INVESTOR’S RIGHTS AGREEMENT BEPRECISE INVESTMENTS LIMITED and GLOBAL MARKET GROUP LIMITED and THE PARTIES NAMED HEREIN October 19, 2006
Exhibit
4.71
INVESTOR’S
RIGHTS AGREEMENT
BEPRECISE
INVESTMENTS LIMITED
and
GLOBAL
MARKET GROUP LIMITED
and
THE
PARTIES NAMED HEREIN
October
19, 2006
TABLE
OF CONTENTS
CLAUSE
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HEADING
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PAGE
NO.
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1.
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GENERAL
MATTERS.
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2
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2.
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INFORMATION
AND INSPECTION RIGHTS.
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2
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3.
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PUBLIC
OFFERING RIGHTS.
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3
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4.
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RIGHT
OF PARTICIPATION.
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3
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5.
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RIGHTS
OF FIRST REFUSAL AND CO-SALE.
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6
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6.
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ASSIGNMENT
AND AMENDMENT.
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8
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7.
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PROTECTIVE
PROVISIONS.
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10
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8.
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BOARD
MATTERS.
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12
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9.
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UNDERTAKINGS.
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13
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10.
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CONFIDENTIALITY
AND XXX-XXXXXXXXXX.
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00
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00.
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MISCELLANEOUS.
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16
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ANNEX
A
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–
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DEFINITIONS
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EXHIBIT
A
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–
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ADHERENCE
AGREEMENT
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EXHIBIT
B
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–
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INDEMNIFICATION
AGREEMENT
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INVESTOR’S
RIGHTS AGREEMENT
This
INVESTOR’S RIGHTS AGREEMENT (this “Agreement”) is entered
into on October 19,
2006, by and among:
A. Beprecise
Investments Limited, a company
incorporated in the British Virgin Islands (the “Investor”), whose
registered office is at
P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British
Virgin
Islands,
B. Global
Market Group Limited, a company
incorporated in the Cayman Islands (the “Company”), whose
registered office is at the
offices of Offshore Incorporations (Cayman) Limited, Scotia Centre, 4th Floor,
P.O. Box 2804, Xxxxxx Town, Grand Cayman,
C. Global
Market Group (Asia) Limited, a
company incorporated in the Hong Kong Special Administrative Region (the
“HK Subsidiary”), whose
registered office is at Xxxx 0, Xxxxx X, 0xx Xxxxx, Xxxxx I, Yip Fat Factory
Building, 77 Xxx Xxxx Road, Xxxx Xxxx, Kowloon, Hong Kong,
D. Global
Market (Guangzhou) Co., Ltd., a joint
venture established under the laws of the Republic of China (the
“PRC Subsidiary”),
whose registered address is at Xxxx 000, Xx. 000 Xxxx Xx Dong Road, Xxxx
Xx
District, Guangzhou, the Republic of China, and
E. Pan
Weijia, holder of PRC Passport
No.X00000000, and Pan Weinian, holder
of PRC Identity Card No.PCHN 150184962, the address of both is
at Xxxx 0, Xxxxx X, 0xx Xxxxx, Xxxxx I, Yip Fat Factory Building, 77 Xxx
Xxxx
Road, Xxxx Xxxx, Kowloon, Hong Kong (Pan Weijia and Pan Weinian, each a
“Key Shareholder” and
together, the “Key Shareholders”).
RECITALS
WHEREAS,
the Investor has agreed to subscribe from the Company, and the
Company has agreed to sell to the Investor, 1,940,000 Series A Preferred
Shares
of the Company, representing sixteen point twenty-five percent (16.25%) of
the
equity interests in the Company on a fully-diluted basis, on the terms and
conditions set forth in Series A Preferred Shares Subscription Agreement
dated
September 3, 2006 (the “Share Subscription
Agreement”) by and among, the Company, the Key
Shareholders, the Global Market Subsidiaries and the Investor. This Agreement
is
the “Investor’sRights
Agreement” as defined in the Share
Subscription Agreement.
1
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set
forth, and other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties hereto agree as follows:
1.
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GENERAL
MATTERS.
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1.1 Definitions.
Capitalized terms used herein
without definition have the meanings assigned to them in Annex A attached to this Agreement.
The use of
any term defined in Annex A
in its uncapitalized form indicates that the words have their normal and
general
meaning.
1.2 Pledge.
The Company and each Key Shareholder
shall cause all parties to this Agreement, other than the Investor, to perform
its obligations under this Agreement.
2.
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INFORMATION
AND INSPECTION RIGHTS.
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2.1
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Information
and Inspection Rights.
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(a) Information
Rights. The Company covenants and
agrees that, commencing on the date of the Closing, and for so long as any
Series A Preferred Share is outstanding, the Company shall deliver to the
Investor the following with respect to the Company and its
Subsidiaries:
(i) annual
audited consolidated financial statements within ninety (90) days
after the end of each fiscal year, audited by an international accounting
firm
approved by the Investor;
(ii) six-month
unaudited consolidated financial statements within thirty (30) days after
the
end of such six-month period;
(iii) monthly
unaudited consolidated financial statements within ten (10) days
after the end of each month;
(iv) an
annual consolidated operating budget and strategic plan for the
following fiscal year within thirty (30) days prior to the end of each fiscal
year; and
(v) upon
the
written request by the Investor, such other information as the Investor shall
reasonably request.
All
financial statements to be provided to the Investor pursuant to this
Section 2.1 and pursuant to any other Transaction Agreement, shall include
a balance sheet, a statement of profit or loss and a statement of cash flows,
and shall be prepared in the English language in accordance with the U.S.
GAAP
and shall consolidate all of the financial results of the Group
Companies.
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(b) Inspection
Rights. The Company covenants and
agrees that, commencing on the date of this Agreement, and for so long as
the
Investor holds at least five percent (5%) of the equity interests in the
Company, the Investor or its appointee shall have the right of inspection,
including the right to inspect the properties and facilities of the Company
and/or any of its Subsidiaries and/or any of its joint venture companies
and/or
any of its Affiliates, to access, examine and copy all books or accounts
of the
Company and/or any of its Subsidiaries, and to discuss the business, operations
and conditions of the Company and each of its Subsidiaries with their respective
directors, officers, employees, accounts, legal counsel and investment bankers,
with the full cooperation of the Company, during reasonable business
hours.
(c) Termination
of Rights. Except as set forth in
Section 2.2 below, the foregoing information right shall terminate upon the
closing of a Qualified IPO.
2.2 Information
Rights After a Qualified IPO. The
Company covenants and agrees that, for so long as the Investor holds any
Investment Securities, the Company shall deliver to the Investor (i) promptly
after filing, copies of all of the Company’s annual and periodic reports made
available to its shareholders as well as all public reports (including any
periodic, interim, or extraordinary reports) filed with the Securities and
Futures Commission of the Hong Kong Special Administrative Region, the China
Securities and Regulatory Commission of the People’s Republic of China , the
U.S. Securities and Exchange Commission, or any other stock exchange or
securities regulatory authority, and (ii) promptly upon request, copies of
the
current versions of all documents relating to any subsequent financings by
the
Company, or otherwise affecting the Investment Securities or the holders
of the
Investment Securities, bearing the signatures of all parties and of the
Company’s Memorandum and Articles of Association bearing the file stamp of the
appropriate government authority, in each case with all amendments and
restatements. This Section 2.2 shall survive any termination of this
Agreement.
3.
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PUBLIC
OFFERING RIGHTS.
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3.1 General.
Prior to a Qualified IPO, the Company,
the Investor and the Key Shareholders shall enter into a registration rights
agreement on customary terms and conditions, providing that, among other
things,
the Investor shall be entitled to request three (3) demand registrations
after
the Qualified IPO, an unlimited number of registration on either Form S-3
or
Form F-3 and an unlimited number of piggyback registrations with respect
to any
registration by the Company and its securities, subject to customary underwriter
cutbacks. The Company shall bear the costs and expenses of selling shareholders
in connection with any public offering or registration (other than the
underwriter’s commission), including the costs and expenses of two (2) counsels
for the Investor.
4.
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RIGHT
OF PARTICIPATION.
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4.1
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With
Respect to Issuance of New Securities:
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(a) General.
The Investor and any person to which
rights under this Section 4.1 have been duly assigned in accordance with
Section
6 (each of the Investor and its assignees being hereinafter referred to as
a
“Participation Rights Holder”) shall have
a right of first refusal to purchase such a Pro Rata Share
of all or any part of the New Securities that the
3
Company
may from time to time issue after the date of this Agreement,
including any New Securities not purchased by other Participation Rights
Holders
(the “Right of Participation”).
(b) Pro
Rata Share. A Participation Rights Holder’s
“Pro Rata Share”
is
the
ratio of (a) the number of Registrable Securities then held by such
Participation Rights Holder, to (b) the total number of Ordinary Shares
(assuming conversion of all convertible securities but excluding shares issuable
under unexercised options or warrants) then outstanding immediately prior
to the
issuance of New Securities giving rise to the Right of Participation.
(c) New
Securities. “New
Securities” shall mean any Series A Preferred
Shares, any other shares of the Company designated as “Preferred Shares,”
Ordinary Shares or other voting shares of the Company, whether now authorized
or
not, and rights, options or warrants to purchase such Series A Preferred
Shares
or Preferred Shares, Ordinary Shares and securities of any type whatsoever
that
are, or may become, convertible or exchangeable into such Series A Preferred
Shares, Preferred Shares, Ordinary Shares or other voting shares,
provided, however,
that the term “New Securities” shall not
include:
(i) any
Series A Preferred Shares issued under the Share Subscription Agreement,
or
Ordinary Shares issued upon conversion of the Series A Preferred Shares
authorized herein;
(ii) any
securities issued in connection with any share split, share dividend or other
similar event in which all Participation Rights Holders are entitled to
participate on a pro-rata basis;
(iii) in
the aggregate up to 1,000,000 Ordinary Shares (proportionally adjusted
to reflect any share dividends, share splits, or similar transactions) issued
or
issuable to officers, directors, employees and consultants of the Company
or its
Subsidiaries pursuant to any equity plan or incentive arrangement approved
by
the Board;
(iv) those
issued as a dividend or distribution on Series A Preferred Shares
or any event for which adjustment is made;
(v) any
securities issued pursuant to the acquisition of another corporation or entity
by the Company by consolidation, merger, purchase of assets, or other
reorganization in which the Company acquires, in a single transaction or
series
of related transactions, a majority of the assets, voting power or equity
ownership of such other corporation or entity; and
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(vi)
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any
securities offered in a Qualified IPO by the
Company.
