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 AND EXCHANGE ACT OF 1934
Date
of
Report (Date of Earliest Event Reported): April 24, 2007
CHINA
SECURITY & SURVEILLANCE
TECHNOLOGY,
INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
000-50917
|
98-0509431
|
|
(State
of Incorporation)
|
(Commission
File No.)
|
(IRS
Employer ID No.)
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13/F,
Shenzhen Special Zone Press Tower, Shennan Road
Futian,
Shenzhen, China, 100020
|
|
(Address
of Principal Executive
Offices)
|
(86)
755-83765666
Registrant’s
Telephone Number, Including Area Code:
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 (see General Instruction A.2. below):
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR.425)
o
Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01. Entry into a Material
Definitive Agreement
$50,000,000
Guaranteed
Senior Unsecured Convertible Notes due 2012
The
Notes
were issued pursuant to an Indenture dated April 24, 2007 (the “Indenture”)
among
(i) the Company, (ii) the Company’s subsidiaries China Safetech Holdings Limited
(“Safetech”),
China
Security & Surveillance Technology (HK) Ltd. (“CSST
HK”),
Chain
Star Investments Ltd. (“Chain
Star”),
as
guarantors, and (iii) The Bank of New York, as trustee for the Notes. Pursuant
to the Indenture, the guarantors have agreed, and all of the Company’s other
existing and future subsidiaries are obligated (only to the extent such
subsidiary is permitted under applicable laws to do so), to guarantee, on a
senior unsecured basis, to the holders of the Notes and the trustee the payment
and performance of the Company’s obligations thereunder.
Proceeds
from the issuance of the Notes will be used to finance current operations,
fund
potential acquisitions and for general corporate purposes.
In
connection with the transaction, the Company, its direct and indirect
subsidiaries, Mr. Tu Guo Shen , the CEO of the Company, Ms. Li Zhi Qun, Mr.
Tu’s
wife, and Whitehorse Technology Limited, a British Virgin Islands company wholly
owned by Mr. Tu and the registered owner of Mr. Tu’s equity interest in the
Company (“Whitehorse”,
and
together with Mr. Tu and Ms. Li, the “Controlling
Shareholders”),
and
Citadel also entered into an Amended and Restated Investor Rights Agreement
(“Amended
Investor Rights Agreement”),
dated
April 24, 2007 which amends and restates in its entirety the Investors Rights
Agreement, dated February 16, 2007, as amended on March 29, 2007, by and among
the Company, some of the Company’s direct and indirect subsidiaries, the
Controlling Shareholders and Citadel. Pursuant to the Amended Investor Rights
Agreement, Citadel was granted, among other things and subject to certain
conditions, a right of first refusal with respect to any financing sought by
the
Company and the rights to inspect the properties of the Company and its
subsidiaries, including its corporate and financial records. The Amended
Investor Rights Agreement also includes provisions that prohibit the Company
from issuing any new class of securities, having more than 60,000,000 shares
of
common stock outstanding at any time, or, with certain exceptions, issuing
or
selling securities at a price equal to or less than either 90% of the closing
price of its common stock as of the closing date of such issuance or sale or
the
simple arithmetic average of the closing price of its common stock for the
twenty trading days preceding the closing date of such issuance of sale.
The
offer
and sale of the Notes were made in an offshore transaction pursuant to
Regulation S under the Securities Act of 1933, as amended (the “Securities
Act”).
The
transaction closed on April 24, 2007.
The
foregoing description of the
Notes
Purchase Agreement, the Indenture and the Amended Investor Rights Agreement
does
not
purport to be complete and is qualified in its entirety by reference to such
documents, copies of which are attached hereto as Exhibits 4.1, 4.2 and 4.3,
respectively, and are incorporated herein by reference.
Second
Supplemental Indenture
On
April
24, 2007, the Company entered into a Second Supplemental Indenture (the
“Second
Supplemental Indenture”)
to
that certain Indenture, dated February 16, 2007, as amended on March 29, 2007
(the “February
Indenture”),
by
and among (i) the Company, (ii) Safetech and CSST HK, as guarantors, and (iii)
The Bank of New York, as trustee, in connection with the issuance and sale
by
the Company of a $60,000,000
Guaranteed
Senior Unsecured Convertible Notes due 2012
to
Citadel
(the “February
Notes”).
Under
Section 4.09 of the February Indenture, the Company covenanted to maintain
a
fixed charge coverage ratio of at least 12 to 1 and a leverage ratio not
exceeding 2.50 to 1.00, each determined as of the last day of each fiscal
quarter, for the four fiscal quarters ending on such day. In the Second
Supplemental Indenture, the parties agreed to remove the covenant related to
the
fixed charge coverage ratio and increase the maximum leverage ratio from 2.50
to
3.50. In addition, pursuant to certain provisions of the February Indenture,
the
Company’s newly acquired subsidiary Chain Star entered into the Second
Supplement Indenture and agreed, jointly and severally, with Safetech and CSST
HK, to unconditionally guarantee the Company’s obligations under the February
Notes on the terms and subject to the conditions set forth in the February
Indenture.
