Exhibit 10.3
 
REGISTRATION RIGHTS AGREEMENT
 
This Registration Rights Agreement (this “Agreement”) is made as of June 16th,
2006, among HRDQ Group, Inc., a Delaware corporation (the “Company”), and Top
Rider Group Limited, a BVI corporation (the “Investor” ).
 
RECITALS
 
WHEREAS, the Company, Telecom Communications, Inc., a Delaware corporation,
Alpha Century Holdings Ltd. a BVI corporation (“Alpha”), and China Dongguan
Networks, Inc., a BVI corporation (“CDN”), have entered into that certain
Acquisition Agreement (the “Acquisition Agreement”) of even date herewith
pursuant to which each of Alpha and CDN have contributed to the Company, and the
Company has accepted, the Acquired Assets (as defined in the Acquisition
Agreement);
 
WHEREAS, the Company and Investor have entered into a Series A Preferred and
Common Stock Purchase Agreement (the “Purchase Agreement”) of even date herewith
pursuant to which the Company wants to sell to Investor and Investor wants to
purchase from the Company shares of the Company’s Series A Preferred Stock (the
“Series A Preferred Stock”) and Common Stock (the “Common Stock”);
 
WHEREAS, one condition to Alpha’s and CDN’s obligation to contribute assets
pursuant to the Acquisition Agreement and one condition to Investor’s
obligations to purchase shares of the Company’s Series A Preferred Stock and
Common Stock pursuant to the Purchase Agreement is that the Company and the
Investors enter into this Agreement in order to provide such Investors with
certain rights to register shares of the Company’s Common Stock, including
without limitation Common Stock issued or issuable upon conversion of the Series
A Preferred Stock held by Investor; and
 
WHEREAS, the Company wants to induce Alpha and CDN to enter into the Acquisition
Agreement and the Company wants to induce Investor to purchase shares of Series
A Preferred Stock and Common Stock pursuant to the Purchase Agreement by
agreeing to the terms and conditions set forth herein.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the mutual promises set forth above and the
covenants set forth herein and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto hereby,
intending to be legally bound, hereby agree as follows:
 

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1.  
Registration Rights.

 
1.1  Certain Definitions. As used in this Agreement, the following terms have
the  following respective meanings:
 
“Affiliate” means (i) with respect to any individual, (A) a spouse or
descendant, through blood or adoption, of such individual, (B) any trust, family
partnership or limited liability company whose beneficiaries shall primarily be
such individual and/or such individual’s spouse and/or any Person related by
blood or adoption to such individual or such individual’s spouse, and (C) the
estate or heirs of such individual, and (ii) with respect to any Person that is
not an individual, any other Person that, directly or indirectly through one or
more intermediaries Controls, is Controlled by, or is under common Control with,
such Person and/or one or more Affiliates thereof.
 
“Board” means the board of directors of the Company.
 
“Commission” means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.
 
“Control”, “Controls” or “Controlled means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies (investment or otherwise) of a Person, whether through ownership of
voting securities, by contract or otherwise.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
similar successor federal statute, and the rules and regulations thereunder, all
as the same shall be in effect from time to time.
 
“Form S-3 Initiating Holders” means any Holder or Holders of the Registrable
Securities then outstanding and who propose to register securities on Form S-3,
the aggregate offering price of which, net of underwriting discounts and
commissions, exceeds $1,000,000.
 
“Holder” means (i) any Investor holding Registrable Securities and (ii) any
person holding Registrable Securities to whom the rights under this Agreement
have been transferred in accordance with Section 1.10 hereof.
 
“Initiating Holders” means any Holder or Holders who in the aggregate hold not
less than fifty percent (50%) of the Registrable Securities then outstanding and
who propose to register securities the aggregate offering price of which, net of
underwriting discounts and commissions, exceeds $10,000,000.
 
“Investor” means Top Rider Group Limited, a BVI corporation.
 
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“IPO” means the first public offering of the Common Stock of the Company to the
general public that is affected pursuant to a registration statement filed with,
and declared effective by, the Commission under the Securities Act.
 
“Other Stockholders” means persons other than Holders who, by virtue of
agreements with the Company, are entitled to include their securities in certain
registrations hereunder.
 