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(d)
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Procedures.
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(i) First
Participation Notice. In the event that the
Company proposes to undertake an issuance of New Securities in a single
transaction or a series of related transactions, it shall give to each
Participation Rights Holder a written notice of its intention to issue New
Securities (the “First Participation
Notice”), describing the amount, the type and the
price of New Securities and the general terms upon which the Company proposes
to
issue such
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New
Securities. Each Participation Rights Holder shall be entitled to
purchase such Participation Rights Holder’s Pro Rata Share of such New
Securities at the price and upon the terms and conditions specified in the
First
Participation Notice by giving a written notice to the Company and stating
therein the number of New Securities to be purchased (such number shall not
exceed such Participation Rights Holder’s Pro Rata Share) within twenty (20)
Business Days from the date of such First Participation Notice. If any
Participation Rights Holder fails to send such written notice within the
prescribed time period, then the right of such Participation Rights Holder
to
purchase its Pro Rata Share hereunder shall be forfeited.
(ii) Second
Participation Notice; Oversubscription. If any
Participating Rights Holder fails to exercise its Right of Participation
with
respect to all of the New Securities which such Participating Rights Holder
is
entitled to purchase in accordance with subsection (d)(i) above, the Company
shall promptly give a written notice (the “Second
Participation Notice”) to the Participating Rights
Holders who agreed to exercise their Right of Participation (the
“Rights Participants”)
in accordance with subsection (d)(i) above. Each Rights Participant shall
have
five (5) Business Days from the date of the Second Participation Notice (the
“Second Participation Period”) to notify
the Company of its desire to purchase more than its Pro Rata
Share of the New Securities, stating the number of the additional New Securities
it proposes to purchase. Such notice may be made by telephone if followed
by a
written confirmation within two (2) Business Days from the date of verbal
notice. If as a result thereof, such oversubscription exceeds the total number
of the remaining New Securities available for purchase, the oversubscribing
Rights Participants will be cut back by the Company with respect to their
oversubscriptions to that number of remaining New Securities equal to the
product obtained by multiplying (i) the number of the remaining New Securities
available for subscription by (ii) a fraction the numerator of which is the
number of Registrable Securities held by each oversubscribing Rights Participant
and the denominator of which is the total number of Registrable Securities
held
by all the oversubscribing Rights Participants. Each oversubscribing Rights
Participant shall be obligated to purchase such number of additional New
Securities as determined by the Company pursuant to this subsection (d)(ii)
and
the Company shall so notify the Rights Participants within fifteen (15) Business
Days from the date of the Second Participation Notice.
(e) Failure
to Exercise. In the event Participation
Rights Holders do not exercise the Right of Participation with respect to
all
New Securities described in the First Participation Notice, (i) after twenty
(20) Business Days following the date of the First Participation Notice,
or (ii)
upon the expiration of the Second Participation Period, the Company shall
have a
period of ninety (90) days thereafter to sell the New Securities described
in
the First Participation Notice (with respect to which the Right of Participation
was not fully exercised) at the same or a higher price and upon non-price
terms
not more favorable to the purchasers thereof than specified in the First
Participation Notice. In the event that the Company has not issued and sold
such
New Securities within such prescribed period, then the Company shall not
thereafter issue or sell any New Securities without first offering such New
Securities to the Participation Rights Holders pursuant to this Section
4.1.
(f) Termination.
The Right of Participation under
this Section 4.1 shall terminate upon the completion of a Qualified
IPO.
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5.
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RIGHTS
OF FIRST REFUSAL AND CO-SALE.
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5.1 General.
Without limiting Section 9.1, a Key
Shareholder may sell or transfer its Shares, either directly or indirectly,
prior to the completion of a Qualified IPO only upon compliance with this
Section 5.
5.2 Notice
of Sale. If a Key Shareholder (the
“Selling Shareholder”)
proposes to sell or transfer any of its Shares (the “Transfer Shares”), then the
Selling
Shareholder shall promptly give a written notice (the “Transfer Notice”) to the
Company and to the
Investor describing in reasonable detail the proposed sale or transfer,
including the number of Transfer Shares, the nature of such sale or transfer
and
the consideration to be paid.
5.3 Right
of First Refusal. The Investor shall be
entitled to purchase all or any part of the Investor’s Pro Rata Share of the
Transfer Shares, at the price and upon the terms and conditions specified
in the
Transfer Notice by giving a written notice to the Selling Shareholder within
twenty (20) Business Days after the date of the Transfer Notice stating therein
the number of Transfer Shares to be purchased. If the Investor exercises
such
right and notifies the Selling Shareholder of the number of Transfer Shares
to
be purchased, then the Investor shall complete the purchase of the Transfer
Shares on the same terms and conditions as those set out in the Transfer
Notice.
A failure by the Investor to respond within such prescribed period shall
constitute a decision by the Investor not to exercise its right to purchase
such
Transfer Shares.
5.4 Co-Sale
Right. Without limiting Section 5.3,
the Investor shall have the right, exercisable upon delivery of a written
notice
to the Selling Shareholder, with a copy to the Company, within twenty (20)
Business Days after the date of the Transfer Notice, to participate in the
sale
of any Transfer Shares at the same price and upon the same terms and conditions
indicated in the Transfer Notice. A failure by the Investor to respond within
such prescribed period shall constitute a decision by the Investor not to
exercise its right of co-sale as provided herein. To the extent the Investor
exercises such right of co-sale in accordance with the terms and conditions
set
forth below, the number of Transfer Shares that the Selling Shareholder may
sell
in the transaction shall be correspondingly reduced. The foregoing co-sale
right
of the Investor shall be subject to the following terms and
conditions:
(a) the
Investor may sell all or any part of its Pro Rata Share of the
Transfer Shares. The Investor’s “Pro Rata Co-Sale
Share” of a specified quantity of Transfer Shares
shall mean that number of Ordinary Shares (or that number of Preferred Shares
which, if converted at the current conversion ratio, would equal that number
of
Ordinary Shares) which equals the specified quantity of Transfer Shares proposed
to be transferred multiplied by a fraction equal to (i) the total number
of
Ordinary Shares (on an as-converted basis) then held by the Investor exercising
co-sale rights pursuant to this Section 5.4, divided by (ii) the total number
of
Ordinary Shares held by the Selling Shareholder plus the total number of
Ordinary Shares then held by the Investor exercising co-sale rights pursuant
to
this Section 5.4, on an as-converted basis. As used in this definition, the
phrase “on an as-converted
basis” shall mean assuming conversion of all
Preferred Shares but not assuming exercise or conversion of any other
outstanding option, warrants, or other convertible securities.
6
(b) the
Investor shall effect its participation in the sale by promptly
delivering to the Selling Shareholder, with a copy to the Company, for transfer
to the prospective purchaser share certificates in respect of all Shares
to be
sold by the Investor and a transfer form signed by the Investor, which
indicates:
(i) the
number of Ordinary Shares which the Investor elects to sell;
(ii) that
number
of Preferred Shares which is at such time convertible into the number of
Ordinary Shares that the Investor elects to sell; or
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(iii)
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any
combination of the
foregoing;
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provided,
however,
that if the prospective purchaser objects to the delivery of Preferred Shares
in
lieu of Ordinary Shares, the Investor shall convert such Preferred Shares
into
Ordinary Shares and deliver Ordinary Shares. The Company agrees to make any
such
conversion concurrent with the actual transfer of such shares to the
purchaser.
5.5 Procedure
at Closing. The share certificate or
certificates that the Investor delivers to the Selling Shareholder pursuant
to
Section 5.4(b) shall be transferred to the prospective purchaser in consummation
of the sale of the Transfer Shares pursuant to the terms and conditions
specified in the Transfer Notice, and the Selling Shareholder shall concurrently
therewith remit to the Investor that portion of the sale proceeds to which
the
Investor is entitled by reason of its participation in such sale. To the
extent
that any prospective purchaser or purchasers prohibit such assignment or
otherwise refuse to purchase shares or other securities from the Investor
exercising its rights of co-sale hereunder, the Selling Shareholder shall
not
sell any Transfer Shares to such prospective purchaser or purchasers unless
and
until, simultaneously with such sales, the Selling Shareholder shall purchase
such shares or other securities from the Investor. In selling its Shares
pursuant to their co-sale right hereunder, the Investor shall not be required
to
give any representations or warranties with respect to its Shares to be sold
except to confirm that they have not transferred or encumbered such
Shares.
5.6 Non-Exercise.
To the extent the Investor does not
elect to participate in the sale of Transfer Shares pursuant to the Transfer
Notice, the Selling Shareholder may, not later than ninety (90) days following
delivery of the Transfer Notice to the Investor, effect a transfer of the
Transfer Shares covered by the Transfer Notice and not elected to be sold
by the
Investor. Any proposed transfer on terms and conditions more favorable than
those described in the Transfer Notice, as well as any subsequent proposed
transfer of any Shares by the Selling Shareholder, shall be subject to the
procedures described in Sections 5.3 and 5.4.
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5.7
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Prohibited
Transfer.
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(a) Prohibited
Transfer. In the event a Selling
Shareholder should sell any Transfer Shares in disregard or contravention
of the
right of first refusal or co-sale rights under this Agreement (a
“Prohibited Transfer”),
the Investor, in addition to such other remedies as may be available at law,
in
equity or hereunder, shall have the put option provided below, and such Selling
Shareholder shall be bound by the applicable provisions of such
option.
