SHAREHOLDERS AGREEMENT by and among Ixworth Enterprises Limited Mr. Fan Hui Yang Zhi Sheng Limited and Ample Spring Holdings Limited April 26, 2007
Execution
Version
Exhibit
4.73
by
and among
Ixworth
Enterprises Limited
Mr.
Fan ▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇ Limited
and
Ample
Spring Holdings Limited
April
26, 2007
This
Shareholders Agreement (this “Agreement”) is made
on April 26, 2007 by and
among the following parties:
A. Ixworth
Enterprises Limited, a British
Virgin Islands company (the “Investor,” together
with the Founder, each a
“Shareholder” and
collectively, the “Shareholders”);
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B.
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Mr.
Fan ▇▇▇ ▇▇▇▇ (ID No.
D538227(1));
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C.
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▇▇▇
▇▇▇▇▇ Limited, a British Virgin
Islands company (the “Founder”);
and
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D. Ample
Spring Holdings Limited, a British
Virgin Islands company (the “Company”).
RECITALS
WHEREAS,
Mr. Fan ▇▇▇ ▇▇▇▇ is the sole shareholder of the Founder and the
Founder currently owns the entire issued share capital of the
Company.
WHEREAS,
the Investor is a party to that certain share purchase and
subscription agreement dated April 9, 2007 among, inter alios, the Company
and
the Founder (the “Purchase and Subscription
Agreement”). A condition to the Investor’s
obligations at the closing as set forth under the Purchase and Subscription
Agreement is the execution of this Agreement.
WHEREAS,
the Investor agreed to (i) subscribe from the Company, and the
Company has agreed to issue and allot to the Investor, thirty-five (35) Ordinary
Shares; and (ii) purchase from the Founder, and the Founder has agreed to
sell
to the Investor, thirty-five (35) Ordinary Shares, which collectively with
the
Ordinary Shares in (i) above represents seventy percent (70%) of the equity
interest in the Company on a fully-diluted basis immediately after the closing
of the transactions contemplated under the Purchase and Subscription Agreement,
on the terms and conditions set forth in the Purchase and Subscription
Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual promises and covenants
herein contained, and other consideration, the receipt and adequacy of which
is
hereby acknowledged, the parties hereto agree as follows:
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1.
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Certain
Definitions.
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1.1 Certain
Defined Terms. As used in this Agreement,
the following terms shall have the following respective meanings:
“Affiliate”
shall mean, with respect to any given Person, a Person that Controls, is
Controlled by, or is under common Control with the given Person, whereas
“Control” means, when
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used
with respect to any Person, the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of equity rights, by contract or otherwise, and the terms “Controlling” and “Controlled”
have
meanings correlative to the
foregoing.
“Agreement”
shall have the meaning as ascribed to it in the introductory paragraph of
this
Agreement.
“Baichuan
Restructure
Documents” shall have the meaning as ascribed to it
in Section 6.1.12 of the Purchase and Subscription Agreement.
“Board”
shall
mean the board of directors of the Company.
“Business
Day”
or “business
day” shall
mean any day that is not a Saturday, Sunday, legal holiday or a day on which
banks are required to be closed in the British Virgin Islands, Hong Kong
Special
Administrative Region or the PRC.
“Closing”
shall have the meaning as ascribed
to it in Section 3.1.1 of the Purchase and Subscription Agreement.
“Company”
shall
have the meaning as ascribed to it in the introductory paragraph of this
Agreement.
“Convertible
Securities” shall mean all options, warrants and other
securities convertible or
exercisable into Ordinary Shares.
“Exchange
Act”
shall mean the U.S. Securities and Exchange
Act of 1934, as
amended.
“Founder”
shall
have the meaning as ascribed to it in the introductory paragraph of this
Agreement.
“Investor”
shallhave the meaning as ascribed to it in the introductory
paragraph of this Agreement.
“Ordinary
Shares” shall mean the ordinary shares of the Company,
par value of US$1.00 per
share.
“Person”
shall
mean any corporation, company, partnership, limited liability company, other
business organization or entity, and any individual.
“PRC”
shall
mean
the People’s Republic of China, excluding the Hong Kong Special Administrative
Region, the Macau Special Administrative Region and the islands of
Taiwan.
“Purchase
and Subscription
Agreement” shall have the meaning as ascribed to it
in the recitals of this Agreement.
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“Qualified
IPO”
shall mean either (i) a public offering of
the Ordinary Shares (or depositary
receipts or other securities evidencing Ordinary Shares) pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
of the United States (the “Securities
Act”), or (ii) any similar public offering on
an
internationally recognized stock exchange, covering the offer and sale of
Ordinary Shares or the closing of a firm commitment public offering pursuant
to
an effective registration statement on Form F-1 under the Securities Act,
which
is underwritten by a managing underwriter of international standing and approved
by the Investor in writing.
“Registration”
shall
mean registration effected by preparing and filing a registration
statement under the Securities Act, and the declaration of effectiveness
of such
registration statement.
“Registrable
Securities” shall mean: (i) Ordinary Shares of the Company issued by
the
Company; (ii) Ordinary Shares of the Company issued as (or issuable upon
the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for
or in
replacement of, any of the foregoing; (iii) any other Ordinary Share owned
or hereafter acquired by the Investor, including Ordinary Shares issued in
respect of the Ordinary Shares described in (i)-(iii) above upon any share
split, share dividend, recapitalization or a similar event; and (iv) any
depositary receipts issued by an institutional depositary upon deposit of
any of
the foregoing. Notwithstanding the foregoing, “Registrable Securities” shall not
include
any Registrable Securities sold by a person in a transaction in which rights
under this Agreement are not assigned in accordance with this Agreement or
any
Registrable Securities sold in a public offering, whether sold pursuant to
Rule
144 promulgated under the Securities Act, or in a registered offering, or
otherwise.
“Restated
Articles” shall mean the Amended and Restated Memorandum
and Articles of
Association of the Company in substantially the form acceptable to the
Shareholders.
“RMB”
shall
mean
the lawful currency of the PRC.
“SEC”
shall
mean
the U.S. Securities and Exchange Commission.
“Securities
Act”
shall mean the U.S. Securities Act of 1933,
as amended.
“Shareholder”
or
“Shareholders”
shallhave
the meaning as ascribed to it in the introductory
paragraph of this Agreement.
“Shares”
shall
mean all Ordinary Shares now owned or subsequently acquired by any Shareholder.
“Subsidiary”
or
“subsidiary”shall
mean, with respect to any subject entity, (i)
any company, partnership or other Person (x) more than fifty percent (50%)
of
whose shares or other interests entitled to vote in the election of directors,
or (y) more than a fifty percent (50%) interest in the profits or capital
of
such entity, are owned or controlled directly or indirectly by the subject
entity or through one or more Subsidiaries of the subject entity; (ii) any
entity whose assets, or
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portions
thereof, are consolidated with the net earnings of the subject
entity and are recorded on the books of the subject entity for financial
reporting purposes in accordance with IFRS or U.S. GAAP or other relevant
generally accepted accounting practices; or (iii) any entity with respect
to and
which the subject entity has the power to otherwise direct the business and
policies of that entity directly or indirectly through another subsidiary.
“Transaction
Agreements” shall mean this Agreement, the Purchase and
Subscription Agreement and
the Baichuan Restructure Documents.
