SERIES C-1 PREFERRED SHARE PURCHASE AGREEMENT DATED THIS 12th DAY OF NOVEMBER, 2010 BY AND AMONG NETQIN MOBILE INC. (as “Company”) BEIJING NETQIN TECHNOLOGY CO., LTD (as “Domestic Enterprise”) NETQIN MOBILE (BEIJING) TECHNOLOGY CO., LTD (as “PRC...
Exhibit
4.7
DATED THIS 12th DAY OF NOVEMBER, 2010
BY AND AMONG
(as “Company”)
BEIJING NETQIN TECHNOLOGY CO., LTD
(as “Domestic Enterprise”)
NETQIN MOBILE (BEIJING) TECHNOLOGY CO., LTD
(as “PRC Subsidiary”)
the Persons listed on Exhibit A
(as “Investors”)
the
Persons listed on Exhibit B
(as “Founders”)
AND
RPL HOLDINGS LIMITED
(as “Founders’ HoldCo”)
This
SERIES C-1 PREFERRED SHARE PURCHASE AGREEMENT (the “Agreement”) is made on the
12th day of November, 2010 by and among NETQIN MOBILE INC, an exempted company
incorporated and existing under the laws of the Cayman Islands (the “Company”), the purchasers of
Series C-1 Preferred Shares of the Company listed on Exhibit A attached to this Agreement
(each an “Investor” and together the “Investors”), the persons listed on Exhibit B
attached to this Agreement (each a “Founder” and together the “Founders”), RPL Holdings Limited
(the “Founders’ HoldCo”), Beijing Netqin Techonology Co., Ltd. (
), a limited
liability company organized and existing under the laws of the People’s Republic of China (the
“PRC”) (the “Domestic Enterprise”), NetQin Mobile (Beijing) Technology Co., Ltd. (
),
a wholly-foreign owned enterprise organized and existing under the laws of the PRC (the
“PRC Subsidiary”, collectively with the Company, the Domestic Enterprise and the Founders’ HoldCo,
the “Group Companies” and each, a “Group Company”).
), a limited
liability company organized and existing under the laws of the People’s Republic of China (the
“PRC”) (the “Domestic Enterprise”), NetQin Mobile (Beijing) Technology Co., Ltd. (),
a wholly-foreign owned enterprise organized and existing under the laws of the PRC (the
“PRC Subsidiary”, collectively with the Company, the Domestic Enterprise and the Founders’ HoldCo,
the “Group Companies” and each, a “Group Company”).
Each of the Company, the Investors, the Founders, the Founders’ HoldCo, the Domestic
Enterprise and the PRC Subsidiary shall be referred to individually as a “Party” and collectively
as the “Parties”.
RECITALS
A. The Company is an exempted limited liability company established under the laws of the
Cayman Islands on March 14, 2007;
B. The Domestic Enterprise is a limited liability company established by the Founders under
the laws of the PRC with its registered address at Xxxx 0000,
Xxxxx X, Xxxxxxxx Xx.0,
Xxxxxxxxxxxx Software Park, Haidian District, Beijing, the PRC (
);
);
C. The Company is the 100% owner of the PRC Subsidiary, which is a wholly
foreign-owned enterprise established under the laws of the PRC with its registered address at Xxxx
0000-0, Xxxxx X, Xxxxxxxx Xx.0, Xxxxxxxxxxxx Software Park,
Haidian District, Beijing, the PRC
(
);
(
);
D. The Company desires to issue and sell to the Investors and the Investors desire to
purchase from the Company, the respective numbers of Series C-1 preferred shares, par value
US$0.0001 per share, of the Company (the “Series C-1 Shares”) as set forth opposite their names
on Exhibit A hereto, on the terms and conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1.
AGREEMENT TO PURCHASE AND ISSUE SERIES C-1 SHARES
1.1 Authorization. As of the Initial Closing (as defined below), the Company
will have authorized the issuance, pursuant to the terms and conditions of this Agreement, of
16,773,301 Series C-1 Shares, having the rights, preferences, privileges and restrictions as set
forth in the Fourth Amended and Restated Memorandum and Articles of Association of the Company
attached hereto as Exhibit C (the “Restated Articles”) and shall duly adopt the Restated
Articles on or before the Closing (as defined below).
1.2
Agreement to Subscribe for and Allot Series C-1 Shares. Subject to the terms and
conditions hereof, the Company hereby agrees to issue to each Investor, and each such Investor
hereby agrees to subscribe from the Company the number of
Series C-1 Shares as set forth opposite
the name of such Investor in Exhibit A hereto for the subscription price of US$0.8418 per
share (the “Subscription Price”), amounting to an
aggregate of up to 16,773,301 Series C-1 Shares
and an aggregate subscription price of up to US$14,119,764.78.
1.3
Initial Closing; Delivery. Subject to the terms and conditions of this Agreement,
the purchase, sale and issuance of the Series C-1 Shares shall take place at one or more closings
(each of which is referred to in this Agreement as a “Closing”). The initial closing (the “Initial
Closing”) shall take place on November 12, 2010 at the offices of the Company, or at such other
place as shall be designated by the Company.
If
less than all of the Series C-1 Shares are sold and issued at the Initial Closing, then,
subject to the terms and conditions of this Agreement, the Company may sell and issue at a
subsequent closing (the “Subsequent Closing”), within sixty (60) days after the Initial Closing, up
to the balance of the unissued Series C-1 Shares to such persons or entities as may be approved by
the Company and a majority of the Investors purchasing shares at the Initial Closing. Any such sale
and issuance in the Subsequent Closing shall be on the same terms and conditions as those contained
herein, and such persons or entities shall, upon execution and delivery of the relevant signature
pages, become parties to, and be bound by, this Agreement and the Restated Shareholders Agreement
(as defined below) without the need for an amendment to any of the Transaction Agreements except to
add such person’s or entity’s name to the appropriate exhibit to such agreement, and shall have the
rights and obligations hereunder and thereunder, in each case as of the date of the Subsequent
Closing. The Subsequent Closing shall take place at such date, time and place as shall be approved
by the Company and a majority of the Investors purchasing shares at the Initial Closing.
Immediately after each Closing, the Schedule of Investors will be amended to list the
Investors purchasing Series C-1 Shares hereunder and the number
of Series C-1 Shares issued to the
Investors hereunder at each such Closing. The Company will furnish to the Investors copies of the
amendments to the Schedule of Investors referred to in the preceding sentence.
At the Closing, the Company and each Investor for such Closing will execute counterpart
signature pages to the Transaction Agreements and the Company shall deliver (i) a certificate
registered in such Investor’s name representing the number of Purchased Shares that such Investor
is purchasing as of such Closing against payment of the Subscription Price therefor, as set forth
in the column designated “Aggregate Subscription Price” opposite such Investor’s name on
Exhibit A and (ii) a copy of the Company’s register of members, certified by a director of
the Company as true and complete as of the date of such Closing, updated to
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show each Investor as the holder of its respective number of the Purchased Shares as of the
Closing.
At or before each Closing, each Investor shall deliver to the Company the aggregate purchase
price of the Series C-1 Shares purchased, which is set forth in the column designated “Aggregate
Subscription Price” opposite such Investor’s name in Exhibit A hereto. The payment shall
be made in the form of a cashier’s check or wire transfer.
2. REPRESENTATIONS AND WARRANTIES OF THE COVENANTORS
The Group Companies and the Founders (the “Covenantors”, and each the “Covenantor”), jointly
and severally, hereby represent and warrant to each Investor, as of the date hereof, the date of
the Closing, as follows. In this Agreement, any reference to a party’s “knowledge” means such
party’s actual knowledge after due and diligent inquiries of officers and directors of such party
reasonably believed to have knowledge of the matter in question.
2.1 Organization, Standing and Qualification. Each of the Group Companies is
duly organized, validly existing and in good standing (or equivalent status in the relevant
jurisdiction) under, and by virtue of, the laws of the place of its incorporation or establishment
and has all requisite power and authority to own its properties and assets and to carry on its
business as now conducted, and to perform each of its obligations hereunder and under any agreement
contemplated hereunder to which it is a party. Each of the Group Companies is qualified to do
business and is in good standing (or equivalent status in the relevant jurisdiction) in each
relevant jurisdiction, where failure to be so qualified would have a material adverse effect on its
financial conditions, assets and properties, results of operation, business (as presently
conducted) or prospects (a “Material Adverse Effect”).