“Person” shall be construed broadly and shall include, without limitation, an
individual, a partnership, an investment fund, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.
 
“Preferred Shares” means the Company’s Series A Preferred Stock.
 
The terms “register”, “registered” and “registration” refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.
 
“Registration Expenses” shall mean all expenses incurred by the Company in
complying with Sections 1.3, 1.4, and 1.5 hereof, including, without limitation,
all registration, qualification, listing and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, fees and
disbursements of one counsel for all of the Holders registering securities not
to exceed twenty thousand dollars ($20,000) in any given registration, blue sky
fees and expenses, and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
the Company which shall be paid in any event by the Company), but shall not
include Selling Expenses.
 
“Registrable Securities” shall mean (i) shares of Common Stock issued or
issuable pursuant to the conversion of the Preferred Shares, (ii) all shares of
Common Stock owned by Telecom as of the date hereof, (iii) all shares of Common
Stock owned by CDN as of the date hereof, (iv) all shares of Common Stock issued
or issuable to Investor pursuant to the Purchase Agreement, and (v) any Common
Stock of the Company issued as a dividend or other distribution with respect to
or in exchange for or in replacement of the shares referenced in clauses (i),
(ii), (iii) and (iv) above provided, however, that shares of Common Stock or
other securities shall only be treated as Registrable Securities if and so long
as they have not been (A) sold to or through a broker or dealer or underwriter
in a public distribution or a public securities transaction, (B) sold in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act under Section 4 (1) thereof so that all transfer restrictions
and restrictive legends with respect thereto are removed upon the consummation
of such sale, or (C) transferred in a transaction pursuant to which the
registration rights are not also assigned in accordance with Section 1.10
hereof; and provided, further, however, that with respect to each Holder, shares
of Common Stock or other securities held by such Holder shall no longer be
treated as Registrable Securities at such time following the IPO as (1) the
Holder, together with such Holder’s Affiliates, holds less than 1% of the
Company’s then outstanding capital stock and all such shares held by such Holder
may be sold under Rule 144 of the Securities Act (or any similar or successor
rule) during any ninety (90) day period or (2) the Holder may sell all such
shares held by such Holder under Rule 144(k) of the Securities Act (or any
similar or successor rule).
 
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“Rule 144” means Rule 144 as promulgated by the Commission under the Securities
Act, as such Rule may be amended from time to time, or any similar successor
rule that may be promulgated by the Commission.
 
“Rule 144(k)” means Rule 144(k) as promulgated by the Commission under the
Securities Act, as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the Commission.
 
“Rule 145” means Rule 145 as promulgated by the Commission under the Securities
Act, as such Rule may be amended from time to time, or any similar successor
rule that may be promulgated by the Commission.
 
“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder or any similar federal statute and
the rules and regulations of the Commission thereunder, all as the same shall be
in effect at the time.
 
“Selling Expenses” shall mean all underwriting discounts, selling commissions
and stock transfer taxes applicable to the securities registered by the Holders
and all fees and disbursements of counsel for any Holder, other than the fees
and disbursements of one counsel for all of the Holders registering securities
in any given registration as provided in the definition of “Registration
Expenses” above.
 
“Telecom” means Telecom Communications, Inc., a Delaware corporation.
 
1.2  Requested Registration.
 
(a)  Request for Registration. If the Company shall receive from Initiating
Holders a written request that the Company effect any registration,
qualification, or compliance, the Company will:
 
(i)  promptly deliver written notice of the proposed registration,
qualification, or compliance to all other Holders; and
 
(ii)   as soon as practicable, use commercially reasonable efforts to effect
such registration, qualification, or compliance (including, without limitation,
the execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws, and
appropriate compliance with applicable regulations issued under the Securities
Act and any other governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale and distribution of all or
such portion of such Registrable Securities as are specified in such request
(including, if applicable, a distribution of such Registrable Securities by way
of dividend), together with all or such portion of the Registrable Securities of
any Holder or Holders joining in such request as are specified in a written
request delivered to the Company within twenty (20) days after delivery of such
written notice from the Company;
 
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provided, however, that the Company shall not be obligated to take any action to
effect any such registration, qualification, or compliance pursuant to this
Section 1.2:
 
