EXHIBIT 4.2
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
THIS AMENDED AND RESTATED SHAREHOLDERS AGREEMENT (this "AGREEMENT") is
made and entered into as of December 2, 2004 by and among Focus Media Holding
Limited, an international business company organized under the laws of the
British Virgin Islands (the "COMPANY"), each of the Persons listed on Schedule A
hereto, (the "ORDINARY SHAREHOLDERS"), each of the Persons listed on Schedule B
hereto (the "EXISTING SUBSIDIARIES"), GS Focus Holding Limited, an exempted
company organized and existing under the laws of Cayman Islands (the "LEAD
INVESTOR"), each of the parties listed on Schedule C hereto (together with the
Lead Investor, the "INVESTORS"), Capital International Private Equity Fund IV,
L.P., a limited partnership organized and existing under the laws of the State
of Delaware ("CIPEF IV"), and CGPE IV, L.P., a limited partnership organized and
existing under the laws of the State of Delaware ("CGPE IV" and, collectively
with CIPEF IV, the "PURCHASERS" and, individually, a "PURCHASER"), each of the
Persons listed on Schedule D hereto (the "EXISTING PREFERRED HOLDERS"), and each
such Person who shall from time to time join this Agreement as a party by
entering into an instrument of accession pursuant to Section 7.4(b).
RECITALS
A. Each Purchaser has agreed to purchase from JJ Media (as defined below),
and JJ Media has agreed to sell to each Purchaser, certain Ordinary Shares (as
defined below) held by JJ Media, and the Company has agreed to exchange for such
shares certain Series C-1 preferred shares, par value US$0.01 per share (the
"SERIES C-1 SHARES"), of the Company on the terms and conditions set forth in
that certain Share Purchase Agreement dated as of December 2, 2004 (the "CAPITAL
PURCHASE AGREEMENT") by and among the Company, the Existing Subsidiaries, JJ
Media, Xx. Xxxxx (as defined below) and the Purchasers.
B. The Company, certain shareholders, certain Existing Subsidiaries and
the Investors have previously entered into an Amended and Restated Shareholders
Agreement, dated November 29, 2004 (the "PRIOR SHAREHOLDERS AGREEMENT").
C. In connection with the consummation of the transactions contemplated by
the Capital Purchase Agreement, the parties hereto desire to enter into this
Agreement to amend and restate in its entirety the Prior Shareholders Agreement.
D. The Capital Purchase Agreement provides that the execution and delivery
of this Agreement by the parties hereto shall be a condition precedent to the
consummation of the transactions contemplated thereunder.
E. The Company, the Ordinary Shareholders, the Existing Preferred
Shareholders, the Investors and the Existing Subsidiaries seek to induce the
Purchasers to consummate the transactions contemplated in the Capital Purchase
Agreement, and to such ends, seek to satisfy the conditions precedent to such
transactions by entering into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
further agree as follows:
SECTION 1 INTERPRETATION
1.1 Definitions. Unless otherwise defined in this Agreement, capitalized
terms used in the English version of this Agreement shall have the following
meanings:
"ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as applied in the United States of America.
"ADDITIONAL NUMBER" has the meaning ascribed thereto in Section
6.2(b).
"AFFILIATE" means, with respect to any given Person, a Person that
Controls, is Controlled by, or is under common Control with the given
Person.
"AGREEMENT" has the meaning ascribed thereto in the preamble hereto.
"AMENDED AND RESTATED CLAWBACK RIGHTS AGREEMENT" means that certain
Amended and Restated Clawback Rights Agreement, dated of even date
herewith, by and among the Company, JJ Media, Xx. Xxxxx, the Investors,
the Purchasers and certain other parties thereto, which amended and
restated the Clawback Rights Agreement in its entirety.
"ANCILLARY DOCUMENTS" means this Agreement, the Earnout Agreement,
the Amended and Restated Clawback Rights Agreement and the Tax Indemnity
Agreement.
"APPLICABLE SECURITIES LAW" means (i) with respect to any offering
of securities in the United States of America, or any other act or
omission within that jurisdiction, the securities law of the United
States, including the Exchange Act and the Securities Act, and any
applicable law of any State of the United States, and (ii) with respect to
any offering of securities in any jurisdiction other than the United
States of America, or any related act or omission in that jurisdiction,
the applicable laws of that jurisdiction.
"AUDITORS" means Deloitte, Touche & Tohmatsu, or such successor
thereto as may be from time to time duly appointed by the Company's Board
of Directors from among the Big 4 to audit the Company's annual financial
statements.
"AUDIT COMMITTEE" has the meaning ascribed thereto in Section 3.4.
"AVAILABLE SECURITIES" has the meaning ascribed thereto in Section
7.3.
"BUSINESS DAY" means any weekday that the banks in the PRC, Hong
Kong and the United States of America are generally open for business.
"CAPITAL ANCILLARY DOCUMENTS" means this Agreement, the Capital
Earnout Agreement, the Amended and Restated Clawback Rights Agreement, and
the Capital Tax Indemnity Agreement.
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"CAPITAL EARNOUT AGREEMENT" means that certain Earnout Agreement,
dated of even date herewith, by and among the Company, the Existing
Subsidiaries, JJ Media, Xx. Xxxxx and the Purchasers.
"CAPITAL PURCHASE AGREEMENT" has the meaning ascribed thereto in the
recitals hereof.
"CAPITAL TAX INDEMNITY AGREEMENT" means that certain Tax Indemnity
Agreement, dated of even date herewith, by and among the Company and the
Purchasers.
"CAPTIVE COMPANY" means any Group Company in respect of which a
majority of the equity is not directly held by any of the Company or the
Group Companies, or a combination of the foregoing.
"CDH" means CDH FM Limited, an international business company
organized and existing under the laws of the British Virgin Islands.
"CDH DIRECTOR" means any individual nominated by CDH to the Board of
Directors of the Company as of right under Section 3.
"CENTRE" has the meaning ascribed thereto in Section 10.3(c).
"CLAWBACK RIGHTS AGREEMENT" means that certain Clawback Rights
Agreement, dated as of November 29, 2004, by and among the Company, JJ
Media, Xx. Xxxxx, the Investors and certain other parties thereto.
"COMMISSION" means (i) with respect to any offering of securities in
the United States of America, the Securities and Exchange Commission of
the United States or any other federal agency at the time administering
the Securities Act, and (ii) with respect to any offering of securities in
a jurisdiction other than the United States of America, the regulatory
body of the jurisdiction with authority to supervise and regulate the sale
of securities in that jurisdiction.
"COMPANY" has the meaning ascribed thereto in the preamble hereto.
"CONTROL" means, when used with respect to any Person, the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" have meanings
correlative to the foregoing.
"CO-SALE NOTICE" has the meaning ascribed thereto in Section 7.2(b).
"CO-SALE PRO RATA PORTION" has the meaning ascribed thereto in
Section 7.2(b).
"CO-SALE RIGHT PERIOD" has the meaning ascribed thereto in Section
7.2(b).
"DISCLOSING PARTY" has the meaning ascribed thereto in Section 9.4.
"DISPUTE" has the meaning ascribed thereto in Section 10.3(a).
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"EARNOUT AGREEMENT" means that certain Earnout Agreement, dated as
of November 29, 2004, by and among the Company, the Existing Subsidiaries,
JJ Media, Xx. Xxxxx and the Investors.
"EQUITY SECURITIES" means any Ordinary Shares, Ordinary Share
Equivalents or other voting securities of the Company.
"EMPLOYEE COMPENSATION SHARE" means any Ordinary Share issued to
employees, consultants or directors of the Company or nominee companies
which are 100% beneficially owned by an employee, consultant or director
of the Company either in connection with a restricted stock plan approved
by the Company's Board of Directors or on exercise of an Employee Share
Option so long as the aggregate number of Employee Compensation Shares
issued and, in the case of outstanding Employee Share Options, issuable
does not exceed 126,041 Ordinary Shares.
"EMPLOYEE SHARE OPTIONS" means options to purchase Employee
Compensation Shares granted to employees, consultants or directors of the
Company or nominee companies which are 100% beneficially owned by an
employee, consultant or director of the Company under any share incentive
plan approved by the Company's Board of Directors.
"EXCHANGE ACT" means the United States Securities Exchange Act of
1934, as amended.
"EXEMPT TRANSACTION" means (i) any redemption or repurchase of
Preferred Shares by the Company pursuant to the terms thereof, (ii) any
redemption or repurchase of Employee Compensation Shares duly approved by
the Company's Board of Directors, (iii) any redemption or repurchase of
Equity Securities by the Company as otherwise duly approved by the Board
of Directors pursuant to Section 4.1 and by the holders of a majority of
the Series C Share pursuant to Section 4.3; (iv) any transfer by JJ Media
to a Permitted Transferee so long as JJ Media shall remain liable for any
breach by such Permitted Transferee of any provision hereunder; (v) any
transfer by any Preferred Holder to another Preferred Holder; (vi) any
transfer by a Preferred Holder that is an Investment Fund to any partner
or member thereof or participant therein; (vii) any transfer by a
Preferred Holder that is an Investment Fund to the investment manager who
manages the business of the Investment Fund; (viii) any transfer by a
Preferred Holder that is an Investment Fund to another Investment Fund
whose business is managed by the same investment manager; (ix) the
repurchase of 18,000 Ordinary Shares owned by Xxxx Xxxx pursuant to that
certain letter agreement dated November 3, 2004, between the Company and
Xxxx Xxxxxx; and (x) any sale or transfer of Equity Securities pursuant to
the Purchase Agreement or the Ancillary Documents or pursuant to the
Capital Purchase Agreement or the Capital Ancillary Documents.
"EXISTING SUBSIDIARY" has the meaning ascribed thereto in the
preamble hereto.
"EXISTING PREFERRED HOLDER" has the meaning ascribed thereto in the
preamble hereto.
"FINANCING DOCUMENTS" has the meaning ascribed thereto in Section
9.1.
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"FINANCING TERMS" has the meaning ascribed thereto in Section 9.1.
"FIRM OFFER NOTICE" has the meaning ascribed thereto in Section
7.3(b).
"FIRST PARTICIPATION NOTICE" has the meaning ascribed thereto in
Section 6.2(a).
"FIRST REFUSAL ALLOTMENT" has the meaning ascribed thereto in
Section 7.2(a).
"FIRST REFUSAL EXPIRATION NOTICE" has the meaning ascribed thereto
in Section 7.2(a)(5).
"FIRST REFUSAL NOTICE" has the meaning ascribed thereto in Section
7.2(a).
"FIRST REFUSAL PERIOD" has the meaning ascribed thereto in Section
7.2(a).
"FORM F-3" means Form F-3 promulgated by the Commission under the
Securities Act or any substantially similar form then in effect.
"FORM S-3" means Form S-3 promulgated by the Commission under the
Securities Act or any substantially similar form then in effect.
"GROUP COMPANY" means any Person that is not a natural Person and
that is Controlled by the Company.
"GS DIRECTOR" means any individual nominated by the Lead Investor to
the Board of Directors of the Company as of right under Section 3.
"HOLDERS" means the Investors, the Purchasers and the Existing
Preferred Holders, together with the permitted transferees and assigns of
any Holder.
"HONG KONG" means the Hong Kong Special Administrative Region.
"INITIATING HOLDERS" means, with respect to a request duly made to
Register any Registrable Securities under Section 5.1(a) or Section
5.1(b), the Holders initiating such request.
"INVESTMENT FUND" means a fund, partnership, limited partnership,
company, limited liability company, investment trust, syndicate or other
entity whose principal business is to make investments.
"INVESTOR" has the meaning ascribed thereto in the preamble hereto.
"IPO" means a firm-commitment underwritten initial public offering
of the Company's Ordinary Shares.
"JJ MEDIA" means JJ Media Investment Holding Limited, an
international business company organized and existing under the laws of
the British Virgin Islands.
"JJ MEDIA DIRECTOR" means any individual nominated by JJ Media to
the Board of Directors of the Company as of right under Section 3.
"LEAD INVESTOR" has the meaning ascribed thereto in the preamble
hereto.
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"MEMORANDUM AND ARTICLES" means the Memorandum and Articles of
Association of the Company, as the same may be amended from time to time.
"XX. XXXXX" means Jiang Nanchun, the founder and chairman of the
board of directors of the Company and the holder of 100% of the equity
interests in JJ Media.
"NEW SECURITIES" means any Equity Securities of the Company, whether
or not now authorized, and securities of any type whatsoever, provided,
however, that the term "New Securities" shall not include: (i) Employee
Share Options; (ii) any Employee Compensation Shares; (iii) any Series C
Shares issued under the Purchase Agreement or the Ancillary Documents;
(iv) any Series C-1 Shares issued under the Capital Purchase Agreement or
the Capital Ancillary Documents; (v) any securities issued in connection
with any share split, share dividend or other similar event; or (vi) any
securities issued on the conversion of any Preferred Shares.
"OBSERVER" has the meaning ascribed thereto in Section 3.6(a).
"OFFERED SHARES" has the meaning ascribed thereto Section 7.1.
"OFFERING HOLDER" has the meaning ascribed thereto in Section 7.3.
"OFFERING NOTICE" has the meaning ascribed thereto in Section 7.3.
"ORDINARY SHARES" means the ordinary shares, par value US$0.01 per
share, of the Company.
"ORDINARY SHARE EQUIVALENTS" means warrants, options and rights
exercisable for Ordinary Shares and instruments convertible or
exchangeable for Ordinary Shares.
"ORDINARY SHAREHOLDERS" has the meaning ascribed thereto in the
preamble hereto.
"PERMITTED TRANSFEREE" means, the parents, children or spouse of
Jiang Nanchun, or a trust for the benefit of the foregoing relatives of
Jiang Nanchun established for bona fide estate planning purposes.
"PERSON" means any natural person, corporation limited liability
company, joint stock company, joint venture, partnership, enterprise,
trust, unincorporated organization or any other entity or organization.
"PREFERRED CO-SALE NOTICE" has the meaning ascribed thereto in
Section 7.3(b)(1).
"PREFERRED HOLDER" means the Investors, the Purchasers and the
Existing Preferred Holders, together with the permitted transferees and
assigns of any Preferred Holder.
"PREFERRED SHARE" means any of the Series A Shares, Series B Shares
or Series C Shares.
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"PRIOR SHAREHOLDERS AGREEMENT" has the meaning ascribed thereto in
the recitals hereof.
"PRO RATA SHARE" means, as of any give time with respect to the
Right of Participation of any Preferred Holder, the ratio of (i) the
number of Ordinary Shares (calculated on an as-converted basis) then held
by such Preferred Holder to (ii) the total number of Ordinary Shares
(calculated on a fully-diluted and as-converted basis) then held by all
Preferred Holders.
"PURCHASE AGREEMENT" means that certain Series C Preferred Share
Purchase Agreement, dated November 9, 2004, by and among the Company, the
Existing Subsidiaries, the Investors and certain other parties thereto.
"PURCHASE OFFER" has the meaning ascribed thereto in Section 7.3(a).
"PURCHASERS" has the meaning ascribed thereto in the preamble
hereof.
"QUALIFIED EXCHANGE" means the New York Stock Exchange, the Nasdaq
Stock Market's National Market System, the Main Board of the Hong Kong
Stock Exchange, the Main Market of the London Stock Exchange and the
Mainboard of the Singapore Exchange.
"REGISTRATION" means a registration effected by preparing and filing
a Registration Statement and the declaration or ordering of the
effectiveness of that Registration Statement, and the terms "Register" and
"Registered" have meanings correlative with the foregoing.
