| |
|
|
| Section 2.09 |
Benefits of Indenture |
12 |
| |
|
|
| Section 2.10 |
Authenticating Agent |
12 |
| |
|
|
| Section 2.11 |
Global Securities |
13 |
| |
|
|
| ARTICLE 3 REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS |
14 |
| |
|
|
| Section 3.01 |
Redemption |
14 |
| |
|
|
| Section 3.02 |
Notice of Redemption |
14 |
| |
|
|
| Section 3.03 |
Payment Upon Redemption |
15 |
| |
|
|
| Section 3.04 |
Sinking Fund |
16 |
| |
|
|
| Section 3.05 |
Satisfaction of Sinking Fund Payments with Securities |
16 |
| |
|
|
| Section 3.06 |
Redemption of Securities for Sinking Fund |
16 |
| |
|
|
| ARTICLE 4 COVENANTS |
17 |
| |
|
|
| Section 4.01 |
Payment of Principal, Premium and Interest |
17 |
TABLE OF
CONTENTS
| |
|
Page |
| |
|
|
| Section 4.02 |
Maintenance of Office or Agency |
17 |
| |
|
|
| Section 4.03 |
Paying Agents |
17 |
| |
|
|
| Section 4.04 |
Appointment to Fill Vacancy in Office of Trustee |
19 |
| |
|
|
| Section 4.05 |
Compliance with Consolidation Provisions |
19 |
| |
|
|
| ARTICLE 5 SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE |
19 |
| |
|
|
| Section 5.01 |
Company to Furnish Trustee Names and Addresses of Securityholders |
19 |
| |
|
|
| Section 5.02 |
Preservation of Information; Communications with Securityholders |
19 |
| |
|
|
| Section 5.03 |
Reports by the Company |
20 |
| |
|
|
| Section 5.04 |
Reports by the Trustee |
20 |
| |
|
|
| ARTICLE 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT |
20 |
| |
|
|
| Section 6.01 |
Events of Default |
20 |
| |
|
|
| Section 6.02 |
Collection of Indebtedness and Suits for Enforcement by Trustee |
22 |
| |
|
|
| Section 6.03 |
Application of Moneys or Property Collected |
24 |
| |
|
|
| Section 6.04 |
Limitation on Suits |
24 |
| |
|
|
| Section 6.05 |
Rights and Remedies Cumulative; Delay or Omission Not Waiver |
25 |
| |
|
|
| Section 6.06 |
Control by Securityholders |
25 |
| |
|
|
| Section 6.07 |
Undertaking to Pay Costs |
26 |
| |
|
|
| ARTICLE 7 CONCERNING THE TRUSTEE |
26 |
| |
|
|
| Section 7.01 |
Certain Duties and Responsibilities of Trustee |
26 |
| |
|
|
| Section 7.02 |
Certain Rights of Trustee |
27 |
| |
|
|
| Section 7.03 |
Trustee Not Responsible for Recitals or Issuance or Securities |
29 |
TABLE OF
CONTENTS
| |
|
Page |
| |
|
|
| Section 7.04 |
May Hold Securities |
29 |
| |
|
|
| Section 7.05 |
Moneys Held in Trust |
29 |
| |
|
|
| Section 7.06 |
Compensation and Reimbursement |
29 |
| |
|
|
| Section 7.07 |
Reliance on Officers’ Certificate |
30 |
| |
|
|
| Section 7.08 |
Disqualification; Conflicting Interests |
30 |
| |
|
|
| Section 7.09 |
Corporate Trustee Required; Eligibility |
30 |
| |
|
|
| Section 7.10 |
Resignation and Removal; Appointment of Successor |
31 |
| |
|
|
| Section 7.11 |
Acceptance of Appointment by Successor |
32 |
| |
|
|
| Section 7.12 |
Merger, Conversion, Consolidation or Succession to Business |
33 |
| |
|
|
| Section 7.13 |
Preferential Collection of Claims Against the Company |
34 |
| |
|
|
| Section 7.14 |
Notice of Default |
34 |
| |
|
|
| ARTICLE 8 CONCERNING THE SECURITYHOLDERS |
34 |
| |
|
|
| Section 8.01 |
Evidence of Action by Securityholders |
34 |
| |
|
|
| Section 8.02 |
Proof of Execution by Securityholders |
35 |
| |
|
|
| Section 8.03 |
Who May be Deemed Owners |
35 |
| |
|
|
| Section 8.04 |
Certain Securities Owned by Company Disregarded |
35 |
| |
|
|
| Section 8.05 |
Actions Binding on Future Securityholders |
36 |
| |
|
|
| ARTICLE 9 SUPPLEMENTAL INDENTURES |
36 |
| |
|
|
| Section 9.01 |
Supplemental Indentures without the Consent of Securityholders |
36 |
| |
|
|
| Section 9.02 |
Supplemental Indentures with Consent of Securityholders |
38 |
| |
|
|
| Section 9.03 |
Effect of Supplemental Indentures |
38 |
| |
|
|
| Section 9.04 |
Securities Affected by Supplemental Indentures |
38 |
| |
|
|
| Section 9.05 |
Execution of Supplemental Indentures |
39 |
TABLE OF
CONTENTS
| |
|
Page |
| |
|
|
| ARTICLE 10 SUCCESSOR ENTITY |
39 |
| |
|
|
| Section 10.01 |
Company May Consolidate, Etc. |
39 |
| |
|
|
| Section 10.02 |
Successor Entity Substituted |
40 |
| |
|
|
| Section 10.03 |
Evidence of Consolidation, Etc. to Trustee |
40 |
| |
|
|
| ARTICLE 11 SATISFACTION AND DISCHARGE |
40 |
| |
|
|
| Section 11.01 |
Satisfaction and Discharge of Indenture |
40 |
| |
|
|
| Section 11.02 |
Discharge of Obligations |
41 |
| |
|
|
| Section 11.03 |
Deposited Moneys to be Held in Trust |
41 |
| |
|
|
| Section 11.04 |
Payment of Moneys Held by Paying Agents |
41 |
| |
|
|
| Section 11.05 |
Repayment to Company |
42 |
| |
|
|
| ARTICLE 12 IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS |
42 |
| |
|
|
| Section 12.01 |
No Recourse |
42 |
| |
|
|
| ARTICLE 13 MISCELLANEOUS PROVISIONS |
43 |
| |
|
|
| Section 13.01 |
Effect on Successors and Assigns |
43 |
| |
|
|
| Section 13.02 |
Actions by Successor |
43 |
| |
|
|
| Section 13.03 |
Surrender of Company Powers |
43 |
| |
|
|
| Section 13.04 |
Notices |
43 |
| |
|
|
| Section 13.05 |
Governing Law |
43 |
| |
|
|
| Section 13.06 |
Treatment of Securities as Debt |
44 |
| |
|
|
| Section 13.07 |
Certificates and Opinions as to Conditions Precedent |
44 |
| |
|
|
| Section 13.08 |
Payments on Business Days |
44 |
| |
|
|
| Section 13.09 |
Conflict with Trust Indenture Act |
44 |
| |
|
|
| Section 13.10 |
Indenture and Securities Solely Corporate Obligations |
45 |
| |
|
|
| Section 13.11 |
Counterparts |
45 |
| |
|
|
| Section 13.12 |
Separability |
45 |
| |
|
|
| Section 13.13 |
Compliance Certificates |
45 |
| (1) |
This Table of Contents does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions. |
INDENTURE
INDENTURE, dated as of [●], 20[●], among Baosheng
Media Group Holdings Limited, a Cayman Islands exempted company with limited liability (the “Company”), and [TRUSTEE], as
trustee (the “Trustee”).
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to provide for the issuance of debt securities (hereinafter referred to as
the “Securities”), in an unlimited aggregate principal amount to be issued from time to time in one or more series as in this
Indenture provided, as registered Securities without coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the
Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase
of the Securities by the holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the holders
of Securities:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions of Terms.
The terms defined in this Section (except as in this Indenture or any
indenture supplemental hereto otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture
and of any indenture supplemental hereto shall have the respective meanings specified in this Section and shall include the plural as
well as the singular. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that
are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein or any indenture supplemental hereto
otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture
Act and in said Securities Act as in force at the date of the execution of this instrument.
“Authenticating Agent” means an authenticating
agent with respect to all or any of the series of Securities appointed by the Trustee pursuant to Section 2.10.
“Bankruptcy Law” means Title 11, U.S. Code,
or any similar federal or state law for the relief of debtors.
“Board of Directors” means the Board of Directors
of the Company or any duly authorized committee of such Board.
“Board Resolution” means a copy of a resolution
certified by any director of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification.
“Business Day” means, with respect to any
series of Securities, any day other than a day on which federal or state banking institutions in the Borough of Manhattan, the City of
New York, or in the city of the Corporate Trust Office of the Trustee, are authorized or obligated by law, executive order or regulation
to close.
“Certificate” means a certificate signed
by any Officer. The Certificate need not comply with the provisions of Section 13.07.
“Company” means Baosheng Media Group Holdings
Limited, a Cayman Islands exempted company with limited liability, and, subject to the provisions of Article Ten, shall also include its
successors and assigns.
“Corporate Trust Office” means the office
of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date
hereof is located at [ ].
“Custodian” means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.
“Default” means any event, act or condition
that with notice or lapse of time, or both, would constitute an Event of Default.
“Depositary” means, with respect to Securities
of any series for which the Company shall determine that such Securities will be issued as a Global Security, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a clearing agency under the Securities and Exchange Act of
1934, as amended (the “Exchange Act”), or other applicable statute or regulation, which, in each case, shall be designated
by the Company pursuant to either Section 2.01 or 2.11.
“Event of Default” means, with respect to
Securities of a particular series, any event specified in Section 6.01, continued for the period of time, if any, therein designated.
“Global Security” means, with respect to
any series of Securities, a Security executed by the Company and delivered by the Trustee to the Depositary or pursuant to the Depositary’s
instruction, all in accordance with the Indenture, which shall be registered in the name of the Depositary or its nominee.
“Governmental Obligations” means securities
that are (a) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which
is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either case, are not callable
or redeemable at the option of the issuer thereof at any time prior to the stated maturity of the Securities, and shall also include a
depositary receipt issued by a bank or trust company as custodian with respect to any such Governmental Obligation or a specific payment
of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder of such depositary
receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental Obligation or the specific
payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.
“herein”, “hereof” and
“hereunder”, and other words of similar import, refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
“Indenture” means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into in accordance
with the terms hereof.
“Interest Payment Date”, when used with respect
to any installment of interest on a Security of a particular series, means the date specified in such Security or in a Board Resolution
or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect
to Securities of that series is due and payable.
“Officer” means, with respect to the Company,
the chairman of the Board of Directors, a chief executive officer, a president, a chief financial officer, chief operating officer, any
executive vice president, any senior vice president, any vice president, the treasurer or any assistant treasurer, the controller or any
assistant controller or the secretary or any assistant secretary.
“Officers’ Certificate” means a certificate
signed by any two Officers. Each such certificate shall include the statements provided for in Section 13.07, if and to the extent required
by the provisions thereof.
“Opinion of Counsel” means an opinion in
writing subject to customary exceptions of legal counsel, who may be an employee of or counsel for the Company, that is delivered to the
Trustee in accordance with the terms hereof. Each such opinion shall include the statements provided for in Section 13.07, if and to the
extent required by the provisions thereof.
“Outstanding”, when used with reference to
Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all Securities of that series theretofore
authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee or any paying
agent, or delivered to the Trustee or any paying agent for cancellation or that have previously been canceled; (b) Securities or portions
thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust by the Company
(if the Company shall act as its own paying agent); provided, however, that if such Securities or portions of such Securities are to be
redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article Three provided, or provision satisfactory
to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of or in substitution for which other Securities
shall have been authenticated and delivered pursuant to the terms of Section 2.07.
“Person” means any individual, corporation,
partnership, joint venture, joint-stock company, limited liability company, association, trust, unincorporated organization, any other
entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Predecessor Security” of any particular
Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and,
for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or stolen
Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.
“Responsible Officer” when used with respect
to the Trustee means the chairman of its board of directors, the chief executive officer, the president, any vice president, the secretary,
the treasurer, any trust officer, any corporate trust officer or any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his or her knowledge of and familiarity with the particular subject.
“Securities” means the debt Securities authenticated
and delivered under this Indenture.
“Securityholder”, “holder of Securities”,
“registered holder”, or other similar term, means the Person or Persons in whose name or names a particular Security shall
be registered on the books of the Company kept for that purpose in accordance with the terms of this Indenture.
“Security Register” and “Security
Registrar” shall have the meanings as set forth in Section 2.05.
“Subsidiary” means, with respect to any Person,
(i) any corporation at least a majority of whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such
Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of whose outstanding partnership or similar interests shall at the time be owned by such
Person, or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited partnership
of which such Person or any of its Subsidiaries is a general partner.
“Trustee” means , and, subject to the provisions
of Article Seven, shall also include its successors and assigns, and, if at any time there is more than one Person acting in such capacity
hereunder, “Trustee” shall mean each such Person. The term “Trustee” as used with respect to a particular series
of the Securities shall mean the trustee with respect to that series.
“Trust Indenture Act” means the Trust Indenture
Act of 1939, as amended.
“Voting Stock”, as applied to stock of any
Person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by reason of the occurrence of a contingency.
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION
AND EXCHANGE OF SECURITIES
Section 2.01 Designation and Terms of Securities.
(a) The aggregate principal amount
of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series
up to the aggregate principal amount of Securities of that series from time to time authorized by or pursuant to a Board Resolution or
pursuant to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of any series, there shall be established
in or pursuant to a Board Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures supplemental
hereto:
(1) the title of the Securities of the
series (which shall distinguish the Securities of that series from all other Securities);
(2) any limit upon the aggregate principal
amount of the Securities of that series that may be authenticated and delivered under this Indenture (except for Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series);
(3) the date or dates on which the principal
of the Securities of the series is payable, any original issue discount that may apply to the Securities of that series upon their issuance,
the principal amount due at maturity, and the place(s) of payment;
(4) the rate or rates at which the Securities
of the series shall bear interest or the manner of calculation of such rate or rates, if any;
(5) the date or dates from which such
interest shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of determination of such Interest
Payment Dates, the place(s) of payment, and the record date for the determination of holders to whom interest is payable on any such Interest
Payment Dates or the manner of determination of such record dates;
(6) the right, if any, to extend the
interest payment periods and the duration of such extension;
(7) the period or periods within which,
the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at
the option of the Company;
(8) the obligation, if any, of the Company
to redeem or purchase Securities of the series pursuant to any sinking fund, mandatory redemption, or analogous provisions (including
payments made in cash in satisfaction of future sinking fund obligations) or at the option of a holder thereof and the period or periods
within which, the price or prices at which, and the terms and conditions upon which, Securities of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;
(9) the form of the Securities of the
series including the form of the Certificate of Authentication for such series;
(10) if other than denominations of one
thousand U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities of the series shall be issuable;
(11) any and all other terms (including
terms, to the extent applicable, relating to any auction or remarketing of the Securities of that series and any security for the obligations
of the Company with respect to such Securities) with respect to such series (which terms shall not be inconsistent with the terms of this
Indenture, as amended by any supplemental indenture) including any terms which may be required by or advisable under United States laws
or regulations or advisable in connection with the marketing of Securities of that series;
(12) whether the Securities are issuable
as a Global Security and, in such case, the terms and the identity of the Depositary for such series;
(13) whether the Securities will be convertible
into or exchangeable for ordinary shares or other securities of the Company or any other Person and, if so, the terms and conditions upon
which such Securities will be so convertible or exchangeable, including the conversion or exchange price, as applicable, or how it will
be calculated and may be adjusted, any mandatory or optional (at the Company’s option or the holders’ option) conversion or
exchange features, and the applicable conversion or exchange period;
(14) if other than the principal amount
thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the
maturity thereof pursuant to Section 6.01;
(15) any additional or different Events
of Default or restrictive covenants (which may include, among other restrictions, restrictions on the Company’s ability or the ability
of the Company’s Subsidiaries to: incur additional indebtedness; issue additional securities; create liens; pay dividends or make
distributions in respect of their capital stock; redeem capital stock; place restrictions on such Subsidiaries placing restrictions on
their ability to pay dividends, make distributions or transfer assets; make investments or other restricted payments; sell or otherwise
dispose of assets; enter into sale-leaseback transactions; engage in transactions with shareholders and affiliates; issue or sell shares
of their Subsidiaries; or effect a consolidation or merger) or financial covenants (which may include, among other financial covenants,
financial covenants that require the Company and its Subsidiaries to maintain specified interest coverage, fixed charge, cash flow-based
or asset-based ratios) provided for with respect to the Securities of the series;
(16) if other than dollars, the coin
or currency in which the Securities of the series are denominated (including, but not limited to, foreign currency);
(17) the terms and conditions, if any,
upon which the Company shall pay amounts in addition to the stated interest, premium, if any and principal amounts of the Securities of
the series to any Securityholder that is not a “United States person” for federal tax purposes; and
(18) any restrictions on transfer, sale
or assignment of the Securities of the series.
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to any such Board Resolution or in any indentures supplemental
hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by the secretary or an assistant
secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate of the Company setting
forth the terms of the series.
Securities of any particular series may be issued at various times,
with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different
methods by which rates of interest may be determined, with different dates on which such interest may be payable and with different redemption
dates.
Section 2.02 Form of Securities and Trustee’s Certificate.
The Securities of any series and the Trustee’s certificate of
authentication to be borne by such Securities shall be substantially of the tenor and purport as set forth in one or more indentures supplemental
hereto or as provided in a Board Resolution, and set forth in an Officers’ Certificate, and they may have such letters, numbers
or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange on which Securities of that
series may be listed, or to conform to usage.
Section 2.03 Denominations: Provisions for Payment.
The Securities shall be issuable as registered Securities and in the
denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(a)(10). The Securities of
a particular series shall bear interest payable on the dates and at the rate specified with respect to that series. Subject to Section
2.01(a)(16), the principal of and the interest on the Securities of any series, as well as any premium thereon in case of redemption thereof
prior to maturity, shall be payable in the coin or currency of the United States of America that at the time is legal tender for public
and private debt, at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, the City and State of
New York. Each Security shall be dated the date of its authentication. Interest on the Securities shall be computed on the basis of a
360-day year composed of twelve 30-day months.
The interest installment on any Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date for Securities of that series shall be paid to the Person in whose name said Security
(or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment.
In the event that any Security of a particular series or portion thereof is called for redemption and the redemption date is subsequent
to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Security
will be paid upon presentation and surrender of such Security as provided in Section 3.03.
Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called “Defaulted Interest”)
shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder;
and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any
Defaulted Interest on Securities to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered
at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner:
the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Security and the
date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted
Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record
date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the
special record date therefor to be mailed, first class postage prepaid, to each Securityholder at his or her address as it appears in
the Security Register (as hereinafter defined), not less than 10 days prior to such special record date. Notice of the proposed payment
of such Defaulted Interest and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid
to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered on such special record date.
(2) The Company may make payment of any
Defaulted Interest on any Securities in any other lawful manner not inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or more indentures
supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term “regular record
date” as used in this Section with respect to a series of Securities and any Interest Payment Date for such series shall mean either
the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant
to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the first day of the month in which
an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the
fifteenth day of a month, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Security
of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series shall carry
the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security.
Section 2.04 Execution and Authentication.
The Securities shall be signed on behalf of the Company by one of its
Directors. Signatures may be in the form of a manual or facsimile signature.
The Company may use the facsimile signature of any Person who shall
have been an Officer, notwithstanding the fact that at the time the Securities shall be authenticated and delivered or disposed of such
Person shall have ceased to be such an officer of the Company. The Securities may contain such notations, legends or endorsements required
by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication by the Trustee.
A Security shall not be valid until authenticated manually by an authorized
signatory of the Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the Security so authenticated
has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. At any time and
from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a written order of the Company for the authentication and delivery of such Securities,
signed by an Officer, and the Trustee in accordance with such written order shall authenticate and deliver such Securities.
In authenticating such Securities and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with
the provisions of this Indenture.
The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities
and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.
Section 2.05 Registration of Transfer and Exchange.
(a) Securities of any series may be
exchanged upon presentation thereof at the office or agency of the Company designated for such purpose in the Borough of Manhattan, the
City and State of New York, for other Securities of such series of authorized denominations, and for a like aggregate principal amount,
upon payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, all as provided in this Section. In
respect of any Securities so surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency
shall deliver in exchange therefor the Security or Securities of the same series that the Securityholder making the exchange shall be
entitled to receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause
to be kept, at its office or agency designated for such purpose in the Borough of Manhattan, the City and State of New York, or such other
location designated by the Company, a register or registers (herein referred to as the “Security Register”) in which, subject
to such reasonable regulations as it may prescribe, the Company shall register the Securities and the transfers of Securities as in this
Article provided and which at all reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of registering
Securities and transfer of Securities as herein provided shall be appointed as authorized by Board Resolution (the “Security Registrar”).
Upon surrender for transfer of any Security at the office or agency
of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate and such office or agency shall
deliver in the name of the transferee or transferees a new Security or Securities of the same series as the Security presented for a like
aggregate principal amount.
All Securities presented or surrendered for exchange or registration
of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar, duly executed by the registered
holder or by such holder’s duly authorized attorney in writing.
(c) Except as provided pursuant to
Section 2.01 pursuant to a Board Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures
supplemental to this Indenture, no service charge shall be made for any exchange or registration of transfer of Securities, or issue of
new Securities in case of partial redemption of any series, but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge in relation thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving
any transfer.
(d) The Company shall not be required
(i) to issue, exchange or register the transfer of any Securities during a period beginning at the opening of business 15 days before
the day of the mailing of a notice of redemption of less than all the Outstanding Securities of the same series and ending at the close
of business on the day of such mailing, nor (ii) to register the transfer of or exchange any Securities of any series or portions thereof
called for redemption, other than the unredeemed portion of any such Securities being redeemed in part. The provisions of this Section
2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.
Section 2.06 Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or typewritten) of any
authorized denomination. Such temporary Securities shall be substantially in the form of the definitive Securities in lieu of which they
are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined
by the Company. Every temporary Security of any series shall be executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series. Without unnecessary
delay the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of
such series may be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated
for the purpose in the Borough of Manhattan, the City and State of New York, and the Trustee shall authenticate and such office or agency
shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless
the Company advises the Trustee to the effect that definitive Securities need not be executed and furnished until further notice from
the Company. Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under this Indenture as
definitive Securities of such series authenticated and delivered hereunder.
Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities.
In case any temporary or definitive Security shall become mutilated
or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s request
the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed,
lost or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish
to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s Security and
of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the written request or
authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith.
In case any Security that has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as they may require to save them harmless, and, in case of destruction, loss or theft,
evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.
Every replacement Security issued pursuant to the provisions of this
Section shall constitute an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost or stolen Security
shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of the same series duly issued hereunder. All Securities shall be held and owned upon the express condition
that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities,
and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.
Section 2.08 Cancellation.
All Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation,
or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required
or permitted by any of the provisions of this Indenture. In the absence of such request the Trustee may dispose of canceled Securities
in accordance with its standard procedures and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire
any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are delivered to the Trustee for cancellation.
Section 2.09 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give or be construed to give to any Person, other than the parties hereto and the holders of the Securities any legal or equitable
right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all such
covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Securities.
Section 2.10 Authenticating Agent.
So long as any of the Securities of any series remain Outstanding there
may be an Authenticating Agent for any or all such series of Securities which the Trustee shall have the right to appoint. Said Authenticating
Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, transfer or
partial redemption thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder. All references in this Indenture to the authentication of Securities
by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be
acceptable to the Company and shall be a corporation that has a combined capital and surplus, as most recently reported or determined
by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business,
and that is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by federal or state
authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall) terminate the agency
of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company. Upon resignation,
termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent
acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with
all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto.
Section 2.11 Global Securities.
(a) If the Company shall establish
pursuant to Section 2.01 that the Securities of a particular series are to be issued as a Global Security, then the Company shall execute
and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that (i) shall represent, and shall
be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such series, (ii) shall be
registered in the name of the Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary’s instruction and (iv) shall bear a legend substantially to the following effect: “Except as otherwise provided
in Section 2.11 of the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depositary
or to a successor Depositary or to a nominee of such successor Depositary.”
(b) Notwithstanding the provisions
of Section 2.05, the Global Security of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05,
only to another nominee of the Depositary for such series, or to a successor Depositary for such series selected or approved by the Company
or to a nominee of such successor Depositary.
(c) If at any time the Depositary for
a series of the Securities notifies the Company that it is unwilling or unable to continue as Depositary for such series or if at any
time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable statute
or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case may be, or if an Event of Default has occurred and is continuing and the Company
has received a request from the Depositary, this Section 2.11 shall no longer be applicable to the Securities of such series and the Company
will execute, and subject to Section 2.04, the Trustee will authenticate and deliver the Securities of such series in definitive registered
form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security
of such series in exchange for such Global Security. In addition, the Company may at any time determine that the Securities of any series
shall no longer be represented by a Global Security and that the provisions of this Section 2.11 shall no longer apply to the Securities
of such series. In such event the Company will execute and, subject to Section 2.04, the Trustee, upon receipt of an Officers’ Certificate
evidencing such determination by the Company, will authenticate and deliver the Securities of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security
of such series in exchange for such Global Security. Upon the exchange of the Global Security for such Securities in definitive registered
form without coupons, in authorized denominations, the Global Security shall be canceled by the Trustee. Such Securities in definitive
registered form issued in exchange for the Global Security pursuant to this Section 2.11(c) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct
the Trustee. The Trustee shall deliver such Securities to the Depositary for delivery to the Persons in whose names such Securities are
so registered.
ARTICLE 3
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
Section 3.01 Redemption.
The Company may redeem the Securities of any series issued hereunder
on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof.
Section 3.02 Notice of Redemption.
(a) In case the Company shall desire
to exercise such right to redeem all or, as the case may be, a portion of the Securities of any series in accordance with any right the
Company reserved for itself to do so pursuant to Section 2.01 hereof, the Company shall, or shall cause the Trustee to, give notice of
such redemption to holders of the Securities of such series to be redeemed by mailing, first class postage prepaid, a notice of such redemption
not less than 30 days and not more than 90 days before the date fixed for redemption of that series to such holders at their last addresses
as they shall appear upon the Security Register, unless a shorter period is specified in the Securities to be redeemed. Any notice that
is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives
the notice. In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption in whole
or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Securities of
such series or any other series. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’
Certificate evidencing compliance with any such restriction.
Each such notice of redemption shall specify the date fixed for redemption
and the redemption price at which Securities of that series are to be redeemed, and shall state that payment of the redemption price of
such Securities to be redeemed will be made at the office or agency of the Company in the Borough of Manhattan, the City and State of
New York, upon presentation and surrender of such Securities, that interest accrued to the date fixed for redemption will be paid as specified
in said notice, that from and after said date interest will cease to accrue and that the redemption is for a sinking fund, if such is
the case. If less than all the Securities of a series are to be redeemed, the notice to the holders of Securities of that series to be
redeemed in part shall specify the particular Securities to be so redeemed.
In case any Security is to be redeemed in part only, the notice that
relates to such Security shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the
redemption date, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed
portion thereof will be issued.
(b) If less than all the Securities
of a series are to be redeemed, the Company shall give the Trustee at least 45 days’ notice (unless a shorter notice shall be satisfactory
to the Trustee) in advance of the date fixed for redemption as to the aggregate principal amount of Securities of the series to be redeemed,
and thereupon the Trustee shall select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and that
may provide for the selection of a portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof)
of the principal amount of such Securities of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly
notify the Company in writing of the numbers of the Securities to be redeemed, in whole or in part. The Company may, if and whenever it
shall so elect, by delivery of instructions signed on its behalf by an Officer, instruct the Trustee or any paying agent to call all or
any part of the Securities of a particular series for redemption and to give notice of redemption in the manner set forth in this Section,
such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which
notice of redemption is to be given by the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or
permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records,
or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be
required under the provisions of this Section.
Section 3.03 Payment Upon Redemption.
(a) If the giving of notice of redemption
shall have been completed as above provided, the Securities or portions of Securities of the series to be redeemed specified in such notice
shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest
accrued to the date fixed for redemption and interest on such Securities or portions of Securities shall cease to accrue on and after
the date fixed for redemption, unless the Company shall default in the payment of such redemption price and accrued interest with respect
to any such Security or portion thereof. On presentation and surrender of such Securities on or after the date fixed for redemption at
the place of payment specified in the notice, said Securities shall be paid and redeemed at the applicable redemption price for such series,
together with interest accrued thereon to the date fixed for redemption (but if the date fixed for redemption is an interest payment date,
the interest installment payable on such date shall be payable to the registered holder at the close of business on the applicable record
date pursuant to Section 2.03).
(b) Upon presentation of any Security
of such series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the office or agency
where the Security is presented shall deliver to the holder thereof, at the expense of the Company, a new Security of the same series
of authorized denominations in principal amount equal to the unredeemed portion of the Security so presented.
Section 3.04 Sinking Fund.
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable
to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01 for Securities
of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”.
If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided
in Section 3.05. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms
of Securities of such series.
Section 3.05 Satisfaction of Sinking Fund Payments with Securities.
The Company (i) may deliver Outstanding Securities of a series and
(ii) may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms
of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in
each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be
made pursuant to the terms of such Securities as provided for by the terms of such series, provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified
in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 3.06 Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities (unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the Trustee an Officers’
Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of the series, the portion
thereof, if any, that is to be satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the basis
for such credit and will, together with such Officers’ Certificate, deliver to the Trustee any Securities to be so delivered. Not
less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at
the expense of the Company in the manner provided in Section 3.02. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Section 3.03.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Principal, Premium and Interest.
The Company will duly and punctually pay or cause to be paid the principal
of (and premium, if any) and interest on the Securities of that series at the time and place and in the manner provided herein and established
with respect to such Securities.
Section 4.02 Maintenance of Office or Agency.
So long as any series of the Securities remain Outstanding, the Company
agrees to maintain an office or agency in the Borough of Manhattan, the City and State of New York, with respect to each such series and
at such other location or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series may be
presented for payment, (ii) Securities of that series may be presented as herein above authorized for registration of transfer and exchange,
and (iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be given or served,
such designation to continue with respect to such office or agency until the Company shall, by written notice signed by any officer authorized
to sign an Officers’ Certificate and delivered to the Trustee, designate some other office or agency for such purposes or any of
them. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations, notices and demands. The Company initially appoints the Corporate
Trust Office of the Trustee located in the Borough of Manhattan, the City of New York as its paying agent with respect to the Securities.
Section 4.03 Paying Agents.
(a) If the Company shall appoint one
or more paying agents for all or any series of the Securities, other than the Trustee, the Company will cause each such paying agent to
execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section:
(1) that it will hold all sums held by
it as such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series (whether such
sums have been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons entitled
thereto;
(2) that it will give the Trustee notice
of any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of (and premium, if any)
or interest on the Securities of that series when the same shall be due and payable;
(3) that it will, at any time during
the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such paying agent; and
(4) that it will perform all other duties
of paying agent as set forth in this Indenture.
(b) If the Company shall act as its
own paying agent with respect to any series of the Securities, it will on or before each due date of the principal of (and premium, if
any) or interest on Securities of that series, set aside, segregate and hold in trust for the benefit of the Persons entitled thereto
a sum sufficient to pay such principal (and premium, if any) or interest so becoming due on Securities of that series until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or any
failure (by it or any other obligor on such Securities) to take such action. Whenever the Company shall have one or more paying agents
for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities
of that series, deposit with the paying agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such paying agent
is the Trustee) the Company will promptly notify the Trustee of this action or failure so to act.
(c) Notwithstanding anything in this
Section to the contrary, (i) the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 11.05,
and (ii) the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose,
pay, or direct any paying agent to pay, to the Trustee all sums held in trust by the Company or such paying agent, such sums to be held
by the Trustee upon the same terms and conditions as those upon which such sums were held by the Company or such paying agent; and, upon
such payment by the Company or any paying agent to the Trustee, the Company or such paying agent shall be released from all further liability
with respect to such money.
Section 4.04 Appointment to Fill Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder.
Section 4.05 Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remain Outstanding,
consolidate with or merge into any other Person, in either case where the Company is not the survivor of such transaction, or sell or
convey all or substantially all of its property to any other Person unless the provisions of Article Ten hereof are complied with.
ARTICLE 5
SECURITYHOLDERS’ LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 5.01 Company to Furnish Trustee Names and Addresses of Securityholders.
The Company will furnish or cause to be furnished to the Trustee (a)
within 15 days after each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require,
of the names and addresses of the holders of each series of Securities as of such regular record date, provided that the Company shall
not be obligated to furnish or cause to furnish such list at any time that the list shall not differ in any respect from the most recent
list furnished to the Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30 days after the
receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such
list is furnished; provided, however, that, in either case, no such list need be furnished for any series for which the Trustee shall
be the Security Registrar.
Section 5.02 Preservation of Information; Communications with Securityholders.
(a) The Trustee shall preserve, in
as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in
the most recent list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of Securities received by
the Trustee in its capacity as Security Registrar (if acting in such capacity).
(b) The Trustee may destroy any list
furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.
(c) Securityholders may communicate
as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture
or under the Securities, and, in connection with any such communications, the Trustee shall satisfy its obligations under Section 312(b)
of the Trust Indenture Act in accordance with the provisions of Section 312(b) of the Trust Indenture Act.
Section 5.03 Reports by the Company.
The Company covenants and agrees to provide a copy to the Trustee,
after the Company files the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the Securities and Exchange Commission may from time to time
by rules and regulations prescribe) that the Company files with the Securities and Exchange Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; provided, however, the Company shall not be required to deliver to the Trustee any materials for which the
Company has sought and received confidential treatment by the SEC. The Company shall also comply with the requirements of Section 314
of the Trust Indenture Act, but only to the extent then applicable to the Company.
Section 5.04 Reports by the Trustee.
(a) On or before July 1 in each year
in which any of the Securities are Outstanding, the Trustee shall transmit by mail, first class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Security Register, a brief report dated as of the preceding May 1, if and to the extent required
under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section
313(b) and 313(c) of the Trust Indenture Act.
(c) A copy of each such report shall,
at the time of such transmission to Securityholders, be filed by the Trustee with the Company, with each securities exchange upon which
any Securities are listed (if so listed) and also with the Securities and Exchange Commission. The Company agrees to notify the Trustee
when any Securities become listed on any securities exchange.
ARTICLE 6
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
Section 6.01 Events of Default.
(a) Whenever used herein with respect
to Securities of a particular series, “Event of Default” means any one or more of the following events that has occurred and
is continuing:
(1) the Company defaults in the payment
of any installment of interest upon any of the Securities of that series, as and when the same shall become due and payable, and such
default continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by the Company in accordance
with the terms of any indenture supplemental hereto shall not constitute a default in the payment of interest for this purpose;
(2) the Company defaults in the payment
of the principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable whether
at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with
respect to that series; provided, however, that a valid extension of the maturity of such Securities in accordance with the terms of any
indenture supplemental hereto shall not constitute a default in the payment of principal or premium, if any;
(3) the Company fails to observe or perform
any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established with respect
to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly included in this
Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days after the date on
which written notice of such failure, requiring the same to be remedied and stating that such notice is a “Notice of Default”
hereunder, shall have been given to the Company by the Trustee, by registered or certified mail, or to the Company and the Trustee by
the holders of at least 25% in principal amount of the Securities of that series at the time Outstanding;
(4) the Company pursuant to or within
the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary
case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property or (iv) makes a general assignment
for the benefit of its creditors; or
(5) a court of competent jurisdiction
enters an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian
of the Company for all or substantially all of its property or (iii) orders the liquidation of the Company, and the order or decree remains
unstayed and in effect for 90 days.
(b) In each and every such case (other
than an Event of Default specified in clause (4) or clause (5) above), unless the principal of all the Securities of that series shall
have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Securities
of that series then Outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by such Securityholders),
may declare the principal of (and premium, if any, on) and accrued and unpaid interest on all the Securities of that series to be due
and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable. If an Event of
Default specified in clause (4) or clause (5) above occurs, the principal of and accrued and unpaid interest on all the Securities of
that series shall automatically be immediately due and payable without any declaration or other act on the part of the Trustee or the
holders of the Securities.
(c) At any time after the principal
of (and premium, if any, on) and accrued and unpaid interest on the Securities of that series shall have been so declared due and payable,
and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the holders
of a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited with the Trustee
a sum sufficient to pay all matured installments of interest upon all the Securities of that series and the principal of (and premium,
if any, on) any and all Securities of that series that shall have become due otherwise than by acceleration (with interest upon such principal
and premium, if any, and, to the extent that such payment is enforceable under applicable law, upon overdue installments of interest,
at the rate per annum expressed in the Securities of that series to the date of such payment or deposit) and the amount payable to the
Trustee under Section 7.06, and (ii) any and all Events of Default under the Indenture with respect to such series, other than the nonpayment
of principal on (and premium, if any, on) and accrued and unpaid interest on Securities of that series that shall not have become due
by their terms, shall have been remedied or waived as provided in Section 6.06.
No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.
