EXHIBIT 4.71
ECHINAMOBILE LIMITED
STOCKHOLDERS AGREEMENT
APRIL 20, 2007
ECHINAMOBILE LIMITED
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (this "AGREEMENT") is entered into as of April
20, 2007, by and among eChinaMobile Limited, a limited liability company
incorporated under the laws of the British Virgin Islands (the "COMPANY"),
eChinaCash, Inc., a Delaware corporation ("ECHINACASH"), Linktone Ltd., an
exempted company with limited liability incorporated under the laws of the
Cayman Islands ("LINKTONE"), and any other stockholder or option holder who from
time to time becomes party to this Agreement by execution of a Joinder Agreement
in substantially the form attached hereto as Exhibit A. EChinaCash, Linktone and
any other stockholder who may join this agreement are each sometimes referred to
herein individually as a "STOCKHOLDER" and collectively as "STOCKHOLDERS".
RECITALS
WHEREAS, eChinaCash and Linktone constitute all of the current stockholders
of the Company.
WHEREAS, the Company, eChinaCash and Linktone have entered into a Stock
Purchase and Subscription Agreement dated as of April 20, 2007 (the "PURCHASE
AGREEMENT") pursuant to which (i) eChinaCash has agreed to sell to Linktone
49,000 shares of Common Stock US $1.00 par value per share of the Company
("COMMON STOCK") and (ii) the Company has agreed to issue to Linktone shares of
Common Stock.
WHEREAS, it is a condition to the obligations of the parties to the
Purchase Agreement to consummate the transactions contemplated thereby that the
Company, eChinaCash and Linktone enter into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Parties hereby agree
as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1. CERTAIN DEFINITIONS. All capitalized terms used herein and not defined
below shall have the meanings set forth in the Purchase Agreement. The following
terms shall have the following respective meanings:
"AFFILIATE" means, with respect to any Person, any of (a) a director,
officer, member, employee or stockholder holding 5% or more of the capital stock
(on a fully diluted basis) of
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such Person, (b) a spouse, parent, sibling or descendant of such Person (or a
spouse, parent, sibling or descendant of any director or officer of such person)
and (c) any other Person that, directly or indirectly through one or more
intermediaries, control, or is controlled by, or is under common control with,
such first Person. The term "CONTROL" includes, without limitation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGREEMENT" has the meaning set forth in the Preamble of this Agreement.
"CAPITALIZATION INFORMATION" has the meaning set forth in Section 7.2.
"CERTIFICATE OF INCORPORATION" means the Company's Certificate of
Incorporation, as it may be amended or restated from time to time.
"COMMISSION" means the United States Securities and Exchange Commission.
"COMMON STOCK" has the meaning set forth in the recitals of this Agreement.
"COMPANY" has the meaning set forth in the Preamble of this Agreement.
"CO-SALE RIGHT" has the meaning set forth in Section 5.1(c) of this
Agreement.
"CO-SALE RIGHT NOTICE" has the meaning set forth in Section 4.1(b) of this
Agreement.
"ELECTION NOTICE" has the meaning set forth in Section 4.1(c) of this
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FULLY-EXERCISING INVESTOR" has the meaning set forth in Section 4.1(d) of
this Agreement.
"HOLDER" means (i) any of the Stockholders holding Registrable Securities
or (ii) any person holding Registrable Securities to whom the registration
rights under this Agreement have been transferred in accordance with Section
2.13 hereof.
"INDEMNIFIED PARTY" has the meaning set forth in Section 2.10(c) of this
Agreement.
"INDEMNIFYING PARTY" has the meaning set forth in Section 2.10(c) of this
Agreement.
"INITIAL PUBLIC OFFERING" means the Company's first registered offering of
its Shares solely for cash, other than a registration (i) on Form S-8 or any
successor form, (ii) with respect to any employee benefit plan, or (iii) solely
in connection with a Rule 145 transaction under the Securities Act.
"INITIATING HOLDERS" means Holders holding not less than 35% of the
Registrable Securities.
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"INVESTOR ELECTION NOTICE" has the meaning set forth in Section 5.1(b) of
this Agreement.
"INVESTOR REGISTRATION EXPENSES" means the reasonable, out-of-pocket costs
and expenses incurred by the Holders whose Registrable Securities are included
in a registration pursuant to the Registration Sections; including one counsel
for the Holders; provided that the definition of Investor Registration Expenses
shall not include, and in no event shall the Company have any responsibility to
reimburse the Holders or pay for (i) any Selling Expenses, or (ii) more than US
$50,000 in any registration pursuant to the Registration Sections in which the
Company is represented by a national law firm.
"LOSSES" has the meaning set forth in Section 2.10 of this Agreement.
"MARKET STAND-OFF" has the meaning set forth in Section 2.14(a) of this
Agreement.
"NEW ISSUANCE NOTICE" has the meaning set forth in Section 4.1(c) of this
Agreement.
"NEW SECURITIES" has the meaning set forth in Section 4.1(b) of this
Agreement.
"PERMITTED TRANSFEREE" has the meaning set forth in Section 5.1(d) of this
Agreement.
"PERSON" shall be construed broadly and shall include an individual, a
general partnership, a limited partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, a governmental authority (or any department,
agency, or political subdivision thereof) or any other person or entity.
"PROPORTIONATE PERCENTAGE" has the meaning set forth in Section 4.1(a) of
this Agreement.
"PUBLIC OFFERING" means a sale of securities to the public in an offering
pursuant to an effective registration statement filed with the Commission
pursuant to the Securities Act, provided that a Public Offering shall not
include an offering made in connection with a business acquisition or
combination or an employee benefit plan.
"PURCHASE AGREEMENT" has the meaning set forth in the Recitals of this
Agreement.
"QUALIFIED IPO" means the sale, in a firm commitment underwritten Public
Offering, of shares of Common Stock, which results in net proceeds to the
Company of not less than US $75,000,000.
"REFUSED SECURITIES" has the meaning set forth in Section 4.1(d) of this
Agreement.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement by the Commission.
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"REGISTRATION EXPENSES" means all expenses incurred by the Company in
complying with the Registration Sections hereof, including, without limitation,
all registration, qualification, filing and NASD fees, all fees and expenses of
complying with securities or blue sky laws, all word processing, duplicating and
printing expenses, messenger and delivery expenses, escrow fees, the fees and
expenses of counsel for the Company, including the expenses (as limited by
Section 2.8 hereof) of any special audits or "cold comfort" letters incident to
or required by any such registration (but excluding the compensation of regular
employees of the Company that shall be paid in any event by the Company),
provided that the definition of Registration Expenses shall not include, and in
no event shall the Company have any responsibility to reimburse the Holders or
pay for, any Selling Expenses.
"REGISTRATION SECTIONS" has the meaning set forth in Section 2.4 of this
Agreement.
"REGISTRABLE SECURITIES" means the Shares and any shares of common stock of
the Company issued or issuable in respect of the Shares upon any stock split,
stock dividend, recapitalization or similar event; provided, that, the Shares or
other securities shall only be treated as Registrable Securities if and so long
as they have not been (A) sold to or through a broker or dealer or underwriter
in a public distribution or a public securities transaction, or (B) sold or
saleable in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions and restrictive legends with respect thereto are removed
upon the consummation of such sale.
"RESTRICTED SECURITIES" means the securities of the Company required to
bear the legend set forth in Section 2.1 of this Agreement.
"RIGHT OF FIRST OFFER" has the meaning set forth in Section 4.1(a) of this
Agreement.
"ROFR NOTICE" has the meaning set forth in Section 5.1(a) of this
Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLING EXPENSES" means all underwriting discounts, selling commissions
and stock transfer taxes applicable to the offering and sale of the securities
registered by the Holders.
"SHARES" means the issued and outstanding capital stock of the Company.
"SELLING STOCKHOLDER" has the meaning set forth in Section 3.1 of this
Agreement.
"STOCKHOLDERS" has the meaning set forth in the Introduction of this
Agreement.
"TRADE SALE" has the meaning set forth in Section 3.1 of this Agreement.
"TRANSFER" has the meaning set forth in Section 2.1 of this Agreement.
"TRANSFER SHARES" has the meaning set forth in Section 5.1(a) of this
Agreement.