"REGISTRABLE SECURITIES" means (i) the Preferred Shares, (ii)
Ordinary Shares issuable or issued upon conversion of the Preferred
Shares, (iii) all Equity Securities which may be from time to time
acquired by a Holder after the date hereof and (iv) any Equity Securities
of the Company issued as (or issuable upon the conversion, exchange or
exercise of any Ordinary Share Equivalent) a dividend or other
distribution with respect to, or in exchange for, or in replacement of,
the shares referenced in (i), (ii) and (iii), excluding in all cases,
however, any Equity Securities sold by a Person in a transaction other
than an assignment pursuant to Section 10.1(b).
"REGISTRATION STATEMENT" means a registration statement prepared on
Forms X-0, X-0, X-0, F-1, F-2 or F-3 under the Securities Act, or on any
comparable form in connection with registration in a jurisdiction other
than the United States.
"RELATED PARTY" means (i) the holder of any equity interest in the
Company, in any Group Company or in any Affiliate of the Company or any
Group Company (unless such equityholder is the Company or another Group
Company) or any director, officer, supervisory board member, or employee
of the Company, of any Group Company, or of any Affiliate of the Company
or any Group Company, (ii) the parents, children or spouse of any such
officer, director, supervisory board member, employee or equityholder, and
(iii) any Affiliate of the foregoing (unless such Affiliate is the Company
or a Group Company).
"RIGHT OF PARTICIPATION" has the meaning ascribed thereto in Section
6.1.
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"RIGHT PARTICIPANT" has the meaning ascribed thereto in Section
6.2(b)
"SEC" means the Securities and Exchange Commission of the United
States of America.
"SECOND PARTICIPATION NOTICE" has the meaning ascribed thereto in
Section 6.2(b).
"SECOND PARTICIPATION PERIOD" has the meaning ascribed thereto in
Section 6.2(b).
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended.
"SELLING EXPENSES" means, with respect to the issue or sale of any
securities by the Company, any underwriting, brokerage or similar
commissions, compensation, discounts or concessions paid or allowed by the
Company in connection with such issue or sale.
"SELLING SHAREHOLDER" has the meaning ascribed thereto in Section
7.1.
"SERIES A REGISTRABLE SECURITIES" means (i) the Series A Shares,
(ii) Ordinary Shares issuable or issued upon conversion of any Series A
Shares, (iii) any Equity Securities of the Company issued as (or issuable
upon the conversion or exercise of any Ordinary Share Equivalent) a
dividend or other distribution with respect to, or in exchange for, or in
replacement of, the shares referenced in (i) or (ii), excluding in all
cases, however, any Equity Securities sold by a Person in a transaction
other than an assignment pursuant to Section 10.1(b).
"SERIES A SHARES" means the Series A preferred shares, par value
US$0.01 per share, of the Company.
"SERIES A/B QPO" means an IPO by the Company on a Qualified Exchange
(or such other exchange as shall be approved in writing by the holders of
both a majority in voting power of the outstanding Series A Shares and a
majority in voting power of the Series B Shares) of Ordinary Shares
representing at least 25% of the fully-diluted share capital of the
Company immediately following the offering, at a price per share that
values the Company at no less than US$200,000,000 immediately prior to the
offering.
"SERIES B REGISTRABLE SECURITIES" means (i) the Series B Shares,
(ii) Ordinary Shares issuable or issued upon conversion of any Series B
Shares, (iii) any Equity Securities of the Company issued as (or issuable
upon the conversion or exercise of any Ordinary Share Equivalent) a
dividend or other distribution with respect to, or in exchange for, or in
replacement of, the shares referenced in (i) or (ii), excluding in all
cases, however, any Equity Securities sold by a Person in a transaction
other than an assignment pursuant to Section 10.1(b).
"SERIES B SHARES" means the Series B preferred shares, par value
US$0.01 per share, of the Company.
"SERIES C SHARES" means the Series C-1 Shares and the Series C-2
Shares.
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"SERIES C QPO" means an IPO by the Company on a Qualified Exchange
(or such other exchange as shall be approved in writing by the holders of
a majority in voting power of the outstanding Series C Shares) of Ordinary
Shares representing at least 25% of the fully-diluted share capital of the
Company immediately following the offering, at a price per share that
values the Company at no less than US$335,000,000 immediately prior to the
offering.
"SERIES C REGISTRABLE SECURITIES" means (i) the Series C Shares,
(ii) Ordinary Shares issuable or issued upon conversion of any Series C
Shares, (iii) any Equity Securities of the Company issued as (or issuable
upon the conversion or exercise of any Ordinary Share Equivalent) a
dividend or other distribution with respect to, or in exchange for, or in
replacement of, the shares referenced in (i) or (ii), excluding in all
cases, however, any Equity Securities sold by a Person in a transaction
other than an assignment pursuant to Section 10.1(b).
"SERIES C-1 SHARES" has the meaning ascribed thereto in the recitals
hereof.
"SERIES C-2 SHARES" means the Series C-2 preferred shares, par value
US$0.01 per share, of the Company.
"TAXES" means any national, provincial or local income, sales and
use, excise, franchise, real and personal property, gross receipt, capital
stock, production, business and occupation, disability, employment,
payroll, severance or withholding tax or charge imposed by any government
entity, any interest and penalties (civil or criminal) related thereto or
to the nonpayment thereof, and any loss or tax liability incurred in
connection with the determination, settlement or litigation of any
liability arising therefrom.
"TAX INDEMNITY AGREEMENT" means that certain Tax Indemnity
Agreement, dated as of November 29, 2004, by and among the Company and the
Investors.
"TAX RETURN" means any tax return, declaration, reports, estimates,
claim for refund, claim for extension, information returns, or statements
relating to Taxes, including any schedule or attachment thereto.
"TRANSFER NOTICE" has the meaning ascribed thereto in Section 7.1.
"UCI" means United China Investment Limited, an international
business company organized and existing under the laws of the British
Virgin Islands.
"UCI DIRECTOR" means any individual nominated by UCI to the Board of
Directors of the Company as of right under Section 3.
"VIOLATION" has the meaning ascribed thereto in Section 5.6(a).
1.2 Interpretation. For all purposes of this Agreement, except as
otherwise expressly herein provided, (i) the terms defined in Section 1 shall
have the meanings assigned to them in Section 1 and include the plural as well
as the singular, (ii) all accounting terms not otherwise defined herein have the
meanings assigned under the Accounting Principles, (iii) all references in this
Agreement to designated "Sections" and other subdivisions are to the designated
Sections and other subdivisions of the body of this Agreement, (iv) pronouns
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of either gender or neuter shall include, as appropriate, the other pronoun
forms, (v) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision, and (vi) all references in this Agreement to
designated Schedules, Exhibits and Annexes are to the Schedules, Exhibits and
Annexes attached to this Agreement.
1.3 Intent. The terms of Section 5 of this Agreement are drafted primarily
in contemplation of an offering of Ordinary Shares in the United States of
America. The parties recognize, however, the possibility that securities may be
qualified or Registered in a jurisdiction other than the United States of
America for offering to the public or that the Company might seek to effect an
offering in the United States of America in the form of American Depositary
Receipts or American Depositary Shares. Accordingly,
(a) It is their intention that, whenever this Agreement refers to a
law or institution of the United States of America but the parties wish to
effectuate qualification or Registration in a different jurisdiction, reference
in this Agreement to the laws or institutions of the United States shall be read
as referring, mutatis mutandis, to the comparable laws or institutions of the
jurisdiction in question; and
(b) It is agreed that the Company will not undertake any listing of
American Depositary Receipts, American Depositary Shares or any other security
derivative of the Ordinary Shares unless arrangements have been made
satisfactory to Holders representing a majority in voting power of the Series A
Registrable Securities, a majority in voting power of the Series B Registrable
Securities and a majority in voting power of the Series C Registrable Securities
to ensure that the spirit and intent of this Agreement will be realized and that
the Company is committed to take such actions as are necessary such that the
Holders will enjoy rights corresponding to the rights hereunder to sell their
Registrable Securities in a public offering in the United States of America as
if the Company had listed Ordinary Shares in lieu of such derivative securities.
1.4 Nominees. The parties hereto acknowledge that any Equity Securities
acquired in the Company by 3i Asia Pacific Technology LP and 3i Asia Pacific
2004-06 LP shall be held by 3i AP Tech Nominees Limited and 3i Nominee Limited
as nominees, respectively. Notwithstanding, 3i Asia Pacific Technology LP and 3i
Asia Pacific 2004-06 LP shall continue to exercise any rights and undertake any
obligations under this Agreement as if such Equity Securities were directly held
by such Investors.
SECTION 2 INFORMATION RIGHTS
2.1 Information Rights. The Company shall deliver to each Preferred
Holder:
(a) as soon as practicable, but in any event within ninety (90) days
after the end of each fiscal year of the Company, consolidated and consolidating
income statements and statements of cash flows for the Company and the Group
Companies for such fiscal year and consolidated and consolidating balance sheets
and accounts receivable aging reports for the Company and the Group Companies as
of the end of the fiscal year, all prepared in accordance with the Accounting
Principles and audited and certified by the Auditors;
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(b) as soon as practicable, but in any event within 45 days after
the end of each fiscal quarter of the Company, consolidated and consolidating
unaudited income statements and statements of cash flows for the Company and the
Group Companies for such fiscal quarter and consolidated and consolidating
unaudited balance sheets and accounts receivable aging reports for the Company
and the Group Companies as of the end of such fiscal quarter, all prepared in
accordance with the Accounting Principles;
(c) as soon as practicable, but in any event within fifteen (15)
days of the end of each month, consolidated and consolidating unaudited income
statements and statements of cash flows for the Company and the Group Companies
for such month and consolidated and consolidating balance sheets and accounts
receivable aging reports for the Company and the Group Companies as of the end
of such month, all prepared in accordance with the Accounting Principles;
(d) as soon as practicable, but in any event at least thirty (30)
days prior to the end of each fiscal year, a budget and business plan for the
succeeding fiscal year for the Company and the Group Companies, setting forth
for each month during such succeeding fiscal year projected balance sheets,
income statements and statements of cash flows;
(e) as soon as practicable, but in any event within five (5) working
days after providing such information to such other Person, copies of all other
documents or other information (including, without limitation, proposals and/or
reports with respect to acquisition of any franchise company and with respect to
the establishment, or negotiations in respect of the establishment, of any joint
venture by the Company or any Group Company) sent to any other Person in such
other Person's capacity as a shareholder of the Company or any Group Company;
(f) as soon as practicable, but in any event at least fourteen (14)
working days prior to such meeting, notices and agendas of any meeting of the
Board of Directors of the Company or any Group Company; and
(g) as soon as practicable, but in any event within thirty (30) days
after such meeting, minutes of any meeting of the Board of Directors of the
Company or any Group Company;
(h) as soon as practicable, but in any event within five (5) days
after the Company first becomes aware of such action, notice of any legal action
initiated against the Company or any Group Company; and
(i) as soon as practicable, such other information as any Preferred
Holder shall reasonably request from time to time.
2.2 Inspection Rights. The Company shall permit each Preferred Holder, at
such Preferred Holder's expense, to visit and inspect any of the properties and
examine the books of account and records of the Company and the Group Companies
and discuss the affairs, finances and accounts of the Company and the Group
Companies with the directors, officers, employees, accountants, legal counsel
and investment bankers of the Company and the Group Companies, all at such
reasonable times as may be requested by the Preferred Holder.
2.3 Termination of Information Rights. Upon a Series C QPO, the rights
under this Section 2 of all Preferred Holders shall immediately terminate. Upon
a Series A/B QPO,
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the rights under this Section 2 of any Preferred Holder that does not hold
Series C Shares at such date shall terminate.
SECTION 3 BOARD REPRESENTATION; OBSERVERS
3.1 Board Representation. The Board of Directors for each of the Company
and the Group Companies shall consist of five (5) members. The composition of
the Board of Directors for each of the Company and the Group Companies shall be
determined as follows:
(a) So long as UCI shall continue to hold any Series A Shares, UCI
shall have the right to nominate, from time to time, individuals to occupy one
of the positions on the Board of Directors of each of the Company and the Group
Companies.
(b) So long as CDH shall continue to hold any Series B Shares, CDH
shall have the right to nominate, from time to time, individuals to occupy one
of the positions on the Board of Directors of each of the Company and the Group
Companies.
(c) So long as the Lead Investor shall continue to hold any Series C
Shares, the Lead Investor shall have the right to nominate, from time to time
individuals to occupy one of the positions on the Board of Directors of each of
the Company and the Group Companies.
(d) So long as JJ Media shall continue to hold any Ordinary Shares,
JJ Media shall have the right to nominate, from time to time, individuals to
occupy two of the positions on the Board of Directors of each of the Company and
the Group Companies.
(e) The holders of a majority in voting power of the Company's
shares (any series or class of shares to vote together with the Ordinary Shares
and not as a separate class or series) shall be entitled to nominate individuals
from time to time to occupy the balance of any positions on the Board of
Directors of each of the Company and the Group Companies.
3.2 Election and Removal of Directors.
(a) Upon the death, resignation, removal or incapacity of any
director nominated as of right hereunder to the Board of Directors of any of the
Company or the Group Companies by any party hereto, such party shall be entitled
to nominate such director's replacement to the applicable Board of Directors.
Any director nominated as of right hereunder by any party to the Board of
Directors of any of the Company or the Group Companies shall be removed from
office upon motion by such party. Except as provided in paragraph (c) below, no
director nominated by any party as of right hereunder shall be removed from the
Board of Directors of any of the Company or the Group Companies unless the
nominating party consents to the removal.
(b) Each party agrees to vote all the Equity Securities of the
Company owned thereby in favor of the election of any director nominated by any
party to the Board of Directors of the Company pursuant to this Section 3 The
Company agrees to take such action, and each other party hereto agrees to
procure the Company to take such action, as is necessary to cause the election
of any director nominated to the Board of Directors of any Group Company
pursuant to this Section 3. Upon a motion to remove any director from the
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Board of Directors of the Company in accordance with this Section 3, each party
agrees to vote all the voting securities of the Company owned thereby to effect
removal of such director from the Board of Directors. Upon a motion to remove
any director from the Board of Directors of any Group Company in accordance with
this Section 3, the Company agrees to take such action, and each other party
hereto agrees to procure the Company to take such action, as is necessary to
cause the removal of such director from the Board of Directors of such Group
Company.
(c) Any director nominated by a party hereto as of right hereunder
to a position on the Board of Directors of any of the Company or the Group
Companies, following such time as the party shall cease to hold the right
hereunder to nominate individuals to occupy such position, shall be promptly
removed therefrom as if a motion had been duly made for such removal under this
Section 3.2.
3.3 Chairman of the Board. The Chairman of the Company's Board of
Directors and the Board of Directors of each Group Company shall be decided by a
majority of such Board of Directors. The parties agree that Jiang Nanchun shall
serve as the first Chairman of the Company's Board of Directors from the date
hereof.
3.4 Audit Committee. The Board of Directors of the Company shall have an
audit committee (the "AUDIT COMMITTEE") composed of four (4) directors of the
Company, which shall be vested with oversight functions for financial and
accounting matters of the Company, including without limitation the preparation
of budgets and internal auditing. For so long as any GS Director, CDH Director,
UCI Director or JJ Media Director shall continue to serve on the Board of
Directors of the Company, the parties hereto shall procure that such directors
shall also serve as a member of the Audit Committee.
3.5 Compensation Committee. The Board of Directors of the Company shall
have a compensation committee (the "COMPENSATION COMMITTEE") composed of three
(3) directors of the Company, which shall be vested with authority to oversee
and recommend compensation policies for the Company. For so long as any GS
Director, CDH Director or UCI Director shall continue to serve on the Board of
Directors of the Company, the parties hereto shall procure that such directors
shall also serve as a member of the Compensation Committee.
