Exhibit 10.1

 

ORDINARY SHARES PURCHASE AGREEMENT

 

THIS ORDINARY SHARES PURCHASE AGREEMENT (this “Agreement”), is made as of this
30th day of January 2005, by and among China HR.com Holdings Ltd., an exempted
company limited by shares incorporated under the laws of the Cayman Islands (the
“Company”), TMP Worldwide Limited, a company incorporated under the laws of the
United Kingdom (the “Investor”), and the shareholders of the Company listed on
Schedule A hereto (which persons and entities are hereinafter collectively
referred to as the “Shareholders” and each individually as a “Shareholder”).

 

RECITALS

 

WHEREAS, the Investor desires to purchase from the Company, and the Company
desires to sell to the Investor, 22,815,357 of the Company’s ordinary shares,
U.S. $.05 par value per share, (the “Shares”), at U.S. $2.1915 per share.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
in this Agreement, and intending to be legally bound, the parties agree as
follows:

 

SECTION 1.  PURCHASE AND SALE OF SHARES.

 

1.1          SALE OF ORDINARY SHARES.  SUBJECT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, THE INVESTOR AGREES TO PURCHASE AT THE CLOSING (AS DEFINED
BELOW) AND COMPANY AGREES TO ISSUE AND SELL TO THE INVESTOR AT THE CLOSING (AS
DEFINED BELOW) THE SHARES FOR THE AGGREGATE PURCHASE PRICE OF FIFTY MILLION
UNITED STATES DOLLARS (U.S. $50,000,000) (THE “PURCHASE PRICE”).  THE PURCHASE
AND SALE OF THE SHARES SHALL TAKE PLACE AT THE OFFICES OF MORRISON & FOERSTER,
ENTERTAINMENT BUILDING, 30 QUEEN’S ROAD CENTRAL, HONG KONG AT 10:00 A.M., ON
FEBRUARY 1, 2005, OR AT SUCH OTHER TIME AND PLACE AS THE COMPANY AND THE
INVESTOR SHALL MUTUALLY AGREE IN WRITING (THE “CLOSING”).

 

1.2          CLOSING.  FOR PURPOSES OF THIS AGREEMENT, THE DATE OF THE CLOSING
SHALL BE REFERRED TO AS THE “CLOSING DATE”.  IN ADDITION TO THE OTHER
DELIVERABLES SPECIFIED HEREIN, AT THE CLOSING, THE COMPANY SHALL DELIVER TO THE
INVESTOR A SHARE CERTIFICATE REGISTERED IN THE NAME OF THE INVESTOR REPRESENTING
THE SHARES BEING PURCHASED BY IT AT THE CLOSING.  AS PAYMENT IN FULL FOR THE
SHARES BEING PURCHASED BY IT UNDER THIS AGREEMENT, AND AGAINST DELIVERY OF THE
SHARE CERTIFICATE OR CERTIFICATES THEREFOR AS AFORESAID, AT THE CLOSING THE
INVESTOR SHALL DELIVER THE PURCHASE PRICE TO THE COMPANY BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FUNDS IN ACCORDANCE WITH WIRE INSTRUCTIONS PROVIDED BY THE
COMPANY TO THE INVESTOR.   THE COMPANY AND THE INVESTOR EACH AGREE TO USE THEIR
REASONABLE BEST EFFORTS TO SATISFY PROMPTLY THE CONDITIONS TO THEIR RESPECTIVE
OBLIGATIONS TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.

 

1.3          ADDITIONAL SHARES.  IF AT ANY TIME SUBSEQUENT TO THE CLOSING IT
SHALL BE DETERMINED THAT THE COMPANY’S REPRESENTATIONS AND WARRANTIES IN
SECTION 2.5 OF THIS AGREEMENT WERE INCORRECT AS OF THE CLOSING SUCH THAT (I) THE
TOTAL NUMBER OF SHARES HELD BY THE INVESTOR SUBSEQUENT TO THE CLOSING WAS LESS
THAN 40% OF THE FULLY-DILUTED OUTSTANDING SHARES (AS DEFINED BELOW) THEN THE
COMPANY SHALL IMMEDIATELY ISSUE TO THE INVESTOR FOR NO ADDITIONAL CONSIDERATION
THAT NUMBER OF ORDINARY SHARES (AS HEREINAFTER DEFINED) SO THAT THE TOTAL NUMBER
OF SHARES THE

 

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INVESTOR HOLDS AFTER SUCH ISSUANCE WOULD HAVE EQUALED 40% OF THE FULLY-DILUTED
OUTSTANDING SHARES AS OF A DATE IMMEDIATELY SUBSEQUENT TO THE CLOSING.  FOR
PURPOSES OF THIS SECTION 1.3, THE “FULLY-DILUTED OUTSTANDING SHARES” AT ANY
PARTICULAR TIME SHALL EQUAL THE SUM OF: (I) THE NUMBER OF ORDINARY SHARES
OUTSTANDING AT SUCH TIME, (II) THE NUMBER OF ORDINARY SHARES INTO WHICH ANY
OUTSTANDING PREFERENCE SHARES (AS HEREINAFTER DEFINED) ARE CONVERTIBLE AT SUCH
TIME, AND (III) THE NUMBER OF SHARES ISSUABLE UPON EXERCISE OR CONVERSION OF
OTHER SECURITIES OF THE COMPANY (INCLUDING, WITHOUT LIMITATION, ANY OPTIONS,
RIGHTS, WARRANTS, OR INDEBTEDNESS OF THE COMPANY), INCLUDING A MAXIMUM TOTAL OF
6,919,716 ORDINARY SHARES SUBJECT TO THE COMPANY’S 2005 INCENTIVE STOCK OPTION
PLAN (THE “2005 PLAN”).

 

SECTION 2.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company hereby represents and warrants to the Investor that the statements
contained in this Section 2 are correct and complete as of the date of this
Agreement, and will be correct and complete on the Closing Date (as though made
then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 2), except as set forth in the Schedule of
Exceptions delivered by the Company on the date hereof (the “Schedule of
Exceptions”).  As used in this Section 2, the “Company” shall mean the Company
and its subsidiaries, including without limitation, China-HR.com Corporation,
China HR.com (Hong Kong) Limited, Ecareer (Shanghai) Limited (“Ecareer
Shanghai”) and Ecareer (Beijing) Limited (“Ecareer Beijing”) (each subsidiary of
the Company, whether or not specifically identified in the preceding portion of
this sentence, is referred to herein as a “Subsidiary” and collectively, the
“Subsidiaries”) unless the context otherwise requires.  Nothing in the
Schedule of Exceptions shall be deemed adequate to disclose an exception to a
representation or warranty made herein, however, unless the Schedule of
Exceptions identifies the exception with reasonable particularity and describes
the relevant facts in reasonable detail.  Without limiting the generality of the
foregoing, the mere listing (or inclusion of a copy) of a document or other item
shall not be deemed adequate to disclose an exception to a representation or
warranty made herein (unless the representation or warranty has to do with the
existence of the document or other item itself).  The Schedule of Exceptions is
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 2.

 

2.1          ORGANIZATION; POWER; GOOD STANDING; QUALIFICATION.  THE COMPANY IS
AN EXEMPTED COMPANY LIMITED BY SHARES DULY INCORPORATED, VALIDLY EXISTING, AND
IN GOOD STANDING UNDER THE LAWS OF THE CAYMAN ISLANDS, HAS ALL REQUISITE
CORPORATE POWER AND AUTHORITY TO OWN AND OPERATE ITS PROPERTIES AND ASSETS AND
TO CARRY ON ITS BUSINESS AS NOW CONDUCTED AND AS PRESENTLY PROPOSED TO BE
CONDUCTED, TO EXECUTE AND DELIVER THIS AGREEMENT AND ANY OTHER AGREEMENT TO
WHICH THE COMPANY IS A PARTY, THE EXECUTION AND DELIVERY OF WHICH IS
CONTEMPLATED HEREBY, INCLUDING THE SHAREHOLDERS AGREEMENT ATTACHED HERETO AS
EXHIBIT A (THE “SHAREHOLDERS AGREEMENT”), TO ISSUE AND SELL THE SHARES AND TO
CARRY OUT THE PROVISIONS OF THIS AGREEMENT AND THE SHAREHOLDERS AGREEMENT.  THE
COMPANY IS DULY QUALIFIED AND IS AUTHORIZED TO TRANSACT BUSINESS IN EACH
JURISDICTION IN WHICH THE CONDUCT OF THE COMPANY’S BUSINESS OR THE NATURE OF THE
PROPERTY OWNED BY IT REQUIRES SUCH QUALIFICATION AND IN WHICH THE FAILURE SO TO
QUALIFY WOULD HAVE A MATERIAL ADVERSE EFFECT ON ITS BUSINESS, PROPERTIES,
PROSPECTS, OR FINANCIAL CONDITION.  EACH SUBSIDIARY IS VALIDLY EXISTING AND IS
IN GOOD STANDING IN THE JURISDICTION OF ITS ORGANIZATION, HAS ALL REQUISITE
CORPORATE POWER AND AUTHORITY TO OWN AND OPERATE ITS PROPERTIES AND ASSETS AND
TO CARRY ON ITS BUSINESS AS NOW CONDUCTED AND AS PRESENTLY PROPOSED TO BE
CONDUCTED.  EACH SUBSIDIARY IS DULY QUALIFIED AND IS AUTHORIZED TO TRANSACT
BUSINESS IN EACH JURISDICTION IN WHICH

 

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THE CONDUCT OF SUCH SUBSIDIARY’S BUSINESS OR THE NATURE OF THE PROPERTY OWNED BY
IT REQUIRES SUCH QUALIFICATION AND IN WHICH THE FAILURE SO TO QUALIFY WOULD HAVE
A MATERIAL ADVERSE EFFECT ON ITS BUSINESS, PROPERTIES, PROSPECTS, OR FINANCIAL
CONDITION.

 

2.2          AUTHORIZATION.  ALL CORPORATE ACTION ON THE PART OF THE COMPANY,
ITS OFFICERS, DIRECTORS AND SHAREHOLDERS NECESSARY FOR THE AUTHORIZATION,
EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE SHAREHOLDERS AGREEMENT, THE
PERFORMANCE OF ALL OBLIGATIONS OF THE COMPANY HEREUNDER AND THEREUNDER AT THE
CLOSING AND THE AUTHORIZATION, ISSUANCE, SALE AND DELIVERY OF THE SHARES HAVE
BEEN TAKEN OR WILL BE TAKEN PRIOR TO THE CLOSING, AND THIS AGREEMENT AND THE
SHAREHOLDERS AGREEMENT, WHEN EXECUTED AND DELIVERED, WILL CONSTITUTE VALID AND
LEGALLY BINDING OBLIGATIONS OF THE COMPANY, ENFORCEABLE IN ACCORDANCE WITH ITS
TERMS, EXCEPT AS SUCH ENFORCEMENT MAY BE SUBJECT TO BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM OR OTHER SIMILAR LAWS NOW OR HEREAFTER IN EFFECT
RELATING TO CREDITOR’S RIGHTS AND GENERAL PRINCIPLES OF EQUITY.

 

2.3          CORPORATE POWER.  THE COMPANY HAS ALL REQUISITE LEGAL AND CORPORATE
POWER AND AUTHORITY TO EXECUTE AND DELIVER THIS AGREEMENT AND THE SHAREHOLDERS
AGREEMENT, TO SELL AND ISSUE THE SHARES HEREUNDER, AND TO CARRY OUT AND PERFORM
ITS OBLIGATIONS UNDER THE TERMS OF EACH OF THE FOREGOING AGREEMENTS.