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1.2. INTERPRETATION. Each definition in this Agreement includes the
singular and the plural, and reference to the neuter gender includes the
masculine and feminine where appropriate. The words "include or including" shall
mean including without limitation based on the item or items listed. The
headings to articles and sections are for convenience of reference and shall not
affect the meaning or interpretation of this Agreement. Except as otherwise
stated, references to Sections, Schedules and Exhibits mean the Sections,
Schedules and Exhibits of this Agreement. The Schedules and Exhibits are hereby
incorporated by reference into and constitute a part of this Agreement.
ARTICLE 2
RESTRICTIONS ON TRANSFERABILITY; REGISTRATION RIGHTS
2.1. RESTRICTIONS. The Shares held by the Stockholders shall not be sold,
assigned, transferred, pledged or disposed of in any way (whether by operation
of law or otherwise) (each, a "TRANSFER") without the prior written consent of
the non-Transferring Party, other than in accordance with the procedures for
Transfer described herein or to a Permitted Transferee. Each Stockholder shall
cause any proposed purchaser, assignee, transferee or pledgee of Shares to agree
to take and hold such securities subject to the provisions and upon the
conditions specified in this Agreement.
2.2. RESTRICTIVE LEGEND. Each certificate representing the Shares, and any
other securities issued in respect to the Shares upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event, shall
(unless otherwise permitted by the provisions of Section 2.3 below) be stamped
or otherwise imprinted with a legend in substantially the following form (in
addition to any legend required under applicable state securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE OFFERED, SOLD, TRANSFERRED,
HYPOTHECATED OR PLEDGED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION FROM REGISTRATION.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF A STOCKHOLDERS AGREEMENT BETWEEN THE COMPANY
AND THE STOCKHOLDERS, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY."
2.3. NOTICE OF PROPOSED TRANSFERS. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 2.3. Prior to any proposed sale,
assignment, transfer, pledge or hypothecation of any Restricted Securities
(other than (i) a transfer not involving a change in beneficial ownership, (ii)
transactions involving the distribution without consideration of Restricted
Securities by a Holder to any of its partners or members, or retired partners or
members, or to the
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estate of any of its partners or members or retired partners or members, (iii)
any transfer to any Affiliate of a Holder or (iv) transactions in compliance
with Rule 144), unless there is in effect a registration statement under the
Securities Act covering the proposed transfer, the holder thereof shall give
written notice to the Company of such holder's intention to effect such
transfer, sale, assignment, pledge or hypothecation. Each such notice shall
describe the manner and circumstances of the proposed transfer, sale,
assignment, pledge or hypothecation in sufficient detail, and shall be
accompanied, at such holder's expense by either (i) an unqualified written
opinion of legal counsel who shall be, and whose legal opinion shall be,
reasonably satisfactory to the Company and addressed to the Company, to the
effect that the proposed transfer of the Restricted Securities may be effected
without registration under the Securities Act, or (ii) a "no action" letter from
the Commission to the effect that the transfer of such securities without
registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto, whereupon the holder of such
Restricted Securities shall be entitled to transfer such Restricted Securities
in accordance with the terms of the notice delivered by the holder to the
Company. Each certificate evidencing the Restricted Securities transferred as
above (including Restricted Securities the transfer of which is described in the
parenthetical of the first sentence of this Section) provided shall bear, except
if such transfer is made pursuant to Rule 144 or an offering registered under
the Securities Act, the appropriate restrictive legend set forth in Section 2.2
above, except that such certificate shall not bear such restrictive legend if in
the opinion of counsel for such holder (if required above) and the Company such
legend is not required in order to establish compliance with any provision of
the Securities Act.
2.4. REGISTRATION OF SHARES. Pursuant to the terms of Sections 2.5, 2.6,
and 2.7 of this Agreement (collectively the "REGISTRATION SECTIONS"), the
Company makes certain commitments to register the Registrable Securities for the
benefit of the Holders. Notwithstanding the terms of the Registration Sections,
it is agreed that the Holders have the rights specified under the Registration
Sections solely with respect to the registration of Registrable Securities.
Prior to the effective time of any such registration, the Holders may retain
their Shares in whatever form they are held and, notwithstanding the exercise of
any registration rights, will not be obligated to convert their Shares into
Registrable Securities unless and until the subject registration is effective.
2.5. DEMAND REGISTRATION.
(a) Demand Registration. If the Company receives from the Initiating
Holders a written request that the Company effect any registration,
qualification or compliance with respect to issued Registrable Securities, the
Company shall (i) within ten (10) days of the receipt by the Company of such
request, give written notice of the proposed registration, qualification or
compliance to all other Holders and (ii) as soon as practicable, use its
commercially reasonable efforts to effect such registration, qualification or
compliance (including, without limitation, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act and any other
governmental requirements or regulations). The subject registration,
qualification or compliance shall be made so as to permit or facilitate the sale
and distribution of all or such portion of such Registrable Securities held by
the Initiating Holders, in the form of common stock, as are specified in such
request, together with all or such portion of
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the Registrable Securities of any Holder or Holders joining in such request as
are specified in a written request, received by the Company within twenty (20)
days after receipt of such written notice from the Company; provided, that, the
Company shall not be obligated to take any action to effect any such
registration, qualification or compliance pursuant to this Section 2.5(a):
(i) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act;
(ii) In any event after two such requests have been made;
provided, that, a registration requested pursuant to this Section 2.5 shall not
be deemed to have been effected for the purposes of this Section 2.5(a)(ii)
unless (i) it has been declared effective by the SEC, (ii) it has remained
effective during such period as required by the SEC to effect the offering of
all common stock registered pursuant to such registration, and (iii) the
offering of common stock pursuant to such registration has been completed;
(iii) If the Company furnishes to such Holders a certificate
signed by a duly authorized officer of the Company stating that in the good
faith judgment of the Board of Directors it would be materially detrimental to
the Company or its stockholders for a registration statement to be filed in the
near future, then the Company's obligation to use its best efforts to register,
qualify or comply under this Section 2.5 shall be deferred for a period not to
exceed ninety (90) days from the date of receipt of written request from the
Initiating Holders; provided, however, that the Company may not utilize this
right more than once in any twelve (12) month period; provided further, that the
Company shall not register any other Shares during such twelve (12) month
period; or
(iv) prior to the completion of a Qualified IPO.
(b) Underwriting. In the event that a registration pursuant to this
Section 2.5 is for a registered public offering involving an underwriting, the
Initiating Holders shall notify the Company of such fact and the Company shall
so advise the Holders as part of the notice given pursuant to Section 2.5(a). In
such event, the right of any Holder to participate in the registration pursuant
to this Section 2.5 shall be conditioned upon such Holder's participation in the
underwriting arrangements required by this Section 2.5, and the inclusion of
such Holder's Registrable Securities in the underwriting to the extent requested
shall be limited to the extent provided herein. The Company shall be entitled to
participate in an underwritten offering on the terms set forth herein.
The Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
reasonable and customary form with the managing underwriter selected for such
underwriting by the Initiating Holders holding a majority of the Registrable
Securities held by such Initiating Holders and reasonably acceptable to the
Company. Notwithstanding any other provision of this Section 2.5, if the
managing underwriter advises the Initiating Holders in writing that marketing
factors require a limitation of the number of shares to be underwritten, then
the Company shall so advise all
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Holders of Registrable Securities, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all Holders thereof in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by such Holders at the
time of filing the registration statement. No Shares excluded from the
underwriting by reason of the underwriter's marketing limitation shall be
included in such registration. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the underwriters may round
the number of shares allocated to any holder to the nearest 100 shares.
If any Holder disapproves of the terms of the underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company, the managing
underwriter and the Initiating Holders no later than ten (10) business days
prior to the date the registration is declared effective. Any securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration, and shall not be transferred in a public distribution prior to 90
days after the effective date of the registration statement relating thereto.
2.6. REGISTRATION ON FORM S-3 OR FORM F-3.
(a) If any Holder or Holders request that the Company file a
registration statement on Form S-3 or Form F-3 (or any successor form to Form
S-3 and Form F-3) for a public offering of Registrable Securities, the
reasonably anticipated aggregate price to the public of which, net of
underwriting discounts and commissions, would be at least US $5,000,000, and the
Company is a registrant entitled to use Form S-3 or Form F-3, the Company shall
(i) promptly give written notice of the proposed registration and the Holder's
or Holders' request therefor, and any related qualification or compliance, to
all other Holders of Registrable Securities; and (ii) use its commercially
reasonable efforts to cause the number of shares of such Holder or Holders'
Registrable Securities to be registered on such form for the offering and to
cause such Registrable Securities to be qualified in such jurisdictions as the
Holder or Holders may reasonably request. After the Company's Initial Public
Offering of its securities, the Company shall use its commercially reasonable
efforts to qualify for Form S-3 or Form F-3 registration or a similar short-form
registration. The provisions of Section 2.5(b) shall be applicable to each
registration initiated under this Section 2.6.