3.6 Board Observers.
(a) In respect of the Board of Directors for any of the Company or
the Group Companies:
(1) Each Preferred Holder which, together with its Affiliates, holds
Preferred Shares with an aggregate conversion price equal to not less than
US$1,000,000 shall be entitled, from time to time, by notice in writing to
the Company, to appoint an individual (an "OBSERVER") to attend any
meetings of such Board of Directors and any committee thereof. Observers
in attendance thereat shall be entitled to speak at meetings of such Board
of Directors and any committee thereof, but no Person shall have any right
in respect of his/her status as an Observer to vote on questions put
before such Board of Directors or such committee. For so long as the Lead
Investor, CDH or UCI, respectively, shall continue to enjoy a right to
nominate a director to the Board of Directors of the Company and each
Group Company under this Section 3,
Shareholders Agreement
13
such party agrees it shall not exercise its right under this Section 3.6
to appoint any Observer.
(2) Concurrent with the delivery of notice or other materials to the
directors of such Board of Directors or the members of any committee
thereof, the Company shall give each Observer for such Board of Directors
a copy of such notice or materials. Further, (i) promptly following any
meeting of such Board of Directors or such committee, the Company shall
provide such Observer with a copy of the minutes of such meeting, together
with all materials distributed to the directors of such Board of Directors
or members of such committee at the meeting; (ii) concurrent with
distribution to the directors of such Board of Directors or the members of
such committee of any resolution proposed to be adopted by the Board of
Directors or such committee in writing in lieu of a meeting, the director
or member proposing such resolution shall distribute a copy to such
Observer; and (iii) following the adoption thereof, the Company shall
provide the Observer with copies of all resolutions adopted by the Board
of Directors or such committee in writing in lieu of a meeting.
(c) The parties hereto acknowledge that Observers appointed by any
Preferred Holder hereunder are responsible for reporting to such Preferred
Holder and the Affiliates thereof any information disclosed to such Observers in
respect of the Company and the Group Companies.
3.7 Termination. Upon a Series C QPO, the rights under this Section 3 of
all Preferred Holders shall immediately terminate. Upon a Series A/B QPO, the
rights under this Section 3 of any Preferred Holder that does not hold Series C
Shares at such date shall terminate.
SECTION 4 PROTECTIVE PROVISIONS
4.1 Acts of the Company. Notwithstanding anything to the contrary in the
Memorandum and Articles of the Company or the charter documents of any Group
Company, the parties hereto shall ensure that none of the Company or the Group
Companies shall take any action described below without prior approval in a
resolution adopted by the affirmative vote of a majority of the Board of
Directors of the Company, which majority shall include the affirmative vote of
(i) the UCI Director, (ii) the CDH Director and (iii) the GS Director, if any:
(1) any amendment or change of the rights, preferences, privileges
or powers of, or the restrictions provided for the benefit of, any class
or series of Preferred Shares;
(2) any new issuance of any equity securities of, or income in the
registered capital of the Company or any Group Company, excluding (i) any
issuance of the Series C Shares under the Purchase Agreement or the
Ancillary Documents, (ii) any issuance of the Series C-1 Shares under the
Capital Purchase Agreement or the Capital Ancillary Documents, (iii) any
issuance of Ordinary Shares upon conversion of the Preferred Shares,
including, but not limited to, any conversion of Series A Shares and
Series B Shares after any adjustment to the conversion price therefor
under Article 10(h)(5) of the Company's Memorandum of Association, (iv) as
required by Article 10(b) or Article 10(c) of the Company's Memorandum of
Shareholders Agreement
14
Association in connection with a liquidation or deemed liquidation of the
Company, and (v) any issuance of Ordinary Shares as consideration in any
bona fide acquisition of the business and/or assets of another Person by
the Company or any Group Company, or any combination of the foregoing,
whether in a single transaction or a series of related transactions, where
the aggregate value of the transaction does not exceed US$2,000,000;
(3) any action to reclassify any outstanding shares into shares
having preferences or priority as to dividends or assets senior to or on a
parity with the preference of any class or series of Preferred Shares;
(4) any repurchase or redemption of any of the equity of the Company
or any Group Company other than (i) the redemption of any Preferred Shares
pursuant to the terms thereof, (ii) any redemption or repurchase of
Employee Compensation Shares duly approved by the Company's Board of
Directors, (iii) the repurchase of 18,000 Ordinary Shares owned by Xxxx
Xxxx pursuant to that certain letter agreement dated November 3, 2004,
between the Company and Xxxx Xxxxxx; and (iv) as necessary to allow the
Company to meet its obligations under the Ancillary Documents or the
Capital Ancillary Documents;
(5) any amendment of the Memorandum and Articles, or any amendment
of any of the charter documents of any Group Company except as necessary
to allow the Company to meet its obligations under the Ancillary Documents
or the Capital Ancillary Documents;
(6) the establishment of any joint venture in which the capital
contribution from any of the Company or the Group Companies, or any
combination of the foregoing, shall exceed US$1,000,000;
(7) the establishment of any new Group Company by any of the Company
or the Group Companies, or any combination of the foregoing;
(8) the acquisition of any new Group Company by any of the Company
or the Group Companies, or any combination of the foregoing, in a single
transaction or a series of related transactions, for aggregate
consideration in excess of the equivalent of US$2,000,000;
(9) any material change to the business scope or current line of
business of the Company or any Group Company except as otherwise required
of the Company by the terms of its Memorandum and Articles;
(10) any transactions involving the Company or any Group Company not
in the ordinary course of business other than (i) the repurchase of 18,000
Ordinary Shares owned by Xxxx Xxxx pursuant to that certain letter
agreement dated November 3, 2004, between the Company and Xxxx Xxxxxx, and
(ii) as otherwise required of the Company by the terms of the Memorandum
and Articles;
(11) the entry into any transaction or series of transactions (or
the termination, extension, continuation after expiry, renewal, amendment,
variation or waiver of any contract term or agreement with respect to any
transaction or series of transactions) which is between the Company or any
Group Company, on the one hand, and any
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15
Related Party, on the other hand, other than (i) the exercise by any
Preferred Holder of its rights in respect of any Preferred Shares pursuant
to the terms of such Preferred Shares under the Memorandum and Articles
and (ii) the repurchase of 18,000 Ordinary Shares owned by Xxxx Xxxx
pursuant to that certain letter agreement dated November 3, 2004, between
the Company and Xxxx Xxxxxx;
(12) appointment and removal of auditors of the Company or any Group
Company or any material change in the accounting policies of the Company
or any Group Company;
(13) any leasing arrangement involving any of the Company or any
Group Company, or any combination of the foregoing, with a value in excess
of RMB(yen)10,000,000;
(14) any merger or consolidation of the Company with or into any
other business entity in which the shareholders of the Company immediately
prior to such merger or consolidation held shares representing less than a
majority of the voting power of the outstanding share capital of the
surviving business entity;
(15) any merger or consolidation of any Group Company with or into
any other business entity resulting in the Company giving up Control over
such Group Company;
(16) the sale or transfer of all or substantially all of the assets
of the Company or any Group Company;
(17) the liquidation, dissolution or winding up of any of the
Company or the Group Companies;
(18) any change in the dividend policy of the Company or any Group
Company or the declaration or payment of a dividend or other distribution
by the Company or any Group Company except for (i) any distribution or
dividend with respect to which the sole recipient of any proceeds
therefrom will be the Company or any Group Company, (ii) any distribution
required to be paid pursuant to Article 10(b) or Article 10(c) of the
Company's Memorandum of Association in connection with a liquidation or
deemed liquidation of the Company, (iii) any amounts paid upon redemption
of any Preferred Share pursuant to the terms thereof, or (iv) any amounts
paid in the repurchase of 18,000 Ordinary Shares owned by Xxxx Xxxx
pursuant to that certain letter agreement dated November 3, 2004, between
the Company and Xxxx Xxxxxx; or
(19) the determination of the timing and valuation of a public
offering of the securities of the Company (other than a Series C QPO) and
the securities exchange on which such securities shall be listed (other
than a Qualified Exchange).
4.2 Further Acts of the Company. Notwithstanding anything to the contrary
in the Memorandum and Articles or the charter documents of any Group Company,
the parties hereto shall ensure that none of the Company or the Group Companies
shall take action described below without prior approval in a resolution adopted
by the affirmative vote of at least 80% of the directors serving on the
Company's Board of Directors:
Shareholders Agreement
16
(1) the appointment or removal of the Chief Executive Officer, the
Chief Operating Officer, the Chief Financial Officer and other executive
officers of the Company or any Group Company;
(2) the adoption of, and any amendment to or deviation from, the
annual budget of the Company or any Group Company;
(3) any incurrence, assumption or refinancing of interest-bearing
indebtedness (including any off-balance sheet liability) by any of the
Company or the Group Companies, or any combination of the foregoing, in
excess of RMB(yen)10,000,000 in the aggregate;
(4) the adoption of, or amendment to, any employee equity incentive
plan of the Company and all related agreements and documents;
(5) the adoption of, or amendment to, any compensation, welfare,
benefit and equity incentive schemes for the benefit of the management
staff of any of the Company or the Group Companies, including without
limitation the purchase and provision of automobiles and residential real
estate for use by the management staff;
(6) the disposition of any business or assets by any of the Company
or the Group Companies, or any combination of the foregoing, whether in a
single transaction or a series of related transactions, with an aggregate
value in excess of US$1,000,000;
(7) the acquisition of any business and/or assets of any Person by
any of the Company or the Group Companies, or any combination of the
foregoing, whether in a single transaction or a series of related
transactions, with an aggregate value in excess of US$2,000,000;
(8) the establishment of any joint venture, partnership or
non-wholly owned subsidiary in which the contribution of any of the
Company or the Group Companies, or any combination of the foregoing, shall
exceed US$1,000,000;
(9) the entry into any transaction or series of related transactions
pursuant to which the Company, directly or indirectly, gives up Control
over any Group Company;
(10) any capital expenditures by any of the Company or the Group
Companies, or any combination of the foregoing, in excess of US$1,000,000,
whether in a single transaction or a series of related transactions;
(11) the settlement by the Company or any Group Company of any
litigation in excess of US$250,000;
(12) the payment or declaration by the Company of any dividend on
the Ordinary Shares or any other class or series of shares that is junior
to the Series C Shares in terms of the right to receive dividends except
for (i) any distribution required to be paid pursuant to Article 10(b) or
Article 10(c) of the Memorandum and Articles, (ii) any amounts paid upon
redemption of any Preferred Share pursuant to the terms thereof, or (iii)
any amounts paid in the repurchase of 18,000 Ordinary
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17
Shares owned by Xxxx Xxxx pursuant to that certain letter agreement dated
November 3, 2004, between the Company and Xxxx Xxxxxx;
(13) any change in the authorized number of directors of the Company
or any Group Company;
(14) the sale, license or other transfer of any intellectual
property or intangible property material to the business of the Company or
any Group Company, other than licenses in the ordinary course of the
business of the Company or such Group Company consistent with past
practice;
(15) the selection of, and any change in, any Person retained by the
Company or any Group Company (other than employees hired thereby in the
ordinary course) to provide Tax advisory services thereto or to assist in
the preparation of Tax Returns therefor;
(16) the entry into any transaction or series of related
transactions by any of the Company or the Group Companies, or by any
combination of the foregoing, which has as an objective and/or the effect
of securing a Tax benefit; or
(17) the tax-motivated restructuring of any of the Company or the
Group Companies, or of any combination of the foregoing, or of the
business, operations or practices thereof.
4.3 Approval by Holders of Series C Shares. Notwithstanding anything to
the contrary in the Memorandum and Articles or the charter documents of any
Group Company, the parties hereto shall ensure that none of the Company or the
Group Companies take any action described below without prior approval in a
resolution adopted by the affirmative vote of members holding more than eighty
percent (80%) in voting power of the Series C Shares then issued and
outstanding:
(1) the amendment of the Memorandum and Articles or the charter
documents of any Group Company;
(2) the merger, consolidation, reorganization, or amalgamation of
the Company or any Group Company with or into any other Person or any
scheme of arrangement or other business combination with or into any other
Person;
(3) the sale, transfer, lease, assignment, parting with or disposal
by the Company or any Group Company, whether directly or indirectly, of
all or substantially all of the property, assets or revenues thereof;
(4) any voluntary action to initiate any liquidation, dissolution or
winding up of the Company or any Group Company or to permit the
commencement of a proceeding for bankruptcy, insolvency, receivership or
similar action with respect to the Company or any Group Company;
(5) the creation of any new class of shares having any preference
over the Series C Shares (in respect of dividends, distributions on
liquidation, voting rights or otherwise);
Shareholders Agreement
18
(6) the increase or decrease in the authorized or registered capital
of the Company or any Group Company except as necessary (i) to permit the
conversion of any Preferred Share in accordance with the terms thereof and
(ii) to permit the issuance of Ordinary Shares as consideration in any
bona fide acquisition of the business and/or assets of another Person by
the Company or any Group Company, or any combination of the foregoing,
whether in a single transaction or a series of related transactions, where
the aggregate value of the transaction does not exceed US$2,000,000;
(7) any redemption, purchase or acquisition of any of the equity of
the Company or any Group Company other than (i) the redemption of any
Preferred Shares pursuant to the terms thereof, (ii) the redemption or
repurchase of Employee Compensation Shares duly approved by the Board, and
(iii) the repurchase of 18,000 Ordinary Shares owned by Xxxx Xxxx pursuant
to that certain letter agreement dated November 3, 2004, between the
Company and Xxxx Xxxxxx; or
(8) any material changes to the Company's business plan.
4.4 Protective Provisions Cumulative. The requirements imposed by this
Section 4 are cumulative, and in respect of any matter subject to approval under
Section 4.1, Section 4.2 or Section 4.3, the securing of such approval shall not
be sufficient to discharge any further requirement of approval or consent under
law, under the Memorandum and Articles or under this Agreement (including,
without limitation, any further requirement of approval under this Section 4).
SECTION 5 REGISTRATION RIGHTS.
5.1 Demand Registration Rights.
(a) Registration Other Than on Form F-3.
(1) Subject to the terms of this Agreement, at any time after the
earlier of April 28, 2007 and the date six (6) months following a Series
A/B QPO, Holders representing a majority in voting power of the then
outstanding Series A Registrable Securities may request the Company in
writing to effect the Registration of any Registrable Securities held
thereby. Upon receipt of such a request, the Company shall (i) promptly,
and in any event within ten (10) Business Days after receipt of such
written request, give written notice of the proposed Registration to all
other Holders and (ii) use best efforts to cause, as soon as practicable,
the Registrable Securities specified in the request, together with any
Registrable Securities of any Holder who requests in writing to join such
Registration within twenty (20) days after the Company's delivery of
written notice, to be Registered and/or qualified for sale and
distribution to the public in such jurisdictions as the Initiating Holders
may reasonably request. The Company shall be obligated to effect no more
than two (2) Registration pursuant to this Section 5.1(a)(1).
(2) Subject to the terms of this Agreement, at any time after the
earlier of April 28, 2007 and the date six (6) months following a Series
A/B QPO, Holders representing a majority in voting power of the then
outstanding Series B Registrable Securities may request the Company in
writing to effect the Registration of any
Shareholders Agreement
19
Registrable Securities held thereby. Upon receipt of such a request, the
Company shall (i) promptly, and in any event within ten (10) Business Days
after receipt of such written request, give written notice of the proposed
Registration to all other Holders and (ii) use best efforts to cause, as
soon as practicable, the Registrable Securities specified in the request,
together with any Registrable Securities of any Holder who requests in
writing to join such Registration within twenty (20) days after the
Company's delivery of written notice, to be Registered and/or qualified
for sale and distribution to the public in such jurisdictions as the
Initiating Holders may reasonably request. The Company shall be obligated
to effect no more than two (2) Registration pursuant to this Section
5.1(a)(2).
