EXHIBIT 4.4
TECHFAITH WIRELESS COMMUNICATION
TECHNOLOGY LIMITED
NOTE SUBSCRIPTION AND RIGHTS AGREEMENT
Dated April 9, 2004
TABLE OF CONTENTS
Page
1. DEFINITIONS AND INTERPRETATION.....................................................................2
2. SUBSCRIPTION AND ISSUANCE OF NOTES................................................................10
3. REPRESENTATIONS AND WARRANTIES....................................................................15
4. TRANSFER RESTRICTIONS.............................................................................16
5. RIGHT OF REPURCHASE...............................................................................17
6. RIGHT OF FIRST REFUSAL............................................................................18
7. RIGHT OF CO-SALE..................................................................................20
8. DRAG-ALONG RIGHT..................................................................................21
9. PARTICIPATION RIGHT...............................................................................22
10. INFORMATION AND INSPECTION RIGHTS.................................................................24
11. REGISTRATION RIGHTS...............................................................................25
12. BOARD OF DIRECTORS................................................................................38
13. PROTECTIVE PROVISIONS (NEGATIVE COVENANTS)........................................................38
14. NON-COMPETE AND NON-SOLICITATION..................................................................41
15. REORGANISATION....................................................................................42
16. OTHER COVENANTS...................................................................................42
17. CONFIDENTIALITY...................................................................................45
18. EXPENSES..........................................................................................46
19. MISCELLANEOUS.....................................................................................47
EXHIBIT A - SCHEDULE OF INVESTORS
EXHIBIT B - FORM OF REDEEMABLE CONVERTIBLE NOTE
EXHIBIT C - DISCLOSURE SCHEDULE
EXHIBIT D - SCHEDULE OF REPRESENTATIONS AND WARRANTIES
EXHIBIT E - EXISTING AND PROPOSED GROUP STRUCTURE AND REORGANISATION
EXHIBIT F - LIST OF KEY EMPLOYEES
This Note SUBSCRIPTION AND RIGHTS AGREEMENT (the "AGREEMENT") is made the 9th
day of April 2004
BETWEEN:
(1) HTF 7 LIMITED, a limited liability company organised and existing under
the laws of the Cayman Islands ("HSBC");
(2) SEABRIGHT CHINA SPECIAL OPPORTUNITIES (I) LIMITED, a company
incorporated in the British Virgin Islands and having its registered
office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, P.O. Box 144, Road Town, Tortola, British
Virgin Islands ("SEABRIGHT");
(3) INTEL CAPITAL CORPORATION, a limited liability company organised and
existing under the laws of the Cayman Islands ("INTEL"); and
(4) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, a Delaware corporation ("QUALCOMM")
(parties (1) to (4) each an "INVESTOR" and together the "INVESTORS");
(5) TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED, a company
incorporated under the laws of the British Virgin Islands, whose
registered office is at P.O. Box 957, Offshore Incorporation Centre,
Road Town, Tortola, British Virgin Islands (the "COMPANY");
(6) GREAT ▇▇▇▇▇▇▇ TECHNOLOGY LIMITED, a company incorporated under the laws
of the British Virgin Islands ("GREAT ▇▇▇▇▇▇▇");
(7) BEIJING TECHFAITH R&D CO., LTD., a limited liability company
established under the laws of the People's Republic of China, the legal
address of which is at No. 1 Jiu Xian Qiao East Road, ▇▇▇▇ ▇▇▇▇
District, Beijing 100016 ("BEIJING TECHFAITH");
(8) ▇▇▇ TECHNOLOGY LIMITED, a company incorporated under the laws of the
British Virgin Islands ("▇▇▇");
(9) CENTEL TECHNOLOGY R&D CO., LTD., a limited liability company
established under the laws of the People's Republic of China, the legal
address of which is at No. 1 Jiu Xian Qiao East Road, ▇▇▇▇ ▇▇▇▇
District, Beijing 100016 ("CENTEL"); and
(10) STEP TECHNOLOGIES (BEIJING) CO., LTD., a limited liability company
established under the laws of the People's Republic of China, the legal
address of which is at ▇▇. ▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇-▇, ▇▇. ▇ Jiu Xian Qiao
East Road, ▇▇▇▇ ▇▇▇▇ District, Beijing 100016 ("STEP TECHNOLOGIES");
(11) FINEST TECHNOLOGY LIMITED, a company incorporated under the laws of the
British Virgin Islands ("FINEST TECHNOLOGY")
(12) LEADTECH COMMUNICATION TECHNOLOGY (SHANGHAI) LIMITED, a limited
liability company established under the laws of the People's Republic
of China,
the legal address of which is at 6F/8#, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ("LEADTECH");
(13) DONG DEFU, an individual;
(14) LIU CANGSONG, an individual;
(15) HE CHANGKE, an individual; and
(16) HUO BAOZHUANG, an individual;
(parties (13) to (16) each a "FOUNDER" and together the "FOUNDERS");
(17) ▇▇▇ ▇▇▇▇▇▇▇▇, an individual; and
(18) WU KEBO, an individual;
(parties (17) to (18) each an "INITIAL SHAREHOLDER" and together the "INITIAL
SHAREHOLDERS").
RECITALS:
(A) WHEREAS, the Investors intend to lend to the Company in cash, or
through the cancellation of existing indebtedness, an aggregate of
US$14,000,000, each in the amount set forth on the Schedule of
Investors attached hereto as Exhibit A (the "SCHEDULE OF INVESTORS");
(B) WHEREAS, in return for such loans, the Company intends to issue to the
Investors redeemable convertible notes totalling US$14,000,000; and
(C) WHEREAS, in connection with, and in consideration of the subscription
of the Notes, the Group, the Founders, and the Initial Shareholders
have agreed to give certain representations and warranties,
undertakings, covenants, and indemnities as set out in this Agreement.
NOW IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
(A) In this Agreement, including the recitals and the Exhibits, unless the
context otherwise requires, the following terms have the respective
meanings set opposite them:
"Affiliate" means, with respect to any entity, any
other entity directly or indirectly
controlling, controlled by, or under
common control with the first entity
(for the purpose of this definition,
"control" shall mean the power, whether
held directly or indirectly, to exercise
or control the right to vote attached to
50% or more of the Equity Interest or to
appoint one half or more of
the number of directors to the board or
other governing body of the entity) and,
in the case of any Investor that is an
investment fund or (or a subsidiary of
an investment fund), the term
"Affiliate" shall include any other
investment fund (or a subsidiary of any
such investment fund) managed by the
same manager of such Investor (or, if
such Investor is a subsidiary of an
investment fund, the same manager of the
investment fund of which such Investor
is a subsidiary) and any person who
succeeds such manager as the manager of
such investment fund;
"Applicable Laws" means, with respect to any Person, all
provisions of laws, statutes,
ordinances, rules, regulations, permits,
certificates or orders of any
Governmental Authority applicable to
such Person or any of its assets or
property or to which such Person or any
of its assets or property is subject,
and all judgments, injunctions, orders
and decrees of all courts and
arbitrators in proceedings or actions in
which such Person is a party or by which
it or any of its assets or properties is
or may be bound or subject;
"Board Observer" has the meaning ascribed thereto in
Clause 12(c) of this Agreement;
"Business Day" means any day (excluding Saturdays,
Sundays and public holidays in Hong
Kong) on which banks generally are open
for business in Hong Kong;
"Cause" means dishonesty, fraud, misconduct,
unauthorised use or disclosure of
confidential information or trade
secrets, or conviction or confession of
a crime punishable by law (except minor
violations), in each case as determined
by the Board of Directors of the
Company, and its determination shall be
conclusive and binding;
"Claim" means any claim, demand, assessment,
judgment, order, decree, action, cause
of action, litigation, suit,
investigation or other Proceeding;
"Company" Techfaith Wireless Communication
Technology Limited (fka Techfaith
Holdings Limited), a
company incorporated under the laws of
the British Virgin Islands, whose
registered office is at P.O. Box 957,
Offshore Incorporation Centre, Road
Town, Tortola, British Virgin Islands;
"Constitutional Documents" has the meaning ascribed thereto in
Clause 1.1(c) of the Warranty Schedule;
"Contracts" has the meaning ascribed thereto in
Clause 1.6(a)(iii) of the Warranty
Schedule;
"Conversion Shares" the shares issued or issuable upon the
conversion of the Notes;
"Disclosure Schedule" the Disclosure Schedule attached hereto
as Exhibit C;
"Equity Interest" means (i) with respect to a corporation,
any and all issued and outstanding (or
if applicable, in issue and credited as
fully paid) shares, and warrants,
options, rights to acquire shares,
rights to participate in the profits of
such corporation and any other security
or right convertible or exchangeable
into or exercisable for any shares or
right to participate in the profits of
such corporation; (ii) with respect to a
PRC foreign invested enterprise, any and
all contributed registered capital, and
warrants, options, rights to
contribute/acquire registered capital,
rights to participate in the profits of
such PRC foreign invested enterprise,
and any other security or right
convertible or exchangeable into or
exercisable for any registered capital
or right to participate in the profits
of such PRC foreign invested enterprise;
and (iii) with respect to a partnership,
limited liability company or similar
Person, any and all units, interests, or
other equivalents of, or other ownership
interests in any such Person and
warrants, options, rights to acquire any
such units or interests, rights to
participate in the profits of such
partnership and any other security or
right convertible or exchangeable into
or exercisable for any units, interests,
or other equivalents of, or right to
participate in the profits of such
partnership;
"Exchange" The Stock Exchange of Hong Kong Limited
and/or any other internationally
recognised stock exchange as the Company
may reasonably select;
"Executive Director" a director that is also an employee of a
Group Company;
"Financial Statements" has the meaning ascribed thereto in
Clause 1.9(a) of the Warranty Schedule;
"Group" the Company and all direct or indirect
Subsidiaries of the Company;
"Governmental Authority" means any government or political
subdivision thereof, whether on a
federal, state, provincial, municipal or
local level and whether executive,
legislative or judicial in nature,
including any agency, authority, board,
bureau, commission, court, department or
other instrumentality thereof;
"Group Companies" the Company, or any direct or indirect
Subsidiary of the Company;
"Hong Kong" the Hong Kong Special Administration
Region of the PRC;
"HK GAAP" means generally accepted accounting
principles in Hong Kong;
"Intellectual Property Rights" means all industrial and intellectual
property rights, including, without
limitation, software rights, software
licences, patents, patent applications,
patent rights, patent licenses,
trademarks (whether or not registered),
trademark applications, maskworks,
internet domain names, internet domain
name rights, trade names, service marks
(whether or not registered), service
▇▇▇▇ applications, copyrights (whether
or not registered), copyright
applications, know-how, trade secrets,
enterprise name, logos, proprietary
processes and formulae, confidential
information, franchises, licenses,
inventions, instructions, marketing
materials, trade dress, product
configurations, brands and designs and
all documentation and media
constituting, describing or relating to
the foregoing, including manuals,
memoranda and records;
"IPO" the allotment and issue date of the firm
commitment underwritten initial public
offering
of shares in the Company or the Listing
Company on the Exchange;
"Lien" any lien, encumbrance, mortgage, pledge,
hypothecation, charge (whether fixed or
floating or otherwise), right of first
refusal, lease, license, adverse claim,
or other conflicting ownership affecting
title or resulting in a charge against
real or personal property, or security
interest of any kind (including, without
limitation, any conditional sale or
other title retention agreement, any
lease in the nature thereof, any option
or other agreement to sell);
"Listing Company" either the Company or a 100% parent of
the Company, that is used as the listing
vehicle for an IPO on the Exchange.
"Material Adverse Change" any change, event or effect that
individually or in the aggregate might
have a material adverse effect on the
Group's business, results of operations,
assets, or financial condition, or the
transactions contemplated by this
Agreement;
"NAV" net asset value;
"NEC" has the meaning ascribed thereto in
Clause 1.2(h)(i) of the Warranty
Schedule;
"NewCo" has the meaning ascribed thereto in
Clause 15(B) of this Agreement;
"Non-Compete Period" the period from the date of this
Agreement to the one year anniversary of
the termination of a Founder's
employment or service relationship with
all Group Companies;
"Notes" the redeemable convertible notes issued
by the Company and subscribed by the
Investors in an aggregate principal
amount of US$14,000,000, in
substantially the form attached to this
Agreement as Exhibit B;
"New Securities" has the meaning ascribed thereto in
Clause 9(B) of this Agreement;
"Obligors" has the meaning ascribed thereto in
Clause 1.4 of the Warranty Schedule;
"Ordinary Shares" the ordinary shares having a par value
of US$1.00 each in the share capital of
the Company;
"Permitted Transfers" Transfers made (a) pursuant to Clauses
5, 6, 7 or 8 of this Agreement, (b)
solely for purposes of the
Reorganisation (strictly pursuant to
Clause 15), or (c) to a trust for which
the transferor and his or her immediate
family (meaning, spouse and children)
are the sole beneficiaries; provided
that in each case the Transferee agrees
in writing to be subject to the same
Transfer restrictions of this Agreement
as are applicable to the transferor;
"Person" shall be construed as broadly as
possible and shall include an
individual, a partnership (including a
limited liability partnership), a
company, an association, a joint stock
company, a limited liability company, a
trust, a joint venture (including a
sino-foreign equity joint venture), an
unincorporated organisation and a
governmental authority;
"PRC" the People's Republic of China;
"PRC Subsidiaries" refers to Beijing Techfaith, Centel,
STEP Technologies and Leadtech;
"Proceeding" means any legal, administrative or
arbitration action, suit, complaint,
charge, hearing, inquiry, investigation
or proceeding (including any partial or
threatened proceedings);
"Pro Rata Participation Share" the ratio of (a) the number of Ordinary
Shares that would be held by an Investor
if all Notes held by such Investor were
fully converted, to (b) the total number
of Ordinary Shares of the Company,
assuming conversion of all convertible
securities including all Notes held by
all Investors, immediately prior to the
issuance of New Securities giving rise
to the Right of Participation;
"Pro Rata Portion" the ratio of (a) the number of Shares
held by an Investor plus the number of
Shares issuable upon conversion of Notes
then held by such Investor, to (b) the
number of Shares held by all Investors
plus the number of Shares issuable
upon conversion of the outstanding Notes
then held by all Investors;
"Qualified IPO" allotment and issue date of any IPO
undertaken by the Listing Company where:
(a) the public float following such
IPO equals or exceeds 25% of the
total issued share capital of the
Listing Company at the time of
IPO;
(b) shares offered under the IPO have
been offered through one or more
reputable investment or merchant
banks or securities firms both to
international and domestic
investors and at investor
presentations held in one or more
principal financial centres;
(c) there is a sufficient spread of
shareholders which meets the
requirements of the Exchange; and
(d) (i) in the event the IPO takes
place on or before March 31,
2005, the IPO offer size, for a
25% public float, shall not be
less than US$70,000,000 and the
indicative post-offering market
capitalization of the Listing
Company (based on the IPO
offering price) shall not be less
than US$300,000,000; or
(ii) in the event the IPO takes
place after March 31, 2005, the
IPO offer size, for a 25% public
float, shall not be less than
US$95,800,000 and the indicative
post-offering market
capitalization of the Listing
Company (based on the IPO
offering price) shall not be less
than US$383,300,000;
"Qualified Trade Sale" the completion date for the sale of all
outstanding Shares of the Company
(including any Conversion Shares), or
sale of all or substantially all assets
of the Company or all Group Companies,
where the consideration payable for all
outstanding Shares of the Company or for
such assets shall be at least (i) on or
before March 31, 2005, US$240,000,000,
and (ii) after March 31, 2005,
US$300,000,000;
"SAFE" the State Administration for Foreign
Exchange of the PRC;
"SEABRIGHT Notes" has the meaning ascribed thereto in
Clause 2(F)(xiv);
"Shares" any shares of the Company or securities
convertible into shares of the Company
(or any interest therein, any right
attaching thereto or any economic
benefit thereof);
"Six Shareholders" the Founders and the Initial
Shareholders, collectively;
"Special Shareholder" Mr. ▇▇▇ ▇▇▇▇▇▇▇▇.
"Subsidiary" Great Earnest, Leo, Finest Technology,
STEP Technologies, Beijing Techfaith,
Centel, and Leadtech, and any subsidiary
of the Company and for this purpose
"Subsidiary" has the meaning ascribed
thereto in the Companies Ordinance
(Chapter 32 of the Laws of Hong Kong)
and "Subsidiaries" shall be construed
accordingly;
"Taxes" any federal, state, provincial, local or
municipal income, gross receipts,
license, payroll, employment, excise,
severance, stamp, occupation, premium,
windfall profits, environmental, customs
duties, capital stock, franchise,
profits, withholding, social security
(or similar), unemployment, disability,
real property, personal property, sales,
use, transfer, registration, value
added, alternative or add-on minimum, or
estimated, tax, levy, duty or any other
form of taxation of any kind whatsoever,
including any interest, penalty, or
addition thereto, whether disputed or
not and any expenses incurred in
connection with the determination,
settlement or litigation of any Tax
liability;
"Transactions" has the meaning ascribed thereto in
Clause 1.4 of the Warranty Schedule;
"Transfer" the act of directly or indirectly,
voluntarily or involuntarily selling,
assigning, mortgaging, charging,
transferring, pledging, hypothecating,
or otherwise disposing of;
"Transferee" any Person to whom any Founder or
Initial Shareholder has directly or
indirectly transferred any Shares; and
"Warranty Schedule" the Schedule of Representations and
Warranties attached hereto as Exhibit D.