(b) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this Section 2.6:
(i) more than twice in any twelve (12) month period;
(ii) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act;
(iii) during the period starting with the date one hundred eighty
(180) days prior to the Company's estimated date of filing of, and ending on the
date six months immediately following, the effective date of any registration
statement pertaining to securities of
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the Company (other than a registration of securities in a Rule 145 transaction
or with respect to an employee benefit plan); provided, that, the Company is
actively employing in good faith all commercially reasonable efforts to cause
such registration statement to become effective;
(iv) prior to six months after a Qualified IPO; or
(v) if the Company furnishes to such Holder a certificate signed
by a duly authorized officer of the Company stating that in the good faith
judgment of the Board of Directors it would be materially detrimental to the
Company or its stockholders for registration statements to be filed in the near
future, then the Company's obligation to use its best efforts to file a
registration statement shall be deferred for a period not to exceed ninety (90)
days from the receipt of the request to file such registration by such Holder.
2.7. PIGGYBACK REGISTRATION.
(a) Notice of Registration. If, at any time or from time to time, the
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders other than Holders
pursuant to Section 2.5 or 2.6 hereof, other than (i) a registration relating
solely to employee benefit plans, or (ii) a registration relating solely to a
Rule 145 transaction, the Company shall:
(i) give to each Holder at least thirty (30) days prior written
notice thereof; and
(ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests made within thirty (30) days after receipt of such written notice from
the Company by any Holder, but only to the extent that such inclusion will not
diminish the number of securities included by the Company or by holders of the
Company's securities who have demanded such registration.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.7(a). In such event, the right of any Holder to
registration pursuant to this Section 2.7 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of Registrable
Securities in the underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in reasonable
and customary form with the managing underwriter selected for such underwriting
by the Company. Notwithstanding any other provision of this Section 2.7, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares of Common Stock to be underwritten, the managing
underwriter may limit the number of Common Stock to be included in the
registration and underwriting, on a pro rata basis based on the total number of
securities (including, without limitation, Registrable Securities) entitled to
registration pursuant to registration rights granted to the participating
Holders by the Company. The number of shares of
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securities that may be included in the registration and underwriting shall be
allocated as follows: (i) first, to the Company, (ii) second, to the Holders
proposing to distribute their securities through such underwriting, in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by such Holders, and (iii) third, to any other stockholders of
the Company (other than Holders) on a pro rata basis. To facilitate the
allocation of shares in accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any Holder or other
stockholder to the nearest 100 shares. If any Holder or other stockholder
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the managing underwriter
no later than ten (10) business days prior to the date that the registration
statement for the subject underwriting is declared effective. Any securities
excluded or withdrawn from such underwriting shall be excluded and withdrawn
from such registration and shall not be transferred in a public distribution
prior to 90 days after the effective date of the registration statement relating
thereto.
(c) Right to Terminate Registration. The Company shall have the right
to terminate or withdraw any registration initiated by it under this Section 2.7
prior to the effectiveness of such registration, whether or not any Holder has
elected to include securities in such registration, without prejudice, however,
to the rights of the Holders immediately to request that such registration be
effected as a registration under Section 2.5 to the extent permitted thereunder.
(d) Not Demand Registration. Form S-3 or Form F-3 registrations shall
not be deemed to be demand registrations as described in Section 2.5 above.
Except as otherwise provided herein, there shall be no limit on the number of
times the Holders may request registration of Registrable Securities under this
Section 2.7.
2.8. EXPENSES OF REGISTRATION.
(a) All Registration Expenses and Investor Registration Expenses
incurred in connection with any registration pursuant to the Registration
Sections shall be borne by or reimbursed by, the Company, as applicable;
provided, that the Company shall not be required to pay the Registration
Expenses or Investor Registration Expenses of any registration proceeding begun
pursuant to Section 2.5, the request of which has been subsequently withdrawn at
the request of the Holders of a majority of the Registrable Securities to be
registered, unless the Holders of a majority of the Registrable Securities then
outstanding agree that such registration constitutes the use by the Holders of
one (1) demand registration pursuant to Section 2.5 (in which case such
registration shall also constitute the use by all Holders of Registrable
Securities of one (1) such demand registration); provided further, however, that
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, then the Holders shall not be required
to pay any of such expenses and such registration shall not constitute the use
of a demand registration pursuant to Section 2.5.
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(b) Notwithstanding the foregoing, all Selling Expenses, except for
the payment of any applicable transfer taxes, relating to securities registered
on behalf of the Holders shall be borne by the Holders of the Registered
Securities included in such registration pro rata on the basis of the number of
shares so registered. Any transfer tax expense shall be borne by the Holder
obligated to pay such transfer tax to the applicable governmental entity.
2.9. REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this ARTICLE 2,
the Company shall keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company shall:
(a) Prepare and file with the Commission a registration statement with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective for at least one hundred eighty (180)
days or until the distribution described in the registration statement has been
completed;
(b) Furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities;
(c) Use commercially reasonable 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;
(d) Notify each Holder holding Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act 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; and
(e) Use its commercially reasonable efforts to furnish, at the request
of any Holder requesting registration of Registrable Securities, on the date
that the Holder's 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 of the Registrable Securities covered by the
applicable registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) subject to
applicable accounting standards a "comfort" letter dated as of such date, from
the independent certified public
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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 of the Registrable Securities covered by the applicable registration,
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities.
(f) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, if required, in each case not later than the effective
date of such registration.
(g) To the extent a request for registration is made under Section 2.5
and the Initiating Holders request that the Company file an automatic shelf
registration statement on Form F-3 or S-3, the Company, if an eligible "well
known seasoned issuer" as defined in Rule 405 under the Securities Act, shall
file an automatic shelf registration statement which covers those Registrable
Securities which are requested to be registered (or an appropriate prospectus
supplement to such automatic shelf registration statement if one has already
been filed). The Company shall use its commercially reasonable efforts to remain
a WKSI (and not become an ineligible issuer (as defined in Rule 405 under the
Securities Act)) during the period during which such automatic shelf
registration statement is required to remain effective. If the Company does not
pay the filing fee covering the Registrable Securities at the time the automatic
shelf registration statement is filed, the Company agrees to pay such fee at
such time or times as the Registrable Securities are to be sold. If the
applicable automatic shelf registration statement has been outstanding for at
least three (3) years, at the end of the third year the Company shall refile a
new automatic shelf registration statement covering the Registrable Securities,
to the extent any Registrable Securities remain unsold. If at any time when the
Company is required to re-evaluate its "well known seasoned issuer" status the
Company determines that it is not a "well known seasoned issuer", the Company
shall use its commercially reasonable best efforts to refile the shelf
registration statement on Form F-3 or S-3 and, if such form is not available, on
Form F-1 or S-1 and keep such registration statement effective during the period
during which such registration statement is required to be kept effective.
2.10. INDEMNIFICATION.
(a) The Company shall indemnify each Holder, each of its officers and
directors and partners, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which registration,
qualification or compliance effected pursuant to the Registration Sections, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against any and all expenses,
claims, losses, fees (including reasonable attorney's fees) damages or
liabilities, joint or several (or actions in respect thereof) (individually
"LOSS" and collectively "LOSSES"), including any of the foregoing incurred in
settlement of any litigation (which settlement must be approved by the Company,
and which approval may not be unreasonably withheld), commenced or threatened,
arising out of or based on or in respect of any untrue statement (or alleged
untrue statement) of a material fact contained in any registration statement,
prospectus (whether preliminary, final or summary), offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on
13
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any violation (or
alleged violation) by the Company of any rule or regulation promulgated under
the Securities Act applicable to the Company in connection with any such
registration, qualification or compliance in each case pursuant to the
Registration Sections and the Company shall reimburse each such Holder, each of
its officers and directors, and each person controlling such Holder and each
such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending against any such Loss, as such expenses
are incurred, provided, that (i) such indemnity 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) and (ii) the Company shall not be liable in any
such case to the extent that any such Loss arises out of or is based on or in
respect of any untrue statement or alleged untrue statement or omission or
alleged omission is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder, controlling person or
underwriter and specifically for use therein; and with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, this indemnity shall not inure to the benefit of any
underwriter (or to the benefit of any person controlling any underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) to
the extent that any such Loss of such underwriter or any person controlling such
underwriter results from the fact that such underwriter sold shares of Common
Stock to a person to whom there was not sent or given by such underwriter or on
such underwriter's behalf at or prior to the written confirmation of the sale of
such shares of Common Stock to such person, a copy of the prospectus (as then
amended or supplemented), if required by law so to have been delivered, and if
the prospectus (as so amended or supplemented) would have cured the defect
giving rise to such Loss. This indemnity will be in addition to any liability
which the Company may otherwise have.