(3) Subject to the terms of this Agreement, at any time after the
earlier of the third anniversary of this Agreement and the date six (6)
months following an IPO, Holders representing 20% or more in voting power
of the then outstanding Series C Registrable Securities may request the
Company in writing to effect the Registration of Registrable Securities
for which the reasonably anticipated aggregate price to the public, net of
Selling Expenses, would not be less than US$20,000,000. Upon receipt of
such a request, the Company shall (i) promptly, and in any event within
ten (10) Business Days after receipt of such written request, give written
notice of the proposed Registration to all other Holders and (ii) as soon
as practicable, and in any event within sixty (60) days of the receipt of
such request, cause the Registrable Securities specified in the request,
together with any Registrable Securities of any Holder who requests in
writing to join such Registration within twenty (20) days after the
Company's delivery of written notice, to be Registered and/or qualified
for sale and distribution to the public in such jurisdictions as the
Initiating Holders may reasonably request. The Company shall be obligated
to effect no more than two (2) Registrations pursuant to this Section
5.1(a)(3).
(b) Registration on Form F-3.
(1) Subject to the terms of this Agreement, from time to time and at
any time after April 28, 2005, Holders holding any Series A Registrable
Securities may request the Company in writing to file a Registration
Statement on Form F-3 or Form S-3 (or any successor form to Form F-3 or
Form S-3, or any comparable form for Registration in a jurisdiction other
than the United States) for a public offering of Registrable Securities
for which the reasonably anticipated aggregate price to the public would
not be less than US$1,000,000 and for which the Company is entitled to use
Form F-3, Form S-3 or a comparable form to register the requested
Registrable Securities. Upon receipt of such a request, the Company shall
(i) promptly, and in any event within ten (10) Business Days after receipt
of such written request, give written notice of the proposed Registration
to all other Holders and (ii) use best efforts to cause, as soon as
practicable, the Registrable Securities specified in the request, together
with any Registrable Securities of any Holder who requests in writing to
join such Registration within twenty (20) days after the Company's
delivery of written notice, to be Registered and/or qualified for sale and
distribution to the public in such jurisdictions as the Initiating Holders
may reasonably request.
(2) Subject to the terms of this Agreement, from time to time and at
any time after April 28, 2005, Holders holding any Series B Registrable
Securities may request the Company in writing to file a Registration
Statement on Form F-3 or Form S-3 (or any successor form to Form F-3 or
Form S-3, or any comparable form for
Shareholders Agreement
20
Registration in a jurisdiction other than the United States) for a public
offering of Registrable Securities for which the reasonably anticipated
aggregate price to the public would not be less than US$1,000,000 and for
which the Company is entitled to use Form F-3, Form S-3 or a comparable
form to register the requested Registrable Securities. Upon receipt of
such a request, the Company shall (i) promptly, and in any event within
ten (10) Business Days after receipt of such written request, give written
notice of the proposed Registration to all other Holders and (ii) use best
efforts to cause, as soon as practicable, the Registrable Securities
specified in the request, together with any Registrable Securities of any
Holder who requests in writing to join such Registration within twenty
(20) days after the Company's delivery of written notice, to be Registered
and/or qualified for sale and distribution to the public in such
jurisdictions as the Initiating Holders may reasonably request.
(3) Subject to the terms of this Agreement, from time to time and at
any time, Holders holding any Series C Registrable Securities may request
the Company in writing to file a Registration Statement on Form F-3 or
Form S-3 (or any successor form to Form F-3 or Form S-3, or any comparable
form for Registration in a jurisdiction other than the United States) for
a public offering of Registrable Securities for which the reasonably
anticipated aggregate price to the public would exceed US$1,000,000 and
for which the Company is entitled to use Form F-3, Form S-3 or a
comparable form to register the requested Registrable Securities. Upon
receipt of such a request the Company shall (i) promptly, and in any event
within ten (10) Business Days after receipt of such written request, give
written notice of the proposed Registration to all other Holders and (ii)
as soon as practicable, and in any event within sixty (60) days of the
receipt of such request, cause the Registrable Securities specified in the
request, together with any Registrable Securities of any Holder who
requests in writing to join such Registration within twenty (20) days
after the Company's delivery of written notice, to be Registered and
qualified for sale and distribution in such jurisdictions as the
Initiating Holders may reasonably request.
(c) Right of Deferral. Notwithstanding anything to the contrary in
this Section 5.1:
(1) The Company shall not be obligated to Register or qualify
Registrable Securities pursuant to any of the provisions of Section 5.1(a)
if, within the six (6) month period preceding the date of such request,
the Company has either (i) already effected a Registration under any of
the provisions of Section 5.1(a) or Section 5.1(b) or (ii) already
affected a Registration (other than a registration of securities in a
transaction under Rule 145 of the Securities Act or with respect to an
employee benefit plan) in which the Holders had an opportunity to
participate pursuant to the provisions of Section 5.2 and no Registrable
Securities of the Holders were excluded from such Registration pursuant to
the provisions of Section 5.2(c).
(2) The Company shall not be obligated to Register or qualify
Registrable Securities pursuant to Section 5.1(b) if, within the six (6)
month period preceding the date of such request, the Company has already
effected a Registration (other than a registration of securities in a
transaction under Rule 145 of the Securities Act or with respect to an
employee benefit plan) in which the Holders had an opportunity to
participate pursuant to the provisions of Section 5.2 and no Registrable
Securities of the Holders were excluded from such Registration pursuant to
the provisions of Section 5.2(c).
Shareholders Agreement
21
(3) The Company shall not be obligated to Register or qualify
Registrable Securities pursuant to Section 5.1(a) or Section 5.1(b) if the
Company shall furnish to the Holders a certificate signed by the Chief
Executive Officer of the Company stating that, in the good faith judgment
of the Board of Directors of the Company, it would be materially
detrimental to the Company and its shareholders for a Registration
Statement to be filed in the near future. Following delivery of such
certificate, the Company shall have the right to defer such filing for a
period not to exceed ninety (90) days from the receipt of any request duly
submitted by Holders under Section 5.1(a) or Section 5.1(b) to Register
Registrable Securities; provided, however, that the Company shall not
utilize this right more than once in any twelve (12) month period.
(d) Underwritten Offerings. If, in connection with a request to
Register Registrable Securities under any of the provisions of Section 5.1(a) or
Section 5.1(b), the Initiating Holders seek to distribute such Registrable
Securities in an underwriting, they shall so advise the Company as a part of the
request, and the Company shall include such information in the written notice to
the other Holders described in to Section 5.1(a) or Section 5.1(b). In such
event, the right of any Holder to include its Registrable Securities in such
Registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by Initiating Holders
representing a majority in voting power of the Registrable Securities held by
the Initiating Holders) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company (which underwriter or underwriters
shall be reasonably acceptable to Initiating Holders representing a majority in
voting power of the Registrable Securities held by the Initiating Holders).
Notwithstanding any other provision of this Agreement, if the managing
underwriter advises the Company that marketing factors (including the aggregate
number of securities requested to be Registered, the general condition of the
market, and the status of the Persons proposing to sell securities pursuant to
the Registration) require a limitation of the number of Equity Securities to be
underwritten, the underwriters may exclude such number of Registrable Securities
from the underwriting as required (i) after excluding any other Equity
Securities from the underwriting (including, without limitation, any Equity
Securities which the Company may seek to include in the underwriting for its own
account) and (ii) so long as at least thirty percent (30%) in voting power of
any Registrable Securities requested by the Holders to be included in such
underwriting and Registration shall be included. If a limitation of the number
of Registrable Securities is required pursuant to this Section 5.1(d), the
number of Registrable Securities that may be included in the underwriting by
selling Holders shall be allocated among such Holders, in proportion, as nearly
as practicable, to the respective amounts of Registrable Securities which the
Holders would otherwise be entitled to include in the Registration. If any
Holder disapproves of the terms of any underwriting, the Holder may elect to
withdraw therefrom by written notice to the Company and the underwriters
delivered at least ten (10) Business Days prior to the effective date of the
Registration Statement. Any Registrable Securities excluded or withdrawn from
such underwriting shall be withdrawn from the Registration.
5.2 Piggyback Registrations.
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(a) Registration of the Company's Securities. Subject to Section
5.2(c), if the Company proposes to Register for its own account any of its
Equity Securities in connection with the public offering of such securities, the
Company shall promptly give each Holder written notice of such Registration and,
upon the written request of any Holder given within twenty (20) days after
delivery of such notice, the Company shall use best efforts to include in such
Registration any Registrable Securities thereby requested by such Holder. If a
Holder decides not to include all or any of its Registrable Securities in such
Registration by the Company, such Holder shall nevertheless continue to have the
right to include any Registrable Securities in any subsequent Registration
Statement or Registration Statements as may be filed by the Company with respect
to offerings of its securities, all upon the terms and conditions set forth
herein.
(b) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any Registration initiated by it under Section
5.2(a) prior to the effectiveness of such Registration, whether or not any
Holder has elected to participate therein. The expenses of such withdrawn
Registration shall be borne by the Company in accordance with Section 5.3.
(c) Underwriting Requirements.
(1) In connection with any offering involving an underwriting of the
Company's Equity Securities, the Company shall not be required to Register
the Registrable Securities of a Holder under this Section 5.2 unless such
Holder shall include such Registrable Securities in the underwriting and
such Holder enters into an underwriting agreement in customary form with
the underwriters selected by the Company and setting forth such terms for
the underwriting as have been agreed upon between the Company and the
underwriters. Subject to clause (2) below, in the event the underwriters
advise Holders seeking Registration of Registrable Securities pursuant to
this Section 5.2 in writing that market factors (including the aggregate
number of Registrable Securities requested to be Registered, the general
condition of the market, and the status of the Persons proposing to sell
securities pursuant to the Registration) require a limitation of the
number of Equity Securities to be underwritten, the underwriters may
exclude some or all Registrable Securities from the Registration and
underwriting after excluding any other Equity Securities from the
underwriting (other than any Equity Securities which the Company may seek
to include in the underwriting for its own account), and the number of
Equity Securities and Registrable Securities that may be included in the
Registration and the underwriting shall be allocated (i) first, to the
Company and (ii) thereafter, among the Holders requesting inclusion of
their Registrable Securities in such Registration Statement in proportion,
as nearly as practicable, to the respective amounts of Registrable
Securities which the Holders would otherwise be entitled to include in the
Registration.
(2) Notwithstanding anything to the contrary in this clause (c), in
connection with any offering involving an underwriting of the Company's
Equity Securities, in no event shall the underwriters exclude any
Registrable Securities which Holders may seek to include in such
Registration and underwriting under this Section 5.2 unless at least
thirty percent (30%) in voting power of any Registrable Securities
requested by the Holders to be included in such underwriting and
Registration shall be included.
Shareholders Agreement
23
(3) If any Holder disapproves of the terms of any underwriting, the
Holder may elect to withdraw therefrom by written notice to the Company
and the underwriters delivered at least seven (7) days prior to the
effective date of the Registration Statement. Any Registrable Securities
excluded or withdrawn from the underwriting shall be withdrawn from the
Registration.
(d) Exempt Transactions. The Company shall have no obligation to
Register any Registrable Securities under this Section 5.2 in connection with a
Registration by the Company (i) relating solely to the sale of securities to
participants in a Company share plan, (ii) relating to a corporate
reorganization or other transaction under Rule 145 of the Securities Act (or
comparable provision under the laws of another jurisdiction, as applicable), or
(iii) on any form that does not include substantially the same information as
would be required to be included in a Registration Statement covering the sale
of the Registrable securities.
5.3 Expenses. All expenses, other than Selling Expenses, incurred in
connection with Registrations, filings or qualifications pursuant to this
Agreement, including, without limitation, all U.S. federal, "blue sky" and all
foreign registration, filing and qualification fees, printer's and accounting
fees, and fees and disbursements of counsel for the Company and of counsel for
the Holders (but excluding underwriters' discounts and commissions relating to
shares sold by the Holders), shall be borne by the Company. Notwithstanding the
foregoing, the Company shall not be required to pay for any expenses of any
Registration proceeding begun pursuant to Section 5.1(a) or Section 5.1(b) if
the Registration request is subsequently withdrawn at the request of the Holders
of a majority of the Registrable Securities to be registered unless (i) in
connection with a Registration proceeding begun pursuant to Section 5.1(a) and
withdrawn, Holders representing a majority in voting power of Registrable
Securities then held by the Initiating Holders for such Registration request
agree that such Registration request constitutes the use by such Holders of one
(1) registration request under Section 5.1(a) or (ii) if at the time of such
withdrawal, the Holders have learned of a material adverse change in the
condition, business, or prospects of the Company not known to the Holders at the
time of their request for such Registration and have withdrawn their request for
Registration with reasonable promptness after learning of such material adverse
change.
5.4 Obligations of the Company. Whenever required to effect the
Registration of any Registrable Securities under this Agreement the Company
shall, as expeditiously as reasonably possible:
(a) Registration Statement. Prepare and file with the Commission a
Registration Statement with respect to such Registrable Securities and use its
best efforts to cause such Registration Statement to become effective, and upon
the request of any Holder, keep the Registration Statement Effective; provided,
that the Company shall not be required to keep any such Registration Statement
effective for more than ninety (90) days.
(b) Amendments and Supplements. Prepare and file with the Commission
such amendments and supplements to such Registration Statement and the
prospectus used in connection with such Registration Statement as may be
necessary to comply with the provisions of Applicable Securities Law with
respect to the disposition of all securities covered by such Registration
Statement.
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24
(c) Prospectuses. Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Applicable Securities Law, and such other documents as such
Holders may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by them that are included in such Registration.
(d) Blue Sky. Use its best efforts to register and qualify the
securities covered by such Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) Underwriting. In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement in usual
and customary form, with the managing underwriter(s) of such offering. Each
Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notification. Notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under Applicable Securities Law of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
(g) Opinion and Comfort Letter. Furnish, at the request of any
Holder requesting Registration of Registrable Securities, on the date that such
Registrable Securities are delivered to the underwriter(s) for sale, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the Registration Statement
with respect to such securities becomes effective, (i) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering and reasonably satisfactory to a majority in
interest of the Holders requesting Registration, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities and
(ii) a "comfort" letter dated as of such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
(h) Transfer Agent and CUSIP. Provide a transfer agent and registrar
for all Registrable Securities Registered pursuant to the Registration Statement
and, where applicable, a CUSIP number for all those Registrable Securities, in
each case not later than the effective date of the Registration.
(i) Further Actions. Take all reasonable action necessary to list
the Registrable Securities on the primary exchange upon which the Company's
securities are traded or, in connection with any IPO, the primary exchange upon
which the Company's securities will be traded.
Shareholders Agreement
25
5.5 Obligations of Holders. It shall be a condition precedent to the
obligations of the Company to Register the Registrable Securities of any Holder
pursuant to this Section 5 that the selling Holder shall furnish to the Company
such information regarding itself, the Registrable Securities held thereby and
the intended method of disposition of such securities as shall be required to
timely effect the Registration of such Holder's Registrable Securities.
5.6 Indemnification. In the event any Registrable Securities are included
in a registration statement under this Section 5:
(a) Company Indemnity. To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, its partners, officers, directors,
legal counsel, accountants, any underwriter (as defined in the Securities Act)
for such Holder and each Person, if any, who controls (as defined in the
Securities Act) such Holder or underwriter against any losses, claims, damages,
or liabilities (joint or several) to which they may become subject under laws
which are applicable in connection with any Registration, qualification, or
compliance, of the Company's securities insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"VIOLATION"):
(1) any untrue statement or alleged untrue statement of a material
fact contained in such Registration Statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto;
(2) the omission or alleged omission to state in the Registration
Statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, a material
fact required to be stated therein, or necessary to make the statements
therein not misleading; or
(3) any violation or alleged violation by the Company of Applicable
Securities Laws, or any rule or regulation promulgated under Applicable
Securities Laws;
and the Company will reimburse each such Holder, its partner, officer, director,
legal counsel, accountants, underwriter or controlling Person for any legal or
other expenses reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 5.6(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such Registration by such Holder,
underwriter or controlling Person of such Holder.