 

2.4          GOVERNMENTAL CONSENTS.  NO CONSENT, APPROVAL, QUALIFICATION, ORDER
OR AUTHORIZATION OF, OR FILING WITH, ANY LOCAL, STATE, OR FEDERAL GOVERNMENTAL
AUTHORITY IS REQUIRED ON THE PART OF THE COMPANY IN CONNECTION WITH ITS VALID
EXECUTION, DELIVERY, OR PERFORMANCE OF THIS AGREEMENT, THE SHAREHOLDERS
AGREEMENT OR THE OFFER, SALE OR ISSUANCE OF THE SHARES, EXCEPT SUCH POST-CLOSING
FILINGS AS MAY BE REQUIRED UNDER APPLICABLE LAWS, ALL OF WHICH WILL BE TIMELY
FILED AFTER THE CLOSING WITHIN THE APPLICABLE PERIODS THEREFOR.

 

2.5          CAPITALIZATION AND VOTING RIGHTS.

 

(A)           THE COMPANY HAS 16,403,875 AUTHORIZED SERIES A PREFERENCE SHARES,
U.S. $.05 PAR VALUE PER SHARE (THE “PREFERENCE SHARES”), ALL OF WHICH ARE ISSUED
AND OUTSTANDING.  ALL OF THE PREFERENCE SHARES SHALL BE CONVERTED TO ORDINARY
SHARES IMMEDIATELY PRIOR TO THE CLOSING.

 

(B)           THE COMPANY HAS 400,000,000 AUTHORIZED ORDINARY SHARES, U.S. $.05
PAR VALUE PER SHARE (THE “ORDINARY SHARES”), OF WHICH 22,870,194 SHARES ARE
ISSUED AND OUTSTANDING.  THE OUTSTANDING ORDINARY SHARES ARE OWNED BENEFICIALLY
BY THE SHAREHOLDERS THAT ARE SET FORTH ON SCHEDULE 2.5(B) HERETO.

 

(C)           THE OUTSTANDING ORDINARY SHARES HAVE BEEN DULY AUTHORIZED AND
VALIDLY ISSUED, ARE FULLY PAID AND NONASSESSABLE, AND WERE ISSUED IN ACCORDANCE
WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND ANY RELEVANT
STATE, FOREIGN AND LOCAL SECURITIES AND SIMILAR LAWS OR PURSUANT TO VALID
EXEMPTIONS THEREFROM, AND WERE NOT ISSUED IN VIOLATION OF ANY PREEMPTIVE RIGHTS,
RIGHTS OF FIRST REFUSAL AND SIMILAR RIGHTS.

 

(D)           EXCEPT AS SET FORTH ON SCHEDULE 2.5(D) AND EXCEPT FOR THE RIGHTS
PROVIDED IN THE SHAREHOLDERS AGREEMENT, THERE ARE NO OUTSTANDING OPTIONS,
WARRANTS, RIGHTS (INCLUDING CONVERSION OR PREEMPTIVE RIGHTS AND RIGHTS OF FIRST
REFUSAL), PROXY OR SHAREHOLDER AGREEMENTS OR AGREEMENTS OF ANY KIND FOR THE
PURCHASE OR ACQUISITION FROM THE COMPANY OF ANY OF THE

 

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COMPANY’S SECURITIES.  THE COMPANY HAS RESERVED A TOTAL OF 6,919,716 ORDINARY
SHARES FOR ISSUANCE PURSUANT TO THE 2005 PLAN.  THE COMPANY HAS ISSUED WARRANTS
TO PURCHASE AN AGGREGATE OF 4,000,000 ORDINARY SHARES.  SET FORTH ON
SCHEDULE 2.5(D) IS A LIST OF ALL HOLDERS OF OPTIONS, WARRANTS OR OTHER
SECURITIES EXERCISABLE OR CONVERTIBLE INTO SHARE CAPITAL OF THE COMPANY, THE
NUMBER OF SHARES COVERED THEREBY AND THE APPLICABLE EXERCISE OR CONVERSION
PRICE.  EXCEPT FOR THE SHAREHOLDERS AGREEMENT, THE COMPANY IS NOT A PARTY OR
SUBJECT TO ANY AGREEMENT OR UNDERSTANDING AND THERE IS NO AGREEMENT OR
UNDERSTANDING BETWEEN ANY PERSONS (WHETHER OR NOT THE COMPANY OR ANY OF ITS
SUBSIDIARIES IS A PARTY THERETO), THAT AFFECTS OR RELATES TO THE VOTING OR
GIVING OF WRITTEN CONSENTS WITH RESPECT TO ANY SECURITY OR THE VOTING BY A
DIRECTOR OF THE COMPANY.

 

(e)           The Company has an aggregate of 50,193,785 outstanding Ordinary
Shares and Ordinary Shares issuable upon conversion of the Preference Shares or
exercise of outstanding options or warrants.  At the Closing, an aggregate of
15,970,750 Ordinary Shares will be purchased from the Shareholders, as set forth
on Schedule A, at an aggregate purchase price of U.S.$35,000,000, so that at the
Closing and giving effect to such repurchase and the sale of the Shares to the
Investor, the Company will have outstanding 57,038,392 Ordinary Shares.

 

2.6          VALID ISSUANCE OF SHARES.  THE SHARES THAT ARE BEING PURCHASED BY
THE INVESTOR HEREUNDER, WHEN ISSUED, SOLD AND DELIVERED IN ACCORDANCE WITH THE
TERMS OF THIS AGREEMENT FOR THE CONSIDERATION EXPRESSED HEREIN, WILL BE DULY AND
VALIDLY ISSUED, FULLY PAID, AND NONASSESSABLE, AND WILL BE FREE OF RESTRICTIONS
ON TRANSFER OTHER THAN RESTRICTIONS ON TRANSFER UNDER THIS AGREEMENT, THE
SHAREHOLDERS AGREEMENT AND UNDER APPLICABLE SECURITIES LAWS OF THE UNITED STATES
AND OTHER JURISDICTIONS.

 

2.7          SUBSIDIARIES.  EXCEPT AS SET FORTH ON SCHEDULE 2.7, THE COMPANY
DOES NOT OWN OR CONTROL, DIRECTLY OR INDIRECTLY, ANY INTEREST IN ANY OTHER
CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY, ASSOCIATION, OR OTHER
BUSINESS ENTITY.  THE COMPANY IS NOT A PARTICIPANT IN ANY JOINT VENTURE,
PARTNERSHIP, OR SIMILAR ARRANGEMENT.

 

2.8          CONTRACTS AND OTHER COMMITMENTS.  EXCEPT AS SET FORTH ON
SCHEDULE 2.8, THE COMPANY DOES NOT HAVE AND IS NOT BOUND BY ANY CONTRACT,
AGREEMENT, LEASE, OR COMMITMENT, WRITTEN OR ORAL, ABSOLUTE OR CONTINGENT, OTHER
THAN (I) CONTRACTS FOR THE PURCHASE OF SUPPLIES AND SERVICES THAT WERE ENTERED
INTO IN THE ORDINARY COURSE OF BUSINESS AND THAT DO NOT INVOLVE MORE THAN
TWENTY-FIVE THOUSAND UNITED STATES DOLLARS (U.S. $25,000), AND DO NOT EXTEND FOR
MORE THAN ONE YEAR BEYOND THE DATE HEREOF, (II) SALES CONTRACTS ENTERED INTO IN
THE ORDINARY COURSE OF BUSINESS, (III) CONTRACTS TERMINABLE AT WILL BY THE
COMPANY ON NO MORE THAN THIRTY (30) DAYS’ NOTICE WITHOUT COST OR LIABILITY TO
THE COMPANY WHICH NEITHER INVOLVE ANY EMPLOYMENT OR CONSULTING ARRANGEMENT NOR
ARE MATERIAL TO THE CONDUCT OF THE COMPANY’S BUSINESS, (IV) CONFIDENTIALITY
AGREEMENTS, AND (V) CONTRACTS PROVIDED FOR IN THIS AGREEMENT.  NEITHER THE
COMPANY, NOR, TO THE COMPANY’S KNOWLEDGE, ANY OTHER PARTY TO ANY CONTRACT
COVERED BY CLAUSES (I) TO (V) ABOVE, IS IN DEFAULT (OR WOULD BE IN DEFAULT IN
THE EVENT OF THE GIVING OF NOTICE OR PASSAGE OF TIME OR BOTH) UNDER ANY
CONTRACT, AGREEMENT, LEASE OR COMMITMENT, INCLUDING BUT NOT LIMITED TO THOSE
COVERED BY CLAUSES (I) TO (V) ABOVE.  NOTWITHSTANDING THE FOREGOING, EMPLOYMENT
AND CONSULTING CONTRACTS AND CONTRACTS WITH LABOR UNIONS, AND LICENSE AGREEMENTS
AND ANY OTHER AGREEMENTS RELATING TO THE COMPANY’S ACQUISITION OR DISPOSITION OF
PATENT, COPYRIGHT, TRADE SECRET OR OTHER PROPRIETARY RIGHTS OR TECHNOLOGY (OTHER
THAN STANDARD END-USER LICENSE AGREEMENTS) SHALL NOT BE CONSIDERED TO BE
CONTRACTS ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS.  THE COMPANY

 

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IS NOT IN VIOLATION OF OR DEFAULT (OR WOULD BE IN DEFAULT IN THE EVENT OF THE
GIVING OF NOTICE OR PASSAGE OF TIME OR BOTH) UNDER ANY PROVISION OF EITHER THE
ECAREER BEIJING COOPERATIVE CONTRACT, DATED DECEMBER 2, 1999 OR THE ECAREER
SHANGHAI COOPERATIVE CONTRACT, DATED JULY 20, 2000.

 

2.9          RELATED-PARTY TRANSACTIONS.  EXCEPT AS SET FORTH ON SCHEDULE 2.9,
NO EMPLOYEE, OFFICER, SHAREHOLDER OR DIRECTOR OF THE COMPANY OR MEMBER OF HIS OR
HER IMMEDIATE FAMILY IS INDEBTED TO THE COMPANY, NOR IS THE COMPANY INDEBTED (OR
COMMITTED TO MAKE LOANS OR EXTEND OR GUARANTEE CREDIT) TO ANY OF THEM.  TO THE
BEST OF THE COMPANY’S KNOWLEDGE, NONE OF SUCH PERSONS HAS ANY DIRECT OR INDIRECT
OWNERSHIP INTEREST IN ANY FIRM OR CORPORATION WITH WHICH THE COMPANY IS
AFFILIATED OR WITH WHICH THE COMPANY HAS A BUSINESS RELATIONSHIP, OR ANY FIRM OR
CORPORATION THAT COMPETES WITH THE COMPANY, EXCEPT THAT EMPLOYEES, SHAREHOLDERS,
OFFICERS, OR DIRECTORS OF THE COMPANY AND MEMBERS OF THEIR IMMEDIATE FAMILIES
MAY OWN STOCK IN PUBLICLY TRADED COMPANIES THAT MAY COMPETE WITH THE COMPANY
(BUT NOT EXCEEDING 2% OF THE OUTSTANDING CAPITAL STOCK OF ANY SUCH FIRM OR
CORPORATION).  NO OFFICER, DIRECTOR, OR SHAREHOLDER OR ANY MEMBER OF THEIR
IMMEDIATE FAMILIES IS, DIRECTLY OR INDIRECTLY, INTERESTED IN ANY CONTRACT(S) OR
TRANSACTION(S) WITH THE COMPANY.

