UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER
PURSUANT
TO
RULE
13a-16 OR 15d-16
UNDER
THE
SECURITIES EXCHANGE ACT OF 1934
For
February
20, 2008
Commission
File No. 001-
32860
Shanghai
Century Acquisition Corporation
23
rd
Floor,
Shun Ho Tower, 24-30 Ice House Street, Central,
Hong
Kong
SAR, China
(ADDRESS
OF PRINCIPAL EXECUTIVE OFFICES.)
Indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F
or
Form
40-F.
Form
20-F
x
Form 40-F
¨
I
ndicate
by check mark
if
the
registrant is submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(1): ____
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): ____
Indicate
by check mark
w
hether
the registrant by furnishing the information contained in this form is also
thereby furnishing the information
to
the
Commission pursuant to Rule
12
g
3-2
(b)
under
the Securities Exchange Act of 1934.
Yes
¨
No
x
If
“Yes”
marked, indicate below the file number assigned to the registrant in connection
with Rule 12g3-2(b):
82
-
___
Forward-looking
statements
This
Report on Form 6-K contains statements of a forward-looking nature. These
statements are made under the “safe harbor” provisions of the U.S. Private
Securities Litigation Reform Act of 1995. You can identify these forward-looking
statements by terminology such as “will,” “expects,” “anticipates,” “future,”
“intends,” “plans,” “believes,” “estimates” and similar statements. The accuracy
of these statements may be impacted by a number of business risks and
uncertainties that could cause actual results to differ materially from those
projected or anticipated, including risks related to: business conditions in
China, changing interpretations of generally accepted accounting principles;
outcomes of government reviews; inquiries and investigations and related
litigation; continued compliance with government regulations; legislation or
regulatory environments, requirements or changes adversely affecting the
businesses in which Shanghai Century and/or New Goal International Limited
is
engaged; fluctuations in customer demand; management of rapid growth; intensity
of competition from other competitors; timing, approval and market acceptance
of
new services and solutions; general economic conditions; geopolitical events
and
regulatory changes, as well as other relevant risks detailed in Shanghai
Century's filings with the Securities and Exchange Commission, including its
report on Form 10-K. The information set forth herein should be read in light
of
such risks. Shanghai Century does not assume any obligation to update the
information contained in this Report on Form 6-K.
Termination
of Material Agreement; Entry Into Material Agreements
On
February 20, 2008, Shanghai Century Acquisition Corporation (“Shanghai
Century”), Sichuan Kelun Pharmaceutical Co., Ltd (“Kelun”) and the shareholders
of Kelun (the “Kelun Shareholders”) entered into a Termination and Release
Agreement dated February 20, 2008 (the “Termination Agreement”), whereby the
parties agreed to terminate the Share Purchase Agreement dated May 28, 2007
by
and among Shanghai Century, Kelun and the Kelun Shareholders (the “Kelun
Agreement”). The parties decided to terminate the Kelun Agreement because they
agreed that it would be highly unlikely that the proposed acquisition of Kelun
by Shanghai Century would have received the required PRC regulatory approvals
prior to April 28, 2008, the deadline for consummation of a business combination
by Shanghai Century. A copy of the Termination Agreement is filed herewith
as
Exhibit 10.1 and incorporated herein by reference. The description of the
Termination Agreement contained herein is qualified in its entirety by reference
to Exhibit 10.1.
On
February 20, 2008, Shanghai Century and Richard Li (“Mr Li”) entered into a
Stock Purchase Agreement dated as of February 20, 2008 (the “Stock Purchase
Agreement”) whereby Shanghai Century agreed to purchase from Mr Li 100% of the
issued and outstanding shares of common stock (the “Shares”) of Asia Leader
Investments Limited, a Hong Kong company (“Asia Leader”). Asia Leader is the
owner of 67% of the outstanding equity of New Goal International Limited, a
Hong
Kong company (“New Goal”) that was formed to engage in certain financing leasing
arrangements and other leasing services in the People’s Republic of China (the
“PRC”). The purchase price for the Shares consists of the payment of US$300,000
and the assumption by Shanghai Century of all of Asia Leader’s obligations and
responsibilities under the New Goal Joint Venture Agreement (as defined and
more
fully described below) including, without limitation, Asia Leader’s obligation
to make a cash capital contribution in an amount up to US$70,000,000 to New
Goal. Pursuant to the New Goal Joint Venture Agreement, Shanghai Century will
also acquire, on the closing date, Asia Leader’s option to purchase the
remaining 33% of the equity of New Goal, which Shanghai Century will exercise
on
the closing date for US$31,800,000 (the "Buyout Option"). The closing of the
transactions contemplated by the Stock Purchase Agreement is conditioned, among
other things upon the receipt of the requisite approval of the proposed
acquisition by the shareholders of Shanghai Century. The proposed acquisition
of
the Shares will not require PRC regulatory approval. A copy of the Stock
Purchase Agreement is filed herewith as Exhibit 10.2 and incorporated herein
by
reference. The description of the Stock Purchase Agreement contained herein
is
qualified in its entirety by reference to Exhibit 10.2.