(b) Notice. Promptly after receipt by an indemnified party under
this Section 5.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 5.6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own
Shareholders Agreement
26
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall relieve such indemnifying party of liability to the indemnified
party under this Section 5.6 to the extent the indemnifying party is prejudiced
as a result thereof, but the omission to so deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 5.6.
(c) Contribution. If any indemnification provided for in this
Section 5.6 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to herein, the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party, on the one hand, and of the indemnified party, on the
other, in connection with the statements or omissions that resulted in such
loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(d) Survival. The obligations of the Company and Holders under this
Section 5.6 shall survive the completion of any offering of Registrable
Securities in a Registration Statement, regardless of the expiration of any
statutes of limitation or extensions of such statutes.
5.7 Termination of the Company's Obligations. The Company shall not be
obligated under this Section 5 to Register any Registrable Securities which a
Holder proposes to sell more than seven (7) years after the closing of the
Purchase Agreement, or, if, in the reasonable opinion of counsel to the Company,
all such Registrable Securities proposed to be sold may then be sold without
registration in any ninety (90) day period pursuant to Rule 144 under the
Securities Act.
5.8 No Registration Rights to Third Parties. Without the prior written
consent of the Holders of a majority in voting power of the Series C Registrable
Securities, the Series B Registrable Securities and the Series A Registrable
Securities, respectively, then outstanding, the Company covenants and agrees
that it shall not grant, or cause or permit to be created, for the benefit of
any Person or entity any registration rights of any kind (whether similar to the
demand, "piggyback" or Form S-3 or Form F-3 registration rights described in
this Section 5, or otherwise).
5.9 Rule 144 Reporting. With a view to making available the benefits of
Rule 144 promulgated under the Securities Act and any comparable provision of
Applicable Securities Law which may at any time permit the sale of the
Registrable Securities to the public without registration or pursuant to a
registration on Form S-3 or F-3 (or any comparable form in a jurisdiction other
than the United States), after such time as a public market exists for the
Ordinary Shares, the Company agrees to:
Shareholders Agreement
27
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act (or comparable
provision under Applicable Securities Laws in any jurisdiction where the
Company's securities are listed), at all times after the consummation of any
IPO;
(b) Use reasonable, diligent efforts to file with the Commission in
a timely manner all reports and other documents required of the Company under
Applicable Securities Law; and
(c) So long as a Holder owns any Registrable Securities, to furnish
to such Holder forthwith upon request (i) a written statement by the Company as
to its compliance with the reporting requirements of all Applicable Securities
Laws at any time after it has become subject to such reporting requirements or,
at any time after so qualified, that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 or F-3 (or any form comparable
thereto under Applicable Securities Laws of any jurisdiction where the Company's
securities are listed), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents as may be filed by
the Company with the Commission, and (iii) such other reports and documents of
the Company as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission that permits the selling of any such securities
without registration or pursuant to Form S-3 or F-3 (or any form comparable
thereto under Applicable Securities Laws of any jurisdiction where the Company's
securities are listed).
SECTION 6 PRE-EMPTIVE RIGHTS
6.1 General. Each Preferred Holder shall have the right of first refusal
to purchase up to such Preferred Holder's Pro Rata Share of any New Securities
that the Company may from time to time issue after the date of this Agreement
(the "RIGHT OF PARTICIPATION").
6.2 Procedures.
(a) First Participation Notice. In the event that the Company
proposes to undertake an issuance of New Securities, it shall give to each
Preferred Holder written notice of its intention to issue such New Securities
(the "FIRST PARTICIPATION NOTICE"), which notice shall describe the amount and
type of such New Securities and the price and the general terms upon which the
Company proposes to issue such New Securities. Each Preferred Holder shall have
ten (10) Business Days from the date of receipt of any such First Participation
Notice to agree in writing to purchase such Preferred Holder's Pro Rata Share of
such New Securities for the price and upon the terms and conditions specified in
the First Participation Notice by notifying the Company in writing as to the
number of New Securities the Preferred Holder seeks to purchase (not to exceed
such Preferred Holder's Pro Rata Share). If any Preferred Holder shall not agree
to purchase its full Pro Rata Share of any New Securities within such ten (10)
Business Day period, then such Preferred Holder shall forfeit the right
hereunder to purchase such part of its Pro Rata Share of such New Securities as
it did not elect to purchase.
(b) Second Participation Notice; Oversubscription. The Company shall
promptly give notice in writing (the "SECOND PARTICIPATION NOTICE") of any New
Securities which have not been subscribed for pursuant to paragraph (a) above to
each Preferred Holder who exercises its Right of Participation (a "RIGHT
PARTICIPANT") with respect to its full Pro
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28
Rata Share of the New Securities. Each Right 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 any
unsubscribed New Securities, stating the number of unsubscribed New Securities
it seeks to buy (the "ADDITIONAL NUMBER"). Such notice may be made by telephone
if confirmed in writing within two (2) Business Days thereafter. If the
aggregate number of unsubscribed New Securities that all Right Participants seek
to oversubscribe for exceeds the aggregate number of unsubscribed New Securities
available for purchase, each oversubscribing Right Participant will be cut back
by the Company with respect to its oversubscription to that number of remaining
New Securities equal to the lesser of (x) the Additional Number therefor and (y)
the product obtained by multiplying (i) the number of the remaining New
Securities available for oversubscription by (ii) a fraction the numerator of
which is the number of Ordinary Shares (calculated on an as-converted basis)
held by such oversubscribing Right Participant and the denominator of which is
the total number of Ordinary Shares (calculated on an as-converted basis) held
by all the oversubscribing Right Participants. Each oversubscribing Right
Participant shall be obligated to buy such number of New Securities as it shall
notify the Company pursuant to this paragraph, subject to adjustment pursuant to
the preceding sentence in the event of any cut-back. Within fifteen (15)
Business Days following the date of the Second Participation Notice, the Company
will notify each Right Participant seeking to oversubscribe for any New
Securities hereunder as to the amount of New Securities the Right Participant
will be required to oversubscribe for.
6.3 Failure to Exercise. To the extent the Preferred Holders have not
timely exercised their Right of Participation (including any right of
oversubscription) hereunder with respect to any New Securities, the Company
shall have 120 days to sell such New Securities at the same or higher price and
upon non-price terms not materially 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 120 day period, then the
Company shall not thereafter issue or sell any New Securities without again
first offering such New Securities to the Preferred Holders pursuant to this
Section 6.
6.4 Termination. Upon a Series C QPO, the rights under this Section 6 of
all Preferred Holders shall immediately terminate. Upon a Series A/B QPO, the
rights under this Section 2 of any Preferred Holder that does not hold Series C
Shares at such date shall terminate.
SECTION 7 TRANSFER RESTRICTIONS
7.1 Prohibition on Transfer of Shares. None of the parties to this
Agreement will sell, assign, transfer, pledge, hypothecate, or otherwise
encumber or dispose of in any way, all or any part of any interest in the Equity
Securities now or hereafter owned or held thereby except in a transaction that
complies with Section 7.4 and either (i) qualifies as an Exempt Transaction,
(ii) in the case of any Preferred Holder, is in compliance with Section 7.3 or
(iii) in the case of any other party hereto, is in compliance with Section 7.2.
Any sale, assignment, transfer, pledge, hypothecation or other encumbrance or
disposition of the Equity Securities not made in conformance with this Agreement
shall be null and void, shall not be recorded on the books of the Company, and
shall not be recognized by the Company.
7.2 Sale by Party Other than Preferred Holder. If a party to this
Agreement other than a Preferred Holder proposes to sell or transfer any Equity
Securities held by it (the
Shareholders Agreement
29
"SELLING SHAREHOLDER") in a transaction that is not an Exempt Transaction, then
such Selling Shareholder shall promptly give written notice (a "TRANSFER
NOTICE") to each Preferred Holder prior to such sale or transfer. The Notice
shall describe in reasonable detail the proposed sale or transfer, including,
without limitation, the number of Equity Securities to be sold or transferred
(the "OFFERED SHARES"), the nature of such sale or transfer, the consideration
to be paid per share, and the name and address of each prospective purchaser or
transferee.
(a) Right of First Refusal. Each Preferred Holder will have the
right, exercisable upon written notice (the "FIRST REFUSAL NOTICE") to the
Selling Shareholder, the Company and each other Preferred Holder within thirty
(30) days after receipt of the Transfer Notice (the "FIRST REFUSAL PERIOD"), to
purchase up to such number of Offered Shares (the "FIRST REFUSAL ALLOTMENT") as
equal the product obtained by multiplying the aggregate number of the Offered
Shares by a fraction, the numerator of which is the number of Ordinary Shares
(calculated on a fully-diluted and as-converted basis) then held by such
Preferred Holder and the denominator of which is the total number of Ordinary
Shares (calculated on a fully-diluted and as-converted basis) then owned by all
the Preferred Holders. The First Refusal Notice for any Preferred Holder shall
set forth the number of Offered Shares (together with any re-allotment) that
such Preferred Holder wishes to purchase.
(1) Each Preferred Holder shall have a right of re-allotment such
that, if any other Preferred Holder fails to exercise the right to
purchase its full First Refusal Allotment, the other participating
Preferred Holders shall have an additional right to purchase such number
of re-allotment shares as is indicated in its First Refusal Notice. In the
event that the aggregate number of Offered Shares which all Preferred
Holders seek to purchase pursuant to the exercise of their right of
re-allotment hereunder exceeds the number of remaining Offered Shares,
each Preferred Holder exercising its right of re-allotment will be cut
back to such number of Offered Shares in connection with such re-allotment
as equals the lesser of (x) the number of Offered Shares which such
Preferred Holder indicated in its First Refusal Notice it would be willing
to purchase pursuant to the exercise of its right of re-allotment and (y)
the product obtained by multiplying (i) the number of the remaining
Offered Shares by (ii) a fraction the numerator of which is the number of
Ordinary Shares (calculated on an as-converted basis) held by such
Preferred Holder and the denominator of which is the total number of
Ordinary Shares (calculated on an as-converted basis) held by all the
Preferred Holders exercising their right of re-allotment.
(2) If a Preferred Holder timely gives a First Refusal Notice
indicating that it desires to acquire any part of its First Refusal
Allotment with respect to the Offered Shares and, as the case may be, any
re-allotment, then payment for the Offered Shares shall be by check or
wire transfer, against delivery of the Offered Shares to be purchased at a
place agreed by the parties and at the time of the scheduled closing
therefor, which shall be no later than forty-five (45) days after the
Company's receipt of the Transfer Notice, unless such notice contemplated
a later closing with the prospective third party transferee.
(3) The purchase price per share for the Offered Shares to be
purchased by any Preferred Holder pursuant to the exercise of its right of
first refusal hereunder (together with any right of re-allotment) shall be
the price set forth in the Transfer Notice. In the event the Transfer
Notice provides for any part of the purchase price to
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30
be paid in non-cash consideration, any Preferred Holder exercising its
right of first refusal (and any right of re-allotment) hereunder shall be
entitled to pay the cash equivalent of such non-cash consideration, as
determined by the Board in good faith. The determination of the Board
under this clause as to the value of any non-cash consideration shall be
binding upon the Company, the Preferred Holders, and the Selling
Shareholder, absent fraud or error.
(4) If any Preferred Holder exercises its right of first refusal to
purchase any Offered Shares (together with any right of re-allotment),
then upon expiration of the First Refusal Period, the Selling Shareholder
will have no further rights as a holder of such Offered Shares except the
right to receive payment therefor from such Preferred Holder in accordance
with the terms of this Agreement, and the Selling Shareholder will
forthwith cause all certificate(s) evidencing such Offered Shares to be
surrendered to the Company for transfer to such Preferred Holder.
(5) Within ten (10) days after expiration of the First Refusal
Period, the Company shall give written notice (the "FIRST REFUSAL
EXPIRATION NOTICE") to the Selling Shareholder and each Preferred Holder
which has not timely exercised its right of first refusal during such
period, setting forth the number of Offered Shares which the Preferred
Holders have elected to purchase in the exercise of their right of first
refusal (and any right of re-allotment) hereunder.
(b) Co-Sale Right. After delivery of a Transfer Notice, to the
extent that the Preferred Holders have not exercised their right of first
refusal (together with any right of re-allotment) with respect to all of the
Offered Shares, each Preferred Holder shall have a right, exercisable upon
written notice (the "CO-SALE NOTICE") to the Selling Shareholder and the Company
within thirty (30) days after receipt of the First Refusal Expiration Notice
(the "CO-SALE RIGHT PERIOD"), to participate in the sale of any remaining
Offered Shares on the same terms and conditions as specified in the Transfer
Notice and, accordingly, to sell up to such number of Equity Securities
(determined on an as-converted basis) in connection therewith as is equal to its
Co-Sale Pro Rata Portion. The Co-Sale Notice shall set forth the number of
Equity Securities that such Preferred Holder wishes to include in such sale
pursuant to the exercise of its right of participation hereunder (together with
any further participation amount). For purposes of this Section, each Preferred
Holder's "CO-SALE PRO RATA PORTION" shall mean that number of Equity Securities
held by it which is equal (on an as-converted basis) to the product obtained by
multiplying (x) the aggregate number of the Offered Shares (on an as-converted
basis) subject to the co-sale right hereunder by (y) a fraction, the numerator
of which is the number of Ordinary Shares (on an as-converted basis) then owned
by the Preferred Holder and the denominator of which is the combined number of
Ordinary Shares (on an as-converted basis) then owned by all Preferred Holders
and the Selling Shareholder.
(1) To the extent that any Preferred Holder does not exercise its
co-sale right hereunder with respect to its full Co-Sale Pro Rata Portion,
the Preferred Holders exercising their co-sale right with respect to their
full Co-Sale Pro Rata Portion shall have a right of further participation
with respect to the sale of Offered Shares by the Selling Shareholder such
that each participating Preferred Holder shall be entitled to include in
such sale such additional shares as equals the lesser of (x) the number of
Ordinary Shares which Preferred Holder indicated in its Co-Sale Notice it
would be willing to sell pursuant to the exercise of its right of further
participation and (y) the product obtained by multiplying (i) the sum of
the unexercised part of all Preferred
Shareholders Agreement
31
Holders' Co-Sale Pro Rata Portion by (ii) a fraction the numerator of
which is the number of Ordinary Shares (calculated on an as-converted
basis) held by the participating Preferred Holder and the denominator of
which is the total number of Ordinary Shares (calculated on an
as-converted basis) which all Preferred Holders exercising their right of
further participation seek to sell.
(2) Within ten (10) days following the expiration of the Co-Sale
Period, the Company shall provide a notice to the Selling Shareholder and
each Preferred Holder indicating for each Preferred Holder the number of
Ordinary Shares which such Preferred Holder will be permitted to include
in the sale of Offered Shares by the Selling Shareholder. Following
receipt of such notice, each Preferred Holder exercising its right of
participation hereunder (and any right of further participation) shall
promptly deliver to the Selling Shareholder for sale to the prospective
purchaser one or more certificates, properly endorsed for transfer,
representing such number of Equity Securities (determined on an
as-converted basis) as such Preferred Holder is entitled to include in
such sale. However, if the prospective purchaser objects to the delivery
of any Ordinary Share Equivalents in lieu of Ordinary Shares, such
Preferred Holder shall convert such Ordinary Share Equivalents into
Ordinary Shares prior to delivery thereof to the Selling Shareholder. The
Company agrees to make any such conversion concurrent with the actual
transfer of such shares to the purchaser.