“Transfer”
shall
mean, directly or indirectly, selling, transferring, assigning or otherwise
disposing of, all or any of the Shares in the Company to any other
Person.
“U.S.
GAAP”
shall mean the accounting principles generally
accepted in the United
States.
1.2 Definitions.
The following terms have the
meanings set forth in the Sections below:
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Definition
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Location
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Confirmation
Notice
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Section
6.1
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Co-Sale
Closing
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Section
7.2
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Drag-Along
Notice
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Section
8.2
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Drag-Along
Right
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Section
8.1
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Drag-Along
Sale
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Section
8.1
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Dragged
Shareholder
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Section
8.1
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HKIAC
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Section
16.12
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Information
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Section
14.3
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Investor
Director
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Section
14.1
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New
Securities
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Section
4.3
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Offered
Price
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Section
5.2
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Offered
Shares
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Section
5.2
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Participation
Notice
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Section
4.4
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Participation
Rights Holder
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Section
4.1
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Prohibited
Transfer
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Section
9.3
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Definition
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Location
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Proposed
Transferee
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Section
5.2
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Pro
Rata Share
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Section
4.2
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Put
Shares
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Section
9.3
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Put
Notice
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Section
9.3
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Refusal
Period
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Section
6.1
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Residual
Shares
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Section
7.1
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Restricted
Period
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Section
5.1
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Right
of Co-Sale
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Section
7
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Right
of First Refusal
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Section
6
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Right
of Participation
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Section
4.1
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Terms
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Section
15.1
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Transfer
Notice
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Section
5.2
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2.
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INFORMATION
AND INSPECTION RIGHTS.
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2.1
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Information
and Inspection Rights.
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(a) Information
Rights. The Company covenants and
agrees that, commencing on the date hereof, the Company shall deliver to
the
Investor the following with respect to the Company and its
Subsidiaries:
(i) annual
audited consolidated financial statements within ninety (90) days
after the end of each fiscal year, audited by an international accounting
firm
approved by the Investor;
(ii) six-month
unaudited consolidated financial statements within thirty (30) days after
the
end of such six-month period;
(iii) monthly
unaudited consolidated financial statements within ten (10) days
after the end of each month;
(iv) an
annual consolidated operating budget and strategic plan for the
following fiscal year within thirty (30) days prior to the end of each fiscal
year; and
(v) upon
the
written request by the Investor, such other information as the Investor shall
reasonably request.
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All
financial statements to be provided to the Investor pursuant to this
Section 2.1 and pursuant to any other Transaction Agreement, shall include
a
balance sheet, a statement of profit or loss and a statement of cash flows,
and
shall be prepared in the English language in accordance with the U.S. GAAP
and
shall consolidate all of the financial results of the Company and its
Subsidiaries.
(b) Inspection
Rights. The Company covenants and
agrees that, commencing on the date hereof, the Investor or its appointee
shall
have the right of inspection, including the right to inspect the properties
and
facilities of the Company and/or any of its Subsidiaries and/or any of its
joint
venture companies and/or any of its Affiliates, to access, examine and copy
all
books or accounts of the Company and/or any of its Subsidiaries, and to discuss
the business, operations and conditions of the Company and each of its
Subsidiaries with their respective directors, officers, employees, accounts,
legal counsel and investment bankers, with the full cooperation of the Company,
during reasonable business hours.
(c) Termination
of Rights. Except as set forth in
Section 2.2 below, the foregoing information and inspection rights shall
terminate upon the closing of a Qualified IPO.
2.2 Information
Rights After a Qualified IPO. The
Company covenants that the Company shall deliver to the Investor (i) promptly
after filing, copies of all of the Company’s annual and periodic reports made
available to its shareholders as well as all public reports (including any
periodic, interim, or extraordinary reports) filed with any stock exchange
or
securities regulatory authority, and (ii) promptly upon request, copies of
the
current versions of all documents relating to any subsequent financings by
the
Company, or otherwise affecting the Shares or the Investor, in each case
with
all amendments and restatements. This Section 2.2 shall survive any termination
of this Agreement.
2.3 Re-sale
Rights. The Company shall at its
own cost use its best efforts to assist the Investor in the sale or disposition
of its Registrable Securities, including without limitation (a) the prompt
delivery of applicable instruction letters to the Company’s transfer agent to
remove legends from the Investor’s share certificates, (b) causing the prompt
delivery of appropriate legal opinions from the Company's counsels in forms
reasonably satisfactory to the Investor’s counsel, (c) if the Company has
depository receipts listed or traded on any exchange or inter-dealer quotation
system, (i) the prompt delivery of instruction letters to the Company's share
registrar and depository agent to convert the Investor’s securities into
depository receipts or similar instruments to be deposited in the Investor’s
brokerage account(s), and (ii) the prompt payment of all costs and fees related
to such depositary facility, including conversion fees and maintenance fees
for
Registrable Securities held by the Investor. The Company acknowledges that
time is of the essence with respect to its obligations under this Section
2.3,
and that any delay will cause the Investor irreparable harm and constitutes
a
material breach of its obligations under this Agreement.
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3.
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PUBLIC
OFFERING RIGHTS.
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3.1 General.
Prior to an initial public offering of
the Company’s securities, the Company, the Investor and the Founder shall enter
into a registration rights agreement on customary terms and conditions,
providing that, among other things, the Investor shall be entitled to request
three (3) demand registrations after the initial public offering of the
Company’s securities, an
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unlimited
number of registration on either Form S-3 or Form F-3 and an
unlimited number of piggyback registrations with respect to any registration
by
the Company and its securities, subject to customary underwriter cutbacks.
The
Company shall bear the costs and expenses of selling shareholders in connection
with any public offering or registration (other than the underwriter’s
commission), including the costs and expenses of two (2) counsels for the
Investor.
3.2 Rule
144 Reporting. With a view to making
available to the Investor the benefits of certain rules and regulations of
the
SEC, which may at any time permit the sale of the Registrable Securities
to the
public without registration or pursuant to a registration on Form S-3 or
Form
F-3, after such time as a public market exists for the Ordinary Shares, the
Company agrees to:
(a) make
and keep public information available, as those terms are understood
and defined in Rule 144 under the Securities Act, at all times after the
effective date of the first registration under the Securities Act filed by
the
Company for an offering of its securities to the general public;
(b) file
with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act (at
any
time after it has become subject to such reporting requirements);
and
(c) so
long as the Investor owns any Registrable Securities, to furnish to
the Investor forthwith upon request (i) a written statement by the Company
as to
its compliance with the reporting requirements of Rule 144 (at any time after
ninety (90) days after the effective date of the Company’s initial public
offering), the Securities Act and the Exchange Act (at any time after it
has
become subject to such reporting requirements), or its qualification as a
registrant whose securities may be resold pursuant to Form S-3 or Form F-3
(at
any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company, and (iii) such other reports and documents
of
the Company as the Investor may reasonably request in availing itself of
any
rule or regulation of the SEC that permits the selling of any such securities
without registration or pursuant to Form S-3 or Form F-3.
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4.
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RIGHT
OF PARTICIPATION.
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4.1 General.
The Investor and any person to which
rights under this Section 4 have been duly assigned in accordance with Section
12 (each of the Investor and its assignees being hereinafter referred to
as a
“Participation Rights Holder”) shall have
a right of first refusal to purchase a Pro Rata Share of
all or any part of the New Securities that the Company may from time to time
issue after the date hereof (the “Right of
Participation”).