7
(b) Put
Right. Without prejudice to any other rights
and remedies available to the Investor, in the event of a Prohibited Transfer,
the Investor shall have the right to sell to the Selling Shareholder the
type
and number of Ordinary Shares equal to the number of Shares the Investor
would
have been entitled to transfer to the purchaser under Section 5.4 hereof
had the
Prohibited Transfer been effected pursuant to and in compliance with the
terms
hereof. Such sale shall be made on the following terms and
conditions:
(i) The
price per share at which the Shares are to be sold to the Selling Shareholder
shall be equal to the price per share paid by the purchaser to the Selling
Shareholder in the Prohibited Transfer. The Selling Shareholder shall also
reimburse the Investor for any and all reasonable fees and expenses, including
legal fees and out-of-pocket expenses, incurred pursuant to the exercise
or the
attempted exercise of the Investor’s rights under this Section 5.
(ii) The
Investor shall, if exercising the option created hereby, deliver to the Selling
Shareholder within ninety (90) days after the later of the dates on which
the
Investor (A) received notice of the Prohibited Transfer or (B) otherwise
become
aware of the Prohibited Transfer, a notice describing the type and the number
of
Shares to be transferred by the Investor.
(iii) The
Selling Shareholder shall, promptly upon receipt of such notice from
the Investor exercising the option created hereby, pay to the Investor the
aggregate purchase price for the Shares to be sold by the Investor, and the
amount of reimbursable fees and expenses, as specified above, in cash or
by
other means acceptable to the Investor.
(iv) Upon
receipt of full payment of the amount due from the Selling
Shareholder, the Investor shall deliver to the Selling Shareholder the
certificate or certificates representing Shares to be sold, together with
a
transfer form signed by the Investor transferring such shares.
(v) Notwithstanding
the foregoing, any attempt by a Selling Shareholder to
transfer any of the Transfer Shares in violation of Sections 5.3 or 5.4
shall be void, and the Company undertakes it will not effect such a transfer
nor
will treat any alleged transferee as the holder of such shares without the
written consent of the Investor.
5.8 Termination.
The Investor’s rights under
Sections 5.1 to 5.7 shall terminate upon the completion of a Qualified
IPO.
6.
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ASSIGNMENT
AND AMENDMENT.
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6.1
|
Assignment.
Notwithstanding
anything
herein to the contrary:
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(a) Information
Rights. The rights of the Investor
under Sections 2.1 (prior to a Qualified IPO) and 2.2 are transferable to
any
Affiliate of the Investor or to any person who holds or is acquiring Investment
Securities immediately after the Closing in a transfer which does not breach
any
express provision of this Agreement; provided, however,
that the Company is given a written
notice stating the name and address of the assignee and identifying the
securities of the Company as to which the rights in question are being assigned;
and provided further that
8
any
such assignee shall receive such assigned rights, subject to all the
terms and conditions of this Agreement, including the provisions of this
Section
6.
(b) Registration
Rights. The registration rights of
the Holders under Section 3 are fully assignable to any Affiliate of such
Holder
or to any person who holds or is acquiring Registrable Securities in a permitted
transfer; provided,
however,
that the Company is
given a written notice stating the name and address of the assignee and
identifying the securities of the Company as to which the rights in question
are
being assigned; and provided further that any such assignee
shall receive such assigned rights, subject to
all the terms and conditions of this Agreement, including the provisions
of this
Section 6.
(c) Right
of Participation. The Right of
Participation of the Investor under Section 4 hereof is fully assignable
to the
Investor’s Affiliates or to any person who holds or is acquiring Series A
Preferred Shares immediately after the Closing in a transfer which does not
breach any express provision of this Agreement; provided, however
that any such assignee shall receive such
assigned rights, subject to all the terms and conditions of this Agreement,
including the provisions of this Section 6.
(d) Rights
of First Refusal and Co-sale. The rights
of the Investor under Section 5 are assignable prior to a Qualified IPO to
any Affiliate of the Investor or to any person who holds or is acquiring
Investment Securities in a transfer which does not breach any express provision
of this Agreement; provided,
however,
that the Company and Key
Shareholders are given a written notice stating the name and address of the
assignee and provided further
that any such assignee shall receive such assigned rights, subject to all
the
terms and conditions of this Agreement, including the provisions of this
Section
6.
6.2 Adherence
Agreement. For any transfer of Shares
to be deemed effective, the transferee shall assume the obligations of the
transferor under this Agreement by executing and delivering to the Company
an
Adherence Agreement substantially in the form attached hereto as Exhibit A. Upon the execution
and delivery of an
Adherence Agreement by any transferee, such transferee shall be deemed to
be a
Key Shareholder, Investor, or Holder hereunder, as appropriate.
6.3 No
restriction or encumbrance on Series A Preferred
Shares. The transfer and assignment of the Series A
Preferred Shares or any right of the Investor under this Agreement or any
other
Transaction Agreements shall not be subject to any rights of first refusal
or
co-sale rights or other restrictions or encumbrances on transfer or
assignment.
6.4 Amendment
of Rights. A provision of this
Agreement may only be amended and the observance thereof may only be waived
(either generally or in a particular instance and either retroactively or
prospectively) with the written consent of the Company and the Investor,
except
for Section 5 which may be amended with the written consent of the Investor
and
the holders of a majority of the Ordinary Shares. Any amendment or waiver
effected in accordance with this Section 6.4 shall be binding upon each Party
hereto and their respective successors.
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7.
|
PROTECTIVE
PROVISIONS.
|
7.1 Acts
of the Company (General). Notwithstanding
anything to the contrary in this Agreement, for as long as any Series A
Preferred Shares are outstanding, any action (whether in a single transaction
or
a series of related transactions) that effects or approves any of the following
transactions involving the Company or any of its Subsidiaries shall require
the
approval of the New Board in accordance with Section 7.3 below:
(a) any
guarantee or agreement by the Company or any of its Subsidiaries to
indemnify any other person against any loss or liability of any person’s
obligations, except for the furtherance of the commercial benefits of the
Company;
(b) any
borrowing of money, obtaining of financial facilities (including
factoring, facility letters, undertakings, guarantees, indemnities, comfort
letters, etc.) or incurrence of indebtedness by the Company or any of its
Subsidiaries (including indebtedness in the form of assumption or guaranty
of
borrowing or indebtedness of any other person) which individually or together
with all related borrowing equal to or exceed forty percent (40%) of the
net
debt equity ratio of the Company or any of its Subsidiaries at any
time;
(c) any
transaction or series of related transactions or any contract
involving the Company or any of its Subsidiaries and any Key Shareholder,
director, officer, employee or consultant of the Company which individually
or
together with all related transactions equal to or exceed RMB1,000,000;
(d) any
investment in the securities or shares or other rights of any
company;
(e) any
purchase, lease, sale or other transaction by the Company or any of
its Subsidiaries involving real property;
(f) any
fee or monetary transaction or arrangement, including the acquisition
or disposal of property or procurement of service, between the Company or
any of
its Subsidiaries and any of its shareholder or its Affiliate;
(g) any
change of the auditors of the Company and/or any of its Subsidiaries
or any material change in the commencement date of the financial year of
the
Company or the relevant Subsidiary;
(h) any
adoption, change or announcement of the Employee Share Option Plan of
the Company;
(i) any
increase or decrease in the authorized number of the Series A
Preferred Shares, allotment or issuance of any additional Series A Preferred
Shares, amendment of the Company’s Memorandum or Articles of Association in a
manner that adversely affects the rights of the holders of the Series A
Preferred Shares; amendment of or change in the rights, preferences, privileges
or powers of, or the restrictions provided for, the benefit of the holders
of
the Series A Preferred Shares;
10
(j) the
authorization, creation or issuance of shares of any class of capital
stock having preferences superior to or on a parity with the holders of the
Series A Preferred Shares in liquidation, redemption, or dividend rights
or
other rights or privileges;
(k) any
change in the authorized number, manner of election or term of the
office of directors of the Company;
(l) the
declaration or payment of any dividend or distribution of profits on
any Shares ranking junior to the Series A Preferred Shares in liquidation,
redemption, or dividend rights or privileges; or the redemption and repurchase
of any Shares junior to the Series A Preferred Shares in liquidation,
redemption, or dividend rights or privileges except for repurchases of Shares
pursuant to a contractual right of repurchase upon termination of employment
or
service in a bona fide employment or service agreement;
(m) any
merger, acquisition, consolidation, reorganization or other
transaction of or involving one (1) or more other companies in which the
shareholders of the Company immediately prior thereto shall not hold a majority
of the outstanding voting power of each surviving or acquiring company pro-rata
immediately thereafter;
(n) the
sale, transfer (including a transfer by way of a spin-off, split-off
or business separation) or disposition of the whole or a substantial part
of the
business, undertaking, goodwill, assets or intellectual property of the Company
and/or any of its Subsidiaries, including the sale, transfer or other
disposition of a subsidiary or the grant of an exclusive license to intellectual
property;
(o) any
resolution for the winding up, liquidation or dissolution of the
Company and/or any of its Subsidiaries, application for the appointment of
a
receiver, manager or judicial manager or like officer or initiation of similar
insolvency-related proceedings of which any of the Company or its Subsidiaries
is the subject company;
(p) the
creation of any mortgage, pledge, hypothecation, lien or charge
(whether by way of fixed or floating charge, mortgage or other security)
or
other security interest on all or substantial part of the undertaking, assets,
rights or properties (tangible or intangible) of the Company;
(q) any
material change to the fundamental business character, plan or
strategy of the Company or any of its Subsidiaries as now carried
out;
(r) any
delegation of authority in respect of any of the foregoing matters to
any committee of the Board; or
(s) any
agreement, any commitment or the adoption of any corporate resolution
to do any of the foregoing matters.