(d) In case the Trustee shall have
proceeded to enforce any right with respect to Securities of that series under this Indenture and such proceedings shall have been discontinued
or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then
and in every such case, subject to any determination in such proceedings, the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though
no such proceedings had been taken.
Section 6.02 Collection of Indebtedness and Suits for Enforcement
by Trustee.
(a) The Company covenants that (i)
in case it shall default in the payment of any installment of interest on any of the Securities of a series, or in any payment required
by any sinking or analogous fund established with respect to that series as and when the same shall have become due and payable, and such
default shall have continued for a period of 90 Business Days, or (ii) in case it shall default in the payment of the principal of (or
premium, if any, on) any of the Securities of a series when the same shall have become due and payable, whether upon maturity of the Securities
of a series or upon redemption or upon declaration or otherwise then, upon demand of the Trustee, the Company will pay to the Trustee,
for the benefit of the holders of the Securities of that series, the whole amount that then shall have been become due and payable on
all such Securities for principal (and premium, if any) or interest, or both, as the case may be, with interest upon the overdue principal
(and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments
of interest at the rate per annum expressed in the Securities of that series; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under Section 7.06.
(b) If the Company shall fail to pay
such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered
to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such
action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor
upon the Securities of that series and collect the moneys adjudged or decreed to be payable in the manner provided by law or equity out
of the property of the Company or other obligor upon the Securities of that series, wherever situated.
(c) In case of any receivership, insolvency,
liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings affecting the Company, or its
creditors or property, the Trustee shall have power to intervene in such proceedings and take any action therein that may be permitted
by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other papers and documents
as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Securities of such series allowed for
the entire amount due and payable by the Company under the Indenture at the date of institution of such proceedings and for any additional
amount that may become due and payable by the Company after such date, and to collect and receive any moneys or other property payable
or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee under Section 7.06;
and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders of Securities of such
series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly
to such Securityholders, to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting
claims under this Indenture, or under any of the terms established with respect to Securities of that series, may be enforced by the Trustee
without the possession of any of such Securities, or the production thereof at any trial or other proceeding relative thereto, and any
such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable benefit of the holders
of the Securities of such series.
In case of an Event of Default hereunder, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in the Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities of that series or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim
of any Securityholder in any such proceeding.
Section 6.03 Application of Moneys or Property Collected.
Any moneys or property collected by the Trustee pursuant to this Article
with respect to a particular series of Securities shall be applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such moneys or property on account of principal (or premium, if any) or interest, upon presentation of
the Securities of that series, and notation thereon of the payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of reasonable costs and expenses of collection
and of all amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of the amounts then due and unpaid upon Securities
of such series for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium,
if any) and interest, respectively; and
THIRD: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto as requested by the Company.
Section 6.04 Limitation on Suits.
No holder of any Security of any series shall have any right by virtue
or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with
respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (i) such holder previously
shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to the Securities of
such series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less than 25% in aggregate principal amount
of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding
in its own name as Trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or thereby; (iv) the Trustee for 90 days after its receipt
of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding and (v) during such
90 day period, the holders of a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent
with the request.
Notwithstanding anything contained herein to the contrary or any other
provisions of this Indenture, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and
interest on such Security, as therein provided, on or after the respective due dates expressed in such Security (or in the case of redemption,
on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security of such series with every other such taker and holder and the Trustee,
that no one or more holders of Securities of such series shall have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities, or to obtain or
seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of Securities of such series. For the protection and enforcement
of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either
at law or in equity.
Section 6.05 Rights and Remedies Cumulative; Delay or Omission Not
Waiver.
(a) Except as otherwise provided in
Section 2.07, all powers and remedies given by this Article to the Trustee or to the Securityholders shall, to the extent permitted by
law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Securities,
by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture
or otherwise established with respect to such Securities.
(b) No delay or omission of the Trustee
or of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee or the Securityholders
may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.
Section 6.06 Control by Securityholders.
The holders of a majority in aggregate principal amount of the Securities
of any series at the time Outstanding, determined in accordance with Section 8.04, shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee
with respect to such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture.
Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in
good faith shall, by a Responsible Officer or officers of the Trustee, determine that the proceeding so directed, subject to the Trustee’s
duties under the Trust Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to the Securityholders
not involved in the proceeding. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding
affected thereby, determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities of such series waive
any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to such
series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the Securities
of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless such default
has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited with
the Trustee (in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be deemed to be cured for all
purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent
thereon.
Section 6.07 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Securities
by such holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it
as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not
apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more than
10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of (or premium, if any) or interest on any Security of such series, on or after the respective
due dates expressed in such Security or established pursuant to this Indenture.
ARTICLE 7
CONCERNING THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities of Trustee.
(a) The Trustee, prior to the occurrence
of an Event of Default with respect to the Securities of a series and after the curing of all Events of Default with respect to the Securities
of that series that may have occurred, shall undertake to perform with respect to the Securities of such series such duties and only such
duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this Indenture against the Trustee.
In case an Event of Default with respect to the Securities of a series has occurred (that has not been cured or waived), the Trustee shall
exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
(b) No provision of this Indenture
shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event
of Default with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect to that
series that may have occurred:
(A) the duties and obligations of the
Trustee shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee;
and
(B) in the absence of bad faith on
the part of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the
requirement of this Indenture;
(ii) the Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less
than a majority in principal amount of the Securities of any series at the time Outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this
Indenture with respect to the Securities of that series; and
(iv) None of the provisions contained
in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or powers if there is reasonable ground for believing that the repayment
of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk is
not reasonably assured to it.
Section 7.02 Certain Rights of Trustee.
Except as otherwise provided in Section 7.01:
(a) The Trustee may rely conclusively
and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, security or other paper or document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) Any request, direction, order or
demand of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name of the
Company by any authorized officer of the Company (unless other evidence in respect thereof is specifically prescribed herein);
(c) The Trustee may consult with counsel
and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders
pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained herein shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the Securities (that has not been
cured or waived), to exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture,
and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
(e) The Trustee shall not be liable
for any action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Indenture;
(f) The Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, security, or other papers or documents, unless requested in writing so to do by the holders of
not less than a majority in principal amount of the Outstanding Securities of the particular series affected thereby (determined as provided
in Section 8.04); provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee
by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses
or liabilities as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Company or, if paid
by the Trustee, shall be repaid by the Company upon demand; and
(g) The Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall
not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.
In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (1) any Event of Default occurring pursuant to Sections 6.01(a)(1), 6.01(a)(2) and 4.01 hereof or (2)
any Default or Event of Default of which the Trustee shall have received written notification in the manner set forth in this Indenture
or a Responsible Officer of the Trustee shall have obtained actual knowledge. Delivery of reports, information and documents to the Trustee
under Section 5.03 is for informational purposes only and the information and the Trustee’s receipt of the foregoing shall not constitute
constructive notice of any information contained therein, or determinable from information contained therein including the Company’s
compliance with any of their covenants thereunder (as to which the Trustee is entitled to rely conclusively on an Officers’ Certificate).
Section 7.03 Trustee Not Responsible for Recitals or Issuance or
Securities.
(a) The recitals contained herein and
in the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the
same.
(b) The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities.
(c) The Trustee shall not be accountable
for the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the use or application
of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01, or
for the use or application of any moneys received by any paying agent other than the Trustee.
Section 7.04 May Hold Securities.
The Trustee or any paying agent or Security Registrar, in its individual
or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying
agent or Security Registrar.
Section 7.05 Moneys Held in Trust.
Subject to the provisions of Section 11.05, all moneys received by
the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need
not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any moneys
received by it hereunder except such as it may agree with the Company to pay thereon.
Section 7.06 Compensation and Reimbursement.
(a) The Company covenants and agrees
to pay to the Trustee, and the Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust) as the Company and the Trustee may from time to time agree in writing,
for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons
not regularly in its employ), except any such expense, disbursement or advance as may arise from its negligence or bad faith and except
as the Company and Trustee may from time to time agree in writing. The Company also covenants to indemnify the Trustee (and its officers,
agents, directors and employees) for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the
reasonable costs and expenses of defending itself against any claim of liability in the premises.
(b) The obligations of the Company
under this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for reasonable expenses, disbursements
and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that
of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Securities.
Section 7.07 Reliance on Officers’ Certificate.
Except as otherwise provided in Section 7.01, whenever in the administration
of the provisions of this Indenture the Trustee shall deem it reasonably necessary or desirable that a matter be proved or established
prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers’ Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith
on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it under the
provisions of this Indenture upon the faith thereof.
Section 7.08 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any “conflicting interest”
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
Section 7.09 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee with respect to the Securities
issued hereunder which shall at all times be a corporation organized and doing business under the laws of the United States of America
or any state or territory thereof or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the
Securities and Exchange Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus
of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial, or District
of Columbia authority.
If such corporation or other Person publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such corporation or other Person shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee. In case at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in
Section 7.10.
Section 7.10 Resignation and Removal; Appointment of Successor.
(a) The Trustee or any successor hereafter
appointed may at any time resign with respect to the Securities of one or more series by giving written notice thereof to the Company
and by transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of such series, as their names
and addresses appear upon the Security Register.
Upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of the Board
of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor
trustee shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Securities
of such series, or any Securityholder of that series who has been a bona fide holder of a Security or Securities for at least six months
may on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any one of
the following shall occur:
(i) the Trustee shall fail to comply
with the provisions of Section 7.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder
of a Security or Securities for at least six months; or
(ii) the Trustee shall cease to be eligible
in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such
Securityholder; or
(iii) the Trustee shall become incapable
of acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or
of its property shall be appointed or consented to, or any public officer shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, the Company may remove the Trustee
with respect to all Securities and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or any Securityholder
who has been a bona fide holder of a Security or Securities for at least six months may, on behalf of that holder and all others similarly
situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate
principal amount of the Securities of any series at the time Outstanding may at any time remove the Trustee with respect to such series
by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with the consent of the Company.
(d) Any resignation or removal of the
Trustee and appointment of a successor trustee with respect to the Securities of a series pursuant to any of the provisions of this Section
shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed
pursuant to this Section may be appointed with respect to the Securities of one or more series or all of such series, and at any time
there shall be only one Trustee with respect to the Securities of any particular series.
Section 7.11 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder
of a successor trustee with respect to all Securities, every such successor trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor trustee all the rights, powers,
and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder
of a successor trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each
successor trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein
each successor trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the appointment of such successor trustee relates, (ii) shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (iii) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible
for any act or failure to act on the part of any other Trustee hereunder; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall
with respect to the Securities of that or those series to which the appointment of such successor trustee relates have no further responsibility
for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture,
and each such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee
relates; but, on request of the Company or any successor trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment of such successor trustee relates.
(c) Upon request of any such successor
trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor trustee
all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor trustee shall accept
its appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article.
(e) Upon acceptance of appointment
by a successor trustee as provided in this Section, the Company shall transmit notice of the succession of such trustee hereunder by mail,
first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register. If the Company fails
to transmit such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such
notice to be transmitted at the expense of the Company.
Section 7.12 Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall
be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09,
without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated
with the same effect as if such successor Trustee had itself authenticated such Securities.
Section 7.13 Preferential Collection of Claims Against the Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.
Section 7.14 Notice of Default
If any Default or any Event of Default occurs and is continuing and
if such Default or Event of Default is known to a Responsible Officer of the Trustee, the Trustee shall mail to each Securityholder in
the manner and to the extent provided in Section 313(c) of the Trust Indenture Act notice of the Default or Event of Default within 45
days after it occurs and becomes known to the Trustee, unless such Default or Event of Default has been cured; provided, however,
that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security, the Trustee
shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding
of such notice is in the interest of the Securityholders.
ARTICLE 8
CONCERNING THE SECURITYHOLDERS
Section 8.01 Evidence of Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a majority
or specified percentage in aggregate principal amount of the Securities of a particular series may take any action (including the making
of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of
taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such holders of Securities of that series in person or by agent or
proxy appointed in writing.
If the Company shall solicit from the Securityholders of any series
any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, as evidenced by
an Officers’ Certificate, fix in advance a record date for such series for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to
be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of Outstanding Securities of that
series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action,
and for that purpose the Outstanding Securities of that series shall be computed as of the record date; provided, however, that no such
authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the record date.
Section 8.02 Proof of Execution by Securityholders.
Subject to the provisions of Section 7.01, proof of the execution of
any instrument by a Securityholder (such proof will not require notarization) or his agent or proxy and proof of the holding by any Person
of any of the Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution
by any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Securities shall
be proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof.
The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.
Section 8.03 Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of any Security,
the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name such Security shall
be registered upon the books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to Section 2.03) interest on such Security and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the
contrary.
Section 8.04 Certain Securities Owned by Company Disregarded.
In determining whether the holders of the requisite aggregate principal
amount of Securities of a particular series have concurred in any direction, consent or waiver under this Indenture, the Securities of
that series that are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly
controlling or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only Securities of such series that the Trustee actually knows
are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may be regarded as Outstanding for
the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right so to act with
respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee.
Section 8.05 Actions Binding on Future Securityholders.
At any time prior to (but not after) the evidencing to the Trustee,
as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal amount of
the Securities of a particular series specified in this Indenture in connection with such action, any holder of a Security of that series
that is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing written
notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security. Except
as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof or in place
thereof, irrespective of whether or not any notation in regard thereto is made upon such Security. Any action taken by the holders of
the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in
connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Securities of that
series.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without the Consent of Securityholders.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for
one or more of the following purposes:
(a) to cure any ambiguity, defect,
or inconsistency herein or in the Securities of any series;
(b) to comply with Article Ten;
(c) to provide for uncertificated Securities
in addition to or in place of certificated Securities and to make all appropriate changes for such purpose;
(d) to add to the covenants, restrictions,
conditions or provisions relating to the Company for the benefit of the holders of all or any series of Securities (and if such covenants,
restrictions, conditions or provisions are to be for the benefit of less than all series of Securities, stating that such covenants, restrictions,
conditions or provisions are expressly being included solely for the benefit of such series), to make the occurrence, or the occurrence
and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default, or to
surrender any right or power herein conferred upon the Company;
(e) to add to, delete from, or revise
the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication, and delivery of Securities,
as herein set forth;
(f) to make any change that does not
adversely affect the rights of any Securityholder in any material respect;
(g) to provide for the issuance of
and establish the form and terms and conditions of the Securities of any series as provided in Section 2.01, to establish the form of
any certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add to the rights
of the holders of any series of Securities;
(h) to evidence and provide for the
acceptance of appointment hereunder by a successor trustee; or
(i) to comply with any requirements
of the Securities and Exchange Commission or any successor in connection with the qualification of this Indenture under the Trust Indenture
Act.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, and to make any further appropriate agreements and stipulations that may be therein contained, but
the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed by the Company and the Trustee without the consent of the holders of any of the Securities at the time Outstanding, notwithstanding
any of the provisions of Section 9.02.
Section 9.02 Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Section 8.01) of the holders
of not less than a majority in aggregate principal amount of the Securities of each series affected by such supplemental indenture or
indentures at the time Outstanding, the Company, when authorized by a Board Resolution, and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then
in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities
of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the holders
of each Security then Outstanding and affected thereby, (a) extend the fixed maturity of any Securities of any series, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption
thereof or (b) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders of
any series affected thereby under this Section to approve the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
Section 9.03 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions
of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the
Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 9.04 Securities Affected by Supplemental Indentures.
Securities of any series affected by a supplemental indenture, authenticated
and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01, may bear
a notation in form approved by the Company, provided such form meets the requirements of any securities exchange upon which such series
may be listed, as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of that
series so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities of that
series then Outstanding.
Section 9.05 Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by its Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders
required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture. The Trustee, subject to the provisions
of Section 7.01, will be entitled to receive and will be fully protected in relying upon an Officers’ Certificate and an Opinion
of Counsel stating that any supplemental indenture executed pursuant to this Article is authorized or permitted by, and conforms to, the
terms of this Article and that it is proper for the Trustee under the provisions of this Article to join in the execution thereof; provided,
however, that such Officers’ Certificate or Opinion of Counsel need not be provided in connection with the execution of a supplemental
indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a
notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders of all series affected thereby
as their names and addresses appear upon the Security Register. Any failure of the Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such supplemental indenture.
ARTICLE 10
SUCCESSOR ENTITY
Section 10.01 Company May Consolidate, Etc.
Except as provided pursuant to Section 2.01 pursuant to a Board Resolution,
and set forth in an Officers’ Certificate, or established in one or more indentures supplemental to this Indenture, nothing contained
in this Indenture shall prevent any consolidation or merger of the Company with or into any other Person (whether or not affiliated with
the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties,
or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor or successors as
an entirety, or substantially as an entirety, to any other corporation (whether or not affiliated with the Company or its successor or
successors) authorized to acquire and operate the same; provided, however, the Company hereby covenants and agrees that, upon any such
consolidation or merger (in each case, if the Company is not the survivor of such transaction), sale, conveyance, transfer or other disposition,
the due and punctual payment of the principal of (premium, if any) and interest on all of the Securities of all series in accordance with
the terms of each series, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions
of this Indenture with respect to each series or established with respect to such series pursuant to Section 2.01 to be kept or performed
by the Company shall be expressly assumed, by supplemental indenture (which shall conform to the provisions of the Trust Indenture Act,
as then in effect) reasonably satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by such consolidation,
or into which the Company shall have been merged, or by the entity which shall have acquired such property.
Section 10.02 Successor Entity Substituted.
(a) In case of any such consolidation,
merger, sale, conveyance, transfer or other disposition and upon the assumption by the successor entity by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the obligations set forth under Section 10.01 on all of the Securities
of all series Outstanding, such successor entity shall succeed to and be substituted for the Company with the same effect as if it had
been named as the Company herein, and thereupon the predecessor corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.
(b) In case of any such consolidation,
merger, sale, conveyance, transfer or other disposition, such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
(c) Nothing contained in this Article
shall require any action by the Company in the case of a consolidation or merger of any Person into the Company where the Company is the
survivor of such transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the property of any other
Person (whether or not affiliated with the Company).
Section 10.03 Evidence of Consolidation, Etc. to Trustee.
The Trustee, subject to the provisions of Section 7.01, may receive
an Officers’ Certificate or an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance,
transfer or other disposition, and any such assumption, comply with the provisions of this Article.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the Trustee
for cancellation all Securities of a series theretofore authenticated and not delivered to the Trustee for cancellation (other than any
Securities that shall have been destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07 and Securities
for whose payment money or Governmental Obligations have theretofore been deposited in trust or segregated and held in trust by the Company
and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05); or (b) all such Securities of a particular
series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due
and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the
giving of notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as trust funds the entire amount
in moneys or Governmental Obligations or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon redemption all Securities
of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or
to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to
be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall thereupon cease to be of
further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall
survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that shall survive to such date
and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture with respect to such series.