The
foregoing description of the
Second Supplemental Indenture does not
purport to be complete and is qualified in its entirety by reference to such
document, a copy of which is attached hereto as Exhibit 4.4 and is incorporated
herein by reference.
Item
2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant
The
Notes
are convertible, by the holders thereof, at any time on or prior to maturity,
into common shares of the Company initially at the conversion price of $23.60
per share (subject to adjustment in certain circumstances, including semi-annual
reset of the conversion price and upon occurrence of certain dilutive events,
in
each case subject to certain conditions). If the Notes are not converted before
its maturity, the Notes will be redeemed by the Company on the maturity date
at
a redemption price equal to 100% of the principal amount of the Notes then
outstanding plus an additional amount such that the total amount represents
to
the holders thereof a gross yield (including the paid or any accrued and unpaid
interest) of 15.0% per annum, calculated on a quarterly compounded basis, plus
any accrued and unpaid interest. In addition, if the 45-day variable weighted
average price or VWAP preceding February 15, 2010 equals or is greater than
$40.00 per share of Common Stock, the Company shall, within 1 trading day,
force
holders of the Notes to convert 50% of the then-outstanding principal amount
of
the Notes at the then applicable conversion rate on a pro rata basis (the
“2010
Mandatory Conversion”). If
the
45-day VWAP preceding February 15, 2011 equals or is greater than $45.00 per
share of Common Stock (the “2011
Mandatory Conversion Trigger”)
and
the 2010 Mandatory Conversion had occurred, the Company shall, within 1 trading
day, force holders of the Notes to convert all of the then-outstanding principal
amount of the Notes at the then applicable conversion price. If the 2011
Mandatory Conversion Trigger occurs and the 2010 Mandatory Conversion had not
occurred, the Company shall, within
1
trading day, force holders of the Notes to convert 50% of the then-outstanding
principal amount of the Notes at the then applicable conversion rate on a pro
rata basis.
If
a
Change of Control, Asset Sales (as defined in the Indenture), or certain other
designated events including de-listing occur, holders of the Notes may require
the Company to repurchase all or a portion of their Notes for cash at the
applicable redemption price.
Additional
terms and conditions are contained in Item 1.01 and are incorporated herein
by
reference.
Item
3.02. Unregistered
Sales of Equity Securities
The
information pertaining to the Notes in Item 1.01 and Item 2.03 is incorporated
herein by reference in its entirety. Neither the Notes nor the common shares
issuable upon conversion of the Notes have been registered under the Securities
Act and neither may be offered or sold in the United States absent registration
or an applicable exemption from registration requirements. This current report
on Form 8-K does not constitute an offer to sell, or a solicitation of an offer
to buy, any security and shall not constitution an offer, solicitation or sale
in any jurisdiction in which such offering would be unlawful.
Item
9.01. Financial
Statements and Exhibits
| (d) |
Exhibits |
| |
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4.1
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Notes
Purchase Agreement by and among the
Company, Chain Star, Safetech,
CSST HK, CSST PRC, Golden, Cheng Feng, Cheng Feng Equipment, Cheng
Feng
Public Safety, Hongtianzhi, Shixing, Tongxing and
Citadel, dated April 24, 2007.
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4.2
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Indenture
by and among the Company, Chain Star, Safetech, CSST HK and The Bank
of
New York, dated April 24, 2007.
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4.3
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Amended
and Restated Investor Rights Agreement by and among the
Company, Chain Star, Safetech,
CSST HK, CSST PRC, Golden, Cheng Feng, Cheng Feng Equipment, Cheng
Feng
Public Safety, Hongtianzhi, Shixing, Tongxing, Mr. Tu, Ms. Li, Whitehorse
and Citadel, dated April 24, 2007.
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4.4
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Second
Supplemental Indenture by and among the Company, Chain Star, Safetech,
CSST HK and The Bank of New York, dated April 24,
2007.
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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.
China
Security & Surveillance Technology, Inc.
Date:
April 24, 2007
/s/
Terence Yap
Chief
Financial Officer
EXHIBIT
INDEX
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Exhibit
No.
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Description
of Exhibit
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| |
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4.1
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Notes
Purchase Agreement by and among the
Company, Chain Star, Safetech,
CSST HK, CSST PRC, Golden, Cheng Feng, Cheng Feng Equipment, Cheng
Feng
Public Safety, Hongtianzhi, Shixing, Tongxing and
Citadel, dated April 24, 2007.
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4.2
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Indenture
by and among the Company, Chain Star, Safetech, CSST HK and The Bank
of
New York, dated April 24, 2007.
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4.3
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Amended
and Restated Investor Rights Agreement by and among the
Company, Chain Star, Safetech,
CSST HK, CSST PRC, Golden, Cheng Feng, Cheng Feng Equipment, Cheng
Feng
Public Safety, Hongtianzhi, Shixing, Tongxing, Mr. Tu, Ms. Li, Whitehorse
and Citadel, dated April 24, 2007.
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4.4
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Second
Supplemental Indenture by and among the Company, Chain Star, Safetech,
CSST HK and The Bank of New York, dated April 24,
2007.
|