2.2 Capitalization. Immediately prior to the Initial Closing, the authorized share
capital of the Company is US$36,463.7272, consisting of the following:
(a) Common Shares. A total of 250,000,000 authorized Common Shares, of which
50,352,941 Common Shares are issued and outstanding.
(b) Series A Shares. A total of 33,250,000 authorized Series A preferred shares, par
value US$0.0001 per share, of the Company (the “Series A Shares”), all of which are issued and
outstanding. The rights, privileges and preference of the Series A Shares are as stated in the
Restated Articles and as provided by the Companies Law (2009 Revision) of the Cayman Islands.
(c) Series B Shares. A total of 34,926,471 authorized Series B preferred shares, par
value US$0.0001 per share, of the Company (the “Series B Shares”), all of which are issued and
outstanding. The rights, privileges and preference of the Series B Shares are as stated in the
Restated Articles and as provided by the Companies Law (2009 Revision) of the Cayman Islands.
(d) Series C Shares. A total of 29,687,500 authorized Series C preferred shares, par
value US$0.0001, of the Company (the “Series C Shares”), all of which are issued and outstanding.
The rights, privileges and preference of the Series C Shares are as stated in the Restated Articles
and as provided by the Companies Law (2009 Revision) of the Cayman Islands.
3
(e)
Series C-1 Shares. A total of 16,773,301 authorized
Series C-1 Shares, none
of which are issued and outstanding. The rights, privileges and
preference of the Series C-1 Shares
are as stated in the Restated Articles and as provided by the Companies Law (2009 Revision) of the
Cayman Islands.
(f) The Purchased Shares, when issued, sold and delivered in accordance with the terms of this
Agreement, will be duly and validly issued, fully paid and nonassessable. The Common Shares
issuable upon conversion of the Series C-1 Shares (the “Conversion Shares”) have been duly and
validly reserved for issuance and, upon issuance in accordance with the terms of the Restated
Articles, will be duly and validly issued, fully paid and nonassessable.
(g) All of the outstanding shares of the Company have been duly and validly issued, fully paid
and nonassessable, and all outstanding shares, options, warrants and other securities of the
Company have been issued in full compliance with the requirements of all applicable securities laws
and regulations, including the registration and prospectus delivery requirements of the United
States Securities Act of 1933, as amended (the “Securities Act”), or in compliance with applicable
exemptions therefrom, all other provisions of applicable securities laws and regulations, and the
“Notice Regarding Certain Administrative Measures on Financing and Inbound Investments by PRC
Residents Through Offshore Special Purpose Vehicles”, effective as of November 1, 2005 (the
“Circular 75”) issued by the State Administration of
Foreign Exchange of the PRC (the “SAFE”) on
October 21, 2005.
(h) Options, Warrants, Reserved Shares. Except for (i) the conversion privileges of
the Series A Shares, Series B Shares, Series C Shares
and Series C-1 Shares, (ii) up to 26,415,442
Common Shares reserved for issuance pursuant to the ESOP (as defined in Section 5.7),
there are no options, warrants, conversion privileges or other rights, or agreements with respect
to the issuance thereof, presently outstanding to purchase any of the shares of the Company.
Except as set forth in the Restated Shareholders Agreement, no shares of the Company’s outstanding
share capital, or shares issuable upon exercise or exchange of any outstanding options or other
shares issuable by the Company, are subject to any preemptive rights, rights of first refusal or
other rights to purchase such shares (whether in favor of the Company or any other person).
(i) Domestic Enterprise Registered Capital. The registered capital of the Domestic
Enterprise is RMB10,000,000, which has been contributed in full. There are no options, warrants,
conversion privileges or other rights, or agreements with respect to the issuance thereof,
presently outstanding to purchase any of the equity interests of the Domestic Enterprise and no
outstanding equity interests of the Domestic Enterprise are subject to any encumbrance, preemptive
rights, rights of first refusal or other rights to purchase such equity interests (whether in
favor of the Domestic Enterprise or any other person).
(j) PRC Subsidiary Registered Capital. The registered capital of the PRC Subsidiary
is US$14,700,000, which has been contributed in full. The Company owns beneficially and of record
one hundred percent 100% of the equity interest of the PRC Subsidiary. There are no options,
warrants, conversion privileges or other rights, or agreements with respect to the issuance
thereof, presently outstanding to purchase any of the equity interests of the PRC Subsidiary and
no outstanding equity interests of the PRC Subsidiary are subject to any encumbrance, preemptive
rights, rights of first refusal or other
4
rights to purchase such equity interests (whether in favor of the PRC Subsidiary or any other
person).
(k) Founders’ HoldCo. The Founders own beneficially and of record one hundred
percent (100%) of the equity interest of the Founders’ Holdco.
2.3 Subsidiaries. Except for the Company’s ownership of the PRC Subsidiary and the
contractual control of the Domestic Enterprise by the PRC Subsidiary, no Group Company presently
owns or controls, directly or indirectly, any interest in any other corporation, partnership,
trust, joint venture, association, or other entity. No member of the Group Companies is a
participant in any joint venture, partnership or similar arrangement.
2.4 Due Authorization. All corporate action on the part of each Group Company, its
officers, directors and equity interest holders necessary for the authorization, execution and
delivery of, and the performance of its obligations under, this Agreement, the Restated
Shareholders Agreement and any other agreements to which it is a party and those which is
contemplated hereunder (collectively, the “Transaction Agreements”) will have been obtained prior
to the Closing. Each of this Agreement and the other Transaction Agreements, upon execution by each
Covenantor, will be a valid and binding obligation of the such Covenantor enforceable against such
Covenantor in accordance with their respective terms, subject, as to enforcement of remedies, to
applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’
rights generally and to general equitable principles.
2.5 Financial Statements. Each Group Company has delivered to the Investors its
consolidated financial statements (including balance sheets and income statements) for the twelve
(12) consecutive months period ending September 30th, 2010 (the foregoing financial
statements and any notes thereto are hereinafter referred to as the “Financial Statements”, and
September 30th, 2010, the “Balance Sheet Date”). Such Financial Statements (a) are in
accordance with the books and records of such Group Company, (b) are true, correct and complete and
present fairly the financial condition of such Group Company at the date or dates therein indicated
and the results of operations for the period or periods therein specified, and (c) have been
prepared in accordance with the generally accepted accounting principles of the PRC (“PRC GAAP”)
applied on a consistent basis, except as to the unaudited consolidated financial statements, for
the omission of notes thereto and normal year-end audit adjustments. Specifically, but not by way
of limitation, the respective balance sheets of the Financial Statements disclose all of such Group
Company’s material debts, liabilities and obligations of any nature, whether due or to become due,
as of their respective dates (including, without limitation, absolute liabilities, accrued
liabilities, and contingent liabilities) to the extent such debts, liabilities and obligations are
required to be disclosed in accordance with the PRC GAAP. Each Group Company has good and
marketable title to all assets set forth on the balance sheets of the Financial Statements, except
for such assets as have been spent, sold or transferred in the ordinary course of business since
the Balance Sheet Date. Except as disclosed in the Financial Statements, none of the Group
Companies or any Founder is a guarantor or indemnitor of any indebtedness of any other person or
entity. Each Group Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with generally accepted accounting principles.
2.6 Title to Properties and Assets. Each Group Company has good and marketable
title to its properties and assets subject to no mortgage, pledge, lien, encumbrance,
5
security interest or charge of any kind. With respect to the property and assets it leases, each
Group Company is in compliance with such leases and holds valid leasehold interests in such assets
free of any liens, encumbrances, security interests or claims of any party other than the lessors
of such property and assets.
2.7 Status of Proprietary Assets. For purpose of this Agreement, (i) “Proprietary
Assets” shall mean all patents, patent applications, trademarks, service marks, trade names, domain
names, copyrights, copyright registrations and applications and all other rights corresponding
thereto, inventions, databases and all rights therein, all computer software including all source
code, object code, firmware, development tools, files, records and data, including all media on
which any of the foregoing is stored, formulas, designs, trade secrets, confidential and
proprietary information, proprietary rights, know-how and processes of a company, and all
documentation related to any of the foregoing; and (ii) “Registered Intellectual Property” means
all Proprietary Assets of the Group Companies, wherever located, that is the subject of an
application, certificate, filing, registration or other document issued by, filed with or recorded
by any government authority.
(a) Each Group Company has taken all commercially reasonable security measures to protect the
secrecy, confidentiality, and value of all its Proprietary Assets, including the Registered
Intellectual Property, required to conduct its business.