4.2 Pro
Rata Share. A Participation Rights Holder’s
“Pro Rata Share”
is
the
ratio of (a) the number of Registrable Securities then held by such
Participation Rights Holder, to (b) the total number of Ordinary Shares
(assuming conversion of all Convertible Securities but excluding shares issuable
under unexercised options or warrants into Ordinary Shares) then outstanding
immediately prior to the issuance of New Securities giving rise to the Right
of
Participation.
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4.3 New
Securities. “New
Securities” shall mean any Ordinary Shares, any
other shares of the Company regardless of designation, or other voting shares
of
the Company, whether now authorized or not, and rights, options or warrants
to
purchase such Ordinary Shares and securities of any type whatsoever that are, or
may become, convertible or exchangeable into such Ordinary Shares or other
voting shares, provided,
however,
that the term
“New Securities” shall
not include:
(a) Ordinary
Shares issued under the Purchase and Subscription
Agreement;
(b) securities
issued in connection with any share split, share dividend or
other similar event in which all Participation Rights Holders are entitled
to
participate on a pro-rata basis;
(c) in
the aggregate up to ten percent (10%) Ordinary Shares (proportionally
adjusted to reflect any share dividends, share splits, or similar transactions)
issued or issuable to officers, directors, employees and consultants of the
Company or its Subsidiaries pursuant to any equity plan or incentive arrangement
approved by the Board;
(d) options,
warrants and other securities convertible or exercisable into
Ordinary Shares, issued as part of a Board approved employee share option
plan;
(e) those
issued as a dividend or distribution on Ordinary Shares or any
event for which adjustment is made;
(f) any
securities issued pursuant to the acquisition of another corporation
or entity by the Company by consolidation, merger, purchase of assets, or
other
reorganization in which the Company acquires, in a single transaction or
series
of related transactions, a majority of the assets, voting power or equity
ownership of such other corporation or entity; and
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(g)
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any
securities offered in a Qualified IPO by the
Company.
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4.4 Procedures.
In the event that the Company
proposes to undertake an issuance of New Securities in a single transaction
or a
series of related transactions, it shall give to each Participation Rights
Holder a written notice of its intention to issue New Securities (the
“Participation Notice”), describing
the amount, the type and the price of New Securities and
the general terms upon which the Company proposes to issue such New Securities.
Each Participation Rights Holder shall be entitled to purchase such
Participation Rights Holder’s Pro Rata Share of such New Securities at the price
and upon the terms and conditions specified in the Participation Notice by
giving a written notice to the Company and stating therein the number of
New
Securities to be purchased (such number shall not exceed such Participation
Rights Holder’s Pro Rata Share) within twenty (20) Business Days from the date
of such Participation Notice. If any Participation Rights Holder fails to
send
such written notice within the prescribed time period, then the right of
such
Participation Rights Holder to purchase its Pro Rata Share hereunder shall
be
forfeited.
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4.5 Failure
to Exercise. In the event Participation
Rights Holders do not exercise the Right of Participation with respect to
all
New Securities described in the Participation Notice, after twenty (20) Business
Days following the date of the Participation Notice, the Company shall have
a
period of sixty (60) days thereafter to sell the New Securities described
in the
Participation Notice (with respect to which the Right of Participation was
not
fully exercised) at the same or a higher price and upon non-price terms not
more
favorable to the purchasers thereof than specified in the Participation Notice.
In the event that the Company has not issued and sold such New Securities
within
such prescribed period, then the Company shall not thereafter issue or sell
any
New Securities without first offering such New Securities to the Participation
Rights Holders pursuant to this Section 4.5.
4.6 Termination.
The Right of Participation under
this Section 4 shall terminate upon the completion of a Qualified
IPO.
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5.
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Restrictions
on Transfer.
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5.1 General.
The Founder may not Transfer, directly
or indirectly, any Shares without the Investor’s prior written approval for
three (3) years after the Closing (the “Restricted
Period”).
5.2 Notice
of Proposed Transfer. Prior to the Founder
Transfers any of its Shares, the Founder shall simultaneously deliver to
the
Company and the Investor a written notice (the “Transfer Notice”) in the
form attached
hereto as Exhibit A,
stating: (i) the Founder’s bona fide intention to sell or otherwise
Transfer such Shares (the “Offered
Shares”); (ii) the name, address and phone
number of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the
aggregate number of the Offered Shares proposed to be Transferred to each
Proposed Transferee; (iv) the bona fide cash price or, in reasonable
detail, other consideration for which the Founder proposes to Transfer the
Offered Shares (the “Offered
Price”); and (v) the Investor’s right to
exercise its Right of First Refusal or its Right of Co-Sale with respect
to the
Offered Shares.
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6.
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Right
of First Refusal.
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6.1 Exercise
by the Investor.The Investor and its
affiliated assignees have the Right of First Refusal to purchase all or any
part
of the Offered Shares upon the terms and conditions set forth in the Transfer
Notice; providedthat
the Investor gives written notice of the
exercise of such right to the Founder within thirty (30) days after the date
on
which the Transfer Notice is, pursuant to Section 5.2 deemed to have been
delivered to the Investor (the “Refusal
Period”). Within five (5) days after the expiration
of the Refusal Period, the Founder will give written notice to the Company
and
the Investor specifying the number of Offered Shares that was subscribed
by the
Investor exercising its Right of First Refusal (the “Confirmation Notice”). The Confirmation
Notice shall specify the number of Offered Shares to be purchased by the
Investor.
6.2 Purchase
Price.The purchase price for the Offered
Shares to be purchased by the Investor exercising its Right of First Refusal
under this Agreement will be the Offered Price, and will be payable as set
forth
in Section 6.3 hereof. If the Offered Price includes consideration other
than
cash, the cash equivalent value of the non-cash consideration will be determined
by the Board in
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good
faith, which determination will be binding upon the Company, the
Investor and the Founder, absent fraud or error.
6.3 Payment.
Payment of the purchase price for the
Offered Shares purchased by the Investor exercising its Right of First Refusal
will be made within ten (10) days after the later of (i) delivery of the
Confirmation Notice, or (ii) the end of the Refusal Period. Payment of the
purchase price will be made, at the option of the Investor, (i) in cash (by
check or wire transfer), (ii) by cancellation of all or a portion of any
outstanding indebtedness of the Founder to the Investor, if any, or (iii)
by any
combination of the foregoing.
6.4 Rights
as a Shareholder. If the Investor
exercises its Right of First Refusal to purchase the Offered Shares, then,
upon
the date that the notice of such exercise by the Investor is deemed delivered
to
the Founder pursuant to Section 6.1 hereof, the Founder will have no further
rights as a holder of the Offered Shares except the right to receive payment
for
the Offered Shares from the Investor(s), in accordance with the terms of
this
Agreement, and the Founder will forthwith cause all certificate(s) evidencing
such Offered Shares to be surrendered for Transfer to the Investor.