Section 11.02 Discharge of Obligations.
If at any time all such Securities of a particular series not heretofore
delivered to the Trustee for cancellation or that have not become due and payable as described in Section 11.01 shall have been paid by
the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to pay
at maturity or upon redemption all such Securities of that series not theretofore delivered to the Trustee for cancellation, including
principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may
be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series,
then after the date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee the obligations of the
Company under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03,
2.05, 2.07, 4,01, 4.02, 4,03, 7.05, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.
Thereafter, Sections 7.06 and 11.05 shall survive.
Section 11.03 Deposited Moneys to be Held in Trust.
All moneys or Governmental Obligations deposited with the Trustee pursuant
to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption
of which such moneys or Governmental Obligations have been deposited with the Trustee.
Section 11.04 Payment of Moneys Held by Paying Agents.
In connection with the satisfaction and discharge of this Indenture
all moneys or Governmental Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand of the
Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys
or Governmental Obligations.
Section 11.05 Repayment to Company.
Any moneys or Governmental Obligations deposited with any paying agent
or the Trustee, or then held by the Company, in trust for payment of principal of or premium, if any, or interest on the Securities of
a particular series that are not applied but remain unclaimed by the holders of such Securities for at least two years after the date
upon which the principal of (and premium, if any) or interest on such Securities shall have respectively become due and payable, or such
other shorter period set forth in applicable escheat or abandoned or unclaimed property law, shall be repaid to the Company on May 31
of each year or upon the Company’s request or (if then held by the Company) shall be discharged from such trust; and thereupon the
paying agent and the Trustee shall be released from all further liability with respect to such moneys or Governmental Obligations, and
the holder of any of the Securities entitled to receive such payment shall thereafter, as a general creditor, look only to the Company
for the payment thereof.
ARTICLE 12
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS
AND DIRECTORS
Section 12.01 No Recourse.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred
by, the incorporators, shareholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or
any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name
and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every
such incorporator, shareholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are
hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of
such Securities.
ARTICLE 13
MISCELLANEOUS PROVISIONS
Section 13.01 Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in this Indenture
made by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.
Section 13.02 Actions by Successor.
Any act or proceeding by any provision of this Indenture authorized
or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Company.
Section 13.03 Surrender of Company Powers.
The Company by instrument in writing executed by authority of its Board
of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon such power so surrendered
shall terminate both as to the Company and as to any successor corporation.
Section 13.04 Notices.
Except as otherwise expressly provided herein, any notice, request
or demand that by any provision of this Indenture is required or permitted to be given, made or served by the Trustee or by the holders
of Securities or by any other Person pursuant to this Indenture to or on the Company may be given or served by being deposited in first
class mail, postage prepaid, addressed (until another address is filed in writing by the Company with the Trustee), as follows: East Floor
5, Building No. 8, Xishanhui, Shijingshan District, Beijing 100041, People’s Republic of China, with a copy to Hunter Taubman Fischer
& Li LLC, 950 Third Avenue, 19th Floor, New York, NY 10022, Attn: Ying Li, Esq. Any notice, election, request or demand
by the Company or any Securityholder or by any other Person pursuant to this Indenture to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee.
Section 13.05 Governing Law.
This Indenture and each Security shall be deemed to be a contract made
under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State, except
to the extent that the Trust Indenture Act is applicable.
Section 13.06 Treatment of Securities as Debt.
It is intended that the Securities will be treated as indebtedness
and not as equity for federal income tax purposes. The provisions of this Indenture shall be interpreted to further this intention.
Section 13.07 Certificates and Opinions as to Conditions Precedent.
(a) Upon any application or demand
by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee
an Officers’ Certificate stating that all conditions precedent provided for in this Indenture (other than the certificate to be
delivered pursuant to Section 13.13) relating to the proposed action have been complied with and an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or
demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular
application or demand, no additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided
for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture shall include
(i) a statement that the Person making such certificate or opinion has read such covenant or condition; (ii) a brief statement as to the
nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are
based; (iii) a statement that, in the opinion of such Person, he has made such examination or investigation as is reasonably necessary
to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement
as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
Section 13.08 Payments on Business Days.
Except as provided pursuant to Section 2.01 pursuant to a Board Resolution,
and set forth in an Officers’ Certificate, or established in one or more indentures supplemental to this Indenture, in any case
where the date of maturity of interest or principal of any Security or the date of redemption of any Security shall not be a Business
Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding Business Day with the same force and
effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal date.
Section 13.09 Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 13.10 Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of, premium, if any, or
interest on any Securities, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Security, or because of the creation
of any indebtedness represented thereby, shall be had against any incorporator, shareholder, employee, agent, officer, director or subsidiary,
as such, past, present or future, of the Company or of any successor entity, either directly or through the Company or any successor entity,
whether by virtue of any constitution, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of the Securities.
Section 13.11 Counterparts.
This Indenture may be executed in any number of counterparts, each
of which shall be an original, but such counterparts shall together constitute but one and the same instrument.
Section 13.12 Separability.
In case any one or more of the provisions contained in this Indenture
or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such
Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.
Section 13.13 Compliance Certificates.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year during which any Securities of any series were outstanding, a compliance certificate stating whether or not the
signer knows of any Default or Event of Default that occurred during such fiscal year. Such certificate shall contain a certification
from the principal executive officer, principal financial officer or principal accounting officer of the Company that a review has been
conducted of the activities of the Company and the Company’s performance under this Indenture and that the Company has complied
with all conditions and covenants under this Indenture. For purposes of this Section 13.13, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this Indenture. If the officer of the Company signing such certificate
has knowledge of such a Default or Event of Default, the certificate shall describe any such Default or Event of Default and its status.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed all as of the day and year first above written.
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Baosheng Media Group Holdings Limited |
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By: |
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Name: |
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Title: |
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[TRUSTEE], as Trustee |
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By: |
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Name: |
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Title: |
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CROSS-REFERENCE TABLE (1)
| Section of Trust Indenture Act of 1939, as Amended | |
Section of Indenture |
| 310(a) | |
7.09 |
| 310(b) | |
7.08 |
| | |
7.10 |
| 310(c) | |
Inapplicable |
| 311(a) | |
7.13 |
| 311(b) | |
7.13 |
| | |
|
| 311(c) | |
Inapplicable |
| 312(a) | |
5.01 |
| | |
5.02(a) |
| 312(b) | |
5.02(c) |
| 312(c) | |
5.02(c) |
| 313(a) | |
5.04(a) |
| 313(b) | |
5.04(b) |
| 313(c) | |
5.04(a) |
| | |
5.04(b) |
| 313(d) | |
5.04(c) |
| 314(a) | |
5.03 |
| | |
13.12 |
| 314(b) | |
Inapplicable |
| 314(c) | |
13.07(a) |
| 314(d) | |
Inapplicable |
| 314(e) | |
13.07(b) |
| 314(f) | |
Inapplicable |
| 315(a) | |
7.01(a) |
| | |
7.01(b) |
| 315(b) | |
7.14 |
| 315(c) | |
7.01 |
| 315(d) | |
7.01(b) |
| | |
|
| 315(e) | |
6.07 |
| 316(a) | |
6.06 |
| | |
8.04 |
| 316(b) | |
6.04 |
| 316(c) | |
8.01 |
| 317(a) | |
6.02 |
| 317(b) | |
4.03 |
| 318(a) | |
13.09 |
| (1) |
This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions. |
Exhibit 4.7
BAOSHENG MEDIA GROUP HOLDINGS LIMITED
(the “Issuer”)
AND
[TRUSTEE]
(the “Trustee”)
INDENTURE
Dated as of [●], 20[●]
Subordinated Debt Securities
TABLE OF CONTENTS
| ARTICLE 1 DEFINITIONS |
1 |
| |
|
| Section 1.01 |
Definitions of Terms |
1 |
| |
|
|
| ARTICLE 2 ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES |
4 |
| Section 2.01 |
Designation and Terms of Securities |
4 |
| Section 2.02 |
Form of Securities and Trustee’s Certificate |
6 |
| Section 2.03 |
Denominations: Provisions for Payment |
6 |
| Section 2.04 |
Execution and Authentication |
8 |
| Section 2.05 |
Registration of Transfer and Exchange |
8 |
| Section 2.06 |
Temporary Securities. |
9 |
| Section 2.07 |
Mutilated, Destroyed, Lost or Stolen Securities |
10 |
| Section 2.08 |
Cancellation |
10 |
| Section 2.09 |
Benefits of Indenture |
10 |
| Section 2.10 |
Authenticating Agent |
11 |
| Section 2.11 |
Global Securities |
11 |
| |
|
|
| ARTICLE 3 REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS |
12 |
| Section 3.01 |
Redemption |
12 |
| Section 3.02 |
Notice of Redemption |
12 |
| Section 3.03 |
Payment Upon Redemption |
13 |
| Section 3.04 |
Sinking Fund |
14 |
| Section 3.05 |
Satisfaction of Sinking Fund Payments with Securities |
14 |
| Section 3.06 |
Redemption of Securities for Sinking Fund |
14 |
| |
|
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| ARTICLE 4 COVENANTS |
14 |
| Section 4.01 |
Payment of Principal, Premium and Interest |
14 |
| Section 4.02 |
Maintenance of Office or Agency |
15 |
| Section 4.03 |
Paying Agents |
15 |
| Section 4.04 |
Appointment to Fill Vacancy in Office of Trustee |
16 |
| Section 4.05 |
Compliance with Consolidation Provisions |
16 |
| |
|
|
| ARTICLE 5 SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE |
16 |
| Section 5.01 |
Company to Furnish Trustee Names and Addresses of Securityholders |
16 |
| Section 5.02 |
Preservation of Information; Communications with Securityholders |
16 |
| Section 5.03 |
Reports by the Company |
17 |
| Section 5.04 |
Reports by the Trustee |
17 |
| ARTICLE 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT |
17 |
| Section 6.01 |
Events of Default |
17 |
| Section 6.02 |
Collection of Indebtedness and Suits for Enforcement by Trustee |
19 |
| Section 6.03 |
Application of Moneys or Property Collected |
20 |
| Section 6.04 |
Limitation on Suits |
20 |
| Section 6.05 |
Rights and Remedies Cumulative; Delay or Omission Not Waiver |
21 |
| Section 6.06 |
Control by Securityholders |
21 |
| Section 6.07 |
Undertaking to Pay Costs |
22 |
| |
|
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| ARTICLE 7 CONCERNING THE TRUSTEE |
22 |
| Section 7.01 |
Certain Duties and Responsibilities of Trustee |
22 |
| Section 7.02 |
Certain Rights of Trustee |
23 |
| Section 7.03 |
Trustee Not Responsible for Recitals or Issuance or Securities |
24 |
| Section 7.04 |
May Hold Securities |
24 |
| Section 7.05 |
Moneys Held in Trust |
25 |
| Section 7.06 |
Compensation and Reimbursement |
25 |
| Section 7.07 |
Reliance on Officers’ Certificate |
25 |
| Section 7.08 |
Disqualification; Conflicting Interests |
25 |
| Section 7.09 |
Corporate Trustee Required; Eligibility |
26 |
| Section 7.10 |
Resignation and Removal; Appointment of Successor |
26 |
| Section 7.11 |
Acceptance of Appointment by Successor |
27 |
| Section 7.12 |
Merger, Conversion, Consolidation or Succession to Business |
28 |
| Section 7.13 |
Preferential Collection of Claims Against the Company |
28 |
| Section 7.14 |
Notice of Default |
28 |
| |
|
|
| ARTICLE 8 CONCERNING THE SECURITYHOLDERS |
29 |
| Section 8.01 |
Evidence of Action by Securityholders |
29 |
| Section 8.02 |
Proof of Execution by Securityholders |
29 |
| Section 8.03 |
Who May be Deemed Owners |
29 |
| Section 8.04 |
Certain Securities Owned by Company Disregarded |
30 |
| Section 8.05 |
Actions Binding on Future Securityholders |
30 |
| |
|
|
| ARTICLE 9 SUPPLEMENTAL INDENTURES |
30 |
| Section 9.01 |
Supplemental Indentures Without the Consent of Securityholders |
30 |
| Section 9.02 |
Supplemental Indentures With Consent of Securityholders |
31 |
| Section 9.03 |
Effect of Supplemental Indentures |
32 |
| Section 9.04 |
Securities Affected by Supplemental Indentures |
32 |
| Section 9.05 |
Execution of Supplemental Indentures |
32 |
| |
|
|
| ARTICLE 10 SUCCESSOR ENTITY |
33 |
| Section 10.01 |
Company May Consolidate, Etc |
33 |
| Section 10.02 |
Successor Entity Substituted |
33 |
| Section 10.03 |
Evidence of Consolidation, Etc. to Trustee |
33 |
| |
|
|
| ARTICLE 11 SATISFACTION AND DISCHARGE |
34 |
| Section 11.01 |
Satisfaction and Discharge of Indenture |
34 |
| Section 11.02 |
Discharge of Obligations |
34 |
| Section 11.03 |
Deposited Moneys to be Held in Trust |
34 |
| Section 11.04 |
Payment of Moneys Held by Paying Agents |
35 |
| Section 11.05 |
Repayment to Company |
35 |
| ARTICLE 12 IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS |
35 |
| Section 12.01 |
No Recourse |
35 |
| |
|
|
| ARTICLE 13 MISCELLANEOUS PROVISIONS |
36 |
| Section 13.01 |
Effect on Successors and Assigns |
36 |
| Section 13.02 |
Actions by Successor |
36 |
| Section 13.03 |
Surrender of Company Powers |
36 |
| Section 13.04 |
Notices |
36 |
| Section 13.05 |
Governing Law |
36 |
| Section 13.06 |
Treatment of Securities as Debt |
36 |
| Section 13.07 |
Certificates and Opinions as to Conditions Precedent |
36 |
| Section 13.08 |
Payments on Business Days |
37 |
| Section 13.09 |
Conflict with Trust Indenture Act |
37 |
| Section 13.10 |
Indenture and Securities Solely Corporate Obligations |
37 |
| Section 13.11 |
Counterparts |
37 |
| Section 13.12 |
Separability |
38 |
| Section 13.13 |
Compliance Certificates |
38 |
| |
|
|
| ARTICLE 14 SUBORDINATION OF SECURITIES |
38 |
| Section 14.01 |
Subordination Terms |
38 |
| (1) |
This Table of Contents does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions. |
INDENTURE
INDENTURE, dated as of [●], 20[●],
among Baosheng Media Group Holdings Limited, a Cayman Islands exempted company with limited liability (the “Company”), and
[TRUSTEE], as trustee (the “Trustee”).
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to provide for the issuance of subordinated debt securities (hereinafter
referred to as the “Securities”), in an unlimited aggregate principal amount to be issued from time to time in one or more
series as in this Indenture provided, as registered Securities without coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the
Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase
of the Securities by the holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the holders
of Securities:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions of Terms.
The terms defined in this Section (except as in this Indenture or any
indenture supplemental hereto otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture
and of any indenture supplemental hereto shall have the respective meanings specified in this Section and shall include the plural as
well as the singular. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that
are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein or any indenture supplemental hereto
otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture
Act and in said Securities Act as in force at the date of the execution of this instrument.
“Authenticating Agent” means an authenticating
agent with respect to all or any of the series of Securities appointed by the Trustee pursuant to Section 2.10.
“Bankruptcy Law” means Title 11, U.S. Code,
or any similar federal or state law for the relief of debtors.
“Board of Directors” means the Board of Directors
of the Company or any duly authorized committee of such Board.
“Board Resolution” means a copy of a resolution
certified by any director of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification.
“Business Day” means, with respect to any
series of Securities, any day other than a day on which federal or state banking institutions in the Borough of Manhattan, the City of
New York, or in the city of the Corporate Trust Office of the Trustee, are authorized or obligated by law, executive order or regulation
to close.
“Certificate” means a certificate signed
by any Officer. The Certificate need not comply with the provisions of Section 13.07.
“Company” means Baosheng Media Group Holdings
Limited, a Cayman Islands exempted company with limited liability, and, subject to the provisions of Article Ten, shall also include its
successors and assigns.
“Corporate Trust Office” means the office
of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date
hereof is located at [ ].
“Custodian” means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.
“Default” means any event, act or condition
that with notice or lapse of time, or both, would constitute an Event of Default.
“Depositary” means, with respect to Securities
of any series for which the Company shall determine that such Securities will be issued as a Global Security, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a clearing agency under the Securities and Exchange Act of
1934, as amended (the “Exchange Act”), or other applicable statute or regulation, which, in each case, shall be designated
by the Company pursuant to either Section 2.01 or 2.11.
“Event of Default” means, with respect to
Securities of a particular series, any event specified in Section 6.01, continued for the period of time, if any, therein designated.
“Global Security” means, with respect to
any series of Securities, a Security executed by the Company and delivered by the Trustee to the Depositary or pursuant to the Depositary’s
instruction, all in accordance with the Indenture, which shall be registered in the name of the Depositary or its nominee.
“Governmental Obligations” means securities
that are (a) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which
is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either case, are not callable
or redeemable at the option of the issuer thereof at any time prior to the stated maturity of the Securities, and shall also include a
depositary receipt issued by a bank or trust company as custodian with respect to any such Governmental Obligation or a specific payment
of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder of such depositary
receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental Obligation or the specific
payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.
“herein”, “hereof” and
“hereunder”, and other words of similar import, refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
“Indenture” means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into in accordance
with the terms hereof.
“Interest Payment Date”, when used with respect
to any installment of interest on a Security of a particular series, means the date specified in such Security or in a Board Resolution
or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect
to Securities of that series is due and payable.
“Officer” means, with respect to the Company,
the chairman of the Board of Directors, a chief executive officer, a president, a chief financial officer, chief operating officer, any
executive vice president, any senior vice president, any vice president, the treasurer or any assistant treasurer, the controller or any
assistant controller or the secretary or any assistant secretary.
“Officers’ Certificate” means a certificate
signed by any two Officers. Each such certificate shall include the statements provided for in Section 13.07, if and to the extent required
by the provisions thereof.
“Opinion of Counsel” means an opinion in
writing subject to customary exceptions of legal counsel, who may be an employee of or counsel for the Company, that is delivered to the
Trustee in accordance with the terms hereof. Each such opinion shall include the statements provided for in Section 13.07, if and to the
extent required by the provisions thereof.
“Outstanding”, when used with reference to
Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all Securities of that series theretofore
authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee or any paying
agent, or delivered to the Trustee or any paying agent for cancellation or that have previously been canceled; (b) Securities or portions
thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust by the Company
(if the Company shall act as its own paying agent); provided, however, that if such Securities or portions of such Securities are to be
redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article Three provided, or provision satisfactory
to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of or in substitution for which other Securities
shall have been authenticated and delivered pursuant to the terms of Section 2.07.