(3) The certificates that the participating Preferred Holder
delivers to the Selling Shareholder pursuant to Section (b)(2) shall be
transferred to the prospective purchaser in consummation of the sale
thereof pursuant to the terms and conditions specified in the Transfer
Notice, and the Selling Shareholder shall concurrently therewith remit to
such Preferred Holder that portion of the sale proceeds to which such
Preferred Holder is entitled by reason of its participation in such sale.
To the extent that any prospective purchaser or purchasers prohibits such
assignment or otherwise refuses to purchase shares or other securities
from a Preferred Holder exercising its co-sale right hereunder, the
Selling Shareholder shall not sell to such prospective purchaser or
purchasers any Equity Securities unless and until, simultaneously with
such sale, the Selling Shareholder shall purchase such shares or other
securities from such Preferred Holder on terms and conditions
substantially the same as those provided in the Transfer Notice in respect
of a sale to the prospective purchaser.
(4) To the extent one or more of the Preferred Holders exercises its
right of participation hereunder (together with any right of further
participation), the number of Offered Shares that the Selling Shareholder
may sell in the transaction shall be correspondingly reduced.
(c) Right to Transfer. Subject to any other applicable restrictions
on the sale of such Equity Securities, to the extent the Preferred Holders do
not timely elect to purchase, or to participate in the sale of, the Offered
Shares, the Selling Shareholder may, not later than 120 days following delivery
to the Company and each of the Preferred Holders of the Transfer Notice,
conclude a transfer of such Equity Securities on terms and conditions not
materially different from those described in the Transfer Notice. In the event
the Selling Shareholder is not able to conclude the transfer of such Equity
Securities within such time on terms and conditions materially the same as those
described in the Transfer Notice, the Preferred Holders' rights of first refusal
and co-sale rights under this Section 7 shall apply to any subsequent
disposition of such Equity Securities.
Shareholders Agreement
32
7.3 Sale by Preferred Holder. If at any time a Preferred Holder (an
"OFFERING HOLDER") proposes to sell or transfer any of its Equity Securities
(the "AVAILABLE SECURITIES") in a transaction that is not an Exempt Transaction,
then before offering such Available Securities to any third party, the Offering
Holder shall give each of the other Preferred Holders written notice (the
"OFFERING NOTICE") of the Offering Holder's intent to transfer the Available
Securities, which Offering Notice shall include a description of the Available
Securities.
(a) Right of First Offer. Within ten (10) days after delivery of an
Offering Notice, each Preferred Holder shall have a right, either separately or
together with other Preferred Holders, to make an offer in writing (a "PURCHASE
OFFER") to purchase all, but not less than all, of the Available Securities. Any
Purchase Offer shall set forth the consideration and the material terms and
conditions upon which the party or parties making the Purchase Offer propose to
acquire the Available Securities. Within ten (10) days of receiving a timely
Purchase Offer, the Offering Holder shall accept or decline the Purchase Offer
in writing, and prior to expiration of such 10-day period, the Purchase Offer
shall not be rescinded.
(1) If the Offering Holder shall accept a Purchase Offer, then the
Offering Holder and the party or parties making such Purchase Offer shall
use their good faith efforts to conclude, within sixty (60) days after the
date of the Offering Notice, a sale between them of the Available
Securities pursuant to the terms and conditions of the Purchase Offer. If
the Offering Holder and the party or parties making the Purchase Offer
have not timely concluded the sale of the Available Securities within such
60-day period, the Purchase Offer shall be deemed to have been rescinded,
and neither the Offering Holder or any party making such Purchase Offer
shall have any further obligation to consummate a sale of the Available
Securities pursuant to the terms and conditions of such Purchase Offer.
(2) Following the Release Date in respect of any Available
Securities offered pursuant to an Offering Notice, the Offering Holder may
either withdraw its intention to sell the Available Securities or, for a
period of ninety (90) days from the Release Date, the Offering Holder
shall have the right to solicit an offer from a third party to purchase
the Available Securities; provided that (i) the terms and conditions of
any sale of the Available Securities to a third party shall not be
materially less favorable to the Offering Holder than the terms and
conditions contained in any timely Purchase Offer in respect of such
Available Securities and (ii) any such sale shall be subject to all the
terms of Section 7.3(b). If within such 90-day period the Offering Holder
has not concluded a binding letter of intent with any third party for sale
of the Available Securities thereto, the Offering Holder shall not further
offer the Available Securities to any third party without first again
permitting the other Preferred Holders to exercise their right of first
offer under this Section 7.3. In respect of any Offering Notice for
Available Securities, "RELEASE DATE" shall mean the earlier of (i) the
date that the 10-day period for making Purchase Offers hereunder shall
expire without the Offering Holder having received a Purchase Offer, (ii)
the date that the Offering Holder shall have declined to accept all timely
Purchase Offers or (iii) the date that any Purchase Offer accepted by the
Offering Holder shall subsequently be rescinded.
(b) Co-Sale Right. If the Offering Holder receives a firm offer for
the purchase of any part of the Available Securities within 90-days after the
Release Date, the Offering Holder shall promptly provide notice (a "FIRM OFFER
NOTICE") in writing to each of the other Preferred Holders, describing in
reasonable detail the terms of the proposed sale,
Shareholders Agreement
33
including, without limitation, the number of Available Securities to be sold or
transferred, the consideration to be paid per share, and the name and address of
the prospective purchaser.
(1) Each Preferred Holder shall have a right, exercisable by
delivery of written notice (a "PREFERRED CO-SALE NOTICE") to the Offering
Holder and the Company within thirty (30) days after receipt of a Firm
Offer Notice, to participate in the sale of such Available Securities on
the same terms and conditions as specified in the Firm Offer Notice and,
accordingly, to sell up to a pro rata share of its Equity Securities in
connection therewith. The Preferred Co-Sale Notice shall set forth the
number of Equity Securities that such Preferred Holder wishes to include
in such sale pursuant to the exercise of its right of participation
hereunder (together with any further participation amount). For purposes
of this Section 7.3(b), a Preferred Holder's "pro rata share" of its
Equity Securities shall mean such number of Equity Securities as is equal
(on an as-converted basis) to the product of (i) the number of Available
Securities described in the Firm Offer Notice (determined on an
as-converted basis) and (ii) a fraction, the numerator of which is the
number of Ordinary Shares then held by such Preferred Holder (determined
on an as-converted basis) and the denominator of which is the number of
Ordinary Shares then held by all Preferred Holders (determined on an
as-converted basis).
(2) To the extent that any Preferred Holder (other than the Offering
Holder) does not exercise its co-sale right hereunder with respect to its
full pro rata share, Preferred Holders participating in their full pro
rata share shall have a right of further participation with respect to the
sale of Available Securities by the Offering Holder such that each
participating Preferred Holder shall be entitled to include in such sale
such additional shares as equals the lesser of (x) the number of Equity
Shares which such Preferred Holder indicated in its Co-Sale Notice it
would be willing to sell pursuant to the exercise of its right of further
participation (determined on an as-converted basis) and (y) the product
obtained by multiplying (i) the sum of the unexercised part of all
Preferred Holders' pro rata share by (ii) a fraction the numerator of
which is the number of Ordinary Shares (calculated on an as-converted
basis) held by the participating Preferred Holder and the denominator of
which is the total number of Ordinary Shares (calculated on an
as-converted basis) which all Preferred Holders exercising their right of
further participation seek to sell.
(3) Within ten (10) days following the expiration of the 30-day
period for Preferred Holders to exercise their co-sale rights hereunder,
the Company shall provide a notice to the Offering Holder and each
Preferred Holder indicating for each Preferred Holder the number of
Ordinary Shares which such Preferred Holder will be permitted to include
in the sale of Available Securities by the Offering Holder. Following
receipt of such notice, each Preferred Holder exercising its right of
participation hereunder (and any right of further participation) shall
promptly deliver to the Offering Shareholder, for sale to the prospective
purchaser, one or more certificates, properly endorsed for transfer,
representing such number of Equity Securities (determined on an
as-converted basis) as such Preferred Holder is entitled to include in
such sale. However, if the prospective purchaser objects to the delivery
of any Ordinary Share Equivalents in lieu of Ordinary Shares, such
Preferred Holder shall convert such Ordinary Share Equivalents into
Ordinary Shares prior to delivery thereof to the Offering Holder. The
Company agrees to make any such conversion concurrent with the actual
transfer of such shares to the purchaser.
Shareholders Agreement
34
(4) The certificates that a participating Preferred Holder delivers
to the Offering Holder pursuant to Section 7.2(b) shall be transferred to
the prospective purchaser in consummation of the sale thereof pursuant to
the terms and conditions specified in the Firm Offer Notice, and the
Offering Holder shall concurrently therewith remit to such Preferred
Holder that portion of the sale proceeds to which such Preferred Holder is
entitled by reason of its participation in such sale. To the extent that
any prospective purchaser or purchasers prohibits such assignment or
otherwise refuses to purchase shares or other securities from a Preferred
Holder exercising its co-sale right hereunder, the Offering Holder shall
not sell to such prospective purchaser or purchasers any Equity Securities
unless and until, simultaneously with such sale, the Offering Shareholder
shall purchase such shares or other securities from such Preferred Holder
on terms and conditions substantially the same as those provided in the
Transfer Notice in respect of a sale to the prospective purchaser.
(5) To the extent one or more of the Preferred Holders exercises its
right of participation (together with any right of further participation)
under this Section 7.3(b), the number of Available Securities that the
Offering Holder may sell in the transaction described by the Firm Offer
Notice shall be correspondingly reduced.
(c) Right to Transfer. Subject to any other applicable restrictions
on the sale of such Equity Securities, to the extent the Preferred Holders do
not timely elect to participate in the sale of the Available Securities, the
Offering Holder may, not later than ninety (90) days following expiration of the
30-day period for the Preferred Holders to deliver a Preferred Co-Sale Notice,
conclude a transfer of such Equity Securities on terms and conditions not
materially different from those described in the Firm Offer Notice. In the event
the Offering Shareholder is not able to conclude the transfer of such Equity
Securities within such time on terms and conditions materially the same as those
described in the Firm Offer Notice, the other Preferred Holders' rights of first
offer and co-sale rights under this Section 7 shall apply to any subsequent
disposition of such Equity Securities.
7.4 Additional Transfer Restrictions.
(a) Notwithstanding anything to the contrary contained herein,
except for any sale or transfer of Equity Securities pursuant to the Purchase
Agreement, the Ancillary Documents, the Capital Purchase Agreement or the
Capital Ancillary Documents, JJ Media shall not, without the prior written
consent of Preferred Holders representing not less than a majority in voting
power of the Series A Shares, the Series B Shares and the Series C Shares,
respectively, sell, assign, transfer, pledge, hypothecate, mortgage, encumber or
otherwise dispose of any Equity Securities held by JJ Media to any Person (i)
within one year from the closing of the Purchase Agreement, or (ii) within 180
days following the consummation of a Series C QPO.
(b) Notwithstanding anything to the contrary contained herein, none
of the parties hereto shall sell, assign, transfer, pledge, hypothecate, or
otherwise encumber or dispose of in any way, all or any part of any interest in
any Equity Securities now or hereafter owned or held thereby unless the Person
to whom such Equity Securities are so disposed of shall have entered into an
instrument of accession, in substantially the form attached hereto as Exhibit A,
acceding to the obligations under this Agreement (but not necessarily the
rights) of the Party so disposing of its Equity Securities.
Shareholders Agreement
35
7.5 Legend. For so long as this Section 7 shall continue in effect, each
certificate representing any Equity Securities now or hereafter owned by a party
to this Agreement shall bear the following legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A
SHAREHOLDERS AGREEMENT BY AND BETWEEN THE SHAREHOLDER, THE COMPANY,
CERTAIN AFFILIATES OF THE COMPANY AND CERTAIN SHAREHOLDERS OF THE COMPANY.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY."
The above restrictions on share transfer should also be recorded in a notation
on the Company's share register.
7.6 Term. Except for Section 7.4(a), the provisions under this Section 7
shall terminate upon the closing of a Series C QPO.
SECTION 8 ADDITIONAL COVENANTS
8.1 Everease. In the event that Shanghai Everease Advertising Co., Ltd.
[CHINESE CHARACTERS] ("EVEREASE") or any of its Affiliates (other than the
Company or Group Companies) shall issue to any Person (an "EVEREASE INVESTOR")
any equity securities of Everease or such Affiliate or any options or warrants
for, or any other securities exchangeable for or convertible into, such equity
securities of Everease or such Affiliate (collectively, the "EVEREASE
SECURITIES"), Xxxxxxx Xxxxx shall cause Everease to notify each of the Preferred
Holders by written notice (the "EVEREASE ISSUANCE NOTICE") describing such
issuance and the terms and conditions thereof, and each of the Preferred Holders
shall have the right to subscribe for, at the same price and subject to the same
terms and conditions as offered to such Everease Investor, up to the number of
Everease Securities obtained by multiplying (x) the aggregate number of Everease
Securities offered by (y) a fraction, the numerator of which is the number of
Ordinary Shares (on an as-converted basis) owned by such Preferred Holder, and
the denominator of which is the combined number of Ordinary Shares (on an
as-converted basis) owned by all the Preferred Holders and JJ Media, which right
shall be exercised by written notice to Xxxxxxx Xxxxx within thirty (30) days
following the receipt of the Everease Issuance Notice indicating such Preferred
Holder's election to participate and the number of Everease securities it
intends to subscribe.
8.2 Adjustment of Equity Interest in PRC Affiliate. The Company hereby
grants to each Preferred Holder, which together with any Affiliates, holding
Preferred Shares with aggregate conversion price equal to at least $5,000,000 a
right to acquire an equity interest in any Captive Company which is proportional
to the number of Ordinary Shares held by such Preferred Holder in the Company
(determined on an as-if converted basis) in relation to the Company's then
issued and outstanding Ordinary Shares (determined on an as-if converted basis).
The consideration payable by any Preferred Holder in the exercise of its option
hereunder shall be the minimum consideration permissible by law.
(a) In the event the Preferred Holder shall sell any Equity
Securities in the Company, it agrees that it shall promptly sell a corresponding
part of any equity interest held
Shareholders Agreement
36
thereby in any Captive Company to the Company or a nominee designated by the
Company for the minimum consideration permissible by law.
(b) Upon acquiring any interest in a Captive Company under this
Section 8.2, the Preferred Holder shall be required to sign such agreements and
other instruments as required by the Company's Board of Directors to ensure (i)
that the beneficial ownership of such equity interest shall remain with any of
the Company or the Group Companies, or a combination of the foregoing, (ii) that
all the economic benefits deriving from such interest shall be exclusively
enjoyed by any of the Company or the Group Companies, or a combination of the
foregoing, and (iii) that the Company, or a representative thereof, shall have
full authority to determine the exercise of any voting rights associated with
such interest.
(c) In the exercise of its right hereunder, any Preferred Holder may
appoint a nominee to hold shares in the Captive Company on its behalf so long as
such nominee shall be bound to perform all the obligations of the Preferred
Holder in respect of such Captive Company under this Section 8.2.
SECTION 9 CONFIDENTIALITY AND NON-DISCLOSURE.
9.1 Disclosure of Terms. The terms and conditions (the "FINANCING TERMS")
of this Agreement, any agreement pursuant to the Preferred Holders subscribed to
the Company's Equity Securities, and any Ancillary Documents, together with any
annexes, exhibits and schedules thereto (collectively, the "FINANCING
DOCUMENTS"), including their existence, shall be considered confidential
information and shall not be disclosed by any party hereto to any third party
except in accordance with the provisions set forth below.