(B) In this Agreement, including the recitals and the Exhibits, unless the
context otherwise requires:
i. references to "Clauses" and "Exhibits" are references to
clauses of, and the exhibits to, this Agreement;
ii. references to this Agreement include this Agreement, the
Exhibits and all other documents executed in accordance with
this Agreement and expressed to be supplemental to this
Agreement;
iii. headings are for convenience only and shall not limit, extend,
vary or otherwise affect the construction of any provision of
this Agreement;
iv. words and expressions importing the singular include the
plural and vice versa;
v. words and expressions importing one gender include both
genders and the neuter;
vi. where any word or expression is given a defined meaning, any
other grammatical form of such word or expression (as the case
may be) shall have a corresponding meaning;
vii. references to statutory provisions shall be construed as
references to those provisions as respectively amended or
re-enacted (whether before or after the date of this
Agreement) from time to time and shall include any provision
of which they are re-enactments (whether with or without
modification) and any subordinate legislation made under such
statutory provisions; and
viii. references to anything which any party is required to do or
not to do shall include its acts, defaults and omissions,
whether:
(a) direct or indirect;
(b) on its own account; or
(c) for or through any other Person,
and shall include acts, defaults and omissions which it
permits or suffers to be done or not done by any other Person.
2. SUBSCRIPTION AND ISSUANCE OF NOTES
(A) The Investors agree, on the terms and subject to the conditions specified in
this Agreement, to lend to the Company in cash or via the cancellation of
existing indebtedness, the amounts set forth opposite each Investor's name in
the Schedule of Investors.
(B) In return for the consideration provided by each Investor, the Company shall
issue to such Investor a redeemable convertible note in substantially the form
attached hereto as Exhibit B.
(C) Each such Note shall have a principal balance equal to one hundred percent
(100%) of the aggregate amount of consideration provided by such Investor (the
"INVESTMENT AMOUNT"), shall be convertible into Ordinary Shares on terms more
fully described in the Note, and shall be dated as of the date such
consideration is provided to the Company.
(D) The closing (the "CLOSING") of the subscription and issuance of the Notes
will be held at the offices of HSBC in Hong Kong at 11:00 a.m. on April 16, 2004
or on such other date and time as is mutually agreed upon by the Company and the
Investors; provided, however, that Closing shall actually be deemed to have
occurred for purposes of this Agreement only as specified in Clause 2(E)(iii)
below. This Agreement will immediately terminate (i) with respect to any
Investor that fails to participate in the Closing, except as otherwise provided
in Clause 2(E)(iv), and such party shall no longer be considered an Investor
hereunder, or (ii) if Closing has not occurred by April 27, 2004, unless agreed
upon in writing by the Company and all Investors.
(E) In connection with Closing, the delivery of the Investors' respective
Investment Amounts and the issuance of the Notes shall take place in strict
accordance with the provisions of this Clause 2(E). Each Investor's obligation
to deliver the Investment Amount listed opposite its name in the Schedule of
Investors shall be several and not joint, such that no Investor is obligated to
make up any part of another Investor's Investment Amount that is not funded.
(i) As provided in Clause 2(F)(xiv), SEABRIGHT shall deliver the SEABRIGHT Notes
to the Company for cancellation upon Closing, together with SEABRIGHT's
confirmation of its agreement to the cancellation of the SEABRIGHT Notes. Such
delivery shall fully satisfy SEABRIGHT's obligation to pay its Investment
Amount.
(ii) Upon satisfaction of the conditions specified in Clause 2(F)(or waiver
thereof by all the Investors), INTEL and QUALCOMM shall each deliver their
respective Investment Amount to the Company by telegraphic transfer to the
following bank account of the Company, or to such other bank account as the
Company may notify INTEL and QUALCOMM in writing (the "COMPANY BANK ACCOUNT"):
Bank: Industrial and Commercial Bank of China (Asia) Limited
Account Name: Techfaith Wireless Communication Technology Limited
Foreign Currency S/A No: ▇▇▇-▇▇▇-▇▇▇▇▇▇▇▇
SWIFT Code: ▇▇▇▇▇▇▇▇
Bank Address: ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇.
(iii) Upon the Company's receipt of fax copies of TT wire confirmation documents
evidencing that both INTEL's and QUALCOMM's respective Investment Amounts have
been transmitted via telegraphic transfer to the Company Bank Account, Closing
will be deemed to have occurred. For purposes of this Clause 2(E), "TT wire
confirmation documents" shall mean irrevocable instructions issued to an
Investor's bank to transfer such Investor's Investment Amount via telegraphic
transfer.
(iv) Upon Closing, HSBC shall have an unconditional obligation to deliver its
Investment Amount to the Company by telegraphic transfer to the Company Bank
Account no later than April 26, 2004 (the "HSBC FUNDING OBLIGATION"). Upon the
receipt by the Company, INTEL, and QUALCOMM of fax copies of TT wire
confirmation documents evidencing that
HSBC's Investment Amount has been transmitted by telegraphic transfer to the
Company Bank Account, the HSBC Funding Obligation shall be deemed fully
satisfied.
(v) Upon Closing, the Company shall deliver to ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Lo, at ▇▇/▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, executed
Notes issued in the names of INTEL and QUALCOMM, respectively, with principal
amounts equal to INTEL's and QUALCOMM's respective Investment Amounts. Within
one (1) Business Day following the date that INTEL's and/or QUALCOMM's
respective Investment Amount, as the case may be, is actually received in the
Company Bank Account, the Note issued to such Investor shall be hand-delivered
by ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Lo to ▇▇▇▇▇▇▇ Coie, at 25/F Three Exchange Square, ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, for delivery to such Investor.
(vi) Upon Closing, the Company shall deliver to SEABRIGHT an executed Note
issued in the name of SEABRIGHT with a principal amount equal to SEABRIGHT's
Investment Amount, and simultaneously with such delivery, the SEABRIGHT Notes
shall be cancelled and superseded by the Note delivered to SEABRIGHT.
(vii) Upon Closing, the Company shall deliver to ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Lo an
executed Note issued in the name of HSBC with a principal amount equal to HSBC's
Investment Amount. Within one (1) Business Day following the date that HSBC's
Investment Amount is actually received in the Company Bank Account, such Note
shall be hand-delivered by ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Lo to ▇▇▇▇▇▇▇ Coie for delivery
to HSBC.
(viii) In the event that the HSBC Funding Obligation has not been fully
satisfied on or before April 26, 2004, each of INTEL and QUALCOMM (but not
SEABRIGHT) shall have an independent right, but not an obligation, to deliver a
written notice (a "PAYMENT NOTICE") to HSBC demanding payment of an amount equal
to such Investor's respective Investment Amount (a "PAYMENT DEMAND" and the
Investor making a Payment Demand, a "DEMANDING INVESTOR").
(ix) Within five (5) Business Days of the receipt of a Payment Notice, HSBC
shall pay to the Demanding Investor such Demanding Investor's Investment Amount.
Payment shall be made via telegraphic transfer to the bank account specified in
the Payment Notice by the Demanding Investor. Upon receipt by the Demanding
Investor of fax copies of TT wire confirmation documents evidencing that HSBC
has transmitted the Demanding Investor's Investment Amount to the bank account
specified in the Payment Notice, such Demanding Investor shall immediately
deliver to HSBC the Note representing such Demanding Investor's Investment
Amount, together with an executed transfer form with respect thereto.
Notwithstanding the foregoing, if HSBC satisfies in full the HSBC Funding
Obligation prior to the expiration of the five (5) Business Day period specified
in this Clause 2(E)(ix), the Payment Demand shall be immediately and
automatically revoked, HSBC shall have no further obligations with respect to
such Payment Demand, and the Demanding Investor shall have no further right to
payment from HSBC, or any right to bring any Claim against HSBC relating to the
Payment Demand or the HSBC Funding Obligation.
(x) The rights of INTEL and QUALCOMM to make a Payment Demand or to bring any
Claim against HSBC relating to a Payment Demand or the HSBC Funding Obligation,
shall terminate immediately upon the satisfaction in full of the HSBC Funding
Obligation.
(xi) In the event of (a) the failure of HSBC to fully satisfy the HSBC Funding
Obligation, and/or (b) the discharge by HSBC of one or more Payment Demands in
accordance with Clause 2(E)(ix) above, the Company and each of the Investors
agree to execute such documents and instruments, including without limitation,
an amendment to this Agreement, as may be necessary or appropriate in connection
with such event(s).
(F) The Investors shall be under no obligation to proceed to the Closing or to
purchase the Notes, unless and until all of the following shall have occurred,
except as waived in writing by all of the Investors:
i. All legal, financial, business and other due diligence being
performed to the reasonable satisfaction of the Investors and
any corrective items identified by any Investor shall have
been corrected to all Investors' satisfaction;
ii. The delivery to the Investors of consolidated financial
statements of the Group, as audited by Deloitte Touche
Tohmatsu (the "AUDIT REPORT") for the nine months ended
December 31, 2003, which shows that the Group's NAV as of
December 31, 2003, and profit after tax for the nine months
ended December 31, 2003, are at least RMB100 million and RMB65
million respectively;
iii. Discussions regarding the Audit Report between the Investors
and Deloitte Touche Tohmatsu being performed to the reasonable
satisfaction of the Investors;
iv. There shall have been no Material Adverse Change since the
date of this Agreement;
v. Except as set forth in a supplemental Disclosure Schedule
dated as of Closing and attached to the certificate described
in Clause 2(F)(vii), all representations and warranties of
Group and the Founders contained herein shall be true,
accurate and complete in all material respects on and as of
Closing with the same effect as though such representations
and warranties had been made on and as of the date of Closing;
vi. The Group and each of the Six Shareholders shall have fully
and timely performed and complied with all agreements,
obligations and conditions contained in this Agreement that
are required to be performed or complied with by him or it on
or before Closing;
vii. A duly authorised officer of the Company and each of the
Founders shall have executed and delivered to the Investors at
Closing a certificate, with faxed or original signatures (with
the originals to follow as soon as practicable after Closing),
stating on behalf of the Company that the conditions specified
in Clauses 2(F)(iv), 2(F)(v), 2(F)(vi), and 2(F)(xix) have
been fulfilled ;
viii. All necessary resolutions (whether directors or shareholders
resolutions as the case may be) of the Company have been
passed in order to approve the issuance of the Notes, the
execution and delivery of this Agreement, and the consummation
of the transactions contemplated hereby and thereby;
ix. Delivery to the Investors of faxed copies of certificates of
good standing for the Company, ▇▇▇, Great ▇▇▇▇▇▇▇, and Finest
Technology issued by Registrar of Companies of the British
Virgin Islands certifying that the each was duly constituted,
paid all required fees and is in good legal standing (with the
originals to follow as soon as practicable after Closing);
x. Faxed copies of legal opinions by PRC and BVI counsel to the
Company dated as of the date of Closing and addressed to the
Investors in form and substance reasonably satisfactory to the
Investors have been provided to the Investors (with originals
or certified copies to follow as soon as practicable after
Closing);
xi. Delivery to the Investors of certified copies of each Group
Company's Memorandum and Articles of Association or other
Constitutional Documents, in effect as of the date of Closing;
xii. This Agreement and the Notes (pending delivery) have been duly
executed by the Company;
xiii. The persons listed in Exhibit F (the "KEY EMPLOYEES") have
entered into service agreements with the Company in a form
reasonably agreed upon with the Investors;
xiv. SEABRIGHT shall have delivered all of its existing convertible
notes (the "SEABRIGHT NOTES"), in the aggregate principal
amount of US$4,000,000, to the Company for cancellation at the
Closing, and SEABRIGHT shall have confirmed in writing that
its rights and obligations relating to the SEABRIGHT Notes are
superseded in their entirety by this Agreement at the Closing;
xv. None of HSBC, SEABRIGHT, INTEL or QUALCOMM shall have
indicated to the other Investors that it will not be investing
(or in the case of SEABRIGHT, cancelling SEABRIGHT Notes) in
the amount of US$4,000,000, US$4,000,000, US$4,000,000 and
US$2,000,000, respectively, subject to the satisfaction of the
conditions in Clause 2(F);
xvi. The Investors shall have been provided with evidence
reasonably satisfactory to them that any and all litigation
against any Group Company or their Affiliates or past joint
venture companies established by any Group Company
(specifically including without limitation the claims by CECW
[CHINESE CHARACTERS]) have been finally and unconditionally
resolved and all related proceedings withdrawn or dismissed
with prejudice, including delivery of a faxed copy of PRC
legal opinion from the Company's legal counsel in form and
substance satisfactory to the Investors in relation to the
resolution of such litigation (with a original or certified
copy to follow as soon as practicable after Closing;
xvii. As of Closing the organisation of the Group and the respective
ownership percentages on a fully-diluted basis shall be as
depicted in the diagram entitled "Group structure immediately
after conversion of Notes and before IPO" in
the Existing and Proposed Group Structure and Reorganisation
attached hereto as Exhibit E, except for the conversion of
Notes;
xviii. QUALCOMM and the Company shall have entered into a
DMSS6050/6025 Software Agreement which will enable the Company
to use certain QUALCOMM software in connection with its
business and which also will reflect the commitments outlined
in the Memorandum of Understanding between QUALCOMM and the
Company dated December 25, 2003; and
xix. Each Group Company shall have obtained any and all consents
and waivers necessary or appropriate for consummation of the
transactions contemplated by this Agreement including, but not
limited to, all necessary PRC government approvals to permit
the investment in the PRC Subsidiaries of the proceeds from
the issuance of the Notes, except for the approvals in
relation to the transmission of funds into the PRC and the
approval to increase the registered capital of Leadtech from
US$2,400,000 to US$4,000,000.
3. REPRESENTATIONS AND WARRANTIES
(A) In consideration of the Investors agreeing to enter into or become
party to this Agreement and to subscribe for Notes pursuant hereto,
except as set forth in the Disclosure Schedule attached hereto as
Exhibit C, each of the Company and the Founders hereby jointly and
severally represents and warrants to the Investors in the terms set out
in the Schedule of Representations and Warranties, attached hereto as
Exhibit D in respect of all matters relating to the Group and the
Founders, provided that no Group Company makes any representation or
warranty with respect to any Founder, and no Founder makes any
representation or warranty with respect to another Founder.
(B) The Initial Shareholders hereby represent and warrant to the Investors
that the Agreement has been duly and validly executed and delivered by
each of the Initial Shareholders or by their attorney-in-fact pursuant
to a duly and validly executed and legally binding power of attorney,
and constitutes the legal, valid and binding obligation of the Initial
Shareholders, enforceable against each of the Initial Shareholders in
accordance with their 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.
(C) The liabilities of the Company, the Founders and the Initial
Shareholders under the representations and warranties set out in
Exhibit D and under Clauses 3(A) and (B) and under Clause 16(F) shall
be limited as follows:
i. no liability shall in any event arise in respect of any Claim
under the representations and warranties unless the loss
sustained by the Investors (together with the aggregate amount
of loss sustained arising from previous breaches of
representations and warranties, if any) shall exceed an
aggregate sum of US$25,000 and in the event that such
aggregate sum is exceeded, the Investors shall, subject to
this Clause, be entitled to claim for sums payable including
the first US$25,000 thereof;
ii. the aggregate liability of the Company, the Founders and the
Initial Shareholders in respect of all the Claims under
Clauses 3(A) and (B) and Clause 16(F) shall not exceed (a)
until the first anniversary of the date of Closing,
US$16,100,000, (b) between the first anniversary of the date
of Closing and the second anniversary of the date of Closing,
US$18,510,000, and (c) after the second anniversary of the
date of Closing, US$21,290,000, and the aggregate liability in
respect of all the Claims by any Investor, shall not exceed
such Investor's Pro Rata Portion of the amounts specified for
each period in this Clause 3(C)(ii);
iii. For purposes of determining the appropriate amount of
liability pursuant to Clause 3(C)(ii), the reference date
shall be the date of written settlement or judgment for the
respective Claim at issue; and
iv. in the absence of fraud, dishonesty or willful concealment on
the part of the Company, the Founders and/or the Initial
Shareholders in respect of any potential liabilities under
this Clause 3(C) and Clause 16(F), no Claim shall be brought
by the Investors against the Company, the Founders and/or the
Initial Shareholders and/or unless notice of any such Claim
(specifying in reasonable detail the nature of the breach) has
been given to the Company, the Founders and/or the Initial
Shareholders on or prior to the third anniversary of Closing.
(D) the aggregate liability of the Investors in respect of any and all
Claims relating to this Agreement shall be US$14,000,000, and the
aggregate liability in respect of any and all such Claims against an
individual Investor shall be such Investor's Investment Amount, with
any amounts under this Clause 3(D) payable solely by way of offset and
cancellation in whole or in part of the relevant Investor's Notes in
the amount of any written settlement or judgment.
4. TRANSFER RESTRICTIONS
(A) Except for Permitted Transfers, the Founders shall not transfer,
assign, encumber or otherwise dispose of any Shares prior to an IPO.
(B) Except for Permitted Transfers, the Initial Shareholders shall not
Transfer or assign any Shares to any proposed Transferee prior to an
IPO unless and until such Initial Shareholder has received the written
approval and acknowledgement of the Company that such proposed
Transferee is not a competitor of the Company.
(C) The Company covenants that no Transfer of Shares in contravention of
this Agreement shall be given effect by the Company and that the
Company shall not (i) register on its books or any share register any
Transfer of Shares in contravention of this Agreement, or (ii) treat as
the owner of Shares, or otherwise accord voting, dividend or
liquidation rights to, any Transferee to whom Shares have been
Transferred in contravention of this Agreement.
(D) There are no Transfer restrictions on the Notes or any Shares held by
the Investors.
(E) Any Transfer of title or beneficial ownership of shares of the Company
upon default, foreclosure, forfeit, court order, or otherwise than by a
voluntary decision on the part
of any shareholder of the Company (other than the Investors), other
than any Transfer upon death or any Transfer to the Investors in
accordance with the terms this Agreement (an "INVOLUNTARY TRANSFER"),
shall be void to the extent permitted by applicable law. Upon the
Involuntary Transfer of any shares of the Company, such shareholder
shall promptly (but in no event later than five (5) Business Days after
such Involuntary Transfer) furnish written notice to the Company, all
other shareholders of the Company and all other parties to this
Agreement indicating that the Involuntary Transfer has occurred,
specifying the name of the Person to whom such shares have been
Transferred, giving a detailed description of the circumstances giving
rise to, and stating the legal basis for, the Involuntary Transfer.
5. RIGHT OF REPURCHASE
(A) One hundred percent (100%) of any Shares held by a Founder shall
initially be considered "Restricted Shares" and shall be subject to a
right (but not an obligation) of repurchase by the Company (the "RIGHT
OF Repurchase"). Shares which are no longer subject to the Right of
Repurchase shall cease to be Restricted Shares.
(B) The Right of Repurchase with respect to a Founder shall be exercisable
only during the 60-day period next following the date when such
Founder's service terminates for Cause.
(C) The Right of Repurchase shall lapse with respect to one-third (1/3rd)
of the initial Restricted Shares on each anniversary of the Closing
(and such Shares shall cease to be Restricted Shares) such that all
Shares held by the Founders will be free of the Right of Repurchase on
the third anniversary of the Closing. Notwithstanding the foregoing,
upon the occurrence of the Qualified IPO, one hundred percent (100%) of
any then remaining Restricted Shares shall cease to be subject to the
Right of Repurchase.
(D) If the Company exercises the Right of Repurchase with respect to a
Founder's Restricted Shares, it shall pay such Founder an amount in
cash or cash equivalents (which cash equivalent shall be acceptable to
the Founder) equal to such Founder's original purchase price for the
Shares so repurchased by the Company.
(E) The Right of Repurchase shall be exercisable only by the Company
delivering a written notice to such Founder prior to the expiration of
the 60-day period specified in Clause 5(B) above, upon which, such
Founder shall immediately (but no later than the close of business on
the date specified for the repurchase which date shall not be earlier
than the 7th day after receipt of the said written notice) deliver to
the Company the certificate(s) representing the Restricted Shares to be
repurchased, properly endorsed for transfer. The Company shall,
concurrently with the receipt of such certificate(s), pay to such
Founder the purchase price determined according to Clause 5(D) above.
Payment shall be made in cash or cash equivalents (which cash
equivalent shall be acceptable to the Founder) or by cancelling
existing indebtedness to the Company incurred by such Founder in the
subscription of Shares. The Right of Repurchase shall lapse with
respect to any Restricted Shares for which it has not been timely
exercised pursuant to this Clause 5(E).
(F) In the event of the declaration of a share dividend, the declaration of
an extraordinary dividend payable in a form other than shares, a
spin-off, a share split, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the Company's
outstanding securities without receipt of consideration, any new,
substituted or additional securities or other property (including money
paid other than as an ordinary cash dividend) that by reason of such
transaction are distributed with respect to any Restricted Shares or
into which such Restricted Shares thereby become convertible shall
immediately be subject to the Right of Repurchase. After each such
transaction, appropriate adjustments shall be made to the price per
share to be paid upon the exercise of the Right of Repurchase in order
to reflect any change in the Company's outstanding securities effected
without receipt of consideration therefor; provided, however, that the
aggregate purchase price payable for the Restricted Shares shall remain
the same.
(G) If after the Company exercises its Right of Repurchase, a Founder fails
to transfer the subject Restricted Shares, the Company may hold the
consideration for the purchased Restricted Shares on behalf of the
Founder and the Founder shall be deemed to have appointed any one
director of the Company or the Company secretary as his agent to
execute any transfer instrument(s) or other agreement required to
evidence the transfer of the Restricted Shares, or the cancellation of
amounts owed by the Founder to the Company and, upon execution of such
transfer documents, the Company shall hold the consideration in trust
for the Founder and the Founder shall have no further rights with
respect to the Restricted Shares purchased by the Company.
(H) Notwithstanding any provision to the contrary, Founders may not
transfer Restricted Shares to any Transferee.
6. RIGHT OF FIRST REFUSAL
(A) If (a) upon waiver by all of the Investors of the restrictions in
Clause 4(A) a Founder proposes to Transfer Shares for which the Right
of Repurchase has lapsed, or (b) upon receipt of the written approval
and acknowledgement required by Clause 4(B) the Special Shareholder
proposes to Transfer Shares (for the purposes of this Agreement, any
Shares, securities, interest, right or economic consequence proposed to
be Transferred by any Special Shareholder or Founder, the "TRANSFER
SHARES"), in each case, other than for the purpose of a Permitted
Transfer, then each Investor shall have a right to purchase such
Investor's Pro Rata Portion of the Transfer Shares (the "RIGHT OF FIRST
REFUSAL") as provided in this Clause 6. Notwithstanding the foregoing,
the Investors shall be entitled to apportion any right under this
Clause 6 to purchase the Transfer Shares in such proportions as they
deem appropriate among themselves, and their respective Affiliates.
(B) For the purpose of this Clause 6 any Special Shareholder or Founder
proposing to Transfer any Transfer Shares shall be referred to as a
"TRANSFERRING SHAREHOLDER".
(C) In the event a Transferring Shareholder receives a bona fide offer to
Transfer the Transfer Shares, the Transferring Shareholder shall
deliver a written notice (the "FIRST NOTICE") to each Investor,
describing fully the proposed Transfer, including the number of Shares
proposed to be Transferred, the proposed Transfer price, the name and
address of each prospective bona fide purchaser, and any other material
terms and
conditions, and for the purpose of the Right of First Refusal setting
forth an offer (irrevocable by its terms for ten (10) Business Days
following receipt) to sell to each Investor its Pro-Rata Portion of the
Transfer Shares (provided that the Investors may reallocate the
entitlements among themselves) for the same purchase price per share,
and on the same terms and conditions contained in the First Notice.
(D) Within ten (10) Business Days following receipt of the First Notice,
each Investor desiring to exercise its Right of First Refusal shall
deliver a written notice to the Transferring Shareholder, with a copy
to the Company, setting forth, if it elects to exercise its Right of
First Refusal, its acceptance of the offer set forth in the First
Notice (such acceptance may relate to part or all of the Shares set
forth in the offer).
(E) Immediately following the expiration of the ten (10) Business Day
period referred to in Clause 6(D), the Transferring Shareholder shall
send out a second notice (the "SECOND NOTICE") to each applicable
Investor having exercised its Right of First Refusal, with a copy to
the Company, setting forth the number of Transfer Shares that have not
been accepted for purchase pursuant to an exercise of a Right of First
Refusal. Each Investor who has accepted all or part of the Shares
offered to it in the First Notice shall then have ten (10) Business
Days from its receipt of the Second Notice to send another written
notice to the Transferring Shareholder, with a copy to the Company, to
exercise its Right of First Refusal with respect to any number of
Transfer Shares that have not been accepted for purchase pursuant to an
exercise of a Right of First Refusal.
(F) Completion of the Transfer of the Transfer Shares to the bona fide
third party or parties set forth in the First Notice (and if
applicable, Investors who exercise their Right of First Refusal) shall
occur no later than twenty-seven (27) Business Days after the receipt
of the First Notice by the Investors. The number of Transfer Shares
that the Transferring Shareholder may Transfer to the third party shall
be reduced by such exercises. If no Investor elects to exercise the
Right of First Refusal, all but not less than all Transfer Shares may
be Transferred to the bona fide third party or parties set forth in the
First Notice. Unless written consent of each Investor is obtained, if
completion of such Transfer does not occur within the time period
prescribed in this Clause 6(F), or if any proposed terms or conditions
with respect to the Transfer of the Transfer Shares become more
favourable to the proposed Transferee than those set forth in the First
Notice, then such proposed Transfer shall again be subject to the Right
of First Refusal, and the procedures in connection therewith, set forth
in this Clause 6.
(G) The exercise (whether in full or in part) or non-exercise of any Right
of First Refusal by any Investor to purchase or participate in one or
more proposals to Transfer any Transfer Shares shall not adversely
affect its rights to purchase or participate in subsequent Transfers of
Transfer Shares.
(H) Notwithstanding the foregoing, the Right of First Refusal shall not
apply to the conversion of the Founders' Ordinary Shares into Shares of
the Listing Company pursuant to the Reorganisation, and upon occurrence
of the IPO, the Founders' Shares shall cease to be subject to the Right
of First Refusal.
7. RIGHT OF CO-SALE
(A) To the extent the Investors do not exercise their Rights of First
Refusal under Clause 6 above as to all of the Transfer Shares offered
by a Founder (but not a Special Shareholder) (a "SELLING FOUNDER"),
then each Investor which notifies the Selling Founder in writing within
ten (10) days after receipt of the First Notice referred to in Clause
6(C) (a "SELLING INVESTOR" for purposes of this Clause 7) shall have
the right to participate in such sale of Transfer Shares, on the same
terms and conditions as specified in the First Notice (the "CO-SALE
RIGHT"). Such Selling Investor's notice to the Selling Founder shall
indicate the number of Shares the Selling Investor wishes to sell under
its Co-Sale Right. To the extent one or more of the Investors exercise
such Co-Sale Right in accordance with the terms and conditions set
forth below, the number of Shares that the Selling Founder may sell in
the Transfer shall be correspondingly reduced.
(B) Each Selling Investor may sell all or any part of that number of Shares
equal to such Selling Investor's Pro-Rata Portion of the aggregate
number of Transfer Shares that have not been accepted for purchase
pursuant to an exercise of a Right of First Refusal. The Selling
Founder shall notify each Investor of the number of Shares comprising
their respective Pro-Rata Portion, upon the expiration of the periods
specified in Clause 5 for notification of the exercise of the Right of
First Refusal.
(C) Each Selling Investor shall effect its participation in the sale by
promptly converting all or a portion of its Note for at least the
number of Shares it has elected to sell, then delivering to the Selling
Founder for transfer to the prospective purchaser one or more
certificates, properly endorsed for transfer (or a transfer instrument
in respect of such transfer duly executed by the Selling Investor
together with the relevant share certificates), which represent the
number of Shares such Selling Investor has elected to sell.
(D) The share certificate or certificates that the Selling Investor
delivers to the Selling Founder pursuant to Clause 7(C) shall be
transferred to the prospective purchaser in consummation of the sale of
the Shares pursuant to the terms and conditions specified in the First
Notice, and the Selling Founder shall within 7 days from the date of
receipt of all the sale proceeds from the Transferee remit or cause to
be remitted to such Selling Investor that portion of the sale proceeds
to which such Selling Investor is entitled by reason of its
participation in such sale. To the extent that any prospective
purchaser or purchasers prohibits such assignment or otherwise refuses
to purchase Shares or other securities from a Selling Investor
exercising its Co-Sale Rights hereunder, the Selling Founder shall not
sell to such prospective purchaser(s) any Shares unless and until,
simultaneously with such sale, the Selling Founder shall purchase such
Shares or other securities from such Selling Investor for the same
consideration and on the same terms and conditions as the proposed
transfer described in the First Notice.
(E) To the extent that the Investors have not exercised their Rights of
First Refusal or Co-Sale Rights, the Selling Founder shall have a
period of twenty-seven (27) Business Days after the receipt of the
First Notice by the Investors in which to sell such Shares, upon terms
and conditions (including the purchase price) no more favourable than
those specified in the First Notice to the third-party transferee(s)
identified in the First
Notice. Unless written consent of each Investor is obtained, if
completion does not occur within the time period prescribed in this
Clause 7(E), or if any proposed terms or conditions with respect to the
Transfer of the Shares become more favourable than those set forth in
the First Notice, then such proposed Transfer shall again be subject to
the Co-Sale Right, and the procedures in connection therewith, set
forth in this Clause 7.
(F) The exercise (whether in full or in part) or non-exercise of any
Co-Sale Rights by any Investor shall not adversely affect its rights to
subsequently participate in sales of Shares by a Selling Founder.
(G) Notwithstanding the foregoing, the Co-Sale Right shall not apply to the
conversion of the Founders' Ordinary Shares into Shares of the Listing
Company pursuant to the Reorganisation, and upon occurrence of the IPO,
the Founders' Shares shall cease to be subject to the Co-Sale Right.
8. DRAG-ALONG RIGHT
(A) If (i) all of the Investors and (ii) the Founders that hold a majority
in interest of the aggregate Shares held by the Founders, (the
"DRAGGING PARTIES") agree to Transfer all the Shares of the Company
held by them to, or vote for a merger or consolidation of the Company
into, or a sale of all or substantially all assets of the Company to, a
purchaser that is not an Affiliate of the Company (a "DRAG-ALONG
SALE"), then all of the Six Shareholders (the "DRAGGED PARTIES") shall
agree to, and shall vote in favour of, such Drag-Along Sale and shall
Transfer the same pro rata amount of their respective outstanding
Shares in such Drag-Along Sale as the Dragging Parties propose to
Transfer in such Drag-Along Sale.
(B) Any such sale or disposition by the Dragged Parties shall be on the
same terms and conditions, including (without limitation) as to the
form of consideration, as the proposed Drag-Along Sale by the Dragging
Parties. Such Dragged Parties shall be required to make such
representations, warranties and indemnities in connection with the
Drag-Along Sale as made by the Dragging Parties.
(C) Prior to making any Drag-Along Sale in which the Dragging Parties wish
to exercise their rights under this Clause 8, the Dragging Parties
shall provide the Company and all the Dragged Parties with written
notice (the "DRAG-ALONG NOTICE") not less than five (5) Business Days
prior to the proposed closing date of the Drag-Along Sale (the
"DRAG-ALONG SALE DATE"). The Drag-Along Notice shall set forth: (i) the
name and address of the third party purchasers; (ii) the proposed
amount and form of consideration to be paid per share, and the terms
and conditions of payment offered by each of the third party
purchasers; (iii) the Drag-Along Sale Date; (iv) the number of Shares
held of record by the Dragging Parties on the date of the Drag-Along
Notice; (v) the number of Shares to be transferred, sold or otherwise
disposed of by the Dragging Parties; and (vi) the number of Shares of
the Dragged Parties to be included in the Drag-Along Sale.
(D) On the Drag-Along Sale Date, the Dragged Parties shall each deliver or
cause to be delivered a certificate or certificates evidencing its
Shares of the Company to be included in the Drag-Along Sale, duly
endorsed for transfer with signatures witnessed
(or a transfer instrument in respect of such transfer duly executed by
the Dragged Parties together with the relevant share certificates), to
the Company.
(E) If the Dragged Parties receive the purchase price for their Shares but
they fail to deliver certificates evidencing their Shares and/or the
transfer instrument as described in this Clause 8(D), they shall for
all purposes be deemed no longer to be shareholders of the Company
(with the Dragged Parties being deemed to have appointed one director
of the Company or the Company secretary as his agent to execute any
transfer instrument with respect to such transfer and with the register
of members of the Company updated to reflect such status), shall have
no voting rights, shall not be entitled to any dividends or other
distributions with respect to any Shares of the Company held by them,
shall have no other rights or privileges as a shareholder of the
Company and, in the event of liquidation of the Company, their rights
with respect to any consideration they would have received if they had
complied with this Clause 8(E), if any, shall be subordinate to the
rights of any equity holder. In addition, upon demand by the Dragging
Parties, and in addition to any of the other rights or remedies of the
Dragging Parties under this Agreement or otherwise, the Company shall
stop any subsequent transfer of any such Shares held by such Dragged
Parties (as the case may be).
(F) Upon occurrence of the IPO, the Founders' Shares shall cease to be
subject to the rights of this Clause 8.
9. PARTICIPATION RIGHT
(A) Each Investor shall have the right to purchase such Investor's Pro Rata
Participation Share, of all or any part of any New Securities that the
Company may from time to time issue after the date of this Agreement
(the "RIGHT OF PARTICIPATION").
(B) "NEW SECURITIES" means any Shares of the Company, whether now
authorised or not, including any rights, options or warrants to
purchase such Shares, provided, however, that the term "New Securities"
shall not include:
i. Ordinary Shares issued upon conversion of any Notes;
ii. securities of the Company issued or issuable upon exercise of
options, warrants or convertible securities outstanding on the
date hereof; or
iii. any Share issued in a Qualified IPO or Qualified Trade Sale.
(C) Procedures.
i. First Participation Notice. In the event that the Company
proposes to undertake an issuance of New Securities (in a
single transaction or a series of related transactions), it
shall deliver to each Investor written notice of its intention
to issue New Securities (the "FIRST PARTICIPATION NOTICE"),
describing the amount and type of New Securities, the price
and the general terms upon which the Company proposes to issue
such New Securities. Each Investor shall have ten (10)
Business Days from the date of receipt of any such First
Participation Notice to agree in writing to purchase up to
such Investor's Pro
Rata Participation Share of such New Securities for the price
and upon the terms and conditions specified in the First
Participation Notice by giving written notice to the Company
and stating therein the quantity of New Securities to be
purchased (not to exceed such Investor's Pro Rata
Participation Share). If any Investor fails to provide notice
in writing within such ten (10) Business Day period to
purchase such Investor's full Pro Rata Participation Share of
an offering of New Securities, then such Investor shall
forfeit the right hereunder to purchase that part of its Pro
Rata Participation Share of such New Securities that it did
not agree to purchase.
ii. Second Participation Notice; Oversubscription. If any Investor
fails or declines to exercise its Right of Participation in
accordance with Clause 9(C)(i) above, the Company shall
promptly deliver notice (the "SECOND PARTICIPATION NOTICE") to
other Investors who exercised their Right of Participation
(the "RIGHT PARTICIPANTS") in accordance with Clause 9(C)(i)
above. Each Right Participant shall then have five (5)
Business Days from the date of the Second Participation Notice
(the "SECOND PARTICIPATION PERIOD") to notify the Company of
its desire to purchase more than its Pro Rata Participation
Share of the New Securities, stating the number of the
additional New Securities it proposes to buy (the "ADDITIONAL
NUMBER"). Such notice may be made by telephone if confirmed in
writing within two (2) Business Days, however the evidence of
funds must be submitted in written form. Failure to satisfy
the conditions in this Clause within the Second Participation
Period will forfeit the any right of the Right Participant to
purchase the Additional Number. If, as a result thereof, such
oversubscription exceeds the total number of the remaining New
Securities available for purchase, each oversubscribing Right
Participant will be cut back by the Company with respect to
its oversubscription to that number of remaining New
Securities equal to the lesser of (x) the Additional Number
and (y) the product obtained by multiplying (i) the number of
the remaining New Securities available for subscription by
(ii) a fraction, the numerator of which is the number of
Ordinary Shares (calculated on an as-converted basis) held by
such oversubscribing Right Participant and the denominator of
which is the total number of Ordinary Shares (calculated on an
as-converted basis) held by all the oversubscribing Right
Participants. Each Right Participant shall be obligated to buy
such number of New Securities as determined by the Company
pursuant to this Clause and the Company shall so notify the
Right Participants within fifteen (15) Business Days following
the date of the Second Participation Notice.
(D) Upon the expiration of the First Participation Period or (in the event
that the delivery of the Second Participation Notice becomes necessary)
the Second Participation Period, or in the event no Investor exercises
the Right of Participation within ten (10) days following the issuance
of the First Participation Notice, the Company shall have ninety (90)
days thereafter to sell the New Securities described in the First
Participation Notice (with respect to which the Right of Participation
hereunder were not exercised) at the same or higher price and upon
non-price terms not more favourable to the purchasers thereof than
specified in the First Participation Notice. In the event that the
Company has not issued and sold such New Securities within such ninety
(90) day period, then the Company shall not thereafter issue or sell
any
New Securities without again first offering such New Securities to the
Investors pursuant to this Clause 9.
(E) The Right of Participation for each Investor shall terminate upon a
Qualified IPO.
10. INFORMATION AND INSPECTION RIGHTS
(A) Information Rights. The Company covenants and agrees that, commencing
on the date of this Agreement, the Company will deliver as soon as
practicable to each Investor that continues to hold Notes or Shares
issued upon conversion of the Notes:
i. audited consolidated financial statements, including an income
statement, balance sheet and statement of cashflows for the
Group within ninety (90) days of the financial year-end;
ii. monthly consolidated Group management accounts to be provided
within fifteen (15) Business Days of each month end;
iii. monthly individual Group Company accounts to be provided
within ten (10) Business Days of each month end;
iv. quarterly consolidated management accounts within thirty (30)
days after each quarter end;
v. annual Group budgets and trading forecasts (as approved by the
Company's Board of Directors) not less than ten (10) days
prior to the commencement of each financial year;
vi. upon the written request by any Investor, such other
information as such Investor shall reasonably request, within
seven (7) days after receipt of a notice requesting such
information; and
vii. full details of any progress in relation to any initial public
offering of securities by any Group Company, or any material
litigation which may be made or threatened by or against any
of the Group Companies or any circumstances likely to give
rise to the same, as soon as practicable (the above rights,
collectively, the "INFORMATION RIGHTS").
(B) All financial statements to be provided to the Investors pursuant to
their Information Rights shall be prepared in English and in
conformance with HK GAAP.
(C) Inspection Rights. Each of the Group Companies further covenants and
agrees that, commencing on the date of this Agreement, each Investor
that continues to hold Notes or Shares issued upon conversion of the
Notes shall have (i) the right to inspect facilities, records and books
of the Group Companies and to make extracts and copies therefrom, at
any time during regular working hours on reasonable prior notice, and
(ii) the right to discuss the business, operations and conditions of
the Group Companies with their respective directors, officers,
employees, accountants, legal counsel and investment bankers (the
"INSPECTION RIGHTS"). The Group Companies
agree to provide to the Investors other information and access as may
be mutually agreed upon from time to time.
(D) The Information Rights and Inspection Rights shall terminate upon the
closing of the IPO.
(E) Post-IPO Information Rights. Each of the Group Companies further
covenants and agrees that, commencing upon the completion of an initial
public offering of securities by any Group Company, such Group Company
shall provide to each Investor that continues to hold Notes or Shares
issued upon conversion of the Notes (a) annual and periodic reports as
well as public reports filed with the relevant securities regulatory
authorities, and (b) promptly upon request, current versions of the
articles of association of other constitutional document bearing the
file stamp of the appropriate government authority, investment
documents and all documents relating to any subsequent financings by
the relevant Group Company, the management of such Group Company or any
other documents affecting the rights of the Investors, each bearing the
signatures of all parties, in each case with all amendments and
restatements (the above rights collectively the "POST-IPO INFORMATION
RIGHTS"). To the extent permitted by relevant law, the Post-IPO
Information Rights shall survive the completion of such initial pubic
offering.
(F) The Company acknowledges that each Investor will likely have, from time
to time, information that may be of interest to the Company or the
Subsidiaries ("INVESTOR INFORMATION") regarding a wide variety of
matters including, by way of example only, (1) an Investor's
technologies, plans and services, and plans and strategies relating
thereto, (2) current and future investments an Investor has made, may
make, may consider or may become aware of with respect to other
companies and other technologies, products and services, including,
without limitation, technologies, products and services that may be
competitive with those of the Company or the Subsidiaries, and (3)
developments with respect to the technologies, products and services,
and plans and strategies relating thereto, of other companies,
including without limitation, companies that may be competitive with
the Company or any of the Subsidiaries. The Company recognises that a
portion of such Investor Information may be of interest to the Company
or any of the Subsidiaries; such Investor Information may or may not be
known by the Board Observer. The Company, as a material part of the
consideration for this Agreement, agrees that the Board Observer and
each Investor shall have no duty to disclose any Investor Information
to the Company or the Subsidiaries, or permit the Company or any of the
Subsidiaries to participate in any projects or investments based on any
Investor Information, or to otherwise take advantage of any opportunity
that may be of interest to the Company or any of the Subsidiaries if it
were aware of such Investor Information, and hereby waives to the
extent permitted by law, any claim based on the corporate opportunity
doctrine or otherwise that could limit any Investor's ability to pursue
opportunities based on such Investor Information or that would require
any Investor, any representative or Board Observer to disclose any such
Investor Information to the Company or any of its Subsidiaries or offer
any opportunity relating thereto to the Company or any of it
Subsidiaries.
11. REGISTRATION RIGHTS
(A) Applicability of Rights. The Holders (as defined below) shall be
entitled to the following rights with respect to any proposed public
offering of the Company's Ordinary Shares in the United States.
(B) Definitions. For the purpose of this Clause 11:
i. Registration. The terms "REGISTER," "REGISTERED," and
"REGISTRATION" refer to a registration effected by filing a
registration statement which is in a form that complies with,
and is declared effective by the SEC (as defined below) in
accordance with, the Securities Act (as defined below).
ii. Registrable Securities. The term "REGISTRABLE SECURITIES"
means: any Ordinary Shares of the Company issued or issuable
to the Investors or their assigns pursuant to conversion of
any Notes held by the Investors. Notwithstanding the
foregoing, "Registrable Securities" shall exclude any
Registrable Securities sold by a Person in a transaction in
which rights under this Clause 11 are not assigned in
accordance with this Agreement, and any Registrable Securities
which are sold in a registered public offering under the
Securities Act or analogous statute of another jurisdiction,
or sold pursuant to Rule 144 promulgated under the Securities
Act or analogous rule of another jurisdiction.
iii. Registrable Securities then Outstanding. The number of shares
of "REGISTRABLE SECURITIES THEN OUTSTANDING" shall mean the
number of Ordinary Shares of the Company that are Registrable
Securities and are then issued and outstanding, issuable upon
conversion of Notes then issued and outstanding.
iv. Holder. For purposes of this Agreement, the term "HOLDER"
means any Person owning Registrable Securities or any
permitted assignee of record of such Registrable Securities to
whom rights under this Agreement have been duly assigned in
accordance with this Agreement.
v. Form S-3 and Form F-3. The terms "FORM S-3" and "FORM F-3"
means such respective form under the Securities Act or any
successor registration form under the Securities Act
subsequently adopted by the SEC that permits inclusion or
incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
vi. SEC. The term "SEC" means the United States Securities and
Exchange Commission.
vii. Registration Expenses. The term "REGISTRATION EXPENSES" shall
mean all expenses incurred by the Company in complying with
Clauses 11(C), 11(D) and 11(E) hereof, including, without
limitation, all registration and filing fees, printing
expenses, fees, and disbursements of counsel for the Company,
reasonable fees and disbursements of one counsel for the
Holders, "blue sky" fees and expenses and the expense of any
special audits incident to or required by any such
registration (but excluding the compensation of regular
employees of the Company which shall be paid in any event by
the Company).
viii. Selling Expenses. The term "SELLING EXPENSES" shall mean all
underwriting discounts and selling commissions applicable to
the sale of Registrable Securities pursuant to Clauses 11(C),
11(D) or 11(E) hereof.
ix. Exchange Act. The term "EXCHANGE ACT" shall mean the U.S.
Securities Exchange Act of 1934, as amended.
x. Securities Act. The term "SECURITIES ACT" means the U.S.
Securities Act of 1933, as amended.
(C) Demand Registration.
i. Request by Holders. If the Company shall, at any time after
six (6) months following the closing of a Qualified IPO in the
United States on either the New York Stock Exchange or the
Nasdaq National Market, receive a written request from the
Holders of at least 50% of the Registrable Securities then
Outstanding that the Company file a registration statement
under the Securities Act covering the registration of
Registrable Securities pursuant to this Clause 11(C), then the
Company shall, within ten (10) Business Days of the receipt of
such written request, deliver written notice of such request
(the "REQUEST NOTICE") to all Holders, and use its best
efforts to effect, as soon as practicable, the registration
under the Securities Act of all Registrable Securities that
the Holders request to be registered and included in such
registration by written notice delivered by such Holders to
the Company within twenty (20) days after receipt of the
Request Notice, subject only to the limitations of this Clause
11(C); provided that the Company shall not be obligated to
effect any such registration if the Company has, within the
preceding twelve (12) month period, already effected two or
more registrations under the Securities Act pursuant to this
Clause 11(C) or Clause 11(E) or in which the Holders had an
opportunity to participate pursuant to the provisions of
Clause 11(D), other than a registration from which the
Registrable Securities of the Holders have been excluded (with
respect to all or any portion of the Registrable Securities
the Holders requested be included in such registration)
pursuant to the provisions of Clause 11(D)(i).
ii. Underwriting. If the Holders initiating the registration
request under this Clause 11(C) (the "INITIATING HOLDERS")
intend to distribute the Registrable Securities included in
their request by means of an underwriting, then they shall so
advise the Company as a part of their request made pursuant to
this Clause 11(C) and the Company shall include such
information in the Request Notice. In such event, the right of
any Holder to include its Registrable Securities in such
registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided
herein. All Holders proposing to distribute their securities
through such underwriting shall enter into an underwriting
agreement in customary form with the managing underwriter or
underwriters selected for such underwriting by the Holders of
a majority of the Registrable Securities being registered and
reasonably acceptable to the Company. Notwithstanding
any other provision of this Clause 11(C), if the
underwriter(s) advise(s) the Company in writing that marketing
factors require a limitation of the number of securities to be
underwritten, then the Company shall so advise all Holders of
Registrable Securities which would otherwise be registered and
underwritten pursuant hereto, and the number of Registrable
Securities that may be included in the underwriting shall be
reduced as required by the underwriter(s) and allocated among
the Holders of Registrable Securities on a pro rata basis
according to the number of Registrable Securities then
Outstanding held by each Holder requesting registration
(including the Initiating Holders); provided, however, that
the number of shares of Registrable Securities to be included
in such underwriting and registration shall not be reduced
unless all other securities are first entirely excluded from
the underwriting and registration including, without
limitation, all Shares that are not Registrable Securities and
are held by any other Person, including, without limitation,
any Person who is an employee, officer or director of the
Company or any subsidiary of the Company; provided further,
that at least twenty-five percent (25)% of shares of
Registrable Securities requested by the Holders to be included
in such underwriting and registration shall be so included. If
any Holder disapproves of the terms of any such underwriting,
such Holder may elect to withdraw therefrom by written notice
to the Company and the underwriter(s), delivered at least ten
(10) Business Days prior to the effective date of the
registration statement. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and
withdrawn from the registration.
iii. Maximum Number of Demand Registrations. The Company shall not
be obligated to effect more than three (3) such demand
registrations pursuant to this Clause 11(C).
iv. Deferral. Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting registration pursuant to this
Clause 11(C), a certificate signed by the President or Chief
Executive Officer of the Company stating that in the good
faith judgment of the Board, it would be materially
detrimental to the Company and its shareholders for such
registration statement to be filed at such time, then the
Company shall have the right to defer such filing for a period
of not more than 120 days after receipt of the request of the
Initiating Holders; provided, however, that the Company may
not utilise this right more than once in any twelve (12) month
period; provided further, that the Company shall not register
any other of its Shares during such twelve (12) month period.
A demand right shall not be deemed to have been exercised
until such deferred registration shall have been effected.
(D) Piggyback Registrations.
i. The Company shall notify all Holders of Registrable Securities
in writing at least thirty (30) days prior to filing any
registration statement under the Securities Act for purposes
of effecting a public offering of securities of the Company
(including, but not limited to, registration statements
relating to secondary offerings of securities of the Company,
but excluding registration statements relating to any
registration under Clause 11(C) or Clause 11(E) of
this Agreement or to any employee benefit plan or a corporate
reorganisation), and shall afford each such Holder an
opportunity to include in such registration statement all or
any part of the Registrable Securities then held by such
Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable
Securities held by it shall within twenty (20) days after
receipt of the above-described notice from the Company, so
notify the Company in writing, and in such notice shall inform
the Company of the number of Registrable Securities such
Holder wishes to include in such registration statement. If a
Holder decides not to include all of its Registrable
Securities in any registration statement thereafter filed by
the Company, such Holder shall nevertheless continue to have
the right to include any Registrable Securities in any
subsequent registration statement or registration statements
as may be filed by the Company with respect to offerings of
its securities, all upon the terms and conditions set forth
herein.
ii. Underwriting. If a registration statement under which the
Company gives notice under this Clause 11(D) is for an
underwritten offering, then the Company shall so advise the
Holders of Registrable Securities. In such event, the right of
any such Holder's Registrable Securities to be included in a
registration pursuant to this Clause 11(D) shall be
conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable
Securities in the underwriting to the extent provided herein.
All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an
underwriting agreement in customary form with the managing
underwriter or underwriters selected for such underwriting.
Notwithstanding any other provision of this Agreement but
subject to Clause 11(L), if the managing underwriter(s)
determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then
the managing underwriter(s) may exclude shares from the
registration and the underwriting, and the number of shares
that may be included in the registration and the underwriting
shall be allocated, first, to the Company, second, to each of
the Holders requesting inclusion of their Registrable
Securities in such registration statement on a pro rata basis
based on the total number of shares of Registrable Securities
then held by each such Holder, and third, to holders of other
securities of the Company; provided, however, that the right
of the underwriter(s) to exclude shares (including Registrable
Securities) from the registration and underwriting as
described above shall be restricted so that (i) the number of
Registrable Securities included in any such registration is
not reduced below twenty-five percent (25%) of the aggregate
number of shares of Registrable Securities for which inclusion
has been requested; and (ii) all shares that are not
Registrable Securities and are held by any other Person,
including, without limitation, any Person who is an employee,
officer or director of the Company (or any subsidiary of the
Company) shall first be excluded from such registration and
underwriting before any Registrable Securities are so
excluded. If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by
written notice to the Company and the underwriter(s),
delivered at least ten (10) Business Days prior to the
effective date of the registration statement. Any Registrable
Securities excluded or withdrawn from such underwriting shall
be excluded and withdrawn from the registration.
iii. Not Demand Registration. Registration pursuant to this Clause
11(D) shall not be deemed to be a demand registration as
described in Clause 11(C) above. There shall be no limit on
the number of times the Holders may request registration of
Registrable Securities under this Clause 11(D).
(E) Form S-3 or Form F-3 Registration. In case the Company shall receive
from any Holder or Holders of a majority of all Registrable Securities
then outstanding a written request or requests that the Company effect
a registration on Form S-3 or Form F-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities
owned by such Holder or Holders, then the Company will:
i. Notice. Promptly deliver 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. Registration. As soon as practicable, effect such registration
and all such qualifications and compliances as may be so
requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holders or
Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable
Securities of any other Holder or Holders joining in such
request as are specified in a written request delivered within
twenty (20) days after the Company provides the notice
contemplated by Clause 11(E)(i); provided, however, that the
Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this
Clause 11(E):
(1) if Form S-3 or Form F-3 is not available for such
offering by the Holders;
(2) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion
in such registration, propose to sell Registrable
Securities and such other securities (if any) at an
aggregate price to the public of less than
US$1,000,000;
(3) if the Company shall furnish to the Holders a
certificate signed by the President or Chief
Executive Officer of the Company stating that in the
good faith judgment of the Board of Directors of the
Company, it would be materially detrimental to the
Company and its shareholders for such Form S-3 or
Form F-3 Registration to be effected at such time, in
which event the Company shall have the right to defer
the filing of the Form S-3 or Form F-3 registration
statement no more than once during any twelve (12)
month period for a period of not more than 120 days
after receipt of the request of the Holder or Holders
under this Clause 11(E); provided that the Company
shall not register any of its other shares during
such 120 day period.
(4) if the Company has, within the six (6) month
period preceding the date of such request, already
effected a registration under the Securities Act
other than a registration from which the Registrable
Securities of Holders have been excluded (with
respect to all or any
portion of the Registrable Securities the Holders
requested be included in such registration) pursuant
to the provisions of Clauses 11(C)(ii) and 11(D)(i);
or
(5) in any particular jurisdiction in which the
Company would be required to qualify to do business
or to execute a general consent to service of process
in effecting such registration, qualification or
compliance.
Subject to the foregoing, the Company shall file a Form S-3 or
Form F-3 registration statement covering the Registrable
Securities and other securities so requested to be registered
as soon as practicable after receipt of the request or
requests of the Holders.
iii. Not Demand Registration. Form S-3 or Form F-3 registrations
shall not be deemed to be demand registrations as described in
Clause 11(C) 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
Clause 11(E).
(F) Expenses. All Registration Expenses incurred in connection with any
registration pursuant to Clauses 11(C), 11(D) or 11(E) (but excluding
Selling Expenses) shall be borne by the Company. Each Holder
participating in a registration pursuant to Clauses 11(C), 11(D) or
11(E) shall bear such Holder's proportionate share (based on the total
number of shares sold in such registration other than for the account
of the Company) of all Selling Expenses or other amounts payable to
underwriter(s) or brokers, in connection with such offering by the
Holders. Notwithstanding the foregoing, the Company shall not be
required to pay for any expenses of any registration proceeding begun
pursuant to Clause 11(C) if the registration request is 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 Clause 11(C) (in which case such registration
shall also constitute the use by all Holders of Registrable Securities
of one (1) such demand registration). Notwithstanding the foregoing, 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
due to acts, omissions, or events within the Company's control that
were 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 request shall not constitute the use of a demand
registration pursuant to Clause 11(C). If the Holders have learned of a
material adverse change in the condition, business, or prospects of the
Company due to acts, omissions, or events beyond the Company's control
that were 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 Company, on the one hand, and the Holders, on the
other hand, shall pay any such expenses on an equal basis and such
registration request shall not constitute the use of a demand
registration pursuant to Clause 11(C).
(G) Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement the
Company shall, as expeditiously as reasonably possible:
i. Registration Statement. Prepare and file with the SEC a
registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration
statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for a
period of up to ninety (90) days or, in the case of
Registrable Securities registered under Form S-3 or Form F-3
in accordance with Rule 415 under the Securities Act or a
successor rule, until the distribution contemplated in the
registration statement has been completed; provided, however,
that (i) such ninety (90) day period shall be extended for a
period of time equal to the period any Holder refrains from
selling any securities included in such registration at the
request of the underwriter(s), and (ii) in the case of any
registration of Registrable Securities on Form S-3 or Form F-3
which are intended to be offered on a continuous or delayed
basis, such ninety (90) day period shall be extended, if
necessary, to keep the registration statement effective until
all such Registrable Securities are sold.
ii. Amendments and Supplements. Prepare and file with the SEC such
amendments and supplements to such registration statement and
the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all
securities covered by such registration statement.
iii. Prospectuses. Furnish to the Holders such number of copies of
a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and
such other documents as they may reasonably request in order
to facilitate the disposition of the Registrable Securities
owned by them that are included in such registration.
iv. Blue Sky. Use its best efforts to register or 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 in any
jurisdiction where it would not otherwise be required to
qualify but for this subsection, to subject itself to taxation
in any such jurisdiction or consent to service of process in
any such jurisdiction, unless the Company is already subject
to service in such jurisdiction.
v. Underwriting. In the event of any underwritten public
offering, enter into and perform its obligations under an
underwriting agreement in usual and customary form, with the
managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and
perform its obligations under such an agreement.
vi. Notification. Notify each Holder of Registrable Securities
covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under
the Securities Act of (i) the issuance of any stop order by
the SEC in respect of such registration statement, or (ii) 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.
vii. Opinion and Comfort Letter. Furnish, at the request of any
Holder requesting registration of Registrable Securities, on
the date that such Registrable Securities are delivered to the
underwriter(s) for sale, if such securities are being sold
through underwriters, or, if such securities are not being
sold through underwriters, on the date that the registration
statement with respect to such securities becomes effective,
(i) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if
any, and to the Holders requesting registration of Registrable
Securities and (ii) letters dated as of (x) the effective date
of the registration statement covering such Registrable
Securities and (y) the closing date of the offering, from the
independent certified public accountants of the Company, in
form and substance as is customarily given by independent
certified public accountants to underwriters in an
underwritten public offering and reasonably satisfactory to a
majority in interest of the Holders requesting registration,
addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities.
(H) Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Clauses
11(C), 11(D) or 11(E) that the selling Holders shall furnish to the
Company such information regarding themselves, the Registrable
Securities held by them and the intended method of disposition of such
securities as shall be required to timely effect the Registration of
their Registrable Securities.
(I) Indemnification. In the event any Registrable Securities are included
in a registration statement under Clauses 11(C), 11(D) or 11(E):
i. By the Company. To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, its partners,
officers, directors, legal counsel, any underwriter (as
defined in the Securities Act) for such Holder and each
Person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or the Exchange Act (each a
"CONTROLLING PERSON"), against any losses, Claims, damages, or
liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act, or other
U.S. federal or state law, insofar as such losses, Claims,
damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations
(collectively a "VIOLATION"):
(1) any untrue statement or alleged untrue statement
of a material fact contained in such registration
statement, including any preliminary prospectus or
final prospectus contained therein or any amendments
or supplements thereto;
(2) the omission or alleged omission to state therein
a material fact required to be stated therein, or
necessary to make the statements therein not
misleading; or
(3) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, any U.S.
federal or state securities law, or any rule or
regulation promulgated under the Securities Act, the
Exchange Act, or any U.S. federal or state securities
law in connection with the offering covered by such
registration statement;
and the Company will reimburse each such Holder, its partner,
officer, director, legal counsel, underwriter or Controlling
Person for any legal or other expenses reasonably incurred by
them, as such expenses are incurred, in connection with
investigating or defending any such loss, Claim, damage,
liability or action; provided, however, that the indemnity
agreement contained in this Clause 11(I)(i) shall not apply to
amounts paid in settlement of any such loss, Claim, damage,
liability or action if such settlement is effected without the
consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, Claim, damage, liability or
action to the extent (and only to the extent) that it arises
out of or is based upon a Violation which occurs in reliance
upon and in conformity with written information furnished
expressly for use in connection with such registration by such
Holder, partner, officer, director, legal counsel, underwriter
or Controlling Person of such Holder.
ii. By Selling Holders. To the extent permitted by law, each
selling Holder will, if Registrable Securities held by Holder
are included in the securities as to which such registration
qualifications or compliance is being effected, indemnify and
hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each
Person, if any, who controls the Company within the meaning of
the Securities Act, any underwriter and any other Holder
selling securities under such registration statement or any of
such other Holder's partners, directors, officers, legal
counsel, or any Person who controls such Holder within the
meaning of the Securities Act or the Exchange Act, against any
losses, Claims, damages or liabilities (joint or several) to
which the Company or any such director, officer, legal
counsel, Controlling Person, underwriter or other such Holder,
partner or director, officer or Controlling Person of such
other Holder may become subject under the Securities Act, the
Exchange Act or other U.S. federal or state law, insofar as
such losses, Claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon
and in conformity with written information furnished by such
Holder expressly for use in connection with such registration;
and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such
director, officer, Controlling Person, underwriter or other
Holder, partner, officer, director or Controlling Person of
such other Holder in connection with investigating or
defending any such loss, Claim, damage, liability or action;
provided, however, that the indemnity agreement contained in
this Clause 11(I)(ii) 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 Holder, which consent shall not be unreasonably withheld;
and provided, further, that in no event shall any indemnity
under this Clause 11(I)(ii) exceed the net proceeds received
by such Holder in the registered offering out of which the
applicable Violation arises.
iii. Notice. Promptly after receipt by an indemnified party under
this Clause 11(I) of notice of the commencement of any action
(including any governmental action), such indemnified party
will, if a claim in respect thereof is to be made against any
indemnifying party under this Clause 11(I), deliver to the
indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly
noticed, to assume the defence thereof with counsel mutually
satisfactory to the parties in their reasonable judgment;
provided, however, that an indemnified party shall have the
right to retain its own counsel, with the fees and expenses to
be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential
conflict of interests between such indemnified party and any
other party represented by such counsel in such proceeding.
The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such
action shall relieve such indemnifying party of liability to
the indemnified party under this Clause 11(I) to the extent
the indemnifying party is prejudiced as a result thereof, but
the omission to so deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Clause 11(I).
iv. Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in
any case in which either (i) any indemnified party makes a
claim for indemnification pursuant to this Clause 11(I) but it
is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case
notwithstanding the fact that this Clause 11(I) provides for
indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of any indemnified
party in circumstances for which indemnification is provided
under this Clause 11(I); then, and in each such case, the
indemnified party and the indemnifying party will contribute
to the aggregate losses, Claims, damages or liabilities to
which they may be subject (after contribution from others) in
such proportion so that a Holder (together with its related
persons) is responsible for the portion represented by
the percentage that the public offering price of its
Registrable Securities offered by and sold under the
registration statement bears to the public offering price of
all securities offered by and sold under such registration
statement, and the Company and other selling Holders are
responsible for the remaining portion. 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, however, that, in any
such case: (A) no Holder will be required to contribute any
amount in excess of the net proceeds to such Holder from the
sale of all such Registrable Securities offered and sold by
such Holder pursuant to such registration statement; and (B)
no Person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any Person or entity who
was not guilty of such fraudulent misrepresentation.
v. Survival; Consents to Judgments and Settlements. The
obligations of the Company and Holders under this Clause 11(I)
shall survive the completion of any offering of Registrable
Securities in a registration statement, regardless of the
expiration of any statutes of limitation or extensions of such
statutes. No indemnifying party, in the defence 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 which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect
to such Claim or litigation.
(J) Termination of the Company's Obligations. The Company shall have no
obligations pursuant to Clauses 11(C), 11(D) and 11(E) with respect to
any Registrable Securities proposed to be sold by a Holder in a
registration pursuant to Clause 11(C), 11(D) or 11(E) after seven (7)
years following the consummation of the Qualifying IPO in the United
States on either the New York Stock Exchange or the Nasdaq National
Market or, as to any Holder, such earlier time at which all Registrable
Securities held by such Holder (and any affiliate of the Holder with
whom such Holder must aggregate its sales under Rule 144) can be sold
in any ninety (90) day period without registration in compliance with
Rule 144 of the Securities Act.
(K) No Registration Rights to Third Parties. Without the prior written
consent of the holders of a majority of the Registrable Securities then
outstanding, the Company covenants and agrees that it shall not grant,
or cause or permit to be created, for the benefit of any Person or
entity (other than the Founders) any registration rights of any kind
(whether similar to the demand, "piggyback" or Form S-3 or Form F-3
registration rights described in this Clause 11, or otherwise) relating
to any securities of the Company which are senior to, or on a parity
with, those granted to the Holders of Registrable Securities.
(L) Market Stand-Off. Each of the Founders and the Special Shareholder
agrees that, so long as it holds any voting securities of the Company,
upon request by the Listing Company or the underwriters managing the
initial public offering of the Company's securities, it will not sell
or otherwise transfer or dispose of any securities of the Listing
Company (other than those permitted to be included in the registration
and other transfers to Affiliates permitted by law) without the prior
written consent of the Listing Company or such underwriters, as the
case may be, for a period of time specified by the representative of
the underwriters not to exceed 180 days from the effective date of the
registration statement covering such initial public offering or the
pricing date of such offering as may be requested by the underwriters.
The foregoing provision of this Clause 11(L) shall not apply to the
sale of any securities of the Company to an underwriter pursuant to any
underwriting agreement. The Company shall require all future acquirers
of the Founders' and Special Shareholders' securities to execute prior
to a Qualified IPO a market stand-off agreement containing
substantially similar provisions as those contained in this Clause
11(L).
(M) Rule 144 Reporting. With a view to making available to the Holders the
benefits of certain rules and regulations of the SEC which may at any
time permit the sale of the Registrable Securities to the public
without registration or pursuant to a registration on Form S-3 or Form
F-3, after such time as a public market exists for the Ordinary Shares
in the United States, the Company agrees to:
i. 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 of the first
registration under the Securities Act filed by the Company for
an offering of its securities to the general public;
ii. File with the SEC 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); and
iii. So long as a Holder owns any Registrable Securities, to
furnish to such Holder forthwith upon request (i) a written
statement by the Company as to its compliance with the
reporting requirements of Rule 144 (at any time after ninety
(90) days after the effective date of the Company's initial
public offering in the United States), the Securities Act and
the Exchange Act (at any time after it has become subject to
such reporting requirements), or its qualification as a
registrant whose securities may be resold pursuant to Form S-3
or Form F-3 (at any time after it so qualifies), (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 SEC that permits the selling of any such
securities without registration or pursuant to Form S-3 or
Form F-3.
N. Transfer of Registration Rights.
i. The rights of the Holders under this Clause 11 (the
"REGISTRATION RIGHTS") may be assigned by a Holder, in
conjunction with a Transfer of Registrable Securities, to a
Transferee that (a) is a subsidiary, parent, partner, limited
partner, member, retired member, retired, partner, affiliate
or stockholder of a
Holder, (b) is a Holder's family member or trust for the
benefit of an individual Holder, (c) holds Registrable
Securities at the time of such Transfer, or (d) after such
Transfer, holds at least twenty five percent (25%) of the
Registrable Securities held by such Holder prior to any
Transfers of Registrable Securities.
ii. In the event of a Transfer of Registration Rights pursuant to
Clauses 11(N)(i)(a), (b), or (c), if such Transferee receives
one hundred percent (100%) of the Registrable Securities held
by the Transferring Holder, then such Transferee may
subsequently transfer the Registration Rights in accordance
with this Clause 11(N), otherwise such Transferee may not
subsequently transfer the Registration Rights.
iii. In the event of a Transfer of Registration Rights pursuant to
Clauses 11(N)(i)(d), such Transferee may not subsequently
transfer the Registration Rights.
iv. Nothing in this Clause 11(N) shall be construed as imposing
any restrictions on the transferability of the Holders'
Registrable Securities.
12. BOARD OF DIRECTORS
(A) Each Founder and Initial Shareholder shall take, as of the effective
date of this Agreement and from time to time, all action (including,
without limitation, voting the Shares owned by it, calling special
meetings of shareholders to amend the Memorandum and Articles and
executing and delivering written consents) necessary to elect up to
five (5) members to the Board, which shall include the following:
i. One (1) director nominated by a majority in interest of the
Investors (or subsequent holders of the Notes), which director
initially shall be designated by HSBC, provided that HSBC has
participated in the Closing;
ii. four (4) other directors nominated by the Founders.
(B) The quorum of all Board meetings shall be three directors, including
▇▇. ▇▇▇▇ Defu and at least one director nominated by the Investors (or
subsequent holders of the Notes). All Board resolutions will require
the affirmative vote of a majority of the Directors present at a duly
constituted Board meeting.
(C) In addition, INTEL, QUALCOMM and SEABRIGHT provided that each has
participated in the Closing, shall each have the right to designate a
representative (each a "BOARD OBSERVER") to attend all meetings of the
Board and all committees of the Company and the other Group Companies
(whether in person, telephonic or other) in a non-voting observer
capacity. The Company shall provide both Board Observers with copies of
all notices and materials provided to the voting Board or committee
members, at the same time and in the same manner as the same are
provided to the voting Board or committee members.
13. PROTECTIVE PROVISIONS (NEGATIVE COVENANTS)
(A) In addition to such other limitations as may be provided in the
Memorandum and Articles or other constitutional document of each Group
Company, without the prior written approval of the holder(s) of 100% of
the Shares issued or issuable upon conversion of the Notes, none of the
Group Companies shall take any of the following actions; provided
however that approval of only 70% of the Shares issued or issuable upon
conversion of the Notes shall be required for the actions described in
Clauses 13(i), 13(ii), 13(x), 13(xi), 13(xvi), 13(xviii) and 13(xx):
i. make any loans or investments or acquire any share or give any
credit (other than normal trade credit) or give any guarantee
or indemnity (save to a Group Company's banker to secure Group
Company borrowings), in excess of RMB5,000,000, except that no
approval shall be necessary for (a) loans among the Group
Companies (b) payments totalling an aggregate of US$4,930,000
to the Six Shareholders for the acquisition of Beijing
Techfaith and Centel, (c) for an aggregate of US$4,000,000 in
direct injection or loans to Leadtech, each strictly as
provided in Clause 16, and (d) investments utilized solely for
cash management purposes in such amounts and in such
investment products or strategies as are approved by the Board
of Directors of the Company, including the director nominated
by the Investors (or subsequent holders of the Notes);
ii. borrow any money in excess of 30% of the Group's NAV
individually, or in the aggregate (except pursuant to the
Notes), provided, however, that if less than US$14,000,000 is
lent to the Company at Closing (including cancellation of the
SEABRIGHT Notes), no approval shall be required to borrow an
amount equal to difference between US$14,000,000 and the
amount lent at Closing, and provided further that no approval
shall be required to obtain letters of credit or other bank
facilities for trade purposes in the ordinary course of
business;
iii. acquire or dispose of any Shares or material part of its
business or assets (excluding inventory and fixed assets in
the ordinary course of business) or take other steps to merge,
reorganize, reincorporate, or combine with any other entity;
iv. save for the purpose of effecting conversion of the Notes as
contemplated hereunder and save as required by applicable laws
or regulatory authorities for the purpose of consummation of
the Qualified IPO, change its authorised or issued share
capital, Memorandum or Articles of Association or other
Constitutional Documents;
v. capitalise any debenture;
vi. save as contemplated under this agreement and save as required
by applicable laws or regulatory authorities for the purpose
of consummation of the Qualified IPO, issue any new Equity
Interests for acquisitions or otherwise, excluding under any
employee share option plan approved by the Investors;
vii. make any material change in the nature of its business;
viii. enter into transactions which are not made on a bona fide
arm's length basis in the ordinary course of business;
ix. enter into any joint venture, partnership or consortium
arrangement;
x. enter into any arrangement with any of its directors or other
substantial shareholders or any related party transactions,
except for agreements between the Group Companies and NEC,
INTEL, QUALCOMM or SEABRIGHT;
xi. pay emoluments bonuses in excess of agreed annual levels to
members of the Board of Directors of any Group Company, which
levels shall be determined by the Company's Board of Directors
including the director appointed by the Investors (or
subsequent holders of the Notes) at the first meeting of the
Board of Directors following the Closing;
xii. change its auditors, independent reporting accountant, or
accounting reference date, except that changes of the PRC
auditor of the PRC Subsidiaries shall only require
notification to the Investors;
xiii. change its accounting policies and bases, except for changes
approved by a Group Company's auditor in writing as being in
compliance with HK GAAP;
xiv. change its Executive Directors, except for Executive Directors
of STEP Technologies who, pursuant to the current
Constitutional Documents of STEP Technologies or other
existing contractual arrangements, are appointed by NEC;
xv. declare or pay any dividends or distributions or change its
dividend or distribution policy, except that no approval shall
be required for dividends or distributions among the Group
Companies, subject to the limitation that any dividends or
distributions by STEP Technologies pursuant to this exception
must be made on a pro-rata basis to its equity owners, based
upon their respective ownership interests in STEP
Technologies.
xvi. make a capital expenditure or enter into any hire
purchase/leasing arrangement that is twenty percent (20%)
greater than that contemplated in the business plan unless in
accordance with the annual budget approved by the Board of
Directors of the Company;
xvii. save as required by applicable laws or regulatory authorities
for the purpose of consummation of the Qualified IPO, take any
steps to effect a liquidation, dissolution, winding up or
institution of bankruptcy, receivership, assignment for the
benefit of creditors or similar insolvency related proceedings
of any Group Company. A merger, acquisition, change of
control, consolidation, or other transaction or series of
transactions in which the Group Company's shareholders prior
thereto will not retain a majority of the voting power of the
surviving entity immediately thereafter; or a sale, lease,
license or other transfer of all or substantially all the
Group Company's assets or Intellectual Property Rights to a
party that is not an Affiliate of such Group Company, shall be
deemed to be a liquidation, dissolution or winding up;
xviii. change the terms of employment of any employee whose basic
salary is in excess of US$100,000 per year;
xix. create or issue any new class of shares having preference over
the Ordinary Shares;
xx. approve any new employee share option plan, amend the current
employee share option plan, or increase the shares available
for issuance thereunder; or
xxi. effect any change to the corporate structure of the Group,
except as approved by the Board including the director
nominated by the Investors (or subsequent holders of the
Notes);
(B) Without the prior written approval of QUALCOMM, Leadtech shall not:
i. effect a change of the top executive (CEO / general manager)
of Leadtech;
ii. Transfer any Equity Interest in Leadtech other than a Transfer
or liquidation originated by the Company and affecting the
entire Group; or
iii. enter into any strategic Contract, or other commercial
arrangement that may adversely affect QUALCOMM as a key
component partner for Leadtech.
(C) All directors of the Group Companies shall be appointed and removed
only by the Company pursuant to action of the Board of Directors of the
Company. All corporate actions of the Group shall be pursuant to action
by the Board of Directors of the Company.
14. NON-COMPETE AND NON-SOLICITATION
(A) The Founders shall, and shall procure the Company's Key Employees to
(i) devote substantially the whole of their time to the Group's
business and (ii) prior to Closing, enter into three-year service
agreements (the "SERVICE AGREEMENTS") in a form acceptable to the
Company and Investors. Each Founder undertakes he shall not, and shall
not permit any of his Affiliates to, engage, directly or indirectly, in
any business that competes with the Group or, without the prior written
consent of the Investors, directly or indirectly, own an interest in,
manage, operate, join, control, lend money or render financial or other
assistance to or participate in or be connected with, as an officer,
employee, partner, shareholder, consultant or otherwise, any Person
that competes with the Group, provided that this Clause shall not
prohibit the ownership of shares in a publicly traded company which
does not exceed 5% of the entire issued share capital of such publicly
traded company, so long as such shareholder is not a member of the
board of directors of such publicly traded company.
(B) Each Founder undertakes, and procures any Affiliate of such Founder to
undertake, with the Investors that, during the Non-Compete Period, such
Founder and its Affiliates will not in any way, directly or indirectly,
for the purpose of conducting or engaging in any business that competes
with the Group, (i) call upon, solicit, advise or otherwise do, or
attempt to do, business with any customers of the Group with whom
the Company had any dealings during the Non-Compete Period, (ii) take
away or interfere or attempt to interfere with any custom, trade,
business or patronage of the Group, (iii) interfere with or attempt to
interfere with any officers, employees, representatives or agents of
the Company or (iv) induce or attempt to induce any such officer,
employee, representative or agent to leave the employ of the Company or
violate the terms of their contracts, or any employment arrangements,
with the Company.
15. REORGANISATION
(A) The Group will be reorganised as described in the Exhibit E (the
"REORGANISATION"). Among other things, the Reorganisation will involve
the incorporation of a new holding company to serve as the proposed
Listing Company, in which each Investor will hold after the
Reorganisation the same percentage of Ordinary Shares (or securities
convertible into such Ordinary Shares) as in the Company, and in
respect of which each Investor will have identical rights, mutatis
mutandis to its rights in relation to the Ordinary Shares of the
Company under their respective articles of association and other
Constitutional Documents.
(B) As soon as practicable following incorporation or establishment of the
Listing Company and any future 100% parent of the Company, or directly
or indirectly wholly owned subsidiary of the Company (each a "NEWCO"),
the Company, Founders and Investors shall execute and deliver, and
shall cause the NewCo to execute and deliver, any and all agreements,
documents and instruments required to add the NewCo as a party to this
Agreement and to bind the NewCo to the terms of this Agreement, in the
capacity of a "Group Company" as that term is used herein.
(C) Following the establishment of the Listing Company, the shares held by
the Investors shall be exchanged at the same time, and upon the same
terms, as the shares held by the Six Shareholder for shares of the
Listing Company, such that the Investors and Six Shareholders each hold
the same percentage of the Listing Company immediately following such
exchange, as each held of the Company, on a fully-diluted basis,
immediately following Closing.
(D) If the Board of Directors of the Company shall after Closing, elect to
engage China Everbright Capital Limited as its financial adviser,
sponsor and/or lead underwriter for its IPO, the Investors shall not
oppose such engagement.
16. OTHER COVENANTS
(A) The US$14,000,000 in proceeds from the subscription by the Investors
for the Notes pursuant to this Agreement (the "SUBSCRIPTION PROCEEDS")
shall be applied by the Company solely as follows and any material
deviation from the steps described below shall be considered a breach
of this Agreement unless prior written approval of all the Investors is
obtained:
i. approximately US$2,500,000 (equivalent to RMB20,600,000) shall
be loaned by the Company to Great ▇▇▇▇▇▇▇ and Great ▇▇▇▇▇▇▇
shall pay the entire amount to the Six Shareholders as
consideration for the acquisition of the entire equity
interest in Beijing Techfaith under the Share Assignment
Contract [Chinese Characters] dated December 12, 2003, and the
Six Shareholders shall donate such consideration amount to
Beijing Techfaith and instruct Great ▇▇▇▇▇▇▇ to directly pay
the entire amount into Beijing Techfaith;
ii. approximately US$2,430,000 (equivalent to RMB20,000,000) shall
be loaned by the Company to ▇▇▇ and ▇▇▇ shall pay the entire
amount to the Six Shareholders as consideration for the
acquisition of the entire equity interest in Centel under the
Share Assignment Contract [Chinese Characters] dated
December 12, 2003 and the Six Shareholders shall donate such
consideration amount to Centel and instruct ▇▇▇ to directly
pay the entire amount into Centel;
iii. the Company shall provide to the Investors evidence obtained
from the SAFE reflecting the foreign currency injection of a
USD equivalent amount of RMB20,600,000 into Beijing Techfaith
and a USD equivalent amount of RMB20,000,000 into Centel;
iv. upon the completion of Clauses 16A(i), 16A(ii) and 16A(iii),
Beijing Techfaith and Centel shall each have completed the
procedure for transforming from a PRC domestic company into a
wholly foreign owned entity ("WFOE") owned 100% by Great
▇▇▇▇▇▇▇ and ▇▇▇, respectively;
v. the US$4,930,000 donated to Beijing Techfaith and Centel as
set out in Clauses 16(A)(ii) and (iii) shall be used by each
as working capital;
vi. US$4,000,000 shall represent the cancellation of the
outstanding indebtedness evidenced by the SEABRIGHT Notes;
vii. US$4,000,000 shall be loaned by the Company to Finest
Technology and in turn, Finest Technology shall inject
US$2,400,000 amount into Leadtech to pay up its registered
capital and the Company shall provide to the Investors
evidence obtained from the SAFE reflecting the foreign
currency injection of US$2,400,000 into Leadtech;
viii. upon the completion of Clause 16(A)(vii), Leadtech shall be a
WFOE owned 100% by Finest Technology;
ix. The Company shall procure PRC government approval to increase
the registered capital of Leadtech to US$4,000,000, and upon
such approval Finest Technology will inject an additional
US$1,600,000 into Leadtech as additional capital and shall
provide to the Investors evidence obtained from the SAFE
reflecting the foreign currency injection of the additional
amount of US$1,600,000 into Leadtech; and
x. The balance of the Subscription Proceeds shall be used by the
Company for working capital purposes and to pay professional
service fees incurred in connection with the transactions
contemplated by this Agreement.
(B) The Company shall undertake to carry out all of the actions described
in Clause 16(A) and the distribution of the Subscription Proceeds and
all of the actions described in Clause 16(A) (i), (ii), (iii), (iv),
(v), (vi), (vii), (viii), and (x) shall be completed no
later than thirty (30) days following the Closing and the actions
described in Clause 16(A)(ix) shall be completed no later than sixty
(60) days following the date HSBC's Investment Amount is received by
the Company.
(C) This Agreement and the Investors' rights thereunder shall terminate
upon the closing of any Qualified IPO, except for the representations
and warranties of Clause 3, which shall survive for a period of 24
months after Closing, and the provisions of Clauses 10(E) (Post-IPO
Information Rights), 11 (Registration Rights), 14 (Non-Compete and
Non-Solicitation), 16(C) (Survival), 16(F) (Indemnification), 17
(Confidentiality), and 19 (Miscellaneous) which will survive
termination and continue for their respective agreed periods.
(D) The Company shall undertake to obtain in aggregate US$1,000,000 of
key-person insurance in respect of DONG Defu and any other key senior
management employee of the Group, as may be reasonably requested by the
Investors, payable to the Company.
(E) Each party undertakes with the other parties that it will execute all
such documents and do all such acts and things as the other parties or
any of them may at any time and from time to time reasonably request
and as may be lawful and within its power to do to carry into effect or
to give legal effect to the provisions in this Agreement and
Transactions.
(F) The Founders and the Company unconditionally and irrevocably undertake
to indemnify, defend and hold harmless each Investor and its Affiliates
(together, the "INDEMNIFIED PARTIES"), and each of them, from and
against any and all losses, damages, or settlement amounts arising out
of, relating to, connected with or incidental to, (i) any breach or
default of this Agreement or the Notes, or (2) any Claim relating to
any Group Company's right to utilize the Intellectual Property Rights
of Skyworks Solutions, Inc. ("SKYWORKS") or ▇▇▇▇▇▇▇▇ ▇▇ (or its
Affiliates), prior to entering into license agreements with each of
Skyworks and ▇▇▇▇▇▇▇▇, together with all reasonable costs, expenses,
charges, interest and penalties incurred in relation thereto, save
where such losses are directly caused by the wilful misconduct, bad
faith or gross negligence on the part of the relevant Indemnified
Party. This Clause shall survive the termination of this Agreement and
the Notes.
(G) As a separate and independent right, in the event of any breach or
default of this Agreement, any of the Investors may declare that an
"Event of Default" has occurred for the purposes of the Note held by
such Investor.
(H) The Group, the Founders, and the Initial Shareholders agree that they
shall, upon request by any Investor, execute and deliver any documents
required to transfer all or a portion of the Note held by such Investor
to any Transferee (a "NOTE TRANSFEREE").
(I) The Company and Founders shall undertake to have all Group Company
employees and consultants execute a confidential information and
intellectual property assignment agreement in a form approved by the
Investors as soon as practicable following Closing.
(J) The Company shall undertake to use its reasonable endeavours to
complete its application for any utility model patent applications that
have not yet been published.
(K) The Company shall undertake to enter into trademark license agreements
with Beijing Techfaith and Centel regarding such trademarks that are
owned by the Company and are required for use by Beijing Techfaith and
Centel in their ordinary course of business.
(L) The Company shall undertake by the earlier of June 30, 2005 or the date
of the listing hearing (or other equivalent event) by the Exchange
relating to the IPO (i) to obtain all legally required licenses for
software applications installed on the Group's personal computers or
servers, or (ii) to uninstall and permanently delete any copies of
software applications for which a license is required but will not be
obtained. A report on the progress of this undertaking shall be made at
each meeting of the Company's Board of Directors until this undertaking
is completed.
17. CONFIDENTIALITY
(A) The terms and conditions of this Agreement, the Notes and all exhibits
and schedules attached hereto (collectively, the "FINANCING TERMS")
including their existence, shall be considered confidential information
and shall not be disclosed to any third party by the Company, the
Founders, or the Initial Shareholders except as provided below.
(B) The Company shall be allowed to disclose any of the Financing Terms, as
well as Investors' investment in the Company, solely to the Company's
investors, investment bankers, lenders, accountants, legal counsel,
bona fide prospective investors and employees, in each case only where
such persons or entities were under appropriate nondisclosure
obligations.
(C) Each Investor may disclose the amount or terms of its own respective
investment to any Person or in a press release or other public
announcement at its option, and the Company and the other Investors
thereafter would be freely entitled to disclose any information so
disclosed in a press release or other public announcement.
(D) Within sixty (60) days of the Closing, the Company may issue a press
release disclosing that each Investor has invested in the Company;
provided that the release does not disclose the amount or terms of the
investment and the final form of the press release is approved in
advance in writing by the respective Investors. The name of each
Investor and the fact that such Investor is a shareholder of the
Company can be included in a reusable press release boilerplate
statement, so long as such Investor has given the Company its initial
approval of such boilerplate statement and the boilerplate statement is
reproduced in exactly the form in which it was approved. No other
announcement regarding the Financing Terms in a press release,
conference, in any professional or trade publication, in any marketing
materials or otherwise to the general public shall be made without the
prior written consent of the respective Investor, which consent may be
withheld at such Investor's sole discretion.
(E) In the event that any party is requested or becomes legally required
(including without limitation, pursuant to securities laws and
regulations or the Rules Governing the Listing of Securities on the
Stock Exchange of Hong Kong Limited) or is required by the regulatory
authorities for the purpose of consummation of the Qualified IPO, to
disclose the existence of this Agreement or any of the Financing Terms
in
contravention of the provisions of this Clause 17, such party (the
"DISCLOSING PARTY") shall provide the other parties (the
"NON-DISCLOSING PARTIES") with prompt written notice of that fact so
that the appropriate party may seek (with the cooperation and
reasonable efforts of the other parties) a protective order,
confidential treatment or other appropriate remedy. In such event, the
Disclosing Party shall furnish only that portion of the information
which is legally required and shall exercise reasonable efforts to
obtain reliable assurance that confidential treatment will be accorded
such information to the extent reasonably requested by any
Non-Disclosing Party.
(F) The provisions of this Clause 17 shall be in addition to, and not in
substitution for, the provisions of any separate non-disclosure
agreement executed by any of the parties hereto with respect to the
transactions contemplated hereby. In particular, additional disclosures
and exchange of confidential information between the Company and INTEL
(including without limitation, any exchanges of information with any
INTEL Board Observer) shall be governed by the terms of the Corporate
Non-Disclosure Agreement No. 4837364 dated October 24, 2003, executed
by the Company and INTEL, and any Confidential Information Transmittal
Records (CITR) provided in connection therewith.
18. EXPENSES
(A) The Company shall pay to and reimburse HSBC, QUALCOMM, and INTEL for
all reasonable costs and expenses (including reasonable legal costs and
all administrative and out-of-pocket expenses) properly incurred in
connection with the due diligence exercise carried out by HSBC,
QUALCOMM, and INTEL as contemplated under this Agreement and the
negotiation, preparation and completion of this Agreement, the Note,
and the transactions contemplated hereby and thereby, provided always
that the Company's maximum liability under this Clause shall not exceed
US$120,000 in aggregate (the "LEGAL FEES") and provided that, if the
Investors do not proceed to Closing (except in the case of breach of
this Agreement by the Company, the Founders, or the Initial
Shareholders), then the Company shall have no obligation to pay such
Legal Fees to HSBC, QUALCOMM, and INTEL.
(B) In performance of its obligations under Clause 18(A), the Company
hereby irrevocably authorises HSBC and QUALCOMM to deduct at Closing
from its Investment Amount a pro-rata portion (based upon the
respective Investment Amounts of HSBC, INTEL and QUALCOMM as compared
to US$10,000,000) of the amounts payable by the Company to the
Investors under Clause 18(A) prior to transferring the relevant amounts
to the Company in accordance with Clause 2(E); provided however, that
in the case of INTEL, at Closing, the Company shall pay INTEL a
pro-rata portion (based upon the respective Investment Amounts of HSBC,
INTEL and QUALCOMM as compared to US$10,000,000) of the amount payable
by the Company to INTEL under Clause 18(A). In the event the Investors
do not proceed to Closing in relation to a breach of this Agreement by
the Company, the Founders, or the Initial Shareholders, the Company
shall pay the Legal Fees as described in this Clause 18(A) within five
Business Days of written notice from all Investors of such breach.
19. MISCELLANEOUS
(A) If at any time one or more of the provisions of this Agreement is or
becomes invalid, illegal, unenforceable or incapable of performance in
any respect, the validity, legality, enforceability or performance of
the remaining provisions of this Agreement shall not thereby in any way
be affected or impaired.
(B) No single or partial exercise of, or failure or omission to exercise or
delay in exercising any right, power, Claim or remedy vested in any
party under or pursuant to this Agreement or otherwise shall affect,
prejudice or constitute a waiver by such party of such or any other
right, power, Claim or remedy.
(C) Any right, power, Claim or remedy expressly conferred upon any party
under this Agreement shall be in addition to and without prejudice to
all other rights, powers, Claims and remedies which would otherwise be
available to such party under this Agreement or at law.
(D) Any notice, demand or other communication to be given by any party to
the other parties under this Agreement shall be in writing, and shall
be deemed duly served if:
(i) delivered personally;
(ii) sent by prepaid registered post; or
(iii) sent by facsimile transmission,
to the address or facsimile number (as the case may be) of such other
party previously in writing notified to the party serving the same
(and, in the case of any subsequent change of the address or facsimile
number, such notification shall be given in accordance with the
provisions of this Agreement and shall state in clear terms the
intention to change the address or facsimile number, as the case may
be).
(E) A notice, demand or other communication shall be deemed served:
(i) if delivered personally, at the time of delivery;
(ii) if sent by post, at the expiration of two Business
Days (for local addresses in Hong Kong) or five Business Days
(for any other overseas address) after the envelope containing
the same has been delivered into the custody of the postal
authorities; and
(iii) if sent by facsimile transmission, upon receipt by
the party giving the same of machine printed confirmation of
such transmission.
(F) In proving the service of any notice, demand or other communication, it
shall be sufficient to prove that:
(i) in the case of personal delivery, the same has been
delivered or left at the address, or the postal box of such
address, of the party to be served on;
(ii) in the case of a mail, the envelope containing the
same has been properly addressed, delivered into the custody
of the postal authorities and duly stamped; and
(iii) in the case of a facsimile transmission, the same has
been duly transmitted to the facsimile number of the party to
be served on.
(G) For the purposes of Clause 19(D) above, the initial address and
facsimile number of each party are:
To: ▇▇. ▇▇▇▇ Defu
Address: 5/F., M7 East, No. 1 Jiu Xian ▇▇▇▇ ▇▇▇▇ Road
▇▇▇▇ ▇▇▇▇ District, Beijing, PRC
Facsimile number: (▇▇ ▇▇) ▇▇▇▇ ▇▇▇▇
To: ▇▇. ▇▇▇ Baozhuang
Address: 5/F., M2 East, No. 1 Jiu Xian ▇▇▇▇ ▇▇▇▇ Road
▇▇▇▇ ▇▇▇▇ District, Beijing, PRC
Facsimile number: (▇▇ ▇▇) ▇▇▇▇ ▇▇▇▇
To: Mr. He Changke
Address: 5/F., M7 East, No. 1 Jiu Xian ▇▇▇▇ ▇▇▇▇ Road
▇▇▇▇ ▇▇▇▇ District, Beijing, PRC
Facsimile number: (▇▇ ▇▇) ▇▇▇▇ ▇▇▇▇
To: ▇▇. ▇▇▇ Cangsong
Address: 5/F., M2 East, No. 1 Jiu Xian ▇▇▇▇ ▇▇▇▇ Road
▇▇▇▇ ▇▇▇▇ District, Beijing, PRC
Facsimile number: (▇▇ ▇▇) ▇▇▇▇ ▇▇▇▇
To: Mr. ▇▇▇ ▇▇▇▇▇▇▇▇
Address: ▇▇. ▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇ District
Qingdao City, PRC
Facsimile number: (▇▇ ▇▇) ▇▇▇▇ ▇▇▇▇
To: ▇▇. ▇▇ Kebo
Address: ▇▇▇▇ ▇▇▇▇, ▇▇/▇., ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇▇ ▇▇▇▇
To: The Group Companies
Address: 5/F M7 East, No. 1 Jiu Xian ▇▇▇▇ ▇▇▇▇ Road,
▇▇▇▇ ▇▇▇▇ District, Beijing, PRC
Facsimile number: (▇▇ ▇▇) ▇▇▇▇ ▇▇▇▇
For the attention of: ▇▇. ▇▇▇▇ Defu, Chairman
To: HTF7 Limited
Address: c/o HSBC Private Equity (Asia) Ltd., ▇▇▇▇▇ ▇▇,
▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Facsimile: 852-28459992
For attention of: Managing Director
To: SeaBright China Special Opportunities (I)
Limited
Address: ▇/▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ Finance Centre
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇▇ ▇▇▇▇
For the attention of: Managing Director
To: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile number: ▇▇ ▇▇▇-▇▇▇-▇▇▇▇
For the attention of: ▇▇▇▇ ▇▇▇▇▇▇▇▇
and
To: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
2601 North Tower, Beijing ▇▇▇▇▇ Centre
▇▇. ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, 100020, People's Republic of China
Facsimile number: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
For the attention of: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
To: Intel Capital Corporation
c/o Intel Semiconductor Ltd
32/F Two Pacific place
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Fax: 852- 2240 3775
For the attention of: APAC Portfolio Manager
With an e-mail copy in .pdf format to ▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
(H) Time shall be of the essence of this Agreement, both as regards the
dates and periods specifically mentioned in this Agreement and as to
any date and period which may by written agreement between or on behalf
of the parties be substituted for them.
(I) This Agreement shall be binding on and shall inure for the benefit of
the successors and assignees of the parties. None of the parties may
assign any of its rights or obligations under this Agreement without
the prior consent in writing of the other parties; provided however
that the Investors may assign their rights and obligations under this
Agreement to any Note Transferee, pursuant to Clause 16(H).
(J) This Agreement may be executed in any number of counterparts and by any
party on separate counterparts, each of which when so executed and
delivered shall be an original, but all the counterparts together shall
constitute one and the same instrument.
(K) All notices, communications, and proceedings relating to this financing
and the exercise or performance of the parties' respective rights and
duties shall be in the English language.
(L) Except with respect to the references in Clause 11 to the Exchange Act
and the Securities Act, this Agreement shall be governed by and
construed exclusively in accordance with the internal laws of Hong Kong
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 Hong Kong to the rights and duties of the parties hereunder.
(M) The parties shall submit to the non-exclusive jurisdiction of the
courts of Hong Kong.
(N) The following parties hereby irrevocably appoint the persons set out
opposite their names below as their respective agents to accept service
of process in Hong Kong in any legal proceeding arising out of this
Agreement, service upon whom shall be deemed completed whether or not
forwarded to or received by the parties concerned:
PARTY AGENT AND ADDRESS
Group Companies China Everbright Capital Limited
40/F., Far East Finance Centre, ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
SEABRIGHT China Everbright Assets
Management Limited
▇▇/▇., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
HSBC HSBC Private Equity (Asia) Ltd.,
▇▇▇▇▇ ▇▇,
▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
INTEL Intel Capital Corporation
c/o Intel Semiconductor Ltd
▇▇/▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
QUALCOMM QUALCOMM International Inc.
(HK Rep office)
Units 1903-04, ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Founders China Everbright Capital Limited
40/F., Far East Finance Centre, ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
PARTY AGENT AND ADDRESS
Initial Shareholders China Everbright Capital Limited
40/F., Far East Finance Centre, ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
(O) If any of the process agents ceases to be able to act as such or to
have an address in Hong Kong, the party or parties which appoint such
process agent shall appoint a new process agent in Hong Kong and to
deliver to the other parties within thirty (30) days a copy of a
written acceptance of appointment by the new process agent. In the
event of any failure to appoint a substitute process agent, it shall be
effective service for the other parties to serve the process upon the
last known address in Hong Kong of the last known process agent for
such party notified to the other parties, notwithstanding that such
process agent is no longer found at such address or has ceased to act.
(P) Nothing in this Agreement shall affect the right to serve process in
any other manner permitted by law or the right to bring proceedings in
any other jurisdiction for the purposes of the enforcement or execution
of any judgement or other settlement in any other courts.
(Q) Any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), with
the written consent of the Company and all Investors and each party to
this Agreement shall be bound by any such amendment whether or not he
or it is a signatory to the relevant document.
(R) This Agreement sets forth the entire agreement and understanding among
the parties in relation to the transactions contemplated by this
Agreement, and supersedes and cancels in all respects all previous
letters of intent, correspondence, understandings, agreements and
undertakings (if any) among the parties with respect to the subject
matter of this Agreement, whether such be written or oral, 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 of this Agreement, all of which agreements shall continue in
full force and effect until terminated in accordance with their
respective terms.
(S) Each Investor stipulates that it is not relying upon any person or
entity other than the Group Companies and their respective officers and
directors in entering into this Agreement or investing in the Company,
and specifically and without limitation is not relying on any other
Investor or any other Investor's controlling persons, member,
shareholders, officers, directors, employees, agents, or professional
advisers, or on any advice, representations, or work product of any of
them. Each Investor hereby waives any claim against, and covenants not
to ▇▇▇, any other Investor or the respective controlling persons,
members, shareholders, officers, directors, employees, agents, or
professional advisers of any Investor on account of any action
heretofore or hereafter taken or omitted to be taken in connection with
this Agreement or any transaction contemplated hereby.
[SIGNATURE PAGES FOLLOW]
IN WITNESS whereof the parties have executed this Agreement the day and year
first above written.
COMPANY:
SIGNED BY DONG DEFU )
----------------------------
as: Director )
---------------------------------
for and on behalf of ) /S/
--------------------------------------
TECHFAITH WIRELESS COMMUNICATION )TECHFAITH WIRELESS COMMUNICATION
TECHNOLOGY LIMITED )TECHNOLOGY LIMITED
in the presence of: )
Signature of Witness:
Name: ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
--------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Tower
----------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
--------------------------------------
GROUP COMPANIES:
SIGNED BY DONG DEFU )
----------------------------
as: Director )
----------------------------------
for and on behalf of ) /S/
--------------------------------------
GREAT ▇▇▇▇▇▇▇ TECHNOLOGY LIMITED )GREAT ▇▇▇▇▇▇▇ TECHNOLOGY LIMITED
in the presence of: )
Signature of Witness:
Name: ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
--------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Tower
----------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
--------------------------------------
SIGNED BY DONG DEFU )
-----------------------------
as: Director )
----------------------------------
for and on behalf of ) /S/
--------------------------------------
BEIJING TECHFAITH R&D CO., LTD. )BEIJING TECHFAITH R&D CO., LTD.
in the presence of: )
Signature of Witness:
Name: ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
--------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Tower
----------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
--------------------------------------
IN WITNESS whereof the parties have executed this Agreement the day and year
first above written.
GROUP COMPANIES:
SIGNED BY DONG DEFU )
----------------------------
as: Director )
---------------------------------- /S/
for and on behalf of )--------------------------------------
▇▇▇ TECHNOLOGY LIMITED )▇▇▇ TECHNOLOGY LIMITED
in the presence of: )
Signature of Witness:
Name: ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
--------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Tower
----------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
--------------------------------------
SIGNED BY DONG DEFU )
----------------------------
as: Director )
---------------------------------- /S/
for and on behalf of )--------------------------------------
CENTEL TECHNOLOGY R&D CO., LIMITED )CENTEL TECHNOLOGY R&D CO., LIMITED
in the presence of: )
Signature of Witness:
Name: ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
--------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Tower
----------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
--------------------------------------
SIGNED BY DONG DEFU )
-----------------------------
as: Director )
----------------------------------
for and on behalf of ) /S/
----------------------------------------
STEP TECHNOLOGIES (BEIJING) CO., )STEP TECHNOLOGIES (BEIJING) CO., LIMITED
LIMITED
in the presence of: )
Signature of Witness:
Name: ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
--------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Tower
----------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
--------------------------------------
IN WITNESS whereof the parties have executed this Agreement the day and year
first above written.
GROUP COMPANIES:
SIGNED BY DONG DEFU )
--------------------------------
as: Director )
------------------------------------- /S/
for and on behalf of )--------------------------------------
FINEST TECHNOLOGY LIMITED )FINEST TECHNOLOGY LIMITED
in the presence of: )
Signature of Witness:
Name: ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
-----------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Tower
-------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
-----------------------------------------
SIGNED BY DONG DEFU )
--------------------------------
as: Director )
------------------------------------- /S/
for and on behalf of )-------------------------------------
LEADTECH COMMUNICATION TECHNOLOGY )LEADTECH COMMUNICATION TECHNOLOGY
(SHANGHAI) LIMITED )(SHANGHAI) LIMITED
in the presence of: )
Signature of Witness:
Name: ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
-----------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Tower
-------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
-----------------------------------------
IN WITNESS whereof the parties have executed this Agreement the day and year
first above written.
INVESTORS:
SIGNED BY ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇ )
-------------------------------
as: Authorized Signatory )
-------------------------------------
for and on behalf of ) /S/
THE HTF 7 LIMITED ) ---------------------------------
in the presence of: ) THE HTF 7 LIMITED
Signature of Witness:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Address: ▇▇/▇., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
-----------------------------------------
SIGNED BY ▇▇▇▇ ▇▇▇ KIONS )
--------------------------------
as: Authorized Signatory )
--------------------------------------
for and on behalf of ) /S/
SEABRIGHT CHINA SPECIAL ) --------------------------------
OPPORTUNITIES (I) LIMITED ) SEABRIGHT CHINA SPECIAL
in the presence of: ) OPPORTUNITIES (I) LIMITED
Signature of Witness:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Address: ▇▇/▇., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
-----------------------------------------
IN WITNESS whereof the parties have executed this Agreement the day and year
first above written.
INVESTORS:
SIGNED BY ▇▇▇▇▇▇▇ ▇▇ )
---------------------------------
as: Authorized Signatory )
--------------------------------------
for and on behalf of ) /S/
INTEL CAPITAL CORPORATION ) --------------------------------
in the presence of: ) INTEL CAPITAL CORPORATION
Signature of Witness:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Address: ▇▇/▇., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
------------------------------------------
SIGNED BY ▇▇▇▇ ▇▇▇▇▇▇▇▇ )
---------------------------------
as: President and Chief Operating Officer)
--------------------------------------
for and on behalf of ) /S/
QUALCOMM, INCORPORATED ) --------------------------------
in the presence of: ) QUALCOMM, INCORPORATED
Signature of Witness:
Name: /s/
------------------------------------
Address: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
------------------------------------------
IN WITNESS whereof the parties have executed this Agreement the day and year
first above written.
FOUNDERS:
SIGNED BY DONG DEFU )
) /S/
-------------------------------
in the presence of: ) DONG DEFU
Signature of Witness:
Name: ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇
-------------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Tower
---------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
-------------------------------------------
SIGNED BY LIU CANGSONG )
) /S/
-------------------------------
in the presence of: ) LIU CANGSONG
Signature of Witness:
Name: Eva Hon
-------------------------------------
Address: 5/F M7 East, No. 1 Jiu Xian Qiao
---------------------------------
Dong Road, ▇▇▇▇ ▇▇▇▇ District, Beijing, PRC
-------------------------------------------
IN WITNESS whereof the parties have executed this Agreement the day and year
first above written.
FOUNDERS:
SIGNED BY HE CHANGKE )
) /S/
---------------------------------
in the presence of: ) HE CHANGKE
Signature of Witness:
Name: ▇▇▇▇▇▇ ▇▇
-----------------------------------
Address: 40/F., Far East Finance Centre
-------------------------------
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
-----------------------------------------
SIGNED BY HUO BOUZHUANG )
) /S/
---------------------------------
in the presence of: ) HUO BAOZHUANG
Signature of Witness:
Name: ▇▇▇▇▇▇ ▇▇
-----------------------------------
Address: 40/F., Far East Finance Centre
-------------------------------
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
-----------------------------------------
IN WITNESS whereof the parties have executed this Agreement the day and year
first above written.
INITIAL SHAREHOLDERS:
SIGNED BY ▇▇▇ ▇▇▇▇▇▇▇▇ )
) /S/
-------------------------------
in the presence of: ) ▇▇▇ ▇▇▇▇▇▇▇▇
Signature of Witness:
Name: Eva Hon
-------------------------------------
Address: 5/F M7 East, No. 1 Jiu Xian Qiao
---------------------------------
Dong Road, ▇▇▇▇ ▇▇▇▇ District, Beijing, PRC
-------------------------------------------
SIGNED BY WU KEBO )
) /S/
-------------------------------
in the presence of: ) WU KEBO
Signature of Witness:
Name: ▇▇▇▇▇▇ ▇▇
-------------------------------------
Address: 40/F., Far East Finance Centre
---------------------------------
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇
-------------------------------------------
EXHIBIT A
SCHEDULE OF INVESTORS
INVESTOR INVESTMENT AMOUNT
THE HTF 7 LIMITED US$4,000,000
SEABRIGHT CHINA SPECIAL US$4,000,000
OPPORTUNITIES (I) LIMITED (TO BE PAID VIA CANCELLATION OF
EXISTING NOTES)
INTEL CAPITAL CORPORATION US$4,000,000
QUALCOMM, INCORPORATED US$2,000,000
TOTAL US$14,000,000
EXHIBIT B
FORM OF REDEEMABLE CONVERTIBLE NOTE
EXHIBIT C
DISCLOSURE SCHEDULE
EXHIBIT D
SCHEDULE OF REPRESENTATIONS AND WARRANTIES
EXHIBIT E
PROPOSED GROUP STRUCTURE
Existing Group Structure
--------------- -------------- ------------- -------------- -------------- -------------
Dong [CHINESE Huo [CHINESE He [CHINESE Liu [CHINESE Tan [CHINESE Wu [CHINESE
CHARACTER] CHARACTER] CHARACTER] CHARACTER] CHARACTER] CHARACTER]
--------------- -------------- ------------- -------------- -------------- -------------
| 41.15% | 16.70% | 3.35% | 16.65% | 16.15% | 6%
| | | | | |
------------------------------------------------------------------------------------------------
|
|
--------------------------------------------------------------------- ------------
The Company NEC
--------------------------------------------------------------------- ------------
| | | |70% |30%
| 100% | 100% | 100% | |
| | | -----------------------------
------------------ --------------- -------------- |
Great ▇▇▇▇▇▇▇ ▇▇▇ Finest -----------------------------
Technology STEP Technologies
------------------ --------------- -------------- -----------------------------
| | |
| 100% | 100% | 100%
| | |
------------------ --------------- --------------
Beijing Techfaith Centel Leadtech
------------------ --------------- --------------
RE-ORGANISATION STEPS
1. The Investors will invest US$14,000,000 (the "PRE-IPO FUNDS") in the
Company by way of subscription of Notes. Except as provided in Clause
2(E)(iv) of the Agreement, the Pre-IPO Funds will be held by the Company
upon Closing.
2. Immediately after Step 1 is completed, the Company will grant
shareholders' loans of approximately US$2,500,000 (equivalent to
RMB20,600,000), US$2,430,000 (equivalent to RMB20,000,000) and
US$4,000,000 to Great Earnest, Leo, and Finest Technology, respectively.
As a result, approximately US$8,930,000 out of the Pre-IPO Funds will be
lent to Great ▇▇▇▇▇▇▇, ▇▇▇ and Finest Technology.
3. Immediately after Step 2 is completed, Great ▇▇▇▇▇▇▇ and ▇▇▇ shall each
remit the entire amount loaned by the Company to Beijing Techfaith and
Centel, respectively. This payment will satisfy the payment obligations to
the Six Shareholders pursuant to the share purchase agreements with the
Six Shareholders with respect to Beijing Techfaith and Centel and shall be
treated as a donation to Beijing Techfaith and Centel by the Six
Shareholders (the "DONATION"). As a result, US$4,930,000 out of the
Pre-IPO Funds will then be paid into Beijing Techfaith and Centel. The
transformation of each of Beijing Techfaith and Centel from a PRC domestic
company to a wholly foreign owned entity ("WFOE") will then be complete.
4. Immediately after Step 2 is completed, Finest Technology shall inject
US$2,400,000 of the US$4,000,000 loaned by the Company to Leadtech to pay
up its registered capital. The US$2,400,000 cash will be retained in
Leadtech and used as working capital.
5. Within thirty days of the completion of Steps 1-4, the Company shall
obtain evidence from SAFE evidencing the injection of approximately
US$2,500,000, US$2,430,000, and US$2,400,000 into Beijing Techfaith,
Centel, and Leadtech, respectively. This evidence will be provided to the
Investors within two Business Days of being obtained.
6. Beijing Techfaith and Centel shall recognize the Donation as Reserve. The
US$4,930,000 in cash will be retained in Beijing Techfaith and Centel and
used as working capital.
7. Within sixty days of the receipt of HSBC's Investment Amount, Leadtech
will amend its articles of association and obtain the relevant PRC
government approvals required to increase its registered capital and total
investment to US$4,000,000.
8. Within thirty days of the completion of Step 7, the Company shall obtain
evidence from SAFE evidencing the injection of the additional US$1,600,000
into Leadtech. This evidence will be provided to the Investors within two
Business Days of being obtained.
9. The total of US$4,000,000 cash injected in Leadtech will be retained in
Leadtech and used as working capital.
10. Prior to the IPO, the Listing Company will be incorporated.
11. Prior to the IPO, the Notes of the Company will be converted into the
ordinary shares of
the Company.
12. Prior to the IPO, but after Steps 10 and 11 have been completed, the
ordinary shares of the Company held by the Investors shall be converted
into shares of the Listing Company at the same time as, and on a pro-rata
basis with, all other holders of ordinary shares of the Company such that
the Investors hold the same percentage of the Listing Company as they held
of the Company, on a fully-diluted basis, immediately after Closing.
GROUP STRUCTURE IMMEDIATELY AFTER THE CONVERSION OF NOTES BUT BEFORE IPO
--------------
--------------- -------------- ------------- -------------- -------------- ------------- Investors(1)
Dong [CHINESE Huo [CHINESE He [CHINESE Liu [CHINESE Tan [CHINESE Wu [CHINESE
CHARACTER] CHARACTER] CHARACTER] CHARACTER] CHARACTER] CHARACTER]
--------------- -------------- ------------- -------------- -------------- ------------- --------------
| 36.35% | 14.75% | 2.96% | 14.71% | 14.27% | 5.30% | 11.66%
| | | | | | |
-----------------------------------------------------------------------------------------------------------------
|
|
--------------------------------------------------------------------- ------------
The Company NEC
--------------------------------------------------------------------- ------------
| | | |70% |30%
| 100% | 100% | 100% | |
| | | -----------------------------
------------------ --------------- -------------- |
Great ▇▇▇▇▇▇▇ ▇▇▇ Finest -----------------------------
Technology STEP Technologies
------------------ --------------- -------------- -----------------------------
| | |
| 100% | 100% | 100%
| | |
------------------ --------------- --------------
Beijing Techfaith Centel Leadtech
------------------ --------------- --------------
Note:
(1). The Notes of the Company will have been converted into the ordinary
shares of the Company prior to the IPO of the Company (approximately 1
month before listing).
GROUP STRUCTURE IMMEDIATELY AFTER THE IPO
------------- ------------
--------------- -------------- ------------- -------------- -------------- ------------- Investors(2) Public
Dong [CHINESE Huo [CHINESE He [CHINESE Liu [CHINESE Tan [CHINESE Wu [CHINESE Shareholders
CHARACTER] CHARACTER] CHARACTER] CHARACTER] CHARACTER] CHARACTER]
--------------- -------------- ------------- -------------- -------------- ------------- -------------- ------------
| 27.26% | 11.06% | 2.22% | 11.03% | 10.70% | 3.98% | 8.75% | 25%
| | | | | | | |
-------------------------------------------------------------------------------------------------------------------
|
|
---------------------------------------------------------------------
Listing Company(1)
---------------------------------------------------------------------
|
|
--------------------------------------------------------------------- ------------
The Company NEC
--------------------------------------------------------------------- ------------
| | | |70% |30%
| 100% | 100% | 100% | |
| | | -----------------------------
------------------ --------------- -------------- |
Great ▇▇▇▇▇▇▇ ▇▇▇ Finest -----------------------------
Technology STEP Technologies
------------------ --------------- -------------- -----------------------------
| | |
| 100% | 100% | 100%
| | |
------------------ --------------- --------------
Beijing Techfaith Centel Leadtech
------------------ --------------- --------------
Notes:
1. To be incorporated.
2. Following the incorporation of the Listing Company, but prior to the
IPO, the ordinary shares of the Company held by the Investors shall be
converted into shares of the Listing Company at the same time as, and
on a pro-rata basis with, all other holders of ordinary shares of the
Company.
EXHIBIT F
LIST OF KEY EMPLOYEES
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
Numbering Name Title ID Card Number Remarks
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
The Company
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
1 [CHINESE CHARACTERS] DONG Defu [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ [CHINESE CHARACTERS]
President of the President of
Group Leadtech
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
Beijing Techfaith
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
2 [CHINESE CHARACTERS] ▇▇▇ ▇▇▇ [CHINESE CHARACTERS] 37030219720619001x [CHINESE CHARACTERS]
President Vice President
of the Group
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
3 [CHINESE CHARACTERS] ▇▇▇▇▇▇▇, HE [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ [CHINESE CHARACTERS]
Changke CTO of the Group Vice President
of the Group
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
4 [CHINESE CHARACTERS] ▇▇▇▇ ▇▇▇▇ [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ [CHINESE CHARACTERS]
CTO Vice President Director of
and CTO Hardware Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
5 [CHINESE CHARACTERS] ▇▇▇▇▇▇, ▇▇▇ [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Xiaonong Vice President
and Director of
Marketing and
Sales Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
6 [CHINESE CHARACTERS] LI Shugang [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Vice President
and Director of
Project Management Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
7 [CHINESE CHARACTERS] ▇▇ ▇▇▇ [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Director of
Software Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
8 [CHINESE CHARACTERS] Domen ZHU [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
Hongyuan Director of
Mechanical
Engineering Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
9 [CHINESE CHARACTERS] ▇▇▇ ▇▇▇▇ [CHINESE CHARACTERS] 12010519680814451x
Xuezhong Director of Sourcing Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
10 [CHINESE CHARACTERS] ▇▇▇▇▇▇ TEE [CHINESE CHARACTERS] (ID) A9553054
[CHINESE CHARACTERS]
▇▇▇▇▇ ▇▇▇▇▇ Director of
Industrial Design Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
Centel
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
11 [CHINESE CHARACTERS] ▇▇▇, HUO [CHINESE CHARACTERS] 650300710513401 [CHINESE CHARACTERS]
Baozhuang President of the Group
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
12 [CHINESE CHARACTERS] ▇▇▇▇▇ ▇▇▇ [CHINESE CHARACTERS] 110108710427891
Cangsong Vice President
and Director of
Marketing and Sales Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
13 [CHINESE CHARACTERS] ▇▇▇ ▇▇ [CHINESE CHARACTERS] 132622760213063
Vice President
and Director of
Technical Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
14 [CHINESE CHARACTERS] WANG Wagon [CHINESE CHARACTERS] (ID) 110108720605371
[CHINESE CHARACTERS]
Director of
Industrial
Design Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
15 [CHINESE CHARACTERS] CHEN [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Xingxing Director of Mobile
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
Software Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
16 [CHINESE CHARACTERS] WU Zunxiang [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Director of PDA
Software Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
17 [CHINESE CHARACTERS] ▇▇▇ ▇▇▇ [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Director of
Sourcing Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
18 [CHINESE CHARACTERS] ▇▇▇▇ ▇▇▇▇ [CHINESE CHARACTERS] 430603721023303
Director of
Hardware Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
19 [CHINESE CHARACTERS] Daytojoy DAI [CHINESE CHARACTERS] 370104720616001
Director of
Mechanical
Engineering Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
20 [CHINESE CHARACTERS] ▇▇▇▇▇ RAN Bo [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Director of
Module Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
STEP Technologies
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
21 [CHINESE CHARACTERS] FAN ▇▇▇▇▇▇ [CHINESE CHARACTERS] 330106641229003 [CHINESE CHARACTERS]
President Vice President
of the Group
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
22 [CHINESE CHARACTERS] ▇▇▇▇▇▇▇ ▇▇ [CHINESE CHARACTERS] 330106740708001
Haoqiang Director of
Marketing and
Sales Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
23 [CHINESE CHARACTERS] ▇▇▇▇▇, ▇▇▇▇▇ [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Ruojian Director of
Software Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
24 [CHINESE CHARACTERS] ▇▇▇, ZHAO [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Yutao Director of Quality &
Process Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
25 [CHINESE CHARACTERS] LI Hai [CHINESE CHARACTERS] (ID) ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
[CHINESE CHARACTERS]
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
[CHINESE CHARACTERS]
Director of Industrial
Design Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
26 [CHINESE CHARACTERS] Pierre SUN [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Penglong Director of Hardware Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
27 [CHINESE CHARACTERS] ▇▇▇▇ ▇▇ [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Zhen Director of Project
Management Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
28 [CHINESE CHARACTERS] Young YANG [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Yuxin Director of Sourcing Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
29 [CHINESE CHARACTERS] LI Chengzhi [CHINESE CHARACTERS] 42011197005274073
Director of Mechanical
Engineering Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
[CHINESE CHARACTERS]
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
30 [CHINESE CHARACTERS] ▇▇▇▇▇, ▇▇▇▇▇ [CHINESE CHARACTERS] 142127720906051
Junhou Vice President
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
31 [CHINESE CHARACTERS] ▇▇▇▇▇▇, WANG [CHINESE CHARACTERS] 372328731115001
Xun Director of Mechanical
Engineering Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------
32 [CHINESE CHARACTERS] ▇▇▇▇, YU [CHINESE CHARACTERS] ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Xiao Director of Hardware Dept
-------------------- ---------------------------------- ------------------------- ------------------------ -------------------------