On
February 20, 2008, Asia Leader, RAD International Investments Company Limited
(“RAD”) and Mr. Kevin Ma (“Mr Ma”) entered into a Joint Venture Agreement dated
as of February 20, 2008 with respect to New Goal (the “New Goal Joint Venture
Agreement”). The New Goal Joint Venture Agreement provided for the establishment
of New Goal and set forth the respective capital contributions of Asia Leader
and RAD. Pursuant to the New Goal Joint Venture Agreement, RAD agreed to
contribute to New Goal in consideration for 33% of the equity of New Goal,
(i)
an Exclusive Cooperation Agreement between New Goal and New Century
International Leasing Co., Ltd (“NCIL”), (ii) three Framework Contracts, which
shall include a Framework Contract for automobiles among New Goal, NCIL and
the
supplier, a Framework Contract for windmills among New Goal, NCIL and the
supplier and a Framework Contract for ATM among New Goal, NCIL, the supplier
and
the lessee, (iii) three Trust Lease Contracts, which shall include the Trust
Lease Contract for automobiles between New Goal and NCIL, the Trust Lease
Contract for windmills between New Goal and NCIL and the Trust Lease Contract
for ATN between New Goal and NCIL, (iv) three Lease Contracts, which shall
include the Lease Contract for automobiles between NCIL and each lessee, the
Lease Contract for windmills between NCIL and each lessee and the Lease Contract
for ATM between NCIL and each lessee, (v) three Supply Contracts, which shall
include the Supply Contract for automobiles among New Goal, NCIL and the
supplier, the Supply Contract for windmills among New Goal, NCIL and the
supplier and the Supply Contract for ATM among New Goal, NCIL and the supplier,
(vi) certain Arranger Agreements, (vii) Joint Venture Contracts between New
Goal
and three PRC entities, (viii) temporary assistance to New Goal until its is
able to establish a wholly-owned foreign enterprise in Beijing ( a “WFOE”) and
the WFOE receives its official business license authorizing it to engage in
the
financial leasing business in the PRC and (ix) the Right of First Refusal
Agreement dated February 20, 2008 by and among Asia Leader, RAD, NCIL, New
Century International Leasing Company Limited (“New Century”) and Kevin Ma (the
“Right of First Refusal Agreement”), as more fully described below. Pursuant to
the New Goal Joint Venture Agreement, Asia Leader agreed to contribute to New
Goal, in exchange for 67% of the equity of New Goal, US$70,000,000, provided,
however, that in the event that the value of the equipment purchased by New
Goal
pursuant to the Supply Contracts was less than $70,000,000 the amount of Asia
Leader’s capital contribution shall be decreased by the same amount, provided
further, however, that in no event shall the value of such equipment as set
forth in the Supply Contracts be less than US$50,000,000.
Pursuant
to the New Goal Joint Venture Agreement, RAD granted to Asia Leader the
exclusive option to purchase all of its shares in New Goal at any time on
an all
or nothing basis for a purchase price of US$31,800,000. Shanghai Century
intends
to exercise the Buyout Option on the date of the closing of the transactions
contemplated by the Stock Purchase Agreement.
The
obligation of Asia Leader to make the capital contribution described above
to
New Goal is conditioned, among other things upon the effectiveness as of the
contribution date of (i) the Exclusive Cooperation Agreement, (ii) the Framework
Contract for automobiles and the Framework Contract for ATM, (iii) the Trust
Lease Contract for automobiles and the Trust Lease Contract for ATM, (iv) the
Lease Contract fir ATM, (v) the Supply Contract for automobiles and the Supply
Contract for ATM and (vi) the Arranger Agreements. In addition, Asia Leader
may,
at its option require that RAD obtain for New Goal, the following signed and
effective agreements as of the contribution date (i) the Framework Contract
for
windmills, (ii) the Trust Lease Contract for windmills, (iii) the Lease Contract
for windmills, (iv) the Supply Contract for windmills and (v) certain Lease
Contracts for automobiles. The obligation of Asia Leader to make the
capital contribution is also conditioned upon the execution by New Goal of
a
Consulting Agreement with Shanghai Century Capital Corporation (“SHCC”), a
corporation owned by the current Co-Chief Executive Officers of Shanghai Century
pursuant to which SHCC will provide certain management consulting services
to
New Goal in consideration for a total of US$1,600,000 in fees, payable in three
installments of US$600,000 on the contribution date, US$500,000 on January
1,
2009 and US$500,000 on January 1, 2010.