(b) To the extent permitted by law and if so requested by the Company,
each Holder shall, if Registrable Securities held by such Holder are included in
the securities as to which such registration, qualification or compliance is
being effected, indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act, and each other such Holder, each of
its officers and directors and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against any and all Losses arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, such Holders,
such directors, officers, persons, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating,
preparing or defending against any such Loss, as such expenses are incurred, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity
14
with written information furnished to the Company by such Holder and stated to
be specifically for use therein. In no event shall any indemnity under this
Section 2.10(b) exceed the proceeds from the offering received by such Holder.
(c) Each party entitled to indemnification under this Section 2.10
(each, an "INDEMNIFIED PARTY") shall give notice to the party required to
provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense; provided, however, that an Indemnified Party
(together with all other Indemnified Parties that may be represented without
conflict by one counsel) shall have the right to retain one separate 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 differing
interests between such Indemnified Party and any other party represented by such
counsel in such proceeding. The failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 2.10 unless the failure to give such notice is materially
prejudicial to an Indemnifying Party's ability to defend such action.
(d) If the indemnification provided for in this Section 2.10 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any Losses referred to herein, the Indemnifying Party, in lieu
of indemnifying such Indemnified Party thereunder, shall, to the extent
permitted by applicable law, contribute to the amount paid or payable by such
Indemnified Party as a result of such Loss 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 untrue statement or
omission or alleged untrue statement or omission that resulted in such Loss, as
well as any other relevant equitable considerations. The relative fault of the
Indemnifying Party and of the Indemnified Party shall be determined by a court
of law 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; provided, that that in no
event (i) shall any contribution by a Holder hereunder exceed the proceeds from
the Offering received by such Holder and (ii) shall any person or entity guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) be entitled to contribution from any person or entity who was
not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and Holders under this Section 2.10
shall survive completion of any offering of Registrable Securities in a
registration statement and the termination of this Agreement. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
15
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
2.11. INFORMATION BY HOLDER. The Holder or Holders holding Registrable
Securities included in any registration shall furnish promptly to the Company
such information regarding such Holder or Holders, the Registrable Securities
and Common Stock held or beneficially owned by them and the distribution
proposed by such Holder or Holders as the Company may request in writing and as
shall be required in connection with any registration, qualification or
compliance referred to in this ARTICLE 2.
2.12. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission that may at any time permit the
sale of the Company's securities to the public without registration, after such
time as a public market exists for the Shares, the Company agrees to use its
best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Exchange Act.
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting requirements).
(c) Furnish to Holders owning not less than 25% of the Registrable
Securities forthwith upon request (i) a written statement by the Company as to
its compliance with the reporting requirements of said Rule 144 (at any time
after ninety (90) days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), (ii) a copy of the most
recent annual or quarterly report of the Company, 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.
2.13. TRANSFER OF REGISTRATION RIGHTS. Notwithstanding anything contained
herein to the contrary (including, without limitation, any provision relating to
the transfer of Registrable Securities, generally) the rights to cause the
Company to register securities granted to Holders under the Registration
Sections may be transferred only (A) to a transferee or assignee who is any
Person who, after giving effect to such acquisition, holds at least 10% of the
Shares, or (B) to an Affiliate of any Holder in connection with a distribution
of the Shares or held by such Holder in accordance with the partnership
agreement or other governing document applicable to such Holder and in each case
only to the extent transfer is permitted pursuant to Section 2.3; provided,
however, that such transferee or assignee does not, directly or indirectly,
compete with the Company's business as determined in good faith by the Company's
Board of Directors.
2.14. LOCK-UP AGREEMENT.
16
(a) Lock-Up Period; Agreement. In connection with the Initial Public
Offering or any other registered public offering of the Company's securities and
upon request of the Company or the underwriters managing such offering of the
Company's securities, each Holder agrees not to sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any
securities of the Company held immediately prior to the effectiveness of the
registration statement for such offering (other than such securities included in
the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days from the effective date of such registration) as may
be requested by the Company or such managing underwriters and to execute an
agreement reflecting the foregoing as may be requested by the underwriters at
the time of the registered offering (the "MARKET STAND-OFF"). The Market
Stand-Off shall not apply to a registration relating solely to employee benefit
plans, or to a registration relating solely to a transaction pursuant to Rule
145 under the Securities Act. Any new, substituted or additional securities that
are by reason of any recapitalization or reorganization distributed with respect
to securities of any Holder shall be immediately subject to the Market
Stand-Off.
(b) Limitations. The Market Stand-Off shall apply to the Registrable
Securities of the Holders only in the event and to the extent that all officers,
directors and Stockholders enter into similar agreements and if any such person,
or any Holder is released from such obligations, all Holders shall be released
from their respective obligations under Section 2.14(a) on a pro-rata basis.
(c) Stop-Transfer Instructions. In order to enforce the Market
Stand-Off, the Company may impose stop-transfer instructions with respect to the
securities of each Holder (and the securities of every other person subject to
the Market Stand-Off).
(d) Transferees Bound. In addition to any restrictions on transfer
contained herein, each Holder agrees that prior to the Initial Public Offering
it will not transfer securities of the Company unless each transferee agrees in
writing to be bound by the Market Stand-Off, provided, that this Section 2.14(d)
shall not apply to transfers pursuant to a registration statement.
2.15. NO REGISTRATION RIGHTS TO THIRD PARTIES. Without the prior written
consent of the Stockholders holding two-thirds of the Shares, 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 nature
relating to any securities of the Company which are superior to, or on a parity
with, those granted to the Stockholders.
2.16. TERMINATION OF RIGHTS. The rights of any and all Holders to cause the
Company to register securities under the Registration Sections, including such
rights set forth in this ARTICLE 2 (except with respect to the indemnification
provisions of Section 2.10, which shall survive), shall terminate and be of no
further force or effect immediately upon the earlier of (i) the date on which
all Registrable Securities have been sold pursuant to one or more Trade Sales,
and (ii) the date on which all Registrable Securities may be sold without
registration or other restrictions or limitations pursuant to Rule 144 under the
Securities Act.
17
ARTICLE 3
DRAG-ALONG RIGHT
3.1. DRAG-ALONG RIGHT. If at any time after the date of this Agreement a
Selling Stockholder who owns at least 30% of the Shares (a "SELLING
STOCKHOLDER") desires to sell all of the Shares owned by way of a Trade Sale,
and if such Selling Stockholder so requests that the other Stockholders sell
their Shares in such Trade Sale, then each of the other Stockholders shall
consent to, participate in and sell their Shares in such Trade Sale, and shall
use their commercially reasonable efforts to cause all other stockholders of the
Company to consent to, enter into any agreement in connection with, and
participate in, such Trade Sale; provided that (i) the Selling Stockholder has
approved the terms and conditions of such Trade Sale and will participate in
such Trade Sale, (ii) the terms and conditions, including without limitation,
the consideration payable with respect to each Share in each class or series as
a result of such Trade Sale, are the same (except for cash payments in lieu of
fractional shares payable to the Selling Stockholders) as for each other Share
in such class or series; (iii) each class and series of Shares of the Company
shall be entitled to receive the same form of consideration as a result of such
Trade Sale as that received by each other class or series of shares; and (iv)
the valuation of the Company pursuant to the proposed Trade Sale shall be no
less than US $30,000,000. For purposes of this Agreement, "TRADE SALE" means
either (i) a merger, consolidation or other business combination of the Company
with or into any other business entity in which the stockholders of the Company
immediately after such merger, consolidation or business combination hold shares
representing less than a majority of the voting power of the outstanding share
capital of the surviving business entity, (ii) the sale, lease, transfer or
other disposition of all or substantially all of the Company's assets (including
the sale or exclusive licensing of substantially all of the intellectual
property assets of the Company or to a third party), or (iii) the sale, pledge,
transfer or other disposition of a majority of Company's outstanding voting
shares.