6.5 Founder’s
Right To Transfer. If the Investor has
not elected to purchase all or any portion of the Offered Shares, then, with
respect to that portion of Offered Shares that will not be purchased by the
Investor pursuant to Section 6 hereof, the Right of First Refusal shall not
apply to such Transfer, and the Founder may Transfer such portion of the
Offered
Shares which the Investor has not elected to purchase to any person named
as a
purchaser or other Transferee in the Transfer Notice, at the Offered Price
or at
a higher price; provided that
such Transfer shall still be subject to the
Investor’s Right of Co-Sale as defined in Section 7 hereof; provided further
that
such Transfer (i) is consummated within sixty (60) days after the end of
the
Refusal Period, (ii) is on the same terms as set forth in the Transfer Notice,
and (iii) is in accordance with all the terms of this Agreement. If the Offered
Shares are not so Transferred during such sixty (60) day period, then the
Founder may not Transfer any of such Offered Shares without complying again
in
full with the provisions of this Agreement.
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7.
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Investor's
Right of Co-Sale.
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7.1 Exercise
by the Investor. The Investor shall have
the right to participate in the sale of the Offered Shares
(“Right of Co-Sale”),
which are not being purchased by the Investor pursuant to its Right of First
Refusal in Section 6 hereof (“Residual
Shares”), on the same terms and conditions as
specified in the Transfer Notice. The Investor may sell all or any part of
the
Shares held by it equal to the product obtained by multiplying (i) the Residual
Shares, by (ii) a fraction, the numerator of which shall be the number of
Shares
owned by the Investor and the denominator of which shall be the total number
of
the issued and outstanding Shares of the Company, calculated immediately
prior
to the time of the Transfer. To exercise its rights hereunder, the Investor
must
have provided a written notice to the Founder within the Refusal Period
indicating the number of Shares that it wishes to sell pursuant to this Section
7.1.
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7.2 Closing;
Consummation of the Co-Sale. Subject to
compliance with applicable state and federal securities laws, the sale of
the
Shares by the Investor pursuant to the Right of Co-Sale shall occur within
ten
(10) days after the later of (i) delivery of the Confirmation Notice and
(ii) expiration of the Refusal Period (the “Co-Sale Closing”). The Investor
shall
deliver to the Founder at or before the Co-Sale Closing, one or more
certificates, properly endorsed for Transfer (or with a duly executed separate
instrument of transfer, as applicable), representing the number of Shares
to
which the Investor is entitled to sell pursuant to this Section 7. At the
Co-Sale Closing, the Founder shall cause such certificates or other instruments
to be Transferred and delivered to the Transferee pursuant to the terms and
conditions specified in the Transfer Notice.
7.3 Founder’s
Right To Transfer. If any of the
Offered Shares remain available after the exercise of the Investor’s Right of
First Refusal and all Rights of Co-Sale, then the Founder shall be free to
Transfer, subject to Section 8 below, any such remaining Shares to the
Proposed Transferee at the Offered Price or a higher price in accordance
with
the terms set forth in the Transfer Notice; provided, however,
that if the Offered Shares are not so
Transferred during the sixty (60) day period following the deemed delivery
of
the Transfer Notice, then the Founder may not Transfer any of such remaining
Offered Shares without complying again in full with the provisions of this
Agreement.
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8.
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INVESTOR’S
DRAG-ALONG RIGHTS
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8.1 Exercise
by the Investor. If a Qualified IPO does
not occur on or before December 31, 2009 and the Investor approves an offer
by
any Person or Persons (for purposes of this Section 8, the “Proposed Transferee”) to purchase
all or
substantially all of the equity or assets, of the Company, or the business
conducted by it (the “Drag-Along
Sale”), then the Investor shall have the right,
the
“Drag-Along Right”),
but not the obligation, to require each other Shareholder (each a
“Dragged Shareholder”)
to vote to approve such sale or to sell to the Proposed Transferee up to
all the
Shares or ownership interest in the Company held by such Dragged Shareholder,
provided that the valuation of the Company at the time of such Drag-Along
Sale
is not less than RMB600,000,000 and, unless with the prior written consent
of
the Dragged Shareholder. Each Shareholder agrees to take all steps necessary
to
enable him or it to comply with the provisions of this Section 8.1, including,
but not limited to, voting in favor of such Drag-Along Sale, converting
Convertible Securities into Ordinary Shares and transferring its Shares or
ownership interest in the Company involved in such Drag-Along Sale.
Notwithstanding any provision to the contrary, the share Transfer restrictions
as provided in Section 5, Section 6 and Section 7 shall not apply to any
Transfers made pursuant to this Section 8.
8.2 Closing;
Consummation of Drag-Along Sale. To
exercise a Drag-Along Right, the Investor shall give each Dragged Shareholder
and the Company a written notice (for purposes of this Section 8.2, a
“Drag-Along Notice”)
containing (a) the name and address of the Proposed Transferee and (b) the
proposed purchase price, terms of payment and other material terms and
conditions of the Proposed Transferee’s offer. Each Dragged Shareholder shall
thereafter be obligated to sell the Ordinary Shares subject to such Drag-Along
Notice, providedthat
the sale to the Proposed Transferee is
consummated within sixty (60) days of delivery of such Drag-Along Notice.
If the
sale is not consummated within such 60-day period, then each Dragged Shareholder
shall no longer be
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obligated
to sell such Dragged Shareholder’s Shares pursuant to that
specific Drag-Along Right but shall remain subject to the provisions of this
Section 8.
8.3 Terms
and Conditions. Any such sale or
disposition by the Dragged Shareholders shall be on the same terms and
conditions, including, without limitation, as to the form of consideration,
as
the proposed Drag-Along Sale by the Investor. The Dragged Shareholders shall
be
required to make customary and usual representations and warranties in
connection with the Drag-Along Sale, including, without limitation, as to
their
ownership and authority to sell, free of all liens, claims and encumbrances
of
any kind, the Shares proposed to be Transferred or sold by such persons or
entities and shall, without limitation as to time, indemnify and hold harmless
to the full extent permitted by law, the Investor and the third party purchasers
against all obligations, cost, damages, expenses, losses, judgments,
assessments, or other liabilities including, without limitation, any special,
indirect, consequential or punitive damages, any court costs, costs of
preparation, attorney’s fees or expenses, or any accountant’s or expert witness’
fees arising out of, in connection with or related to any breach or alleged
breach of any representation or warranty made by, or agreements, understandings
or covenants of the Dragged Shareholders as the case may be, under the terms
of
the agreements relating to such Drag-Along Sale.
8.4 Deemed
Transfers. At the closing of the
Drag-Along Sale, each Dragged Shareholder shall deliver or cause to be delivered
a certificate or certificates evidencing its Shares to be included in the
Drag-Along Sale, duly endorsed for Transfer with signatures guaranteed, to
such
Proposed Transferee in the manner and at the address indicated in the Drag-Along
Notice. If a Dragged Shareholder fails to deliver certificates evidencing
its
Shares as described in this Section 8 at such closing, it shall for all purposes
be deemed no longer to be a shareholder of the Company (with the record books
of
the Company including, as appropriate, its register of shareholders updated
to
reflect such status), shall have no voting rights, shall not be entitled
to any
dividends or other distributions with respect to any Shares held by them,
shall
have no other rights or privileges as a shareholder of the Company and, in
the
event of liquidation of the Company, its rights with respect to any
consideration it would have received if it had complied with this Section
8, if
any, shall be subordinate to the rights of any equity holder. In addition,
upon
demand by the Investor and in addition to any other rights or remedies of
the
Investor granted herein or otherwise, the Company shall stop any subsequent
Transfer of any such Shares held by the Dragged Shareholders.
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9.
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Conditions
to Valid Transfer.
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9.1 Generally.
