Item 1.
Security and Issuer
This
statement is being filed with respect to the A Common Shares, $0.001 par value
per share (the “Common Shares”), of Xinhua Sports & Entertainment Limited
(“XSEL”).
XSEL
has its principal executive office at 18/F, Tower A, Winterless Centre, No. 1
West Da Wang Road, Chaoyang District, Beijing 100026, People’s Republic of
China.
Item 2.
Identity and Background
(a)
— (c) and (f) This statement is filed by (i) Patriarch Partners Media Holdings,
LLC (“PPMH”), ZOHAR CDO 2003-1, LIMITED, a Cayman Islands company (“Zohar I”),
and ZOHAR II 2005-1, LIMITED, a Cayman Islands company (“Zohar II”), with
respect to the Common Shares beneficially owned by such entities; (ii)
Patriarch Partners VIII, LLC (“Patriarch VIII”) with respect to the Common
Shares beneficially owned by Zohar I; (iii) Patriarch Partners XIV, LLC
(“Patriarch XIV”) with respect to the Common Shares beneficially owned by Zohar
II and (iv) Lynn Tilton with respect to Common Shares beneficially owned by
PPMH, Zohar I and Zohar II. Ms. Tilton disclaims beneficial ownership of the
securities covered by this statement except to the extent of her pecuniary
interest therein. Each of PPMH, Zohar I, Zohar II, Patriarch VIII, Patriarch
XIV and Ms. Tilton are referred to herein as a “Reporting Person” and
collectively, the “Reporting Persons.”
The
principal place of business and principal office address of each of Zohar I and
Zohar II is PO Box 1093GT, Queensgate House, South Church Street, George Town,
Grand Cayman, Cayman Islands. The principal place of business and principal office of each of PPMH,
Patriarch VIII, Patriarch XIV and Ms. Tilton is located at c/o Patriarch
Partners, LLC, 32 Avenue of the Americas, 17th Floor, New York, NY 10013.
The
principal business of each of Zohar I and Zohar II is that of purchasing,
selling and managing investments for its own account. The principal business of
each of Patriarch VIII and Patriarch XIV is to act as the collateral manager to
Zohar I and Zohar II, respectively. Ms. Tilton is the Chief Executive Officer
and sole Principal of Patriarch Partners, LLC (“Patriarch Partners”), a private
equity firm that Ms. Tilton founded in 2000, and Ms. Tilton also serves as
manager of certain of its affiliated entities, including Patriarch VIII and
Patriarch XIV. Ms. Tilton is a citizen of the United States.
(d) — (e)
None of PPMH, Zohar I, Zohar II, Patriarch VIII, Patriarch XIV or Ms. Tilton, has, during the last
five years (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and, as a result
of such proceeding, was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source
and Amount of Funds or Other Consideration
The total
amount of funds described in Item 4 and provided as Convertible Term Loans
(defined below) under the Credit Agreement (defined below) by each of Zohar I
and Zohar II and to acquire the Series C Preferred Shares (defined below) were provided
by working capital. Each of Zohar I and Zohar II issued notes to third parties
in connection with their respective formation transactions, and the funds
raised from such notes issuances are used by each of Zohar I and Zohar II as
working capital in connection with their primary investment operations,
including those used to fund the Convertible Term Loans, Additional Term Loans
(as defined below) and the acquisition of Series C Preferred Shares.
Item 4.
Purpose of Transaction
On October 21,
2008, XSEL entered into a credit agreement with Zohar I and Zohar II, as
lenders (“Lenders”), together with Patriarch Partners Agency Services, LLC, as
agent for the Lenders (the “Credit Agreement”). Each of the Lenders and the
agent are affiliates of Patriarch Partners. The Credit Agreement provided for
commitments by the Lenders of up to a maximum of $80 million in convertible
term loans, subject to certain borrowing conditions (the “Convertible Term
Loans”). The facility was for a term of four years and was secured by a pledge
of certain of XSEL’s television assets. The Convertible Term Loans are
convertible into XSEL’s Common Shares beginning October 21, 2009 at the
conversion prices set forth in the Credit Agreement, subject to adjustment as
provided therein. As of July 12, 2010, Zohar I holds $22,234,208.30 and Zohar
II holds $19,221,831.70 of Convertible Term Loans outstanding under the Credit
Agreement.
On July 12,
2010, XSEL entered into a second amendment to the Credit Agreement (the “Second
Amendment”) pursuant to which the Lenders thereunder waived certain defaults
under the Credit Agreement, as amended, and Zohar I made an additional loan of $4,076,124.57 and Zohar
II made an additional loan of $3,523,875.43 (the “Additional Term Loans”). The
Additional Term Loans are not convertible into Common Shares.