“Person” means any individual, corporation,
partnership, joint venture, joint-stock company, limited liability company, association, trust, unincorporated organization, any other
entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Predecessor Security” of any particular
Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and,
for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or stolen
Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.
“Responsible Officer” when used with respect
to the Trustee means the chairman of its board of directors, the chief executive officer, the president, any vice president, the secretary,
the treasurer, any trust officer, any corporate trust officer or any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his or her knowledge of and familiarity with the particular subject.
“Securities” means the debt Securities authenticated
and delivered under this Indenture.
“Securityholder”, “holder of Securities”,
“registered holder”, or other similar term, means the Person or Persons in whose name or names a particular Security shall
be registered on the books of the Company kept for that purpose in accordance with the terms of this Indenture.
“Security Register” and “Security
Registrar” shall have the meanings as set forth in Section 2.05.
“Subsidiary” means, with respect to any Person,
(i) any corporation at least a majority of whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such
Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of whose outstanding partnership or similar interests shall at the time be owned by such
Person, or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited partnership
of which such Person or any of its Subsidiaries is a general partner.
“Trustee” means, and, subject to the provisions
of Article Seven, shall also include its successors and assigns, and, if at any time there is more than one Person acting in such capacity
hereunder, “Trustee” shall mean each such Person. The term “Trustee” as used with respect to a particular series
of the Securities shall mean the trustee with respect to that series.
“Trust Indenture Act” means the Trust Indenture
Act of 1939, as amended.
“Voting Stock”, as applied to stock of any
Person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by reason of the occurrence of a contingency.
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND
EXCHANGE OF SECURITIES
Section 2.01 Designation and Terms of Securities.
(a) The aggregate principal amount of Securities
that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series up to the
aggregate principal amount of Securities of that series from time to time authorized by or pursuant to a Board Resolution or pursuant
to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of any series, there shall be established in
or pursuant to a Board Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures supplemental
hereto:
(1) the title of the Securities of the series
(which shall distinguish the Securities of that series from all other Securities);
(2) any limit upon the aggregate principal amount
of the Securities of that series that may be authenticated and delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series);
(3) the date or dates on which the principal
of the Securities of the series is payable, any original issue discount that may apply to the Securities of that series upon their issuance,
the principal amount due at maturity, and the place(s) of payment;
(4) the rate or rates at which the Securities
of the series shall bear interest or the manner of calculation of such rate or rates, if any;
(5) the date or dates from which such interest
shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of determination of such Interest Payment
Dates, the place(s) of payment, and the record date for the determination of holders to whom interest is payable on any such Interest
Payment Dates or the manner of determination of such record dates;
(6) the right, if any, to extend the interest
payment periods and the duration of such extension;
(7) the period or periods within which, the
price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the
option of the Company;
(8) the obligation, if any, of the Company to
redeem or purchase Securities of the series pursuant to any sinking fund, mandatory redemption, or analogous provisions (including payments
made in cash in satisfaction of future sinking fund obligations) or at the option of a holder thereof and the period or periods within
which, the price or prices at which, and the terms and conditions upon which, Securities of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;
(9) the form of the Securities of the series
including the form of the Certificate of Authentication for such series;
(10) if other than denominations of one thousand
U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities of the series shall be issuable;
(11) any and all other terms (including terms,
to the extent applicable, relating to any auction or remarketing of the Securities of that series and any security for the obligations
of the Company with respect to such Securities) with respect to such series (which terms shall not be inconsistent with the terms of this
Indenture, as amended by any supplemental indenture) including any terms which may be required by or advisable under United States laws
or regulations or advisable in connection with the marketing of Securities of that series;
(12) whether the Securities are issuable as
a Global Security and, in such case, the terms and the identity of the Depositary for such series;
(13) whether the Securities will be convertible
into or exchangeable for ordinary shares or other securities of the Company or any other Person and, if so, the terms and conditions upon
which such Securities will be so convertible or exchangeable, including the conversion or exchange price, as applicable, or how it will
be calculated and may be adjusted, any mandatory or optional (at the Company’s option or the holders’ option) conversion or
exchange features, and the applicable conversion or exchange period;
(14) if other than the principal amount thereof,
the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01;
(15) any additional or different Events of Default
or restrictive covenants (which may include, among other restrictions, restrictions on the Company’s ability or the ability of the
Company’s Subsidiaries to: incur additional indebtedness; issue additional securities; create liens; pay dividends or make distributions
in respect of their capital stock; redeem capital stock; place restrictions on such Subsidiaries placing restrictions on their ability
to pay dividends, make distributions or transfer assets; make investments or other restricted payments; sell or otherwise dispose of assets;
enter into sale-leaseback transactions; engage in transactions with shareholders and affiliates; issue or sell shares of their Subsidiaries;
or effect a consolidation or merger) or financial covenants (which may include, among other financial covenants, financial covenants that
require the Company and its Subsidiaries to maintain specified interest coverage, fixed charge, cash flow-based or asset-based ratios)
provided for with respect to the Securities of the series;
(16) if other than dollars, the coin or currency
in which the Securities of the series are denominated (including, but not limited to, foreign currency);
(17) the terms and conditions, if any, upon
which the Company shall pay amounts in addition to the stated interest, premium, if any and principal amounts of the Securities of the
series to any Securityholder that is not a “United States person” for federal tax purposes;
(18) any restrictions on transfer, sale or assignment
of the Securities of the series; and
(19) the subordination terms of the Securities
of the series.
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to any such Board Resolution or in any indentures supplemental
hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by the secretary or an assistant
secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate of the Company setting
forth the terms of the series.
Securities of any particular series may be issued at various times,
with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different
methods by which rates of interest may be determined, with different dates on which such interest may be payable and with different redemption
dates.
Section 2.02 Form of Securities and Trustee’s Certificate.
The Securities of any series and the Trustee’s certificate of
authentication to be borne by such Securities shall be substantially of the tenor and purport as set forth in one or more indentures supplemental
hereto or as provided in a Board Resolution, and set forth in an Officers’ Certificate, and they may have such letters, numbers
or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange on which Securities of that
series may be listed, or to conform to usage.
Section 2.03 Denominations: Provisions for Payment.
The Securities shall be issuable as registered Securities and in the
denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(a)(10). The Securities of
a particular series shall bear interest payable on the dates and at the rate specified with respect to that series. Subject to Section
2.01(a)(16), the principal of and the interest on the Securities of any series, as well as any premium thereon in case of redemption thereof
prior to maturity, shall be payable in the coin or currency of the United States of America that at the time is legal tender for public
and private debt, at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, the City and State of
New York. Each Security shall be dated the date of its authentication. Interest on the Securities shall be computed on the basis of a
360-day year composed of twelve 30-day months.
The interest installment on any Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date for Securities of that series shall be paid to the Person in whose name said Security
(or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment.
In the event that any Security of a particular series or portion thereof is called for redemption and the redemption date is subsequent
to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Security
will be paid upon presentation and surrender of such Security as provided in Section 3.03.
Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called “Defaulted Interest”)
shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder;
and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted
Interest on Securities to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered at the
close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the
Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Security and the date
of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior
to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest
which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in
the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first class postage prepaid, to each Securityholder at his or her address as it appears in the Security Register
(as hereinafter defined), not less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Interest
and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names
such Securities (or their respective Predecessor Securities) are registered on such special record date.
(2) The Company may make payment of any Defaulted
Interest on any Securities in any other lawful manner not inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or more indentures
supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term “regular record
date” as used in this Section with respect to a series of Securities and any Interest Payment Date for such series shall mean either
the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant
to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the first day of the month in which
an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the
fifteenth day of a month, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Security
of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series shall carry
the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security.
Section 2.04 Execution and Authentication.
The Securities shall be signed on behalf of the Company by one of its
Directors. Signatures may be in the form of a manual or facsimile signature.
The Company may use the facsimile signature of any Person who shall
have been an Officer, notwithstanding the fact that at the time the Securities shall be authenticated and delivered or disposed of such
Person shall have ceased to be such an officer of the Company. The Securities may contain such notations, legends or endorsements required
by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication by the Trustee.
A Security shall not be valid until authenticated manually by an authorized
signatory of the Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the Security so authenticated
has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. At any time and
from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a written order of the Company for the authentication and delivery of such Securities,
signed by an Officer, and the Trustee in accordance with such written order shall authenticate and deliver such Securities.
In authenticating such Securities and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with
the provisions of this Indenture.
The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities
and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.
Section 2.05 Registration of Transfer and Exchange.
(a) Securities of any series may be exchanged
upon presentation thereof at the office or agency of the Company designated for such purpose in the Borough of Manhattan, the City and
State of New York, for other Securities of such series of authorized denominations, and for a like aggregate principal amount, upon payment
of a sum sufficient to cover any tax or other governmental charge in relation thereto, all as provided in this Section. In respect of
any Securities so surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency shall
deliver in exchange therefor the Security or Securities of the same series that the Securityholder making the exchange shall be entitled
to receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be
kept, at its office or agency designated for such purpose in the Borough of Manhattan, the City and State of New York, or such other location
designated by the Company, a register or registers (herein referred to as the “Security Register”) in which, subject to such
reasonable regulations as it may prescribe, the Company shall register the Securities and the transfers of Securities as in this Article
provided and which at all reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of registering Securities
and transfer of Securities as herein provided shall be appointed as authorized by Board Resolution (the “Security Registrar”).
Upon surrender for transfer of any Security at the office or agency
of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate and such office or agency shall
deliver in the name of the transferee or transferees a new Security or Securities of the same series as the Security presented for a like
aggregate principal amount.
All Securities presented or surrendered for exchange or registration
of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar, duly executed by the registered
holder or by such holder’s duly authorized attorney in writing.
(c) Except as provided pursuant to Section
2.01 pursuant to a Board Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures supplemental
to this Indenture, no service charge shall be made for any exchange or registration of transfer of Securities, or issue of new Securities
in case of partial redemption of any series, but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer.
(d) The Company shall not be required (i)
to issue, exchange or register the transfer of any Securities during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of less than all the Outstanding Securities of the same series and ending at the close of
business on the day of such mailing, nor (ii) to register the transfer of or exchange any Securities of any series or portions thereof
called for redemption, other than the unredeemed portion of any such Securities being redeemed in part. The provisions of this Section
2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.
Section 2.06 Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or typewritten) of any
authorized denomination. Such temporary Securities shall be substantially in the form of the definitive Securities in lieu of which they
are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined
by the Company. Every temporary Security of any series shall be executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series. Without unnecessary
delay the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of
such series may be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated
for the purpose in the Borough of Manhattan, the City and State of New York, and the Trustee shall authenticate and such office or agency
shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless
the Company advises the Trustee to the effect that definitive Securities need not be executed and furnished until further notice from
the Company. Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under this Indenture as
definitive Securities of such series authenticated and delivered hereunder.
Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities.
In case any temporary or definitive Security shall become mutilated
or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s request
the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed,
lost or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish
to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s Security and
of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the written request or
authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith.
In case any Security that has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as they may require to save them harmless, and, in case of destruction, loss or theft,
evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.
Every replacement Security issued pursuant to the provisions of this
Section shall constitute an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost or stolen Security
shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of the same series duly issued hereunder. All Securities shall be held and owned upon the express condition
that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities,
and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.
Section 2.08 Cancellation.
All Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation,
or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required
or permitted by any of the provisions of this Indenture. In the absence of such request the Trustee may dispose of canceled Securities
in accordance with its standard procedures and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire
any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are delivered to the Trustee for cancellation.
Section 2.09 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give or be construed to give to any Person, other than the parties hereto and the holders of the Securities (and, with respect to
the provisions of Article Fourteen, the holders of any indebtedness of the Company to which the Securities of any series are subordinated)
any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein
contained; all such covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Securities
(and, with respect to the provisions of Article Fourteen, the holders of any indebtedness of the Company to which the Securities of any
series are subordinated).
Section 2.10 Authenticating Agent.
So long as any of the Securities of any series remain Outstanding there
may be an Authenticating Agent for any or all such series of Securities which the Trustee shall have the right to appoint. Said Authenticating
Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, transfer or
partial redemption thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder. All references in this Indenture to the authentication of Securities
by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be
acceptable to the Company and shall be a corporation that has a combined capital and surplus, as most recently reported or determined
by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business,
and that is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by federal or state
authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall) terminate the agency
of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company. Upon resignation,
termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent
acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with
all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto.
Section 2.11 Global Securities.
(a) If the Company shall establish pursuant
to Section 2.01 that the Securities of a particular series are to be issued as a Global Security, then the Company shall execute and the
Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that (i) shall represent, and shall be denominated
in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such series, (ii) shall be registered in
the name of the Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary’s
instruction and (iv) shall bear a legend substantially to the following effect: “Except as otherwise provided in Section 2.11 of
the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depositary or to a successor
Depositary or to a nominee of such successor Depositary.”
(b) Notwithstanding the provisions of Section
2.05, the Global Security of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05, only to
another nominee of the Depositary for such series, or to a successor Depositary for such series selected or approved by the Company or
to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series
of the Securities notifies the Company that it is unwilling or unable to continue as Depositary for such series or if at any time the
Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation,
and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes
aware of such condition, as the case may be, or if an Event of Default has occurred and is continuing and the Company has received a request
from the Depositary, this Section 2.11 shall no longer be applicable to the Securities of such series and the Company will execute, and
subject to Section 2.04, the Trustee will authenticate and deliver the Securities of such series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such
series in exchange for such Global Security. In addition, the Company may at any time determine that the Securities of any series shall
no longer be represented by a Global Security and that the provisions of this Section 2.11 shall no longer apply to the Securities of
such series. In such event the Company will execute and, subject to Section 2.04, the Trustee, upon receipt of an Officers’ Certificate
evidencing such determination by the Company, will authenticate and deliver the Securities of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security
of such series in exchange for such Global Security. Upon the exchange of the Global Security for such Securities in definitive registered
form without coupons, in authorized denominations, the Global Security shall be canceled by the Trustee. Such Securities in definitive
registered form issued in exchange for the Global Security pursuant to this Section 2.11(c) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct
the Trustee. The Trustee shall deliver such Securities to the Depositary for delivery to the Persons in whose names such Securities are
so registered.
ARTICLE 3
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
Section 3.01 Redemption.
The Company may redeem the Securities of any series issued hereunder
on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof.
Section 3.02 Notice of Redemption.
(a) In case the Company shall desire to exercise
such right to redeem all or, as the case may be, a portion of the Securities of any series in accordance with any right the Company reserved
for itself to do so pursuant to Section 2.01 hereof, the Company shall, or shall cause the Trustee to, give notice of such redemption
to holders of the Securities of such series to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less
than 30 days and not more than 90 days before the date fixed for redemption of that series to such holders at their last addresses as
they shall appear upon the Security Register, unless a shorter period is specified in the Securities to be redeemed. Any notice that is
mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives
the notice. In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption in whole
or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Securities of
such series or any other series. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’
Certificate evidencing compliance with any such restriction.
Each such notice of redemption shall specify the date fixed for redemption
and the redemption price at which Securities of that series are to be redeemed, and shall state that payment of the redemption price of
such Securities to be redeemed will be made at the office or agency of the Company in the Borough of Manhattan, the City and State of
New York, upon presentation and surrender of such Securities, that interest accrued to the date fixed for redemption will be paid as specified
in said notice, that from and after said date interest will cease to accrue and that the redemption is for a sinking fund, if such is
the case. If less than all the Securities of a series are to be redeemed, the notice to the holders of Securities of that series to be
redeemed in part shall specify the particular Securities to be so redeemed.
In case any Security is to be redeemed in part only, the notice that
relates to such Security shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the
redemption date, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed
portion thereof will be issued.
(b) If less than all the Securities of a series
are to be redeemed, the Company shall give the Trustee at least 45 days’ notice (unless a shorter notice shall be satisfactory to
the Trustee) in advance of the date fixed for redemption as to the aggregate principal amount of Securities of the series to be redeemed,
and thereupon the Trustee shall select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and that
may provide for the selection of a portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof)
of the principal amount of such Securities of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly
notify the Company in writing of the numbers of the Securities to be redeemed, in whole or in part. The Company may, if and whenever it
shall so elect, by delivery of instructions signed on its behalf by an Officer, instruct the Trustee or any paying agent to call all or
any part of the Securities of a particular series for redemption and to give notice of redemption in the manner set forth in this Section,
such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which
notice of redemption is to be given by the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or
permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records,
or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be
required under the provisions of this Section.
Section 3.03 Payment Upon Redemption.
(a) If the giving of notice of redemption
shall have been completed as above provided, the Securities or portions of Securities of the series to be redeemed specified in such notice
shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest
accrued to the date fixed for redemption and interest on such Securities or portions of Securities shall cease to accrue on and after
the date fixed for redemption, unless the Company shall default in the payment of such redemption price and accrued interest with respect
to any such Security or portion thereof. On presentation and surrender of such Securities on or after the date fixed for redemption at
the place of payment specified in the notice, said Securities shall be paid and redeemed at the applicable redemption price for such series,
together with interest accrued thereon to the date fixed for redemption (but if the date fixed for redemption is an interest payment date,
the interest installment payable on such date shall be payable to the registered holder at the close of business on the applicable record
date pursuant to Section 2.03).
(b) Upon presentation of any Security of such
series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the office or agency where
the Security is presented shall deliver to the holder thereof, at the expense of the Company, a new Security of the same series of authorized
denominations in principal amount equal to the unredeemed portion of the Security so presented.
Section 3.04 Sinking Fund.
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable
to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01 for Securities
of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”.
If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided
in Section 3.05. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms
of Securities of such series.
Section 3.05 Satisfaction of Sinking Fund Payments with Securities.
The Company (i) may deliver Outstanding Securities of a series and
(ii) may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms
of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in
each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be
made pursuant to the terms of such Securities as provided for by the terms of such series, provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified
in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 3.06 Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities (unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the Trustee an Officers’
Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of the series, the portion
thereof, if any, that is to be satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the basis
for such credit and will, together with such Officers’ Certificate, deliver to the Trustee any Securities to be so delivered. Not
less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at
the expense of the Company in the manner provided in Section 3.02. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Section 3.03.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Principal, Premium and Interest.
The Company will duly and punctually pay or cause to be paid the principal
of (and premium, if any) and interest on the Securities of that series at the time and place and in the manner provided herein and established
with respect to such Securities.
Section 4.02 Maintenance of Office or Agency.