7.2 Amendment
of Charter Documents. Notwithstanding
anything to the contrary in this Agreement, for as long as any Series A
Preferred Share is outstanding, any alteration or amendment to the Memorandum
and/or Articles of Association or any other charter documents of the Company
or
any of its Subsidiaries shall require the approval of the Investor.
11
7.3 Approval
of the Board. The actions set out in
Section 7.1 shall be approved in accordance with the following
requirements:
(a) if
such action is proposed within the period from the date of Closing to
September 30, 2007, approval of all members of the New Board shall be
required;
(b) if
such action is proposed within one (1) year after the first twelve
(12) months of October 1, 2006, in the event that the Company’s 2006 Profit is
(i) RMB20,000,000 or more, approval by a majority of the members of the New
Board shall be required or (ii) less than RMB20,000,000, approval by all
members
of the New Board shall be required; and
(c)
for
any
year after the first twenty-four (24) months of October 1, 2006, in the event
that the Company’s “profit after tax” for the one (1) year immediately prior to
such year is (i) RMB20,000,000 or more, approval by a majority of the members
of
the New Board shall be required or (ii) less than RMB20,000,000, approval
by all
members of the New Board shall be required.
8.
|
BOARD
MATTERS.
|
8.1 Designation
Right. The Board of the Company shall
consist of not more than five (5) directors. For so long as the Investor
holds
any Investment Securities, the Investor shall be entitled to designate one
(1)
director to the Board of the Company.
8.2 Board
Quorum; Meetings; Management etc. The
Company’s Restated Articles shall provide for a quorum (which shall exist at the
time of the voting as well as the attendance of the Board meeting) of the
Board
for three (3) directors including at least one (1) director designated by
the
Investor. Notices and agendas of the Board meetings as well as copies of
all
board papers shall be sent to all the relevant directors and to the Investor
at
least ten (10) Business Days prior to the relevant Board meeting, except
for
emergency Board meeting. The Company shall hold Board meetings at least once
a
quarter after Closing. Except for any contrary provision in the Transaction
Agreements or the relevant laws, the Company shall be managed and controlled
by
the New Board.
8.3 Waiver.
The Company acknowledges that the
Investor will likely have, from time to time, information that may be of
interest to the Company or its Subsidiaries (“Information”) regarding
a wide variety of
matters including (1) the Investor’s technologies, plans and services, and plans
and strategies relating thereto, (2) current and future investments the Investor
has made, may make, may consider or may become aware of with respect to other
companies and other technologies, products and services, including technologies,
products and services that may be competitive with those of the Company or
any
of its Subsidiaries, and (3) developments with respect to the technologies,
products and services, and plans and strategies relating thereto, of other
companies, including companies that may be competitive with the Company or
any
of its Subsidiaries. The Company recognizes that a portion of such Information
may be of interest to the Company or any of its Subsidiaries. Such Information
may or may not be known by the Investor Director. The Company, as a material
part of the consideration for this Agreement, agrees that the Investor Director
shall not have any duty to disclose any Information to the Company or any
of its
Subsidiaries, or permit the Company or any of its Subsidiaries to
12
participate
in any projects or investments based on any Information, or
otherwise to take advantage of any opportunity that may be of interest to
the
Company or any of its Subsidiaries if it were aware of such Information,
and
hereby waives, to the extent permitted by law, any claim based on the corporate
opportunity doctrine or otherwise that could limit the Investor’s ability to
pursue opportunities based on such Information or that would require the
Investor, any representative, the Investor Director to disclose any such
Information to the Company or any of its Subsidiaries or offer any opportunity
relating thereto to the Company or any of its Subsidiaries.
8.4 Director
Expenses. The Company shall reimburse
each member of the Board for all reasonable traveling expenses incurred in
connection with Board duties and meetings.
8.5 Insurance
and Indemnification. The Company shall
procure customary
directors
and officers insurance for the directors, covering an amount
of at
least
US$1,000,000 or such other amount as is
approved by the Investor. Notwithstanding anything to the
contrary in this Agreement or in the Restated Articles, the Company
shall indemnify and hold harmless the
Investor Director and his alternate, to the fullest extent permissible by
law,
from and against all liabilities, damages, actions, suits, proceedings, claims,
costs, charges and expenses suffered or incurred by or brought or made against
such Investor Director or his alternate as a result of any act, matter or
thing
done or omitted to be done by him in good faith in the course of acting as
a
director or alternate director, as applicable, of the Company, by delivering
to
such Investor Director or its alternate, at the time of its appointment as
a
director or an alternate director, an indemnification agreement duly executed
by
the Company substantially in the form attached hereto as Exhibit B.
8.6 Assignment
and Termination. The rights of the
Investor set forth in this Section 8 are fully assignable to any person who
holds or is acquiring the Series A Preferred Shares in a transfer which does
not
breach any express provision of this Agreement; provided, however,
that the Company is given a written
notice stating the name and address of the assignee and identifying the
securities of the Company as to which the rights in question are being assigned;
provided further, that the
transferee executes and delivers an Adherence Agreement. The rights of the
Investor in this Section 8 shall terminate upon completion of a Qualified
IPO.
9.
|
UNDERTAKINGS.
|
9.1 Restrictions
on Transfers. Each Key Shareholder
agrees that it shall not, directly or indirectly, sell, transfer or otherwise
dispose of any of its Shares prior to a Qualified IPO, without the prior
written
consent of the Investor.
9.2 Operation
of the ICP Company. The ICP Company
shall take all reasonably necessary steps to promptly assign and transfer
to the
PRC Subsidiary (pursuant to the Restructuring Agreements or otherwise)
substantially all of its revenues, earnings and other values and benefits
generated from its business operations (except for certain payments required
to
be made to the Investor under certain contractual arrangements between the
Investor and the ICP Company). The ICP Company shall, to the extent permitted
by
applicable law, operate its business at the direction of its board of directors
and its shareholders (who have assigned their voting rights to the PRC
Subsidiary). The PRC Subsidiary shall take all reasonably necessary
13
steps
to ensure that the ICP Company shall have funds available to cover
its operating expenses and to timely repay its debts as they become due.
10.
|
CONFIDENTIALITY
AND NON-DISCLOSURE.
|
|
10.1
|
Financing
Terms and Conditions.
|
(a) Disclosure
of Terms. Each party hereto
acknowledges that the terms and conditions (collectively, the
“Terms”) of this
Agreement, the other Transaction Agreements, and all exhibits, restatements
and
amendments hereto and thereto, including their existence, shall be considered
confidential information and shall not be disclosed by it to any third party
except in accordance with the provisions set forth below.
(b) Press
Releases. Within sixty (60) days after the
Closing, the Company may issue a press release disclosing that the Investor
has
invested in the Company provided that (i) the release does not disclose any
of the Terms, (ii) the press release does not disclose the amount or other
specific terms of the investment, and (iii) the final form of the press
release is approved in advance in writing by the Investor mentioned therein.
The
Investor’s name and the fact that Investor is a shareholder in the Company can
be included in a reusable press release boilerplate statement, so long as
the
Investor has given the Company its initial approval of such boilerplate
statement and the boilerplate statement is reproduced in exactly the form
in
which it was approved. No other announcement regarding the Investor in a
press
release, conference, advertisement, announcement, professional or trade
publication, mass marketing materials or otherwise to the general public
may be
made without such Investor’s prior written consent, which consent may be
withheld at such Investor’s sole discretion.
(c) Permitted
Disclosures. Notwithstanding anything
in the foregoing to the contrary,
(i) the
Company may disclose any of the Terms to its current or bona fide prospective
investors, directors, officers, employees, shareholders, investment bankers,
lenders, accountants, auditors, insurers, business or financial advisors,
and
attorneys, in each case only where such persons or entities are under
appropriate nondisclosure obligations imposed by professional ethics, law
or
otherwise;
(ii) the
Investor may, without disclosing the Terms of their respective investments
in
the Company without its consent, disclose the Investor’s investment in the
Company to third parties or to the public (including issuance of a press
release
and filing of appropriate reports with relevant regulatory authorities) at
its
sole discretion and, if it does so, the other parties shall have the right
to
disclose to third parties any such information disclosed in a press release
or
other public announcement by the Investor;
|
(iii)
|
the
Investor shall have the right to
disclose:
|
(1) any
information to the Investor’s and/or its Affiliate’s legal counsel,
insurer, accountant, consultant or to an officer, director, shareholder,
investment counsel or advisor, or employee of the Investor and/or its Affiliate;
provided, however,
that any counsel, auditor, insurer,
accountant, consultant, officer, director, shareholder, investment counsel
or
14
advisor,
or employee shall be advised of the confidential nature of the
information or are under appropriate non-disclosure obligation imposed by
professional ethics, law or otherwise;
(2) any
information as required by law, government authorities, exchanges
and/or regulatory bodies, including by the Securities and Futures Commission
of
the Hong Kong Special Administrative Region, the China Securities and Regulatory
Commission of the PRC or the Securities and Exchange Commission of the United
States (or equivalent for other venues);
(3) any
information to bona fide prospective purchasers/investors of any
share, security or other interests in the Company; and/or
(4) any
information contained in press releases or public announcements of
the Company pursuant to Section 10.1(b) above.
|
(d)
|
the
confidentiality obligations set out in this Section 10.1 do not
apply to:
|
(i) information
which was in the public domain or otherwise known to the
relevant party before it was furnished to it by another party hereto or,
after
it was furnished to that party, entered the public domain otherwise than
as a
result of (i) a breach by that party of this Section 10.1 or (ii) a breach
of a
confidentiality obligation by the discloser, where the breach was known to
that
party;
(ii) information
the disclosure of which is necessary in order to comply with any applicable
law,
the order of any court, the requirements of a stock exchange or to obtain
tax or
other clearances or consents from any relevant authority; or
(iii) information
disclosed by any director of the Company to its appointer or
any of its Affiliates or otherwise in accordance with the foregoing provisions
of this Section 10.1.