In
the
event that Asia leader does not make its capital contribution on or prior to
April 30, 2008, regardless of whether the closing of the transactions under
the
Stock Purchase Agreement has occurred, then RAD shall, under certain
circumstances, be entitled to receive a nonperformance fee of US$350,000.
Shanghai Century has agreed to be responsible for payment of such nonperformance
fee.
The
obligation of RAD to make the capital contribution to New Goal described above
is conditioned, among other things, upon (i) receipt by New Goal of the cash
capital contribution of Asia Leader and (ii) receipt by RAD from Asia Leader
of
its notice to exercise the Buyout Option.
A
copy of
the New Goal Joint Venture Agreement is filed herewith as Exhibit 10.3 and
incorporated herein by reference. The description of the New Goal Joint Venture
Agreement contained herein is qualified in its entirety by reference to Exhibit
10.3.
On
February 20, 2008, Shanghai Century and Mr Ma entered into an Employment
Agreement dated February 20, 2008 (the “Employment Agreement”) pursuant to which
Shanghai Century agreed to employ Mr Ma to serve as Chief Executive Officer
of
Shanghai Century commencing on the date of the closing of the transactions
contemplated by the Stock Purchase Agreement and ending on the later of June
30,
2013 or the date on which either Shanghai Century or Mr Ma elects not to extend
the Employment Agreement further by giving written notice to the other party.
Mr
Ma shall, among other things, be responsible for recruiting a management team
experienced in leasing and related service areas for Shanghai Century and/or
its
subsidiaries (the “Management Team”). Pursuant to the Employment Agreement, Mr
Ma shall be paid an annual base salary of US$600,000. In addition, Mr Ma and
members of the Management Team shall be eligible to receive an annual
performance share incentive bonus (the “Share Bonus”) in respect of fiscal years
2008, 2009 and 2010, subject to the achievement of certain annual performance
targets. Mr Ma shall be entitled to retain for himself a minimum of fifty
percent (50%) of the Share Bonus paid in each of 2008, 2009 and 2010. Four
million (4,000,000) shares of Shanghai Century and four million (4,000,000)
warrants to purchase ordinary shares of Shanghai Century will be issued to
the
Management Team if New Goal and its PRC leasing subsidiary achieve a combined
net after tax income of US$20,000,000 in 2008, which number of shares and
warrants could be increased pro rata up to a maximum of 50% and decreased pro
rata without any minimum in the event that combined net after tax income is
greater or less than US$20,000,000. An additional four million (4,000,000)
shares of Shanghai Century will be issued to the Management Team if New Goal
and
its PRC leasing subsidiary achieve a combined net after tax income of
US$34,000,000 in 2009, which number of shares could be increased pro rata up
to
a maximum of 25% with no shares being issued to the Management Team unless
the
US$34,000,000 combined net after tax income target is reached. An additional
four million (4,000,000) shares of Shanghai Century will be issued to the
Management Team if New Goal and its PRC leasing subsidiary achieve a combined
net after tax income of US$57,800,000 in 2010, which number of shares could
be
increased pro rata up to a maximum of 25% with no shares being issued to the
Management Team unless the US$57,800,000 combined net after tax income target
is
reached.
Shanghai
Century shall be entitled to terminate Mr Ma’s employment at any time for Cause
(as defined in the Employment Agreement) but may not terminate Mr Ma’s
employment without Cause. Mr Ma shall be entitled to resign for any reason
during the term of his employment with three (3) months prior written notice
to
Shanghai Century. A copy of the Employment Agreement is filed herewith as
Exhibit 10.4 and incorporated herein by reference. The description of the
Employment Agreement contained herein is qualified in its entirety by reference
to Exhibit 10.4.
On
February 20, 2008, Asia Leader, RAD, NCIL, New Century and Mr Ma entered into
the Right of First Refusal Agreement dated February 20, 2008. RAD and New
Century are the owners, respectively, of 80% and 20% of the equity of NCIL.