(b) None of the Group Companies has received any communications (oral or written) alleging
that any of the Group Companies has violated or, by conducting its business (including as proposed
to be conducted by such Group Companies), would violate any of the intellectual property rights of
any other person or entity.
(c) Each Group Company has obtained and possesses valid licenses to use all of the software
programs present on the computers and other software-enabled electronic devices that it owns or
leases or that it has otherwise provided to its employees for their use in connection with the
business of such Group Company.
(d) Each Founder, employee and consultant of any Group Company has assigned to a Group Company
all intellectual property rights he or she owns that are related to the business as now conducted
or as presently proposed to be conducted by any Group Company, and such intellectual property
rights will remain with the Group Company in the event of the termination of employment and/or
consultation relationship of such Founder, employee and/or consultant with the Group Company.
(e) Neither the execution nor delivery of this Agreement and any other Transaction Agreement,
nor the carrying on of the business of any Group Company by its employees, nor the conduct of the
business of the Group Companies as proposed, will conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract, covenant or instrument
under which the any Group Company or any of such employees is now obligated.
2.8
Compliance with Laws; Consents and Permits.
(a) None of the Group Companies has conducted any activity in material violation of any
applicable statute, rule, regulation, order or restriction of any domestic or foreign government
or any instrumentality or agency thereof in respect of the conduct of its business as now
conducted and as presently proposed to be conducted or the ownership of its
6
properties. All consents, permits, approvals, orders, authorizations or registrations,
qualifications, designations, declarations or filings by or with any governmental authority and any
third party which are required to be obtained or made by each Covenantor in connection with the
consummation of the transactions contemplated hereunder shall have been obtained or made prior to
and be effective as of the Closing.
(b) Each Group Company has all material approvals, permits, licenses and any similar authority
necessary for the conduct of its business as currently conducted, the absence of which would be
reasonably likely to have a Material Adverse Effect. None of the Group Companies is in default
under any of such approvals, permits, licenses or other similar authority, nor is it in receipt of
any letter or notice from any relevant authority notifying revocation of any such approvals,
permits or licenses issued to it for non-compliance or the need for compliance or remedial actions
in respect of the activities carried out directly or indirectly by such Group Company. In respect
of approvals, licenses or permits requisite for the conduct of any part of the business of the
Domestic Enterprise or the PRC Subsidiary which are subject to periodic renewal, none of the
Covenantors has any reason to believe that such requisite renewals will not be granted by the
relevant PRC authorities. The Founders have obtained any and all necessary approvals and
authorizations from relevant governmental or regulatory authority and have fulfilled any and all
necessary registration requirements with relevant governmental or regulatory authority with respect
to their investments in the Company.
7
(c) No Group Company has received any written notice from any Governmental Authority
regarding (i) any actual, alleged or likely material violation of, or material failure to comply
with, any applicable law, or (ii) any actual, alleged or likely material obligation on the part of
any Group Company to undertake, or to bear all or any portion of the cost of, any remedial action
of any nature.
(d) There are no Actions or claims against any Group Company alleging a violation of
applicable law regarding bribery, kickback or similar unlawful payments made to any public official
by the Company or any Group Company, or any facts or circumstances which could reasonably be
expected to give rise to such Action or claims. Additionally, no Group Company, nor any director,
officer or employee, or any other person authorized by a Group Company to act for or on behalf of
such Group Company, has established or maintained any fund or assets in which any Group Company
shall have proprietary rights that have not been recorded in the books and records of such Group
Company.
(e) During the previous five (5) years, no Founder has been (i) subject to voluntary or
involuntary petition under any applicable bankruptcy laws or any applicable insolvency law or the
appointment of a manager, receiver, or similar officer by a court for his business or property;
(ii) convicted in a criminal proceeding or named as a subject of a pending criminal proceeding
(excluding traffic violations and other minor offences); (iii) subject to any order, judgment, or
decree (not subsequently reversed, suspended, or vacated) of any court of competent jurisdiction
permanently or temporarily enjoining him from engaging, or otherwise imposing limits or conditions
on his engagement in any securities, investment advisory, banking, insurance, or other type of
business or acting as an officer or director of a public company; or (iv) found by a court of
competent jurisdiction in a civil action or by any regulatory organization to have violated any
applicable securities, commodities or unfair trade practices law whatsoever, which such judgment
or finding has not been subsequently reversed, suspended, or vacated.
2.9 Compliance with Other Instruments and Agreements. None of the Group Companies is
in, nor shall the conduct of its business as currently or proposed to be conducted result in,
violation, breach or default of any term of its constitutional documents of the respective Group
Company which may include, as applicable, memoranda and articles of association, by-laws, joint
venture contracts, feasibility studies for the PRC Subsidiary or the Domestic Enterprise and the
like (the “Constitutional Documents”), or of any term or provision of any mortgage, indenture,
contract, agreement or instrument to which the Group Company is a party or by which it may be
bound, (the “Group Company Contracts”) or of any provision of any judgment, decree, order, statute,
rule or regulation applicable to or binding upon the Group Company. None of the activities,
agreements, commitments or rights of any Group Company is ultra xxxxx or unauthorized. The
execution, delivery and performance of and compliance with this Agreement, the Restated
Shareholders Agreement and other Transaction Agreements and the consummation of the transactions
contemplated hereby and thereby will not result in any such violation, breach or default, or be in
conflict with or constitute, with or without the passage of time or the giving of notice or both,
either a default under any Group Company’s Constitutional Documents or any Group Company Contract,
or, to the best knowledge of each Group Company and each Founder, a violation of any statutes,
laws, regulations or orders, or an event which results in the creation of any lien, charge or
encumbrance upon any asset of any Group Company.
8
2.10 Disclosure. Each Covenantor has fully provided the Investors with all the
information that the Investors have reasonably requested for deciding whether to purchase the
Purchased Shares and all information that each Group Company and the Founders believe is reasonably
necessary to enable the Investors to make such decision. No representation or warranty by the
Covenantors in this Agreement and no information or materials provided by the Covenantors to the
Investors in connection with the negotiation or execution of this Agreement or any agreement
contemplated hereby contains any untrue statement of a material fact, or omits to state any
material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances in which they are made, not misleading.
2.11 Registration Rights. Except as provided in the Restated Shareholders
Agreement, no Group Company has granted or agreed to grant any person or entity any registration
rights (including piggyback registration rights) with respect to, nor is the Company obliged to
list, any securities of a Group Company on any securities exchange. Except as contemplated under
this Agreement and the Restated Shareholders Agreement, there are no voting or similar agreements
which relate to any of the Group Companies’ securities.
2.12 Insurance. Each of the Group Companies has obtained and maintained business
interruption and other insurance consistent with industry practice.
2.13 Accounting. Each of the Group Companies maintains and will continue to maintain
a standard system of accounting established and administered in accordance with the relevant
accounting principle and will maintain a standard system of accounting established and administered
in conformity with PRC GAAP.
2.14 Tax Matters.
(a) There have been no examinations or audits of any tax returns or reports by any applicable
governmental agency. Each Group Company has duly filed all tax returns required to have been filed
by it and paid all taxes shown to be due on such returns. None of the Group Companies is subject to
any waivers of applicable statutes of limitations with respect to taxes for any year. Each Group
Company has duly withheld individual income taxes and adequately paid mandatory contributions to
the statutory welfare or social security funds on behalf of all its employees in material
compliance with the applicable regulations in each respective jurisdiction such that there shall be
no material default or underpayment in respect of individual income taxes and mandatory
contributions to the statutory social security funds. Since its formation, none of the Group
Companies has incurred any taxes, assessments or governmental charges other than in its ordinary
course of business and each Group Company has made adequate provisions on its books of account for
all taxes, assessments and governmental charges with respect to its business, properties and
operations for such period.
(b) No Group Company is, or will be immediately after Closing, a “Controlled Foreign
Corporation” (“CFC”) as defined in the Internal Revenue Code of 1986, as amended (or any successor
thereto) (the “Code”) with respect to the shares held by Investor. No Group Company is, or will
be immediately after Closing, a “passive foreign investment company” within the meaning of Section
1297 of the Code. Each Group Company shall take such actions, including making an election to be
treated as a corporation
9
or refraining from making an election to be treated as a partnership, as may be required to ensure
that at all times, each Group Company is treated as a corporation for United States federal income
tax purposes. In the event that a Investor’s interest in any Group Company is determined by
counsel or accountants for such Investor to be subject to the reporting requirements of either or
both of Sections 6038 and 6038B, each Group Company agrees, upon a request from such Investor, to
provide such information to such Investor as may be necessary to fulfill such Investor’s
obligations thereunder.