 

2.10        REGISTRATION RIGHTS.  THE COMPANY IS PRESENTLY NOT UNDER ANY
OBLIGATION AND HAS NOT GRANTED ANY RIGHTS TO REGISTER UNDER THE SECURITIES ACT
OR THE SECURITIES LAWS AND REGULATIONS OF ANY JURISDICTION ANY OF ITS PRESENTLY
OUTSTANDING SECURITIES OR ANY OF ITS SECURITIES THAT MAY SUBSEQUENTLY BE ISSUED.

 

2.11        PERMITS.  EXCEPT AS SET FORTH ON SCHEDULE 2.11, THE COMPANY HAS ALL
FRANCHISES, PERMITS, LICENSES, AND ANY SIMILAR AUTHORITY NECESSARY FOR THE
CONDUCT OF ITS BUSINESS AS NOW BEING CONDUCTED BY IT, THE LACK OF WHICH COULD
MATERIALLY AND ADVERSELY AFFECT THE BUSINESS, PROPERTIES, PROSPECTS, OR
FINANCIAL CONDITION OF THE COMPANY, AND BELIEVES IT CAN OBTAIN, WITHOUT UNDUE
BURDEN OR EXPENSE, ANY SIMILAR AUTHORITY FOR THE CONDUCT OF ITS BUSINESS AS
PRESENTLY PLANNED TO BE CONDUCTED.  THE COMPANY IS NOT IN DEFAULT IN ANY
MATERIAL RESPECT UNDER ANY OF SUCH FRANCHISES, PERMITS, LICENSES OR OTHER
SIMILAR AUTHORITY.  ECAREER SHANGHAI AND ECAREER BEIJING ARE PROPERLY AND FULLY
LICENSED BY ALL APPLICABLE GOVERNMENTAL AUTHORITIES OF THE PEOPLES REPUBLIC OF
CHINA (THE “PRC”) AND ARE ESTABLISHED AND ARE OWNED, AND HAVE CONDUCTED THEIR
RESPECTIVE BUSINESSES IN ACCORDANCE WITH ALL RELEVANT PERMITS, LICENSES,
APPROVALS AND ALL OTHER APPLICABLE LEGAL REQUIREMENTS OF THE PRC.

 

2.12        COMPLIANCE WITH OTHER INSTRUMENTS.  THE COMPANY IS NOT IN VIOLATION
OR DEFAULT OF ANY PROVISION OF ITS MEMORANDUM OF ASSOCIATION, ARTICLES OF
ASSOCIATION OR CERTIFICATE OF INCORPORATION OR IN ANY RESPECT OF ANY PROVISION
OF ANY MORTGAGE, INDENTURE, AGREEMENT, INSTRUMENT, OR CONTRACT TO WHICH THE
COMPANY IS A PARTY OR BY WHICH THE COMPANY OR ANY OF ITS PROPERTIES OR ASSETS IS
BOUND OR OF ANY FOREIGN, FEDERAL, STATE OR LOCAL JUDGMENT, ORDER, WRIT, DECREE,
STATUTE, RULE, REGULATION OR RESTRICTION APPLICABLE TO THE COMPANY.  THE
EXECUTION, DELIVERY, AND PERFORMANCE BY THE COMPANY OF THIS AGREEMENT AND THE
SHAREHOLDERS AGREEMENT, AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY, WILL NOT RESULT IN ANY SUCH VIOLATION OR DEFAULT OR
CONSTITUTE, WITH OR WITHOUT THE PASSAGE OF TIME OR GIVING OF NOTICE, EITHER A
DEFAULT UNDER ANY SUCH PROVISION OR AN EVENT THAT RESULTS IN THE CREATION OF ANY
LIEN, CHARGE, OR ENCUMBRANCE UPON ANY ASSETS OF THE COMPANY OR THE SUSPENSION,
REVOCATION, IMPAIRMENT, FORFEITURE, OR NONRENEWAL OF ANY MATERIAL PERMIT,
LICENSE, AUTHORIZATION, OR APPROVAL APPLICABLE TO THE COMPANY, ITS BUSINESS OR
OPERATIONS, OR ANY OF ITS ASSETS OR PROPERTIES.

 

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2.13        LITIGATION.  THERE IS NO ACTION, SUIT, PROCEEDING, OR INVESTIGATION
PENDING OR, TO THE COMPANY’S KNOWLEDGE, CURRENTLY THREATENED AGAINST THE COMPANY
THAT QUESTIONS THE VALIDITY OF THIS AGREEMENT, OR THE SHAREHOLDERS AGREEMENT OR
THE RIGHT OF THE COMPANY TO ENTER INTO SUCH AGREEMENTS, OR TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR THAT MIGHT RESULT, EITHER
INDIVIDUALLY OR IN THE AGGREGATE, IN ANY ADVERSE CHANGE IN THE BUSINESS,
PROPERTIES, PROSPECTS, OR FINANCIAL CONDITION OF THE COMPANY, OR IN ANY CHANGE
IN THE CURRENT EQUITY OWNERSHIP OF THE COMPANY.  THE FOREGOING INCLUDES, WITHOUT
LIMITATION, ANY ACTION, SUIT, PROCEEDING, OR INVESTIGATION PENDING OR CURRENTLY
THREATENED INVOLVING THE PRIOR EMPLOYMENT OF ANY OF THE COMPANY’S EMPLOYEES,
THEIR USE IN CONNECTION WITH THE COMPANY’S BUSINESS OF ANY INFORMATION OR
TECHNIQUES ALLEGEDLY PROPRIETARY TO ANY OF THEIR FORMER EMPLOYERS, THEIR
OBLIGATIONS UNDER ANY AGREEMENTS WITH PRIOR EMPLOYERS, OR NEGOTIATIONS BY THE
COMPANY WITH POTENTIAL BACKERS OF, OR INVESTORS IN, THE COMPANY OR ITS PROPOSED
BUSINESS.  THE COMPANY IS NOT A PARTY TO OR, TO THE COMPANY’S KNOWLEDGE, NAMED
IN OR SUBJECT TO ANY ORDER, WRIT, INJUNCTION, JUDGMENT, OR DECREE OF ANY COURT,
GOVERNMENT AGENCY, OR INSTRUMENTALITY.  EXCEPT AS SET FORTH ON SCHEDULE 2.13,
THERE IS NO ACTION, SUIT, PROCEEDING OR INVESTIGATION BY THE COMPANY CURRENTLY
PENDING OR THAT THE COMPANY CURRENTLY INTENDS TO INITIATE.

 

2.14        DISCLOSURE.  THE COMPANY HAS PROVIDED THE INVESTOR WITH ALL THE
INFORMATION THAT THE INVESTOR HAS REQUESTED FOR DECIDING WHETHER TO PURCHASE THE
SHARES.  NEITHER THIS AGREEMENT NOR THE SHAREHOLDERS AGREEMENT, OR CERTIFICATES
MADE OR DELIVERED IN CONNECTION HEREWITH CONTAINS ANY UNTRUE STATEMENT OF A
MATERIAL FACT OR OMITS TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
HEREIN OR THEREIN, IN LIGHT OF THE CIRCUMSTANCES IN WHICH THEY WERE MADE, NOT
MISLEADING.  THERE IS NO FACT KNOWN TO THE COMPANY WHICH HAS HAD OR COULD BE
REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE ASSETS, BUSINESS,
PROPERTIES, PROSPECTS, FINANCIAL CONDITION OR RESULTS OF OPERATION OF THE
COMPANY WHICH HAS NOT BEEN DISCLOSED OR PROVIDED TO THE INVESTOR.

 

2.15        PRIVATE OFFERING.  SUBJECT IN PART TO THE TRUTH AND ACCURACY OF THE
INVESTOR’S REPRESENTATIONS SET FORTH IN THIS AGREEMENT, THE OFFER, SALE AND
ISSUANCE OF THE SHARES AS CONTEMPLATED BY THIS AGREEMENT IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND FROM THE REGISTRATION OR
QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS, AND NEITHER THE
COMPANY NOR ANY AUTHORIZED AGENT ACTING ON ITS BEHALF WILL TAKE ANY ACTION
HEREAFTER THAT WOULD CAUSE THE LOSS OF SUCH EXEMPTIONS.

 

2.16        TITLE TO PROPERTY AND ASSETS; LEASES.  THE COMPANY DOES NOT OWN ANY
REAL OR IMMOVABLE PROPERTY.  THE COMPANY OWNS OR HAS VALID RIGHTS TO USE ALL
PROPERTY AND ASSETS (TANGIBLE AND INTANGIBLE) NECESSARY FOR THE CONDUCT OF ITS
BUSINESS AS NOW CONDUCTED.  EXCEPT (I) FOR LIENS FOR CURRENT TAXES NOT YET
DELINQUENT, (II) FOR LIENS IMPOSED BY LAW AND INCURRED IN THE ORDINARY COURSE OF
BUSINESS FOR OBLIGATIONS, NOT PAST DUE, TO CARRIERS, WAREHOUSEMEN, LABORERS,
MATERIALMEN AND THE LIKE, (III) FOR LIENS IN RESPECT OF PLEDGES OR DEPOSITS
UNDER WORKERS’ COMPENSATION LAWS OR SIMILAR LEGISLATION OR (IV) FOR MINOR
DEFECTS IN TITLE, NONE OF WHICH, INDIVIDUALLY OR IN THE AGGREGATE, MATERIALLY
INTERFERES WITH THE USE OF SUCH PROPERTY, THE COMPANY HAS GOOD AND MARKETABLE
TITLE TO ITS PROPERTY AND ASSETS FREE AND CLEAR OF ALL MORTGAGES, LIENS, CLAIMS,
AND ENCUMBRANCES.  WITH RESPECT TO THE PROPERTY AND ASSETS IT LEASES, THE
COMPANY IS IN COMPLIANCE WITH SUCH LEASES AND, TO THE COMPANY’S KNOWLEDGE, HOLDS
A VALID LEASEHOLD INTEREST FREE OF ANY LIENS, CLAIMS, OR ENCUMBRANCES, SUBJECT
TO CLAUSES (I)-(IV) ABOVE.