Pursuant to the Right of First Refusal Agreement, RAD and New Century each
agreed that for a period of five (5) years commencing on the date on which
Asia
Leader makes its capital contribution to New Goal, that in the event that RAD
and/or New Century desires to sell or otherwise transfer any of its equity
in
NCIL that it shall first offer Asia Leader the right to purchase such equity
on
the terms and subject to the conditions set forth in the Right of First Refusal
Agreement. A copy of the Right of First Refusal Agreement is filed herewith
as
Exhibit 10.5 and incorporated herein by reference. The description of the Right
of First Refusal Agreement contained herein is qualified in its entirety by
reference to Exhibit 10.5.
Other
Information
Shanghai
Century intends to hold presentations for certain of its stockholders regarding
its proposed acquisition of New Goal through the acquisition of 100% of the
stock of Asia Leader, the owner of 67% of the equity of New Goal and the
exercise of the Buyout Option for the remaining 33% of the equity of New Goal,
as described above in “Entry Into Material Agreements”. A copy of the
presentation is filed herewith as Exhibit 99.1 and is incorporated by reference
herein.
On
February 20, Shanghai Century issued a press release announcing the termination
of the Kelun Agreement and the execution of certain agreements in connection
with its proposed acquisition of Asia Leader, the owner of 67% of the equity
of
New Goal and the remaining 33% of the equity of New Goal
,
as
described above in “Termination of Material Agreement; Entry Into Material
Agreements”.
A copy
of the press release is filed herewith as Exhibit 99.2 and is incorporated
herein by reference.
The
proposed acquisition has been unanimously approved by the board of directors
of
Shanghai Century and the relevant acquisition parties. It is subject to the
approval by a majority of the shareholders of Shanghai Century voting in person
or by proxy at a meeting to be held for that purpose as well as certain closing
conditions. In addition, Shanghai Century will not complete the acquisition
if
its shareholders holding 20% or more of the ordinary shares issued in its
initial public offering both vote against the Acquisition and elect to convert
their ordinary shares into a pro rata share of the funds in Shanghai Century’s
trust account.
Shanghai
Century will file with the United States Securities and Exchange Commission
(the
“SEC”) and
distribute
to its shareholders a proxy statement in connection with the proposed
acquisition. Shanghai Century’s shareholders are encouraged to read the proxy
statement which will contain important information about Shanghai Century,
New
Goal and the proposed acquisition, including detailed risk factors.
Shanghai
Century is a foreign private issuer. As such, its proxy statement and other
proxy materials with respect to the proposed acquisition will not be subject
to
preliminary review and comment by the SEC. Shanghai Century’s proxy statement
with respect to the proposed acquisition will contain risk factor disclosure
alerting its shareholders to the fact that its proxy materials have not been
reviewed by the SEC and may not have all of the material disclosures required
to
be included under the SEC’s rules. It is, however, the intent of Shanghai
Century to provide to its shareholders proxy materials with respect to the
proposed acquisition that meet the form and content requirements of the Schedule
14A of the Securities Exchange Act of 1934, as amended.
Exhibits
|
10.1
|
Termination
and Release Agreement dated February 20, 2008 by and among Shanghai
Century, Kelun and
the
Kelun Shareholders
|
|
10.2
|
Stock
Purchase Agreement dated as of February 20, 2008 by and between Shanghai
Century and Richard
Li
|
|
10.3
|
Joint
Venture Agreement dated as of February 20, 2008 by and among Asia
Leader,
RAD and Kevin Ma
|
|
10.4
|
Employment
Agreement dated February 20, 2008 by and between Shanghai Century
and
Kevin Ma
|
|
10.5
|
Right
of First Refusal Agreement dated February 20, 2008 by and among Asia
Leader, RAD, NCIL, New
Century
and Kevin Ma
|
|
99.1
|
Investor
Presentation of Shanghai Century dated February,
2008
|
|
99.2
|
Press
Release of Shanghai Century dated February 20,
2008
|
The
information in this Report, including the exhibits filed herewith , shall not
be
deemed to be “filed” for the purposes of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liabilities of that
Section. It shall not be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, except as shall be expressly set forth
by specific reference in such a filing.
SIGNATURE
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, thereunto
duly
authorized.
|
|
|
|
|
|
Shanghai
Century Acquisition Corporation
|
|
|
|
|
|
By:
|
/s/
Franklin Chu
|
|
|
Name:
Franklin Chu
|
|
|
Title:
Co-Chief Executive Officer
|
Dated:
February 20, 2008
Shanghai Century Acquisition Corp. (AMEX:SHA)
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Shanghai Century Acquisition Corp. (AMEX:SHA)
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