ITEM 1.02 Termination of a Material Definitive Agreement
On June 15, 2020, China XD Plastic Company Limited (the "Company"), Faith Dawn
Limited, an exempted company with limited liability incorporated under the laws
of the Cayman Islands ("Parent"), and Faith Horizon Inc., a Nevada corporation
("Merger Sub"), entered into an agreement and plan of merger, as amended (the
"merger agreement"), pursuant to which Merger Sub will merge with and into the
Company (the "merger") and cease to exist, with the Company continuing as the
surviving corporation (the "surviving corporation") and becoming a wholly-owned
subsidiary of Parent.
On May 8, 2021, the Company issued a notice of termination to Parent (the
"Notice of Termination") notifying Parent that the Company terminated the merger
agreement pursuant to Section 9.1(c)(i) of the merger agreement, based on Parent
and Merger Sub's breaches of the merger agreement, which have given rise to the
failure of several conditions set forth in Section 8.1 and Section 8.3 of the
merger agreement. These breaches are not capable of being cured prior to the
termination date of the merger agreement. Pursuant to the Notice of Termination,
as a result of such termination, the Parent Termination Fee becomes due and
payable to the Company by Parent.
On May 12, 2021, Parent sent a response letter, dated May 11, 2021 (the
"Response Letter"), to the Company that while it disagrees with the allegations
made in the Notice of Termination, Parent acknowledges that the Company may
terminate the merger agreement pursuant to Section 9.1(c)(iii) of the merger
agreement and thus agrees to pay the Parent Termination Fee pursuant to Section
9.3(b) of the merger agreement under that basis. As a result of the termination
of the merger agreement, the merger will not be completed.
A copy of the Notice of Termination is filed as Exhibit 99.1 and is incorporated
by reference herein. A copy of the Response Letter is filed as Exhibit 99.2 and
is incorporated by reference herein.
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
99.1 Notice of Termination by the Company, dated May 8, 2021
99.2 Response Letter by Parent, dated May 11, 2021
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