2.15 Interested Party Transactions.
(a) No Founder or officer or director of a Group Company or any Affiliate or Associate of any
such person has any agreement, understanding, proposed transaction with, or is indebted to, any
Group Company, nor is any Group Company indebted (or committed to make loans or extend or guarantee
credit) to any of them (other than for accrued salaries, reimbursable expenses or other standard
employee benefits). No Founder has any direct or indirect ownership interest in any firm or
corporation with which any of the Group Company is affiliated or with which any Group Company has a
business relationship, or any firm or corporation that competes with any Group Company, except that
any such Founder may have record ownership interest in the Company or own shares in publicly traded
companies that may compete with the Group Companies.
(b) No shareholder or officer or director of a Group Company or any Affiliate or Associate of
any such person has had, either directly or indirectly, a material interest in: (a) any person or
entity which purchases from or sells, licenses or furnishes to the a Group Company any goods,
property, intellectual or other property rights or services; or (b) any contract or agreement to
which a Group Company is a party or by which it may be bound or affected. For purpose of this
Agreement, an “Affiliate” shall mean (a) in relation to any individual, such individual’s spouse,
parents, children, siblings, mother-in-law and father-in-law and brothers- and sisters-in-law or
any entity controlled by the individual (and in the case of the Founders, whether by himself or
together with other Founders), where “control” shall mean the power to direct the management and
policies or appoint or remove members of the board of directors or any governing body of the
entity, directly or indirectly, whether through the ownership of voting securities, contract or
otherwise, and “controlled” shall be construed accordingly; (b) in relation to any legal person, a
company which is for the time being a holding company of such legal person, or a Subsidiary of such
legal person or of such holding company, and an “Associate” shall mean with respect to any person,
(1) a corporation or organization (other than the Group Companies) of which such person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10 percent or more of any
class of equity securities, (2) any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a similar capacity, or (3)
any relative or spouse of such person, or any relative of such spouse, who has the same home as
such person.
2.16 Minute Books. The internal records of each Group Company contain a complete
summary of all material meetings and actions taken by directors and equity interest holders of such
Group Company since its time of formation, and reflect all transactions referred to in such minutes
accurately in all material respects.
2.17 Government Filings.
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(a) All filings and registrations with the PRC authorities required in respect of the Domestic
Enterprise and the PRC Subsidiary and their respective operations, including but not limited to the
registrations with the State Administration of Industry and Commerce, the State Administration of
Foreign Exchange, the Ministry of Information Industry, tax bureau, customs authorities,
product registration authorities, and labor authorities have been duly completed in accordance
with the relevant rules and regulations.
(b) The registered capital of the Domestic Enterprise and the PRC Subsidiary has been fully
paid up in accordance with the schedule of payment stipulated in its respective articles of
association, approval document, certificate of approval and legal person business license
(hereinafter referred to as the “Establishment Documents”) and in compliance with applicable PRC
laws and regulations, and there is no outstanding capital contribution commitment.
(c) The Establishment Document of the Domestic Enterprise and the PRC Subsidiary have been
duly approved in accordance with the laws of the PRC and are valid and enforceable. The business
scope specified in the Establishment Documents of the Domestic Enterprise and the PRC Subsidiary
complies with the requirements of all applicable PRC laws. The operation and conduct of the
business by and the term of operation of the Domestic Enterprise and the PRC Subsidiary in
accordance with the Establishment Documents is in compliance with the applicable PRC laws.
(d) Each of the Domestic Enterprise and the PRC Subsidiary has passed its annual inspection by
the relevant governmental authorities for its operation in the last three years (where applicable),
and the relevant administration for industry and commerce has affixed an annual inspection chop on
its business license.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor severally, but not jointly, hereby represents and warrants to the
Company in respect of itself, as of the date hereof and the Closing hereunder, as follows:
3.1 Authorization. The Investor has all requisite power, authority and capacity to
enter into this Agreement, and to perform its obligations under this Agreement. This Agreement has
been duly authorized, executed and delivered by the Investor. This Agreement, when executed and
delivered by the Investor, will constitute valid and legally binding obligations of the Investor,
subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors’ rights generally and to general equitable
principles.
3.2
Purchase for Own Account. The Series C-1 Shares and the Conversion Shares will be
acquired by the Investor for its own account, not as a nominee or agent, and not with a view to or
in connection with the sale or distribution of any part thereof.
3.3
Exempt from Registration; Restricted Securities. The Investor understands that
the Purchased Shares and the Conversion Shares will not, when issued, be registered under the
Securities Act or registered or listed publicly pursuant to any other applicable securities laws
and regulations, on the ground that the sale provided for in this Agreement is exempt from
registration under the Securities Act or the registration or listing requirements of any other
applicable securities laws and regulations, and that the reliance of the Company on
11
such exemption is predicated in part on such Investor’s representations set forth in this
Agreement. The Investor understands that the Purchased Shares and the Conversion Shares are
restricted securities within the meaning of Rule 144 under the Securities Act and that the
Purchased Shares and the Conversion Shares are not registered or listed publicly and must be held
indefinitely unless they are subsequently registered or listed publicly or an exemption from such
registration or listing is available.
3.4 Disclosure of Information. The Investor has had an opportunity to discuss the
Company’s business, management, financial affairs and the terms and conditions of the offering of
the Purchased Shares with the Company’s management and has had an opportunity to review the
Company’s facilities. The foregoing, however, does not limit or modify the representations and
warranties of the Company in Section 2 of this Agreement or the right of the Investors to
rely thereon.
4. COVENANTS OF THE GROUP COMPANIES AND THE FOUNDERS
Each of the Covenantors jointly and severally covenants to each of the Investors as follows:
4.1 Use of Proceeds from Capital Contribution by the Investors. The proceeds from
the issuance of the Purchased Shares hereunder shall be used to meet the Company’s business
expansion, capital expenditures and general working capital needs.
4.2 Employment Agreement, Confidentiality, Non-compete and Non-solicitation and Invention
Assignment Agreements. The key employees of the Group Companies identified in Exhibit
D hereto (the “Key Employees”) shall enter into an employment agreement, a confidentiality and
invention assignment agreement and a non-compete and non-solicitation agreement with a Group
Company in such form and substance as approved by the board of directors of the Company (the
“Board”).
4.3 Compliance.
(a) Each of the Founders shall, at his expense, fully comply, and shall cause other persons
that acquires any securities of the Company in the future, if applicable, to fully comply, with all
requirements under the applicable PRC laws and regulations with respect to their direct or indirect
holding of the Common Shares or other securities in the Company, on a continuing basis, including,
but not limited to receiving all approval, consents and permits from and fulfilling the reporting
requirements with the SAFE or its competent local branch, in a timely manner, as required under
Circular 75.
(b) Each Group Company shall obtain and maintain in full force and effect on a continuing
basis all approvals, registrations, permits, licenses and any similar authority necessary for the
conduct of its business as currently conducted, the absence of which would have a Material Adverse
Effect.
4.4 Notice of Breach. The Covenantors undertake to promptly give notice to the
Investors if the Covenantors becomes aware after the Closing that any one of them was in breach of
any representation or warranty at the time made or at the Closing.
12
4.5 Conversion. The Company covenants to at all times reserve sufficient Common
Shares or, if the reservation is insufficient, to take all actions necessary to authorize such
additional Common Shares, for issuance upon conversion of all
Series C-1 Shares.
4.6 Fulfillment of Closing Conditions. Each Covenantor shall use its best efforts to
fulfill all closing conditions contained in Section 6 of this Agreement
4.7 Stock Option Plan. Without the approval of the Series A Director, the Series B
Director and the Series C Director, the Company shall not, directly or indirectly, (i) issue any
Common Shares, share options or other forms of equity of the Company to employees, directors or
consultants except Common Shares reserved pursuant to the ESOP or any award agreement between the
Company and any employees, directors or consultants regarding grant of any options under the ESOP.
4.8 Assignment of Certain Business Contracts. The PRC Subsidiary shall not be engaged
in any value-added telecommunication business or other industries or services in which a wholly
foreign owned enterprise is not legally permitted or authorized to be engaged under the applicable
PRC laws, and, to the extent applicable, all contracts and agreements entered into by the PRC
Subsidiary and any other person that are related to any value-added telecommunication business
shall be terminated or amended to the satisfaction of the Investors.