     (A)  Prior to one hundred eighty (180) days following the effective date of
the IPO;
 
     (B)  After the Company has effected two (2) such registrations pursuant to
this Section 1.2, such registrations have been declared or ordered effective,
and the securities offered pursuant to such registrations have been sold;
 
     (C)  During the period starting with the date sixty (60) days prior to the
Company’s estimated date of filing of, and ending on a date one hundred and
eighty (180) days after the effective date of, a registration initiated by the
Company; provided that the Company is actively employing in good faith its
commercially reasonable efforts to cause such registration statement to become
effective and that the Company’s estimate of the date of filing such
registration statement is made in good faith; provided, further, that the
Company provides written notice to the Initiating Holders within thirty (30)
days of any request for registration by the Initiating Holders of the Company’s
intent to file a registration statement for a public offering within ninety (90)
days after the date of such request and provided further, that such offering is
an offering subject to Section 1.4 below;
 
     (D)  In any particular jurisdiction in which the Company would be required
to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act; or
 
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     (E)  If in the good faith judgment of the Board, such registration would be
seriously detrimental to the Company and the Board concludes, as a result, that
it is essential to defer the filing of such registration statement at such time,
and the Company thereafter delivers to the Initiating Holders a certificate,
signed by the President or Chief Executive Officer of the Company, stating that
in the good faith judgment of the Board it would be detrimental to the Company
or its stockholders for a registration statement to be filed in the near future,
then the Company’s obligation to use its commercially reasonable efforts to
register, qualify, or comply under this Section 1.2 shall be deferred for a
period not to exceed ninety (90) days from the delivery of the written request
from the Initiating Holders; provided, however, that the Company may not utilize
this right more than once in any twelve (12) month period.
 
     (F)  Subject to the foregoing clauses (A) through (E), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Initiating Holders. The registration statement filed pursuant to the
request of the Initiating Holders may, subject to the provisions of Sections
1.2(c) and Section 1.12 hereof, include other securities of the Company with
respect to which registration rights have been granted, and may include
securities being sold for the account of the Company.
 
     (b)  Underwriting. The right of any Holder to registration pursuant to this
Section 1.2 shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein. A Holder may elect to include in
such underwriting all or a part of the Registrable Securities held by such
Holder.
 
     (c)  Procedures. If the Company shall request inclusion in any registration
pursuant to this Section 1.2 of securities being sold for its own account, or if
other persons shall request inclusion in any registration pursuant to this
Section 1.2, the Initiating Holders shall, on behalf of all Holders, offer to
include such securities in the underwriting and may condition such offer on
their acceptance of the applicable provisions of this Section 1 (including
without limitation Section 1.12). The Company shall (together with all Holders
or other persons proposing to distribute their securities through such
underwriting) enter into and perform its obligations under an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by a majority in interest of the Initiating Holders (which managing
underwriter shall be reasonably acceptable to the Company). Notwithstanding any
other provision of this Section 1.2, if the managing underwriter advises the
Initiating Holders in writing that marketing factors require a limitation of the
number of shares to be underwritten, the number of shares to be included in the
underwriting or registration shall be allocated as set forth in Section 1.12. If
any person who has requested inclusion in such registration as provided above
disapproves of the terms of the underwriting, such person shall be excluded
therefrom by written notice delivered by the Company or the managing
underwriter. Any Registrable Securities and/or other securities so excluded or
withdrawn shall also be withdrawn from registration.
 
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1.3  Registration on Form S-3.
 
(a)  Qualification on Form S-3. After the IPO, the Company shall use its
commercially reasonable efforts to qualify (and continue to be qualified) for
registration on Form S-3 or any comparable or successor form. To that end, the
Company shall register (whether or not required by law to do so) its Common
Stock under the Exchange Act in accordance with the provisions of the Exchange
Act following the effective date of the first registration of any securities of
the Company on Form S-1 or any comparable or successor form or forms.
 