(e) Legally
Compelled Disclosure. In the event that
any party is requested or becomes legally compelled (including without
limitation pursuant to securities laws and regulations) to disclose the
existence of this Agreement or any Terms in contravention of the provisions
of
this Section 10.1, such party (the “Disclosing
Party”) shall, to the extent practicable under
the
then prevailing circumstances, provide the other parties (the
“Non-Disclosing Parties”) with prompt
written notice of that fact so that the appropriate party
may seek (with the cooperation and reasonable efforts of the other parties)
a
protective order, confidential treatment or other appropriate remedy. In
such
event, the Disclosing Party shall furnish only that portion of the information
that is legally required and shall exercise reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded such information
to the extent reasonably requested by any Non-Disclosing Party.
10.2 Other
Confidential Information. Except as
otherwise provided herein, the Investor and the Company shall keep confidential
and shall not disclose or divulge, any information which the Investor or
the
Company obtains from the other side, pursuant to financial statements, reports,
presentations, correspondence, and any other materials provided by the Company
or the Investor to, or communications between the Company and the Investor,
15
or
pursuant to information rights granted under this Agreement or any
other related documents, unless the information is known, or until the
information becomes known, to the public through no fault of the Investor
or the
Company, as the case may be, or unless the Company or the Investor gives
its
written consent to the Investor or the Company’s release of the information,
respectively.
11.
|
MISCELLANEOUS.
|
11.1 Governing
Law. This Agreement shall be governed
in all respects by the laws of the Hong Kong Special Administrative Region
without regard to conflicts of law principles.
11.2 Successors
and Assigns. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit
of,
and be binding upon, the successors, permitted assigns, heirs, executors
and
administrators of the parties hereto whose rights or obligations hereunder
are
affected by such amendments. Except as expressly stated otherwise, the rights
of
the Investor set forth in this Agreement are fully assignable to any person
who
holds or is acquiring Shares from the Investor.
11.3 Third
Parties. Nothing in this Agreement, express or implied,
is intended to confer upon any person, other than the parties hereto and
their
permitted successors and assigns, any rights or remedies under or by reason
of
this Agreement.
11.4 Entire
Agreement. This Agreement, the Share Subscription
Agreement and the schedules and exhibits hereto and thereto, which are hereby
expressly incorporated herein by this reference, constitute the entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
11.5 Notices.
Except as may be otherwise provided
herein, all notices, requests, waivers and other communications made pursuant
to
this Agreement shall be in writing and shall be conclusively deemed to have
been
duly given (a) when hand delivered to the other party; (b) when sent by
facsimile at the number set forth below, upon a successful transmission report
being generated by the sender’s machine; or (c) three (3) Business Days after
deposit with an internationally-recognized overnight delivery service, postage
prepaid, addressed to the parties as set forth below with next-business-day
delivery guaranteed, provided that the sending party receives a confirmation
of
delivery from the delivery service provider.
To
the Company, each Key Shareholder,
HK Subsidiary and the PRC Subsidiary: |
To the Investor: |
Rooms
353B-355B,
Aether
Square, 986 Xxx Xxxx Bei Road,
Guangzhou,
PRC
Postal
code: 510040
Attn:
Pan Weijia
Fax
No.:(86) (00) 0000 0000
|
Suites
1705-6,
17/F,
Two Chinachem Exchange Square,
338
King’s Road,
North
Point, Hong Kong
Attn:
Xxxxx Xxx Lun Fork
Fax
No.: (000) 0000 0000
|
16
Each
person making a communication hereunder by facsimile shall promptly
confirm by telephone to the person to whom such communication was addressed
each
communication made by it by facsimile pursuant hereto but the absence of
such
confirmation shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 11.5, by giving the other party written
notice of the new address in the manner set forth above.
11.6 Delays
or Omissions. No delay or omission to
exercise any right, power or remedy accruing to any party upon any breach
or
default of any other party hereto under this Agreement, shall impair any
such
right, power or remedy of the aggrieved party nor shall it be construed to
be a
waiver of any such breach or default, or an acquiescence therein, or of any
similar breach or default thereafter occurring; nor shall any waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit,
consent or approval of any kind or character on the part of any party of
any
breach or default under this Agreement or any waiver on the part of any party
of
any provisions or conditions of this Agreement, must be in writing and shall
be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, or by law or otherwise afforded to
the
parties shall be cumulative and not alternative.
11.7 Interpretation;
Titles and Subtitles. This
Agreement shall be construed according to its fair language. The rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be employed in interpreting this Agreement. The
titles
of the sections and subsections of this Agreement are for convenience of
reference only and are not to be considered in construing this
Agreement.
11.8 Counterparts.
This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of
which
together shall constitute one (1) instrument.
11.9 Severability.
Should any provision of this
Agreement be determined to be illegal or unenforceable, such determination
shall
not affect the remaining provisions of this Agreement.
11.10 Adjustment
for Share Splits, etc. Whenever in
this Agreement there is a reference to a specific number or percentage of
the
Series A Preferred Shares, then, upon the occurrence of any subdivision,
combination or share dividend of the Series A Preferred Shares, the specific
number of shares so referenced in this Agreement shall automatically be
proportionally adjusted to reflect the effect on the outstanding shares of
such
class or series of shares by such subdivision, combination or share
dividend.
11.11 Pronouns.
All pronouns and any variations thereof
are deemed to refer to the masculine, feminine, neuter, singular or plural,
as
the identity of the Person or Persons may require.
11.12 Dispute
Resolution. Any dispute, controversy or
claim arising out of or relating to this Agreement, or the breach, termination
or invalidity thereof, shall be settled by arbitration in
17
accordance
with the UNCITRAL Arbitration Rules (“UNCITRAL Rules”) as at present
in force and
as may be amended by the rest of this provision. The appointing authority
shall
be Hong Kong International Arbitration Centre (the “HKIAC”). The place
of arbitration shall be
in Hong Kong at HKIAC. There shall be three (3) arbitrators. The language(s)
to
be used in the arbitral proceedings shall be English. Any such arbitration
shall
be administered by HKIAC in accordance with HKIAC Procedures for Arbitration
in
force at the date of this Agreement including such additions to the UNCITRAL
Rules as are therein contained.
11.13 Investor’s
Rights Agreement to Prevail. If and to
the extent that there are inconsistencies between the provisions of this
Agreement and those of the Restated Articles, the terms of this Agreement
shall prevail. The parties agree to take all actions necessary or advisable,
as
promptly as practicable after the discovery of such inconsistency, to amend
the Restated Articles so as to eliminate such inconsistency.
[Signature
Page Follows]
18
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year herein above first written.
BEPRECISE
INVESTMENTS LIMITED
By
/s/
Xxxx Xxxxxx
Print
Name: Xxxx Xxxxxx
Title:
Director
Witnessed
by:
_____________________________________
Print
Name:
Title:
|
GLOBAL
MARKET GROUP LIMITED
By
/s/
Pan Weijia
Print
Name: Pan Weijia
Title:
Director
Witnessed
by:
/s/
Xxxx Xxxxxxx
Print
Name: Xxxx Xxxxxxx
Title:
Secretary
|
SEALED
with the COMMON SEAL of
GLOBAL MARKET GROUP (ASIA) LIMITED By
/s/
Pan Weijia
Print
Name: Pan Weijia
Title:
Director
Witnessed
by:
/s/
Xxxx Xxxxxxx
Print
Name: Xxxx Xxxxxxx
Title:
Secretary
|
SEALED
with the OFFICIAL SEAL of
GLOBAL MARKET (GUANGZHOU) CO., LTD. By
/s/
Pan Weijia
Print
Name: Pan Weijia
Title:
Director
Witnessed
by:
/s/
Xxxx Xxxxxxx
Print
Name: Xxxx Xxxxxxx
Title:
Secretary
|
[Signature
Page to Investor’s Rights Agreement]
SIGNED,
SEALED AND DELIVERED BY:
/s/
Pan Weijia
PAN
WEIJIA, as an individual
Witnessed
by:
/s/
Xxxx Xxxxxxx
Print
Name: Xxxx Xxxxxxx
Title:
Secretary
|
SIGNED,
SEALED AND DELIVERED BY:
/s/
Pan Weinian
PAN
WEINIAN, as an individual
Witnessed
by:
/s/
Xxxx Xxxxxxx
Print
Name: Xxxx Xxxxxxx
Title:
Secretary
|
|
|
[Signature
Page to Investor’s Rights Agreement]
Annex
A
Definitions
Capitalized
terms used but not otherwise defined in this Agreement shall
have the meanings given to them in the Share Subscription
Agreement.
“Affiliate”
shall mean, in respect of a Person, any other Person that, directly or
indirectly, through one (1) or more intermediaries, Controls, is Controlled
by,
or is under common Control with, such Person, and (a) in the case of a natural
Person, shall include such Person’s spouse, parents, children, siblings,
mother-in-law and father-in-law and brothers and sisters-in-law, (b) in the
case
of the Investor, shall include any Person who holds Shares as a nominee for
the
Investor, and (c) in respect of the Investor, shall also include (i) any
shareholder of the Investor, (ii) any entity or individual which has a direct
or
indirect interest in the Investor (including, if applicable, any general
partner
or limited partner); (iii) any Person that directly or indirectly Controls,
is
Controlled by, under common Control with, or is managed by the Investor,
(iv)
the relatives of any individual referred to in (ii) above, and (v) any trust
Controlled by or held for the benefit of such individuals. For the avoidance
of
doubt, the Investor shall not be deemed to be an Affiliate of any Group Company
or Key Shareholder.
“Agreement”
has
the meaning as ascribed to it in the introductory paragraph of this
Agreement.
“Board”
shall
mean the board of directors of the Company.
“Business
Day”
or “business
day” shall
mean any day that is not a Saturday, Sunday, legal holiday or a day on which
banks are required to be closed in Hong Kong Special Administrative Region
or
the PRC.