Any attempt by the Founder to Transfer
any Shares in violation of any provision of this Agreement will be null and
void, shall not be recorded on the books of the Company or its transfer agent
and shall not be recognized by the Company. Each party hereto acknowledges
and
agrees that any breach of this Agreement would result in substantial harm
to the
other parties hereto for which monetary damages alone could not adequately
compensate. Therefore, the parties hereto unconditionally and irrevocably
agree
that any non-breaching party hereto shall be entitled to seek protective
orders,
injunctive relief and other remedies available at law or in equity (including,
without limitation, seeking specific performance or the rescission of purchases,
sales and other Transfers of Shares not made in strict compliance with this
Agreement).
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9.2 Conditions.
No securities shall be Transferred by
the Founder unless (i) such Transfer is made in compliance with all of the
terms of this Agreement and all applicable federal and state securities laws
and
(ii) prior to such Transfer, the transferee or transferees sign a
counterpart to this Agreement pursuant to which it or they agree to be bound
by
the terms of this Agreement. The Company will not be required to
(i) transfer on its books any Shares that have been sold, gifted or
otherwise Transferred in violation of any provisions of this Agreement, or
(ii) to treat as owner of such Shares, or accord the right to vote or pay
dividends to any purchaser, donee or other transferee to whom such Shares
may
have been so Transferred.
9.3 Put
Right. If the Founder Transfers any Shares in
contravention of the Right of Co-Sale under this Agreement (a
“Prohibited Transfer”),
or the Proposed Transferee is unwilling to purchase any securities from the
Investor, the Investor may, by delivery of written notice to the Founder
(a
“Put Notice”) within
thirty (30) days after the date on which the Investor becomes aware of the
Prohibited Transfer or the terms thereof, require the Founder to purchase
from
the Investor the number of Shares that is equal to the number of Residual
Shares
the Investor would have been entitled to Transfer to the purchaser (the
“Put Shares”). Such
sale shall be made on the following terms and conditions:
(a) The
price per share at which the Put Shares are to be sold to the Founder
shall be equal to the price per share that the Investor would have received
at
the Co-Sale Closing of such Prohibited Transfer if the Investor had sold
such
Put Shares at the Co-Sale Closing. Such purchase price of the Put Shares
shall
be paid in cash or such other consideration as the Founder received in the
Prohibited Transfer or at the Co-Sale Closing. The Founder shall also reimburse
the Investor for any and all reasonable fees and expenses, including, but
not
limited to, legal fees and expenses, incurred pursuant to the exercise or
attempted exercise of the Investor’s Rights of Co-Sale pursuant to Section 7 or
in the exercise of its rights under this Section 9 with respect to the Put
Shares.
(b) The
Put Shares to be sold to the Founder shall be of the same class or
type as Transferred in the Prohibited Transfer or at the Co-Sale Closing
if the
Investor then owns securities of such class or type. If the Investor does
not
own any of such class or type, the Put Shares shall be Ordinary
Shares.
(c) The
closing of such sale to the Founder will occur within ten (10) days
after the date of the Investor’s Put Notice to the Founder. At such closing, the
Investor shall deliver to the Founder the certificate or certificates
representing the Put Shares to be sold, each certificate to be properly endorsed
for transfer (or with a duly executed separate instrument of transfer, as
applicable), and immediately upon receipt thereof, the Founder shall pay
the
aggregate purchase price therefor, and the amount of reimbursable fees and
expenses, as specified in Section 9.3(a).
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10.
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Restrictive
Legend and Stop Transfer Orders.
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10.1 Legend.
Each Shareholder understands and agrees
that the Company will cause the legend set forth below, or a legend
substantially equivalent thereto, to be placed upon any certificate(s) or
other
documents or instruments evidencing ownership of Shares:
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THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND MAY ONLY BE
SOLD, DISPOSED OF OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH CERTAIN RIGHTS
OF
FIRST REFUSAL AND RIGHTS OF CO-SALE AS SET FORTH IN A SHAREHOLDERS AGREEMENT
ENTERED INTO BY THE HOLDER OF THESE SHARES, THE COMPANY AND CERTAIN SHAREHOLDERS
OF THE COMPANY. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE
OF
THE COMPANY. SUCH RIGHTS OF FIRST REFUSAL AND RIGHTS OF CO-SALE ARE BINDING
ON
CERTAIN TRANSFEREES OF THESE SHARES WHO ARE PARTIES TO THE SHAREHOLDERS
AGREEMENT.
10.2 Stop
Transfer Instructions. In order to ensure
compliance with the restrictions referred to herein, the Founder agrees that
the
Company may issue appropriate “stop transfer” certificates or instructions in
the event of a Transfer in violation of any provision of this Agreement and
that
it may make appropriate notations to the same effect in its
records.
11. TERMINATION.
The Investor’s Right of First
Refusal and Right of Co-Sale shall terminate upon the closing of a Qualified
IPO.
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12.
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ASSIGNMENT
AND AMENDMENT.
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12.1 Assignment.
Notwithstanding anything herein to
the contrary, the rights of the Investor under Sections 2.1 (prior to a
Qualified IPO), 2.2 and 2.3 are transferable to any Affiliate of the Investor
or
to any person who holds or is acquiring Shares immediately after the Closing
in
a Transfer which does not breach any express provision of this Agreement;
provided, however,
that the Company is given a written
notice stating the name and address of the assignee and identifying the
securities of the Company as to which the rights in question are being assigned;
and provided further that any
such assignee shall receive such assigned rights, subject to all the terms
and
conditions of this Agreement, including the provisions of this Section 12.
The
registration rights of the Investor under Section 3 are fully assignable
to any
Affiliate of such Holder or to any person who holds or is acquiring Registrable
Securities in a permitted Transfer; provided, however,
that the Company is given a written
notice stating the name and address of the assignee and identifying the
securities of the Company as to which the rights in question are being assigned;
and provided further that any
such assignee shall receive such assigned rights, subject to all the terms
and
conditions of this Agreement, including the provisions of this Section 12.
The
Right of Participation of the Investor under Section 4 hereof is fully
assignable to the Investor’s Affiliates or to any person who holds or is
acquiring Ordinary Shares immediately after the Closing in a Transfer which
does
not breach any express provision of this Agreement; provided, however
that any such assignee shall receive such
assigned rights, subject to all the terms and conditions of this Agreement,
including the provisions of this Section 12. The rights of the Investor
under Section 6 are assignable prior to a Qualified IPO to any Affiliate of
the Investor or to any person who holds or is acquiring Shares in a Transfer
which does not breach any express provision of this Agreement; provided, however,
that the Company and the Founder are
given a written notice stating the name and address of the assignee and
provided further that any such
assignee shall receive such assigned rights, subject to all the terms and
conditions of this Agreement, including the provisions of this Section
12.
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12.2 Deed
of
Adherence. For any Transfer of Shares to be deemed
effective, the transferee shall assume the obligations of the transferor
under
this Agreement by executing and delivering to the Company a Deed of Adherence
substantially in the form attached hereto as Exhibit
B. Upon the execution and delivery of a Deed of
Adherence by any transferee, such transferee shall be deemed to be a
Shareholder, hereunder, as appropriate.
12.3 No
restriction or encumbrance on Ordinary Shares. The
Transfer and assignment of Ordinary Shares or any right of the Investor under
this Agreement or any other Transaction Agreements shall not be subject to
any
Rights of First Refusal or Co-Sale Rights or other restrictions or encumbrances
on Transfer or assignment.