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In
connection with and as partial consideration for the Second Amendment, on July
12, 2010, XSEL and Zohar I and Zohar II entered into a Series C Convertible
Preferred Shares Purchase Agreement (the “Series C Purchase Agreement”)
providing for the purchase by Zohar I of 41,992 Series C Convertible Preferred
Shares of XSEL (“Series C Preferred Shares”) and the purchase by Zohar II of
36,303 Series C Preferred Shares.
The Series
C Preferred Shares are a newly-created series of preferred shares that have the
preferences, limitations and relative rights set forth in an authorizing
resolution (the “Authorizing Resolution”) adopted by the Board of Directors of
XSEL, the form of which is attached as Exhibit B to the Series C Purchase
Agreement.
Among other
rights, the Series C Preferred Shares are immediately convertible into Common
Shares at the option of the holders at any time based on the conversion formula
set forth in the Authorizing Resolution.
The Series
C Preferred Shares do not carry any ordinary voting rights with the Common
Shares and do not vote generally on any matters of XSEL other than as expressly
set forth in the Authorizing Resolution or as may be required under applicable
law. The Authorizing Resolution provides that the approval of the holders of a
majority of the outstanding Series C Preferred Shares, voting separately or in
some instances with any outstanding Parity Shares (as defined in the
Authorizing Resolution), will be required for certain extraordinary corporate
matters or matters expressly affecting the rights of the Series C Preferred
Shares, in each case all as more fully set forth in Section 5.2 of the
Authorizing Resolution.
Upon a
liquidation of XSEL, the Series C Preferred Shares will be entitled to the
liquidation preference described in Article 7 of the Authorizing Resolution.
The holders of the Series C Preferred Shares will also have the right to
require that their shares be redeemed by XSEL upon the occurrence of certain
“Realization Events,” as set forth in Article 6 of the Authorizing Resolution.
Pursuant to
an Investor and Registration Rights Agreement, dated October 21, 2008, between
XSEL, Zohar I, Zohar II and Xinhua Finance Limited entered into in connection
with the Credit Agreement (the “Investor Rights Agreement”), each of Zohar I
and Zohar II also have certain pre-emptive rights and “tag-along” rights with
respect to the Common Shares issuable upon the conversion of the Series C
Preferred Shares and Convertible Term Loans in connection with certain sales of
Common Shares by Xinhua Finance Limited.
In
connection with the Series C Purchase Agreement, XSEL, Zohar I and Zohar II also
entered into a Registration Rights Agreement in the form of Exhibit D to the
Series C Purchase Agreement providing the holders of the Series C Preferred
Shares with certain piggyback registration rights.
Each of the
Second Amendment and the Series C Purchase Agreement provide Zohar I and Zohar
II and certain affiliates or assignees with rights to appoint a non-voting
board observer to XSEL’s board of directors and to receive certain information
and access to XSEL’s financial and other information.
The
Reporting Persons acquired beneficial ownership of the Common Shares,
Convertible Term Loans and Series C Preferred Shares described in this Schedule
13D for investment purposes. As of the date of this Schedule 13D, none of the
Reporting Persons has any present plan or intention which would result in or
relate to any of the actions described in subparagraphs (a) through (j) of Item
4 of Schedule 13D. However, the Reporting Persons intend to closely monitor
XSEL’s performance and maintain close contact with XSEL’s management and board
of directors regarding its business plans and prospects and may modify their
plans in the future. In addition, the Reporting Persons and their
representatives and advisors may from time to time communicate with other
shareholders, industry participants and other interested parties concerning
XSEL, including discussions with interested parties, either on their own
initiative or at the request of XSEL, regarding potential partnerships,
investments and other transactions involving XSEL and/or the Reporting Person’s
investment in XSEL, any of which may result in one of more of the actions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
References
to and the description of terms of the Credit Agreement, Investor Rights
Agreement, Second Amendment, Series C Purchase Agreement and Registration
Rights Agreement is a summary and is qualified in its entirety by reference to
the full terms of the applicable agreements so described, each of which is
incorporated by reference as an exhibit to this Schedule 13D.
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Item 5.
Interest in Securities of the Issuer
(a) — (b)
Zohar I
holds $22,234,208.30 in Convertible Term Loans and 41,992 Series C Preferred
Shares which, as of July 12, 2010, are immediately convertible into 84,120,292
Common Shares, or 29.7% of XSEL’s Common Shares, for which Zohar I may be
deemed to share the power to vote and dispose of such Common Shares with
Patriarch VIII, its collateral manager. Patriarch VIII is the collateral
manager of Zohar I and, as a result, may be deemed to share the power to vote
and dispose of all shares beneficially owned by Zohar I.