(b)  Request for Registration on Form S-3. After the Company has qualified for
the use of Form S-3, if the Company shall receive from Form S-3 Initiating
Holders a written request that the Company effect a registration on Form S-3 the
Company will:
 
(i)  promptly deliver written notice of the proposed registration to all other
Holders; and
 
(ii)  as soon as practicable, use its commercially reasonable efforts to effect
such registration, qualification, or compliance (including, without limitation,
the execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws, and
appropriate compliance with applicable regulations issued under the Securities
Act and any other governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale and distribution of all or
such portion of such Registrable Securities as are specified in such request
(including, if applicable, a distribution of such Registrable Securities by way
of dividend), together with all or such portion of the Registrable Securities of
any Holder or Holders joining in such request as are specified in a written
request delivered to the Company within twenty (20) days after delivery of such
written notice from the Company; provided, however, that the Company shall not
be obligated to take any action to effect any such registration, qualification,
or compliance pursuant to this Section 1.3:
 
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     (A)  If the Company has effected any such registration pursuant to this
Section 1.3 during the preceding twelve-month period in which such Form S-3
Initiating Holders or their Affiliates participated (irrespective of whether
such registration was requested by such Form S-3 Initiating Holders);
 
     (B)  During the period starting with the date sixty (60) days prior to the
Company’s estimated date of filing of, and ending on a date one hundred and
eighty (180) days after the effective date of, a registration initiated by the
Company; provided that the Company is actively employing in good faith its
commercially reasonable efforts to cause such registration statement to become
effective and that the Company’s estimate of the date of filing such
registration statement is made in good faith; provided, further, that the
Company provides written notice to the Initiating Holders within thirty (30)
days of any request for registration on Form  S-3 by the Initiating Holders of
the Company’s intent to file a registration statement for a public offering
within ninety (90) days after the date of such request and provided further that
such registration is subject to Section 1.4 hereto;
 
     (C)  In any particular jurisdiction in which the Company would be required
to execute a general consent to service of process in effecting such
registration, qualification, or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act;
 
     (D)  If in the good faith judgment of the Board, such registration would be
seriously detrimental to the Company and the Board concludes, as a result, that
it is essential to defer the filing of such registration statement at such time,
and the Company thereafter delivers to the Initiating Holders a certificate,
signed by the President or Chief Executive Officer of the Company, stating that
in the good faith judgment of the Board it would be detrimental to the Company
or its stockholders for a registration statement to be filed in the near future,
then the Company’s obligation to use its commercially reasonable efforts to
register, qualify, or comply under this Section 1.3 shall be deferred for a
period not to exceed ninety (90) days from the date of delivery of the written
request from the Initiating Holders; provided, however, that the Company may not
utilize this right more than once in any twelve (12) month period.
 
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     (c)  Underwriting; Procedure. If a registration requested under this
Section 1.3 is for an underwritten offering, the provisions of Sections 1.2(b)
and 1.2(c) shall apply to such registration.
 
1.4  Company Registration.
 
       (a)  Notice of Registration. If the Company shall determine to register
any of its securities, either for its own account or the account of a security
holder or holders invoking demand registration rights other than (A) a
registration pursuant to Sections 1.2 or 1.3 hereof, (B) a registration relating
solely to employee benefit plans, (C) a registration relating solely to a Rule
145 transaction, or (D) a registration on any registration form that does not
permit secondary sales, the Company will:
 
(i)  promptly deliver to each Holder written notice thereof; and
    
     (ii)  use its commercially reasonable efforts to include in such
registration (and any related qualification under blue sky laws or other
compliance), except as set forth in Section 1.4(b) below, and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests made by any Holder and delivered to the Company
within ten (10) days after the written notice is delivered by the Company. Such
written request may include all or a portion of a Holder’s Registrable
Securities.
 
      (b)  Underwriting; Procedures. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.4(a)(i). In such event, the right of any Holder to
registration pursuant to this Section 1.4 shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion of Registrable
Securities in the underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into and perform their obligations under an
underwriting agreement in customary form with the managing underwriter selected
for such underwriting by the Company. Notwithstanding any other provision of
this Section 1.4, if the managing underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the managing
underwriter may exclude all Registrable Securities from, or limit the number of
Registrable Securities to be included in, the registration and underwriting. The
Company shall so advise all holders of securities requesting registration, and
the number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated as set forth in Section 1.12
(it being understood that the securities to be registered pursuant to Section
1.4(a) for the Company’s account or for the account of such other security
holders invoking registration rights (such securities, the “Priority Shares”)
shall not be reduced with respect to such registration). If any person who has
requested inclusion in such registration as provided above disapproves of the
terms of the underwriting, such person shall be excluded therefrom by written
notice delivered by the Company or the managing underwriter. Any Registrable
Securities and/or other securities so excluded or withdrawn shall also be
withdrawn from registration.
 