12.4 Amendment
of Rights. A provision of this
Agreement may only be amended and the observance thereof may only be waived
(either generally or in a particular instance and either retroactively or
prospectively) with the written consent of the Company, the Investor and
the
Founder. Any amendment or waiver effected in accordance with this Section
12.4
shall be binding upon each party hereto and their respective
successors.
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13.
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PROTECTIVE
PROVISIONS.
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13.1 Acts
of
the Company (General). Notwithstanding anything to the
contrary in this Agreement, any action (whether in a single transaction or
a
series of related transactions) that effects or approves any of the following
transactions involving the Company or any of its Subsidiaries shall require
approval of a majority of the Board of the Company:
(a) any
guarantee or agreement by the Company or any of its Subsidiaries to
indemnify any other person against any loss or liability of any person’s
obligations, except for the furtherance of the commercial benefits of the
Company;
(b) any
borrowing of money, obtaining of financial facilities (including
factoring, facility letters, undertakings, guarantees, indemnities, comfort
letters, etc.) or incurrence of indebtedness by the Company or any of its
Subsidiaries (including indebtedness in the form of assumption or guaranty
of
borrowing or indebtedness of any other person) which individually or together
with all related borrowing equal to or exceed forty percent (40%) of the
net
debt equity ratio of the Company or any of its Subsidiaries at any
time;
(c) any
material change to the fundamental business character, plan or
strategy of the Company or any of its Subsidiaries as now carried
out;
(d) any
investment in the securities or shares or other rights of any
company;
(e) any
purchase, lease, sale or other transaction by the Company or any of
its Subsidiaries involving real property;
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(f) any
fee or monetary transaction or arrangement, including the acquisition
or disposal of property or procurement of service, between the Company or
any of
its Subsidiaries and any of its shareholder or its Affiliate;
(g) any
change of the auditors of the Company and/or any of its Subsidiaries
or any material change in the commencement date of the financial year of
the
Company or the relevant Subsidiary;
(h) any
adoption, change or announcement of an employee share option plan of
the Company;
(i) any
increase or decrease in the authorized number of the Ordinary Shares,
allotment or issuance of any additional Ordinary Shares, amendment of the
Company’s Restated Articles in a manner that adversely affects the rights of the
holders of the Ordinary Shares; amendment of or change in the rights,
preferences, privileges or powers of, or the restrictions provided for, the
benefit of the holders of the Ordinary Shares;
(j) the
authorization, creation or issuance of shares of any class of capital
stock having preferences superior to or on a parity with the holders of the
Ordinary Shares in liquidation, redemption, or dividend rights or other rights
or privileges;
(k) any
change in the authorized number, manner of election or term of the
office of directors of the Company;
(l) the
declaration or payment of any dividend or distribution of profits on
any Shares ranking junior to the Ordinary Shares in liquidation, redemption,
or
dividend rights or privileges; or the redemption and repurchase of any Shares
junior to the Ordinary Shares in liquidation, redemption, or dividend rights
or
privileges except for repurchases of Shares pursuant to a contractual right
of
repurchase upon termination of employment or service in a bona fide employment
or service agreement;
(m) any
merger, acquisition, consolidation, reorganization or other
transaction of or involving one (1) or more other companies in which the
shareholders of the Company immediately prior thereto shall not hold a majority
of the outstanding voting power of each surviving or acquiring company pro-rata
immediately thereafter;
(n) the
sale, transfer (including a transfer by way of a spin-off, split-off
or business separation) or disposition of the whole or a substantial part
of the
business, undertaking, goodwill, assets or intellectual property of the Company
and/or any of its Subsidiaries, including the sale, transfer or other
disposition of a subsidiary or the grant of an exclusive license to intellectual
property;
(o) any
resolution for the winding up, liquidation or dissolution of the
Company and/or any of its Subsidiaries, application for the appointment of
a
receiver, manager or judicial manager or like officer or initiation of similar
insolvency-related proceedings of which any of the Company or its Subsidiaries
is the subject company;
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(p) the
creation of any mortgage, pledge, hypothecation, lien or charge
(whether by way of fixed or floating charge, mortgage or other security)
or
other security interest on all or substantial part of the undertaking, assets,
rights or properties (tangible or intangible) of the Company;
(q) any
delegation of authority in respect of any of the foregoing matters to
any committee of the Board; or
(r) any
agreement, any commitment or the adoption of any corporate resolution
to do any of the foregoing matters.
13.2 Notwithstanding
anything to the contrary in this Agreement, for as long
as any Ordinary Share is outstanding, any alteration or amendment to the
Restated Articles or any other charter documents of the Company or any of
its
Subsidiaries shall require the approval of the Investor.
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14.
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BOARD
MATTERS.
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14.1 Designation
Right. The Board of the Company shall
consist of not more than three (3) directors. The Investor shall be entitled
to
designate two (2) directors to the Board of the Company (each, an
“Investor Director” and
collectively, the “Investor
Directors”) and the Founder shall be entitled to
designate one (1) director to the Board.
14.2 Board
Quorum; Meetings; Management, etc. The Company’s
Restated Sections shall provide for a quorum (which shall exist at the time
of
the voting as well as the attendance of the Board meeting) of the Board for
three (3) directors. Notices and agendas of the Board meetings as well as
copies
of all board papers shall be sent to all the relevant directors and to the
Shareholders at least ten (10) Business Days prior to the relevant Board
meeting, except for emergency Board meeting. The Company shall hold Board
meetings at least once a quarter after Closing. Except for any contrary
provision in the Transaction Agreements or the relevant laws, the Company
shall
be managed and controlled by the Board.
14.3 Waiver.
The Company acknowledges that the
Investor will likely have, from time to time, information that may be of
interest to the Company or its Subsidiaries (“Information”) regarding
a wide variety of
matters including (1) the Investor’s technologies, plans and services, and plans
and strategies relating thereto, (2) current and future investments the Investor
has made, may make, may consider or may become aware of with respect to other
companies and other technologies, products and services, including technologies,
products and services that may be competitive with those of the Company or
any
of its Subsidiaries, and (3) developments with respect to the technologies,
products and services, and plans and strategies relating thereto, of other
companies, including companies that may be competitive with the Company or
any
of its Subsidiaries. The Company recognizes that a portion of such Information
may be of interest to the Company or any of its Subsidiaries. Such Information
may or may not be known by the Investor Directors. The Company, as a material
part of the consideration for this Agreement, agrees that the Investor Directors
shall not have any duty to disclose any Information to the Company or any
of its
Subsidiaries, or permit the Company or any of its Subsidiaries to participate
in
any projects or
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investments
based on any Information, or otherwise to take advantage of
any opportunity that may be of interest to the Company or any of its
Subsidiaries if it were aware of such Information, and hereby waives, to
the
extent permitted by law, any claim based on the corporate opportunity doctrine
or otherwise that could limit the Investor’s ability to pursue opportunities
based on such Information or that would require the Investor, any
representative, the Investor Directors to disclose any such Information to
the
Company or any of its Subsidiaries or offer any opportunity relating thereto
to
the Company or any of its Subsidiaries.
14.4 Director
Expenses. The Company shall reimburse each director of
the Board for all reasonable expenses incurred in connection with Board duties
and meetings.