4.9 Board of Directors. The Board shall have been re-constituted in accordance with
the Restated Articles and the Restated Shareholders Agreement on or prior to the Closing, and, as
soon as practicable and no later than the thirtieth (30th) day after the Closing Date,
the board of directors of each of the PRC Subsidiary and the Domestic Enterprise shall be
established or re-constituted in accordance with Section 1.3 of the Restated Shareholders
Agreement and duly filed with the relevant registration authority of the PRC.
5. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AT THE CLOSING
The obligations of the Company under this Agreement are subject to the fulfillment, to the
satisfaction of the Company on or prior to the Closing (unless otherwise specified), or waiver by
the Company of the following conditions:
5.1 Representations and Warranties True and Correct. The representations and
warranties made by the Investors in Section 3 hereof shall be true and correct in all
material respects as of the date of this Agreement and the Closing Date (except (i) to the extent
any such representations and warranties expressly relate to an earlier date, in which case such
representations and warranties shall be so true, complete, and accurate on and as of such earlier
date; and (ii) those representations and warranties qualified by “Material Adverse Effect” which
shall be true and accurate in all respects) with the same force and effect as if they had been made
on and as of such date, subject to changes contemplated by this Agreement.
5.2 Execution of the Restated Shareholders Agreement and Restated Voting Agreement.
The Investors shall have executed and delivered to the Company the Third Amended and Restated
Shareholders Agreement, substantially in the form attached hereto as Exhibit E (the
“Restated Shareholders Agreement”) and the Third Amended and Restated Voting Agreement,
substantially in the form attached hereto as Exhibit F (the “Restated Voting Agreement”).
13
6. CONDITIONS TO INVESTORS’ OBLIGATIONS AT THE CLOSING
The obligations of each Investor under this Agreement at the Closing are subject to
the fulfillment, to its respective satisfaction, at or before the Closing, or waiver by such
Investor, of the conditions as set forth below.
6.1 Representations and Warranties True and Correct. The representations and
warranties of each of the Covenantors contained in Section 2 shall be true and correct in
all material respects as of the date of this Agreement and the Closing Date (except (i) to the
extent any such representations and warranties expressly relate to an earlier date, in which case
such representations and warranties shall be so true, complete, and accurate on and as of such
earlier date; and (ii) those representations and warranties qualified by “Material Adverse Effect”
which shall be true and accurate in all respects) with the same force and effect as if they had
been made on and as of such date, subject to changes contemplated by this Agreement.
6.2 Performance of Obligations. Each of the Covenantors shall have performed and
complied with all covenants, agreements, obligations and conditions contained in the Transaction
Agreements that are required to be performed, accomplished or complied with by it on or before the
Closing.
6.3 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and instruments incident to
such transactions to be passed, executed and/or delivered by the Covenantors shall be satisfactory
in substance and form to the Investors, and the Investors shall have received all such counterpart
originals or certified or other copies of such documents as it may reasonably request. The Group
Companies shall have performed and complied with all covenants, agreements, obligations and
conditions contained in the Transaction Agreements that are required to be performed or complied
with by such Group Companies on or before the Closing.
6.4 Consents and Waivers. The Covenantors shall have obtained any and all consents
and waivers necessary for consummation of the transactions contemplated by the Transaction
Agreements, including, but not limited to, (i) all permits, authorizations, approvals, consents or
permits of any governmental authority or regulatory body, and (ii) the waiver by the existing
shareholders of the Company of any anti-dilution rights, rights of first refusal, pre-emptive
rights, consent rights and all similar rights that may exist in connection with the issuance of the
Series C-1 Shares.
6.5
Securities Exemptions. The allotment and the issuance of the Series C-1 Shares
to the Investors pursuant to this Agreement and the issuance of the Conversion Shares shall be
exempt from the registration and/or qualification requirements of all applicable securities laws.
6.6 Amendment to Constitutional Documents. The Restated Articles shall have been
duly adopted by the Company by all necessary corporate action of its shareholders.
6.7 Board of Directors. The Board shall have been re-constituted in accordance with
the Restated Articles and the Restated Shareholders Agreement and an updated register of directors,
certified by a director of the Company as true and complete as of the date of the
14
Closing, updated to reflect the re-constitution of the Board as above shall have been provided to
the Investors.
6.8 Restated Shareholders Agreement and Restated Voting Agreement. The Group
Companies and the Founders, as applicable, shall have executed and delivered the Third Restated
Voting Agreement and the Restated Shareholders Agreement.
6.9 Employment Agreement. Each Key Employee of each Group Company identified in
Exhibit D shall have entered into an Employment Agreement with a Group Company in such
form and substance satisfactory to the Investors.
6.10
Confidentiality and Invention Assignment Agreement; Non-compete and Non-solicitation Agreement. Each Key Employee of the Group Companies identified in Exhibit D
shall have entered into a Confidentiality and Invention Assignment Agreement and a Non-compete and Non-solicitation Agreement with a Group Company in such form and substance
satisfactory to the Investors.
6.11 No Material Adverse Effect. No event, circumstance or change shall have
occurred that, individually or in the aggregate with one or more other events, circumstances or
changes, have had or reasonably could be expected to have a Material Adverse Effect on any Group
Company or any subsidiary or Affiliate of any Group Company since the date of this Agreement.
6.12 Government Approval (applicable to H.T.C. (B.V.I.) CORP. only). H.T.C.
(B.V.I.) CORP. has obtained all the government approvals required in Taiwan for its investment in
the Company as contemplated hereunder.
7. INDEMNITY.
7.1 The Founders, the Founders’ Holdco and the Domestic Enterprise (each, an
“Indemnitor”) shall jointly and severally, indemnify the Investors for any losses, liabilities,
damages, liens, penalties, costs and expenses, including reasonable advisor’s fees and other
reasonable expenses of investigation and defense of any of the foregoing (but excluding any
consequential, speculative or punitive damages), incurred by Investors as a result of any breach or
violation of any representation or warranty made by any Indemnitor, or any breach by any Indemnitor
of any covenant or agreement contained herein or in any of the other Transaction Agreements (an
“Indemnifiable Loss”). If an Investor believes that it has a claim that may give rise to an
indemnity obligation hereunder, it shall give prompt notice thereof to the Company stating
specifically the basis on which such claim is being made, the material facts related thereto, and
the amount of the claim asserted; provided that in any event any such notice with respect
to the breach of any covenant shall be given on a timely basis.
7.2 Notwithstanding the foregoing, the Domestic Enterprise, the Founders’ HoldCo and the
Founders shall, jointly and severally, indemnify and keep indemnified the Investors at all times
and hold them harmless against any claim for tax which has been made or may hereafter be made
against any Group Company wholly or partly in respect of or in consequence of any event occurring
or any income, profits or gains earned, accrued or received by any Group Company on or before the
Closing and any reasonable costs, fees or expenses incurred and other liabilities which any Group
Company may properly incur in connection with the investigation, assessment or the contesting of
any claim, the settlement of any claim for tax, any legal proceedings in which the Domestic
Enterprise claims in respect of the claim for tax
15
and in which an arbitration award or judgment is given for the Group Company and the enforcement
of any such arbitration award or judgment whether or not such tax is chargeable against or
attributable to any other person. The statute of limitation for any indemnity obligation relating
to claims for tax matters arising under this Section 7.2 shall be the applicable statue of
limitations for tax claims.
7.3 In the event that the Investors suffer an Indemnifiable Loss and the Founders, the
Founders’ HoldCo and/or the Domestic Enterprise are unable to fulfill their obligations to
indemnify the Investors for the full amount of such Indemnifiable Loss within ninety (90) days of
receipt of written notice thereof from the Investors, then, upon claim of the Investors suffering
an Indemnifiable Loss, the Company shall indemnify such Investors for the full amount of such
Indemnifiable Loss as though an Indemnitor. Any indemnification provided by the Company pursuant to
this Section 7.3 shall not prejudice or otherwise affect the right of the Investors to seek
indemnification from the Founders, the Founders’ HoldCo and the
Domestic Enterprise; provided,
however, that to the extent the Investors are able to recover any Indemnifiable Loss from the
Founders, the Founders’ HoldCo and/or the Domestic Enterprise, the Company shall not be obligated
to indemnify the Investors with respect to such amount.
7.4 Notwithstanding the foregoing, the maximum amount of the indemnity obligation of the
Indemnitors under this Section 7 shall be limited to the aggregate subscription price paid by the
Investors.