 

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2.17        FINANCIAL INFORMATION.  THE COMPANY HAS DELIVERED TO THE INVESTOR
THE COMPANY’S CONSOLIDATED AUDITED FINANCIAL STATEMENTS (CONSOLIDATED INCOME
STATEMENT, CONSOLIDATED BALANCE SHEET, CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY AND CONSOLIDATED CASH FLOW STATEMENT), AS OF AND FOR THE FISCAL YEARS
ENDED DECEMBER 31, 2003 AND DECEMBER 31, 2002 (THE “ANNUAL FINANCIAL
STATEMENTS”) AND UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 2004 (THE “INTERIM FINANCIAL STATEMENTS” AND, TOGETHER WITH
THE ANNUAL FINANCIAL STATEMENTS, THE “FINANCIAL STATEMENTS”), WHICH FINANCIAL
STATEMENTS ARE ATTACHED HERETO AS SCHEDULE 2.17. THE FINANCIAL STATEMENTS ARE
TRUE, COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS, ARE IN ACCORDANCE WITH THE
BOOKS AND RECORDS OF THE COMPANY, AND PRESENT FAIRLY THE FINANCIAL POSITION OF
THE COMPANY AS OF AND AT THE DATES INDICATED AND THE RESULTS OF THEIR OPERATIONS
AND CASH FLOWS FOR THE PERIODS SPECIFIED.  THE FINANCIAL STATEMENTS HAVE BEEN
PREPARED IN CONFORMITY WITH INTERNATIONAL STANDARDS ON ACCOUNTING (“ISA”) ON A
CONSISTENT BASIS THROUGHOUT THE PERIODS INVOLVED, EXCEPT AS MAY BE EXPRESSLY
STATED IN THE RELATED NOTES THERETO AND SUBJECT, IN THE CASE OF THE INTERIM
FINANCIAL STATEMENTS TO NORMAL YEAR END ADJUSTMENTS AND THE OMISSION OF CERTAIN
FOOTNOTES THAT MAY BE REQUIRED BY ISA.  EXCEPT AS SET FORTH IN THE FINANCIAL
STATEMENTS, THE COMPANY DOES NOT HAVE ANY LIABILITIES (WHETHER ACCRUED,
ABSOLUTE, UNLIMITED, CONTINGENT OR OTHERWISE, WHETHER DUE OR TO BECOME DUE, AND
REGARDLESS OF WHEN ASSERTED) ARISING OUT OF TRANSACTIONS ENTERED INTO AT OR
PRIOR TO THE CLOSING, OR ANY ACTION OR INACTION AT OR PRIOR TO THE CLOSING OR
ANY STATE OF FACTS EXISTING AT OR PRIOR TO THE CLOSING OTHER THAN (I) IMMATERIAL
LIABILITIES AND OBLIGATIONS, THAT HAVE ARISEN AFTER SEPTEMBER 30, 2004 IN THE
ORDINARY COURSE OF BUSINESS (NONE OF WHICH IS A LIABILITY RESULTING FROM BREACH
OF CONTRACT, BREACH OF WARRANTY, INFRINGEMENT, CLAIM OR LAWSUIT), OR (II)
OBLIGATIONS THAT WOULD NOT BE REQUIRED TO BE REFLECTED IN FINANCIAL STATEMENTS
PRESENTED IN ACCORDANCE WITH ISA.  ISA, AS IT APPLIES TO THE FINANCIAL
STATEMENTS, IS NOT MATERIALLY DIFFERENT THAN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES AS APPLIED IN THE UNITED STATES.  THE CONSOLIDATED INCOME STATEMENTS
INCLUDED IN THE FINANCIAL STATEMENTS DO NOT CONTAIN ANY MATERIAL ITEMS OF
NON-RECURRING INCOME OR OTHER INCOME NOT EARNED IN THE ORDINARY COURSE OF
BUSINESS EXCEPT AS EXPRESSLY SPECIFIED THEREIN.

 

2.18        CHANGES.  EXCEPT AS SET FORTH IN SCHEDULE 2.18, SINCE SEPTEMBER 30,
2004, THERE HAS NOT BEEN:

 

(A)           ANY CHANGE IN THE ASSETS, LIABILITIES, FINANCIAL CONDITION, OR
OPERATING RESULTS OF THE COMPANY FROM THAT REFLECTED IN THE FINANCIAL
STATEMENTS, EXCEPT FOR CHANGES IN THE ORDINARY COURSE OF BUSINESS THAT HAVE NOT
BEEN, IN THE AGGREGATE, MATERIALLY ADVERSE;

 

(B)           ANY DAMAGE, DESTRUCTION OR LOSS, WHETHER OR NOT COVERED BY
INSURANCE, MATERIALLY AFFECTING THE BUSINESS, PROPERTIES, PROSPECTS, OR
FINANCIAL CONDITION OF THE COMPANY (AS SUCH BUSINESS IS PRESENTLY CONDUCTED AND
AS IT IS PRESENTLY PROPOSED TO BE CONDUCTED);

 

(C)           ANY WAIVER OR COMPROMISE BY THE COMPANY OF A VALUABLE RIGHT OR OF
A MATERIAL DEBT OWED TO IT;

 

(D)           ANY SATISFACTION OR DISCHARGE OF ANY LIEN, CLAIM, OR ENCUMBRANCE
OR PAYMENT OF ANY OBLIGATION BY THE COMPANY, EXCEPT IN THE ORDINARY COURSE OF
BUSINESS AND THAT IS NOT MATERIAL TO THE BUSINESS, PROPERTIES, PROSPECTS OR
FINANCIAL CONDITION OF THE COMPANY;

 

(E)           ANY MATERIAL CHANGE TO A MATERIAL CONTRACT OR ARRANGEMENT BY WHICH
THE COMPANY OR ANY OF ITS ASSETS IS BOUND OR SUBJECT;

 

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(F)            ANY MATERIAL CHANGE IN ANY COMPENSATION ARRANGEMENT OR AGREEMENT
WITH ANY EMPLOYEE, OFFICER, DIRECTOR OR SHAREHOLDER;

 

(G)           ANY SALE, ASSIGNMENT, OR TRANSFER OF ANY PATENTS, TRADEMARKS,
COPYRIGHTS, TRADE SECRETS, OR OTHER INTANGIBLE ASSETS;

 

(H)           ANY RESIGNATION OR TERMINATION OF EMPLOYMENT OF ANY KEY OFFICER OF
THE COMPANY; AND THE COMPANY, TO THE BEST OF THE COMPANY’S KNOWLEDGE, DOES NOT
KNOW OF THE IMPENDING RESIGNATION OR TERMINATION OF EMPLOYMENT OF ANY SUCH
OFFICER;

 

(I)            RECEIPT OF NOTICE THAT THERE HAS BEEN A LOSS OF, OR MATERIAL
ORDER CANCELLATION BY, ANY MAJOR CUSTOMER OF THE COMPANY;

 

(J)            ANY MORTGAGE, PLEDGE, TRANSFER OF A SECURITY INTEREST IN, OR
LIEN, CREATED BY THE COMPANY, WITH RESPECT TO ANY OF ITS PROPERTIES OR ASSETS,
EXCEPT LIENS FOR TAXES NOT YET DUE OR PAYABLE;

 

(K)           ANY LOANS OR GUARANTEES MADE BY THE COMPANY TO OR FOR THE BENEFIT
OF ITS EMPLOYEES, SHAREHOLDERS, OFFICERS, OR DIRECTORS, OR ANY MEMBERS OF THEIR
IMMEDIATE FAMILIES, OTHER THAN TRAVEL ADVANCES AND OTHER ADVANCES MADE IN THE
ORDINARY COURSE OF ITS BUSINESS;

 

(L)            ANY DECLARATION, SETTING ASIDE, OR PAYMENT OF ANY DIVIDEND OR
OTHER DISTRIBUTION OF THE COMPANY’S ASSETS IN RESPECT OF ANY OF THE COMPANY’S
SHARE CAPITAL, OR ANY DIRECT OR INDIRECT REDEMPTION, PURCHASE, OR OTHER
ACQUISITION OF ANY OF SUCH SHARES BY THE COMPANY;

 

(M)          TO THE BEST OF THE COMPANY’S KNOWLEDGE, ANY OTHER EVENT OR
CONDITION OF ANY CHARACTER THAT IS REASONABLY LIKELY TO MATERIALLY AND ADVERSELY
AFFECT THE BUSINESS, PROPERTIES, PROSPECTS, OR FINANCIAL CONDITION OF THE
COMPANY (AS SUCH BUSINESS IS PRESENTLY CONDUCTED AND AS IT IS PRESENTLY PROPOSED
TO BE CONDUCTED); OR

 

(N)           ANY AGREEMENT OR COMMITMENT BY THE COMPANY TO DO ANY OF THE THINGS
DESCRIBED IN THIS SECTION 2.18.

 

2.19        PATENTS AND TRADEMARKS.

 

(A)           EXCEPT AS SET FORTH ON SCHEDULE 2.19, THE COMPANY OWNS OR
POSSESSES FULL LEGAL RIGHTS TO ALL PATENTS, PATENT APPLICATIONS, PATENT RIGHTS,
TRADEMARKS, TRADEMARK APPLICATIONS, SERVICE MARKS, TRADE NAMES, COPYRIGHTS,
TRADE SECRETS, LICENSES, INFORMATION, AND PROPRIETARY RIGHTS AND PROCESSES
NECESSARY FOR ITS BUSINESS AS NOW CONDUCTED AND AS CURRENTLY PROPOSED TO BE
CONDUCTED WITHOUT ANY CONFLICT WITH, OR INFRINGEMENT OF, THE RIGHTS OF OTHERS.
SCHEDULE 2.19 CONTAINS A COMPLETE LIST OF TRADEMARKS, TRADEMARK APPLICATIONS,
PATENTS AND PENDING PATENT APPLICATIONS OF THE COMPANY, IF ANY.  EXCEPT FOR
AGREEMENTS WITH ITS OWN EMPLOYEES OR CONSULTANTS, SUBSTANTIALLY IN THE FORM
REFERENCED IN SECTION 2.21 BELOW, AND END-USER INTERNAL USE SOFTWARE LICENSE AND
SUPPORT/MAINTENANCE AGREEMENTS, THERE ARE NO OUTSTANDING OPTIONS, LICENSES, OR
AGREEMENTS OF ANY KIND RELATING TO THE FOREGOING, NOR IS THE COMPANY BOUND BY OR
A PARTY TO ANY OPTIONS, LICENSES, OR AGREEMENTS OF ANY KIND WITH RESPECT TO THE
PATENTS, TRADEMARKS, SERVICE MARKS, TRADE NAMES, COPYRIGHTS, TRADE SECRETS,
LICENSES, INFORMATION, AND PROPRIETARY RIGHTS AND PROCESSES OF ANY OTHER PERSON
OR ENTITY.  THE COMPANY HAS NOT RECEIVED ANY NOTICE OF OR

 

8

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COMMUNICATION ALLEGING A VIOLATION OF ANY PATENT, TRADEMARK, SERVICE MARK, TRADE
NAME, COPYRIGHT, TRADE SECRET, OR OTHER PROPRIETARY RIGHT OR PROCESS OF ANY
OTHER PERSON OR ENTITY.  ALL PRIOR ART KNOWN TO THE COMPANY WHICH MAY BE OR MAY
HAVE BEEN PERTINENT TO THE EXAMINATION OF ANY UNITED STATES PATENT OR PATENT
APPLICATION LISTED ON SCHEDULE 2.19 HAS BEEN CITED TO THE UNITED STATES PATENT
AND TRADEMARK OFFICE.