14.5 Assignment
and Termination. The rights of the
Investor set forth in this Section 14 are fully assignable to any person
who holds or is acquiring the Ordinary Shares in a Transfer which does not
breach any express provision of this Agreement; provided, however,
that the Company is given a written
notice stating the name and address of the assignee and identifying the
securities of the Company as to which the rights in question are being assigned;
provided further, that the
transferee executes and delivers a Deed of Adherence. The rights of the Investor
in this Section 14 shall terminate upon completion of a Qualified
IPO.
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15.
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CONFIDENTIALITY
AND NON-DISCLOSURE.
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15.1 Disclosure
of Terms. The terms and conditions of
this Agreement and any other Transaction Agreements (collectively, the
“Terms”), including
their existence, shall be considered confidential information and shall not
be
disclosed by any party hereto to any third party without the consent of all
other parties except in accordance with the provisions set forth
below.
15.2 Legally
Compelled Disclosure. In the event that any Shareholder
or any of its Affiliates is requested or becomes legally compelled (including
without limitation, pursuant to securities laws and regulations of any
jurisdiction) to disclose the existence of this Agreement or the content
of any
of the Terms in contravention of the provisions of this Section 15.2, such
Shareholder has the right to make such disclosure in its sole discretion
and
without giving prior written notice to any other party hereto.
15.3 Other
Exceptions. Notwithstanding any other
provision of this Section 15, the confidentiality obligations of the parties
shall not apply to: (i) information which a disclosing party learns from
a third
party having the right to make the disclosure, provided the disclosing party
complies with any restrictions imposed by the third party; (ii) information
which is in the disclosing party’s possession prior to the time of disclosure by
the protected party and not acquired by the disclosing party under a
confidentiality obligation; (iii) information which enters the public domain
without breach of confidentiality by the disclosing party; or (iv) any
disclosure by a party to its employees, officers, bankers, partners,
accountants, attorneys or other professional advisers, in each case only
where
such Persons are under appropriate confidentiality obligations.
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15.4
|
Press
Releases.
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(a) The
Founder shall not issue any press release or make any public
announcement with respect to this Agreement or any other Transaction Agreement
or the transactions contemplated hereby without the prior written consent
of the
Investor.
(b) The
Investor may issue any press release or make any public announcement
as it deems to be appropriate with respect to this Agreement or any other
Transaction Agreement or the transactions contemplated hereby at its own
discretion.
15.5 Other
Information. The provisions of this Article
15 shall survive the termination of this Agreement and shall be in addition
to,
and not in substitution for, the provisions of any separate non-disclosure
agreement executed by any of the parties hereto with respect to the transactions
contemplated hereby.
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16.
|
Miscellaneous
Provisions.
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16.1 Governing
Law. This Agreement shall be governed
in all respects by the laws of Hong Kong.
16.2 Survival.
The representations, warranties,
covenants and agreements made herein shall survive any due diligence
investigation made by any party hereto and shall survive the
Closing.
16.3 Successors
and Assigns. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit
of,
and be binding upon, the successors, permitted assigns, heirs, executors
and
administrators of the parties hereto. This Agreement and the rights and
obligations herein may be assigned by the Investor to any Affiliate of the
Investor. None of the Founder or the Company may assign its rights or delegate
its obligations under this Agreement without the written consent of the
Investor.
16.4 Entire
Agreement. This Agreement and the schedules and exhibits
hereto and thereto and the Transaction Agreements, which are hereby expressly
incorporated herein by this reference, constitute the entire understanding
and
agreement between the parties with regard to the subjects hereof and thereof.
16.5 Notices.
Except as may be otherwise provided
herein, all notices, requests, waivers and other communications made pursuant
to
this Agreement shall be in writing and shall be conclusively deemed to have
been
duly given (i) when hand delivered to the other party; (ii) when sent by
facsimile at the number set forth below, upon a successful transmission report
being generated by the sender’s machine; or (iii) three (3) Business Days after
deposit with an internationally-recognized overnight delivery service, postage
prepaid, addressed to the parties as set forth in Exhibit
C with next-business-day delivery guaranteed, provided
that the sending party receives a confirmation of delivery from the delivery
service provider. Each person making a communication hereunder via facsimile
shall promptly confirm by telephone with the person to whom such communication
was addressed regarding each communication made by it via facsimile pursuant
to
this Article 16., but the absence of such confirmation shall not affect the
validity of any such communication. A party may change or supplement the
addresses given above, or designate
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additional
addresses, for purposes of this Section 16.5 by giving the
other party written notice of the new address in the manner set forth
above.
16.6 Amendments
and Waivers. This Agreement may be
amended only with the prior written consent of the Investor.
16.7 Delays
or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party upon any breach or default of
any
other party hereto under this Agreement, shall impair any such right, power
or
remedy of the aggrieved party nor shall it be construed to be a waiver of
any
such breach or default, or an acquiescence therein, or of any similar breach
of
default thereafter occurring; nor shall any waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent
or
approval of any kind or character on the part of any party of any breach
of
default under this Agreement or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing and shall
be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, or by law or otherwise afforded to
the
parties shall be cumulative and not alternative.
16.8 Interpretation;
Titles and Subtitles. This
Agreement shall be construed according to its fair language. The rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be employed in interpreting this Agreement. The
titles
of the sections and subsections of this Agreement are for convenience of
reference only and are not to be considered in construing this
Agreement.
16.9 Counterparts.
This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of
which
together shall constitute one instrument.
16.10 Severability.
Should any provision of this
Agreement be determined to be illegal or unenforceable, such determination
shall
not affect the remaining provisions of this Agreement.
16.11 Pronouns.
All pronouns and any variations thereof
are deemed to refer to the masculine, feminine, neuter, singular or plural,
as
the identity of the Person or Persons may require.
16.12 Dispute
Resolution. Any
dispute, controversy or claim arising out of or relating to this
Agreement, or the breach, termination or invalidity thereof, shall be settled
by
arbitration in accordance with the UNCITRAL arbitration rules then in effect.
The appointing authority shall be Hong Kong International Arbitration Centre
(“HKIAC”). The place
of
arbitration shall be in Hong Kong at HKIAC. There shall be three (3)
arbitrators. The language to be used in the arbitral proceedings shall be
English. Any such arbitration shall be administered by HKIAC in accordance
with
HKIAC procedures for arbitration in force at the date of this Agreement
including such additions to the UNCITRAL arbitration rules as are therein
contained.
16.13 Obligations
of the Founder. Mr. Fan ▇▇▇ ▇▇▇▇,
jointly and severally, with the Founder, accepts all obligations of the Founder
under this Agreement and shall procure the Founder to take all necessary
actions
to effect the covenants hereunder.
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16.14 Continuity
of Other Restrictions. Any Shares not
purchased by the Investor pursuant to its Right of First Refusal hereunder
will
continue to be subject to all other restrictions imposed upon such Shares
hereunder and by law, including any restrictions imposed under the Restated
Articles, or by agreement.
16.15 Further
Assurances. Each party hereto agrees to
execute and deliver, by the proper exercise of its corporate, limited liability
company, partnership or other powers, all such other and additional instruments
and documents and do all such other acts and things as may be necessary to
more
fully effectuatethis Agreement.