8. MISCELLANEOUS
8.1 Governing Law. Except with respect to the references in this Agreement to the
Securities Act, this Agreement shall be governed by and construed exclusively in accordance with
the internal laws of the State of California without giving effect to any choice of law rule that
would cause the application of the laws of any jurisdiction other than the internal laws of the
State of California to the rights and duties of the parties hereunder.
8.2 Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors and administrators of the parties hereto whose rights or obligations hereunder
are affected by such amendments. This Agreement and the rights and obligations herein may be
assigned by an Investor to its Affiliate without the written consent of any other parties hereto.
This Agreement and the rights and obligations herein may not be assigned by any of the Covenantors
without the written consent of the Investors.
8.3 Entire Agreement. This Agreement and any other Transaction Agreement and the
schedules and exhibits hereto and thereto, which are hereby expressly incorporated herein by this
reference constitute the entire understanding and agreement between the parties with regard to the
subjects hereof and thereof; provided, however, that nothing in this Agreement or related
agreements shall be deemed to terminate or supersede the provisions of any confidentiality and
nondisclosure agreements executed by the parties hereto prior to the date hereof, which agreements
shall continue in full force and effect until terminated in accordance with their respective
terms.
8.4 Notices. Except as may be otherwise provided herein, all notices, requests,
waivers and other communications made pursuant to this Agreement shall be in writing and
16
shall be conclusively deemed to have been duly given (a) when hand delivered to the other party,
upon delivery; (b) when sent by facsimile at the number set forth in Exhibit G hereto,
upon receipt of confirmation of error-free transmission; (c) seven (7) business days after deposit
in the mail as air mail or certified mail, receipt requested, postage prepaid and addressed to the
other party as set forth in Exhibit G; or (d) three (3) business days after deposit with
an overnight delivery service, postage prepaid, addressed to the parties as set forth in
Exhibit H with next business day delivery guaranteed, provided that the sending
party receives a confirmation of delivery from the delivery service provider.
Each person making a communication hereunder by facsimile shall promptly confirm by telephone
to the person to whom such communication was addressed each communication made by it by facsimile
pursuant hereto but the absence of such confirmation shall not affect the validity of any such
communication. A party may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 8.4 by giving, the other party written notice of
the new address in the manner set forth above.
8.5 Amendments and Waivers. Any term of this Agreement may be amended only with the
written consent of all parties hereto. Any amendment or waiver effected in accordance with this
Section 8.5 shall be binding upon all of the parties hereto, and their respective assigns.
8.6 Delays or Omissions. No delay or omission to exercise any right, power or remedy
accruing to any party hereto, upon any breach or default of any other party hereto under this
Agreement, shall impair any such right, power or remedy of such former party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence therein, or of any
similar breach of default thereafter occurring. Any waiver, permit, consent or approval of any
kind or character on the part of any party hereto of any breach of default under this Agreement or
any waiver on the part of any party hereto of any provisions or conditions of this Agreement, must
be in writing and shall be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, or by law or otherwise afforded to the parties hereto shall
be cumulative and not alternative.
8.7 Interpretation; Titles and Subtitles. This Agreement shall be construed
according to its fair language. The rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not be employed in interpreting this Agreement. The
titles of the sections and subsections of this Agreement are for convenience of reference only and
are not to be considered in construing this Agreement. Unless otherwise expressly provided
herein, all references to Sections and Exhibits herein are to Sections and Exhibits of this
Agreement.
8.8 Counterparts; Facsimile. This Agreement may be executed by facsimile signature
and in any number of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.9 Severability. If any provision of this Agreement is found to be invalid or
unenforceable, then such provision shall be construed, to the extent feasible, so as to render the
provision enforceable and to provide for the consummation of the transactions contemplated
hereby on substantially the same terms as originally set forth herein, and if no feasible
interpretation would save such provision, it shall be severed from the remainder of this Agreement,
which shall remain in full force and effect unless the severed provision is
17
essential to the rights or benefits intended by the parties. In such event, the parties shall use
best efforts to negotiate, in good faith, a substitute, valid and enforceable provision or
agreement which most nearly effects the parties’ intent in entering into this Agreement.
8.10 Further Assurances. Each party shall from time to time and at all times
hereafter make, do, execute, or cause or procure to be made, done and executed such further acts,
deeds, conveyances, consents and assurances without further consideration, which may reasonably be
required to effect the transactions contemplated by this Agreement.
8.11 Dispute Resolution.
(a) Negotiation Between Parties. The parties agree to negotiate in good faith to
resolve any dispute between them regarding this Agreement. If the negotiations do not resolve the
dispute to the reasonable satisfaction of all parties within thirty (30) days, subsection (b) below
shall apply.
(b) Arbitration. In the event the parties are unable to settle a dispute between
them regarding this Agreement in accordance with subsection (a) above, such dispute shall be
referred to and finally settled by arbitration at the Hong Kong International Arbitration Centre
under the Rules of Conciliation and Arbitration of the International Chamber of Commerce at the
arbitral situs of Hong Kong (the “ICC Rules”) in effect, which rules are deemed to be incorporated
by reference into this subsection (b) The arbitration tribunal shall consist of three (3)
arbitrators to be appointed according to the ICC Rules. The language of the arbitration shall be
English. The parties understand and agree that this provision regarding arbitration shall not
prevent any party from pursuing preliminary equitable or injunctive relief in a judicial forum
pending arbitration in order to compel another party to comply with this provision, to preserve the
status quo prior to the invocation of arbitration under this provision, or to prevent or halt
actions that may result in irreparable harm. A request for such equitable or injunctive relief
shall not waive this arbitration provision. The arbitrators shall decide any dispute submitted by
the parties to the arbitration strictly in accordance with the substantive law of the State of
California and shall not apply any other substantive law. Each party hereto shall cooperate with
the other in making full disclosure of and providing complete access to all information and
documents requested by the other in connection with such arbitration proceedings, subject only to
any confidentiality obligations binding on such party. The award of the arbitration tribunal
shall be final and binding upon the disputing parties, and either party may apply to a court of
competent jurisdiction for enforcement of such award.
8.12 Confidentiality.
(a) Disclosure of Terms. The terms and conditions of the Transaction Agreements, any
term sheet or memorandum of understanding entered into pursuant to the transactions contemplated
hereby, all exhibits and schedules attached hereto and thereto, and the transactions contemplated
hereby and thereby (collectively, the “Transaction Terms”), including their existence, shall be
considered confidential information and shall not be disclosed by any party hereto to any third
party except as permitted in accordance with the provisions set forth below.
(b) Permitted Disclosures. Notwithstanding the foregoing, the Company may disclose
(i) the existence of the investment to its bona fide prospective investors,
18
employees, bankers, lenders, accountants, legal counsels and business partners, or to any person or
entity to which disclosure is approved in writing by the Investors, such approval not to be
unreasonably withheld; and (ii) the Transaction Terms to its current shareholders, employees,
bankers, lenders, accountants and legal counsels, in each case only where such persons or entities
are under appropriate nondisclosure obligations substantially similar to those set forth in this
Section 8.12, or to any person or entity to which disclosure is approved in writing by the
Investors, which such approval is not to be unreasonably withheld. The Investors may disclose (i)
the existence of the investment and the Transaction Terms to any Affiliate, partner, limited
partner, former partner, potential partner or potential limited partner of the Investors or other
third parties and (ii) the fact of the investment to the public, in each case as it deems
appropriate in its sole discretion. Any Party hereto may also provide disclosure in order to comply
with applicable laws, as set forth in Subsection (c) below.
(c) Legally Compelled Disclosure. In the event that any Party is requested or becomes
legally compelled (including without limitation, pursuant to any applicable tax, securities, or
other laws and regulations of any jurisdiction) to disclose the existence of this Agreement or
content of any of the Transaction Terms, such party (the “Disclosing Party”) shall provide the
other parties with prompt written notice of that fact and shall consult with the other parties
regarding such disclosure. At the request of another party, the Disclosing Party shall, to the
extent reasonably possible and with the cooperation and reasonable efforts of the other parties,
seek a protective order, confidential treatment or other appropriate remedy. In any event, the
Disclosing Party shall furnish only that portion of the information that is legally required and
shall exercise reasonable efforts to obtain reliable assurance that confidential treatment will be
accorded such information.