 

(B)           TO THE BEST KNOWLEDGE OF THE COMPANY,

 

(I)            THE COMPANY HAS NOT VIOLATED OR, BY CONDUCTING ITS BUSINESS AS
PROPOSED, WOULD NOT VIOLATE ANY OF THE PATENTS, TRADEMARKS, SERVICE MARKS, TRADE
NAMES, COPYRIGHTS, TRADE SECRETS, OR OTHER PROPRIETARY RIGHTS OR PROCESSES OF
ANY OTHER PERSON OR ENTITY;

 

(II)           ALL TECHNICAL INFORMATION DEVELOPED BY AND BELONGING TO THE
COMPANY WHICH HAS NOT BEEN PATENTED HAS BEEN KEPT CONFIDENTIAL;

 

(III)          NONE OF THE COMPANY’S EMPLOYEES IS OBLIGATED UNDER ANY CONTRACT
(INCLUDING LICENSES, COVENANTS, OR COMMITMENTS OF ANY NATURE) OR OTHER
AGREEMENT, OR SUBJECT TO ANY JUDGMENT, DECREE, OR ORDER OF ANY COURT OR
ADMINISTRATIVE AGENCY, THAT WOULD INTERFERE WITH THE USE OF SUCH EMPLOYEE’S BEST
EFFORTS TO PROMOTE THE INTERESTS OF THE COMPANY OR THAT WOULD CONFLICT WITH THE
COMPANY’S BUSINESS AS CURRENTLY CONDUCTED OR PROPOSED TO BE CONDUCTED;

 

(IV)          NEITHER THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT,
NOR THE CARRYING ON OF THE COMPANY’S BUSINESS BY THE EMPLOYEES OF THE COMPANY,
NOR THE CONDUCT OF THE COMPANY’S BUSINESS AS PROPOSED, WILL CONFLICT WITH OR
RESULT IN A BREACH OF THE TERMS, CONDITIONS, OR PROVISIONS OF, OR CONSTITUTE A
DEFAULT UNDER, ANY CONTRACT, COVENANT, OR INSTRUMENT UNDER WHICH ANY OF SUCH
EMPLOYEES IS NOW OBLIGATED;

 

(V)           IT WOULD NOT BE NECESSARY TO USE ANY INVENTIONS OF ANY OF THE
COMPANY’S EMPLOYEES (OR PERSONS THE COMPANY CURRENTLY INTENDS TO HIRE) MADE
PRIOR TO THEIR EMPLOYMENT BY THE COMPANY WHICH USE WOULD BE IN VIOLATION OF ANY
SUCH EMPLOYEE’S TERMS OF EMPLOYMENT WITH SUCH FORMER EMPLOYER; AND

 

(VI)          NEITHER THE EXECUTION NOR DELIVERY OF THIS AGREEMENT, NOR THE
CARRYING ON OF THE COMPANY’S BUSINESS BY THE OFFICERS OR OTHER PERSONNEL OF THE
COMPANY, NOR THE CONDUCT OF THE COMPANY’S BUSINESS AS CURRENTLY PROPOSED, WILL
CONFLICT WITH OR RESULT IN A BREACH OF THE TERMS, CONDITIONS, OR PROVISIONS OF,
OR CONSTITUTE A DEFAULT UNDER, ANY CONTRACT, COVENANT, OR INSTRUMENT UNDER WHICH
ANY OF SUCH OFFICERS OR OTHER PERSONNEL IS NOW OBLIGATED.

 

2.20        EMPLOYEES; EMPLOYEE COMPENSATION.  THERE ARE NO STRIKES, LABOR
DISPUTES OR UNION ORGANIZATION ACTIVITIES PENDING OR, TO THE BEST KNOWLEDGE OF
THE COMPANY, THREATENED BETWEEN THE COMPANY AND ITS EMPLOYEES, THE COMPANY IS
NOT PARTY TO ANY COLLECTIVE BARGAINING AGREEMENT AND THE COMPANY IS NOT AWARE OF
ANY LABOR ORGANIZATION OR ACTIVITY INVOLVING ITS EMPLOYEES.  TO THE BEST OF THE
COMPANY’S KNOWLEDGE, THE COMPANY HAS COMPLIED IN ALL MATERIAL RESPECTS WITH ALL
APPLICABLE LAWS RELATED TO EMPLOYMENT.  EXCEPT AS SET FORTH ON SCHEDULE 2.20(I),
THE COMPANY IS NOT A PARTY TO OR BOUND BY ANY CURRENTLY EFFECTIVE EMPLOYMENT
CONTRACT, DEFERRED COMPENSATION AGREEMENT, BONUS PLAN, INCENTIVE PLAN, PROFIT
SHARING PLAN, RETIREMENT AGREEMENT, OR OTHER EMPLOYEE COMPENSATION AGREEMENT. 
THE COMPANY DOES NOT HAVE ANY EMPLOYEE BENEFIT PLAN AS DEFINED IN THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED. THE COMPANY IS NOT AWARE
THAT ANY OFFICER OR KEY EMPLOYEE, OR THAT ANY GROUP OF KEY EMPLOYEES,

 

9

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INTENDS TO TERMINATE THEIR EMPLOYMENT WITH THE COMPANY, NOR DOES THE COMPANY
HAVE A PRESENT INTENTION TO TERMINATE THE EMPLOYMENT OF ANY OF THE FOREGOING.
SUBJECT TO GENERAL PRINCIPLES RELATED TO WRONGFUL TERMINATION OF EMPLOYEES AND
OTHER THAN AS SET FORTH ON SCHEDULE 2.20(II), THE EMPLOYMENT OF EACH OFFICER AND
EMPLOYEE OF THE COMPANY IS TERMINABLE AT THE WILL OF THE COMPANY.

 

2.21        EMPLOYEE CONFIDENTIALITY AGREEMENTS.  EXCEPT AS SET FORTH ON
SCHEDULE 2.21, EACH EMPLOYEE, CONSULTANT AND OFFICER OF THE COMPANY HAS ON OR
PRIOR TO THE DATE HEREOF EXECUTED A FORM OF PROPRIETARY INFORMATION AND
INVENTIONS AGREEMENT.  THE COMPANY IS NOT AWARE THAT ANY OF ITS EMPLOYEES,
CONSULTANTS OR OFFICERS IS IN VIOLATION THEREOF, AND THE COMPANY WILL USE ITS
BEST EFFORTS TO PREVENT ANY SUCH VIOLATION.

 

2.22        DEVELOPMENT AND MARKETING RIGHTS.  TO THE BEST OF ITS KNOWLEDGE, THE
COMPANY HAS NOT GRANTED RIGHTS TO DEVELOP, MANUFACTURE, LICENSE, MARKET,
DISTRIBUTE OR SELL ANY OF ITS PRODUCTS OR SERVICES TO ANY OTHER PERSON AND IS
NOT BOUND BY ANY AGREEMENT THAT AFFECTS THE COMPANY’S EXCLUSIVE RIGHT TO
DEVELOP, MANUFACTURE, LICENSE, MARKET, DISTRIBUTE OR SELL ITS PRODUCTS OR
SERVICES.

 

2.23        TAXES.

 

(A)           THE COMPANY AND EACH OF ITS SUBSIDIARIES HAS (I) FILED ALL TAX
RETURNS OR REPORTS (FEDERAL, STATE, LOCAL OR FOREIGN) AS REQUIRED BY LAW, AND
ALL SUCH TAX RETURNS AND REPORTS WERE TRUE, CORRECT AND COMPLETE IN ALL MATERIAL
RESPECTS, (II) DULY AND TIMELY PAID ALL TAXES AND OTHER ASSESSMENTS DUE, EXCEPT
THOSE CONTESTED BY IT IN GOOD FAITH AND FOR WHICH ADEQUATE RESERVES HAVE BEEN
SET FORTH IN THE FINANCIAL STATEMENTS, (III) MADE ADEQUATE PROVISIONS IN THE
FINANCIAL STATEMENTS FOR ALL TAXES, ASSESSMENTS, AND GOVERNMENTAL CHARGES WITH
RESPECT TO ITS BUSINESS, PROPERTIES, AND OPERATIONS, AND (IV) WITHHELD OR
COLLECTED FROM EACH PAYMENT MADE TO EACH OF ITS EMPLOYEES, THE AMOUNT OF ALL
TAXES, INCLUDING, BUT NOT LIMITED TO, INCOME AND EMPLOYMENT TAXES, REQUIRED TO
BE WITHHELD OR COLLECTED THEREFROM, AND PAID THE SAME TO THE PROPER TAX
RECEIVING OFFICERS OR AUTHORIZED DEPOSITORIES.  THE COMPANY HAS PROVIDED THE
INVESTOR WITH COMPLETE COPIES OF ALL MATERIAL INCOME TAX RETURNS OF THE COMPANY
OR ITS SUBSIDIARIES RELATING TO TAXABLE PERIODS BEGINNING AFTER DECEMBER 31,
2000 AND ANY AUDIT REPORT ISSUED IN THE LAST THREE YEARS.

 

(B)           NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS HAD ANY TAX
DEFICIENCY PROPOSED OR ASSESSED AGAINST IT, OR HAS EXECUTED ANY WAIVER OF ANY
STATUTE OF LIMITATIONS ON THE ASSESSMENT OR COLLECTION OF ANY TAX OR
GOVERNMENTAL CHARGE.  NO TAX PROCEEDINGS, AUDITS OR OTHER INVESTIGATIONS BY OR
INVOLVING ANY TAXING AUTHORITY ARE CURRENTLY IN PROGRESS WITH RESPECT TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, NOR HAS THE COMPANY OR ANY OF ITS
SUBSIDIARIES RECEIVED ANY NOTICE FROM ANY TAXING AUTHORITY THAT IT INTENDS TO
CONDUCT SUCH A PROCEEDING, AUDIT OR INVESTIGATION.

 

(C)           NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES (I) IS A PARTY TO
ANY TAX SHARING OR ALLOCATION AGREEMENT, OR (II) HAS REQUESTED OR RECEIVED A
RULING FROM ANY TAX AUTHORITY OR SIGNED A CLOSING OR OTHER AGREEMENT WITH ANY
TAX AUTHORITY.  NO SUBSIDIARY OF THE COMPANY IS A CORPORATION ORGANIZED UNDER
THE LAWS OF THE UNITED STATES, OR ANY STATE OR POLITICAL SUBDIVISION THEREOF. 
NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS EVER BEEN A MEMBER OF ANY
CONSOLIDATED, COMBINED, UNITARY, AGGREGATE, OR AFFILIATED GROUP FILING OR
REQUIRED TO FILE A RETURN ON A CONSOLIDATED, COMBINED, UNITARY, AGGREGATE, OR
AFFILIATED GROUP BASIS, UNDER THE LAWS OF ANY

 

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JURISDICTION, OTHER THAN THE GROUP THE PARENT OF WHICH IS THE COMPANY.  NEITHER
THE COMPANY NOR ANY OF ITS AFFILIATES IS CURRENTLY A PARTY TO ANY JOINT VENTURE,
PARTNERSHIP OR OTHER ARRANGEMENT THAT COULD BE TREATED AS A PARTNERSHIP FOR U.S.
INCOME TAX PURPOSES.

 

(D)           THE COMPANY HAS PROVIDED THE INVESTOR WITH A TRUE AND COMPLETE
LIST OF EACH OF THE SHAREHOLDERS OF THE COMPANY AND THEIR RESPECTIVE INTEREST IN
THE COMPANY.  NONE OF THE SHAREHOLDERS OF THE COMPANY, NOR, TO THE KNOWLEDGE OF
THE COMPANY, ANY OF THE BENEFICIAL OWNERS OF THE SHAREHOLDERS OF THE COMPANY,
ARE (I) A CITIZEN OR RESIDENT OF THE UNITED STATES, (II) A CORPORATION,
PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN THE UNITED STATES OR UNDER
THE LAW OF THE UNITED STATES OR ANY STATE, (III) AN ESTATE, THE INCOME OF WHICH
IS SUBJECT TO UNITED STATES FEDERAL INCOME TAXATION REGARDLESS OF ITS SOURCE OR
(IV) A TRUST WHICH IS SUBJECT TO THE SUPERVISION OF A COURT WITHIN THE UNITED
STATES AND THE CONTROL OF ONE OR MORE UNITED STATES PERSONS.    NEITHER THE
COMPANY NOR ITS SUBSIDIARIES HOLDS ANY “UNITED STATES PROPERTY” WITHIN THE
MEANING OF SECTION 956 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE “CODE”).  THE COMPANY WAS NOT A “PASSIVE FOREIGN INVESTMENT
COMPANY” WITHIN THE MEANING OF SECTION 1297 OF THE CODE IN 2004 AND DOES NOT
EXPECT TO BE A PASSIVE FOREIGN INVESTMENT COMPANY IN 2005.