3.2. STOCKHOLDER MEETING. In the event such transaction is to be brought to
a vote at a stockholder meeting, each of Stockholder agrees:
(a) to vote (in person, by proxy or by action by written consent, as
applicable) all Shares as to which it has beneficial ownership in favor of such
Trade Sale and in opposition of any and all other proposals that could
reasonably be expected to delay or impair the ability of the Company to
consummate such Trade Sale;
(b) to refrain from exercising any dissenters' rights or rights of
appraisal under applicable law at any time with respect to such Trade Sale;
(c) to execute and deliver all related documentation and take such
other action in support of the Trade Sale as shall reasonably be requested by
the Company.
ARTICLE 4
RIGHT OF FIRST OFFER
18
4.1. RIGHT OF FIRST OFFER.
(a) Right of First Offer. Subject to the terms and conditions
contained in this Section 4.1, the Company hereby grants to each Stockholder the
right of first offer to purchase its Proportionate Percentage (as defined below)
of any New Securities (as defined below in Section 4.1(b)), that the Company
may, from time to time, propose to sell and issue (the "RIGHT OF FIRST OFFER").
Each Stockholder's "PROPORTIONATE PERCENTAGE" for purposes of this Section 4.1
is determined by dividing (x) the sum of the number of Shares then held by such
Stockholder by (y) the sum of the total number of Shares then outstanding.
(b) Definition of New Securities. Except as set forth below, "NEW
SECURITIES" means any Shares, whether authorized or not, and rights, options or
warrants to purchase Shares, and securities of any type whatsoever that are, or
may become, convertible into Shares issued after the date hereof.
Notwithstanding the foregoing, "NEW SECURITIES" does not include (i) securities
offered to the public generally pursuant to a registration statement under the
Securities Act, (ii) securities issued in connection with the acquisition of
another corporation by the Company by merger, purchase of substantially all of
the assets or shares, or other reorganization whereby the Company or its
stockholders own not less than a majority of the voting power of the surviving
or successor corporation; (iii) any Shares or related options convertible into
or exercisable for such Shares issued to employees, leased employees, officers
and directors of, and consultants, customers and vendors to, the Company,
pursuant to a stock option plan or similar plan of the Company or any
arrangement approved by the Board of Directors of the Company; provided, that,
such Shares shall not exceed the number of Shares allocated or reserved for
issuance under and incentive compensation plan of the Company (subject to
appropriate adjustment for stock splits, stock dividends, combinations,
recapitalizations and the like) or approved by the Company's Board of Directors
and/or (iv) stock issued in connection with any stock split, stock dividend or
recapitalization by the Company.
(c) Notice of Right. In the event the Company proposes to undertake an
issuance of New Securities, it shall give to each Stockholder written notice of
its intention, describing the type of New Securities and the price and terms
upon which the Company proposes to issue the same and the definitive documents
for such a financing (a "NEW ISSUANCE NOTICE"). Each Stockholder shall have
fifteen (15) days from the date of delivery of any such New Issuance Notice to
agree to purchase such New Securities (up to the amount referred to in Section
4.1(a)), for the price and upon the terms specified in the notice, by giving
written notice to the Company and stating therein the quantity of New Securities
to be purchased (the "ELECTION NOTICE").
(d) Oversubscription Right. In the event that Election Notices are not
received by the Company in respect of all the New Securities subject to the
Right of First Offer, the New Securities as to which Election Notices have not
been given (the "REFUSED SECURITIES") shall be offered by the Company for sale
on a pro rata basis to each Stockholder that delivered an Election Notice with
respect to its entire Proportionate Percentage of New Securities pursuant to
Section 4.1 (each, a "FULLY-EXERCISING INVESTOR"). The number or amount of
Refused
19
Securities offered to each Fully-Exercising Investor shall be equal to the
product of (i) the number or amount of Refused Securities, multiplied by (ii) a
fraction, the numerator of which is the number of New Securities such
Fully-Exercising Investor has elected to purchase and the denominator of which
is the sum of New Shares of all of the Fully-Exercising Investors have elected
to purchase, and such oversubscription offer shall remain open and irrevocable
for a period of 5 days from the date it is delivered by the Company.
(e) Exercise of Right. If any Stockholder exercises its Right of First
Offer hereunder, the closing of the purchase of the New Securities with respect
to which such right has been exercised shall take place within forty-five (45)
days after such Stockholder gives notice of such exercise, which period of time
shall be extended in order to comply with applicable laws and regulations. Upon
exercise of such Right of First Offer, the Company and the Investor shall be
legally obligated to consummate the purchase contemplated thereby and shall use
their best efforts to secure any approvals required in connection therewith.
(f) Lapse and Reinstatement of Right. Subject to the Company's
obligation to offer any Refused Securities to Fully-Exercised Investors pursuant
to Section 4.1(d), in the event a Stockholder fails to exercise the Right of
First Offer provided in this Section 4.1 within the 15-day period after the
lapse of such 15-day period set forth in Section 4.1(c) above, the Company shall
have one-hundred twenty (120) days thereafter to sell or enter into an agreement
(pursuant to which the sale of New Securities covered thereby shall be closed,
if at all, within ninety (90) days from the date of said agreement) to sell the
New Securities not elected to be purchased by such Stockholder at the price and
upon terms no more favorable to the purchasers of such securities than specified
in the New Issuance Notice. In the event the Company has not sold the New
Securities or entered into an agreement to sell the New Securities within said
120-day period (or sold and issued New Securities in accordance with the
foregoing within ninety (90) days from the date of said agreement), the Company
shall not thereafter issue or sell any New Securities without first offering
such securities to the Stockholders as provided in Section 4.1 above.
Assignment. The Right of First Offer to purchase any part of the New
Securities may only be transferred or assigned in whole or in part in accordance
and in compliance with Section 2.3 hereof.
4.2. TERMINATION OF RIGHTS. The rights set forth in Section 4.1 shall
terminate on and be of no further force or effect immediately prior to the
effectiveness of the registration statement for a Qualified IPO.
ARTICLE 5
RIGHT OF FIRST REFUSAL AND CO-SALE
5.1. STOCKHOLDER'S RIGHT OF FIRST REFUSAL AND CO-SALE.
(a) Right of First Refusal. Should a Stockholder propose to sell or
otherwise transfer (the "SELLING STOCKHOLDER") all or part of his Shares, the
Selling Stockholder shall
20
promptly deliver to the Company and to the other Stockholders not more than
sixty (60) days nor less than thirty (30) days prior to the proposed transfer
date a notice (the "ROFR NOTICE") stating the terms and conditions of such
proposed transfer including, without limitation, the number of Shares (or
securities convertible into such Shares) proposed to be sold or transferred (the
"TRANSFER SHARES"), the nature of such sale or transfer, and the amount and form
of consideration to be paid.
(b) Notice. The Stockholders shall have the right for fifteen (15)
days following receipt of the ROFR Notice, to elect to purchase the Transfer
Shares subject to the ROFR Notice, on the terms and subject to the conditions
set forth in the ROFR Notice. If any Stockholder elects to purchase Transfer
Shares subject to the ROFR Notice, it will provide the selling Stockholder
written notice of the election (an "INVESTOR ELECTION NOTICE"). If no
Stockholder provides an Investor Election Notice within the 15-day period, the
Selling Stockholder shall provide written notice thereof to the other
Stockholders, which notice will also provide notice to the Stockholders of their
Co-Sale Rights (as defined below) (the "CO-SALE RIGHT NOTICE"). Any sale of
Transfer Shares pursuant to this Section 5.1 will take place no later than
forty-five (45) days from the date of the ROFR Notice.
(c) Right of Selling Stockholder. If the Company or any Stockholder
exercises its right of first refusal to purchase the Transfer Shares, then, upon
the date the notice of such exercise is given by the Company or such
Stockholder, and subject to the condition subsequent that such sale is
ultimately consummated, the Selling Stockholder shall have no further rights as
a holder of such Transfer Shares except the right to receive payment for such
Transfer Shares from the Company or such Stockholder in accordance with the
terms of this Agreement, and the Selling Stockholder shall forthwith cause all
certificate(s) evidencing such Transfer Shares to be surrendered to the Company
for cancellation or transfer to such Stockholder.