9.2 Press Releases. None of the parties hereto shall issue any press
release or otherwise make any announcement in an advertisement, conference or
otherwise disclosing any of the Financing Terms without the prior approval in
writing of the holders of a majority in voting power of the Series A Shares, a
majority in voting power of the Series B Shares and 80% in voting power of the
Series C Shares, respectively.
9.3 Permitted Disclosures. Notwithstanding the foregoing, (i) any party
may disclose the existence of the financing (but not the Financing Terms) to any
third party, and (ii) any party may disclose any of the Financing Terms to its
current or bona fide prospective investors, employees, investment bankers,
lenders, partners, accountants and attorneys, in the case of either (i) or (ii),
only where such Person is under appropriate non-disclosure obligations.
9.4 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 any Financing
Document or any of the Financing Terms hereof in contravention of the provisions
of this Section 9, such party (the "DISCLOSING PARTY") shall provide the other
parties hereto with prompt written notice of that fact and use all reasonable
efforts to seek (with the cooperation and reasonable efforts of the other
parties hereto) a protective order, confidential treatment or other appropriate
remedy. In any event, the Disclosing Party shall furnish only that portion of
the information which is legally required and shall exercise reasonable efforts
to keep confidential such information to the extent reasonably requested by any
other party hereto.
Shareholders Agreement
37
9.5 Other Information. The provisions of this Section 9 shall be in
addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by any of the parties hereto with respect to
the transactions contemplated hereby.
SECTION 10 MISCELLANEOUS
10.1 Binding Effect; Assignment.
(a) Notwithstanding anything herein to the contrary, the rights of
any Preferred Holder under Section 2.1, Section 2.2, Section 3.6, Section 6,
Section 7, Section 8 and Section 9 may be assigned to the extent such Preferred
Holder transfers any Preferred Shares held thereby to another Person in
compliance with Section 7 and (i) the Company is, within reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such rights are
being assigned and (ii) such transferee or assignee agrees in writing to be
bound by and subject to the terms and conditions of this Section 10 and the
terms and conditions of each Section of this Agreement with respect to which any
rights are being assigned thereto under this clause. From the time of such
transfer or assignment, for all purposes of each Section of this agreement with
respect to which rights are assigned thereto under this clause, such transferee
or assignee shall be treated as a "Preferred Holder."
(b) Notwithstanding anything herein to the contrary, the rights of
any Holder under Section 5 may be assigned to the extent such Holder transfers
any Registrable Securities held thereby to another Person in compliance with
Section 7 and (i) the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such rights are being
assigned; (ii) such transferee or assignee agrees in writing to be bound by and
subject to the terms and conditions of Section 5 and this Section 10; and (iii)
immediately following such transfer or assignment the further disposition of
such securities by the transferee or assignee is restricted under Applicable
Securities Law. From the time of such transfer or assignment, for all purposes
of Section 5, such transferee or assignee shall be treated as a "Holder".
(c) This Agreement shall be binding upon and shall be enforceable by
each party, its successors and permitted assigns. Except as provided in Section
8.2(c), Section 10.1(a) and Section 10.1(b) or as required by Section 7.4(b), no
party may assign any of its rights or obligations hereunder without the prior
written approval of the other parties.
10.2 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to conflicts
of laws principles thereunder.
10.3 Dispute Resolution.
(a) Any dispute, controversy or claim (each, a "DISPUTE") arising
out of or relating to this Agreement, or the interpretation, breach, termination
or validity hereof, shall be resolved at the first instance through consultation
between the representatives appointed by the highest ranking corporate officer
of each Party. Such consultation shall begin immediately after either Party has
delivered to the other Party a written notice for such consultation.
Shareholders Agreement
38
(b) If the Dispute is not resolved within sixty (60) days following
the date on which such notice is given, the Dispute shall be submitted to
arbitration upon the request of either Party with notice to the other Party (the
"ARBITRATION NOTICE").
(c) The arbitration shall be conducted in Hong Kong under the
auspices of the Hong Kong International Arbitration Centre (the "CENTRE"). There
shall be three (3) arbitrators. The claimants in the Dispute shall collectively
choose one arbitrator, and the respondents shall collectively choose one
arbitrator. The Secretary General of the Centre shall select the third
arbitrator, who shall be qualified to practice law in the State of New York. If
any of the members of the arbitral tribunal have not been appointed within
thirty (30) days after the Arbitration Notice is given, the relevant appointment
shall be made by the Secretary General of the Centre.
(d) The arbitration proceedings shall be conducted in English. The
arbitration tribunal shall apply the Arbitration Rules of the United Nations
Commission on International Trade Law, as in effect at the time of the
arbitration. However, if such rules are in conflict with the provisions of this
Section 10.3, including the provisions concerning the appointment of arbitrator,
the provisions of this Section 10.3 shall prevail.
(e) Each Party shall cooperate with the other in making full
disclosure of and providing complete access to all information and documents
requested by the other in connection with such arbitration proceedings, subject
only to any confidentiality obligations binding on such Party.
(f) The arbitrator shall decide any dispute submitted by the parties
to the arbitration strictly in accordance with the substantive law of the State
of New York and shall not apply any other substantive law.
(g) The award of the arbitration tribunal shall be final and binding
upon the Parties, and the prevailing Party may apply to a court of competent
jurisdiction for enforcement of such award.
(h) Either Party shall be entitled to seek preliminary injunctive
relief, if possible, from any court of competent jurisdiction pending the
constitution of the arbitral tribunal.
(i) During the course of the arbitration tribunal's adjudication of
the dispute, this Agreement shall continue to be performed except with respect
to the part in dispute and under adjudication.
(j) The cost of arbitration (including legal, accounting and other
professional fees and expenses reasonably incurred, by any prevailing party with
respect to the investigation, collection, prosecution and/or defense of any
claim in the Dispute) shall be borne pro rata by each losing party.
10.4 Amendments. This Agreement and its provisions may be amended,
changed, waived, discharged or terminated only by a writing signed by each of
(i) the Company, (ii) Preferred Holders representing a majority in voting power
of the Series A Shares (iii) Preferred Holders representing a majority in voting
power of the Series B Shares, (iv) Preferred Holders representing 80% in voting
power of the Series C Shares and (v) Ordinary Shareholders representing a
majority in voting power of the aggregate Ordinary Shares held
Shareholders Agreement
39
by the Ordinary Shareholders. Any amendment, change, waiver, discharge or
termination effected in accordance with the preceding sentence shall be binding
upon each of the parties hereto and their successors and permitted assigns.
Without limiting the foregoing, any party hereto may by a writing waive any
right that it individually holds hereunder without seeking the prior consent of
any other party hereto.
10.5 Notices. All notices, claims, certificates, requests, demands and
other communications under this Agreement shall be made in writing and shall be
delivered to any party hereto by hand or sent by facsimile, or sent, postage
prepaid, by reputable overnight courier services at the address given for such
party on the signature pages hereof (or at such other address for such party as
shall be specified by like notice), and shall be deemed given when so delivered
by hand, or if sent by facsimile, upon receipt of a confirmed transmittal
receipt, or if sent by overnight courier, five (5) calendar days after delivery
to or pickup by the overnight courier service.
10.6 Further Assurances. Each Party shall do and perform, or cause to be
done and performed, all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments and documents as
the other Party may reasonably request to give effect to the terms and intent of
this Agreement.
10.7 Entire Agreement. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof and supersedes all
prior written or oral understandings or agreements. Without limiting the
generality of the foregoing, this Agreement amends and restates in its entirety
the Prior Shareholders Agreement.
10.8 Severability. If any provision of this Agreement shall be held
invalid or unenforceable to any extent, the remainder of this Agreement shall
not be affected thereby and shall be enforced to the greatest extent permitted
by law.
10.9 Remedies Cumulative. The rights and remedies available under this
Agreement or otherwise available shall be cumulative of all other rights and
remedies and may be exercised successively.
10.10 Counterpart Execution. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
10.11 No Third Party Beneficiary. Except as contemplated in Section 5.6,
nothing in this Agreement is intended to confer upon any Person other than the
Parties hereto and their respective successors and permitted assigns any rights,
benefits, or obligations hereunder.
[The remainder of this page has been left intentionally blank]
Shareholders Agreement
40
IN WITNESS WHEREOF the Parties hereto have caused their duly authorized
representatives to execute this Agreement as of the first date written above.
FOCUS MEDIA HOLDING LIMITED
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: CEO
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
SHANGHAI FOCUS MEDIA ADVERTISING
CO., LTD. [CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
SICHUAN FOCUS MEDIA ADVERTISING
COMPANY LTD. [CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Room 4C, Chuanxin Xxxxx,
Xx. 00, Xxxxxxx Xxx Xxxx
Xxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-000-00000000
Fax: 00-000-00000000
Shareholders Agreement
CHANGSHA CENTURY FOCUS MEDIA ADVERTISING
COMPANY LTD. [CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Room 1213, New Century Xxxxx
Xx. 000, Xxxxxx Xxxxx Xx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-0000-0000000
Fax: 00-0000-0000000-000
Shareholders Agreement
FOCUS MEDIA WUHAN GESHI ADVERTISING
COMPANY LTD. [CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Room 4101, World Xxxxx Xxxxx,
Xx. 000, Xxxxxxx Xxxxxx,
Xxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-000-00000000
Fax: 00-000-00000000
Shareholders Agreement
QINGDAO FOCUS MEDIA ADVERTISING
COMPANY LTD. [CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Room 12E, Plaza A, Xxxx xx Garden,
Xx. 00, Xxxxxxx Xx Xxxx,
Xxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-0000-0000000
Fax: 00-0000-0000-0000000-00
Shareholders Agreement
ZHEJIANG RUIHONG FOCUS MEDIA CULTURE
COMMUNICATIONS COMPANY LTD.
[CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Xxxx 000, Xxxxx X, Xxxxxxxxx Xxxxxxx Xxxxx
Xx. 0, Xxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-0000-00000000
Fax: 00-0000-00000000
Shareholders Agreement
CHONGQIN GEYANG FOCUS MEDIA CULTURE
COMMUNICATIONS COMPANY LTD.
[CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Xxxxx 00, Xxxxx X, Xx. 0, Xxxxxxxx Xxxx,
Xxxxxxx Qu,
Chongqing, China
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-000-00000000
Fax: 00-000-00000000
Shareholders Agreement
NANJING FOCUS MEDIA ADVERTISING
COMPANY LTD. [CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
X0, Xxxxx 00, Xx. 00, Xxxxxxxx Xxxx,
Xxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-000-00000000
Fax: 00-000-00000000
Shareholders Agreement
DALIAN FOCUS MEDIA ADVERTISING
COMPANY LTD. [CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Room 1309, Xx. 00, Xxxxxxxx Xxxx,
Xxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-0000-00000000
Fax: 00-0000-00000000
Shareholders Agreement
FOCUS MEDIA CHANGSHA HOLDING LIMITED
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
YUNNAN FOCUS MEDIA ADVERTISING
COMPANY LTD. [CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Xxxxx 00, Xx. 000, Xxxxxxx Xxxx,
Xxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-0000-0000000
Fax:
Shareholders Agreement
SHANGHAI ON-TARGET COMMUNICATIONS
CO., LTD. [CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
SHANGHAI FOCUS MEDIA ADVERTISING &
COMMUNICATIONS CO., LTD.
[CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
PERFECT MEDIA HOLDING LIMITED
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
FOCUS MEDIA MULTIMEDIA TECHNOLOGY
(SHANGHAI) COMPANY LTD.[CHINESE
CHARACTERS]
By: /s/ Jiang Nanchun
------------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
FOCUS MEDIA DALIAN HOLDING LIMITED
By: /s/ Jiang Nanchun
------------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
FOCUS MEDIA QINGDAO LIMITED
By: /s/ Jiang Nanchun
------------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
FOCUS MEDIA (CHINA) HOLDING LIMITED
By: /s/ Jiang Nanchun
------------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
SHANGHAI PERFECT MEDIA ADVERTISING LTD.
[CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
------------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Xxxxx 0, Xxxx Xxxxxxxx,
Xx. 000, Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
SHANGHAI QIANJIAN ADVERTISING
COMPANY LTD. [CHINESE CHARACTERS]
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Xxxx 0000, Xxxxxxxxxxxx Xxxxxxxx, Xx. 0000,
Xxxx Xxxx Xx,
Xxxxxxxx, Xxxxx
Attn: Jiang Nanchun [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
JJ MEDIA INVESTMENT HOLDING LIMITED
By: /s/ Jiang Nanchun
-----------------------------------
Name: Jiang Nanchun
Capacity: CEO
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Xxxxxxxx Xxxx
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
VICTORY VENTURE CAPITAL LIMITED
By: /s/ Ren Feng
------------------------------------
Name: Ren Feng
Capacity: CEO
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Xxxxxxxx Xxxx
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
GS FOCUS HOLDING LIMITED
By: /s/ Xxxxx Xxxx
---------------------------------------
Name: Xxxxx Xxxx
Capacity: Authorized Signatory
Address for notice:
00/X Xxxxxx Xxxx Xxxxxx
0 Xxxxx'x Xxxx Xxxxxxx
Xxxx Xxxx
Attn: Xxxxx Xxxx
Tel: 000-0000-0000
Fax: 000-0000-0000
Shareholders Agreement
3I GROUP PLC
By: /s/ Cheng Sim Tan
-------------------------------------
Name: Cheng Sim Tan
Capacity: Authorized Signatory
Address for notice:
Suite 1903, 19/F
Two International Finance Centre
0 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxx Xxxx
Attn: Cheng Sim Tan
Tel: 000-0000-0000
Fax: 000-0000-0000
with a copy to:
3i Investments plc
00 Xxxxxxx Xxxxx
#00-00 XXX Xxxxx 0
Xxxxxxxxx 000000
Attn: Cheng Sim Tan
Tel: 00-0000-0000
Fax: 00-0000-0000
Shareholders Agreement
3I ASIA PACIFIC TECHNOLOGY LP
Acting by its manager, 3i Investments plc
By: /s/ Cheng Sim Tan
------------------------------------
Name: Cheng Sim Tan
Capacity: Authorized Signatory
Address for notice:
Suite 1903, 19/F
Two International Finance Centre
0 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxx Xxxx
Attn: Cheng Sim Tan
Tel: 000-0000-0000
Fax: 000-0000-0000
with a copy to:
3i Investments plc
00 Xxxxxxx Xxxxx
#00-00 XXX Xxxxx 0
Xxxxxxxxx 000000
Attn: Cheng Sim Tan
Tel: 00-0000-0000
Fax: 00-0000-0000
Shareholders Agreement
3I ASIA PACIFIC 2004-06 LP
Acting by its manager, 3i Investments plc
By: /s/ Cheng Sim Tan
------------------------------------
Name: Cheng Sim Tan
Capacity: Authorized Signatory
Address for notice:
Suite 1903, 19/F
Two International Finance Centre
0 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxx Xxxx
Attn: Cheng Sim Tan
Tel: 000-0000-0000
Fax: 000-0000-0000
with a copy to:
3i Investments plc
00 Xxxxxxx Xxxxx
#00-00 XXX Xxxxx 0
Xxxxxxxxx 000000
Attn: Cheng Sim Tan
Tel: 00-0000-0000
Fax: 00-0000-0000
Shareholders Agreement
KTB/UCI CHINA VENTURES I LIMITED
By: /s/ Xxx Xx
------------------------------------
Name: Xxx Xx [CHINESE CHARACTERS]
Capacity: CEO
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Xxx Xx [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
MAX WEALTH ENTERPRISES I LIMITED
By: /s/ Xxxx Xxxx
-----------------------------------
Name: Xxxx Xxxx [CHINESE CHARACTERS]
Capacity: Director
Address for notice:
0X, Xx. 0 Xxxxxxx Xxxx, Xxx Xxxxxx,
Xxxx Xxxx
Attn: Xxxx Xxxx [CHINESE CHARACTERS]
Tel: 000-0000-0000
Fax: 000-0000-0000
Shareholders Agreement
FARMAC HOLDINGS LIMITED
By: /s/ Wu Shangzhi
--------------------------------------
Name: Wu Shangzhi
Capacity: Authorized Signatory
Address for notice:
00X Xxxxx 00, Xxxxx Xxxxxxxx
Xx Xxx Xxxx
Hong Kong, PRC
Attn: Wu Shangzhi
Tel:
Fax: 00-00-00000000
Shareholders Agreement
ELITE SELECT GROUP LIMITED
By: /s/ Wu Shangzhi
--------------------------------------
Name: Wu Shangzhi
Capacity: Authorized Signatory
Address for notice:
X.X. Xxx 000
Xxxxxxxx Incorporations Center
Road Town, Tortola
British Virgin Islands
Attn: Wu Shangzhi
Tel:
Fax: 00-00-0000-0000
Shareholders Agreement
XXXXXX XXXXXX JURVETSON EPLANET PARTNERS
FUND, LLC
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Capacity: Authorized Signatory
Address for notice:
0000 Xxxx Xxxx Xxxx, Xxxxx 000,
Xxxxx Xxxx, XX 00000
XXX
Attn: Xxxx Xxxxxx
Tel:
Fax: 0-000-000-0000
Shareholders Agreement
XXXXXX XXXXXX JURVETSON EPLANET
VENTURES GMBH & Co. KG
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Capacity: Authorized Signatory
Address for notice:
0000 Xxxx Xxxx Xxxx, Xxxxx 000,
Xxxxx Xxxx, XX 00000
XXX
Attn: Xxxx Xxxxxx
Tel:
Fax: 0-000-000-0000
Shareholders Agreement
XXXXXX XXXXXX JURVETSON EPLANET
VENTURES L.P.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Capacity: Authorized Signatory
Address for notice:
0000 Xxxx Xxxx Xxxx, Xxxxx 000,
Xxxxx Xxxx, XX 00000
XXX
Attn: Xxxx Xxxxxx
Tel:
Fax: 0-000-000-0000
Shareholders Agreement
MILESTONE DIGITAL MEDIA HOLDINGS LIMITED
By: /s/ Yunli Xxx
--------------------------------------
Name: Yunli Xxx [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Xxxx 0000, Xxxxxxx Xxxxx,
000 Xxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Yunli Xxx [CHINESE CHARACTERS]
Tel:
Fax: 00-00-00000000
Shareholders Agreement
VENTURE TDF TECHNOLOGY FUND III L.P.