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     (c)  Right to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 1.4
prior to the effectiveness of such registration, whether or not any Holder has
elected to include securities in such registration.
 
      1.5  Registration Procedures. In the case of each registration,
qualification, or compliance effected by the Company pursuant to this Section 1,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification, and compliance and as to the completion
thereof and, at its expense, the Company will use its commercially reasonable
efforts to:
 
     (a)  Prepare and file with the Commission a registration statement with
respect to such securities and use its commercially reasonable efforts to cause
such registration statement to become and remain effective for at least ninety
(90) days or until the distribution described in the registration statement has
been completed, whichever occurs first; provided, however, that (i) such 90-day
period shall be extended for a period of time equal to the period the Holder
refrains from selling any securities included in such registration at the
request of an underwriter of common stock or other securities of the Company,
and (ii) in the case of any registration of Registrable Securities on Form S-3
which are intended to be offered on a continuous or delayed basis, such 90-day
period shall be extended, if necessary, up to one hundred eighty (180) days to
keep the registration statement effective until all such Registrable Securities
are sold, however in no event longer than one year from the effective date of
the registration statement and provided that if Rule 415, or any successor rule
under the Securities Act, permits an offering on a continuous or delayed basis,
and provided further that if applicable rules under the Securities Act governing
the obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment which (A) includes any prospectus required by Section
10(a)(3) of the Securities Act or (B) reflects facts or events representing a
material or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be included
in (A) and (B) above shall be contained in periodic reports filed pursuant to
Section 13 or 15(d) of the Exchange Act in the registration statement;
 
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     (b)  Furnish to the Holders participating in such registration and to the
underwriters of the securities being registered such reasonable number of copies
of the registration statement, preliminary prospectus, final prospectus, and
such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities;
 
     (c)  Prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statements as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement;
 
     (d)  Notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and prepare a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the purchaser
of such shares, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or incomplete in the
light of the circumstances then existing and, at the request of any such seller,
furnish to such seller a reasonable number of copies of such supplement to or
amendment of such prospectus;
 
     (e)  Use its commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions;
 
     (f)  Cause all such Registrable Securities to be listed on each securities
exchange on which similar securities issued by the Company are then listed;
 
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     (g)  Provide a transfer agent and registrar for all Registrable Securities
and a CUSIP number for all such Registrable Securities, in each case not later
than the effective date of such registration; and
 
     (h)  Use its commercially reasonable efforts to furnish, at the request of
any Holder requesting registration of Registrable Securities pursuant to this
Section 1, on the date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this Section
1, if such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (i) an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities and
(ii) a letter, dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities (to the extent the
then-applicable standards of professional conduct permit said letter to be
addressed to the Holders).
 
     1.6  Information by Holder. The Holder or Holders of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder or Holders, the Registrable Securities held by them, and
the distribution proposed by such Holder or Holders as the Company may request
in writing and as shall be required in connection with any registration,
qualification, or compliance referred to in this Section 1, and the refusal to
furnish such information by any Holder or Holder shall relieve the Company of
its obligations in this Section 1 with respect to such Holder or Holders.
Furthermore, the Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.3 of this Agreement
if, as a result of the application of the preceding sentence, the number of
shares or the anticipated aggregate offering price of the Registrable Securities
to be included in the registration does not equal or exceed the number of shares
or the anticipated aggregate offering price required to originally trigger the
Company’s obligation to initiate such registration as specified in the
definition of “Initiating Holders” or “Form S-3 Initiating Holders,” whichever
is applicable.
 