 

(E)           THE COMPANY AND EACH OF ITS SUBSIDIARIES ARE IN COMPLIANCE IN ALL
MATERIAL RESPECTS WITH ALL TERMS AND CONDITIONS OF ANY TAX EXEMPTIONS, TAX
HOLIDAY OR OTHER TAX REDUCTION AGREEMENT, APPROVAL OR ORDER OF ANY GOVERNMENT,
AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT WILL NOT
HAVE ANY ADVERSE EFFECT ON THE VALIDITY AND EFFECTIVENESS OF ANY SUCH TAX
EXEMPTIONS, TAX HOLIDAY OR OTHER TAX REDUCTION AGREEMENT, APPROVAL OR ORDER. 
THE SCHEDULE OF EXCEPTIONS LISTS EACH TAX INCENTIVE GRANTED TO OR ENJOYED BY
COMPANY OR ITS SUBSIDIARIES, THE PERIOD FOR WHICH SUCH TAX INCENTIVE APPLIES,
AND THE NATURE OF SUCH TAX INCENTIVE.  COMPANY AND ITS SUBSIDIARIES HAVE
COMPLIED WITH ALL MATERIAL REQUIREMENTS OF APPLICABLE LAW TO BE ENTITLED TO
CLAIM ALL SUCH INCENTIVES.  CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT WILL NOT ADVERSELY AFFECT THE CONTINUED QUALIFICATION FOR THE
INCENTIVES OR THE TERMS OR DURATION THEREOF OR REQUIRE ANY RECAPTURE OF ANY
PREVIOUSLY CLAIMED INCENTIVE, AND NO CONSENT OR APPROVAL OF ANY GOVERNMENTAL
AUTHORITY IS REQUIRED, OTHER THAN AS CONTEMPLATED BY THE SCHEDULE OF EXCEPTIONS,
PRIOR TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN
ORDER TO PRESERVE THE ENTITLEMENT OF THE COMPANY OR ITS SUBSIDIARIES TO ANY SUCH
INCENTIVE.

 

2.24        INSURANCE. THE COMPANY WILL USE ITS BEST EFFORTS TO OBTAIN ON
COMMERCIALLY REASONABLE TERMS, AS SOON AS PRACTICABLE AFTER THE CLOSING, FIRE
AND CASUALTY INSURANCE POLICIES AND OTHER INSURANCE OF THE KINDS AND IN THE
AMOUNTS (A) SUFFICIENT FOR COMPLIANCE BY THE COMPANY WITH ALL REQUIREMENTS OF
LAW AND OF ALL AGREEMENTS TO WHICH THE COMPANY IS A PARTY AND (B) NOT LESS THAN
IS CUSTOMARILY OBTAINED BY CORPORATIONS ENGAGED IN THE SAME OR SIMILAR BUSINESS
AND SIMILARLY SITUATED.

 

2.25        ENVIRONMENTAL AND SAFETY LAWS.  THE COMPANY IS NOT IN MATERIAL
VIOLATION OF ANY APPLICABLE STATUTE, LAW OR REGULATION RELATING TO THE
ENVIRONMENT OR OCCUPATIONAL HEALTH AND SAFETY, AND NO MATERIAL EXPENDITURES ARE
OR WILL BE REQUIRED IN ORDER TO COMPLY WITH ANY SUCH EXISTING STATUTE, LAW OR
REGULATION.

 

2.26        CUSTOMERS.  SCHEDULE 2.26 IS A TRUE, CORRECT AND COMPLETE LIST OF
THE COMPANY’S TEN (10) LARGEST CUSTOMERS BY DOLLAR VOLUME OF SALES MADE OR
SERVICES PROVIDED FOR EACH OF THE

 

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CALENDAR YEAR 2003 AND THE CALENDAR YEAR 2004.  IN THE LAST TWELVE MONTHS, NONE
OF THE COMPANY’S CUSTOMERS, WHETHER OR NOT ONE OF THE COMPANY’S TEN (10)
LARGEST, HAS BEFORE THE SCHEDULED EXPIRATION OF ITS ARRANGEMENT WITH THE COMPANY
CANCELED OR OTHERWISE TERMINATED, OR, TO THE KNOWLEDGE OF THE COMPANY AND THE
SHAREHOLDERS, THREATENED TO CANCEL OR OTHERWISE TERMINATE, ITS RELATIONSHIP WITH
THE COMPANY BEFORE THE SCHEDULED EXPIRATION OF ITS ARRANGEMENT WITH THE
COMPANY.  THE COMPANY HAS NOT RECEIVED ANY NOTICE AND HAS NO KNOWLEDGE OR REASON
TO BELIEVE THAT ANY CUSTOMER INTENDS TO CANCEL OR OTHERWISE MODIFY ITS
RELATIONSHIP WITH THE COMPANY ON ACCOUNT OF THE TRANSACTIONS CONTEMPLATED HEREBY
OR OTHERWISE.

 

2.27        NO SIDE AGREEMENTS.  OTHER THAN THIS AGREEMENT, THE SHAREHOLDERS
AGREEMENT, AND THE AGREEMENTS EXPRESSLY CONTEMPLATED HEREBY OR THEREBY OR
DISCLOSED HEREIN OR THEREIN, THERE ARE NO AGREEMENTS ENTERED INTO, OR CURRENTLY
INTENDED TO BE ENTERED INTO, BETWEEN OR AMONG THE COMPANY AND ANY OF ITS
SHAREHOLDERS.

 

2.28        BOOKS AND RECORDS.  THE BOOKS AND RECORDS OF THE COMPANY, INCLUDING,
WITHOUT LIMITATION, ITS SHARE CAPITAL RECORD BOOKS AND MINUTE BOOKS, ARE
COMPLETE AND CORRECT IN ALL MATERIAL RESPECTS AND ACCURATELY AND FAIRLY REFLECT
ALL MEETINGS AND OTHER CORPORATE ACTIONS OF THE COMPANY’S SHAREHOLDERS AND ITS
BOARD OF DIRECTORS AND COMMITTEES THEREOF AND ALL MATERIAL INFORMATION RELATING
TO ITS BUSINESS, THE NATURE, ACQUISITION, MAINTENANCE, LOCATION AND CHARACTER OF
ITS ASSETS, AND THE NATURE OF ALL TRANSACTIONS GIVING RISE TO ITS OBLIGATIONS OR
ACCOUNTS RECEIVABLE.

 

2.29        BROKERS.  EXCEPT AS SET FORTH ON SCHEDULE 2.29, THE COMPANY HAS NO
CONTRACT, ARRANGEMENT OR UNDERSTANDING WITH ANY BROKER, FINDER OR SIMILAR AGENT
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

2.30        CERTAIN BUSINESS PRACTICES; COMPLIANCE WITH LAWS.

 

(A)           NEITHER THE COMPANY NOR, TO THE KNOWLEDGE OF THE COMPANY OR THE
SHAREHOLDERS, ANY DIRECTOR, OFFICER, AGENT OR EMPLOYEE OF THE COMPANY HAS (I)
USED ANY FUNDS FOR UNLAWFUL CONTRIBUTIONS, GIFTS, ENTERTAINMENT OR OTHER
UNLAWFUL EXPENSES RELATING TO POLITICAL ACTIVITY, (II)  ISSUED ANY UNLAWFUL
PAYMENT OR OTHER CONSIDERATION TO FOREIGN OR DOMESTIC GOVERNMENT OFFICIALS,
SUPPLIERS, EMPLOYEES, OTHER THIRD PARTIES OR TO FOREIGN OR DOMESTIC POLITICAL
PARTIES OR CAMPAIGNS OR  (III) VIOLATED, ANY PROVISION OF THE FOREIGN CORRUPT
PRACTICES ACT OF 1977, AS AMENDED (THE “FCPA”), OR (III) MADE ANY OTHER UNLAWFUL
PAYMENT UNDER UNITED STATES OR OTHER LAW.

 

(B)           NO PAYMENTS OR OTHER CONSIDERATION GRANTED WOULD VIOLATE ANY
PROVISION OF THE FCPA IF SUCH PAYMENTS HAD BEEN MADE BY THE INVESTOR, ANY
DOMESTIC CONCERN (AS DEFINED IN THE FCPA) OR ANY OTHER CONCERN WHICH IS SUBJECT
TO THE REQUIREMENTS OF THE FCPA.

 

(C)           THE COMPANY AND THE SHAREHOLDERS ARE IN COMPLIANCE WITH ALL LAWS,
STATUTES, RULES AND REGULATIONS, INCLUDING BUT NOT LIMITED TO THOSE OF ANY
FEDERAL, STATE OR LOCAL GOVERNMENTAL AUTHORITY IN THE UNITED STATES APPLICABLE
TO SUCH PERSON (AS HEREINAFTER DEFINED), INCLUDING WITHOUT LIMITATION THE
REQUIREMENTS OF EXECUTIVE ORDER NO. 13224, 66 FED. REG. 49079 (SEPTEMBER 25,
2001) (THE “ORDER”) AND OTHER SIMILAR REQUIREMENTS CONTAINED IN THE OFFICE OF
FOREIGN ASSET CONTROL, DEPARTMENT OF TREASURY (“OFAC”) AND IN ANY ENABLING
LEGISLATION OR OTHER EXECUTIVE ORDERS IN RESPECT THEREOF (THE ORDER AND SUCH
OTHER RULES, REGULATIONS, LEGISLATION OR ORDERS ARE COLLECTIVELY CALLED THE
“ORDERS”).  IN ADDITION, THE REPRESENTATION AND WARRANTY

 

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CONTAINED IN THE IMMEDIATELY PRECEDING SENTENCE WOULD REMAIN ACCURATE ASSUMING
FOR PURPOSES HEREOF EACH OF THE FOLLOWING ALTERNATIVES: THAT THE INVESTOR WAS
(I) THE BENEFICIAL OWNER OF IN EXCESS OF 50% BUT LESS THAN 100% OF THE
FULLY-DILUTED SHARES OF THE COMPANY AND (II) THE BENEFICIAL OWNER OF 100% OF THE
FULLY-DILUTED SHARES OF THE COMPANY. FOR PURPOSES OF THIS SECTION, “PERSON”
SHALL MEAN ANY CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY, JOINT
VENTURE, INDIVIDUAL, TRUST, REAL ESTATE INVESTMENT TRUST, BANKING ASSOCIATION,
FEDERAL OR STATE SAVINGS AND LOAN INSTITUTION AND ANY OTHER LEGAL ENTITY,
WHETHER OR NOT A PARTY HERETO.

