Attached files
| file | filename |
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| EX-10.1 - China Architectural Engineering, Inc. | v190921_ex10-1.htm |
| EX-99.1 - China Architectural Engineering, Inc. | v190921_ex99-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
__________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of Earliest Event Reported): July 13,
2010
CHINA
ARCHITECTURAL ENGINEERING, INC.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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001-33709
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51-05021250
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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105
Baishi Road, Jiuzhou West Avenue, Zhuhai 519070
People’s
Republic of China
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N/A
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(Address
of principal executive offices)
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(Zip
code)
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Registrant’s
telephone number, including area code:
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0086-756-8538908
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N/A
(Former
Name or Former Address, If Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive
Agreement.
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On July
13, 2010, China Architectural Engineering, Inc. (the “Company”) entered
into an Amendment and Waiver Agreement (the “Agreement”) with The
Royal Bank of Scotland N.V., London Branch (“RBS N.V.”); CITIC Capital China
Mezzanine Fund Limited (“CITIC,” and together with RBS N.V., the “Bondholders”);
The Royal Bank of Scotland (China) Co. Ltd. Shenzhen Branch; Luo Ken Yi; Jun
Tang; KGE Group Limited; and First Jet Investments Limited. The
Agreement was entered into to, among other things, extend the term of a similar
waiver agreement dated February 24, 2010 entered into by and between the same
parties as reported by the Company in the Current Report on Form 8-K filed with
the Securities and Exchange Commission on February 24, 2010.
The
Bondholders are the holders of its outstanding Variable Rate Convertible Bonds
due 2012 (the “2007
Bonds”) and 12% Convertible Bonds due 2011 (the “2008 Bonds,” and
collectively with the 2007 Bonds, the “Bonds”) and warrants
to purchase 300,000 shares of common stock of the Company expiring 2013 (the
“2008
Warrants”). Pursuant to the Agreement, the holders of the
Bonds and the 2008 Warrants agreed to waive their right to a reduction in the
conversion price of the Bonds and the exercise price of the 2008 Warrants upon
the Company’s anticipated issuance of up to 25,000,000 shares of its common
stock (the “Shares”) to First Jet
Investment Limited (“First Jet”) for a
proposed acquisition of a 60% ownership interest in Shanghai ConnGame Network
Co. Ltd. (“ConnGame”). Additionally,
the holders of the 2008 Bonds agreed to waive any default under the terms and
conditions of the trust deed governing the 2008 Bonds relating to the
requirement that KGE Group Limited own at least 45% of the Company’s issued and
outstanding common stock.
The
waivers contained in the Agreement are subject to numerous conditions, including
repayments of debt and lock-up restrictions.
Repayments
The
Company agreed that it would pay to the Bondholders all outstanding interests in
arrears on the Bonds, plus all other applicable interest up until the payment
date, within 30 days after the closing of the issuance of the Shares, but which
in any event, would not be later than September 30, 2010. The Company
also agreed to pay all unsettled amounts of an overdraft facility, which include
all outstanding principal and interest amounts, within 30 days after the closing
of the issuance of the Shares, but which in any event, would not be later than
September 30, 2010.
The
Company agreed that it will not repay or prepay any debt prior to its currently
scheduled due date until the Company makes all of the payments specified in the
Waiver and the Bonds have been redeemed in full and that any new indebtedness
incurred by the Company for the purpose of repaying the overdraft facility shall
(i) not exceed the outstanding amount due and payable under the overdraft
facility and (ii) be subordinated to all amount owed under the
Bonds.
Lock-up restrictions
First Jet
and KGE Group agreed to certain lock-up restrictions. Pursuant to the
terms of the Agreement, First Jet Investment Limited (“First Jet”), the
owner of the 60% ownership interest in ConnGame being sold to the Company, and
KGE Group each agreed that they will maintain an ownership in the Company that
is no less than 20% and 15%, respectively, of the Company’s common stock (the
“Company Lock-Up
Shares”) after the issuance of the Shares until all liabilities due to
the holders of the Bonds and the Overdraft Lender have been paid in
full. First Jet and KGE Group also agreed not offer, sell, contract
to sell, pledge, grant any option to purchase, make any short sale or otherwise
dispose of or encumber the Company Lock-Up Shares until released from such
restriction. Mr. Jun Tang, the largest shareholder of First Jet, and
Mr. Luo Ken Yi each agreed that, until all liabilities due to the holders of the
Bonds and the Overdraft Lender have been paid in full, he will own at least 20%
and 15%, respectively, of the Company’s outstanding shares of common
stock (the “Individual Lock-Up
Shares”) and that he shall not offer, sell, contract to sell, pledge,
grant any option to purchase, make any short sale or otherwise dispose of or
encumber any of the Individual Lock-Up Shares. Mr. Luo Ken Yi is the
largest shareholder of KGE Group, in addition to the Chief Executive Officer and
Chairman of the Board of the Company.
In
addition, Mr. Luo agreed to not offer, sell, contract to sell, pledge, grant any
option to purchase, make any short sale or otherwise dispose of or encumber any
of the Company shares beneficially owned by Mr. Luo without prior consent of the
Bondholders, which shall not be unreasonably withheld for the purpose of
allowing the payments under the bonds and related interest to be
made. Mr. Luo would be subject to such restrictions until the payment
required under the waiver and interest of 2008 Bonds due on October 15, 2010 are
paid in full.
2
If the
Company fails to make any of the payments specified in the Agreement, then all
rights of the holders of the Bonds and 2008 Warrants waived under the Agreement
to or to be waived under the Agreement, shall not be waived and will be
reinstated, and any previous waivers will be null and void. In such
case, appropriate adjustments will be made to the conversion prices of the Bonds
and the exercise price of the 2008 Warrants in the event any of the Shares are
issued and an event of default under the terms and conditions of the trust deed
governing the 2008 Bonds shall exist, making the 2008 Bonds immediately due and
payable. Additionally, (a) if any part of the proposed issuance of
the Shares is cancelled or not consummated within three months from the
effective date of the Agreement or (b) if the Company breaches either of the
covenants, or (c) if any of KGE Group, First Jet, Mr. Luo Ken Yi or Mr. Jun Tang
fails to beneficially own the specified percentage of the Company’s outstanding
shares of common stock or breaches their lock-up restrictions with respect to
such shares, then all rights of the holders of the Bonds and 2008 Warrants
waived under the Agreement or to be waived under the Agreement, shall not be
waived and will be reinstated, and any previous waivers will be null and
void.
A copy of
the Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K, which
is incorporated herein by reference. The foregoing description of the
Agreement is a summary only and is subject to, and qualified in its entirety by,
such exhibit.
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Item
7.01
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Regulation
FD Disclosure.
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On July
19, 2010, the Company issued a press release announcing the execution of the
Amendment and Waiver Agreement. A copy of the
press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and
the information therein is incorporated herein by reference.
The
information reported under Item 7.01 in this Current Report on Form 8-K,
including Exhibit 99.1 attached hereto, shall not be deemed filed for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or
otherwise subject to the liabilities of that section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, regardless of any general incorporation language
in such filing.
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Item
9.01
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Financial
Statements and Exhibits.
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(d) Exhibits
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Exhibit
Number
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Description
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10.1
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99.1
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Press
Release dated July 19, 2010.
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3
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Date: July
19, 2010
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CHINA
ARCHITECTURAL ENGINEERING, INC.
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By:
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/s/ Luo
Ken Yi
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Name:
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Luo
Ken Yi
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Title:
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Chief
Executive Officer
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