     1.7  Indemnification.
 
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     (a)  To the extent permitted by law, the Company will indemnify each
Holder, each of its officers, directors, partners, legal counsel, and
accountants, and each person controlling such Holder within the meaning of
Section 15 of the Securities Act, with respect to which registration,
qualification, or compliance has been effected pursuant to this Section 1, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages, or liabilities (or actions, proceedings, or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any registration statement,
prospectus, offering circular, or other document (including any related
registration statement, notification, or the like), or any amendment or
supplement thereto, incident to any such registration, qualification, or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or any violation by the Company of the Securities Act or any rule or regulation
promulgated under the Securities Act applicable to the Company in connection
with any such registration, qualification, or compliance, and the Company will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and accountants, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating,
preparing, defending, or settling any such claim, loss, damage, liability, or
action, as such expenses are incurred, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability, or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by such Holder,
controlling person, or underwriter and stated to be specifically for use
therein. It is agreed that the indemnity agreement contained in this Section 1.7
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld).
 
     (b)  To the extent permitted by law, each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification, or compliance is being effected, severally and not
jointly indemnify the Company, each of its directors, officers, partners, legal
counsel, and accountants, and each underwriter, if any, of the Company’s
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder and Other Stockholder, each of their
officers, directors, and partners, and each person controlling such Holder or
Other Stockholder within the meaning of Section 15 of the Securities Act,
against all claims, losses, damages, and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular, or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and such Holders, Other Stockholders, directors, officers, partners,
legal counsel, and accountants, persons, underwriters, or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability, or action,
as such expenses are incurred, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein, provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided that that in no event shall any
indemnity under this Section 1.7 exceed the net proceeds received by such Holder
in such offering.
 
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     (c)  Each party entitled to indemnification under this Section 1.7 (the
“Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party’s expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 1 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party’s ability to defend such action.
No Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
 
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     (d)  If the indemnification provided for in this Section 1.7 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any claim, loss, damage, liability, or expense referred to therein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such claim, loss, damage, liability, or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and the Indemnified party on the other in connection with
the statements or omissions that resulted in such claim, loss, damage,
liability, or expense, as well as any other relevant equitable considerations.
The relative fault of the Indemnifying Party and of the Indemnified Party shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
related to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. The Company and
the Holders agree that it would not be just and equitable if contribution
pursuant to this Section 1.7 were based solely upon the number of entities from
whom contribution was requested or by any other method of allocation which does
not take account of the equitable considerations referred to above. In no event
shall any contribution by a Holder under this Section 1.7 exceed the net
proceeds received by such Holder in such offering.
 
     (e)  The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages, and liabilities referred to above in this Section 1.7
shall be deemed to include any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim, subject to the provisions of Section 1.7(c). No person guilty
of fraudulent misrepresentation (within the meaning of the Securities Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
 
     (f)  Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control provided, however, that if the underwriting agreement fails to address a
matter addressed by the provisions of the Agreement, the failure of the
underwriting agreement to address such matter shall not be deemed to be a
conflict with the provisions of this Agreement.
 
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     (g)  The obligations of the Company and Holders under this Section 1.7
shall survive the completion of any offering of Registrable Securities in a
registration statement.
 
     1.8  Expenses of Registration. All Registration Expenses shall be borne by
the Company; provided, however , that if the Holders bear the Registration
Expenses for any registration proceeding begun pursuant to Section 1.2 that is
subsequently withdrawn by the Holders registering shares therein, such
registration proceeding shall not be counted as a requested registration
pursuant to Section 1.2. Furthermore, in the event that a withdrawal by the
Holders is based upon material adverse information relating to the Company that
is different from the information known or available (upon request from the
Company or otherwise) to the Holders requesting registration at the time of
their request for registration under Section 1.2, such registration proceeding
shall not be counted as a requested registration pursuant to Section 1.2, even
though the Holders do not bear the Registration Expenses for such registration.
All Selling Expenses relating to securities registered on behalf of the Holders
shall be borne by the holders of the registered securities included in such
registration pro rata on the basis of the number of shares so registered.
 
     1.9  Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration after such
time as a public market exists for the Common Stock of the Company, the Company
agrees to use its commercially reasonable efforts to:
 
     (a)  Make and keep public information available, as those terms are
understood and defined in Rule 144,  at all times after the effective date that
the Company becomes subject to the reporting requirements of the Securities Act
or the Exchange Act;
 
     (b)  File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting requirements); and
 
     (c)  So long as a Holder owns any Restricted Securities, to furnish to the
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and of any other
reporting requirements of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as a Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing a Holder to
sell any such securities without registration.
 