 

(D)           NONE OF THE COMPANY, ANY SHAREHOLDER NOR ANY CUSTOMER OR SUPPLIER
OF THE COMPANY OR ANY OTHER PERSON WITH WHOM THE COMPANY HAS DONE BUSINESS AT
ANY TIME SINCE JANUARY 1, 2004:

 

(I)            IS LISTED ON (A) THE SPECIALLY DESIGNATED NATIONALS AND BLOCKED
PERSONS LIST MAINTAINED BY OFAC AND/OR ON ANY OTHER LIST OF TERRORISTS OR
TERRORIST ORGANIZATIONS MAINTAINED PURSUANT TO ANY OF THE RULES AND REGULATIONS
OF OFAC OR PURSUANT TO ANY OTHER APPLICABLE LAWS, REGULATIONS OR ORDERS, (B) THE
DENIED PERSONS LIST MAINTAINED BY THE UNITED STATES DEPARTMENT OF COMMERCE (THE
“DOC”), (C) THE UNVERIFIED LIST MAINTAINED BY THE DOC OR (D) THE DEBARRED LIST
MAINTAINED BY THE UNITED STATES DEPARTMENT OF STATE  (SUCH LISTS ARE
COLLECTIVELY REFERRED TO AS THE “LISTS”);

 

(II)           HAS BEEN INDICTED OR ARRESTED FOR MONEY LAUNDERING OR FOR
PREDICATE CRIMES TO MONEY LAUNDERING, CONVICTED OR PLED NOLO CONTENDERE TO
CHARGES INVOLVING MONEY LAUNDERING OR PREDICATE CRIMES TO MONEY LAUNDERING;

 

(III)          HAS BEEN DETERMINED BY COMPETENT AUTHORITY TO BE SUBJECT TO THE
PROHIBITIONS CONTAINED IN THE ORDERS;

 

(IV)          IS OWNED OR CONTROLLED BY, NOR ACTS FOR OR ON BEHALF OF, ANY
PERSON ON THE LISTS OR ANY OTHER PERSON WHO HAS BEEN DETERMINED BY COMPETENT
AUTHORITY TO BE SUBJECT TO THE PROHIBITIONS CONTAINED IN THE ORDERS;

 

(V)           SHALL TRANSFER OR PERMIT THE TRANSFER OF ANY INTEREST IN THE
COMPANY, ANY SUCH SHAREHOLDERS OR ANY SUCH OTHER PARTY TO ANY PERSON WHO IS, OR
WHOSE BENEFICIAL OWNERS ARE, LISTED ON THE LISTS; OR

 

(VI)          SHALL ASSIGN THIS AGREEMENT OR ANY INTEREST HEREIN, TO ANY PERSON
WHO IS LISTED ON THE LISTS OR WHO IS ENGAGED IN ILLEGAL ACTIVITIES.

 

The representation and warranties in this Section 2.30 are not intended in any
way to limit any of the other representations and warranties hereunder,
including but not limited to those set forth in Section 2.12.

 

SECTION 3.  REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.

 

The Investor hereby represents and warrants to the Company that:

 

3.1          AUTHORIZATION.   ALL CORPORATE ACTION ON THE PART OF THE INVESTOR,
ITS OFFICERS, DIRECTORS AND STOCKHOLDERS NECESSARY FOR THE AUTHORIZATION,
EXECUTION AND DELIVERY OF THIS

 

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AGREEMENT AND THE SHAREHOLDERS AGREEMENT AND THE PERFORMANCE OF ALL OBLIGATIONS
OF THE INVESTOR HEREUNDER AND THEREUNDER AT THE CLOSING HAVE BEEN TAKEN OR WILL
BE TAKEN PRIOR TO THE CLOSING, AND THIS AGREEMENT AND THE SHAREHOLDERS
AGREEMENT, WHEN EXECUTED AND DELIVERED, WILL CONSTITUTE VALID AND LEGALLY
BINDING OBLIGATIONS OF THE INVESTOR, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS,
EXCEPT AS SUCH ENFORCEMENT MAY BE SUBJECT TO BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM OR OTHER SIMILAR LAWS NOW OR HEREAFTER IN EFFECT
RELATING TO CREDITOR’S RIGHTS AND GENERAL PRINCIPLES OF EQUITY.

 

3.2          PURCHASE ENTIRELY FOR OWN ACCOUNT.  THIS AGREEMENT IS MADE WITH THE
INVESTOR IN RELIANCE UPON THE INVESTOR’S REPRESENTATION TO THE COMPANY, WHICH BY
THE INVESTOR’S EXECUTION OF THIS AGREEMENT THE INVESTOR HEREBY CONFIRMS, THAT
THE SHARES WILL BE ACQUIRED FOR INVESTMENT FOR THE INVESTOR’S OWN ACCOUNT, NOT
AS A NOMINEE OR AGENT, AND NOT WITH A VIEW TO THE RESALE, TRANSFER OR
DISTRIBUTION OF ANY PART THEREOF, AND THAT THE INVESTOR HAS NO PRESENT INTENTION
OF SELLING, GRANTING ANY PARTICIPATION IN, OR OTHERWISE DISTRIBUTING THE SAME. 
BY EXECUTING THIS AGREEMENT, THE INVESTOR FURTHER REPRESENTS THAT THE INVESTOR
DOES NOT HAVE ANY CONTRACT, UNDERTAKING, AGREEMENT OR ARRANGEMENT WITH ANY
PERSON TO SELL, TRANSFER OR GRANT PARTICIPATIONS TO SUCH PERSON OR TO ANY THIRD
PERSON, WITH RESPECT TO ANY OF THE SHARES.

 

3.3          RELIANCE UPON INVESTOR’S REPRESENTATIONS.  THE INVESTOR UNDERSTANDS
THAT THE SHARES MIGHT NOT BE REGISTERED UNDER THE SECURITIES ACT ON THE GROUND
THAT THE SALE PROVIDED FOR IN THIS AGREEMENT IS EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT PURSUANT TO SECTION 4(2) THEREOF, AND THAT THE COMPANY’S
RELIANCE ON SUCH EXEMPTION IS PREDICATED ON THE INVESTOR’S REPRESENTATIONS SET
FORTH HEREIN.  THE INVESTOR REALIZES THAT THE BASIS FOR THE EXEMPTION MAY NOT BE
PRESENT IF, NOTWITHSTANDING SUCH REPRESENTATIONS, THE INVESTOR HAS IN MIND
MERELY ACQUIRING THE SHARES FOR A FIXED OR DETERMINABLE PERIOD IN THE FUTURE, OR
FOR A MARKET RISE, OR FOR SALE IF THE MARKET DOES NOT RISE.  THE INVESTOR HAS NO
SUCH INTENTION.

 

3.4          RECEIPT OF INFORMATION.  THE INVESTOR REPRESENTS THAT IT HAS HAD AN
OPPORTUNITY TO ASK QUESTIONS AND RECEIVE ANSWERS FROM THE COMPANY REGARDING THE
TERMS AND CONDITIONS OF THE SALE OF THE SHARES AND THE BUSINESS, PROPERTIES,
PROSPECTS, AND FINANCIAL CONDITION OF THE COMPANY AND TO OBTAIN ADDITIONAL
INFORMATION NECESSARY TO VERIFY THE ACCURACY OF ANY INFORMATION FURNISHED TO THE
INVESTOR OR TO WHICH THE INVESTOR HAD ACCESS; THE FOREGOING, HOWEVER, DOES NOT
LIMIT OR MODIFY THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY IN SECTION 2
OF THIS AGREEMENT OR THE RIGHT OF THE INVESTOR TO RELY THEREON.

 

3.5          INVESTMENT EXPERIENCE.  THE INVESTOR REPRESENTS THAT ITS IS
EXPERIENCED IN EVALUATING AND INVESTING IN PRIVATE PLACEMENT TRANSACTIONS OF
SECURITIES OF COMPANIES IN A SIMILAR STAGE OF DEVELOPMENT AND ACKNOWLEDGES THAT
THE INVESTOR IS ABLE TO FEND FOR ITSELF, CAN BEAR THE ECONOMIC RISK OF THE
INVESTOR’S INVESTMENT FOR AN INDEFINITE PERIOD OF TIME, AND HAS SUCH KNOWLEDGE
AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT THE INVESTOR IS CAPABLE OF
EVALUATING THE MERITS AND RISKS OF THE INVESTMENT IN THE SHARES.

 

3.6          ACCREDITED INVESTOR.  THE INVESTOR REPRESENTS TO THE COMPANY THAT
IT IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501 OF REGULATION D
ADOPTED PURSUANT TO THE SECURITIES ACT.

 

3.7          FINDER’S FEES.  THE INVESTOR NEITHER IS NOR WILL BE OBLIGATED FOR
ANY FINDER’S FEE OR COMMISSION IN CONNECTION WITH THIS TRANSACTION.

 

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3.8          RESTRICTED SHARES.  THE INVESTOR UNDERSTANDS THAT THE SHARES IT IS
PURCHASING MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OR AN EXEMPTION THEREFROM, AND THAT IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING THE SHARES OR AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE SHARES MUST
BE HELD INDEFINITELY.  IN PARTICULAR, THE INVESTOR IS AWARE THAT THE SHARES MAY
NOT BE SOLD PURSUANT TO RULE 144 PROMULGATED UNDER THE SECURITIES ACT UNLESS ALL
OF THE CONDITIONS OF THAT RULE ARE MET.  AMONG THE CONDITIONS FOR USE OF RULE
144 MAY BE THE AVAILABILITY OF CURRENT INFORMATION TO THE PUBLIC ABOUT THE
COMPANY.  SUCH INFORMATION IS NOT NOW AVAILABLE.

 

3.9          LEGENDS.  EACH CERTIFICATE OR OTHER DOCUMENT EVIDENCING ANY OF THE
SHARES SHALL BE ENDORSED WITH THE LEGENDS SUBSTANTIALLY IN THE FORM SET FORTH
BELOW:

 

(A)           THE FOLLOWING LEGEND UNDER THE SECURITIES ACT:

 

“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

(B)           ANY LEGEND IMPOSED OR REQUIRED BY THE COMPANY’S MEMORANDUM OF
ASSOCIATION, ARTICLES OF ASSOCIATION, THE SHAREHOLDERS AGREEMENT OR ANY OTHER
APPLICABLE SECURITIES LAWS.

 

SECTION 4.  CONDITIONS PRECEDENT TO INVESTOR’S OBLIGATIONS.

 

The obligations of the Investor under Section 1.1 of this Agreement are subject
to the fulfillment to the Investor’s satisfaction of each of the following
conditions as of the Closing Date (unless otherwise indicated):

 

4.1          REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND WARRANTIES
OF THE COMPANY CONTAINED IN SECTION 2 AND OTHERWISE MADE BY THE COMPANY IN
WRITING IN CONNECTION WITH THE CLOSING SHALL BE TRUE, CORRECT AND COMPLETE IN
ALL MATERIAL RESPECTS ON AND AS OF THE CLOSING DATE.

 

4.2          PERFORMANCE; DUE DILIGENCE.  THE COMPANY SHALL HAVE PERFORMED AND
COMPLIED WITH ALL AGREEMENTS, OBLIGATIONS, AND CONDITIONS CONTAINED IN THIS
AGREEMENT THAT ARE REQUIRED TO BE PERFORMED OR COMPLIED WITH BY IT.  AS OF THE
CLOSING DATE, THE INVESTOR SHALL HAVE BEEN SATISFIED IN ITS SOLE DISCRETION WITH
ITS DUE DILIGENCE EXAMINATION OF THE BUSINESS, PROSPECTS, FINANCIAL CONDITION,
OPERATIONS, PROPERTY AND AFFAIRS OF THE COMPANY.

 

4.3          NO MATERIAL ADVERSE CHANGE.  THERE SHALL NOT HAVE OCCURRED ANY
MATERIAL CHANGE, OR EVENT, DEVELOPMENT, OR CHANGE OF CIRCUMSTANCE THAT
CONSTITUTES OR COULD REASONABLY BE EXPECTED TO CONSTITUTE, INDIVIDUALLY OR IN
THE AGGREGATE, A MATERIAL ADVERSE CHANGE IN THE BUSINESS OPERATIONS, PROPERTIES,
ASSETS, LIABILITIES, FINANCIAL CONDITION, RESULTS OF OPERATIONS OR PROSPECTS OF
THE COMPANY.

 

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4.4          CONVERSION OF PREFERENCE SHARES.  ANY AND ALL ISSUED AND
OUTSTANDING PREFERENCE SHARES SHALL HAVE BEEN CONVERTED INTO ORDINARY SHARES OF
THE COMPANY AND NO OUTSTANDING SHARES OF THE COMPANY SHALL HAVE ANY RIGHTS
SUPERIOR TO THOSE OF THE ORDINARY SHARES.