So long as any series of the Securities remain Outstanding, the Company
agrees to maintain an office or agency in the Borough of Manhattan, the City and State of New York, with respect to each such series and
at such other location or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series may be
presented for payment, (ii) Securities of that series may be presented as herein above authorized for registration of transfer and exchange,
and (iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be given or served,
such designation to continue with respect to such office or agency until the Company shall, by written notice signed by any officer authorized
to sign an Officers’ Certificate and delivered to the Trustee, designate some other office or agency for such purposes or any of
them. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations, notices and demands. The Company initially appoints the Corporate
Trust Office of the Trustee located in the Borough of Manhattan, the City of New York as its paying agent with respect to the Securities.
Section 4.03 Paying Agents.
(a) If the Company shall appoint one or more
paying agents for all or any series of the Securities, other than the Trustee, the Company will cause each such paying agent to execute
and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section:
(1) that it will hold all sums held by it as
such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series (whether such sums have
been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons entitled thereto;
(2) that it will give the Trustee notice of
any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of (and premium, if any)
or interest on the Securities of that series when the same shall be due and payable;
(3) that it will, at any time during the continuance
of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such paying agent; and
(4) that it will perform all other duties of
paying agent as set forth in this Indenture.
(b) If the Company shall act as its own paying
agent with respect to any series of the Securities, it will on or before each due date of the principal of (and premium, if any) or interest
on Securities of that series, set aside, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient
to pay such principal (and premium, if any) or interest so becoming due on Securities of that series until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or any failure (by it or
any other obligor on such Securities) to take such action. Whenever the Company shall have one or more paying agents for any series of
Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit
with the paying agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such paying agent is the Trustee) the
Company will promptly notify the Trustee of this action or failure so to act.
(c) Notwithstanding anything in this Section
to the contrary, (i) the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 11.05, and
(ii) the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose,
pay, or direct any paying agent to pay, to the Trustee all sums held in trust by the Company or such paying agent, such sums to be held
by the Trustee upon the same terms and conditions as those upon which such sums were held by the Company or such paying agent; and, upon
such payment by the Company or any paying agent to the Trustee, the Company or such paying agent shall be released from all further liability
with respect to such money.
Section 4.04 Appointment to Fill Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder.
Section 4.05 Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remain Outstanding,
consolidate with or merge into any other Person, in either case where the Company is not the survivor of such transaction, or sell or
convey all or substantially all of its property to any other Person unless the provisions of Article Ten hereof are complied with.
ARTICLE 5
SECURITYHOLDERS’ LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 5.01 Company to Furnish Trustee Names and Addresses
of Securityholders.
The Company will furnish or cause to be furnished to the Trustee (a)
within 15 days after each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require,
of the names and addresses of the holders of each series of Securities as of such regular record date, provided that the Company shall
not be obligated to furnish or cause to furnish such list at any time that the list shall not differ in any respect from the most recent
list furnished to the Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30 days after the
receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such
list is furnished; provided, however, that, in either case, no such list need be furnished for any series for which the Trustee shall
be the Security Registrar .
Section 5.02 Preservation of Information; Communications with
Securityholders.
(a) The Trustee shall preserve, in as current
a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in the most
recent list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of Securities received by the Trustee
in its capacity as Security Registrar (if acting in such capacity).
(b) The Trustee may destroy any list furnished
to it as provided in Section 5.01 upon receipt of a new list so furnished.
(c) Securityholders may communicate as provided
in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture or under the
Securities, and, in connection with any such communications, the Trustee shall satisfy its obligations under Section 312(b) of the Trust
Indenture Act in accordance with the provisions of Section 312(b) of the Trust Indenture Act.
Section 5.03 Reports by the Company.
The Company covenants and agrees to provide a copy to the Trustee,
after the Company files the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the Securities and Exchange Commission may from time to time
by rules and regulations prescribe) that the Company files with the Securities and Exchange Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; provided, however, the Company shall not be required to deliver to the Trustee any materials for which the
Company has sought and received confidential treatment by the SEC. The Company shall also comply with the requirements of Section 314
of the Trust Indenture Act, but only to the extent then applicable to the Company.
Section 5.04 Reports by the Trustee.
(a) On or before July 1 in each year in which
any of the Securities are Outstanding, the Trustee shall transmit by mail, first class postage prepaid, to the Securityholders, as their
names and addresses appear upon the Security Register, a brief report dated as of the preceding May 1, if and to the extent required under
Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section
313(b) and 313(c) of the Trust Indenture Act.
(c) A copy of each such report shall, at the
time of such transmission to Securityholders, be filed by the Trustee with the Company, with each securities exchange upon which any Securities
are listed (if so listed) and also with the Securities and Exchange Commission. The Company agrees to notify the Trustee when any Securities
become listed on any securities exchange.
ARTICLE 6
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
Section 6.01 Events of Default.
(a) Whenever used herein with respect to Securities
of a particular series, “Event of Default” means any one or more of the following events that has occurred and is continuing:
(1) the Company defaults in the payment of any
installment of interest upon any of the Securities of that series, as and when the same shall become due and payable, and such default
continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by the Company in accordance
with the terms of any indenture supplemental hereto shall not constitute a default in the payment of interest for this purpose;
(2) the Company defaults in the payment of the
principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable whether at
maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect
to that series; provided, however, that a valid extension of the maturity of such Securities in accordance with the terms of any indenture
supplemental hereto shall not constitute a default in the payment of principal or premium, if any;
(3) the Company fails to observe or perform
any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established with respect
to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly included in this
Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days after the date on
which written notice of such failure, requiring the same to be remedied and stating that such notice is a “Notice of Default”
hereunder, shall have been given to the Company by the Trustee, by registered or certified mail, or to the Company and the Trustee by
the holders of at least 25% in principal amount of the Securities of that series at the time Outstanding;
(4) the Company pursuant to or within the meaning
of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all or substantially all of its property or (iv) makes a general assignment
for the benefit of its creditors; or
(5) a court of competent jurisdiction enters
an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the
Company for all or substantially all of its property or (iii) orders the liquidation of the Company, and the order or decree remains unstayed
and in effect for 90 days.
(b) In each and every such case (other than
an Event of Default specified in clause (4) or clause (5) above), unless the principal of all the Securities of that series shall have
already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Securities
of that series then Outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by such Securityholders),
may declare the principal of (and premium, if any, on) and accrued and unpaid interest on all the Securities of that series to be due
and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable. If an Event of
Default specified in clause (4) or clause (5) above occurs, the principal of and accrued and unpaid interest on all the Securities of
that series shall automatically be immediately due and payable without any declaration or other act on the part of the Trustee or the
holders of the Securities.
(c) At any time after the principal of (and
premium, if any, on) and accrued and unpaid interest on the Securities of that series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the holders
of a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited with the Trustee
a sum sufficient to pay all matured installments of interest upon all the Securities of that series and the principal of (and premium,
if any, on) any and all Securities of that series that shall have become due otherwise than by acceleration (with interest upon such principal
and premium, if any, and, to the extent that such payment is enforceable under applicable law, upon overdue installments of interest,
at the rate per annum expressed in the Securities of that series to the date of such payment or deposit) and the amount payable to the
Trustee under Section 7.06, and (ii) any and all Events of Default under the Indenture with respect to such series, other than the nonpayment
of principal on (and premium, if any, on) and accrued and unpaid interest on Securities of that series that shall not have become due
by their terms, shall have been remedied or waived as provided in Section 6.06.
No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.
(d) In case the Trustee shall have proceeded
to enforce any right with respect to Securities of that series under this Indenture and such proceedings shall have been discontinued
or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then
and in every such case, subject to any determination in such proceedings, the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though
no such proceedings had been taken.
Section 6.02 Collection of Indebtedness and Suits for Enforcement
by Trustee.
(a) The Company covenants that (i) in case
it shall default in the payment of any installment of interest on any of the Securities of a series, or in any payment required by any
sinking or analogous fund established with respect to that series as and when the same shall have become due and payable, and such default
shall have continued for a period of 90 Business Days, or (ii) in case it shall default in the payment of the principal of (or premium,
if any, on) any of the Securities of a series when the same shall have become due and payable, whether upon maturity of the Securities
of a series or upon redemption or upon declaration or otherwise then, upon demand of the Trustee, the Company will pay to the Trustee,
for the benefit of the holders of the Securities of that series, the whole amount that then shall have been become due and payable on
all such Securities for principal (and premium, if any) or interest, or both, as the case may be, with interest upon the overdue principal
(and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments
of interest at the rate per annum expressed in the Securities of that series; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under Section 7.06.
(b) If the Company shall fail to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to
institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action
or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor upon
the Securities of that series and collect the moneys adjudged or decreed to be payable in the manner provided by law or equity out of
the property of the Company or other obligor upon the Securities of that series, wherever situated.
(c) In case of any receivership, insolvency,
liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings affecting the Company, or its
creditors or property, the Trustee shall have power to intervene in such proceedings and take any action therein that may be permitted
by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other papers and documents
as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Securities of such series allowed for
the entire amount due and payable by the Company under the Indenture at the date of institution of such proceedings and for any additional
amount that may become due and payable by the Company after such date, and to collect and receive any moneys or other property payable
or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee under Section 7.06;
and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders of Securities of such
series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly
to such Securityholders, to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting
claims under this Indenture, or under any of the terms established with respect to Securities of that series, may be enforced by the Trustee
without the possession of any of such Securities, or the production thereof at any trial or other proceeding relative thereto, and any
such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable benefit of the holders
of the Securities of such series.
In case of an Event of Default hereunder, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in the Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities of that series or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim
of any Securityholder in any such proceeding.
Section 6.03 Application of Moneys or Property Collected.
Any moneys or property collected by the Trustee pursuant to this Article
with respect to a particular series of Securities shall be applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such moneys or property on account of principal (or premium, if any) or interest, upon presentation of
the Securities of that series, and notation thereon of the payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of reasonable costs and expenses of collection
and of all amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of all indebtedness of the Company to which
such series of Securities is subordinated to the extent required by Section 7.06 and Article Fourteen;
THIRD: To the payment of the amounts then due and unpaid upon Securities
of such series for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium,
if any) and interest, respectively; and
FOURTH: To the payment of the remainder, if any, to the Company or
any other Person lawfully entitled thereto, as requested by the Company.
Section 6.04 Limitation on Suits.
No holder of any Security of any series shall have any right by virtue
or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with
respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (i) such holder previously
shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to the Securities of
such series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less than 25% in aggregate principal amount
of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding
in its own name as Trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or thereby; (iv) the Trustee for 90 days after its receipt
of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding and (v) during such
90 day period, the holders of a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent
with the request.
Notwithstanding anything contained herein to the contrary or any other
provisions of this Indenture, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and
interest on such Security, as therein provided, on or after the respective due dates expressed in such Security (or in the case of redemption,
on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security of such series with every other such taker and holder and the Trustee,
that no one or more holders of Securities of such series shall have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities, or to obtain or
seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of Securities of such series. For the protection and enforcement
of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either
at law or in equity.
Section 6.05 Rights and Remedies Cumulative; Delay or Omission
Not Waiver.
(a) Except as otherwise provided in Section
2.07, all powers and remedies given by this Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Securities, by judicial
proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise
established with respect to such Securities.
(b) No delay or omission of the Trustee or
of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject
to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee or the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.
Section 6.06 Control by Securityholders.
The holders of a majority in aggregate principal amount of the Securities
of any series at the time Outstanding, determined in accordance with Section 8.04, shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee
with respect to such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture.
Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in
good faith shall, by a Responsible Officer or officers of the Trustee, determine that the proceeding so directed, subject to the Trustee’s
duties under the Trust Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to the Securityholders
not involved in the proceeding. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding
affected thereby, determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities of such series waive
any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to such
series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the Securities
of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless such default
has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited with
the Trustee (in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be deemed to be cured for all
purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent
thereon.
Section 6.07 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Securities
by such holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it
as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not
apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more than
10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of (or premium, if any) or interest on any Security of such series, on or after the respective
due dates expressed in such Security or established pursuant to this Indenture.
ARTICLE 7
CONCERNING THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities of Trustee.
(a) The Trustee, prior to the occurrence of
an Event of Default with respect to the Securities of a series and after the curing of all Events of Default with respect to the Securities
of that series that may have occurred, shall undertake to perform with respect to the Securities of such series such duties and only such
duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this Indenture against the Trustee.
In case an Event of Default with respect to the Securities of a series has occurred (that has not been cured or waived), the Trustee shall
exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be
construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) prior to the occurrence of an Event of Default
with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect to that series that
may have occurred:
(A) the duties and obligations of the Trustee
shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and the Trustee
shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations as are specifically
set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(B) in the absence of bad faith on the part
of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirement of this
Indenture;
(ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority
in principal amount of the Securities of any series at the time Outstanding relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture with respect
to the Securities of that series; and
(iv) None of the provisions contained in this
Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or powers if there is reasonable ground for believing that the repayment
of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk is
not reasonably assured to it.
Section 7.02 Certain Rights of Trustee.
Except as otherwise provided in Section 7.01:
(a) The Trustee may rely conclusively and
shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, security or other paper or document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) Any request, direction, order or demand
of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company
by any authorized officer of the Company (unless other evidence in respect thereof is specifically prescribed herein);
(c) The Trustee may consult with counsel and
the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders
pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained herein shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the Securities (that has not been
cured or waived), to exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture,
and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
(e) The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;
(f) The Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, security, or other papers or documents, unless requested in writing so to do by the holders of not less
than a majority in principal amount of the Outstanding Securities of the particular series affected thereby (determined as provided in
Section 8.04); provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities
as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Company or, if paid by the Trustee,
shall be repaid by the Company upon demand; and
(g) The Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.
In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (1) any Event of Default occurring pursuant to Sections 6.01(a)(1), 6.01(a)(2) and 4.01 hereof or (2)
any Default or Event of Default of which the Trustee shall have received written notification in the manner set forth in this Indenture
or a Responsible Officer of the Trustee shall have obtained actual knowledge. Delivery of reports, information and documents to the Trustee
under Section 5.03 is for informational purposes only and the information and the Trustee’s receipt of the foregoing shall not constitute
constructive notice of any information contained therein, or determinable from information contained therein including the Company’s
compliance with any of their covenants thereunder (as to which the Trustee is entitled to rely conclusively on an Officers’ Certificate).
Section 7.03 Trustee Not Responsible for Recitals or Issuance
or Securities.
(a) The recitals contained herein and in the
Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same.
(b) The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities.
(c) The Trustee shall not be accountable for
the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the use or application of
any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01, or for
the use or application of any moneys received by any paying agent other than the Trustee.
Section 7.04 May Hold Securities.
The Trustee or any paying agent or Security Registrar, in its individual
or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying
agent or Security Registrar.
Section 7.05 Moneys Held in Trust.
Subject to the provisions of Section 11.05, all moneys received by
the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need
not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any moneys
received by it hereunder except such as it may agree with the Company to pay thereon.
Section 7.06 Compensation and Reimbursement.
(a) The Company covenants and agrees to pay
to the Trustee, and the Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust) as the Company and the Trustee may from time to time agree in writing,
for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons
not regularly in its employ), except any such expense, disbursement or advance as may arise from its negligence or bad faith and except
as the Company and Trustee may from time to time agree in writing. The Company also covenants to indemnify the Trustee (and its officers,
agents, directors and employees) for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the
reasonable costs and expenses of defending itself against any claim of liability in the premises.
(b) The obligations of the Company under this
Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for reasonable expenses, disbursements and advances
shall constitute indebtedness of the Company to which the Securities are subordinated. Such additional indebtedness shall be secured by
a lien prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Securities.
Section 7.07 Reliance on Officers’ Certificate.
Except as otherwise provided in Section 7.01, whenever in the administration
of the provisions of this Indenture the Trustee shall deem it reasonably necessary or desirable that a matter be proved or established
prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers’ Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith
on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it under the
provisions of this Indenture upon the faith thereof.
Section 7.08 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any “conflicting interest”
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
Section 7.09 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee with respect to the Securities
issued hereunder which shall at all times be a corporation organized and doing business under the laws of the United States of America
or any state or territory thereof or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the
Securities and Exchange Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus
of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial, or District
of Columbia authority.
If such corporation or other Person publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such corporation or other Person shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee. In case at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in
Section 7.10.
Section 7.10 Resignation and Removal; Appointment of Successor.
(a) The Trustee or any successor hereafter
appointed may at any time resign with respect to the Securities of one or more series by giving written notice thereof to the Company
and by transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of such series, as their names
and addresses appear upon the Security Register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor
trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Securities of such series,
or any Securityholder of that series who has been a bona fide holder of a Security or Securities for at least six months may on behalf
of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any one of the following
shall occur:
(i) the Trustee shall fail to comply with the
provisions of Section 7.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder of a
Security or Securities for at least six months; or
(ii) the Trustee shall cease to be eligible
in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such
Securityholder; or
(iii) the Trustee shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of
its property shall be appointed or consented to, or any public officer shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee with respect
to all Securities and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or any Securityholder who
has been a bona fide holder of a Security or Securities for at least six months may, on behalf of that holder and all others similarly
situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate
principal amount of the Securities of any series at the time Outstanding may at any time remove the Trustee with respect to such series
by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with the consent of the Company.
(d) Any resignation or removal of the Trustee
and appointment of a successor trustee with respect to the Securities of a series pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant
to this Section may be appointed with respect to the Securities of one or more series or all of such series, and at any time there shall
be only one Trustee with respect to the Securities of any particular series.
Section 7.11 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of
a successor trustee with respect to all Securities, every such successor trustee so appointed shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor trustee all the rights, powers,
and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of
a successor trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor
trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor
trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm
to, and to vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor trustee relates, (ii) shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii)
shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute
such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for any act or failure
to act on the part of any other Trustee hereunder; and upon the execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall with respect to
the Securities of that or those series to which the appointment of such successor trustee relates have no further responsibility for the
exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture, and each
such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates;
but, on request of the Company or any successor trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor
trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of such successor trustee relates.
(c) Upon request of any such successor trustee,
the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor trustee all
such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor trustee shall accept its
appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article.
(e) Upon acceptance of appointment by a successor
trustee as provided in this Section, the Company shall transmit notice of the succession of such trustee hereunder by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register. If the Company fails to transmit
such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to
be transmitted at the expense of the Company.
Section 7.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall
be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09,
without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated
with the same effect as if such successor Trustee had itself authenticated such Securities.
Section 7.13 Preferential Collection of Claims Against the
Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.
Section 7.14 Notice of Default
If any Default or any Event of Default occurs and is continuing and
if such Default or Event of Default is known to a Responsible Officer of the Trustee, the Trustee shall mail to each Securityholder in
the manner and to the extent provided in Section 313(c) of the Trust Indenture Act notice of the Default or Event of Default within 45
days after it occurs and becomes known to the Trustee, unless such Default or Event of Default has been cured; provided, however,
that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security, the Trustee
shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of
the Securityholders.