(d) Other Exceptions. Notwithstanding any other provision of this Section
8.12, the confidentiality obligations of the parties shall not apply to: (i) information which
a restricted party learns from a third party having the right to make the disclosure, provided the
restricted party complies with any restrictions imposed by the third party; (ii) information which
is rightfully in the restricted party’s possession prior to the time of disclosure by the protected
party and not acquired by the restricted party under a confidentiality obligation; or (iii)
information which enters the public domain without breach of confidentiality by the restricted
party.
(e) Press Releases, Etc. No announcements regarding the Investors’ investment in
the Company may be made by any party hereto in any press conference, professional or trade
publication, marketing materials or otherwise to the public without the prior written consent of
the Investors and the Company, provided, that any such announcement made by any
partner, limited partner, bona fide potential partner or bona fide potential limited partner of the
Investors shall not be subject to the consent of the Company.
(f) Other Information. The provisions of this Section 8.12 shall terminate and
supersede the provisions of any separate nondisclosure agreement executed by any of the Parties
with respect to the transactions contemplated hereby.
8.13 No Finder’s Fees.
Each the Group Company and the Founders represents that it neither is nor will be obligated
for any finder’s fee or commission in connection with this transaction and agrees to indemnify and
hold harmless each Investor from any liability for any commission or
19
compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the
costs and expenses of defending against such liability or asserted liability) for which the Group
Company or any of its officers, employees or representatives is responsible
8.14 Fees and Expenses.
The Company shall pay all reasonable costs and expenses incurred or to be incurred by the
Investors, which shall include all reasonable costs and expenses in conducting due diligence
investigations on the Group Companies and in preparing, negotiating and executing all
documentation, including all reasonable fees and expenses of any outside legal counsel,; provided
that the maximum aggregate amount to be reimbursed by the Company shall not exceed US$30,000.
8.15 Attorney’s Fees.
If any action at law or in equity (including arbitration) is necessary to enforce or interpret
the terms of any of the Transaction Agreements, the prevailing party shall be entitled to
reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to
which such party may be entitled.
8.16 Effectiveness.
Notwithstanding any of the provisions in this Agreement, this Agreement shall not be
effective for either GSR Ventures II, L.P. or GSR Associates II, L.P. (together, “GSR”) until the
signature pages of GSR are accompanied by a seal or chop of the general partner of GSR.
[Signature
pages to follow]
20
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| THE COMPANY: | ||||||
| NETQIN MOBILE INC. | ||||||
| By: Name: |
/s/ Xx Xxx
|
|||||
| Title: | Chairman and Chief Executive Officer | |||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-l PREFERRED SHARE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| INVESTORS: | ||||||
| Ceyuan Ventures I, L.P. | ||||||
| By: | Ceyuan
Ventures Management, LLC
| |||||
| Its: | General
Partner
| |||||
| By: | /s/ Feng Bo
| |||||
| Executive Managing Director | ||||||
| Ceyuan Ventures Advisors Fund, LLC | ||||||
| By: | /s/ Feng Bo
| |||||
| Executive Managing Director | ||||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-l PREFERRED SHARE PURCHASE AGREEMENT
2
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| INVESTORS: | ||||||
| GSR Ventures II, L.P. | ||||||
| By: | GSR Partners II, L.P. | |||||
| Its General Partner | ||||||
| By: | GSR Partners II, Ltd. | |||||
| Its General Partner | ||||||
| By: | /s/ Xxxxx Xxxx
|
|||||
| GSR Associates II, L.P. | ||||||
| By: | GSR Partners II, L.P. | |||||
| Its General Partner | ||||||
| By: | GSR Partners II, Ltd. | |||||
| Its General Partner | ||||||
| By: | /s/ Xxxxx Xxxx
|
|||||
| Banean Holdings Ltd | ||||||
| By: | /s/ Xxxxxxx Xxxxx
|
|||||
| Address: | ||||||
| 000 Xxxxxxxxxx Xxx., 0X | ||||||
| Xxxx Xxxx, XX 00000, XXX | ||||||
| Attn: Xxxxx Xxxx | ||||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-l PREFERRED SHARE PURCHASE AGREEMENT
3
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| INVESTORS: | ||||||
| ASIA VENTURES II L.P. | ||||||
| By: Name: |
/s/ Xxxxxxxxxxx Xxxxxxx
|
|||||
| Title: | Director | |||||
| By: Asia Partners II LP, its General Partner | ||||||
| By: FIL Capital
Management Limited as General Partner |
||||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-l PREFERRED SHARE PURCHASE AGREEMENT
4
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| INVESTORS: | ||||||
| SEQUOIA CAPITAL CHINA I, L.P. | ||||||
| SEQUOIA CAPITAL CHINA PARTNERS FUND I, L.P. | ||||||
| SEQUOIA CAPITAL CHINA PRINCIPALS FUND I, L.P. | ||||||
| By: | Sequoia Capital China Management I, L.P. | |||||
| A Cayman Islands Exempted limited partnership | ||||||
| General Partner of Each | ||||||
| By: | SC China Holding Limited | |||||
| A Cayman Islands limited liability company | ||||||
| Its General Partner | ||||||
| Name: | /s/ Xxxxx Xxxx
|
|||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-1 PREFERRED SHARE PURCHASE AGREEMENT
5
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| INVESTORS: | ||||||
| PACIFIC GROWTH VENTURES, L.P. | ||||||
| By: Pacific Growth Advisors, LDC, its General Partner | ||||||
| By: | /s/ Xxx Xxxx
|
|||||
| Name: | Xxx Xxxx
|
|||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-l PREFERRED SHARE PURCHASE AGREEMENT
6
IN
WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| INVESTORS: | ||||||
| H.T.C. (B.V.I.) CORP. | ||||||
| By: | /s/ Xxxx Xxxx
|
|||||
| Name: | Xxxx Xxxx | |||||
| Title: | Director | |||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-l PREFERRED SHARE PURCHASE AGREEMENT
7
IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to
execute this Agreement as of the date and year first above
written.
| INVESTORS: | ||||||
| XXXXXXXX Xxxxxxxxxxxx | ||||||
| By: Name: |
/s/ Xxxxx Xx
|
|||||
| Title: | Senior Director, Ventures | |||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-l PREFERRED SHARE PURCHASE AGREEMENT
8
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| INVESTORS: | ||||||
| CMC CAPITAL INVESTMENTS, L.P. | ||||||
| By: Pacific Venture Group, LDC, its General Partner | ||||||
| By: | /s/ Xxxx-Xxx Tarn
|
|||||
| Name: | Xxxx-Xxx Tarn
|
|||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-l PREFERRED SHARE PURCHASE AGREEMENT
9
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| INVESTORS: | ||||||
| XXXXXXXX CONSULTING LTD. | ||||||
| By: | /s/ Xxxx-Xxx Tarn
|
|||||
| Name: | Xxxx-Xxx Tarn
|
|||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-l PREFERRED SHARE PURCHASE AGREEMENT
10
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| INVESTORS: | ||||||
| SEQUOIA CAPITAL CHINA I, L.P. | ||||||
| SEQUOIA CAPITAL CHINA PARTNERS FUND I, L.P. | ||||||
| SEQUOIA CAPITAL CHINA PRINCIPALS FUND I, L.P. | ||||||
| By: | Sequoia Capital China Management I, L.P. A Cayman Islands Exempted limited partnership General Partner of Each |
|||||
| By: | SC China Holding Limited A Cayman Islands limited liability company Its General Partner |
|||||
| Name: | /s/ Xxxxx Xxxx
|
|||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-l PREFERRED SHARE PURCHASE AGREEMENT
11
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| FOUNDERS’ HOLDCO: | ||||||
| RPL HOLDINGS LIMITED | ||||||
| By: Name: |
/s/ Xx Xxx
|
|||||
| Title: | Director | |||||
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-l PREFERRED SHARE PURCHASE AGREEMENT
12
IN WITNESS WHEREOF, the parties hereto have caused their respective duly
authorized representatives to execute this Agreement as of the date and year first
above written.
| DOMESTIC ENTERPRISE: Beijing Netqin Technology Co., Ltd. (seal)  |
||||
| By: | /s/ Xx Xxx | |||
| Name: | Xx Xxx | |||
| Title: | Legal Representative | |||
| PRC SUBSIDIARY: NetQin Mobile (Beijing) Technology Co., Ltd (seal)  |
||||
| By: | /s/ Xx Xxx | |||
| Name: | Xx Xxx | |||
| Title: | Legal Representative | |||
SIGNATURE
PAGE OF NETQIN MOBILE’S SERIES C-1 PREFERRED SHARE PURCHASE AGREEMENT
13
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.