By: /s/ Xxxx Xx
--------------------------------------
Name: Xxxx Xx
Capacity: Authorized Signatory
Address for notice:
0000 Xxxxx Merchants Tower
000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxx
Attn: Xxxx Xx
Tel:
Fax: 00-00-00000000
Shareholders Agreement
SPRINGBOARD-XXXXXX TECHNOLOGY FUND
(CAYMAN) LTD.
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
806 IBM Tower
Pacific Century Xxxxx
0X Xxxxx Xxx Xx
Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx
Attn: Xxxxx Xxxxx [CHINESE CHARACTERS]
Tel:
Fax: 00-00-00000000
Shareholders Agreement
SPRINGBOARD-XXXXXX TECHNOLOGY FUND
PTE LTD.
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
806 IBM Tower
Pacific Century Xxxxx
0X Xxxxx Xxx Xx
Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx
Attn: Xxxxx Xxxxx [CHINESE CHARACTERS]
Tel:
Fax: 00-00-00000000
Shareholders Agreement
HANNIBAL INTERNATIONAL LIMITED
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
806 IBM Tower
Pacific Century Xxxxx
0X Xxxxx Xxx Xx
Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx
Attn: Xxxxx Xxxxx [CHINESE CHARACTERS]
Tel:
Fax: 00-00-00000000
Shareholders Agreement
INTERNATIONAL NETWORK CAPITAL GLOBAL
INVESTMENT LIMITED (BVI)
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
806 IBM Tower
Pacific Century Xxxxx
0X Xxxxx Xxx Xx
Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx
Attn: Xxxxx Xxxxx [CHINESE CHARACTERS]
Tel:
Fax: 00-00-00000000
Shareholders Agreement
INTERNATIONAL NETWORK CAPITAL GLOBAL FUND
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
806 IBM Tower
Pacific Century Xxxxx
0X Xxxxx Xxx Xx
Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx
Attn: Xxxxx Xxxxx [CHINESE CHARACTERS]
Tel:
Fax: 00-00-00000000
Shareholders Agreement
CDH FM LIMITED
By: /s/ Xx Xxxxx Zhi
--------------------------------------
Name: Xx Xxxxx Zhi [CHINESE CHARACTERS]
Capacity: CEO
Address for notice:
00/X Xxxxx 0, Xxxxx Xxxxxx
89 Queensway
Hong Kong, PRC
Attn: Xx Xxxxx Zhi [CHINESE CHARACTERS]
Tel:
Fax: 000-00000000
Shareholders Agreement
CMF TECHNOLOGY FUND I LTD.
By: /s/ Xxxx Xx
--------------------------------------
Name: Xxxx Xx [CHINESE CHARACTERS]
Capacity: CEO
Address for notice:
Xxxx 0000, Xxxxx Xxxxx,
Xx. 000, Xxxxxxx Xxxxx Xx,
Xxxxxxxx, PRC
Attn: Xxx Xxxx
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
SNOW HILL DEVELOPMENT LIMITED.
By: /s/ Xxxx Xx
-------------------------------------------
Name: [CHINESE CHARACTERS]
Capacity: CEO
Address for notice:
0/X., Xxxxx Merchants Building
Xx. 000-000 Xxxxxxxxx Xxxx Xxxxxxx,
Xxxx Xxxx
Attn: [CHINESE CHARACTERS]
Tel: 000-00000000
Fax: 000-00000000
Xxxxxxxxxxxx Xxxxxxxxx
XXXXXXXX XXXXXXX XXXXXXX (XXXX XXXX)
COMPANY LIMITED
By: /s/ Xxxxxx Xxxx
--------------------------------------------
Name: Xxxxxx Xxxx [CHINESE CHARACTERS]
Capacity: Authorized Signatory
Address for notice:
Xxxx X000
000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxx
Attn: Xxxxxx Xxxx [CHINESE CHARACTERS]
Tel:
Fax: 00-00-00000000
Shareholders Agreement
MULTIMEDIA PARK VENTURE CAPITAL LIMITED
By: /s/ Xxx Xx
--------------------------------------------
Name: Xxx Xx [CHINESE CHARACTERS]
Capacity: CEO
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Xxx Xx [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
UNITED CHINA INVESTMENT LIMITED
By: /s/ Xxx Xx
--------------------------------------------
Name: Xxx Xx [CHINESE CHARACTERS]
Capacity: CEO
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Xxx Xx [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
CHINA ALLIANCE INVESTMENT LIMITED
By: /s/ Xxx Xx
-------------------------------------------
Name: Xxx Xx [CHINESE CHARACTERS]
Capacity: CEO
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Xxx Xx [CHINESE CHARACTERS]
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
POWERFUL TEAM ENERGY INVESTMENTS LIMITED
By: /s/ Wu Shangzhi
-------------------------------------------
Name: Wu Shangzhi
Capacity: Authorized Signatory
Address for notice:
Drake Xxxxxxxx
P.O. Box 3321
Road Town, Tortola
British Virgin Islands
Attn: Wu Shangzhi
Tel:
Fax: 00-00-00000000
Shareholders Agreement
SB CHINA HOLDINGS PTE LIMITED
By: /s/ Xxxxxxxx Xxxx
-------------------------------------------
Name: Xxxxxxxx Xxxx
Capacity: CEO
Address for notice:
28th Floor, Zhao Feng World Xxxxx Xxxxxxxx,
Xx. 000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxx
Attn: Xxxxxxxx Xxxx
Tel: 00-00-00000000
Fax: 00-00-00000000
Shareholders Agreement
CAPITAL INTERNATIONAL PRIVATE
EQUITY FUND IV, L.P.
By: /s/ Xxxxx Xx
-----------------------------------
Name: Xxxxx Xx
Capacity:
Address for notice:
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
Attn:
Tel:
Fax:
CGPE IV, L.P.
By: /s/ Xxxxx Xx
-----------------------------------
Name: Xxxxx Xx
Capacity:
Address for notice:
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
Attn:
Tel:
Fax:
SCHEDULE A - ORDINARY SHAREHOLDERS
1. JJ Media Investment Holding Limited, an international business company
organized and existing under the laws of the British Virgin Islands
2. Victory Venture Capital Limited, an international business company
organized and existing under the laws of the British Virgin Islands
Shareholders Agreement
Schedule A
1
SCHEDULE B - EXISTING SUBSIDIARIES
1. Focus Media Changsha Limited, an international business company organized
and existing under the laws of the British Virgin Islands
2. Focus Media Dalian Limited, an international business company organized
and existing under the laws of the British Virgin Islands
3. Focus Media Qingdao Limited, an international business company organized
and existing under the laws of the British Virgin Islands
4. Perfect Media Holdings Limited, an international business company
organized and existing under the laws of the British Virgin Islands
5. Focus Media (China) Holding Limited, a company organized and existing
under the laws of Hong Kong
6. Focus Media Multimedia Technology (Shanghai) Co., Ltd, [CHINESE
CHARACTERS], a wholly foreign-owned enterprise organized and existing
under the laws of the XXX
0. Xxxxxxxx Focus Media Advertising & Communications Co., Ltd. [CHINESE
CHARACTERS], a domestically-funded limited liability company organized and
existing under the laws of the PRC
8. Shanghai On-Target Communications Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the laws of the PRC
9. Sichuan Focus Media Advertising Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the laws of the XXX
00. Xxxxxxxx Ruihong Focus Media Culture Communications Co., Ltd. [CHINESE
CHARACTERS], a domestically-funded limited liability company organized and
existing under the laws of the PRC
11. Yunnan Focus Media Advertising Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the laws of the PRC.
12. Focus Media Wuhan Geshi Advertising Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the laws of the PRC
13. Nanjing Focus Media Advertising Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the laws of the PRC
Shareholders Agreement
Schedule B
1
14. Chongqing Geyang Culture Communications Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the laws of the XXX
00. Xxxxxxx Focus Media Advertising Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the laws of the PRC
16. Changsha Focus Media Century Advertising Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the law of the PRC
17. Dalian Focus Media Advertising Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the laws of the XXX
00. Xxxxxxxx Qianjian Advertising Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the laws of the XXX
00. Xxxxxxxx Perfect Culture Transmission Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the laws of the XXX
00. Xxxxxxxx Focus Media Advertising Co., Ltd. [CHINESE CHARACTERS], a
domestically-funded limited liability company organized and existing under
the laws of the PRC
Shareholders Agreement
Schedule B
2
SCHEDULE C - OTHER INVESTORS
1. 3i Group plc, a company organized and existing under the laws of England
2. 3i Asia Pacific Technology LP, a limited partnership duly organized and
existing under the laws of England
3. 3i Asia Pacific 2004-06 LP, a limited partnership duly organized and
existing under the laws of England
4. KTB/UCI China Ventures I Limited, an international business company
organized and existing under the laws of the British Virgin Islands
5. Max Wealth Enterprises Limited, an international business company
organized and existing under the laws of the British Virgin Islands
Shareholders Agreement
Schedule C
1
SCHEDULE D - EXISTING PREFERRED HOLDERS
1. United China Investment Limited, an international business company
organized and existing under the laws of the British Virgin Islands
2. China Alliance Investment Limited, an international business company
organized and existing under the laws of the British Virgin Islands
3. SB China Holdings Pte Ltd., a company organized and existing under the
laws of Singapore
4. Shanghai Venture Capital (Hong Kong) Co., Ltd., a company organized and
existing under the laws of Hong Kong
5. Multimedia Park Venture Capital Limited, an international business company
organized and existing under the laws of the British Virgin Islands
6. Snow Hill Developments Limited, an international business company
organized and existing under the laws of the British Virgin Islands
7. CMF Technology Fund I Ltd., a company organized and existing under the
laws of Cayman Islands
8. Xxxxxx Xxxxxx Jurvetson ePlanet Ventures L.P., a company organized and
existing under the laws of Cayman Islands
9. Xxxxxx Xxxxxx Jurvetson ePlanet Ventures GmbH & Co. KG, a company
organized and existing under the laws of Germany
10. Xxxxxx Xxxxxx Jurvetson ePlanet Partners Fund, LLC, a limited liability
company organized and existing under the laws of the State of California
11. CDH FM Limited, an international business company organized and existing
under the laws of the British Virgin Islands
12. International Network Capital Global Fund, a company organized and
existing under the laws of Cayman Islands
13. International Network Capital Investment Limited (BVI), an international
business company organized and existing under the laws of the British
Virgin Islands
14. Hannibal International Limited, a company organized and existing under the
laws of Cayman Islands
15. Springboard-Xxxxxx Technology Fund Pte Ltd., a company organized and
existing under the laws of Cayman Islands
16. Springboard-Xxxxxx Technology Fund (Cayman) Ltd., a company organized and
existing under the laws of Cayman Islands
Shareholders Agreement
Schedule D
1
17. Venture TDF Technology Fund III L.P, a company organized and existing
under the laws of Cayman Islands
18. Milestone Digital Media Holding Ltd., an international business company
organized and existing under the laws of the British Virgin Islands
19. Elite Select Group Limited, an international business company organized
and existing under the laws of the British Virgin Islands
20. Farmac Holdings Limited, an international business company organized and
existing under the laws of the British Virgin Islands
21. Powerful Team Energy Investments Limited, an international business
company organized and existing under the laws of the British Virgin
Islands
Shareholders Agreement
Schedule D
2
EXHIBIT A - FORM OF INSTRUMENT OF ACCESSION
FORM OF INSTRUMENT OF ACCESSION
THIS INSTRUMENT OF ACCESSION (this "INSTRUMENT") is made as of [INSERT DATE] by
[INSERT THE NAME OF THE TRANSFEREE] (the "TRANSFEREE"). Reference is made to
that certain Amended and Restated Shareholders Agreement, dated as of ______,
2004 by and among the Company, JJ Media Investment Holding Limited, GS Focus
Holding Limited and the signatories to such Agreement, as amended from time to
time (the "SHAREHOLDERS AGREEMENT"). The Transferee, as a condition precedent to
becoming the owner or holder of record of [INSERT NUMBER OF SHARES] [INSERT THE
EQUITY SECURITIES TRANSFERRED] (the "TRANSFERRED SECURITIES") of Focus Media
Holding Limited, an international business company organized and existing under
the laws of the British Virgin Islands (the "COMPANY"), hereby agrees to join
the Shareholders Agreement as a party thereto and to be bound by and hold the
Transferred Securities subject to all the obligations under the Shareholders
Agreement as if the Transferee were an original party thereto.
This Instrument shall take effect and shall become an integral part of the
Shareholders Agreement immediately upon execution and delivery to the Company of
this Instrument. By signing below, the Company acknowledges receipt of written
notice of the assignment to the Transferee of the Transferred Securities.
IN WITNESS WHEREOF, this Instrument has been duly executed by the
Transferee as of the date first above written.
[INSERT TRANSFEREE]
By: __________________________________
Name:
Title:
ACCEPTED:
FOCUS MEDIA HOLDING LIMITED
by: ____________________________
Name:
Title:
Date:
Shareholders Agreement
Exhibit A
1