ARTICLE 8
CONCERNING THE SECURITYHOLDERS
Section 8.01 Evidence of Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a majority
or specified percentage in aggregate principal amount of the Securities of a particular series may take any action (including the making
of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of
taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such holders of Securities of that series in person or by agent or
proxy appointed in writing.
If the Company shall solicit from the Securityholders of any series
any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, as evidenced by
an Officers’ Certificate, fix in advance a record date for such series for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to
be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of Outstanding Securities of that
series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action,
and for that purpose the Outstanding Securities of that series shall be computed as of the record date; provided, however, that no such
authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the record date.
Section 8.02 Proof of Execution by Securityholders.
Subject to the provisions of Section 7.01, proof of the execution of
any instrument by a Securityholder (such proof will not require notarization) or his agent or proxy and proof of the holding by any Person
of any of the Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution by
any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Securities shall be proved
by the Security Register of such Securities or by a certificate of the Security Registrar thereof.
The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.
Section 8.03 Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of any Security,
the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name such Security shall
be registered upon the books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to Section 2.03) interest on such Security and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the
contrary.
Section 8.04 Certain Securities Owned by Company Disregarded.
In determining whether the holders of the requisite aggregate principal
amount of Securities of a particular series have concurred in any direction, consent or waiver under this Indenture, the Securities of
that series that are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly
controlling or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only Securities of such series that the Trustee actually knows
are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may be regarded as Outstanding for
the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right so to act with
respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee.
Section 8.05 Actions Binding on Future Securityholders.
At any time prior to (but not after) the evidencing to the Trustee,
as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal amount of
the Securities of a particular series specified in this Indenture in connection with such action, any holder of a Security of that series
that is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing written
notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security. Except
as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof or in place
thereof, irrespective of whether or not any notation in regard thereto is made upon such Security. Any action taken by the holders of
the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection
with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Securities of that series.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without the Consent of
Securityholders.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for
one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency
herein or in the Securities of any series;
(b) to comply with Article Ten;
(c) to provide for uncertificated Securities
in addition to or in place of certificated Securities and to make all appropriate changes for such purpose;
(d) to add to the covenants, restrictions,
conditions or provisions relating to the Company for the benefit of the holders of all or any series of Securities (and if such covenants,
restrictions, conditions or provisions are to be for the benefit of less than all series of Securities, stating that such covenants, restrictions,
conditions or provisions are expressly being included solely for the benefit of such series), to make the occurrence, or the occurrence
and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default, or to
surrender any right or power herein conferred upon the Company;
(e) to add to, delete from, or revise the
conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication, and delivery of Securities,
as herein set forth;
(f) to make any change that does not adversely
affect the rights of any Securityholder in any material respect;
(g) to provide for the issuance of and establish
the form and terms and conditions of the Securities of any series as provided in Section 2.01, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add to the rights of the holders of
any series of Securities;
(h) to evidence and provide for the acceptance
of appointment hereunder by a successor trustee; or
(i) to comply with any requirements of the
Securities and Exchange Commission or any successor in connection with the qualification of this Indenture under the Trust Indenture Act.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, and to make any further appropriate agreements and stipulations that may be therein contained, but
the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed by the Company and the Trustee without the consent of the holders of any of the Securities at the time Outstanding, notwithstanding
any of the provisions of Section 9.02.
Section 9.02 Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Section 8.01) of the holders
of not less than a majority in aggregate principal amount of the Securities of each series affected by such supplemental indenture or
indentures at the time Outstanding, the Company, when authorized by a Board Resolution, and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then
in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities
of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the holders
of each Security then Outstanding and affected thereby, (a) extend the fixed maturity of any Securities of any series, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption
thereof or (b) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders of
any series affected thereby under this Section to approve the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
Section 9.03 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions
of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the
Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 9.04 Securities Affected by Supplemental Indentures.
Securities of any series affected by a supplemental indenture, authenticated
and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01, may bear
a notation in form approved by the Company, provided such form meets the requirements of any securities exchange upon which such series
may be listed, as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of that
series so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities of that
series then Outstanding.
Section 9.05 Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by its Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders
required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture. The Trustee, subject to the provisions
of Section 7.01, will be entitled to receive and will be fully protected in relying upon an Officers’ Certificate and an Opinion
of Counsel stating that any supplemental indenture executed pursuant to this Article is authorized or permitted by, and conforms to, the
terms of this Article and that it is proper for the Trustee under the provisions of this Article to join in the execution thereof; provided,
however, that such Officers’ Certificate or Opinion of Counsel need not be provided in connection with the execution of a supplemental
indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a
notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders of all series affected thereby
as their names and addresses appear upon the Security Register. Any failure of the Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such supplemental indenture.
ARTICLE 10
SUCCESSOR ENTITY
Section 10.01 Company May Consolidate, Etc.
Except as provided pursuant to Section 2.01 pursuant to a Board Resolution,
and set forth in an Officers’ Certificate, or established in one or more indentures supplemental to this Indenture, nothing contained
in this Indenture shall prevent any consolidation or merger of the Company with or into any other Person (whether or not affiliated with
the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties,
or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor or successors as
an entirety, or substantially as an entirety, to any other corporation (whether or not affiliated with the Company or its successor or
successors) authorized to acquire and operate the same; provided, however, the Company hereby covenants and agrees that, upon any such
consolidation or merger (in each case, if the Company is not the survivor of such transaction), sale, conveyance, transfer or other disposition,
the due and punctual payment of the principal of (premium, if any) and interest on all of the Securities of all series in accordance with
the terms of each series, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions
of this Indenture with respect to each series or established with respect to such series pursuant to Section 2.01 to be kept or performed
by the Company shall be expressly assumed, by supplemental indenture (which shall conform to the provisions of the Trust Indenture Act,
as then in effect) reasonably satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by such consolidation,
or into which the Company shall have been merged, or by the entity which shall have acquired such property.
Section 10.02 Successor Entity Substituted.
(a) In case of any such consolidation, merger,
sale, conveyance, transfer or other disposition and upon the assumption by the successor entity by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the obligations set forth under Section 10.01 on all of the Securities
of all series Outstanding, such successor entity shall succeed to and be substituted for the Company with the same effect as if it had
been named as the Company herein, and thereupon the predecessor corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.
(b) In case of any such consolidation, merger,
sale, conveyance, transfer or other disposition, such changes in phraseology and form (but not in substance) may be made in the Securities
thereafter to be issued as may be appropriate.
(c) Nothing contained in this Article shall
require any action by the Company in the case of a consolidation or merger of any Person into the Company where the Company is the survivor
of such transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the property of any other Person
(whether or not affiliated with the Company).
Section 10.03 Evidence of Consolidation, Etc. to Trustee.
The Trustee, subject to the provisions of Section 7.01, may receive
an Officers’ Certificate or an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance,
transfer or other disposition, and any such assumption, comply with the provisions of this Article.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the Trustee
for cancellation all Securities of a series theretofore authenticated and not delivered to the Trustee for cancellation (other than any
Securities that shall have been destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07 and Securities
for whose payment money or Governmental Obligations have theretofore been deposited in trust or segregated and held in trust by the Company
and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05); or (b) all such Securities of a particular
series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due
and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the
giving of notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as trust funds the entire amount
in moneys or Governmental Obligations or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon redemption all Securities
of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or
to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to
be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall thereupon cease to be of
further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall
survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that shall survive to such date
and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture with respect to such series.
Section 11.02 Discharge of Obligations.
If at any time all such Securities of a particular series not heretofore
delivered to the Trustee for cancellation or that have not become due and payable as described in Section 11.01 shall have been paid by
the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to pay
at maturity or upon redemption all such Securities of that series not theretofore delivered to the Trustee for cancellation, including
principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may
be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series,
then after the date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee the obligations of the
Company under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03,
2.05, 2.07, 4,01, 4.02, 4,03, 7.05, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.
Thereafter, Sections 7.06 and 11.05 shall survive.
Section 11.03 Deposited Moneys to be Held in Trust.
All moneys or Governmental Obligations deposited with the Trustee pursuant
to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption
of which such moneys or Governmental Obligations have been deposited with the Trustee.
Section 11.04 Payment of Moneys Held by Paying Agents.
In connection with the satisfaction and discharge of this Indenture
all moneys or Governmental Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand of the
Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys
or Governmental Obligations.
Section 11.05 Repayment to Company.
Any moneys or Governmental Obligations deposited with any paying agent
or the Trustee, or then held by the Company, in trust for payment of principal of or premium, if any, or interest on the Securities of
a particular series that are not applied but remain unclaimed by the holders of such Securities for at least two years after the date
upon which the principal of (and premium, if any) or interest on such Securities shall have respectively become due and payable, or such
other shorter period set forth in applicable escheat or abandoned or unclaimed property law, shall be repaid to the Company on May 31
of each year or upon the Company’s request or (if then held by the Company) shall be discharged from such trust; and thereupon the
paying agent and the Trustee shall be released from all further liability with respect to such moneys or Governmental Obligations, and
the holder of any of the Securities entitled to receive such payment shall thereafter, as a general creditor, look only to the Company
for the payment thereof.
ARTICLE 12
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
Section 12.01 No Recourse.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred
by, the incorporators, shareholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or
any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name
and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every
such incorporator, shareholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are
hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of
such Securities.
ARTICLE 13
MISCELLANEOUS PROVISIONS
Section 13.01 Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in this Indenture
made by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.
Section 13.02 Actions by Successor.
Any act or proceeding by any provision of this Indenture authorized
or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Company.
Section 13.03 Surrender of Company Powers.
The Company by instrument in writing executed by authority of its Board
of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon such power so surrendered
shall terminate both as to the Company and as to any successor corporation.
Section 13.04 Notices.
Except as otherwise expressly provided herein, any notice, request
or demand that by any provision of this Indenture is required or permitted to be given, made or served by the Trustee or by the holders
of Securities or by any other Person pursuant to this Indenture to or on the Company may be given or served by being deposited in first
class mail, postage prepaid, addressed (until another address is filed in writing by the Company with the Trustee), as follows: East Floor
5 Building No. 8, Xishanhui, Shijingshan District, Beijing 100041, People’s Republic of China, with a copy to Hunter Taubman Fischer
& Li LLC, 950 Third Avenue, 19th floor, New York, NY 10022, Attn: Ying Li, Esq. Any notice, election, request or demand
by the Company or any Securityholder or by any other Person pursuant to this Indenture to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee.
Section 13.05 Governing Law.
This Indenture and each Security shall be deemed to be a contract made
under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State, except
to the extent that the Trust Indenture Act is applicable.
Section 13.06 Treatment of Securities as Debt.
It is intended that the Securities will be treated as indebtedness
and not as equity for federal income tax purposes. The provisions of this Indenture shall be interpreted to further this intention.
Section 13.07 Certificates and Opinions as to Conditions Precedent.
(a) Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers’
Certificate stating that all conditions precedent provided for in this Indenture (other than the certificate to be delivered pursuant
to Section 13.13) relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand,
no additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided for
in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture shall include
(i) a statement that the Person making such certificate or opinion has read such covenant or condition; (ii) a brief statement as to the
nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are
based; (iii) a statement that, in the opinion of such Person, he has made such examination or investigation as is reasonably necessary
to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement
as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
Section 13.08 Payments on Business Days.
Except as provided pursuant to Section 2.01 pursuant to a Board Resolution,
and set forth in an Officers’ Certificate, or established in one or more indentures supplemental to this Indenture, in any case
where the date of maturity of interest or principal of any Security or the date of redemption of any Security shall not be a Business
Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding Business Day with the same force and
effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal date.
Section 13.09 Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 13.10 Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of, premium, if any, or
interest on any Securities, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Security, or because of the creation
of any indebtedness represented thereby, shall be had against any incorporator, shareholder, employee, agent, officer, director or subsidiary,
as such, past, present or future, of the Company or of any successor entity, either directly or through the Company or any successor entity,
whether by virtue of any constitution, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of the Securities.
Section 13.11 Counterparts.
This Indenture may be executed in any number of counterparts, each
of which shall be an original, but such counterparts shall together constitute but one and the same instrument.
Section 13.12 Separability.
In case any one or more of the provisions contained in this Indenture
or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such
Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.
Section 13.13 Compliance Certificates.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year during which any Securities of any series were outstanding, a compliance certificate stating whether or not the
signer knows of any Default or Event of Default that occurred during such fiscal year. Such certificate shall contain a certification
from the principal executive officer, principal financial officer or principal accounting officer of the Company that a review has been
conducted of the activities of the Company and the Company’s performance under this Indenture and that the Company has complied
with all conditions and covenants under this Indenture. For purposes of this Section 13.13, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this Indenture. If the officer of the Company signing such certificate
has knowledge of such a Default or Event of Default, the certificate shall describe any such Default or Event of Default and its status.
ARTICLE 14
SUBORDINATION OF SECURITIES
Section 14.01 Subordination Terms.
The payment by the Company of the principal of, premium, if any, and
interest on any series of securities issued hereunder shall be subordinated to the extent set forth in an indenture supplemental hereto
relating to such Securities.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
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BAOSHENG MEDIA GROUP HOLDINGS LIMITED |
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[TRUSTEE], as Trustee |
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CROSS-REFERENCE TABLE (1)
| Section of Trust Indenture Act Of 1939, as Amended | |
Section of Indenture |
| 310(a) | |
7.09 |
| 310(b) | |
7.08 |
| | |
7.10 |
| 310(c) | |
Inapplicable |
| 311(a) | |
7.13 |
| 311(b) | |
7.13 |
| 311(c) | |
Inapplicable |
| 312(a) | |
5.01 |
| | |
5.02(a) |
| 312(b) | |
5.02(c) |
| 312(c) | |
5.02(c) |
| 313(a) | |
5.04(a) |
| 313(b) | |
5.04(b) |
| 313(c) | |
5.04(a) |
| | |
5.04(b) |
| 313(d) | |
5.04(c) |
| 314(a) | |
5.03 |
| | |
13.12 |
| 314(b) | |
Inapplicable |
| 314(c) | |
13.07(a) |
| 314(d) | |
Inapplicable |
| 314(e) | |
13.07(b) |
| 314(f) | |
Inapplicable |
| 315(a) | |
7.01(a) |
| | |
7.01(b) |
| 315(b) | |
7.14 |
| 315(c) | |
7.01 |
| 315(d) | |
7.01(b) |
| 315(e) | |
6.07 |
| 316(a) | |
6.06 |
| | |
8.04 |
| 316(b) | |
6.04 |
| 316(c) | |
8.01 |
| 317(a) | |
6.02 |
| 317(b) | |
4.03 |
| 318(a) | |
13.09 |
| (1) |
This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions. |
Exhibit 5.1
| Our ref | SQG/741234-000010/26997650v1 |
Baosheng Media Group Holdings Limited
宝盛传媒集团控股有限公司
East Floor 5, Building No. 8, Xishanhui
Shijingshan District, Beijing 100041
People’s Republic of China
4 August 2023
Dear Sirs
Baosheng Media Group Holdings Limited 宝盛传媒集团控股有限公司
We have acted as Cayman Islands legal advisers
to Baosheng Media Group Holdings Limited 宝盛传媒集团控股有限公司
(the "Company") in connection with the Company’s registration statement on Form F-3, including all amendments or
supplements thereto (the "Registration Statement"), filed with the Securities and Exchange Commission under the U.S.
Securities Act of 1933, as amended to date relating to (i) the resale by certain selling shareholders named in the Registration Statement
(the "Selling Shareholders") of up to an aggregate of 447,917 ordinary shares, par value $0.0096 per share in the Company
(the "Resale Shares"); and (ii) the securities to be issued and sold by the Company from time to time. Such securities
include:
| a) | ordinary shares of the Company of par value US$0.0096 each (the "Shares"); |
| b) | debt securities of the Company, which may or may not be converted into our Shares (collectively the "Debt
Securities"), each series of Debt Securities to be issued under indentures to be entered into by the Company and the trustee
for such Debt Securities (the "Indentures"); |
| c) | warrants that entitle the holder to purchase Shares, Debt Securities, Rights, Units or any combination
thereof (the "Warrants") to be issued under warrant agreements to be entered into between the Company and the warrant
agent for such Warrants thereunder (the "Warrant Agreements"); |
| d) | rights to purchase Shares, Debt Securities, Warrants, Units or any combination thereof (the "Rights"),
each series of Rights to be issued under rights agent agreements to be entered into among the Company and a bank, trust company or other
financial institution, as rights agent for such Rights thereunder (the "Rights Agreements"); and |
| e) | units comprising of one or more of the Shares, Debt Securities, Warrants or Rights in any combination
(the "Units") to be issued under unit agreements to be entered into between the Company and the unitholder for such Units
thereunder (the "Unit Agreements"). |
We are furnishing this opinion as Exhibits 5.1
and 23.3 to the Registration Statement.