(d) Right of Co-Sale. To the extent the Right of First Refusal under
Section 5.1(a) is not exercised by the Stockholders with respect to any proposed
sale or transfer of Transfer Shares by any Selling Stockholder, subject to the
rights of any Stockholder pursuant to the Stockholders Agreement, the other
Stockholders shall have the right (the "CO SALE RIGHT"), exercisable upon
written notice to the Company and the Selling Stockholder within fifteen (15)
business days of receipt of the Co Sale Right Notice, to participate in the
Selling Stockholder's sale of Transfer Shares pursuant to the specified terms
and conditions of the Notice. To the extent any Stockholder exercises such Co
Sale Right (the "CO-SELLING STOCKHOLDER") in accordance with the terms and
conditions set forth below, the number of Transfer Shares which the Selling
Stockholder may sell pursuant to the ROFR Notice shall be correspondingly
reduced. The Co Sale Right of the Stockholders shall be subject to the following
terms and conditions:
(i) Calculation of Shares. The Selling Stockholder may sell all
or any part of that number of Shares equal to the product obtained by
multiplying (1) the aggregate number of Transfer Shares covered by the Co Sale
Right Notice by (2) a fraction, the numerator of which is the number of Shares
at the time owned by such Selling Stockholder and the denominator of which is
the sum of (x) the total number of the Company's Shares at the time
21
owned by the Selling Stockholder and (y) the total number of the Company's
Shares at the time owned by the Co-Selling Stockholder. Each Co-Selling
Stockholder may sell all or any part of that number of Shares equal to the
product obtained by multiplying (1) the aggregate number of Transfer Shares
covered by the Co Sale Right Notice by (2) a fraction, the numerator of which is
the number of Shares at the time owned by such Co-Selling Stockholder and the
denominator of which is the sum of (x) the total number of the Company's Shares
at the time owned by the Selling Stockholder and (y) the total number of the
Company's Shares at the time owned by the Co-Selling Stockholder. The provisions
of this Agreement do not confer any Co Sale Rights with respect to any shares of
stock or other securities held by the Stockholders that are not Registrable
Securities.
(ii) Delivery of Certificates. The Co-Selling Stockholder(s)
shall effect their participation in the sale by delivering to the Selling
Stockholder for transfer to the prospective purchaser one or more certificates,
properly endorsed for transfer, which represent the Shares which the
Stockholders elect to sell, which Shares shall be free and clear of any liens or
encumbrances.
(iii) Transfer. The stock certificate or certificates that the
Stockholders deliver to the Selling Stockholder pursuant to this Section 5.1
shall be delivered by the Selling Stockholder to the prospective purchaser in
consummation of the sale pursuant to the terms and conditions specified in the
ROFR Notice, and the Selling Stockholder shall promptly thereafter remit to such
Stockholder that portion of the sale proceeds to which such Stockholder is
entitled by reason of its participation in such sale by wire transfer of
immediately available funds to an account designated by such Stockholder. To the
extent that any prospective purchaser or purchasers prohibits such assignment or
otherwise refuses to purchase Shares from any Stockholder exercising its Co Sale
Right hereunder, the Selling Stockholder shall not sell to such prospective
purchaser or purchasers any Transfer Shares unless and until, simultaneously
with such sale, the Selling Stockholder shall purchase such Shares from such
Stockholder for the same consideration and on the same terms and conditions as
the proposed transfer described in the ROFR Notice (which terms and conditions
shall be no less favorable than those governing the sale to the purchaser by the
Selling Stockholder); provided, that, if any part of the consideration shall be
in a form other than cash, the Selling Stockholder may purchase such Shares
entirely for cash, with the non cash consideration being valued in good faith by
the Board of Directors of the Company at fair market value.
(iv) No Adverse Effect. The exercise or non-exercise of the
rights of the Stockholders hereunder to participate in one or more sales of
Transfer Shares made by a Selling Stockholder shall not adversely affect their
rights to participate in subsequent sales of shares of stock by any Selling
Stockholder.
(e) Permitted Transactions. The provisions of Section 5.1 of this
Agreement shall not pertain or apply to:
(i) any pledge of Shares made by a Selling Stockholder pursuant
to a bona fide loan transaction which creates a mere security interest;
22
(ii) any bona fide gift to a charitable organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended; or
(iii) any non-cash transfer to a Selling Stockholder's ancestors,
descendants or spouse or to a trust for their benefit;
provided, in each case, that the pledgee, transferee or donee shall furnish
the Stockholders with a written agreement to be bound by and comply with
all provisions of this Agreement applicable to the Selling Stockholder
(each a "PERMITTED TRANSFEREE").
5.2. TERMINATION OF RIGHTS AND RESTRICTIONS. The rights set forth in this
Section 5.1 shall terminate on and be of no further force or effect immediately
prior to the effectiveness of the registration statement for a Qualified IPO.
ARTICLE 6
AFFIRMATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
6.1. FINANCIAL INFORMATION. Prior to the closing date of an Initial Public
Offering, and so long as any Stockholder, including any Affiliate of such
Stockholder, is a holder of not less than 25% of the Shares (subject to
appropriate adjustment for stock splits, stock dividends, combinations,
recapitalizations and the like), the Company shall:
(a) provide to such Stockholder as soon as practicable after the end
of each fiscal year, and in any event within one hundred twenty (120) days
thereafter, audited consolidated balance sheets of the Company and its
subsidiaries, if any, as of the end of such fiscal year, and audited
consolidated statements of income and cash flows of the Company and its
subsidiaries, if any, for such year, prepared in accordance with generally
accepted accounting principles and setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
certified by independent public accountants of national standing selected by the
Company;
(b) provide to such Stockholder, within forty-five (45) days after the
end of each calendar month, an unaudited profit or loss statement, schedule as
to the sources and application of funds for such calendar month or fiscal
quarter, as applicable, and an unaudited balance sheet and a statement of
stockholder's equity as of the end of such calendar month or fiscal quarter, as
applicable;
(c) provide to such Stockholder as soon as practicable, but in any
event at least 30 days prior to the end of each fiscal year, a budget and
strategic business plan for the next fiscal year, prepared on a monthly basis,
including balance sheets, income statements and statements of cash flows for
such months and, as soon as prepared, any other operating budgets prepared by
the Company; and
23
(d) provide to such Stockholder such other information as is
reasonably requested.
6.2. INSPECTION. The Company shall permit each Stockholder owning not less
than 25% of the Shares then issued to visit and inspect the Company's
properties, to examine its books of account and records, and to discuss the
Company's affairs, finances, performance and accounts with the Company's
officers, all at such reasonable times as may be requested upon reasonable
notice from a qualified Stockholder from time to time.
6.3. SCOPE OF COVENANTS. The Company's obligations under this ARTICLE 5 of
this Agreement will terminate on and be of no further force or effect
immediately prior to the effectiveness of the registration statement for a
Qualified IPO.
ARTICLE 7
AFFIRMATIVE COVENANTS OF THE STOCKHOLDERS
7.1. NO PURCHASE OF STOCK, OPTIONS OR WARRANTS. Subject to Section 7.5,
each Stockholder agrees that, except with the prior consent of the Stockholders
holding 75% of the outstanding Common Stock, such Stockholder will not:
(a) purchase or acquire, either directly or indirectly, any Shares
other than pursuant to the terms of this Agreement and the Purchase Agreement;
or
(b) purchase or acquire, either directly or indirectly, any
outstanding stock options, warrants, or other securities of Company, or any
rights in or to any rights under any stock options, warrants, or other
securities of the Company, other than pursuant to the terms of this Agreement
and the Purchase Agreement.
7.2. CONFIDENTIALITY. Each Stockholder acknowledges that the capital
structure of Company ("CAPITALIZATION INFORMATION") is confidential and
proprietary information, and that each Stockholder received the Capitalization
Information in confidence. Each Stockholder further agrees that the
Capitalization Information is the exclusive and confidential property of the
Company, and shall at all times be regarded, treated, and protected as such in
accordance with this Agreement. Except as set forth in this Section 7.2 and in
Sections 7.3 and 7.4, no Stockholder shall disclose, either during or after the
term of this Agreement, any of the Capitalization Information to any person or
entity, and will take all reasonable precautions to prevent inadvertent
disclosure of such Capitalization Information. Notwithstanding the foregoing,
each Stockholder may disclose the number of outstanding shares of the capital
stock of Company and the number and character of Registrable Securities held by
such Stockholder as necessary or expedient in connection with such Stockholder's
management of financial matters, including matters of taxation.
7.3. EXCLUSIONS FROM CONFIDENTIALITY. Notwithstanding Section 7.3, each
Stockholder is not restricted from disclosing Capitalization Information that:
(a) is publicly known as of the date of this Agreement, (b) becomes publicly
known through no wrongful act on
24
the part of Investor, or (c) is disclosed to the Stockholder by a third-party
under no legal obligation to keep such information confidential.