Zohar II
holds $19,221,831.70 in Convertible Term Loans and 36,303 Series C Preferred
Shares which, as of July 12, 2010, are immediately convertible into 72,723,348
Common Shares, or 26.8% of XSEL’s Common Shares, for which Zohar II may be
deemed to share the power to vote and dispose such Common Shares with Patriarch
XIV, its collateral manager. Patriarch XIV is the collateral manager of Zohar
II and, as a result, may be deemed to share the power to vote and dispose of
all shares beneficially owned by Zohar II.
PPMH holds
10,139,655 Common Shares, or 5.1% of XSEL’s Common Shares, and may be deemed to
share the power to vote and dispose of such Common Shares with Ms. Tilton, its
manager.
Lynn Tilton
may be deemed to collectively share the power to vote and dispose of
166,983,295 Common Shares, or 46.9% of XSEL’s Common Shares as a result of the
following relationships: Ms. Tilton is the Manager of PPMH and may be deemed to
share the power to vote and dispose of all Common Shares held by PPMH; Ms.
Tilton is the Manager of Patriarch VIII, which is the collateral manager of Zohar
I and, accordingly, may be deemed to share the power to vote and dispose of
Common Shares into which Convertible Term Loans and Series C Preferred Shares
held by Zohar I are immediately convertible; and Ms. Tilton is the Manager of
Patriarch XIV, which is the collateral manager of Zohar II and, accordingly,
may be deemed to share the power to vote and dispose of Common Shares into
which Convertible Term Loans and Series C Preferred Shares held by Zohar II are
immediately convertible. Ms. Tilton disclaims any such ownership (except to the
extent of her pecuniary interest therein), and the filing of this Statement
shall not be construed as an admission that Ms. Tilton is, for the purposes of
Section 13(d) or 13(g) of the Securities Exchange Act of 1934, the beneficial
owner of such shares.
The
percentage ownership of XSEL’s Common Shares of the Reporting Persons is based
on 198,843,675 outstanding Common Shares as of July 12, 2010 and includes the
number of Common Shares for each Reporting Person into which securities
convertible into Common Shares are convertible within 60 days. The number of
outstanding Common Shares and conversion price of each of the Convertible Term
Loans and Series C Preferred Shares are based upon certain representations of XSEL
contained in the Series C Purchase Agreement. Based on representations of XSEL
in the Series C Purchase Agreement, as of July 12, 2010 on a fully-diluted
basis after giving effect to the conversion of all outstanding convertible
securities held by third parties in addition to the Reporting Persons, the
Reporting Persons would collectively beneficially own 39.8% of the Common
Shares. Notwithstanding the foregoing, the Authorizing Resolution for the
Series C Preferred Shares provides that in no event shall Series C Preferred
Shares be convertible in Common Shares to the extent that the conversion would
result in a “change of control,” as that term is defined in the authorizing
resolution for XSEL’s Series B Convertible Preferred Shares.
Except as set
forth in this Item 5, none of PPMH, Zohar I, Zohar II, Patriarch
VIII, Patriarch XIV or Ms.
Tilton beneficially owns or has the power to vote or cause the vote of any
Common Shares.
Neither the
filing of this Schedule 13D nor any of its contents shall be deemed to
constitute an admission that PPMH, Zohar I, Zohar II, Patriarch
VIII, Patriarch XIV or Ms.
Tilton is the beneficial owner of the Common Shares for purposes of
Section 13(d) of the Exchange Act or for any other purpose, and such beneficial
ownership is expressly disclaimed.
(c) Except
for the execution and delivery of the Second Amendment and Series C Purchase
Agreement, no transactions in Common Shares were effected by PPMH, Zohar I,
Zohar II, Patriarch VIII, Patriarch XIV or Ms. Tilton during the 60 days
prior to the date hereof.
(d) — (e)
Not applicable.
Item 6.
Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer
The
information set forth in Items 3 through 5 of this Schedule 13D is hereby
incorporated by reference in this Item 6. Except as otherwise described in
this Schedule 13D, to the knowledge of the Reporting Persons, there are no
contracts, arrangements, understandings or relationships (legal or
otherwise) among the persons named in Item 2 above, and between any such
persons and any other person, with respect to any securities of XSEL.
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Item 7.
Material to be Filed as Exhibits
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1.
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Joint Filing Agreement, dated as of July
22, 2010, among the Reporting Persons, is attached as Exhibit 1 hereto.
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2.