For the purposes of this opinion, we have reviewed
only originals, copies or final drafts of the following documents:
| 1.1 | The certificate of incorporation of the Company dated 4 December 2018. |
| 1.2 | The amended and restated memorandum and articles of association of the Company as conditionally adopted
by a special resolution passed on 20 July 2020 and effective on 10 February 2021 (the "Memorandum and Articles"). |
| 1.3 | The written resolutions of the board of directors of the Company dated 19 July 2023 (the "Resolutions"). |
| 1.4 | A certificate from a director of the Company, a copy of which is attached hereto (the "Director's
Certificate"). |
| 1.5 | A certificate of good standing dated 19 July 2023, issued by the Registrar of Companies in the Cayman
Islands (the "Certificate of Good Standing"). |
| 1.6 | The Registration Statement. |
The following opinions are given only as to, and
based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to
the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving these opinions we have relied (without
further verification) upon the completeness and accuracy, as of the date of this opinion letter, of the Director's Certificate and the
Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently verified:
| 2.1 | Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies
of, or in the final forms of, the originals. |
| 2.2 | All signatures, initials and seals are genuine. |
| 2.3 | There is no contractual or other prohibition or restriction (other than as arising under Cayman Islands
law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Registration Statement
and duly authorised, executed and delivered Indentures, Warrant Agreements, Rights Agreements and Unit Agreements. |
| 2.4 | The Company will have sufficient authorised capital to effect the issue of the Shares at the time of issuance. |
| 2.5 | The Indentures and the Debt Securities, the Warrant Agreements and the Warrants, the Rights and the Rights
Agreements, and the Units and the Unit Agreements, will be, legal, valid, binding and enforceable against all relevant parties in accordance
with their terms under the laws of the State of New York and all other relevant laws (other than, with respect to the Company, the laws
of the Cayman Islands). |
| 2.6 | The choice of the laws of the State of New York as the governing law of the Indentures and the Debt Securities,
the Warrant Agreements and the Warrants, the Rights and the Rights Agreements, and the Units and the Unit Agreements, will be made in
good faith and would be regarded as a valid and binding selection which will be upheld by the courts of the State of New York and any
other relevant jurisdiction (other than the Cayman Islands) as a matter of the laws of the State of New York and all other relevant laws
(other than the laws of the Cayman Islands). |
| 2.7 | The capacity, power, authority and legal right of all parties under all relevant laws and regulations
(other than, with respect to the Company, the laws and regulations of the Cayman Islands) to enter into, execute, unconditionally deliver
and perform their respective obligations under the Indentures and the Debt Securities, the Warrant Agreements and the Warrants, the Rights
and the Rights Agreements, and the Units and the Unit Agreements. |
| 2.8 | No monies paid to or for the account of the Company in respect of the Shares, the Debt Securities, the
Warrants, the Rights or the Units represent or will represent proceeds of criminal conduct or criminal property or terrorist property
(as defined in the Proceeds of Crime Act (As Revised) and the Terrorism Act (As Revised) respectively). |
| 2.9 | There is nothing under any law (other than the law of the Cayman Islands), which would or might affect
the opinions set out below. |
| 2.10 | There is nothing contained in the minute book or the corporate records of the Company (which we have not
inspected) which would or might affect the opinions hereinafter appearing. |
| 2.11 | None of the Resales Shares were issued for less than par value. |
| 2.12 | The issue of (i) the Shares, (ii) the Debt Securities under the Indentures, (iii) the Warrants under the
Warrant Agreements, (iv) the Rights under the Rights Agreements, and (v) the Units under the Unit Agreements will be of commercial benefit
to the Company. |
| 2.13 | No invitation has been or will be made by or on behalf of the Company to the public in the Cayman Islands
to subscribe for any of the Shares, the Debt Securities, the Warrants, the Rights or the Units. |
Based upon the foregoing and subject to the qualifications set out
below and having regard to such legal considerations as we deem relevant, we are of the opinion that:
| 3.1 | The Company has been duly incorporated as an exempted company with limited liability and is validly existing
and in good standing with the Registrar of Companies under the laws of the Cayman Islands. |
| 3.2 | The authorised share capital of the Company is US$60,000 divided into 6,250,000 ordinary shares with a
par value of US$0.0096. |
| 3.3 | The issue and allotment of the Resale Shares to be offered and sold by the Selling Shareholders as contemplated
in the Registration Statement have been duly authorised. The Resale Shares are legally issued and allotted and (assuming the purchase
price therefor has been paid in full) fully paid and non-assessable. |
| 3.4 | With respect to the Shares, when (i) the Board has taken all necessary corporate action to approve the
issue thereof, the terms of the offering thereof and related matters; (ii) the issue of such Shares has been recorded in the Company's
register of members (shareholders); and (iii) the subscription price of such Shares (being not less than the par value of the Shares)
has been fully paid in cash or other consideration approved by the Board, the Shares will be duly authorised, validly issued, fully paid
and non-assessable. |
| 3.5 | With respect to each issue of the Debt Securities, when (i) the Board has taken all necessary corporate
action to approve the creation and terms of the Debt Securities and to approve the issue thereof, the terms of the offering thereof and
related matters; (ii) an Indenture relating to the Debt Securities and the Debt Securities shall have been authorised and duly executed
and delivered by and on behalf of the Company and all the relevant parties thereunder in accordance with all relevant laws; and (iii)
when such Debt Securities issued thereunder have been duly executed and delivered on behalf of the Company and authenticated in the manner
set forth in the Indenture relating to such issue of Debt Securities and delivered against due payment therefor pursuant to, and in accordance
with, the terms of the Registration Statement and any relevant prospectus supplement, such Debt Securities issued pursuant to the Indenture
will have been duly executed, issued and delivered. |
| 3.6 | With respect to each issue of Warrants, when (i) the Board has taken all necessary corporate action to
approve the creation and terms of the Warrants and to approve the issue thereof, the terms of the offering thereof and related matters;
(ii) a Warrant Agreement relating to the Warrants shall have been duly authorised and validly executed and delivered by the Company and
the warrant agent thereunder; and (iii) the certificates representing the Warrants have been duly executed, countersigned, registered
and delivered in accordance with the Warrant Agreement relating to the Warrants and the applicable definitive purchase, underwriting or
similar agreement approved by the Board upon payment of the consideration therefor provided therein, the Warrants will be duly authorised,
legal and binding obligations of the Company. |
| 3.7 | With respect to each issue of the Rights, when (i) the Board has taken all necessary corporate action
to approve the creation and terms of the Rights and to approve the issue thereof, the terms of the offering thereof and related matters;
(ii) a Right Agreement relating to the Rights and the Rights shall have been authorised and duly executed and delivered by and on behalf
of the Company and all the relevant parties thereunder in accordance with all relevant laws; and (iii) when such Rights issued thereunder
have been duly executed and delivered on behalf of the Company and authenticated in the manner set forth in the Right Agreement relating
to such issue of Rights and delivered against due payment therefor pursuant to, and in accordance with, the terms of the Registration
Statement and any relevant prospectus supplement, such Rights issued pursuant to the Right Agreement will have been duly executed, issued
and delivered. |
| 3.8 | With respect to each issue of the Units, when (i) the Board has taken all necessary corporate action to
approve the creation and terms of the Units and to approve the issue thereof, the terms of the offering thereof and related matters; (ii)
a Unit Agreement relating to the Units and the Units shall have been authorised and duly executed and delivered by and on behalf of the
Company and all the relevant parties thereunder in accordance with all relevant laws; and (iii) when such Units issued thereunder have
been duly executed and delivered on behalf of the Company and authenticated in the manner set forth in the Unit Agreement relating to
such issue of Units and delivered against due payment therefor pursuant to, and in accordance with, the terms of the Registration Statement
and any relevant prospectus supplement, such Units issued pursuant to the Unit Agreement will have been duly executed, issued and delivered. |
| 3.9 | The statements under the caption "Taxation" in or incorporated by reference into the prospectus
forming part of the Registration Statement, to the extent that they constitute statements of Cayman Islands law, are accurate in all material
respects and that such statements constitute our opinion. |
| 3.10 | Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States,
a judgment obtained in such jurisdiction will be recognised and enforced in the courts of the Cayman Islands at common law, without any
re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court, provided
such judgment: |
| (a) | is given by a foreign court of competent jurisdiction; |
| (b) | imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given; |
| (d) | is not in respect of taxes, a fine or a penalty; and |
| (e) | was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice
or the public policy of the Cayman Islands. |
The opinions expressed above are subject to the
following qualifications:
| 4.1 | To maintain the Company in good standing with the Registrar of Companies under the laws of the Cayman
Islands, annual filing fees must be paid and returns made to the Registrar of Companies within the time frame prescribed by law. |
| 4.2 | The obligations assumed by the Company under the Indentures, Warrant Agreements, the Rights Agreements,
and the Unit Agreements will not necessarily be enforceable in all circumstances in accordance with their terms. In particular: |
| (a) | enforcement may be limited by bankruptcy, insolvency, liquidation, reorganisation, readjustment of debts
or moratorium or other laws of general application relating to, protecting or affecting the rights of creditors and/or contributories; |
| (b) | enforcement may be limited by general principles of equity. For example, equitable remedies such as specific
performance may not be available, inter alia, where damages are considered to be an adequate remedy; |
| (c) | some claims may become barred under relevant statutes of limitation or may be or become subject to defences
of set off, counterclaim, estoppel and similar defences; |
| (d) | where obligations are to be performed in a jurisdiction outside the Cayman Islands, they may not be enforceable
in the Cayman Islands to the extent that performance would be illegal under the laws of that jurisdiction; |
| (e) | the courts of the Cayman Islands have jurisdiction to give judgment in the currency of the relevant obligation
and statutory rates of interest payable upon judgments will vary according to the currency of the judgment. If the Company becomes insolvent
and is made subject to a liquidation proceeding, the courts of the Cayman Islands will require all debts to be proved in a common currency,
which is likely to be the "functional currency" of the Company determined in accordance with applicable accounting principles.
Currency indemnity provisions have not been tested, so far as we are aware, in the courts of the Cayman Islands; |
| (f) | arrangements that constitute penalties will not be enforceable; |
| (g) | enforcement may be prevented by reason of fraud, coercion, duress, undue influence, misrepresentation,
public policy or mistake or limited by the doctrine of frustration of contracts; |
| (h) | provisions imposing confidentiality obligations may be overridden by compulsion of applicable law or the
requirements of legal and/or regulatory process; |
| (i) | the courts of the Cayman Islands may decline to exercise jurisdiction in relation to substantive proceedings
brought under or in relation to the Indentures, Warrant Agreements, the Right Agreement, and the Unit Agreements in matters where they
determine that such proceedings may be tried in a more appropriate forum; |
| (j) | we reserve our opinion as to the enforceability of the relevant provisions of the Indentures, Warrant
Agreements, the Right Agreement, and the Unit Agreements to the extent that they purport to grant exclusive jurisdiction as there may
be circumstances in which the courts of the Cayman Islands would accept jurisdiction notwithstanding such provisions; |
| (k) | a company cannot, by agreement or in its articles of association, restrict the exercise of a statutory
power and there is doubt as to the enforceability of any provision in the Indentures, Warrant Agreements, the Rights Agreements, or the
Unit Agreements whereby the Company covenants to restrict the exercise of powers specifically given to it under the Companies Act (As
Revised) (the "Companies Act"), including, without limitation, the power to increase its authorised share capital, amend
its memorandum and articles of association or present a petition to a Cayman Islands court for an order to wind up the Company; and |
| (l) | if the Company becomes subject to Part XVIIA of the Companies Act, enforcement or performance of any provision
in the Indentures, Warrant Agreements, the Rights Agreements and the Unit Agreements which relates, directly or indirectly, to an interest
in the Company constituting shares, voting rights or director appointment rights in the Company may be prohibited or restricted if any
such relevant interest is or becomes subject to a restrictions notice issued under the Companies Act. |
| 4.3 | We express no opinion as to the meaning, validity or effect of any references to foreign (i.e. non-Cayman
Islands) statutes, rules, regulations, codes, judicial authority or any other promulgations and any references to them in the Indentures
or the Debt Securities, Warrant Agreements or the Warrants, the Rights Agreements or the Rights, or the Unit Agreements or the Units. |
| 4.4 | We have not reviewed any of the Indentures or the Debt Securities to be issued thereunder, the Warrant
Agreements or the Warrants to be issued thereunder, the Rights Agreements or the Rights to be issued thereunder, or the Unit Agreements
or the Units to be issued thereunder and our opinions are qualified accordingly. |
| 4.5 | We reserve our opinion as to the extent to which the courts of the Cayman Islands would, in the event
of any relevant illegality or invalidity, sever the relevant provisions of the Indentures or the Debt Securities, the Warrant Agreements
or the Warrants, the Rights Agreements or the Rights, or the Unit Agreements or the Units and enforce the remainder of the Indentures
or the Debt Securities, the Warrant Agreements or the Warrants, the Rights Agreements or the Rights, or the Unit Agreements or the Units
or the transaction of which such provisions form a part, notwithstanding any express provisions in the Indentures or the Debt Securities,
the Warrant Agreements or the Warrants, the Rights Agreements or the Rights, or the Unit Agreements or the Units in this regard. |
| 4.6 | Under the Companies Act, the register of members of a Cayman Islands company is by statute regarded as
prima facie evidence of any matters which the Companies Act directs or authorises to be inserted in it. A third party interest in the
shares in question would not appear. An entry in the register of members may yield to a court order for rectification (for example, in
the event of fraud or manifest error). |
| 4.7 | In this opinion the phrase "non-assessable" means, with respect to the Resale Shares and the
Shares in the Company, that a shareholder shall not, solely by virtue of its status as a shareholder, and in absence of a contractual
arrangement, or an obligation pursuant to the memorandum and articles of association, to the contrary, be liable for additional assessments
or calls on either the Resale Shares or the Shares by the Company or its creditors (except in exceptional circumstances, such as involving
fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared
to pierce or lift the corporate veil). |
Except as specifically stated herein, we make
no comment with respect to any representations and warranties which may be made by or with respect to the Company in any of the documents
or instruments cited in this opinion or otherwise with respect to the commercial terms of the transactions, which are the subject of this
opinion.
We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the reference to our name under the headings "Enforceability of Civil Liabilities"
and "Legal Matters" and elsewhere in the prospectus included in the Registration Statement. In giving such consent, we do not
thereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933,
as amended, or the Rules and Regulations of the Commission thereunder.
Yours faithfully
/s/ Maples and Calder (Hong Kong) LLP
Maples and Calder (Hong Kong) LLP
Director's Certificate
Exhibit
23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We consent to the inclusion in this Registration
Statement on Form F-3 of Baosheng Media Group Holdings Limited of our report dated May
8, 2023, with respect to the consolidated balance sheet of Baosheng Media Group Holdings
and its subsidiaries as of December 31, 2022, and related consolidated statements of operations
and comprehensive income (loss), change in shareholders’ equity, and cash flows for the year ended December 31, 2022. We
also consent to the reference to our firm under the heading “Experts” in the Registration Statement.
/s/ YCM CPA, Inc.
PCAOB ID
6781
Irvine, California
August 4, 2023
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We hereby consent to the incorporation by reference
in this Registration Statement on Form F-3 of Baosheng Media Group Holdings Limited of our report dated May 16, 2022, which contains an
explanatory paragraph regarding the effects of the retrospective adjustments related to the 2022 Share Consolidation, Increase in Share
Capital and 2023 Share Consolidation as discussed in Note 1 and Note 15, which were audited by other auditors, relating to the consolidated
balance sheets as of December 31, 2021, and the related consolidated statements of operations and comprehensive income (loss), shareholders’
equity, and cash flows of Baosheng Media Group Holdings Limited and its subsidiaries for each of the years in the two-year period ended
December 31, 2021. We also consent to the reference to our firm under the heading “Experts” in such Registration Statement.
We were dismissed as auditors of Baosheng Media Group Holdings Limited in July 2022 and, accordingly, we have not performed any audit
procedures with respect to any financial statements of Baosheng Media Group Holdings Limited and its subsidiaries appearing in such Registration
Statement for the periods after December 31, 2021.
/s/ Friedman LLP
New York, New York
August 4, 2023
Exhibit 23.4
August 4, 2023
To: Baosheng Media Group
Holdings Limited
East
Floor 5 Building No. 8, Xishanhui Shijingshan District, Beijing 100041 +86- 010-82088021
Dear Sir or Madam,
We
hereby consent to the reference of our name under the following headings in the prospectus on Form F-3 (“Prospectus’’) for the
resale of up to 447,917 ordinary shares by certain selling shareholders of Baosheng Media Group Holdings Limited (the “Company’’),
which will be filed with the U.S. Securities and Exchange Commission (the “SEC’’) in August 2023 and up to $100,000,000 of
securities to be issued and sold by the Company from time to time:
A.“Prospectus Summary—Permissions
Required from PRC Authorities’’;
S. “Risk Factors—Risks
Related to Doing Business in China”;
C. “Legal
Matters’’; and
D. “Enforceability
of Civil Liabilities.”
We
also consent to the filing of this consent letter with the SEC as an exhibit to the Prospectus. In giving such consent, we do not thereby
admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or under the
Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.
Yours faithfully,
Beijing Dacheng Law Offices, LLP
Exhibit 107
Calculation of Filing Fee Table
F-3
(Form Type)
Baosheng Media Group Holdings Limited
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered Securities
| |
|
Security |
|
Security |
|
Fee |
|
Amount |
|
|
Proposed |
|
|
Proposed |
|
|
Fee Rate |
|
|
Amount of |
|
| |
|
Type |
|
Class |
|
Calculation |
|
Registered |
|
|
Maximum |
|
|
Maximum |
|
|
|
|
|
Registration |
|
| |
|
|
|
Title |
|
or Carry |
|
|
|
|
Offering |
|
|
Aggregate |
|
|
|
|
|
Fee |
|
| |
|
|
|
|
|
Forward |
|
|
|
|
Price Per |
|
|
Offering |
|
|
|
|
|
|
|
| |
|
|
|
|
|
Rule |
|
|
|
|
Unit |
|
|
Price |
|
|
|
|
|
|
|
| Fees to be Paid |
|
Equity |
|
Ordinary shares |
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
Debt |
|
Debt Securities |
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
Other |
|
Warrants |
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
Other |
|
Rights |
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
Other |
|
Units |
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
Unallocated (Universal) Shelf |
|
- |
|
457(o) |
|
|
(1) |
|
|
|
(2) |
|
|
|
$100,000,000 |
|
|
|
0.0001102 |
|
|
$ |
11,020 |
|
| Fees to Be Paid |
|
Equity |
|
Ordinary shares (3) |
|
Rule 457(c) |
|
|
447,917 |
|
|
$ |
8.005 (4) |
|
|
$ |
3,585,575.58 |
|
|
|
0.0001102 |
|
|
$ |
395.13 |
|
| |
|
Total Offering Amounts |
|
|
|
|
|
|
$ |
103,585,575.58 |
|
|
|
|
|
|
$ |
11,415.13 |
|
| |
|
Total Fees Previously Paid |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0 |
|
| |
|
Total Fee Offset |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0 |
|
| |
|
Net Fee Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
11,415.13 |
|
| |
(1) |
The registrant is registering an indeterminate number of securities for offer and sale from time to time at indeterminate prices, which shall have an aggregate offering price not to exceed $100,000,000. In addition, pursuant to Rule 416(a) under the Securities Act of 1933, as amended, this registration statement shall be deemed to cover any additional number of securities that may be issued from time to time to prevent dilution as a result of a distribution, split, combination, or similar transaction. Securities registered hereunder may be sold separately, or together with other securities registered hereunder. Includes consideration to be received by the registrant, if applicable, for registered securities that are issuable upon exercise, conversion, or exchange of other registered securities. |
| |
|
|
| |
(2) |
The proposed maximum aggregate offering price per class of security will be determined from time to time by the registrant in connection with the issuance by the registrant of the securities registered hereunder and is not specified as to each class of security pursuant to Instructions to the Calculation of Filing Fee Tables and Related Disclosure (2)(A)(iii)(b) of Form F-3 under the Securities Act. |
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(3) |
Consists of 447,917 Ordinary Shares registered for sale by the Selling Shareholders. |
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(4) |
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) promulgated under the Securities Act of 1933, as amended, based upon the average of the high ($8.4999) and low ($7.51) prices of the Ordinary Shares as reported on the Nasdaq Capital Market on July 31, 2023, which is a date within five (5) business days prior to the filing date of this registration statement. |
Baosheng Media (NASDAQ:BAOS)
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Baosheng Media (NASDAQ:BAOS)
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From May 2023 to May 2024