7.4. LEGAL OBLIGATION TO DISCLOSE. If any Stockholder becomes legally
obligated to disclose any Capitalization Information, such Stockholder shall
give the Company prompt written notice of that fact. No Stockholder shall
disclose any such Capitalization Information without first giving the Company 10
business days to consent to the disclosure or notify such Stockholder of
Company's intention to seek a protective order or other appropriate remedy;
provided, however, such Stockholder may disclose such Capitalization Information
on less than 10-days notice to the Company if ordered to do so by any duly
authorized state or federal governmental entity or court of law or equity. Each
Stockholder shall, at Company's expense, cooperate fully with Company in
connection with Company's efforts to obtain a protective order or other
appropriate remedy. In the event that Company is unable to obtain a protective
order or other appropriate remedy with respect to the Capitalization
Information, each Stockholder shall nevertheless use its reasonable best efforts
to have the Capitalization Information so required to be disclosed to be treated
confidentially.
7.5. SCOPE OF COVENANTS. Each Stockholder's obligations under this ARTICLE
6 of this Agreement will terminate on and be of no further force or effect
immediately prior to the effectiveness of the registration statement for a
Qualified IPO.
ARTICLE 8
VOTING, COMPANY BOARD AND REVENUE GENERATION
8.1. BOARD OF DIRECTORS. Each Stockholder hereby agrees that such
Stockholder shall, unless such requirement is waived in writing by each other
Stockholder, vote, or cause to be voted, all voting securities of the Company
over which such Stockholder has the power to vote or direct the voting, and
shall take all other reasonably necessary actions within such Stockholder's
control (whether in such Stockholder's capacity as a stockholder, director,
member of a board committee or officer of the Company or otherwise, and
including, without limitation, attendance at meetings in person or by proxy for
purposes of obtaining a quorum and execution of written consents in lieu of
meetings), and the Company shall take all reasonably necessary actions within
its control (including, without limitation, calling special board and
stockholder meetings), so that the by-laws (or similar operating agreement) of
the Company shall:
(a) establish the number of members for the board of directors of the
Company (the "BOARD OF DIRECTORS") at six (6) members; and
(b) provide that each director (a "DIRECTOR") shall be entitled to
cast one vote with respect to each matter brought before the Board of Directors
(or any committee of the Board of Directors) for vote;
(c) each of eChinaCash and Linktone shall be entitled to elect three
(3) Directors (and to elect their replacements, as applicable);
25
(d) provide that a quorum of the Board of Directors shall consist of 3
Directors, at least one of whom shall be a Director appointed by eChinaCash and
one of whom shall be a Director appointed by Linktone;
(e) provide that the Company will be managed by the following
officers: a General Manager, a Chief Financial Officer, a Chief Executive Office
and a Secretary-Treasurer;
(f) Linktone shall be entitled to appoint individuals to elect and to
fill (and replace as necessary) the positions of General Manager and Chief
Financial Officer; and
(g) eChinaCash shall be entitled to elect and to fill (and replace as
necessary) the positions of Chairman, Chief Executive Officer and Secretary
-Treasurer.
In the event of any deadlock on a matter to be brought between the Board of
Directors, the Chairman shall have the casting vote on the Board of Directors.
No action by the Board of Directors shall be valid without the approval (if such
action is taken at a meeting of the Board of Directors) or written consent (if
such action is taken by way of a written consent of the Board of Directors) of
at least one (1) Director elected by eChinaCash and at least one (1) Director
elected by Linktone.
8.2. REVENUE GENERATION. Each Stockholder hereby agrees that such
Stockholder shall, unless such requirement is waived in writing by Stockholders
owning more than 75% of the Shares, vote, or cause to be voted, all voting
securities of the Company over which such Stockholder has the power to vote or
direct the voting, and shall take all other reasonably necessary actions within
such Stockholder's control (whether in such Stockholder's capacity as a
stockholder, director, member of a board committee or officer of the Company or
otherwise, and including, without limitation, attendance at meetings in person
or by proxy for purposes of obtaining a quorum and execution of written consents
in lieu of meetings), and specifically including such actions by such
Stockholder in the capacity as an officer, director, stockholder or otherwise of
eChinaCash or Linktone, and the Company shall take all reasonably necessary
actions within its control (including, without limitation, calling special board
and stockholder meetings), so that:
(a) eChinaCash shall cause its subsidiary, Beijing eChinaCash Network
and Technology Co., Ltd., to grant to the Company the right to advertise on at
least two-hundred twenty-four (224) light boxes owned or leased by Beijing
eChinaCash Network and Technology Co., Ltd., located at the one-hundred
twenty-one (121) Sinopec National Petroleum gas stations described on Exhibit B
in and around Shanghai, People's Republic of China.
(b) to the extent permitted by law or agreement, eChinaCash and/or its
subsidiary, Beijing eChinaCash Network and Technology Co., Ltd., shall provide
the Company with reasonable access to its database of customer information for
use in connection with the Company's marketing efforts (subject to the execution
of appropriate confidentiality agreements); provided, however, that eChinaCash
and/or its subsidiary, Beijing eChinaCash Network and Technology Co., Ltd. shall
maintain 100% of the ownership and control of such database and the use thereof.
26
(c) the Company shall produce, publish, operate and manage the
magazine entitled "Car and Style", in the manner that it is currently published
a minimum of once per two (2) months for distribution to members of the SA Club,
in connection with a customer loyalty program of Sinopec pursuant to an
agreement between Beijing eChinaCash Network and Technology Co., Ltd. and
Sinopec, and shall be entitled to receive all advertising revenues generated
from, and shall be responsible for all obligations (including without limitation
publishing costs) relating to, the production, distribution, operation and
management of such magazine; and
(d) the Company and eChinacash (and/or Beijing eChinaCash Network and
Technology Co., Ltd.) shall enter into reasonable agreements to evidence the
foregoing to the extent deemed necessary or appropriate by eChinaCash, Linktone
and the Company.
8.3. CHANGE OF CONTROL. Each Stockholder hereby agrees to vote or cause to
be voted, all voting securities of the Company over which such Stockholder has
the power to vote or direct the voting, in favor of a transaction for the merger
or sale of the Company or all or substantially all of its assets which has been
approved by a majority of the members of the Board of Directors, provided, that
all Stockholders receive the same form and rate of consideration after giving
effect to any applicable liquidation or other preferences in the Certificate of
Incorporation.
8.4. TERMINATION OF VOTING PROVISIONS. The provisions set forth in ARTICLE
7 shall terminate on and be of no further force or effect immediately prior to
the effectiveness of the registration statement for a Qualified IPO.
ARTICLE 9
LIQUIDATION, DISSOLUTION AND WINDING-UP
9.1. DISTRIBUTION. Upon the occurrence of any Liquidation Event (as defined
below), the Stockholders shall cause the assets of the Company available for
distribution among stockholders of the Company to be distributed pro rata among
the stockholders of the Company.
9.2. LIQUIDATION EVENT. For purposes of the above Section 9.1, any of the
following events, in one or a series of transactions, as applicable, shall be a
"LIQUIDATION EVENT": (i) any liquidation, dissolution or winding up of the
Company, either voluntary or involuntary, (ii) a sale, conveyance or disposition
of all or substantially all of the assets of the Company, (iii) a consolidation
or merger of the Company with or into any other company or companies in which
the existing Stockholders of the Company immediately prior to such transactions
do not retain a majority of the voting power in the surviving company, or (iv) a
sale of a majority of the outstanding voting securities of the Company to a
Person other than the Stockholders.
9.3. REPURCHASE OF COMMON STOCK. Notwithstanding any other provision of
this Section 9, the Company may at any time, out of funds legally available
therefor, repurchase Common Stock of the Company issued to or held by employees,
officers or consultants of the Company or its subsidiaries upon termination of
their employment or services, pursuant to any
27
bona fide agreement providing for such right of repurchase, whether or not
dividends on the preferred shares (if any) shall have been declared.
9.4. DISTRIBUTION OF ASSETS OR SECURITIES. In the event the Company
proposes to distribute assets other than cash in connection with any
liquidation, dissolution or winding up of the Company, the value of the assets
to be distributed to the Stockholders shall be determined in good faith by the
liquidator (or, in the case of any proposed distribution in connection with a
transaction which is a deemed liquidation hereunder, by the Board of Directors).