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     1.10  Transfer of Registration Rights. The rights to cause the Company to
register securities granted to any party hereto under Section 1 may be assigned
by a Holder only to a transferee or assignee of not less than fifty thousand
(50,000) shares of Registrable Securities (as appropriately adjusted for stock
splits and the like), provided that the Company is given written notice at the
time of or within a reasonable time after said assignment, stating the name and
address of the transferee or assignee and identifying the securities with
respect to which such registration rights are being assigned, and, provided
further, that the assignee of such rights assumes in writing the obligations of
such Holder under this Section 1. Notwithstanding the foregoing, no such minimum
share assignment requirement shall be necessary for an assignment by a Holder
which is (A) a partnership to its partners or retired partners, (B) a limited
liability company to its members or former members, or (C) to the Holder’s
family member or trust for the benefit of an individual Holder.
 
     1.11  Limitations on Subsequent Registration Rights. From and after the
date hereof, the Company shall not, without the prior written consent of Holders
who in the aggregate hold more than 50% of the then outstanding Registrable
Securities, enter into any agreement granting any holder or prospective holder
of any securities of the Company registration rights the terms of which are more
favorable than the registration rights granted to Holders hereunder.
 
     1.12  Procedure for Underwriter Cutbacks. In any circumstance in which all
of the Registrable Securities and other shares of Common Stock of the Company
with registration rights (such other shares, the “Other Shares”) requested to be
included in a registration on behalf of Holders or Other Stockholders cannot be
so included as a result of limitations of the aggregate number of shares of
Registrable Securities and Other Shares that may be so included, no Other Shares
(other than Priority Shares being registered pursuant to Section 1.4) may be
included unless all Registrable Securities requested to be included in such
registration statement are so included and, if all such Registrable Securities
cannot be included, then the shares of Registrable Securities to be included
shall be allocated among the Holders requesting inclusion of shares pro rata
based upon the total number of Registrable Securities held by such Holders;
provided, however, that such allocation shall not operate to reduce the
aggregate number of Registrable Securities to be included in such registration
if any Holder does not request inclusion of the maximum number of shares of
Registrable Securities allocated to such Holder pursuant to the above-described
procedure, in which case the remaining portion of his allocation shall be
reallocated among those requesting Holders whose allocations did not satisfy
their requests pro rata on the basis of total number of shares of Registrable
Securities held by such Holders, and this procedure shall be repeated until all
shares of Registrable Securities which may be included in the registration on
behalf of the Holders have been so allocated. The Company shall not limit the
number of shares of Registrable Securities to be included in a registration
pursuant to this Agreement in order to include Other Shares (other than Priority
Shares) or shares of stock issued to founders of the Company or to employees,
officers, directors, or consultants pursuant to the Company’s equity incentive
plans, or in the case of registrations under Sections 1.2 or 1.3 hereof, in
order to include in such registration securities registered for the Company’s
own account.
 
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     1.13  Termination of Rights. The rights of any particular Holder to cause
the Company to register securities under Sections 1.2, 1.3 and 1.4 shall
terminate with respect to such Holder on the fifth year anniversary of the
effective date of the Company’s IPO.
 

2.
Miscellaneous.

 
2.1  Governing Law. This Agreement shall be governed by and construed under the
laws of the State of New York without giving effect to the choice of law
provisions thereof.
 
2.2  Successors and Assigns. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors, and administrators of the parties hereto. 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 by this Agreement.
 
2.3  Entire Agreement. This Agreement and the other documents delivered pursuant
hereto constitute the full and entire understanding and agreement among the
parties with regard to the subjects hereof and thereof. Subject to the
provisions of Section 2.10 below, neither this Agreement nor any term hereof may
be amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought, unless otherwise provided.
 