“Closing”
has
the meaning as ascribed to it in Section 4.1 of the Share Subscription
Agreement.
“Company”
has
the meaning as ascribed to it in the introductory paragraph of this
Agreement.
“Conversion
Shares” shall mean Ordinary Shares issuable or issued
upon conversion of the
Series A Preferred Shares subscribed under the Share Subscription
Agreement.
“Disclosing
Party” has the meaning as ascribed to it in Section
10.1(e) of this Agreement.
“Exchange
Act”
shall mean the U.S. Securities and Exchange
Act of 1934, as
amended.
“First
Participation
Notice” has the meaning as ascribed to it in
Section 4.1(d)(i) of this Agreement.
“Group
Companies” shall mean the Company and the Global Market
Subsidiaries (each a
“Group Company”),
unless the text specifically indicate otherwise.
“HK
Subsidiary”
shallhave the meaning as
ascribed to it in the introductory
paragraph of this Agreement.
“HKIAC”
has
the
meaning as ascribed to it in Section 11.12 of this Agreement.
“ICP
Company”
shall mean a company to be incorporated under
the laws of the PRC and shall hold
an “internet content provider” license granted by State Telecom Administration
Department for its business.
“IFRS”
shall
mean the International Financial Reporting Standards.
“Information”
has the meaning as ascribed to it in Section 8.3 of this Agreement.
“Investment
Securities” shall mean the
Series A Preferred Shares and the Conversion Shares.
“Investor”
shallhave the meaning as ascribed to it in the introductory
paragraph of this Agreement.
“Investor’s
Rights
Agreement” has the meaning as ascribed to it in the
recitals of this Agreement.
“Key
Shareholder” or “Key Shareholders”
have
the meaning as ascribed to it in the introductory paragraph of
this Agreement.
“New
Board” has the meaning as ascribed to
it in Section 9.15 of the Share Subscription Agreement.
“New
Securities”
has the meaning as ascribed to it in Section
4.1(c) of this
Agreement.
“Non-Disclosing
Parties” has the meaning as ascribed to it in Section
10.1(e) of this
Agreement.
“Ordinary
Shares” shall mean the ordinary shares of the Company,
par value US$0.001 per
share.
“Participation
Rights
Holder” has the meaning as ascribed to it in
Section 4.1(a) of this Agreement.
“PRC”
shall
mean
the People’s Republic of China, excluding the Hong Kong Special Administrative
Region, the Macau Special Administrative Region and the islands of
Taiwan.
“PRC
Subsidiary”
shallhave the meaning as
ascribed to it in the introductory
paragraph of this Agreement.
“Preferred
Shares” shall mean the Company’s Series A Preferred Shares and/or other
preferred shares of the company that may be issued from time to
time.
“Pro
Rata Co-Sale Share” has the meaning as ascribed to it in Section
5.4(a) of this
Agreement.
“Pro
Rata Share”
has the meaning as ascribed to it in Section
4.1(b) of this
Agreement.
“Prohibited
Transfer” has the meaning as ascribed to it in Section
5.7(a) of this
Agreement.
“Qualified
IPO”
means either (i) a public offering of the Ordinary Shares
of the Company
(or depositary receipts or other securities evidencing Ordinary Shares) that
has
been registered under the Securities Act, managed by a lead underwriter of
international standing reasonably acceptable to the Investor, at a public
offering or initial listing price of at least US$10.00 per Ordinary Share
(proportionally adjusted for share splits, dividends, recombinations, and
like
events) and with proceeds to the Company, net of selling discounts and
commissions, of at least US$25 million or equivalent thereof, or (ii) a
public offering of the Ordinary Shares of the Company in a jurisdiction and
on
an internationally recognized securities exchange or inter-dealer quotation
system outside of the United States, including The Stock Exchange of Hong
Kong
Limited, provided that such public offering satisfies the price and proceeds
thresholds set forth in paragraph (i) above and is approved by the
Investor.
“Restated
Articles” shall mean the Amended and Restated Memorandum
and Articles of
Association of the Company in substantially the form attached hereto as
Exhibit C to the Share
Subscription Agreement.
“Right
of Participation” has the meaning as ascribed to it in Section
4.1(a) of this
Agreement.
“Rights
Participants” has the meaning as ascribed to it in Section
4.1(d)(ii) of this
Agreement.
“SEC”
shall
mean
the U.S. Securities and Exchange Commission.
“Second
Participation
Notice” has the meaning as ascribed to it in
Section 4.1(d)(ii) of this Agreement.
“Second
Participation
Period” has the meaning as ascribed to it in
Section 4.1(d)(ii) of this Agreement.
“Securities
Act”
shall mean the U.S. Securities Act of 1933,
as amended.
“Selling
Shareholder” has the meaning as ascribed to it in Section
5.2 of this
Agreement.
“Series
A Preferred
Shares” shall mean the series A preferred shares,
par value US$0.001 per share, to be issued by the Company.
“Share
Subscription
Agreement” has the meaning as ascribed to it in the
recitals of this Agreement.
“Shareholders”
shall mean the Key Shareholders and the Investor (each a “Shareholder”), unless
the text specifically
indicate otherwise.
“Shares”
shall
mean all Preferred Shares and all Ordinary Shares now owned or subsequently
acquired by any shareholder.
“Subsidiary”
or
“subsidiary”shall
mean, with respect to any subject entity (the
“subject entity”), (i) any company, partnership or other Person (x) more than
fifty percent (50%) of whose shares or other interests entitled to vote in
the
election of directors or (y) more than a fifty percent (50%) interest in
the
profits or capital of such entity are owned or controlled directly or indirectly
by the subject entity or through one or more Subsidiaries of the subject
entity,
(ii) any entity whose assets, or portions thereof, are consolidated with
the net
earnings of the subject entity and are recorded on the books of the subject
entity for financial reporting purposes in accordance with IFRS or U.S. GAAP
or
other relevant generally accepted accounting practices, or (iii) any entity
with
respect to which the subject entity has the power to otherwise direct the
business and policies of that entity directly or indirectly through another
subsidiary.
“Terms”
has
the
meaning as ascribed to it in Section 10.1(a) of this Agreement.
“Transaction
Agreements” shall mean this Agreement and the Share Subscription
Agreement.
“Transfer
Notice” has the meaning as ascribed to it in Section
5.2 of this
Agreement.
“Transfer
Shares” has the meaning as ascribed to it in Section
5.2 of this
Agreement.
“U.S.
GAAP” shall mean the accounting
principles generally accepted in the United States.
“UNCITRAL
Rules”
shall have the meaning as ascribed to it
in Section 11.12 of this
Agreement.
“2006
Profit” shall mean the Company’s
profits after tax for one (1) year commencing from October 1, 2006 to September
30, 2007, which shall be determined by the consolidated financial statements
of
the Company prepared in accordance with the U.S. GAAP and audited by one
of the
“Big Four” accounting firms or any other international accounting firm approved
by the Investor.
EXHIBIT
A
ADHERENCE
AGREEMENT
This
Adherence Agreement (this “Adherence
Agreement”) is executed by the undersigned (the
“Transferee”)
pursuant
to the terms of that certain Investor’s Rights Agreement dated on October 19,
2006 (the “Agreement”)
by and among Global Market Group Limited, a Cayman Islands company (the
“Company”) and certain
of its shareholders and in consideration of the Shares subscribed for by
the
Transferee thereunder and other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged. Capitalized terms used but
not
defined herein shall have the respective meanings ascribed to such terms
in the
Agreement. By the execution of this Adherence Agreement, the Transferee agrees
as follows:
1. Acknowledgment.
Transferee acknowledges that
Transferee is acquiring [number] [preferred/ordinary] shares of the Company
(the
“Shares”) from [name
of
transferor] (the “Transferor”), subject
to the terms and conditions of the Agreement.
2. Agreement.
Immediately upon transfer of the
Shares, Transferee (i) agrees that the Shares acquired by Transferee shall
be bound by and subject to the terms of the Agreement applicable to the
Transferor, and (ii) hereby adopts the Agreement with the same force and
effect as if Transferee were originally a/an [Key Shareholder thereunder
(if transferor is a Key Shareholder)]/[Investor thereunder
(if
transferor is the
Investor)].
3. Notice.
Any notice required or permitted by the
Agreement shall be given to Transferee at the address listed beside Transferee’s
signature below.
EXECUTED
AND DATED this ______ day of _________________,
____.
TRANSFEREE:
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By: _____________________
|
|
Name: ___________________
|
|
Title: ____________________
|
|
Address: _________________
|
|
Fax: _____________________
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Accepted
and Agreed:
GLOBAL
MARKET GROUP LIMITED
By:___________________________
Name:
________________________
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Title:
_________________________
EXHIBIT
B
INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (this “Agreement”) is entered
into on [___ ], 2006
by and between Global Market Group Limited, a company incorporated in the
Cayman
Islands (the “Company”)
and [___] (“Indemnitee”).
RECITALS
A. The
Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for its directors, officers, employees, agents
and
fiduciaries, the significant increases in the cost of such insurance and
the
general reductions in the coverage of such insurance.
B. The
Company and Indemnitee further recognize the substantial increase in
corporate litigation in general, subjecting directors, officers, employees,
agents and fiduciaries to expensive litigation risks at the same time as
the
availability and coverage of liability insurance has been severely
limited.
C. Indemnitee
does not regard the current protection available as adequate
under the present circumstances, and Indemnitee and other directors, officers,
employees, agents and fiduciaries of the Company may not be willing to continue
to serve in such capacities without additional protection.
D. The
Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and, in part,
in
order to induce Indemnitee to continue to provide services to the Company,
wishes to provide for the indemnification and advancing of expenses to
Indemnitee to the maximum extent permitted by law.
E. In
view of the considerations set forth above, the Company desires that
Indemnitee be indemnified by the Company as set forth herein.
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NOW,
THEREFORE, the Company and Indemnitee hereby agree as
follows:
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1.
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Indemnification.