Any securities not subject to restrictions on free marketability shall be valued
as follows:
(a) If traded on a national securities exchange, the value shall be
deemed to be the average of the security's closing prices on such exchange over
the thirty (30) day ending one (1) day prior to the distribution;
(b) If actively traded over the counter, the value shall be deemed to
be the average of the closing bid prices over the thirty (30) day period ending
three (3) days prior to the distribution; and
(c) If there is no active public market, the value shall be the fair
market value thereof as determined in good faith by the liquidator (or, in the
case of any proposed distribution in connection with a transaction which is a
deemed liquidation hereunder, by the Board).
9.5. VALUATION OF SECURITIES. The method of valuation of securities subject
to restrictions on free marketability shall be adjusted to make an appropriate
discount from the market value determined in Section 9.4 to reflect the fair
market value thereof as determined in good faith by the liquidator (or, in the
case of any proposed distribution in connection with a transaction which is a
deemed liquidation hereunder, by the Board of Directors).
ARTICLE 10
AMENDMENT AND TERMINATION
10.1. AMENDMENT AND WAIVER. Neither this Agreement nor any term hereof may
be amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought; provided, that, holders of more than 75% of
the outstanding Shares may waive or amend, on behalf of all Stockholders and
other holders of Shares, any provisions hereof benefiting the Stockholders so
long as the effect thereof will be that all such Stockholders and other holders
of Shares will be treated equally.
10.2. TERMINATION OF CERTAIN PROVISIONS. The provisions of ARTICLE 4,
ARTICLE 5, ARTICLE 6, ARTICLE 7, ARTICLE 7 and ARTICLE 8 will terminate upon the
consummation of a Qualified Public Offering. The provisions of ARTICLE 2 (except
with respect to the indemnification provisions of Section 2.10, which shall
survive) will terminate upon the earlier of (i) the date on which all
Registrable Securities have been sold pursuant to one
28
or more Public Sales, and (ii) the date on which all Registrable Securities may
be sold without volume or other restrictions or limitations pursuant to Rule 144
or under the Securities Act.
10.3. TERMINATION OF AGREEMENT. This Agreement will terminate in respect of
all Stockholders with the written consent of the Company and each Stockholder,
or upon the dissolution, liquidation or winding-up of the Company (except with
respect to the indemnification provisions of Section 2.10, which shall survive).
10.4. TERMINATION AS TO A PARTY. Any Person who ceases to hold any
Securities shall cease to be a Stockholder and shall have no further rights or
obligations under this Agreement (except with respect to the indemnification
provisions of Section 2.10, which shall survive).
ARTICLE 11
MISCELLANEOUS
11.1. GOVERNING LAW. This Agreement and all disputes or controversies
arising out of or relating to this Agreement or the transactions contemplated
hereby shall be governed by, and construed in accordance with, the internal laws
of the State of California, without regard to the conflicts of laws principles
that would apply the laws of any other jurisdiction.
11.2. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
11.3. ARBITRATION. Any dispute, claim or controversy arising out of or
relating to this Agreement or the breach, termination, enforcement,
interpretation or validity thereof, including the determination of the scope or
applicability of this agreement to arbitrate, shall be determined by arbitration
(the "AWARD") in California by one arbitrator. The arbitration shall be
administered by JAMS pursuant to its Streamlined Arbitration Rules and
Procedures. The arbitrator may, in the Award, allocate all or part of the costs
of the arbitration, including the fees of the arbitrator and the reasonable
attorneys' fees of the prevailing party. Judgment on the Award may be entered in
any court having jurisdiction. This clause shall not preclude parties from
seeking provisional remedies in aid of arbitration from a court of appropriate
jurisdiction.
11.4. THIRD PARTIES; SUCCESSORS AND ASSIGNS. Except as expressly provided
herein, this Agreement shall be binding upon and inure solely to the benefit of
each party and their respective successors assigns, heirs, executors and
administrators, and nothing in this Agreement, express or implied, is intended
to or shall confer upon any other person any legal or equitable right, benefit
or remedy of any nature under or by reason of this Agreement.
11.5. ENTIRE AGREEMENT. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement among
the parties with regard to the subjects hereof and thereof. For purposes of this
Section 11.5, the addition of additional holders of capital stock of the Company
as parties to this Agreement after the date hereof
29
pursuant to a Joinder Agreement shall not constitute an amendment of this
Agreement and shall not require the consent of any Stockholder.
11.6. RIGHTS OF HOLDERS. Each Stockholder shall have the absolute right to
exercise or refrain from exercising any right or rights that such holder may
have by reason of this Agreement, including, without limitation, the right to
consent to the waiver or modification of any obligation under this Agreement,
and such holder shall not incur any liability to any other holder of any
securities of the Company as a result of exercising or refraining from
exercising any such right or rights.
11.7. NOTICES, ETC. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or if by facsimile, upon written confirmation of receipt
by facsimile, e-mail or otherwise, (b) on the first business day following the
date of dispatch if delivered by a recognized next-day courier service or (c) on
the earlier of confirmed receipt or the fifth business day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder to the parties shall be delivered to the
addresses set forth below:
if to the Company or Parent, to:
To the Company or Parent:
eChinaCash, Inc.
0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attn: Xxxxxx Xxxx
Phone: (000) 000-0000
Email: xxxxx@xxxxxxxxxxx.xxx
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
Email: xxxxxx@xxxxxxxxxx.xxx
30
if to Linktone, to:
To Linktone:
Xxxxx Xxxx
Chief Financial Officer
Linktone Ltd.
0/X Xxxxxxx Xxxxx
#000 Xxxxxxx Xxxx Xxxx
Xxxxxxxx 200001, PRC
Fax: 00 (00) 00000000
Email: xxxxx.xxxx@xxxxxxxx.xxx
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
Suite 3501, Bund Center
Xx. 000, Xxx Xx Xxxx Xxxx
Xxxxxxxx 200002, PRC
Attn: Xxxxxxx Xxxxx
Fax: 00 (00) 0000 0000
Email: xxxxxx@xxxx.xxx
if to any other Person, at the address, facsimile number of email
address set forth on the signature pages or exhibits hereto, or at such other
address, facsimile number or email address as such party shall have furnished in
writing.
11.8. DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party hereto upon any breach or default under
this Agreement shall impair any such right, power or remedy of such party, nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing or as provided in this Agreement. All remedies, either under this
Agreement or by law or otherwise afforded to any party, shall be cumulative and
not alternative.
11.9. COUNTERPARTS, FACSIMILE. This Agreement may be executed in any number
of counterparts and by facsimile, each of which may be executed by fewer than
all of the parties hereto, each of which shall be enforceable against the
parties actually executing such counterparts, and all of which together shall
constitute one instrument.
11.10. SEVERABILITY OF THIS AGREEMENT. In the event that any provision of
this Agreement becomes or is declared by a court of competent jurisdiction to be
illegal,
31
unenforceable or void, this Agreement shall continue in full force and effect
without said provision and the parties agree to replace such provision with a
valid and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such provisions; provided, that, no
such severability will be effective against a party if it materially and
adversely changes the economic benefits of this Agreement to such party.
11.11. HEADINGS, ETC. The headings of the Sections of this Agreement, and
the headings on the signature pages of this Agreement categorizing the
signatories hereto, have been inserted for convenience of reference only, are
not to be considered a part hereof, and shall in no way modify or restrict any
of the terms and provisions hereof.
[signature pages follow]
32
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first written above.
THE COMPANY:
ECHINAMOBILE LIMITED,
a limited liability company incorporated
under the laws of the British Virgin
Islands
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE STOCKHOLDERS:
ECHINACASH, INC.,
a Delaware corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
LINKTONE LTD.,
an exempted company with limited
liability incorporated under the laws of
the Cayman Islands
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Signature Page to Stockholder Agreement]
EXHIBIT A - JOINDER AGREEMENT
Form of Joinder Agreement
The undersigned hereby agrees, effective as of the date hereof, to become a
party to that certain Stockholders Agreement dated as of April __, 2007, by and
among eChinaMobile Limited (the "Company") and the parties named therein and for
all purposes of the Agreement, the undersigned shall be included within the term
"Stockholder" (as defined in the Agreement). The address and facsimile number to
which notices may be sent to the undersigned is as follows:
[ADDRESS]
Facsimile No.____________________.
----------------------------------------
[NAME OF UNDERSIGNED]
EXHIBIT B
LIGHT BOXES