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Credit Agreement, dated as of October 21,
2008, by and among Xinhua Sports & Entertainment Limited (f/k/a Xinhua
Finance Media Limited), the subsidiary guarantors of the borrower, the
lenders parties thereto, and Patriarch Partners Agency Services, LLC, as
agent. (Incorporated by reference to Exhibit 4.53 of XSEL’s Form 20-F filed
on April 30, 2009 (File No. 0001389476)).
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3.
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Investor and Registration Rights Agreement,
dated as of October 21, 2008, among Xinhua Sports & Entertainment Limited
(f/k/a Xinhua Finance Media Limited), Zohar I, Zohar II and Xinhua Finance
Limited (Incorporated by reference to Exhibit 4.54 of XSEL’s Form 20-F filed
on April 30, 2009 (File No. 0001389476)).
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4.
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Second Amendment and Waiver to Credit
Agreement, dated as of July 12, 2010, by and among Xinhua Sports &
Entertainment Limited, the subsidiary guarantors of the borrower, the lenders
parties thereto, and Patriarch Partners Agency Services, LLC, as agent (Incorporated
by reference to Exhibit 4.65 of XSEL’s Form 20-F filed on July 15, 2010 (File
No. 0001389476)).
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5.
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Series C Convertible Preferred Shares
Purchase Agreement, dated as of July 12, 2010, among Xinhua Sports &
Entertainment Limited, Zohar I and Zohar II (Incorporated by reference to
Exhibit 4.66 of XSEL’s Form 20-F filed on July 15, 2010 (File No.
0001389476)).
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6.
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Registration Rights Agreement, dated as of
July 12, 2010, among Xinhua Sports & Entertainment Limited, Zohar I and
Zohar II (Incorporated by reference to Exhibit 4.67 of XSEL’s Form 20-F filed
on July 15, 2010 (File No. 0001389476)).
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After
reasonable inquiry and to the best of my knowledge and belief, the undersigned
certify that the information set forth in this statement is true, complete and
correct.
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Dated: July
22, 2010
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Patriarch
Partners Media Holdings, LLC
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By:
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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Title:
Manager
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ZOHAR CDO
2003-1, LIMITED
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By:
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Patriarch
Partners VIII, LLC,
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its
Collateral Manager
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By:
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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Title:
Manager
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ZOHAR II
2005-1, LIMITED
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By:
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Patriarch
Partners XIV, LLC,
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its
Collateral Manager
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By:
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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Title:
Manager
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Patriarch
Partners VIII, LLC
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By:
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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Title:
Manager
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Patriarch
Partners XIV, LLC
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By:
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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Title:
Manager
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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Exhibit 1
JOINT FILING AGREEMENT
In
accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as
amended, the undersigned hereby agree to the joint filing of Patriarch Partners
Media Holdings, LLC, ZOHAR CDO 2003-1, LIMITED, ZOHAR II 2005-1, LIMITED,
Patriarch Partners VIII, LLC, Patriarch Partners XIV, LLC and Ms. Lynn Tilton
on behalf of each of them a statement on Schedule 13D (including amendments
thereto) with respect to A Common Shares, par value $0.001 per share, of Xinhua
Sports & Entertainment Limited, a Cayman Islands company, and that this
Agreement be included as an Exhibit to such joint filing. This Agreement may be
executed in any number of counterparts all of which taken together shall
constitute one and the same instrument.
IN WITNESS
WHEREOF, the undersigned hereby execute this Agreement this 22nd day of July
2010.
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Date: July
22, 2010
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Patriarch
Partners Media Holdings, LLC
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By:
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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Title:
Manager
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Date: July
22, 2010
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ZOHAR CDO
2003-1, LIMITED
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By:
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Patriarch
Partners VIII, LLC,
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its
Collateral Manager
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By:
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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Title:
Manager
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Date: July
22, 2010
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ZOHAR II
2005-1, LIMITED
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By:
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Patriarch
Partners XIV, LLC,
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its
Collateral Manager
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By:
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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Title:
Manager
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Date: July
22, 2010
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Patriarch
Partners VIII, LLC
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By:
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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Title:
Manager
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Date: July
22, 2010
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Patriarch
Partners XIV, LLC
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By:
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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Title:
Manager
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Date: July
22, 2010
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/s/ Lynn
Tilton
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Name: Lynn
Tilton
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13
Grafico Azioni Xinhua Sports & Entertainment Limited ADS, Each Representing Two Class A Common Shares (MM) (NASDAQ:XSEL)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Xinhua Sports & Entertainment Limited ADS, Each Representing Two Class A Common Shares (MM) (NASDAQ:XSEL)
Storico
Da Giu 2023 a Giu 2024