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(a) Indemnification
of Expenses. The Company shall
indemnify to the fullest extent permitted by law if Indemnitee was or is
or
becomes a party to or witness or other participant in, or are threatened
to be
made a party to or witness or other participant in, any threatened, pending
or
completed action, suit, proceeding or alternative dispute resolution mechanism,
or any hearing, inquiry or investigation that Indemnitee in good faith believe
might lead to the institution of any such action, suit, proceeding or
alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (hereinafter a “Claim”) by reason
of (or arising in part out
of) any event or occurrence related to the fact that Indemnitee is or was
a
director, officer, employee, agent or fiduciary of the Company, or any
subsidiary of the Company, or is or was serving at the request of the Company
as
a director, officer, employee, agent or fiduciary of another corporation,
partnership,
joint venture, trust or other enterprise, or by reason of
any action or inaction on the part of Indemnitee while serving in such capacity
(hereinafter an “Indemnifiable
Event”) against any and all expenses (including
attorneys’ fees and all other costs, expenses and obligations incurred in
connection with investigating, defending, being a witness in or participating
in
(including on appeal), or preparing to defend, be a witness in or participate
in, any such action, suit, proceeding, alternative dispute resolution mechanism,
hearing, inquiry or investigation), judgments, fines, penalties and amounts
paid
in settlement (if such settlement is approved in advance by the Company,
which
approval shall not be unreasonably withheld) of such Claim and any federal,
state, local or foreign taxes imposed on Indemnitee as a result of the actual
or
deemed receipt of any payments under this Agreement (collectively, hereinafter
“Expenses”), including
all interest, assessments and other charges paid or payable in connection
with
or in respect of such Expenses. Such payment of Expenses shall be made by
the
Company as soon as practicable but in any event no later than twenty days
after
written demand by Indemnitee therefor is presented to the Company. For the
avoidance of doubt, the Indemnitee should be responsible for his actions
that
are unrelated to his duties as a director of the Company.
(b) Reviewing
Party. Notwithstanding the foregoing,
(i) the obligations of the Company under Section 1(a) shall be subject to
the
condition that the Reviewing Party (as described in Section 9(e) hereof)
shall
not have determined (in a written opinion, in any case in which the Independent
Legal Counsel referred to in Section 1(c) hereof is involved) that Indemnitee
would not be permitted to be indemnified under applicable law, and (ii) the
obligation of the Company to make an advance payment of Expenses to Indemnitee
pursuant to Section 2(a) (an “Expense
Advance”) shall be subject to the condition that,
if, when and to the extent that the Reviewing Party determines that Indemnitee
would not be permitted to be so indemnified under applicable law, the Company
shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse
the Company) for all such amounts theretofore paid; provided, however, that
if
Indemnitee has commenced or thereafter commences legal proceedings in a court
of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing
Party
that Indemnitee would not be permitted to be indemnified under applicable
law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). The Indemnitee’s obligation to reimburse the Company for
any Expense Advance shall be unsecured and no interest shall be charged thereon.
If there has not been a Change in Control (as defined in Section 9(c) hereof),
the Reviewing Party shall be selected by the Board of Directors, and if there
has been such a Change in Control (other than a Change in Control which has
been
approved by a majority of the Company’s Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be
the
Independent Legal Counsel referred to in Section 1(c) hereof. If there has
been
no determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in
whole
or in part under applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or challenging any
such
determination by the Reviewing Party or any aspect thereof, including the
legal
or factual bases therefor, and the Company hereby consents to service of
process
and to appear in any such proceeding. Any determination by the Reviewing
Party
otherwise shall be conclusive and binding on the Company and
Indemnitee.
(c) Change
in Control. The Company agrees that if
there is a Change in Control of the Company (other than a Change in Control
which has been approved by a majority of the Company’s Board of Directors who
were directors immediately prior to such Change in Control) then, with respect
to all matters thereafter arising concerning the rights of Indemnitee to
payments of Expenses and Expense Advances under this Agreement or any other
agreement or under the Company’s Certificate of Incorporation or Memorandum and
Articles of Association as now or hereafter in effect, Independent Legal
Counsel
(as defined in Section 9(d) hereof) shall be selected by Indemnitee and approved
by the Company (which approval shall not be unreasonably withheld). Such
counsel, among other things, shall render its written opinion to the Company
and
Indemnitee as to whether and to what extent Indemnitee would be permitted
to be
indemnified under applicable law and the Company agrees to abide by such
opinion. The Company agrees to pay the reasonable fees of the Independent
Legal
Counsel referred to above and to fully indemnify such counsel against any
and
all expenses (including attorneys’ fees), claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant
hereto.
(d) Mandatory
Payment of Expenses. Notwithstanding
any other provision of this Agreement other than Section 8 hereof, to the
extent
that Indemnitee has been successful on the merits or otherwise, including,
without limitation, the dismissal of an action without prejudice, in defense
of
any action, suit, proceeding, inquiry or investigation referred to in Section
(1)(a) hereof or in the defense of any claim, issue or matter therein,
Indemnitee shall be indemnified against all Expenses incurred by Indemnitee
in
connection therewith.
2.
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Expenses;
Indemnification Procedure.
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(a) Advancement
of Expenses. The Company shall
advance all Expenses incurred by Indemnitee. The advances to be made hereunder
shall be paid by the Company to Indemnitee as soon as practicable but in
any
event no later than thirty (30) days after written demand by Indemnitee therefor
to the Company.
(b) Notice/Cooperation
by Indemnitee. Indemnitee
shall, as a condition precedent to Indemnitee’s right to be indemnified under
this Agreement, give the Company notice in writing as soon as practicable
of any
Claim made against Indemnitee for which indemnification will or could be
sought
under this Agreement. Notice to the Company shall be directed to the Chief
Executive Officer of the Company at the address shown on the signature page
of
this Agreement (or such other address as the Company shall designate in writing
to Indemnitee). In addition, Indemnitee shall give the Company such information
and cooperation as it may reasonably require and as shall be within Indemnitee’s
power.
(c) No
Presumptions; Burden of Proof. For purposes of
this Agreement, the termination of any Claim by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of
nolo contendere, or its
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court
has
determined that indemnification is not permitted by applicable law. In addition,
neither the failure of the Reviewing Party to have made a determination as
to
whether Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Reviewing Party that
Indemnitee has not met such standard of conduct or did not have such belief,
prior to the commencement of legal proceedings by Indemnitee to secure a
judicial determination that Indemnitee should be
indemnified
under applicable law, shall be a defense to Indemnitee’s
claim or create a presumption that Indemnitee has not met any particular
standard of conduct or did not have any particular belief. In connection
with
any determination by the Reviewing Party or otherwise as to whether Indemnitee
is entitled to be indemnified hereunder, the burden of proof shall be on
the
Company to establish that Indemnitee is not so entitled.
(d) Notice
to Insurers. If, at the time of the
receipt by the Company of a notice of a Claim pursuant to Section 2(b) hereof,
the Company has liability insurance in effect which may cover such Claim,
the
Company shall give prompt notice of the commencement of such Claim to the
insurers in accordance with the procedures set forth in the respective policies.
The Company shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of Indemnitee, all amounts payable as a result
of such action, suit, proceeding, inquiry or investigation in accordance
with
the terms of such policies.
(e) Selection
of Counsel. In the event the Company
shall be obligated hereunder to pay the Expenses of any Claim, the Company
shall
be entitled to assume the defense of such Claim with counsel approved by
Indemnitee, which approval shall not be unreasonably withheld, upon the delivery
to Indemnitee of written notice of its election so to do. After delivery
of such
notice, approval of such counsel by Indemnitee and the retention of such
counsel
by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same Claim; provided that, (i) Indemnitee shall have the right
to
employ Indemnitee’s counsel in any such Claim at Indemnitee’s expense and (ii)
if (A) the employment of counsel by Indemnitee has been previously authorized
by
the Company, (B) Indemnitee shall have reasonably concluded that there is
a
conflict of interest between the Company and Indemnitee in the conduct of
any
such defense, or (C) the Company shall not continue to retain such counsel
to
defend such Claim, then the fees and expenses of Indemnitee’s counsel shall be
at the expense of the Company. The Company shall have the right to conduct
such
defense as it sees fit in its sole discretion, including the right to settle
any
claim against Indemnitee without the consent of the Indemnitee.
3.
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Additional
Indemnification Rights; Non-Exclusivity.
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(a) Scope.
The Company hereby agrees to indemnify
Indemnitee to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of
this
Agreement, the Company’s Certificate of Incorporation, the Company’s Memorandum
and Articles of Association or by statute. In the event of any change after
the
date of this Agreement in any applicable law, statute or rule which expands
the
right of a Cayman Islands corporation to indemnify a member of its Board
of
Directors or an officer, employee, agent or fiduciary, it is the intent of
the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits afforded by such change. In the event of any change in any applicable
law, statute or rule which narrows the right of a Cayman Islands corporation
to
indemnify a member of its Board of Directors or an officer, employee, agent
or
fiduciary, such change, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement, shall have no effect on
this
Agreement or the parties’ rights and obligations hereunder except as set forth
in Section 8(a) hereof.
(b) Non-exclusivity.
The indemnification provided by
this Agreement shall be in addition to any rights to which Indemnitee may
be
entitled under the Company’s Certificate
of
Incorporation, its Memorandum and Articles of Association, any
agreement, any vote of stockholders or disinterested directors, the laws
of the
Hong Kong Special Administrative Region, or otherwise. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
Indemnitee took or did not take while serving in an indemnified capacity
even
though Indemnitee may have ceased to serve in such capacity.
4. No
Duplication of Payments. The Company shall not
be liable under this Agreement to make any payment in connection with any
Claim
made against Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, Certificate of Incorporation, Memorandum
and Articles of Association or otherwise) of the amounts otherwise indemnifiable
hereunder.