| FOUNDERS: | ||||
/s/ Xx Xxx
 )
|
||||
/s/ Wenyong Shi
 )
|
||||
/s/ Xu Zhou
 )
|
SIGNATURE PAGE OF NETQIN MOBILE’S SERIES C-1 PREFERRED SHARE PURCHASE AGREEMENT
14
LIST OF EXHIBITS
Exhibit A
|
Schedule of Investors | |
Exhibit B
|
Schedule of Founders | |
Exhibit C
|
Form of Restated Articles | |
Exhibit D
|
List of Key Employees | |
Exhibit E
|
Form of Restated Shareholders Agreement | |
Exhibit F
|
Form of Restated Voting Agreement | |
Exhibit G
|
Notices |
EXHIBIT A
Schedule
of Investors
(Subsequent Closing on December 8, 2010)
(Subsequent Closing on December 8, 2010)
| Number of | ||||||||||||
| Number of | Purchased | |||||||||||
| Purchased Shares | Shares at the | Aggregate | ||||||||||
| at the Initial | Subsequent | Subscription | ||||||||||
| Investors | Closing | Closing | Price (US$) | |||||||||
Pacific Growth Ventures, L.P. |
1,039,478 | US$ | 875,032.58 | |||||||||
Sequoia Capital China I,
L.P. |
866,473 | US$ | 729,396.97 | |||||||||
Sequoia Capital China
Partners Fund I, L.P. |
99,563 | US$ | 83,812.13 | |||||||||
Sequoia Capital China
Principals Fund I, L.P. |
134,108 | US$ | 112,892.11 | |||||||||
GSR Ventures II, L.P. |
2,421,944 | US$ | 2,038,792.46 | |||||||||
GSR Associates II, L.P. |
145,317 | US$ | 122,327.85 | |||||||||
Banean Holdings Ltd |
52,393 | US$ | 44,104.43 | |||||||||
Ceyuan Ventures I, L.P. |
1,815,320 | US$ | 1,528,136.38 | |||||||||
Ceyuan Ventures
Advisors Fund, LLC |
81,566 | US$ | 68,662.26 | |||||||||
Asia Ventures II L.P. |
464,975 | US$ | 391,415.96 | |||||||||
H.T.C. (B.V.I.) CORP. |
2,969,938 | US$ | 2,500,093.81 | |||||||||
XXXXXXXX
Xxxxxxxxxxxx |
3,267,530 | US$ | 2,750,606.75 | |||||||||
CMC Capital Investments,
L.P. |
2,613,560 | US$ | 2,200,095.12 | |||||||||
Xxxxxxxx Consulting Ltd. |
504,875 | US$ | 425,003.78 | |||||||||
| Number of | ||||||||||||
| Number of | Purchased | |||||||||||
| Purchased Shares | Shares at the | Aggregate | ||||||||||
| at the Initial | Subsequent | Subscription | ||||||||||
| Investors | Closing | Closing | Price (US$) | |||||||||
Sequoia Capital China I, L.P. |
233,335 | US$ | 196,421.40 | |||||||||
Sequoia
Capital China Partners Fund I, L.P. |
26,812 | US$ | 22,570.34 | |||||||||
Sequoia Capital China Principals
Fund I, L.P. |
36,114 | US$ | 30,400.77 | |||||||||
Total |
10,091,075 | 6,682,226 | US$ | 14,119,765.10 | ||||||||
EXHIBIT B
Schedule of Founders
Founder
XXX XX
()
)
with the PRC ID Number of 000000000000000000
SHI
WENYONG ()
)
with the PRC ID Number of 000000000000000000
ZHOU XU
()
)
with the PRC ID Number of 110104690310301
EXHIBIT C
Restated Articles
EXHIBIT D
List of Key Employees
EXHIBIT E
Form of Restated Shareholders Agreement
EXHIBIT F
Form of Restated Voting Agreement
EXHIBIT G
Notices
To
Group Companies, Founders, and Founder’ HoldCo:
Xxxxxxxx 0, 00 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxxx, Xxxxxxx, X.X.Xxxxx, 000000
Fax: 0000-00000000
Tel: 0000-00000000
Attention: Wenyong Shi
Fax: 0000-00000000
Tel: 0000-00000000
Attention: Wenyong Shi
To
Investors:
GSR
000 Xxxxxxxxxx Xxx., 0X, Xxxx Xxxx, XX 00000, XXX
Fax: x0-000-000-0000
Attention: Xxxxx Xxxx
000 Xxxxxxxxxx Xxx., 0X, Xxxx Xxxx, XX 00000, XXX
Fax: x0-000-000-0000
Attention: Xxxxx Xxxx
Sequoia Capital
Suite 2408, Air Xxxxx Xxxxx,
00 Xxxxxxx Xxxx, Xxxxxxx, Xxxxx, 000000
Fax: 0000-00000000
Attn: Xxxxxx Xxx
Suite 2408, Air Xxxxx Xxxxx,
00 Xxxxxxx Xxxx, Xxxxxxx, Xxxxx, 000000
Fax: 0000-00000000
Attn: Xxxxxx Xxx
Ceyuan Ventures
Ceyuan Ventures I, L.P. / Ceyuan Ventures Advisors Fund, LLC
M&C Corporate Services Limited, Xxxxxx House, P.O. Box 309GT, Grand Cayman, Cayman Islands
With a copy to:
Xx. 00 Xxx Xxx Xxxxxx, Xxxxxxxxx Xxxxxxxx, Xxxxxxx, 000000 P.R.C.
Tel: 00 00 00000000
Fax: 00 00 00000000
Attention: Xx. Xxxx Xxxxxx
Ceyuan Ventures I, L.P. / Ceyuan Ventures Advisors Fund, LLC
M&C Corporate Services Limited, Xxxxxx House, P.O. Box 309GT, Grand Cayman, Cayman Islands
With a copy to:
Xx. 00 Xxx Xxx Xxxxxx, Xxxxxxxxx Xxxxxxxx, Xxxxxxx, 000000 P.R.C.
Tel: 00 00 00000000
Fax: 00 00 00000000
Attention: Xx. Xxxx Xxxxxx
Fidelity
Fidelity Asia Ventures Fund L.P. / Fidelity Asia Principals Fund L.P. / Asia Ventures II L.P.
X/X XXX Xxxxxxx Xxxxxxxxxx (Xxxx Xxxx) Limited
Suite 7013-7015, 70th Floor Two International Finance Center,
0 Xxxxxxx Xxxxxx Xxxxxxx, Xxxx Xxxx
Tel: 000-0000-0000 (main)/000-0000-0000(direct)
Fax: 000-0000-0000
Attn: Xxxxxx Xxx, Partner
Fidelity Asia Ventures Fund L.P. / Fidelity Asia Principals Fund L.P. / Asia Ventures II L.P.
X/X XXX Xxxxxxx Xxxxxxxxxx (Xxxx Xxxx) Limited
Suite 7013-7015, 70th Floor Two International Finance Center,
0 Xxxxxxx Xxxxxx Xxxxxxx, Xxxx Xxxx
Tel: 000-0000-0000 (main)/000-0000-0000(direct)
Fax: 000-0000-0000
Attn: Xxxxxx Xxx, Partner
Pacific Growth Ventures, X.X.
Xxxxxx House, Xxxx Street, XX Xxx 000, Xxxxx Xxxxxx XX0-0000, Xxxxxx Xxxxxxx
Fax: x00-00-00000000
Attention: Xxx Xxxx
Xxxxxx House, Xxxx Street, XX Xxx 000, Xxxxx Xxxxxx XX0-0000, Xxxxxx Xxxxxxx
Fax: x00-00-00000000
Attention: Xxx Xxxx
H.T.C. (B.V.I.) CORP.
0xx Xxxxx, Xxxx Xxxxx Xxxxxxxx, Xxxxxxxx Cay I, X.X. Xxx 000, Xxxx Xxxx, Xxxxxxx,
Xxxxxxx Xxxxxx Xxxxxxx
Phone: x000 0 000 0000 xxx 0000
Email: xxxxxx_xxxx@xxx.xxx
Attention: Xx. Xxxxxx Xxxx
Xxxxxxx Xxxxxx Xxxxxxx
Phone: x000 0 000 0000 xxx 0000
Email: xxxxxx_xxxx@xxx.xxx
Attention: Xx. Xxxxxx Xxxx