2.4  Notices, Etc.All notices required or permitted hereunder shall be in
writing and shall be deemed effectively delivered upon personal delivery to the
party to be notified, or upon the passage of five (5) calendar days after
deposit in the United States mail, by registered or certified mail, postage
prepaid, or the passage of two (2) days if sent by the next day delivery service
of a nationally-recognized reputable courier, each properly addressed to the
party to be notified, as set forth on the Exhibit A hereto or at such other
address as such party or any subsequent Investor may designate by ten (10)
calendar days’ advance written notice to the other parties hereto, or, if sent
by facsimile, upon completion of such facsimile transmission, as conclusively
evidenced by the transmission receipt thereof.
 
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2.5  Delays or Omissions. No delay or omission to exercise any right, power, or
remedy accruing to any Investor upon any breach or default of the Company under
this Agreement shall impair any such right, power, or remedy of such party, nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent, or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing or as provided in this Agreement. All remedies, either under this
Agreement or by law or otherwise afforded to any party, shall be cumulative and
not alternative.
 
2.6  Attorney Fees. In the event that any dispute among the parties to this
Agreement should result in litigation, 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.
 
2.7  Counterparts. This Agreement may be executed in two or more counterparts
and signature pages may be delivered by facsimile, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
 
2.8  Severability. In the event one or more of the provisions of this Agreement
should, for any reason, be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal, or unenforceable provision had never been contained
herein.
 
2.9  Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
 
2.10  Amendment and Waiver. Any provision of this Agreement may be amended or
waived (either generally or in a particular instance and either retroactively or
prospectively) with the written consent of the Company and an Investor or
Investors holding, in the aggregate, more than fifty percent (50%) of the
outstanding shares of the Registrable Securities including (a) the written
consent of Telecom so long as Telecom and its Affiliates own at least 1,000,000
shares of common stock of the Company (on an as converted to Common Stock basis
and as adjusted for any stock splits, consolidations and the like), (b) the
written consent of Investor so long as Investor and its Affiliates own at least
1,000,000 shares of common stock of the Company (on an as converted to Common
Stock basis and as adjusted for any stock splits, consolidations and the like)
and (c) the written consent of CDN so long as CDN and its Affiliates own at
least 1,000,000 shares of common stock of the Company (on an as converted to
Common Stock basis and as adjusted for any stock splits, consolidations and the
like). In addition, the Company may waive performance of any obligation owing to
it, as to some or all of the Investors, or agree to accept alternatives to such
performance, without obtaining the consent of any Investor.
 
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2.11  Rights of Investors. Each party to this Agreement shall have the absolute
right to exercise or refrain from exercising any right or rights that such party
may have by reason of this Agreement, including, without limitation, the right
to consent to the waiver or modification of any obligation under this Agreement,
and such party shall not incur any liability to any other party or other holder
of any securities of the Company as a result of exercising or refraining from
exercising any such right or rights.
 
2.12  Aggregation of Stock. All shares of Preferred Stock and Common Stock of
the Company held or acquired by affiliated entities or persons shall be
aggregated for the purpose of determining the availability of any rights under
this Agreement.
 
2.13  Specific Performance. Without limiting the rights of each party hereto to
pursue all other legal and equitable rights available to such party for any
other party’s failure to perform its obligations under this Agreement, each such
party acknowledges and agrees that the remedy at law for any failure to perform
obligations hereunder would be inadequate and all such parties shall be entitled
to specific performance, injunctive relief, or other equitable remedies in the
event of any such failure. The availability of these remedies shall not prohibit
the parties from pursuing any other remedies for such breach, including the
recovery of monetary damages.
 
[THIS SPACE LEFT BLANK INTENTIONALLY]
 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
 

    HRDQ GROUP, INC.             By:
/s/ Limei Deng
 
 
Name:

--------------------------------------------------------------------------------

Limei Deng
    Title:
President

 
 

    TELECOM COMMUNICATIONS, INC.             By:
/s/ Tim Chen
 
 
Name:

--------------------------------------------------------------------------------

Tim Chen
    Title:
Chief Executive Officer

 
 

   
CHINA DONGGUAN NETWORKS, INC.
            By:
/s/ Limei Deng
 
 
Name:

--------------------------------------------------------------------------------

Limei Deng
    Title:
President

 
 

   
TOP RIDER GROUP LIMITED
            By:
/s/ Martin Chang
 
 

--------------------------------------------------------------------------------

Martin Chang, Manager
     
 

 
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