16.16 Conflict.
In the event of any conflict between
the terms of this Agreement and the Company’s Restated Articles, the terms of
this Agreement shall control. In the event of any conflict between the terms
of
this Agreement and any other agreement to which a Shareholder is a party
or by
which such Shareholder is bound, the terms of this Agreement will control.
In
the event of any conflict between the Company’s books and records and this
Agreement or any notice delivered hereunder, the Company’s books and records
will control absent fraud or error.
16.17 Attorney’s
Fees. In the event that any suit or
action is instituted to enforce any provision in this Agreement, the prevailing
party in such dispute shall be entitled to recover from the losing party
all
fees, costs and expenses of enforcing any right of such prevailing party
under
or with respect to this Agreement, including without limitation, such reasonable
fees and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
16.18 Telecopy
Execution and Delivery. A facsimile,
telecopy or other reproduction of this Agreement may be executed by one or
more
parties hereto and delivered by such party by facsimile or any similar
electronic transmission device pursuant to which the signature of or on behalf
of such party can be seen. Such execution and delivery shall be considered
valid, binding and effective for all purposes. At the request of any party
hereto, all parties hereto agree to execute and deliver an original of this
Agreement as well as any facsimile, telecopy or other reproduction
hereof.
16.19 Share
Split. All references to numbers of Shares in this
Agreement shall be appropriately adjusted to reflect any share splits, share
dividends, bonus issues, combinations, subdivisions, consolidations,
recapitalizations and the like affecting the Ordinary Shares occurring after
the
date of this Agreement.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the day and year herein above first written.
|
Ixworth
Enterprises Limited
By:
/s/
▇▇▇▇ ▇▇▇▇▇▇
Name:
▇▇▇▇ ▇▇▇▇▇▇
Title:
Director
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▇▇▇
▇▇▇▇▇ Limited
By:
/s/
Fan ▇▇▇ ▇▇▇▇
Name:
Fan ▇▇▇ ▇▇▇▇
Title:
Director
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Ample
Spring Holdings Limited
By:
/s/
Fan ▇▇▇ ▇▇▇▇
Name:
Fan ▇▇▇ ▇▇▇▇
Title:
Director
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|
Fan
▇▇▇ ▇▇▇▇
Signature:
/s/
Fan ▇▇▇ ▇▇▇▇
[Signature
Page of Shareholders Agreement]
EXHIBITA
TRANSFER
NOTICE
I/We,
____________, wish to transfer ____________ (indicate number and
class and, if applicable, series of the shares in question) shares of Ample
Spring Holdings Limited (the “Company”) (the
“Shares”) pursuant to a (please check one): sale
( )
other ( ) (please describe)
.
I
propose to transfer Shares to the following entities and
individuals:
|
1. Proposed
Transferee #1
[Address] [Phone Number] |
[amount,
type and price of shares]
|
|
2. Proposed
Transferee #2
[Address] [Phone Number] |
[amount,
type and price of shares]
|
|
3. Proposed
Transferee #3
[Address] [Phone Number] |
[amount,
type and price of shares]
|
The
cash consideration for Shares totals $________. The fair market value
of the non-cash consideration for Shares, if any, as of the date of this
Notice
totals $________.
|
|
The
non-cash consideration, if any, consists of (please describe in
reasonable detail):
___________________________________________________________
___________________________________________________________
|
.
Pursuant
to the Shareholders Agreement, dated ______________, 2007, I/We
write to inform you of your Right of First Refusal and your Right of Co-Sale
with respect to Shares. If you choose to do so, you may exercise one (but
not
both) of these rights with respect to Shares by returning this Notice to
me/us,
at the address below, with a copy to the Company. If you decline your right
to
do so, you need not return anything.
|
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I/We
exercise my Right of First Refusal
|
¨
|
|
|
|
I/We
exercise my Right of Co-Sale
|
¨
|
|
I/We
wish to (circle one, not both) buy/sell ________ shares of ________
the Company.
I/WE
MUST RECEIVE YOUR NOTICE BY 30 DAYS
AFTER NOTICE IF YOU INTEND TO EXERCISE
YOUR RIGHT OF FIRST REFUSAL OR IF YOU INTEND TO EXERCISE YOUR RIGHT OF CO-SALE.
THERE IS NO EXTENSION OF THIS DEADLINE.
[Founder’s
Address and Name]
[Company’s
Address and Contact]
EXHIBIT
B
DEED
OF ADHERENCE
This
Deed of Adherence (this “Deed of
Adherence”) is executed as a deed by the
undersigned (the “New
Shareholder”) pursuant to the terms of that certain
Shareholders Agreement dated April ____, 2007 (the “Agreement”) by and
among Ample Spring
Holdings Limited, a company incorporated under the laws of the British Virgin
Islands (the “Company”)
and certain of its shareholders, and in consideration of the Shares (as defined
below) subscribed for, pledged to, transferred to or issued to the New
Shareholder and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged. Capitalized terms used but
not
defined herein shall have the respective meanings ascribed to such terms
in the
Agreement.
NOW
THIS DEED WITNESSES as follows:
1. Acknowledgement.
The
New Shareholder
acknowledges that Transferee is acquiring [number] [Preferred/Common] shares
of
the Company (the “Shares”), subject
to the terms and conditions of the Agreement.
2. Agreement.
Immediately
upon transfer
or issuance of the Shares, the New Shareholder (i) agrees that the Shares
acquired by New Shareholder shall be bound by and subject to the terms of
the
Agreement applicable to the Founder (as defined in the Agreement), and (ii)
hereby adopts the Agreement with the same force and effect as if the New
Shareholder were originally the Founder.
3. Notice.
Any
notice required or permitted by the Agreement shall be given to the New
Shareholder at the address listed beside the New Shareholder’s signature
below.
4. Governing
Law. This Deed of Adherence
is governed by, and shall be construed in all respects in accordance with,
Hong
Kong law.
IN
WITNESS whereof the Transferee has executed this Deed of Adherence on
________, 20__.
If
the Transferee is an individual
|
|
SIGNED,
SEALED AND DELIVERED
|
)
|
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by
[Name of the Individual]
|
)
|
|
|
in
the presence of:
|
)
|
|
|
Address:............................................
|
)
|
|
|
Fax:
|
)
|
OR
If
the Transferee is a company
|
|
SIGNED,
SEALED AND DELIVERED
|
)
|
|
|
by
[Name of the Company]
|
)
|
|
|
and
SIGNED by:
|
)
|
|
|
in
the presence of:
|
)
|
|
|
Address:............................................
|
)
|
|
|
Fax:
|
)
|
Exhibit
C
Notice
Addresses
|
To
the Investor:
|
Suites
1705-6,
17/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong Attn: ▇▇▇▇▇ ▇▇▇ Lun Fork Fax No.: (▇▇▇) ▇▇▇▇ ▇▇▇▇ |
|
To
Mr. Fan ▇▇▇ ▇▇▇▇ and the
Founder: |
▇▇▇▇▇
▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇. ▇▇ Xizhimen North Street, Haidian District, Beijing, PRC Attn: ▇▇▇▇ ▇▇▇▇▇ Fax No.: (▇▇▇▇) ▇▇▇▇▇▇▇▇ |
|
To
the Company:
|
▇▇▇▇▇
▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇. ▇▇ Xizhimen North Street, Haidian District, Beijing, PRC Attn: ▇▇▇▇ ▇▇▇▇▇ Fax No.: (▇▇▇▇) ▇▇▇▇▇▇▇▇ |