5. Partial
Indemnification. If Indemnitee is
entitled under any provision of this Agreement to indemnification by the
Company
for some or a portion of Expenses incurred in connection with any Claim,
but
not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion of such Expenses to which
Indemnitee is entitled.
6. Mutual
Acknowledgment. Both the Company and
Indemnitee acknowledge that in certain instances, Federal law or applicable
public policy may prohibit the Company from indemnifying its directors,
officers, employees, agents or fiduciaries under this Agreement or otherwise.
Indemnitee understands and acknowledges that if the Company is subject to
the
informational requirements of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”),
the Company may be required to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court
in
certain circumstances for a determination of the Company’s right under public
policy to indemnify Indemnitee.
7. Liability
Insurance. The Company shall, from time
to time, make the good faith determination whether or not it is practicable
for
the Company to obtain and maintain a policy or policies of insurance with
reputable insurance companies providing the officers and directors of the
Company with coverage for losses from wrongful acts, or to ensure the Company’s
performance of its indemnification obligations under this Agreement. Among
other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all policies
of
directors’ and officers’ liability insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee the same rights and benefits
as are accorded to the most favorably insured of the Company’s directors, if
Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a
director of the Company but is an officer; or of the Company’s key employees, if
Indemnitee is not an officer or director but is a key employee.
8. Exceptions.
Any other provision herein to the
contrary notwithstanding, the Company shall not be obligated pursuant to
the
terms of this Agreement:
(a) Excluded
Action or Omissions. To indemnify
Indemnitee for Expenses resulting from acts, omissions or transactions for
which
Indemnitee is prohibited from receiving indemnification under this Agreement
or
applicable law;
(b) Claims
Initiated by Indemnitee. To indemnify or
advance expenses to Indemnitee with respect to Claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except (i) with respect
to
actions or proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other agreement or insurance
policy
or under the Company’s Certificate of Incorporation or Memorandum and Articles
of Association now or hereafter in effect relating to Claims for Indemnifiable
Events, (ii) in specific cases if the Board of Directors has approved the
initiation or bringing of such Claim;
(c) Lack
of Good Faith. To indemnify Indemnitee for
any expenses incurred by Indemnitee with respect to any proceeding instituted
by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by Indemnitee
in such proceeding was not made in good faith or was frivolous; or
(d) Claims
Under Section 16(b). To indemnify
Indemnitee for expenses and the payment of profits arising from the purchase
and
sale by Indemnitee of securities in violation of Section 16(b) of the Exchange
Act, or any similar successor statute if the Company is subject to the
informational requirements of the Exchange Act.
9.
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Construction
of Certain Phrases.
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(a) For
purposes of this Agreement, references to the “Company” shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation
or
merger which, if its separate existence had continued, would have had power
and
authority to indemnify its directors, officers, employees, agents or
fiduciaries, so that if Indemnitee is or was a director, officer, employee,
agent or fiduciary of such constituent corporation, or is or was serving
at the
request of such constituent corporation as a director, officer, employee,
agent
or fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting
or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
(b) For
purposes of this Agreement, references to “other enterprises” shall
include employee benefit plans; references to “fines” shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit plan; and
references to “serving at the request of the Company” shall include any service
as a director, officer, employee, agent or fiduciary of the Company which
imposes duties on, or involves services by, such director, officer, employee,
agent or fiduciary with respect to an employee benefit plan, its participants
or
its beneficiaries; and if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in the interest of the participants
and
beneficiaries of an employee benefit plan, Indemnitee shall be deemed to
have
acted in a manner “not opposed to the best interests of the Company” as referred
to in this Agreement.
(c) For
purposes of this Agreement a “Change in Control” shall be deemed to
have occurred if, on or after the date of this Agreement, (i) any “person” (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act), other
than a
trustee or other fiduciary holding securities under an employee benefit plan
of
the Company acting in such capacity or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, becomes the “beneficial
owner”
(as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing more than 50% of the
total
voting power represented by the Company’s then outstanding Voting Securities,
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company
and
any new director whose election by the Board of Directors or nomination for
election by the Company’s stockholders was approved by a vote of at least two
thirds (2/3) of the directors then still in office who either were directors
at
the beginning of the period or whose election or nomination for election
was
previously so approved, cease for any reason to constitute a majority thereof,
or (iii) the stockholders of the Company approve a merger or consolidation
of
the Company with any other corporation other than a merger or consolidation
which would result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving
entity) at least 80% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding immediately
after
such merger or consolidation, or the stockholders of the Company approve
a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of related
transactions) all or substantially all of the Company’s assets.
(d) For
purposes of this Agreement, “Independent Legal Counsel” shall mean an
attorney or firm of attorneys, selected in accordance with the provisions
of
Section 1(c) hereof, who shall not have otherwise performed services for
the
Company or Indemnitee within the last three years (other than with respect
to
matters concerning the rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).
(e) For
purposes of this Agreement, a “Reviewing Party” shall mean any
appropriate person or body consisting of a member or members of the Company’s
Board of Directors or any other person or body appointed by the Board of
Directors who is not a party to the particular Claim for which Indemnitee
are
seeking indemnification, or Independent Legal Counsel.
(f) For
purposes of this Agreement, “Voting Securities” shall mean any
securities of the Company that vote generally in the election of
directors.
10. Counterparts.
This Agreement may be executed in
one or more counterparts, each of which shall constitute an
original.
11. Binding
Effect; Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors, assigns, including
any
direct or indirect successor by purchase, merger, consolidation or otherwise
to
all or substantially all of the business and/or assets of the Company, spouses,
heirs, and personal and legal representatives. The Company shall require
and
cause any successor (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part,
of
the business and/or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company
would
be required to perform if no such succession had taken place. This Agreement
shall continue in effect with respect to Claims relating to Indemnifiable
Events
regardless of
whether
Indemnitee continues to serve as a director, officer, employee,
agent or fiduciary of the Company or of any other enterprise at the Company’s
request.
12. Attorneys’
Fees.
In the event that any action is
instituted by Indemnitee under this Agreement or under any liability insurance
policies maintained by the Company to enforce or interpret any of the terms
hereof or thereof, Indemnitee shall be entitled to be paid all Expenses incurred
by Indemnitee with respect to such action, regardless of whether Indemnitee
is
ultimately successful in such action, and shall be entitled to the advancement
of Expenses with respect to such action, unless, as a part of such action,
a
court of competent jurisdiction over such action determines that each of
the
material assertions made by Indemnitee as a basis for such action was not
made
in good faith or was frivolous. In the event of an action instituted by or
in
the name of the Company under this Agreement to enforce or interpret any
of the
terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses
incurred by Indemnitee in defense of such action (including costs and expenses
incurred with respect to Indemnitee’s counterclaims and cross-claims made in
such action), and shall be entitled to the advancement of Expenses with respect
to such action, unless, as a part of such action, a court having jurisdiction
over such action determines that each of Indemnitee’s material defenses to such
action was made in bad faith or was frivolous.
13. Notice.
All notices and other communications
required or permitted hereunder shall be in writing, shall be effective when
given, and shall in any event be deemed to be given (a) five (5) days after
deposit with the U.S. Postal Service or other applicable postal service,
if
delivered by first class mail, postage prepaid, (b) upon delivery, if delivered
by hand, (c) one business day after the business day of deposit with Federal
Express or similar overnight courier, freight prepaid, or (d) one day after
the
business day of delivery by facsimile transmission, if delivered by facsimile
transmission, with copy by first class mail, postage prepaid, and shall be
addressed if to Indemnitee, at the Indemnitee’s address as set forth beneath
Indemnitee’s signature to this Agreement and if to the Company at the address
shown on the signature page of this Agreement (attention: Chief Executive
Officer) or at such other address as such party may designate by ten days’
advance written notice to the other party hereto.
14. Consent
to Jurisdiction. The Company and
Indemnitee each hereby irrevocably consent to the jurisdiction of the courts
of
the Hong Kong Special Administrative Region for all purposes in connection
with
any action or proceeding which arises out of or relates to this Agreement
and
agree that any action instituted under this Agreement shall be commenced,
prosecuted and continued only in Hong Kong Special Administrative Region
which
shall be the exclusive and only proper forum for adjudicating such a
claim.
15. Severability.
The
provisions of this
Agreement shall be severable in the event that any of the provisions hereof
(including any provision within a single section, paragraph or sentence)
are
held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable, and the remaining provisions shall remain enforceable to the
fullest extent permitted by law. Furthermore, to the fullest extent
possible, the provisions of this Agreement (including, without limitations,
each
portion of this Agreement containing any provision held to be invalid, void
or
otherwise unenforceable, that is not itself invalid, void or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
16. Choice
of Law. This Agreement shall be governed
by and its provisions construed and enforced in accordance with the laws
of the
Hong Kong Special Administrative Region.
17. Subrogation.
In the event of payment under this
Agreement, the Company shall be subrogated to the extent of such payment
to all
of the rights of recovery of Indemnitee who shall execute all documents required
and shall do all acts that may be necessary to secure such rights and to
enable
the Company effectively to bring suit to enforce such rights.
18. Amendment
and Termination. No amendment,
modification, termination or cancellation of this Agreement shall be effective
unless it is in writing signed by both the parties hereto. No waiver of any
of
the provisions of this Agreement shall be deemed or shall constitute a waiver
of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
19. Integration
and Entire Agreement. This Agreement
sets forth the entire understanding between the parties hereto and supersedes
and merges all previous written and oral negotiations, commitments,
understandings and agreements relating to the subject matter hereof between
the
parties hereto.
20. No
Construction as Employment Agreement. Nothing
contained in this Agreement shall be construed as giving Indemnitee any right
to
be retained in the employ of the Company or any of its
subsidiaries.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
Global
Market Group Limited
_________________________________________________
By:
|
Name:
|
Title:
|
Address
of Global Market Group Limited:
AGREED
TO AND ACCEPTED BY:
_________________________________________________
(Signature
of Indemnitee)
(Type
Name)
Address: