Exhibit 3
EXECUTION COPY
VSOURCE, INC.
STOCKHOLDERS AGREEMENT
DATED AS OF OCTOBER 25, 2002
TABLE OF CONTENTS
PAGE
1. DEFINITIONS..............................................................1
2. RIGHT OF FIRST REFUSAL...................................................4
3. RIGHT OF CO-SALE.........................................................5
4. EXCEPTIONS TO RIGHTS OF FIRST REFUSAL AND CO-SALE; TRANSFER OF RIGHTS....6
5. PROHIBITED TRANSFERS.....................................................7
6. DRAG ALONG RIGHTS........................................................8
6.1 Sale Proposal...................................................8
6.2 Compelled Sale Notice...........................................9
6.3 Conditions to Compelled Sale....................................9
7. CHANGES IN STOCK.........................................................9
8. VOTING..................................................................10
8.1 Agreement to Vote..............................................10
8.2 Board Size; Meetings...........................................10
8.3 Election of Directors..........................................10
8.4 No Liability for Election of Recommended Directors.............12
8.5 Grant of Proxy; Restrictions in Other Agreements...............12
8.6 Specific Enforcement...........................................12
8.7 Observer Rights................................................12
8.8 Restrictions on Certain Corporate Actions......................13
8.9 Restrictions on Certain Board Actions..........................14
8.10 Manner of Voting...............................................15
9. DEPARTING FOUNDER.......................................................15
9.1 Escrow Account.................................................15
9.2 Rights of Departing Founder....................................17
9.3 Article V Put Option...........................................17
10. SECTION 10 PUT OPTION...................................................19
11. ACCESS TO INFORMATION...................................................20
11.1 Delivery of Financial Statements...............................20
11.2 Inspection.....................................................20
12. OTHER COVENANTS OF THE COMPANY..........................................21
12.1 General........................................................21
12.2 Key Person Life Insurance and Director Liability Insurance.....22
12.3 Special Covenants with Respect to SBICs........................22
12.4 Post-Closing Percentages.......................................22
13. LEGENDS ON STOCK CERTIFICATES...........................................24
14. AMENDMENTS AND WAIVERS..................................................25
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15. SUCCESSORS AND ASSIGNS..................................................25
16. STOCK SPLITS, STOCK DIVIDENDS, ETC......................................26
17. ADDITIONAL SERIES 4-A INVESTORS.........................................26
18. ENFORCEABILITY; SEVERABILITY............................................26
19. TERMINATION.............................................................26
20. FURTHER ASSURANCES......................................................27
21. ENTIRE AGREEMENT........................................................27
22. DELAYS OR OMISSIONS.....................................................28
23. COUNTERPARTS............................................................28
24. CAPTIONS AND HEADINGS...................................................28
25. NOTICES.................................................................28
26. GOVERNING LAW; VENUE....................................................28
27. EXPENSES................................................................29
28. CONFIDENTIALITY.........................................................30
28.1 Confidentiality................................................30
28.2 Exceptions.....................................................30
SCHEDULES
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SCHEDULE A Schedule of Investors
SCHEDULE B Schedule of Founders
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VSOURCE, INC.
STOCKHOLDERS AGREEMENT
THIS
STOCKHOLDERS AGREEMENT (this "AGREEMENT") is entered into as of
October 25, 2002 by and among Vsource, Inc., a Delaware corporation (the
"COMPANY"), ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ (the "FOUNDERS") and
the investors listed on Schedule A (each an "INVESTOR" and collectively,
together with the Additional Series 4-A Investors (as defined below) the
"INVESTORS").
The Founders are the owners of that number of shares of Series 4-A
Preferred Stock (as defined below) of the Company set forth opposite each such
Founder's name on Schedule B and common stock, par value $0.01 per share of the
Company (the "COMMON STOCK"), and the Investors are the owners and/or the
purchasers of that number of shares of Series 4-A Preferred Stock as set forth
in detail on Schedule A.
Certain of the Investors and the Company are parties to that certain
Series 4-A Convertible Preferred Stock Purchase Agreement, dated as of October
23, 2002 (the "SERIES 4-A PURCHASE AGREEMENT") relating to the issue and sale of
shares of Series 4-A Convertible Preferred Stock of the Company, par value
U.S.$0.01 per share (the "SERIES 4-A PREFERRED STOCK" or "PREFERRED STOCK") and
relating to the issue of warrants to purchase shares of Common Stock. The
Company may sell and issue additional shares of Series 4-A Preferred Stock (the
"ADDITIONAL SERIES 4-A SHARES") to certain Investors and other investors (the
"ADDITIONAL SERIES 4-A INVESTORS") pursuant to the Second Closing and Additional
Closings under, and as defined in, the Series 4-A Purchase Agreement, provided
that each Additional Series 4-A Investor executes a counterpart of this
Agreement, if not already a party to this Agreement, upon which such Additional
Series 4-A Investor will be deemed an "INVESTOR" hereunder.
The obligations of the Company and certain of the Investors under the
Series 4-A Purchase Agreement are conditioned, among other things, upon the
execution and delivery of this Agreement by the Investors, the Founders and the
Company.
In consideration of the mutual premises and covenants contained in this
Agreement and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged the parties hereto agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
set forth below:
(a) "CHARTER" means the Certificate of Incorporation of the Company,
including any Certificates of Designation filed with the Secretary of State of
Delaware with respect thereto.
(b) "HOLDER" means an Investor or Founder, or any party that becomes a
"HOLDER" subsequent to the date hereof pursuant to the terms of this Agreement.
(c) "IRR" means the discount rate that would make the present value of
a stream of Payments (as defined below) and Receipts (as defined below) equals
zero where:
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(i) cash payments (the "PAYMENTS") are:
(A) the purchase consideration paid by the Share
Purchasers (as defined below) to the Company for the Shares (as defined below)
purchased at the First Closing (as defined in the Series 4-A Purchase
Agreement);
(B) the purchase consideration paid by the Share
Purchasers to the Company, if any, for the Shares purchased at the Second
Closing (as defined in the Series 4-A Purchase Agreement); and
(C) the purchase consideration paid by the Share
Purchasers to the Company, if any, for Common Stock issued upon exercise of the
Warrants (as defined in the Series 4-A Purchase Agreement) (the "WARRANT
SHARES").
(ii) amounts received (the "RECEIPTS") are:
(A) dividend distributions and other cash payments, if
any, received by the Share Purchasers from the Company in respect of: (i) the
Shares and Warrant Shares; and (ii) any securities received by the Share
Purchasers in respect of the Shares or Warrant Shares without additional
consideration paid by the Initial Investor; and
(B) the value of Shares, Warrant Shares and any securities
received by the Share Purchasers in respect of the Shares or Warrant Shares
without additional consideration paid by the Share Purchasers, held by the Share
Purchasers on the Liquidity Date (as defined below) determined as (1) the
aggregate value of the Shares and Warrant Shares and such securities held by the
Share Purchasers on the Liquidity Date in the case of a Qualifying Offering
(determined as the offering price in such Qualifying Offering to the public per
share of Common Stock times the number of Warrant Shares and the shares of
Common Stock issued or issuable upon conversion of Shares); (2) the aggregate
purchase price of the Shares, Warrant Shares and/or such securities on the
Liquidity Date in the case of a Qualifying Sale (as defined below); or (3) the
proceeds distributable to the Share Purchasers on the Liquidity Date in the case
of a sale of assets); and
(iii) the first date in the measurement of the present value will be
the date of the First Closing and the last date will be the Liquidity Date.
(d) "LIQUIDITY DATE" means the earliest to occur of: (i) the date of
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933 of the United
States of America, as amended (the "1933 ACT"), and the declaration or ordering
of effectiveness of such registration statement or document by the U.S.
Securities and Exchange Commission (the "SEC") or, in connection with a
Qualifying Offering (as defined below) on an Authorized Exchange (as defined
below) in a jurisdiction other than the United States, of any registration,
qualification or completion of any procedure in compliance with the applicable
securities laws of such non-U.S. jurisdiction undertaken or made to permit the
unrestricted, lawful distribution or resale of securities to members of the
general public therein, of any of the Common Stock issuable upon conversion of
the Series 4-A Preferred Stock held by the Share Purchasers (as defined below)
or their Permitted Transferees (the "CONVERSION
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SHARES") following, or in conjunction with, the completion of a Qualifying
Offering (as defined below); (ii) the date on which the Share Purchasers and
their Permitted Transferees are able to publicly sell all of their issued or
issuable Conversion Shares pursuant to an effective registration statement
covering such shares or in any three month period pursuant to Rule 144 under the
1933 Act, provided that a Qualifying Offering has occurred; (iii) the date of
the closing of a Qualifying Sale (as defined below); and (iv) the date of the
closing of a sale of all or substantially all of the assets of the Company for
consideration that results in distributions per share to the Share Purchasers of
proceeds from such sale equivalent to the consideration that would be received
in a Qualifying Sale.
(e) "PERMITTED TRANSFEREE" means any Affiliate (as defined below) of
a Holder, any spouse or lineal ancestor or descendant of a Holder, or any trust
or other entity created and existing solely for the benefit, directly or
indirectly, of a Holder or any such person or persons. For purposes of this
Agreement, an "AFFILIATE" of an entity means a person or entity that directly,
or indirectly through one or more intermediaries, controls or is controlled by,
or is under common control with, such entity. For purposes of this Agreement,
Capital International Asia CDPQ, Inc. (the "CDP INVESTOR"), CDP Asia Private
Equity Fund, L.P. I, and Quilvest Asian Equity Ltd. shall be deemed to be
Affiliates of one another, and Mercantile Capital Partners I, L.P.
("MERCANTILE") and Asia Internet Investment Group I, LLC shall be deemed to be
Affiliates of one another. Upon the winding-up, liquidation or dissolution of a
Holder that is a pooled investment vehicle, whether organized as a limited
partnership, general partnership, corporation or otherwise, such Holder's
Permitted Transferees shall be deemed to include each of its general partners,
limited partners, investment managers and shareholders as the case may be.
(f) "PRO RATA SHARE" means at any time, the ratio that (i) the sum of
the number of shares of Common Stock then held by a Holder which were issued
upon conversion of Preferred Stock plus the number of shares of Common Stock
issuable upon conversion of Preferred Stock then held by such Holder bears to
(ii) the sum of the total number of shares of Common Stock then held by all
Holders which were issued upon conversion of Preferred Stock, plus the number of
shares of Common Stock issuable upon conversion of all outstanding Preferred
Stock then held by all Holders.
(g) "QUALIFYING OFFERING" means a firm commitment public offering,
underwritten by an internationally reputable investment bank selected by the
Company's Board of Directors, of the Company's Common Stock on an
internationally recognized exchange or quotation system, which exchange or
quotation system shall have a minimum market capitalization, based on the market
value of all of the securities listed thereon, of US$50,000,000,000, as quoted
and reported within the EMTK Function of Bloomberg Financial Markets or if not
so quoted, based upon statistics made publicly available on such exchange, or if
such statistics are not available, based upon the reasonable discretion of the
Company's Board of Directors (an "AUTHORIZED EXCHANGE") pursuant to an effective
registration statement under the 1933 Act (other than a registration statement
relating either to the sale of securities to employees of the Company pursuant
to its stock option, stock purchase or similar plan or a transaction pursuant to
Rule 145 under the ▇▇▇▇ ▇▇▇) or, in connection with a Qualifying Offering on an
Authorized Exchange in a jurisdiction other than the United States, pursuant to
any registration, qualification or completion of any procedure in compliance
with the applicable securities laws and exchange rules of such non-U.S.
jurisdiction undertaken or made to permit the unrestricted, lawful
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distribution or resale of securities to members of the general public therein,
the public offering price per share (the "OFFERING PRICE") of which is not less
than the price that would yield an IRR of thirty percent (30%) to the persons
who on October 25, 2002 purchased shares of Series 4-A Preferred Stock for cash
consideration (such persons being referred to herein as the "SHARE PURCHASERS"
and such price being referred to herein as the "30% IRR PRICE") and in which the
aggregate net proceeds (after deductions of underwriters' commissions and
offering expenses) to the Company exceed US$20,000,000 (or the equivalent in the
applicable currency).
(h) "QUALIFYING SALE" means a sale of more than fifty percent (50%) of
the Company's Common Stock on a fully diluted basis (assuming full conversion
and exercise of all outstanding convertible, exchangeable and exercisable
securities, including, without limitation, securities granted under any employee
share option plan which have vested), for a purchase price per share at least
equal to the 30% IRR Price, provided, however, that in the event the purchase
price for such securities is payable in marketable securities, such marketable
securities shall be valued at the average of the daily closing prices of such
marketable securities over the 180 consecutive trading days immediately
preceding (and not including) the date such marketable securities are received,
and provided, further, that such purchase price is payable in full at the
closing in cash or marketable securities.
(i) "RECAPITALIZATION" means a stock split, subdivision, stock
dividend, combination, recapitalization and the like.
(j) "SHARES" means, subject to Section 7, all shares of the Series 4-A
Preferred Stock and Common Stock issuable or issued upon conversion of the
Series 4-A Preferred Stock held by each Holder as of the date such Holder
becomes a party to this Agreement or with respect to a Holder who becomes a
party to this Agreement and subsequently purchases Additional Series 4-A Shares,
as of the date of purchase of such Additional Series 4-A Shares.
2. RIGHT OF FIRST REFUSAL
(a) Subject to Section 4, in the event that a Holder (the "PROPOSED
TRANSFEROR") proposes to sell or otherwise transfer any Shares prior to the
Liquidity Date and pursuant to a bona fide offer from a third party (the
"PROPOSED TRANSFEREE"), such Holder must first give each other Holder written
notice (the "HOLDERS' NOTICE") of the number of Shares to be transferred, the
price, terms and conditions of the proposed sale, including the identity of the
Proposed Transferee, and a copy of any written proposal, term sheet, letter of
intent or other agreement relating to the proposed sale.
(b) Each such other Holder will have thirty (30) days from the date of
the Holders' Notice to agree to purchase all of such Holder's Pro Rata Share of
such Shares, for the price and upon the terms and conditions specified in the
Holders' Notice, by giving written notice to such Proposed Transferor stating
therein the number of such Shares to be purchased. If any Holder fails to agree
to purchase its full Pro Rata Share within such thirty (30) day period, the
Proposed Transferor will give the Holders who did so agree (the "ELECTING
HOLDERS") notice (a "SUBSEQUENT HOLDERS' NOTICE") of the number of Shares which
were not subscribed for. The Electing Holders will have fifteen (15) days from
the date of a Subsequent Holders' Notice to agree to purchase their respective
Pro Rata Share of all of the Shares not subscribed for by such
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other Holders. The Proposed Transferor will repeat this process by providing
further Subsequent Holders' Notices to the Electing Holders at the end of each
such fifteen day period until all the Shares have been subscribed for or no
Holders desire to purchase any remaining Shares. For purposes of any election
under this Section 2 pursuant to a Subsequent Holder's Notice, Shares held by
Holders other than Electing Holders will be excluded for the purpose of
calculating an Electing Holder's Pro Rata Share. In the event any Holder or
Holders timely elect to acquire all of the Shares proposed to be sold by the
Proposed Transferor as specified in the Holders' Notice, settlement thereof will
be made within thirty (30) days after the date on which the last such Holder
notifies the Proposed Transferor of such election. To the extent that the terms
of payment set forth in the Holders' Notice consist of property other than cash
against delivery, the Electing Holders must pay for such Shares the cash
equivalent of the fair market value of such property.
(c) Subject to the provisions of Section 3, in the event the Holders
fail to exercise this right of first refusal to purchase all but not less than
all of the Shares stated in the Holders' Notice within the thirty (30) day
period plus the additional periods specified above (collectively, the "NOTICE
PERIOD"), the Proposed Transferor will have ninety (90) days thereafter to sell
all but not less than all of the Shares stated in the Holders' Notice at the
price and upon terms and conditions no more favorable to the purchasers of such
Shares than specified in the Holders' Notice, provided that each such Proposed
Transferee executes and becomes a Holder under this Agreement and agrees to hold
the Shares subject to all the terms and conditions of this Agreement. In the
event the Proposed Transferor has not sold all the Shares within such ninety
(90) day period, the Proposed Transferor may not thereafter sell any Shares
without first offering such Shares to the Holders in the manner provided in this
Section 2.
(d) The Proposed Transferor may, in its sole discretion, agree to
accept an offer from a Holder or Holders pursuant to Section 2(b) to purchase
only a portion of the Shares specified in the Holders' Notice, for the price and
upon the terms and conditions specified in the Holders' Notice, and sell the
remaining unpurchased Shares to the Proposed Transferee at the price and upon
terms and conditions no more favorable to the Proposed Transferee of such Shares
than specified in the Holders' Notice.
3. RIGHT OF CO-SALE
(a) Subject to Section 4, and notwithstanding anything to the contrary
set forth in Section 2(c), no Proposed Transferor may sell any Shares specified
in a Holders' Notice pursuant to Section 2(c) until each other Holder has been
given the opportunity to sell to the Proposed Transferee, upon the same terms
and conditions offered to the Proposed Transferor, up to such Holder's Pro Rata
Share of the Shares ultimately sold, provided, however, that Shares held by
Holders other than those Holders electing to sell to the Proposed Transferee
will be excluded for the purpose of calculating such Holder's Pro Rata Share.
Such Holder proposing to sell or otherwise transfer any Shares shall first
notify each Holder in writing at least thirty (30) days prior to the proposed
sale or transfer of the number of Shares to be sold or transferred and the
price, terms and conditions of the proposed sale or transfer.
(b) Holders who fail to provide an irrevocable notice to the Proposed
Transferor of such Holder's agreement to sell such Holder's Pro Rata Share of
the Shares proposed to be sold
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within fifteen (15) days after the date of notice described in Section 3(a)
hereof will be deemed to have waived their rights under this Section 3. Any sale
made pursuant to this Section 3 shall be consummated within ninety (90) days of
the end of the Notice Period.
(c) Each Holder will effect its participation in the sale by promptly
delivering to the Proposed Transferor for delivery to the Proposed Transferee,
before the consummation of the sale of the Shares, one or more certificates,
properly endorsed for transfer, which represent:
(i) the number of shares of Common Stock which such Holder
elects to sell; or
(ii) that number of shares of Preferred Stock that is at such
time convertible into the number of shares of Common Stock that such Holder
elects to sell; provided, however, that if the Proposed Transferee objects to
the delivery of Preferred Stock in lieu of Common Stock, such Holder will
convert such Preferred Stock into Common Stock and deliver Common Stock as
provided above. The Company agrees to make any such conversion concurrent with
the actual sale of such shares to the Proposed Transferee.
(d) The stock certificate or certificates that the Holder delivers to
the Proposed Transferor pursuant to Section 3(c) will be transferred to the
Proposed Transferee in consummation of the sale of the Shares pursuant to the
terms and conditions specified in the Holders' Notice, and the Proposed
Transferor will concurrently therewith remit or procure that the Proposed
Transferee remits to such Holder that portion of the sale proceeds to which such
Holder is entitled by reason of its participation in such sale. To the extent
that any Proposed Transferee prohibits such assignment or otherwise refuses to
purchase shares or other securities from a Holder exercising its rights of
co-sale hereunder, the Proposed Transferor will not sell to such Proposed
Transferee any Shares unless and until, simultaneously with such sale, the
Proposed Transferor purchases such Shares or other securities from such Holder.
4. EXCEPTIONS TO RIGHTS OF FIRST REFUSAL AND CO-SALE; TRANSFER OF RIGHTS
(a) The restrictions set forth in Sections 2 and 3 will not apply in
the following cases:
(i) each Proposed Transferor may sell or transfer any Shares
to the Company pursuant to a repurchase right or right of first refusal held by
the Company;
(ii) each Proposed Transferor may sell or transfer any Shares
to a Permitted Transferee provided that such Permitted Transferee agrees in
writing to be bound by the terms of this Agreement applicable to the Proposed
Transferor and such Permitted Transferee makes with respect to itself the same
representations and warranties to the Company as those set forth in Section 3 of
the Series 4-A Purchase Agreement, provided, however, that the representation
contained in Section 3.2 of the Series 4-A Purchase Agreement shall be revised
to remove the reference to a contemplated transfer of shares to a separate
investment vehicle;
(iii) the purchase of Escrow Securities by the Company and/or
an Investor under Section 9 hereof; and
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(iv) any resale of Shares as part of an underwriting in
connection with a Qualifying Offering.
(b) The rights of a Holder under Section 2 and Section 3 are not
assignable, except to a Permitted Transferee.
(c) The restrictions set forth in Sections 2 and 3 shall only apply to
seventy-five percent (75%) of the total Shares (the "RESTRICTED SHARES", and all
Shares that are not Restricted Shares shall be "UNRESTRICTED SHARES"),
calculated on the basis of the number of shares of Common Stock constituting the
Shares on a fully diluted basis, held by each Holder and its Permitted
Transferees, including Affiliates that are parties to this Agreement, in the
aggregate, as of the date that such Holder becomes a party to this Agreement,
or, with respect to a Holder who becomes a party to this Agreement and
subsequently purchases Additional Series 4-A Shares, as of the date of purchase
of such Additional Series 4-A Shares, provided that at the time of a sale or
transfer of any Shares by a Holder, the Holder selling or transferring Shares
shall specify by notice to the other Holders whether such Shares shall be
counted against the number of Unrestricted Shares or the number of Restricted
Shares held by such Holder.
5. PROHIBITED TRANSFERS
(a) No Holder may sell, assign, transfer, give, pledge, hypothecate,
mortgage, encumber or dispose of all or any of his Restricted Shares except to a
Permitted Transferee or otherwise as expressly permitted by this Agreement.
(b) In the event any Proposed Transferor sells any Restricted Shares in
contravention of the co-sale rights of the Holders under this Agreement (a
"PROHIBITED TRANSFER"), the Holders, in addition to such other remedies as may
be available at law, in equity, under the Company's Charter or hereunder, will
have the option provided below, and such Proposed Transferor will be bound by
the applicable provisions of such option.
(c) In the event of a Prohibited Transfer, each Holder will have the
right to sell to the Proposed Transferor, and the Proposed Transferor will be
obligated to purchase from such Holder, the number of shares of Common Stock
equal to the number of shares such Holder would have been entitled to transfer
to the purchaser in the Prohibited Transfer under Section 3 had the Prohibited
Transfer been effected pursuant to and in compliance with the terms hereof. Such
sale will be made on the following terms and conditions:
(i) the price per share at which the shares are to be sold to
the Proposed Transferor will be equal to the price per share paid by the
purchaser to the Proposed Transferor in the Prohibited Transfer;
(ii) within ninety (90) days after the later of the dates on
which a Holder (A) receives notice of the Prohibited Transfer or (B) otherwise
becomes aware of the Prohibited Transfer, such Holder will notify the other
Holders, if exercising the put option created hereby, and deliver to the
Proposed Transferor the certificate or certificates representing that number of
shares of Common Stock to be sold, or, at the Holder's option, a certificate or
certificates representing that number of shares of Preferred Stock that is at
such time convertible into the
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number of shares of Common Stock to be sold, each certificate to be properly
endorsed for transfer; and
(iii) the Proposed Transferor will, upon receipt of the
certificate or certificates for the shares to be sold by a Holder pursuant to
this Section 5(c)(iii), pay the aggregate purchase price therefor, as specified
in Section 5(c)(i), in cash or by other means acceptable to the Holder. The
Proposed Transferor must also reimburse the Holder for any and all reasonable
fees and expenses, including reasonable legal fees and expenses, incurred
pursuant to the exercise of such Holder's rights hereunder.
(d) The Company will not, without the approval of Holders holding a
majority of the number of outstanding Shares, calculated on the basis of the
number of shares of Common Stock constituting the Shares on a fully diluted
basis then held by all Holders (other than the Proposed Transferor): (i) permit
any transfer on its books of any Shares which have been sold in violation of any
of the provisions set forth in this Agreement or (ii) treat as the owner of such
Shares, or accord the right to vote as an owner or pay dividends to any
transferee to whom such Shares have been sold in violation of any of the
provisions set forth in this Agreement.
(e) No Holder may transfer any Restricted Shares until the earlier of
March 31, 2006 and the Liquidity Date, other than to a Permitted Transferee or
in accordance with Section 2 and Section 3 of this Agreement or unless such
transfer is pursuant to a Qualifying Sale.
(f) At no time shall a Holder transfer any Shares to a direct
competitor of the Company, as reasonably determined by the Company's Board of
Directors, except pursuant to a Qualifying Sale.
6. DRAG ALONG RIGHTS
6.1 SALE PROPOSAL
If, at any time prior to the Liquidity Date, a proposal for a sale or
other acquisition (whether by merger, consolidation, sale of assets or
otherwise) of all or at least ninety percent (90%) of the Shares, calculated on
the basis of the number of shares of Common Stock constituting the Shares on a
fully diluted basis, then held by all Holders to any third party for a specified
price payable in cash, securities or any other consideration and on specified
terms and conditions in connection with a Qualifying Sale (a "SALE PROPOSAL"),
has been approved by (x) the Board of Directors of the Company, (y) the holders
of a sufficient amount of the outstanding share capital of the Company on a
fully diluted basis (assuming full conversion and exercise of all outstanding
convertible, exchangeable and exercisable securities, including without
limitation securities granted under any employee share option plan which have
vested) required to approve a sale of all or substantially all of the Company's
assets under the Company's Charter and the General Corporation Law of the State
of Delaware and (z) the holders of a sufficient amount of Series 4-A Preferred
Stock required to approve a sale of all or substantially all of the Company's
assets under the Charter, then the parties hereto who so approved the Sale
Proposal (the "APPROVING STOCKHOLDERS") may require all of the parties hereto
who are not Approving Stockholders ("REMAINING STOCKHOLDERS") to sell all of the
Shares of the Company held by them to the party or parties whose Sale Proposal
was accepted as hereinabove provided, for the same
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per share consideration (equitably adjusted to take into account the exercise
price of any options or warrants) and otherwise on the terms and conditions
provided in this Section 6.
6.2 COMPELLED SALE NOTICE
The Company, if instructed in writing by the Approving Stockholders,
will send written notice (the "COMPELLED SALE NOTICE") of the exercise of the
rights of the Approving Stockholders pursuant to this Section 6 to each of the
Remaining Stockholders setting forth the consideration per share to be paid
pursuant to the Sale Proposal and the other terms and conditions of the
transaction. Each Remaining Stockholder, upon receipt of the Compelled Sale
Notice, will be obligated to (i) vote its Shares in favor of such Sale Proposal
at any meeting of stockholders in the Company called to vote on or approve such
Sale Proposal, (ii) sell all of its Shares and participate in the transaction
(the "COMPELLED SALE") contemplated by the Sale Proposal and (iii) otherwise
take all necessary action, including, without limitation, expressly waiving any
dissenter's rights or rights of appraisal or similar rights, providing access to
documents and records of the Company, entering into an agreement reflecting the
terms of the Sale Proposal, surrendering stock certificates, giving any
customary and reasonable representations and warranties given by other
stockholders (e.g., as to title to the Shares and that such sale does not
contravene any laws or regulations applicable to such Remaining Stockholder) and
executing and delivering any certificates or other documents reasonably
requested by the Approving Stockholders and their counsel, to cause the Company
and the Approving Stockholders to consummate such Compelled Sale. Any such
Compelled Sale Notice may be rescinded by the Approving Stockholders by
delivering written notice thereof to all of the Remaining Stockholders.
6.3 CONDITIONS TO COMPELLED SALE
The obligations of Holders pursuant to Section 6.1 and Section 6.2 are
subject to the condition that the purchaser whose Sale Proposal was accepted
agrees that in the event that Holders are required to provide any
representations, warranties or indemnities in connection with the Compelled Sale
(other than representations, warranties and indemnities concerning each Holder's
valid ownership of its shares of capital stock of the Company, free of all liens
and encumbrances (other than those arising under applicable securities laws),
and each Holder's authority, power and right to enter into and consummate the
Compelled Sale without violating any other agreement), then, each Holder (i)
will not be liable for more than its pro rata share (based upon the
consideration received) of any liability for misrepresentation, breach of
warranty or indemnity, (ii) such liability will not exceed the total purchase
price received by such Holder for its Shares and (iii) such liability will be
satisfied solely out of any funds escrowed for such purpose.
7. CHANGES IN STOCK
If, from time to time during the term of this Agreement,
(a) there is a dividend of any security, stock split or other change
in the character or amount of any of the outstanding securities of the Company,
or
9
(b) there is any consolidation or merger immediately following which
stockholders of the Company hold more than 50% of the voting equity securities
of the surviving corporation,
then, in such event, any and all new, substituted or additional securities or
other property to which any Holder is entitled by reason of his ownership of the
Shares will be immediately subject to the provisions of this Agreement and be
included in the meaning of the term "SHARES" for all purposes of this Agreement
with the same force and effect as the Shares presently subject to this
Agreement.
8. VOTING
8.1 AGREEMENT TO VOTE
Each Holder, with respect to its Shares, hereby agrees to hold all of
such Shares and any other voting securities of the Company acquired by such
Holder in the future (and any other securities of the Company issued with
respect to, upon conversion of, or in exchange or substitution for any of the
foregoing), (hereinafter collectively referred to as the "VOTING SHARES")
subject to, and to vote the Voting Shares at regular or special meetings of
stockholders and/or give written consent with respect to such Voting Shares in
accordance with, the provisions of this Agreement.
8.2 BOARD SIZE; MEETINGS
The number of directors comprising the Board of Directors of the
Company shall be seven (7) unless changed in accordance with the provisions of
the By-Laws of the Company and Section 8.8 hereof. A quorum necessary for the
transaction of business by the Board of Directors at a Board of Directors
meeting will be at least three (3) Directors, two of whom will be Directors
nominated by the Investors that have exercised their right to nominate
Directors. The Directors will meet either in person or by means of conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other.
8.3 ELECTION OF DIRECTORS
(a) (i) For so long as the CDP Investor remains a Holder, the
Company agrees to nominate for election to its Board of Directors a nominee of
the CDP Investor (the "CDP NOMINEE"); (ii) for so long as BAPEF Investments XII
Ltd. ("BAPEF") remains a Holder, the Company agrees to nominate for election to
its Board of Directors a nominee of BAPEF (the "BAPEF NOMINEE"); and (iii) for
so long as Mercantile remains a Holder, the Company agrees to nominate for
election to its Board of Directors a nominee of Mercantile (the "MERCANTILE
NOMINEE") such that at all times, if requested by the CDP Investor, BAPEF or
Mercantile (as the case may be), the Company's Board of Directors contains one
CDP Nominee, one BAPEF Nominee, and one Mercantile Nominee. The Company also
agrees to nominate for election to its Board of Directors each of the following:
(i) ▇▇▇▇▇▇▇ ▇▇▇▇▇ (so long as he remains an employee of the Company), as
Chairman; (ii) ▇▇▇▇▇▇ ▇▇▇▇▇ (so long as he remains an employee of the Company),
as Vice-Chairman; and (iii) two (2) "INDEPENDENT DIRECTORS" as such term is
defined by the U.S. securities laws and the rules and regulations promulgated by
the SEC thereunder or
10
by any of the rules of any exchange on which the Company's securities are traded
(the "INDEPENDENT DIRECTORS").
(b) The CDP Nominee, BAPEF Nominee, and Mercantile Nominee shall be
designated by an authorized representative of the CDP Investor, BAPEF and
Mercantile, respectively, and the remaining nominees shall be designated by the
Company. If the CDP Nominee, BAPEF Nominee or Mercantile Nominee should resign
from the Company's Board of Directors or if the CDP Nominee, BAPEF Nominee or
Mercantile Nominee should die or otherwise be removed from office, the Company
shall nominate and use its commercially reasonable efforts to cause the
resulting vacancy to be filled with another CDP Nominee, BAPEF Nominee or
Mercantile Nominee, as the case may be, similarly designated.
(c) Each of the Holders, by its execution of this Agreement, agrees
to use its reasonable efforts to cause the CDP Nominee (for so long as the CDP
Investor remains a Holder), BAPEF Nominee (for so long as BAPEF remains a
Holder), Mercantile Nominee (for so long as Mercantile remains a Holder),
▇▇▇▇▇▇▇ ▇▇▇▇▇ (for so long as he remains an employee), ▇▇▇▇▇▇ ▇▇▇▇▇ (for so long
as he remains an employee), and the Independent Directors to be elected or
appointed in any and all elections or appointments of directors of the Company,
including, without limitation, voting all shares of its Shares over which it
then exercises voting control in favor of the CDP Nominee, BAPEF Nominee,
Mercantile Nominee, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, and the Independent Directors
in connection with any election of Company directors. Notwithstanding the
immediately preceding sentence, no Holder who is a director of the Company will
be required to cause the election of any CDP Nominee, BAPEF Nominee, Mercantile
Nominee, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ or the Independent Directors through action
as such director if the Board of Directors of the Company determines in good
faith, based as to legal matters on the advice of independent counsel, that the
election or appointment of such CDP Nominee, BAPEF Nominee, Mercantile Nominee,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ or the Independent Directors, as the case may be,
would be inconsistent with the fiduciary duty owed by such Board of Directors to
all the stockholders of the Company; provided that the foregoing shall not
detract from the right of the CDP Investor, BAPEF, Mercantile, or the Company,
as the case may be, to nominate another CDP Nominee, BAPEF Nominee, Mercantile
Nominee, or other nominee, as the case may be, for such position.
(d) A director nominated by the CDP Investor shall be entitled to be
a member of each committee maintained by the Board of Directors, provided that
the nomination of such director to such committee would not contravene the U.S.
securities laws and the rules and regulations promulgated by the SEC thereunder
or any of the rules of any exchange on which the Company's securities are
traded. A director nominated by each of the CDP Investor, BAPEF and Mercantile
shall each be entitled to be a member of the compensation committee of the Board
of Directors, provided that the nomination of each such director to the
compensation committee would not contravene the U.S. securities laws and the
rules and regulations promulgated by the SEC thereunder or any of the rules of
any exchange on which the Company's securities are traded.
(e) A vote cast or written consent given by a director of the Company
who is a Holder or has been elected or appointed as a representative of a Holder
as provided in this
11
Section 8.3 that is contrary to the voting mechanism set out in this Section 8.3
shall be deemed a breach of this Agreement.
8.4 NO LIABILITY FOR ELECTION OF RECOMMENDED DIRECTORS
None of the Company, the Holders, nor any officer, director,
stockholder or shareholder, partner, employee or agent of such party, makes any
representation or warranty as to the fitness or competence of the nominee of any
party hereunder to serve on the Board by virtue of such party's execution of
this Agreement or by the act of such party in voting for such nominee pursuant
to this Agreement.
8.5 GRANT OF PROXY; RESTRICTIONS IN OTHER AGREEMENTS
(a) Should the provisions of this Agreement be construed to
constitute the granting of proxies, such proxies will be deemed coupled with an
interest and are irrevocable for the term of this Agreement.
(b) No Holder may enter into any agreement or arrangement with any
person with respect to the Preferred Stock or the Common Stock on terms
inconsistent with the provisions of this Agreement.
8.6 SPECIFIC ENFORCEMENT
Each party hereto agrees that its obligations hereunder are necessary
and reasonable in order to protect the other parties to this Agreement, and each
party expressly agrees and understands that monetary damages would inadequately
compensate an injured party for the breach of this Agreement by any party, that
this Agreement will be specifically enforceable, and that, in addition to any
other remedies that may be available at law, in equity or otherwise, any breach
or threatened breach of this Agreement will be the proper subject of a temporary
or permanent injunction or restraining order, without the necessity of proving
actual damages. Further, each party hereto waives any claim or defense that
there is an adequate remedy at law for such breach or threatened breach.
8.7 OBSERVER RIGHTS
For so long as the CDP Investor remains a Holder, in addition to its
right to nominate a director pursuant to Section 8.3, it will also have the
right to designate one (1) person to be an observer at each Board of Directors
meeting. In addition, for so long as the CDP Investor remains a Holder it will
also have the right to designate one (1) person to be an observer (or to
participate by telephone) at each operations meeting held by the Company's chief
executive officer, president, chief financial officer, chief operations officer
and the heads of each the Company's business units, which meetings will be held
no less frequently than quarterly. Each observer will be entitled to participate
fully in all discussions among directors and officers, as the case may be (but
not entitled to vote) at such meetings, and to receive all notices of meetings
and other materials (including minutes, resolutions and all other material or
information) provided to the directors or officers of the Company, as the case
may be, subject to any restrictions under applicable law and to the execution of
a confidentiality agreement acceptable to the Company.
12
8.8 RESTRICTIONS ON CERTAIN CORPORATE ACTIONS
So long as any shares of Preferred Stock are outstanding and prior to
the Liquidity Date, the Company will not without first obtaining the approval of
the CDP Investor, so long as it remains a Holder, and the holders of at least a
majority of Shares, calculated on the basis of the number of shares of Common
Stock constituting the Shares on a fully diluted basis, held by all the Holders:
(a) increase the size of the Board of Directors of the Company to a
number of members in excess of seven (7);
(b) sell or dispose of all or substantially all of the Company's
assets or any of its assets with a book value in excess of US$250,000 in respect
of any one transaction or in excess of an aggregate of US$500,000 in any one
financial year, provided, however, that such approval shall not be required in
the event such sale or disposal is in connection with a Qualifying Sale or sales
in the ordinary course of business;
(c) increase, reduce, split, consolidate (reverse split) or cancel
its authorized or issued share capital, issue or grant any option over any
shares or securities convertible into or exchangeable for shares of Common Stock
(except than by redemption or to cover conversions or pursuant to any of the
Company's 2001 Stock Option/Stock Issuance Plan and Employee Stock Purchase
Plan), or issue or grant any other option over its unissued share capital, or
list the Common Stock of the Company on any stock exchange, provided, however,
that such approval shall not be required in the event any such action occurs in
connection with a Qualifying Offering; and provided, further, that all Holders
by executing this Agreement are consenting to the reverse split of the Company's
outstanding Common Stock as contemplated under Section 7.14 of the Series 4-A
Purchase Agreement;
(d) terminate or approve the hiring or termination of the Company's
Chief Executive Officer, Chief Financial Officer, Chief Operating Officer or
President, provided, however, that such approval shall not be required in the
event any such termination is in connection with a Qualifying Sale;
(e) increase the aggregate number of Common Stock that may be issued
under the Company's stock option and stock issuance plans to an amount greater
than 18.5% of the total issued and outstanding share capital of the Company
(calculated on the basis of the number of shares of Common Stock on a fully
diluted basis, assuming full conversion and exercise of all outstanding
convertible, exchangeable and exercisable securities, including without
limitation securities granted under any employee share option plan), as of the
time that is immediately after the First Closing (as defined under the Series
4-A Purchase Agreement) or if a Second Closing (as defined under the Series 4-A
Purchase Agreement) occurs, then immediately after the Second Closing;
(f) cease any material business in which the Company or its
subsidiaries are currently involved (a "CURRENT BUSINESS"), materially change
any of its Current Businesses or materially engage in any business other than a
Current Business (the Company will be deemed,
13
without limitation, to have "MATERIALLY ENGAGED" in a business if it invests
more than US$250,000 in the aggregate in such business); or
(g) amend the terms of the Certificate of Designation of the Series
4-A Preferred Stock (the "SERIES 4-A CERTIFICATE OF DESIGNATION").
8.9 RESTRICTIONS ON CERTAIN BOARD ACTIONS
So long as any shares of Preferred Stock are outstanding and prior to
the Liquidity Date, the Company will not, without first obtaining the approval
of at least a majority vote of the Board of Directors which must include the
affirmative vote of the CDP Nominee, so long as the CDP Investor remains a
Holder:
(a) borrow or raise any sum of money from any source in excess of
US$5,000,000 or issue securities of the Company to financial institutions or
lessors in connection with commercial credit arrangements, equipment financings
or similar transactions not intended primarily for equity-financing purposes,
provided, however, that approval of the CDP Nominee shall not be required in the
event such actions are in connection with a Qualifying Offering;
(b) acquire or dispose of any interest in any other company,
corporation, partnership, or business or incorporate or establish any other
company, corporation, partnership or business, provided, however, that approval
of the CDP Nominee shall not be required in the event such acquisition or
disposal is in connection with a Qualifying Sale;
(c) make any loan or advance or give any credit (other than trade
credit) other than in the ordinary course of business;
(d) give any guarantee or indemnity to secure the liabilities or
obligations of any person, firm or corporation exceeding in the aggregate the
sum of US$5,000,000 at any one time;
(e) do, permit or suffer to be done any act or thing whereby the
Company or any of its subsidiaries may be wound up, dissolved or liquidated
(whether voluntarily or compulsorily);
(f) enter into any contracts above the sum of US$1,000,000 which are
of a nature outside the ordinary course of business in respect of any one
transaction, provided, however, that approval of the CDP Nominee shall not be
required in the event such contract is entered into in connection with a
Qualifying Offering or Qualifying Sale;
(g) adopt or revise any proposed budget or the revolving three-year
business plan of the Company;
(h) acquire any investment or incur any capital commitment not stated
in the budget in excess of US$250,000 at any time in respect of any one
transaction or in excess of US$500,000 in the aggregate in any one fiscal year;
14
(i) approve transactions involving the interest of any director or
stockholder of the Company or any of its subsidiaries, including but not limited
to the making of any loans or advances, whether directly or indirectly, to any
Founder or the provision of any guarantee, indemnity or security for or in
connection with any indebtedness or liabilities of any Founder;
(j) undertake any merger, reconstruction or liquidation exercise
concerning the Company or any of its subsidiaries, provided, however, that
approval of the CDP Nominee shall not be required in the event such merger,
reconstruction or liquidation exercise is in connection with a Qualifying Sale;
(k) grant any options or issue stock under the Company's stock option
or stock issuance plans, respectively, at an exercise or purchase price less
than the price at which the Series 4-A Preferred Stock may be converted into
shares of Common Stock, as adjusted from time to time;
(l) increase the number of shares of Common Stock that may be
purchased by the Founders under the Company's stock option and stock issuance
plans to an amount greater than twelve percent (12%) of the total issued and
outstanding share capital of the Company, (calculated on the basis of the number
of shares of Common Stock on a fully diluted basis assuming full conversion and
exercise of all outstanding convertible, exchangeable and exercisable
securities, including without limitation securities granted under any employee
share option plan), as of the time that is immediately after the First Closing
(as defined under the Series 4-A Purchase Agreement) or if a Second Closing (as
defined under the Series 4-A Purchase Agreement) occurs, then immediately after
the Second Closing;
(m) create any mortgage, charge, lien, pledge, encumbrance
or security or other interest on any assets of the Company or any of its
subsidiaries in excess of US$5,000,000;
(n) take any action which, to the Company's knowledge, is likely to
result in the Multimedia Super Corridor status ("MSC STATUS") of its Malaysian
subsidiary, Vsource (Malaysia) Sdn Bhd, being lost or impaired; or
(o) issue or sell stock, warrants or other securities or rights to
persons or entities with which the Company has business or strategic
relationships provided such issuances are for other than primarily equity
financing purposes.
8.10 MANNER OF VOTING
The voting of shares pursuant to this Agreement may be effected in
person, by proxy, by written consent, or in any other manner permitted by
applicable law.
9. DEPARTING FOUNDER
9.1 ESCROW ACCOUNT
Prior to the Liquidity Date, if any Founder voluntarily terminates his
employment with the Company (a "DEPARTING FOUNDER"), he shall no longer be
deemed a Holder and shall promptly place all shares of Series 4-A Preferred
Stock and shares of Common Stock which
15
were issued upon conversion of Preferred Stock then held by him (the "ESCROW
SECURITIES") in an escrow account (the "ESCROW ACCOUNT") held by an escrow agent
selected by the Company and reasonably satisfactory to the Departing Founder
("ESCROW AGENT"). All securities issued in respect of the Escrow Securities by
way of stock dividends shall be deemed Escrow Securities and shall be deposited
in the Escrow Account. The Escrow Account shall be subject to the following
conditions:
(a) The Escrow Securities shall remain in the Escrow Account unless
otherwise purchased pursuant to Section 9.1(b) or Section 9.1(d) below from the
date such Founder places the Escrow Securities in the Escrow Account until the
day (the "RELEASE DATE") which is forty-five (45) days after the Trigger Date
(the "ESCROW PERIOD"), provided, however that such Escrow Securities shall be
released from the Escrow Account in the event the Escrow Securities have not
been purchased, or the Trigger Date has not occurred, by November 15, 2006. The
"TRIGGER DATE" is the earlier of (i) the Liquidity Date and (ii) the date of the
closing of the purchase by the Company of more than fifty percent (50%) of the
total number of Shares outstanding pursuant to the exercise by the Investors of
their put rights stated herein and in the Company's Certificate of Designation
with respect to the Preferred Stock.
(b) At any time beginning on the date of voluntary termination of
employment by the Departing Founder and ending on the last date of the Escrow
Period: (i) the Company shall have the right to purchase all but not less than
all of the Escrow Securities by delivery of a written notice (a "COMPANY ESCROW
PURCHASE NOTICE") to the Departing Founder, the Escrow Agent and the Investors;
and (ii) each Investor shall have a one-time right to purchase up to the total
amount of all such Escrow Securities by delivery of a written notice (an
"INVESTOR ESCROW PURCHASE NOTICE") to the Departing Founder, the Escrow Agent,
the Company and the other Investors, provided, however, that in the event the
number of shares of Escrow Securities each Investor desires to purchase exceeds
the number of shares of Escrow Securities available, the Company shall notify
each such Investor, and within thirty (30) days after delivery (except as
provided below) of the Investor Escrow Purchase Notice, each such Investor will
be entitled to obtain that portion of the Escrow Securities which is equal to
the proportion that the number of shares of Common Stock issued and held, or
issuable upon conversion of the shares of Series 4-A Preferred Stock then held
by such Investor bears to the total number of shares of Common Stock issued and
held, or issuable upon conversion of the shares of Series 4-A Preferred Stock
then held, by all Investors who wish to purchase the Escrow Securities;
provided, further, however, that an Investor's right to purchase Escrow
Securities shall be subject to the Company's preferential right to purchase all
but not less than all of the Escrow Securities as set forth below and shall
terminate upon delivery of a Company Escrow Purchase Notice.
(c) Upon delivery of an Investor Escrow Purchase Notice, the Company
shall, for a period of thirty (30) days from delivery of such Investor Escrow
Purchase Notice, have the right to purchase all but not less than all of the
Escrow Securities set forth in such Investor Escrow Purchase Notice. If the
Company exercises such right, the Investor that delivered the Investor Escrow
Purchase Notice shall not be deemed to have exercised its one time right to
purchase Escrow Securities.
(d) Upon the Trigger Date and for a period of thirty (30) days from
the Trigger Date, each Investor (regardless as to whether or not it has
exercised its right to purchase
16
Escrow Securities set forth in Section 9.1(b) above) shall have the right to
purchase any remaining Escrow Securities. In the event the number of shares of
Escrow Securities each such Investor desires to purchase exceeds the number of
shares of Escrow Securities available, such shares of Escrow Securities shall be
allocated by the Escrow Agent pro-rata among such Investors (based on the total
number of Shares, calculated on the basis of the number of shares of Common
Stock constituting the Shares on a fully diluted basis, held by all the
Investors as at the date hereof) until all the remaining Escrow Securities have
been purchased or there are no Investors seeking to purchase the remaining
Escrow Securities.
(e) The purchase price per share of Escrow Securities (i) shall be
the average of the daily closing prices of the Common Stock on the principal
exchange or NASDAQ on which the Common Stock is then listed or admitted to
trading, as applicable, over the thirty (30) consecutive trading days
immediately preceding (and not including) the date of the Company Escrow
Purchase Notice, Investor Escrow Purchase Notice, or the Trigger Date, as the
case may be, or (ii) shall be determined in good faith by the Board of Directors
of the Company in the event the Escrow Securities are not publicly traded, in
each case less a discount of thirty percent (30%) of such average daily closing
price (the amount of such discount applied per Escrow Security, the "DISCOUNT").
(f) In the event (i) any Investor has exercised its right to purchase
Escrow Securities (such party, an "EXERCISING PARTY") and (ii) the offering
price for a primary or secondary offering by the Company of Common Stock or the
purchase price per Common Stock in connection with a Qualifying Sale exceeds the
30% IRR Price, and such offering or Qualifying Sale takes place within twelve
(12) months from the date that a Founder voluntarily terminates his employment
with the Company, then each Exercising Party shall pay to the Departing Founder
an amount in cash or in equivalent shares of Common Stock equal to the number of
Escrow Securities purchased by such Exercising Party pursuant to Section 9.1(b)
or Section 9.1(d) above multiplied by the Discount, without interest.
9.2 RIGHTS OF DEPARTING FOUNDER
During such time as a Departing Founder's Escrow Securities are in an
Escrow Account, the Departing Founder shall be entitled to exercise all rights
with respect to such Escrow Securities, including without limitation the right
to vote such Escrow Securities, except as such rights may be restricted under
Section 9.1.
9.3 ARTICLE V PUT OPTION
(a) FOUNDER EXERCISE OF ARTICLE V PUT OPTION
None of the Founders may exercise their respective put rights under
Article V.B. of the Series 4-A Certificate of Designation (the "ARTICLE V PUT
OPTION") unless the Founder or Founders holding a majority of the Shares held by
all the Founders in the aggregate (collectively, the "MAJORITY FOUNDER") elect
to exercise their Article V Put Option, in which case each Founder agrees to
exercise all of each Founder's Article V Put Options simultaneously.
17
(b) ARTICLE V ESCROW ACCOUNT
(i) Following exercise of their Article V Put Options under
Section 9.3(a), each Founder will be entitled to receive 61.0% of the actual
proceeds from the exercise of such Founder's Article V Put Option (the "FOUNDER
PUT AMOUNT") and each of the Founders agrees that the Company will promptly
transfer the remaining 39.0% of the proceeds (the "ARTICLE V ESCROW AMOUNT")
into the Article V Escrow Account (as defined below). Such Article V Escrow
Amount will remain in the Article V Escrow Account until the earlier of (i) six
months after the date such Article V Escrow Amount was deposited into the
Article V Escrow Account and (ii) the date that the CDP Investor has been paid
in full under Section 9.3(b)(iii) below (the "ARTICLE V ESCROW PERIOD").
(ii) During the Article V Escrow Period, if the CDP Investor
exercises its Article V Put Option and receives less than the full amount of
proceeds to which it is entitled under the terms of Article V.B of the Series
4-A Certificate of Designation (the "FULL CDP AMOUNT"), it may deliver to each
of the Founders a Shortfall Certificate. The "SHORTFALL CERTIFICATE" shall be a
certificate executed by the CDP Investor setting forth (x) the Full CDP Amount
and (y) the amount of proceeds actually received by the CDP Investor from the
Company following its exercise of the Article V Put Option (the "ACTUAL CDP
AMOUNT").
(iii) The CDP Investor may, at any time after the date that
is 10 business days after the issuance of the Shortfall Certificate and prior to
the expiration of the Article V Escrow Period, instruct the Article V Escrow
Agent (as defined below) to distribute all Article V Escrow Amounts to the
Founders and to the CDP Investor in accordance with the following percentages,
until such time as the sum of (x) the Article V Escrow Amount distributed to the
CDP Investor in accordance with this Section 9.3(b)(iii) and (y) the Actual CDP
Amount, equals the Full CDP Amount:
CDP Investor 65.3%
▇▇▇▇▇▇▇ ▇▇▇▇▇ 19.0%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 8.3%
▇▇▇▇▇▇ ▇▇▇▇▇ 7.4%
For purposes of Section 9.3, the "ARTICLE V ESCROW ACCOUNT"
means an escrow account set up pursuant to escrow arrangements reasonably
mutually agreed to by the CDP Investor and the Majority Founder. The "ARTICLE V
ESCROW AGENT" shall be a person or entity reasonably mutually agreed to by the
CDP Investor and the Majority Founder to administer the Article V Escrow
Account.
(iv) Upon expiration of the Article V Escrow Period, and in
the event there are any Article V Escrow Amounts remaining, any Founder may
instruct the Article V Escrow Agent to distribute all such remaining Article V
Escrow Amounts to the Founders in accordance with the following percentages:
▇▇▇▇▇▇▇ ▇▇▇▇▇ 54.7%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 23.9%
▇▇▇▇▇▇ ▇▇▇▇▇ 21.4%
18
(v) The CDP Investor's right to receive the Article V Escrow Amounts
in accordance with the percentages set forth Section 9.3(b)(iii) shall only
apply with respect to the exercise of the CDP Investor's Article V Put Option
for its Shares purchased at the First Closing (as defined in the Series 4-A
Purchase Agreement) and Second Closing (as defined in the Series 4-A Purchase
Agreement), and for the avoidance of doubt shall not apply with respect to the
exercise of the CDP Investor's Article V Put Option for Shares purchased at an
Additional Closing (as defined in the Series 4-A Purchase Agreement) or
otherwise.
10. SECTION 10 PUT OPTION
If at any time during the term of this Agreement there is a material
breach by the Company of Sections 5(d) (Prohibited Transfers), 6.2 (Compelled
Sale Notice), 8.1 (Agreement to Vote), 8.2 (Board Size; Meetings), 8.3 (Election
of Directors), 8.7 (Observer Rights), 8.8 (Restrictions on Certain Corporate
Actions), 8.9 (Restrictions on Certain Board Actions), 9.3 (Article V Put
Option), 11 (Access to Information), 12 (Other Covenants of the Company), 14
(Amendments and Waivers) or 20 (Further Assurances) under this Agreement, and
provided that the Company has not remedied such material breach to the
satisfaction of the New Investors (as defined below) within thirty (30) days
after the date of receipt by the Company of a Section 10 Put Notice (as defined
below) (the "NOTICE PERIOD"), then in lieu of any damages and such other
remedies as may be available at law, equity, under the Company's Charter or
hereunder, the CDP Investor and each of the Additional Series 4-A Investors
(together, the "NEW INVESTORS") shall have the right, in addition to any put
right contained in the Company's Charter, to require the Company to purchase
all, but not less than all, of the Series 4-A Preferred Stock held by such New
Investor at a price per share equal to US$2,000 plus an amount which would yield
an IRR to each New Investor of ten percent (10%) (the "SECTION 10 PUT AMOUNT")
to the date of such purchase, provided, however, that in calculating the IRR,
the first date in the measurement of the present value will be the date of the
First Closing and the last date will be the date of payment of the Section 10
Put Amount. In order to complete a purchase by the Company pursuant to this
Section 10, the New Investor shall submit to the Company, copied to each other
New Investor, an executed notice within sixty (60) days of such material breach,
setting forth the particulars of the breach and the number of shares of Series
4-A Preferred Stock to be purchased by the Company (a "SECTION 10 PUT NOTICE").
Each other New Investor may within twenty (20) days of the date of such Section
10 Put Notice serve notice (a "SECTION 10 ADDITIONAL PUT NOTICE") on the Company
requiring the Company to purchase all, but not less than all, of the Series 4-A
Preferred Stock held by such New Investor at a price per share equal to the
Section 10 Put Amount. If the Company has been unable to remedy the material
breach to the satisfaction of the New Investors prior to the expiration of the
Notice Period, then the Company shall pay each New Investor that serves a
Section 10 Put Notice or a Section 10 Additional Put Notice its Section 10 Put
Amount, by cash, certified check, wire transfer or any combination thereof, with
respect to each share of Series 4-A Preferred Stock within fifteen (15) days
after the end of the Notice Period against surrender of the related Series 4-A
Preferred Stock Certificates.
19
11. ACCESS TO INFORMATION
11.1 DELIVERY OF FINANCIAL STATEMENTS
The Company will deliver to each Director on the Board of Directors:
(a) as soon as practicable, but in any event within ninety (90) days
after the end of each fiscal year of the Company, an audited consolidated
balance sheet of the Company and its subsidiaries as of the end of such fiscal
year and the related audited consolidated statements of income, stockholders'
equity and cash flows for the fiscal year then ended, prepared in accordance
with U.S. generally accepted accounting principles ("GAAP"), and certified by a
firm of independent public accountants of recognized international standing
selected by the Board of Directors of the Company, provided, however, that
nothing herein shall be deemed to excuse a director of the Company from his or
her duties or liabilities as a director of the Company;
(b) as soon as practicable, but in any event within twenty (20) days
after the end of each month in each fiscal year (other than the last month in
each fiscal year), beginning with the month ending October 31, 2002, a
consolidated balance sheet of the Company and its subsidiaries, and the related
consolidated statements of income, stockholders' equity and cash flows,
unaudited but prepared in accordance with GAAP and certified by the chief
financial officer of the Company, such consolidated balance sheet to be as of
the end of such month and such consolidated statements of income, stockholders'
equity and cash flows to be for such month and for the period from the beginning
of the fiscal year to the end of such month, in each case with comparative
statements for the prior fiscal year, and the projected budget; and, at the time
of delivery of each such monthly statement, a management narrative report
explaining all significant variances from forecasts and all significant current
developments in staffing, marketing, sales and operations, and a status report
with respect to the following: (i) the Support Services Agreement, dated October
24, 2001, among the Company, Gateway Japan Inc. and the Company's Cayman
subsidiary, Vsource (CI) Ltd. (the "GATEWAY CONTRACT"), including the Company's
compliance with the Service Levels (as such term is defined in the Gateway
Contract); and (ii) the MSC status of the Company's Malaysian subsidiary,
Vsource (Malaysia) Sdn Bhd;
(c) as soon as practicable, but in any event at least by the start of
each fiscal year, a revolving three year business plan; and
(d) as early as practicable, but in any event at least no later than
thirty (30) days prior to the start of each fiscal year, a business plan,
consolidated capital and operating expense budgets, cash flow projections and
income and loss projections for the Company and its subsidiaries in respect of
such fiscal year, all itemized in reasonable detail and prepared on a monthly
basis, and, promptly after preparation, any revisions to any of the foregoing.
11.2 INSPECTION
The Company will permit each Holder at such Holder's expense, to visit
and inspect the Company's properties, to examine its books of account and
records and to discuss the Company's affairs, finances and accounts with its
officers, all at such reasonable times as may be
20
reasonably requested by the Holder; provided, however, that the Company will not
be obligated pursuant to this Section 11.2 to provide access to any information
that it reasonably considers to be a trade secret or similar confidential
information, and provided further that the Company may require the Holder to
execute a confidentiality and nondisclosure agreement prior to any such visit
and inspection.
12. OTHER COVENANTS OF THE COMPANY
12.1 GENERAL
The Company agrees and covenants with each Investor as follows:
(a) to use its commercially reasonable efforts to maintain the
registration of its Common Stock under Section 12(g) of the Securities Exchange
Act of 1934, as amended;
(b) to notify each Investor promptly and from time to time of any
material pending or threatened or contemplated arbitrations, actions, suits or
proceedings against or affecting the Company, any of its subsidiaries or any of
their respective assets or properties;
(c) to procure that it and each of its subsidiaries will at all
times comply in all material respects with any applicable legislation or
regulation and any condition of any authority or consent relating to this
Agreement and/or its business and operations, and will notify each of the
Investors in writing immediately in the event of any breach or non-compliance
which could have a material adverse effect on the financial condition, results
or operations of the Company;
(d) to procure that all senior officers, key employees and
consultants of the Company and its subsidiaries enter into non-disclosure
agreements;
(e) to use its commercially reasonable efforts to maintain insurance
policies in respect of the Company's and its subsidiaries' assets which are of
an insurable nature in amounts reasonably regarded as adequate by the Board of
Directors against fire and other risks normally insured against by companies
carrying on similar businesses or owning property of a similar nature;
(f) to maintain all statutory books and records of the Company and
each of its subsidiaries so as to ensure that such statutory books and records
shall at all times accurately reflect the current status of the Company and each
of its subsidiaries; and
(g) within thirty (30) days after the First Closing (as defined in
the Series 4-A Purchase Agreement), to commence an offer (the "OFFER") to the
holders of all of the Series 1-A Preferred Stock, Series 2-A Preferred Stock,
Series 3-A Preferred Stock (including holders that have not yet converted their
Series A Convertible Notes and Series B-1 Exchangeable Notes into Series 3-A
Preferred Stock) (collectively, the "CONVERTIBLE SECURITIES") and Series B
Warrants and Series B-1 Warrants (the "SERIES B WARRANTS") other than BAPEF,
Mercantile, Asia Internet Investment Group I, LLC, and the Founders
(collectively, the "OTHER STOCKHOLDERS"), pursuant to which the Other
Stockholders may in their discretion: (i) keep their existing equity holding in
the Company unchanged, (ii) exchange their Convertible Securities (other than
the Series 1-A Preferred Stock) or Series B Warrants for shares of Series 4-A
Preferred Stock at the same
21
exchange ratio which BAPEF, Mercantile, Asia Internet Investment Group I, LLC,
and the Founders exchanged their applicable class of Convertible Securities
and/or Series B Warrants pursuant to the Convertible Securities Exchange
Agreement entered into by and among the Company, BAPEF, Mercantile, Asia
Internet Investment Group I, LLC, and the Founders as of October 23, 2002, (iii)
exchange their shares of Series 1-A Preferred Stock for shares of Series 4-A
Preferred Stock at an exchange ratio of one share of Series 4-A Preferred Stock
for every 2,642.01 shares of Series 1-A Preferred Stock or (iv) sell their
Series 1-A Preferred Stock to the Company for cash at a price equal to US$0.76
per share of Series 1-A Preferred Stock. Following completion of the Offer, the
Company shall prepay the principal and accrued interest on any Series A
Convertible Notes and Series B-1 Exchangeable Notes that remain outstanding at
such time. In conducting the Offer, the Company shall use its reasonable efforts
so that the number of Other Stockholders who elect option (i) above is
minimized, subject to the foregoing parameters.
Each of the Holders, by its execution of this Agreement, agrees to use
its reasonable efforts, including, without limitation, voting all shares of its
Shares over which it then exercises voting control, to cause the Company to
commence the Offer.
12.2 KEY PERSON LIFE INSURANCE AND DIRECTOR LIABILITY INSURANCE
The Company shall use commercially reasonable efforts to maintain, at
its expense, "KEY PERSON" life insurance insuring the lives of each of the
Founders and designating the Company as the beneficiary of a death benefit of at
least US$1,000,000 for each such individual while such individual is an employee
of the Company.
The Company shall use commercially reasonable efforts to maintain, at
its expense, directors' and officers' liability insurance providing coverage of
at least US$10,000,000 and for no more than one year's prior acts.
12.3 SPECIAL COVENANTS WITH RESPECT TO SBICS
For so long as any Investor which is identified to the Company as a
small business investment company, licensed and regulated by the U.S. Small
Business Administration under the U.S. Small Business Investment Act of 1958, as
amended (a "SBIC HOLDER") owns any of the Company's securities, (i) the Company
shall provide to each SBIC Holder the financial information contained in Section
11.1 of this Agreement and (ii) the Company shall provide each SBIC Holder the
inspection rights contained in Section 11.2 of this Agreement, without regard to
the amount of securities of the Company owned by such SBIC Holder.
12.4 POST-CLOSING PERCENTAGES
(a) The Company shall, on each anniversary of the First Closing (as
defined in the Series 4-A Purchase Agreement) until the earliest of (i) the
Second Closing, (ii) the Liquidity Date or (iii) March 31, 2006, certify in
writing (each such certification a "FIRST CLOSING CERTIFICATION") to each
Initial Investor (as defined in the Series 4-A Purchase Agreement) such Initial
Investor's percentage holding of the Company's issued and outstanding Common
Stock on a fully diluted basis (excluding, for the purpose of calculating such
fully diluted amount, any of the 1,761,724 shares of Common Stock issuable upon
exercise or conversion of the convertible
22
securities identified as "OTHER WARRANTS AND OPTIONS" in Schedule 3 of the
Series 4-A Purchase Agreement if and only if the exercise price or strike price
of such Other Warrants and Options is higher than the market price of such Other
Warrants and Options on the date of such certification) as of the time
immediately after the First Closing. If the percentage holding in any First
Closing Certification is less than the percentage for the First Closing set
forth in Section 2.2(c) of the Series 4-A Purchase Agreement (the "POST-FIRST
CLOSING PERCENTAGE"), then the Company shall promptly and in any case within
sixty (60) days of the date of the relevant First Closing Certification pay the
Initial Investor in cash an amount (the "FIRST CLOSING SHORTFALL AMOUNT") equal
to US$0.10 per share of Common Stock that would have been required to be held by
the Initial Investor immediately after the First Closing in order for the
Initial Investor's shareholdings to equal the Post-First Closing Percentage (the
"FIRST CLOSING SHORTFALL SHARES"), plus a sum equal to an IRR of 30%, provided,
however, that the first date in the measurement of the present value will be the
date of the First Closing and the last date will be the date of such payment.
With respect to each First Closing Certification, the Company will not be
required to pay any First Closing Shortfall Amount on First Closing Shortfall
Shares for which it has previously paid a First Closing Shortfall Amount. For
purposes of determining the Initial Investors' percentage holding pursuant to
this Section 12.4(a), the exchanges of securities that are contemplated in
connection with the Offer will be deemed to have been completed simultaneously
with the First Closing.
(b) If the Second Closing is completed, the Company shall, on each
anniversary of the Second Closing until the earliest of (i) the Liquidity Date
or (ii) March 31, 2006, certify in writing (each such certification a "SECOND
CLOSING CERTIFICATION") to each Initial Investor such Initials Investor's
percentage holding of the Company's issued and outstanding Common Stock on a
fully diluted basis (excluding, for the purpose of calculating such fully
diluted amount, any of the 1,761,724 shares of Common Stock issuable upon
exercise or conversion of the convertible securities identified as "OTHER
WARRANTS AND OPTIONS" in Schedule 3 of the Series 4-A Purchase Agreement if and
only if the exercise price or strike price of such Other Warrants and Options is
higher than the market price of such Other Warrants and Options on the date of
such certification) as of the time immediately after the Second Closing. If the
percentage holding in any Second Closing Certification is less than the
percentage for the Second Closing set forth in Section 2.2(c) of the Series 4-A
Purchase Agreement (the "POST-SECOND CLOSING PERCENTAGE"), then the Company
shall promptly and in any case within sixty (60) days of the date of the
relevant Second Closing Certification pay the Initial Investor in cash an amount
(the "SECOND CLOSING SHORTFALL AMOUNT") equal to US$0.10 per share of Common
Stock that would have been required to be held by the Initial Investor
immediately after the Second Closing in order for the Initial Investor's
shareholdings to equal the Post-Second Closing Percentage (the "SECOND CLOSING
SHORTFALL SHARES"), plus a sum equal to an IRR of 10%, provided, however, that
the first date in the measurement of the present value will be the date of the
Second Closing and the last date will be the date of such payment. With respect
to each Second Closing Certification, the Company will not be required to pay
any Second Closing Shortfall Amount on Second Closing Shortfall Shares for which
it has previously paid either a First Closing Shortfall Amount or a Second
Closing Shortfall Amount. For purposes of determining the number of Second
Closing Shortfall Shares pursuant to this Section 12.4(b), the exchanges of
securities that are contemplated in connection with the Offer will be deemed to
have been completed simultaneously with the First Closing and the Initial
Investor's percentage holding shall be
23
deemed to include any First Closing Shortfall Shares for which the Initial
Investor received the payment provided for in Section 12.4(a).
(c) For the avoidance of doubt, any changes in the Company's
capitalization resulting from the issuance or sale of shares of an existing or
newly created class of securities to investors originating after the First
Closing or Second Closing, as the case may be, shall be excluded from the
calculation of the Company's issued and outstanding Common Stock on a fully
diluted basis for purposes of this Section 12.4, provided, however, that any
Common Stock or securities convertible or exchangeable into Common Stock issued
after the First Closing, other than in connection with the Offer, and, for the
avoidance of doubt, any shares of Series 4-A Preferred Stock issued at an
Additional Closing (as defined in the Series 4-A Purchase Agreement) and Common
Stock issued or issuable upon the conversion of such additional Series 4-A
Preferred Stock shall also be excluded from the calculation of the Company's
issued and outstanding Common Stock on a fully diluted basis for purposes of
this Section 12.4. Further, the parties hereby agree that the payments provided
for in this Section 12.4 shall be the sole remedy for any breach by the Company
of Section 2.2(c) of the Series 4-A Purchase Agreement. If at any time after the
issuance of a First Closing Certification or Second Closing Certification, it is
discovered that the First Closing Shortfall Amounts or Second Closing Shortfall
Amounts previously paid to an Initial Investor were in excess of such First
Closing Shortfall Amounts or Second Closing Shortfall Amounts actually due to
such Initial Investor pursuant to Section 12.4, then upon written notification
by the Company, such Initial Investor shall pay the Company the amount by which
the First Closing Shortfall Amounts or Second Closing Shortfall Amounts
previously paid by the Company to such Initial Investor exceeds the First
Closing Shortfall Amounts or Second Closing Shortfall Amounts actually due to
such Initial Investor pursuant to Section 12.4.
13. LEGENDS ON STOCK CERTIFICATES
(a) In addition to compliance with the terms of this Agreement, no
transfer of Shares may be made except in compliance with applicable U.S. federal
and state securities laws. Accordingly, each certificate representing Shares now
or hereafter held by or issued to any stockholder will have placed thereon a
legend in substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT."
(b) In addition to the foregoing, each certificate representing
shares of capital stock of the Company subject to this Agreement will bear in
conspicuous type the following legend:
24
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE (AND ALL
TRANSFERS THEREOF) ARE SUBJECT TO CERTAIN RESTRICTIONS
CONTAINED IN A
STOCKHOLDERS AGREEMENT, DATED AS OF OCTOBER 25,
2002, BY AND AMONG CERTAIN STOCKHOLDERS OF THE COMPANY AND THE
COMPANY, A COPY OF WHICH IS ON FILE AT THE MAIN OFFICE OF THE
COMPANY."
14. AMENDMENTS AND WAIVERS
Any term hereof may be amended and the observance of any term hereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Company,
the holders of at least a majority of the then outstanding Shares, which must
include the written consent of the CDP Investor, calculated on the basis of the
number of shares of Common Stock constituting the Shares on a fully diluted
basis; provided, however, that no amendment or waiver which adversely affects
any Holder(s) or Founder(s) shall be affected without the prior written consent
of the majority of the Holders or Founders so affected. Any amendment or waiver
so effected will be binding upon the Company, the Holders, each Permitted
Transferee and all of their respective successors and assigns whether or not
such party, successor or assignee entered into or approved such amendment or
waiver. In no event may an amendment hereto that (a) increases the restrictions
on the Preferred Stock or (b) limits the rights of Holders to elect directors
pursuant to Section 8 be effective without the consent of each of the Holders of
Series 4-A Preferred Stock in the case of clause (a) and without the consent of
the parties entitled to elect such directors in the case of clause (b).
15. SUCCESSORS AND ASSIGNS
The provisions of this Agreement will inure to the benefit of and be
binding upon the successors in interest, heirs and assigns of the parties
(including Permitted Transferees). The Company will not permit the transfer of
any of the Shares on its books or issue a new certificate representing any of
the Shares unless and until the person to whom such security is to be
transferred has executed a written agreement, substantially in the form of this
Agreement, pursuant to which such person becomes a party to this Agreement and
agrees to be bound by all the provisions hereof as if such person were a Holder,
or a Founder or an Investor, as applicable. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
No Holder may transfer any rights under this Agreement except in
connection with the sale or transfer of Shares, provided that the CDP Investor,
BAPEF and Mercantile may transfer their rights under Section 8 to a party who
acquires Shares from such party constituting at least five percent (5%) of the
total issued and outstanding share capital of the Company, on a fully diluted
basis (assuming full conversion and exercise of all outstanding convertible,
exchangeable and exercisable securities, including without limitation securities
granted under any employee share option plan), provided, further, however, that
such party transferring the rights notifies the Company and each other Holder in
writing of such transfer. In the event of such transfer of
25
rights, references in Section 8 to the party transferring such rights shall be
deemed to refer to such party receiving such rights.
16. STOCK SPLITS, STOCK DIVIDENDS, ETC.
In the event of any issuance of shares of the Company's voting
securities hereafter to any of the parties hereto (including, without
limitation, in connection with any Recapitalization), such shares will become
subject to this Agreement and will be endorsed with the legend set forth in
Section 13.
17. ADDITIONAL SERIES 4-A INVESTORS
Upon the sale of Additional Series 4-A Shares to Additional Series 4-A
Investors in accordance with the Series 4-A Purchase Agreement, the Company,
without prior action on the part of any Investor, will require each Additional
Series 4-A Investor to execute and deliver this Agreement. Each such Additional
Series 4-A Investor, upon execution and delivery of this Agreement by the
Company and such Additional Series 4-A Investor, will be deemed an Investor
hereunder.
18. ENFORCEABILITY; SEVERABILITY
The parties hereto agree that each provision of this Agreement will be
interpreted in such a manner as to be effective and valid under applicable law.
If one or more provisions of this Agreement are nevertheless held to be
prohibited, invalid or unenforceable under applicable law, such provision will
be effective to the fullest extent possible excluding the terms affected by such
prohibition, invalidity or unenforceability, without invalidating the remainder
of such provision or the remaining provisions of this Agreement. If the
prohibition, invalidity or unenforceability referred to in the prior sentence
requires such provision to be excluded from this Agreement in its entirety, the
balance of the Agreement will be interpreted as if such provision were so
excluded and will be enforceable in accordance with its terms. If necessary, the
parties will, to the extent permissible by applicable law, amend this Agreement,
or enter into a voting trust agreement under which the Voting Shares will be
transferred to the voting trust created thereby, so as to make effective and
enforceable the intent of this Agreement.
19. TERMINATION
The provisions of this Agreement will terminate upon the earlier to
occur of:
(i) the occurrence of the Liquidity Date;
(ii) the closing date of a Qualifying Offering;
(iii) the sale of all or substantially all of the assets of the
Company or the consolidation or merger of the Company with or into any other
business entity pursuant to which stockholders of the Company prior to such
consolidation or merger hold less than 50% of the voting equity of the surviving
or resulting entity;
26
(iv) the liquidation, dissolution or winding up of the business
operations of the Company;
(v) the institution by the Company of proceedings to be
adjudicated bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it under the Bankruptcy Code (Title
11 of the United States Code), or any other applicable federal or state law, or
the consent by it to, or acquiescence in, the filing of any such petition or the
appointment of a receiver, liquidator, assignee, trustee, or other similar
official, of the Company, or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors;
(vi) the expiration of sixty (60) days after the commencement of
proceedings against the Company seeking any bankruptcy, insolvency, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, wherein such action shall not have been dismissed or all orders or
proceedings thereunder affecting the operations or the business of the Company
stayed, or the stay of any such order or proceedings shall thereafter be set
aside;
(vii) the expiration of sixty (60) days after the appointment
without the consent or acquiescence of the Company of any trustee, receiver or
liquidator of the Company or of all or any substantial part of the properties of
the Company, where such appointment shall not have been vacated; or
(viii) with respect to any Holder, when the Shares held by such
Holder (including its Permitted Transferees and Affiliates that are parties to
this Agreement) in the aggregate constitute less than five percent (5%) of the
total issued and outstanding share capital of the Company, on a fully diluted
basis (assuming full conversion and exercise of all outstanding convertible,
exchangeable and exercisable securities, including without limitation securities
granted under any employee share option plan), provided that Sections 20, 25, 26
and 27 shall continue in full force and effect with respect to such Holder, and
provided further, that Section 28 shall continue in full force and effect with
respect to such Holder for one (1) year following termination of this Agreement.
20. FURTHER ASSURANCES
Each Holder and the Company will from time to time and at all times
hereafter make, do, execute, or cause or procure to be made, done and executed
such further acts, deeds, conveyances, consents and assurances without further
consideration, which may reasonably be required to effect the transactions
contemplated by this Agreement.
21. ENTIRE AGREEMENT
This Agreement and the documents referred to herein constitute the
entire agreement among the parties with respect to the subject matter hereof and
no party will be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein.
27
22. DELAYS OR OMISSIONS
No delay or omission to exercise any right power or remedy accruing to
any party under this Agreement, or upon any breach or default of any other party
under this Agreement, will impair any such right, power or remedy of such
non-breaching or non-defaulting party nor will it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor will any waiver of any single breach
or default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any provisions or conditions of this
Agreement, must be in writing and will be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any party, will be cumulative and
not alternative.
23. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together shall constitute one
and the same instrument. Executed counterparts to this Agreement may be
delivered by facsimile and any such copy shall be valid for all purposes to the
same extent as a manually signed original. Any signature page to this Agreement
or any amendment thereto delivered by fax machine or telecopy machine shall be
binding to the same extent as an original signature page. Any party who delivers
such a signature page agrees to later deliver an original counterpart to any
party requesting it.
24. CAPTIONS AND HEADINGS
The captions and headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
25. NOTICES
Any notice or other communication required or permitted to be delivered
under this Agreement shall be in writing and shall be deemed effectively given:
(i) upon personal delivery to the party to be notified; (ii) when sent by
confirmed telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day; (iii) seven (7) days after
having been sent by registered or certified air mail, return receipt requested,
postage prepaid; or (iv) three (3) days after deposit with an internationally
recognized express courier, specifying highest priority delivery, with written
verification of receipt, to the address or facsimile number set forth beneath
the name of each party below (or to such other address or facsimile number as
such party may designate by ten (10) days advance written notice to the other
party hereto). Each person making a communication hereunder by facsimile shall
promptly confirm by telephone to the person to whom such communication was
addressed each communication made by it by facsimile pursuant hereto but the
absence of such confirmation shall not affect the validity of any such
communication.
26. GOVERNING LAW; VENUE
This Agreement is to be construed in accordance with and governed by
the internal laws of the State of
New York without giving effect to any choice
of law rule that would cause the
28
application of the laws of any jurisdiction other than the internal laws of the
State of
New York to the rights and duties of the parties. Any controversy or
claim arising out of or relating to this Agreement (including, without
limitation, the interpretation, performance, breach or termination thereof) will
be settled by arbitration in San Francisco, California, administered by the
American Arbitration Association ("AAA") in accordance with its then-current
Commercial Arbitration Rules except insofar as such rules conflict with this
Section, and judgment on the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. The arbitration will be conducted by
three arbitrators, one appointed by the party or parties commencing the
proceeding, one appointed by the party or parties in opposition, and the third
by the two arbitrators so appointed, provided that if such two arbitrators
cannot agree on a chairman, he shall be appointed by the AAA, and provided,
further, that if the dispute is such that one or more of the parties to the
dispute believes that the dispute is such that the disputing parties cannot
fairly be divided into two groups as above contemplated, such party may make
application to the AAA and if the AAA concurs in such conclusion, the AAA shall
appoint the chairman of the panel and the chairman shall appoint the other two
members of the panel after consultation with all of the parties to the dispute.
All papers, documents, evidence (whether written or oral) and other information
and materials filed with or presented to the arbitrators will be in the English
language and will constitute confidential information, and neither the parties
nor the arbitrators will disclose any such information or materials except as
necessary in connection with the arbitration or as required by applicable law.
Any demand for arbitration, requests for discovery and other notices in
connection with the arbitration may be served in the English language in
accordance with the notice provisions of this Agreement, and each party waives
any right to any other form of notice, other means of delivery or translation
into any other language. The parties will be entitled to discover all
information and materials reasonably necessary for a full understanding of any
issues reasonably raised in the arbitration. They may use all methods of
discovery permitted under the U.S. federal rules as applied in the Northern
District of California, including, without limitation, depositions, requests for
admissions, interrogatories and requests for production of documents. The time
period for compliance will be set by the arbitrators. The arbitrators will have
the authority to award any remedy or relief that a U.S. federal court could
order or grant, including, without limitation, monetary damages, injunctive or
other equitable relief, and sanctions for abuse or frustration of the
arbitration process, provided that the arbitrators shall not have the authority
to award punitive damages. The arbitrators will issue a written explanation of
the reasons for the award, and a full statement of the facts found and rules of
law applied in reaching their decision. Notwithstanding the foregoing, each
party will have the right to a preliminary injunction or other interim relief,
pending a final award by the arbitrators, in any court of competent jurisdiction
in connection with any arbitrable claim or controversy, but only to the extent
that such interim relief is intended to preserve the adequacy or sufficiency of
any final award granted by the arbitrators.
27. EXPENSES
If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party will be entitled to reasonable
attorney's fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
29
28. CONFIDENTIALITY
28.1 CONFIDENTIALITY
No Investor shall divulge or communicate to any person (other than (i)
as required by law or by any regulatory or governmental authority or (ii) to
its, officers, employees or advisors on a need-to-know basis for the purposes of
reporting, evaluating, reviewing or assessing the performance, acquisition,
holding, management, divestment of its interest in the Company or any other
purposes substantially similar therewith) or use or exploit for any purpose
whatsoever the trade secrets, patents, intellectual property, financial
information, matters relating to the Company's business and operations or other
confidential and/or proprietary knowledge or information of the Company which
the first-mentioned Investor may receive or obtain as a result of entering into
this Agreement, and each Investor shall use its reasonable endeavors to prevent
its officers, employees or advisors from so doing. This restriction shall apply
to each Investor until the later of (i) three years from the date this Agreement
is terminated with respect to such Investor and (ii) three years from the date
such Investor ceases to hold any securities in the Company, but shall not apply
to: (a) information or knowledge which may properly come into the public domain
through no fault of the relevant Investor; or (b) a disclosure for a specific
purpose which is approved by resolution of the Board of Directors prior to such
disclosure being made (which approval shall not be unreasonably withheld).
28.2 EXCEPTIONS
Notwithstanding the foregoing, Section 28.1 of this Agreement shall not
apply to: (a) information which an Investor learns from a third party having the
right to make the disclosure, provided the Investor complies with any
restrictions imposed by the third party; (b) information which is in the
Investor's possession prior to the time of disclosure by the Company and not
acquired by the Investor under a confidentiality obligation; (c) information
which the Investor is required to disclose by law or a governmental or
regulatory authority (which, for the purposes of this Agreement, shall be deemed
to include disclosure by an Investor of the nature of such Investor's investment
in filings and submissions with the SEC and the securities regulatory agencies
of other applicable jurisdictions); or (d) information which the Investor is
required to disclose by court order or other legal process. With respect to a
disclosure required by law, any governmental or regulatory authority or pursuant
to a court order or other legal process, prior to making such disclosure, an
Investor shall (i) use all reasonable efforts to limit the scope of such
disclosure and to request and pursue confidential treatment of such disclosure
to the extent available and (ii) unless prohibited or restricted by law, a
governmental or regulatory authority or pursuant to a court order or other legal
process, notify the Company of the pending disclosure as soon as practicable so
that the Company may seek appropriate redress.
30
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY:
VSOURCE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
Address: Vsource, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attn: Chief Financial Officer
Facsimile: ▇ (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Address: Vsource (Asia) Ltd
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇▇-▇▇▇▇
SIGNATURE PAGE TO THE
STOCKHOLDERS AGREEMENT
FOUNDER:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Vsource, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Facsimile: ▇ (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Address: Vsource (Asia) Ltd
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇▇-▇▇▇▇
SIGNATURE PAGE TO THE
STOCKHOLDERS AGREEMENT
FOUNDER:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Level 12, Menara HLA
▇▇. ▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Facsimile: (▇▇) ▇ ▇▇▇▇-▇▇▇▇
with a copy to:
Address: Vsource (Asia) Ltd
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇▇-▇▇▇▇
SIGNATURE PAGE TO THE
STOCKHOLDERS AGREEMENT
FOUNDER:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇▇▇▇ ▇▇▇▇▇
Vsource (Asia) Ltd
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇▇-▇▇▇▇
with a copy to General Counsel of Vsource at the same address
SIGNATURE PAGE TO THE
STOCKHOLDERS AGREEMENT
INVESTOR:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Vsource, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Facsimile: ▇ (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Address: Vsource (Asia) Ltd
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇▇-▇▇▇▇
SIGNATURE PAGE TO THE
STOCKHOLDERS AGREEMENT
INVESTOR:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Level 12, Menara HLA
▇▇. ▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Facsimile: (▇▇) ▇ ▇▇▇▇-▇▇▇▇
with a copy to:
Address: Vsource (Asia) Ltd
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇▇-▇▇▇▇
SIGNATURE PAGE TO THE
STOCKHOLDERS AGREEMENT
INVESTOR:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇▇▇▇ ▇▇▇▇▇
Vsource (Asia) Ltd
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇▇-▇▇▇▇
with a copy to General Counsel of Vsource at the same address
SIGNATURE PAGE TO THE STOCKHOLDERS AGREEMENT
INVESTOR:
MERCANTILE CAPITAL PARTNERS I, L.P.
By: Mercantile Capital Group, LLC, its general partner
By: Mercantile Capital Management Corp., its manager
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
ASIA INTERNET INVESTMENT GROUP I, LLC
By: Asia Investing Group, L.P., its managing member
By: Asia Investors Group, LLC, its general partner
By: Mercantile Asia Investors, L.P., its managing member
By: Mercantile Asia, LLC, its general partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Member
Address for the foregoing Investors: with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ Altheimer & ▇▇▇▇
Attn: I. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇ (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: ▇ (▇▇▇) ▇▇▇-▇▇▇▇
SIGNATURE PAGE TO THE STOCKHOLDERS AGREEMENT
INVESTOR:
BAPEF INVESTMENTS XII LTD.
By: /s/ ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Alternate Director for ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Address: BAPEF Investments XII Ltd.
▇▇ ▇▇▇ ▇▇▇
13-15 Victoria Road
▇▇. ▇▇▇▇▇'▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile: (▇▇) ▇▇▇▇ ▇▇▇ ▇▇▇
For the attention of: ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to: Baring Private Equity Partners (Hong Kong) Ltd.
39th Floor
One International Finance Centre
▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇▇ ▇▇▇▇
For the attention of: ▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇
with a copy to:
Address: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇, LLP
Room 6308-6309, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇▇-▇▇▇▇
SIGNATURE PAGE TO THE STOCKHOLDERS AGREEMENT
INVESTOR:
CAPITAL INTERNATIONAL ASIA CDPQ INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------- -----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory Title: Authorized Signatory
Address: Capital International Asia CDPQ Inc.
▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Facsimile: c/o CDP Asia Investments, Inc
(▇▇▇) ▇▇▇▇-▇▇▇▇
with a copy to:
Address: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Debevoise & ▇▇▇▇▇▇▇▇
▇▇/▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇▇-▇▇▇▇
SIGNATURE PAGE TO THE STOCKHOLDERS AGREEMENT
INVESTOR:
QUILVEST ASIAN EQUITY LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Seghin
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Seghin
Title: Director
Address: Quilvest Asian Equity Ltd.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇▇-▇▇▇▇
with a copy to:
Address: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Debevoise & ▇▇▇▇▇▇▇▇
▇▇/▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇▇-▇▇▇▇
SIGNATURE PAGE TO THE STOCKHOLDERS AGREEMENT
SCHEDULE A
SCHEDULE OF INVESTORS
Investor Name Number of Shares of Series 4-A Preferred Stock
------------- ----------------------------------------------
1. Mercantile Capital Partners I, L.P. 3,387
2. Asia Internet Investment Group I, LLC 401
3. BAPEF Investments XII Ltd. 5,094
4. Capital International Asia CDPQ Inc. 3,000
5. Quilvest Asian Equity Ltd. 750
SCHEDULE B
SCHEDULE OF FOUNDERS
Founder Name Number of Shares of Series 4-A Preferred Stock
------------ ----------------------------------------------
1. ▇▇▇▇▇▇▇ ▇▇▇▇▇ 1,905
2. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 2,053
3. ▇▇▇▇▇▇ ▇▇▇▇▇ 383