 

4.5          QUALIFICATIONS.  ALL AUTHORIZATIONS, APPROVALS, OR PERMITS, IF ANY,
OF ANY GOVERNMENTAL AUTHORITY OR REGULATORY BODY OF THE UNITED STATES OR OTHER
COUNTRY OR OF ANY STATE THAT ARE REQUIRED IN CONNECTION WITH THE LAWFUL ISSUANCE
AND SALE OF THE SHARES PURSUANT TO THIS AGREEMENT SHALL BE DULY OBTAINED AND
EFFECTIVE.

 

4.6          CONSENTS, WAIVERS, ETC.  THE COMPANY SHALL HAVE OBTAINED ALL
CONSENTS OR WAIVERS, IF ANY, NECESSARY TO EXECUTE AND DELIVER THIS AGREEMENT AND
THE SHAREHOLDERS AGREEMENT AND ISSUE THE SHARES, AND TO CARRY OUT THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND ALL SUCH CONSENTS AND WAIVERS
SHALL BE IN FULL FORCE AND EFFECT.  ALL CORPORATE AND OTHER ACTIONS OR
PROCEEDINGS AND GOVERNMENTAL FILINGS NECESSARY TO EFFECTUATE THE TERMS OF THIS
AGREEMENT, THE SHAREHOLDERS AGREEMENT, AND THE OTHER AGREEMENTS AND INSTRUMENTS
EXECUTED AND DELIVERED BY THE COMPANY IN CONNECTION HEREWITH SHALL HAVE BEEN
MADE OR TAKEN, AND SHALL BE REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE
INVESTOR, EXCEPT FOR ANY POST-SALE FILING THAT MAY BE REQUIRED UNDER APPLICABLE
LAWS.  IN ADDITION TO THE DOCUMENTS SET FORTH BELOW IN SECTION 4.7, THE COMPANY
SHALL HAVE PROVIDED TO THE INVESTOR ANY OTHER INFORMATION, COUNTERPART ORIGINAL
AND/OR CERTIFIED OR OTHER COPIES OF DOCUMENTS THAT THE INVESTOR MAY REASONABLY
REQUEST.

 

4.7          CLOSING DOCUMENTATION.  THE INVESTOR SHALL HAVE RECEIVED PRIOR TO
OR AT THE CLOSING ALL OF THE FOLLOWING DOCUMENTS OR INSTRUMENTS, EACH IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE INVESTOR AND ITS COUNSEL:

 

(A)           DIRECTOR’S CERTIFICATE.  A CERTIFICATE OF A DIRECTOR OF THE
COMPANY CERTIFYING AS TO: (I) THE COMPANY’S ATTACHED MEMORANDUM OF ASSOCIATION,
(II) THE COMPANY’S ATTACHED ARTICLES OF ASSOCIATION, (III) THE COMPANY’S
ATTACHED CERTIFICATE OF INCORPORATION, (IV) THE RESOLUTIONS OF THE COMPANY’S
BOARD OF DIRECTORS APPROVING THIS AGREEMENT AND THE SHAREHOLDERS AGREEMENT, AND
AUTHORIZING THE ISSUANCE AND/OR SALE OF THE SHARES AND THE OTHER TRANSACTIONS
CONTEMPLATED HEREBY, AND (V) THE INCUMBENCY OF THE OFFICERS EXECUTING THIS
AGREEMENT, THE SHAREHOLDERS AGREEMENT, AND THE OTHER AGREEMENTS, CERTIFICATES,
DOCUMENTS AND INSTRUMENTS CONTEMPLATED HEREBY AND THEREBY.  THE INVESTOR MAY
CONCLUSIVELY RELY ON SUCH CERTIFICATE UNTIL IT SHALL RECEIVE A FURTHER
CERTIFICATE OF THE DIRECTOR OF THE COMPANY CANCELING OR AMENDING THE PRIOR
CERTIFICATE AND SUBMITTING THE SIGNATURES OF THE OFFICERS NAMED IN SUCH FURTHER
CERTIFICATE.

 

(B)           CERTIFICATE OF GOOD STANDING.  A CERTIFICATE OF GOOD STANDING AS
TO THE COMPANY CERTIFIED BY THE REGISTRAR OF COMPANIES OF THE CAYMAN ISLANDS AND
A CERTIFICATE OF GOOD STANDING AS TO CHINA-HR.COM CORPORATION CERTIFIED BY THE
REGISTRAR OF COMPANIES OF THE BRITISH VIRGIN ISLANDS, IN EACH CASE AS OF A
REASONABLY RECENT DATE PRIOR TO THE CLOSING DATE.

 

(C)           SHAREHOLDERS AGREEMENT.  THE SHAREHOLDERS AGREEMENT IN THE FORM
ATTACHED HERETO AS EXHIBIT A DULY EXECUTED AND DELIVERED BY THE PARTIES NAMED
THEREIN.

 

(D)           SHARE CERTIFICATES.  THE COMPANY SHALL HAVE DELIVERED THE SHARE
CERTIFICATE OR CERTIFICATES TO THE INVESTOR FOR THE CLOSING PURSUANT TO
SECTION 1.2 HEREOF.

 

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4.8          BOARD OF DIRECTORS.  EFFECTIVE AS OF THE CLOSING, (KATHY) XU XIN,
GORDON KWONG CHE KEUNG, ADRIAN FU HAU CHAK AND (JASON) ZHANG JIANGUO AS WELL AS
ANDREW J. MCKELVEY AND TWO OTHER DIRECTORS DESIGNATED BY THE INVESTOR SHALL BE
THE ONLY MEMBERS OF THE COMPANY’S BOARD OF DIRECTORS.

 

SECTION 5.  CONDITIONS OF THE COMPANY’S OBLIGATIONS AT CLOSING.

 

The obligations of the Company to the Investor under this Agreement are subject
to the fulfillment, on or before the Closing, of each of the following
conditions by the Investor:

 

5.1          REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND WARRANTIES
OF THE INVESTOR CONTAINED IN SECTION 3 SHALL BE TRUE AND CORRECT ON AND AS OF
THE CLOSING.

 

5.2          PAYMENT OF PURCHASE PRICE.  THE INVESTOR SHALL HAVE DELIVERED THE
PURCHASE PRICE SPECIFIED IN SECTION 1.1.

 

5.3          QUALIFICATIONS.  ALL AUTHORIZATIONS, APPROVALS, OR PERMITS, IF ANY,
OF ANY GOVERNMENTAL AUTHORITY OR REGULATORY BODY OF THE UNITED STATES OR OTHER
COUNTRY OR OF ANY STATE THAT ARE REQUIRED IN CONNECTION WITH THE LAWFUL ISSUANCE
AND SALE OF THE SHARES PURSUANT TO THIS AGREEMENT SHALL BE DULY OBTAINED AND
EFFECTIVE.

 

5.4          SHAREHOLDERS AGREEMENT.  THE INVESTOR SHALL EXECUTE AND DELIVER THE
SHAREHOLDERS AGREEMENT.

 

SECTION 6.  INDEMNIFICATION.

 

6.1          INDEMNIFICATION BY THE COMPANY AND THE SHAREHOLDERS.  THE COMPANY
AND EACH SHAREHOLDER AGREES, JOINTLY AND SEVERALLY, TO INDEMNIFY, DEFEND AND
SAVE THE INVESTOR AND ITS AFFILIATES, AND EACH OF THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, EMPLOYEE BENEFIT PLANS AND FIDUCIARIES, PLAN
ADMINISTRATORS OR OTHER PARTIES DEALING WITH ANY SUCH PLANS (EACH, AN
“INDEMNIFIED INVESTOR PARTY”), HARMLESS FROM AND AGAINST, AND TO PROMPTLY PAY TO
AN INDEMNIFIED INVESTOR PARTY OR REIMBURSE AN INDEMNIFIED INVESTOR PARTY FOR,
ANY AND ALL LIABILITIES (WHETHER CONTINGENT, FIXED OR UNFIXED, LIQUIDATED OR
UNLIQUIDATED, OR OTHERWISE), OBLIGATIONS, DEFICIENCIES, DEMANDS, CLAIMS, SUITS,
ACTIONS, CAUSES OF ACTION, ASSESSMENTS, LOSSES, COSTS, EXPENSES, INTEREST,
FINES, PENALTIES, ACTUAL AND PUNITIVE DAMAGES AND COSTS OR EXPENSES OF ANY AND
ALL INVESTIGATIONS, PROCEEDINGS, JUDGMENTS, ENVIRONMENTAL ANALYSES,
REMEDIATIONS, SETTLEMENTS AND COMPROMISES (INCLUDING REASONABLE FEES AND
EXPENSES OF ATTORNEYS, ACCOUNTANTS AND OTHER EXPERTS INCURRED BY ANY INDEMNIFIED
PARTY IN ANY ACTION OR PROCEEDING BETWEEN SUCH INDEMNIFIED PARTY AND THE
INDEMNITOR OR BETWEEN ANY INDEMNIFIED PARTY AND ANY THIRD PARTY OR OTHERWISE)
(INDIVIDUALLY A “LOSS” AND COLLECTIVELY, THE “LOSSES”) SUSTAINED OR INCURRED BY
ANY INDEMNIFIED INVESTOR PARTY RELATING TO, RESULTING FROM, ARISING OUT OF OR
OTHERWISE BY VIRTUE OF (I) ANY MISREPRESENTATION OR BREACH OF A REPRESENTATION
OR WARRANTY MADE HEREIN BY THE COMPANY, (II) ANY NON-COMPLIANCE WITH OR BREACH
BY THE COMPANY OR A SHAREHOLDER, OR ANY AFFILIATE OF THE COMPANY OR A
SHAREHOLDER, OF ANY OF THEIR RESPECTIVE COVENANTS OR AGREEMENTS CONTAINED IN
THIS AGREEMENT OR THE SHAREHOLDERS AGREEMENT TO BE PERFORMED BY THE COMPANY, A
SHAREHOLDER OR ANY AFFILIATE OF THE COMPANY OR A SHAREHOLDER OR (III) ANY
ALLEGATIONS BY A THIRD PARTY THAT IS NOT AN INDEMNIFIED INVESTOR PARTY WHICH, IF
TRUE, WOULD CONSTITUTE A MISREPRESENTATION OR BREACH OF A REPRESENTATION OR
WARRANTY MADE HEREIN BY THE COMPANY OR NON-COMPLIANCE WITH OR BREACH BY THE
COMPANY OR A SHAREHOLDER OF ANY OF THEIR RESPECTIVE COVENANTS OR AGREEMENTS
CONTAINED IN THIS AGREEMENT OR

 

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THE SHAREHOLDERS AGREEMENT TO BE PERFORMED BY THE COMPANY, A SHAREHOLDER OR ANY
OF THEIR RESPECTIVE AFFILIATES.

 

6.2          INDEMNIFICATION BY THE INVESTOR.  THE INVESTOR AGREES TO INDEMNIFY,
DEFEND AND SAVE THE COMPANY AND EACH SHAREHOLDER AND HIS, HER OR ITS AFFILIATES,
AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, EMPLOYEE
BENEFIT PLANS AND FIDUCIARIES, PLAN ADMINISTRATORS OR OTHER PARTIES DEALING WITH
SUCH PLANS (EACH, AN “INDEMNIFIED COMPANY PARTY”) HARMLESS FROM AND AGAINST, AND
TO PROMPTLY PAY TO AN INDEMNIFIED COMPANY PARTY OR REIMBURSE AN INDEMNIFIED
COMPANY PARTY FOR, ANY AND ALL LOSSES SUSTAINED OR INCURRED BY ANY INDEMNIFIED
COMPANY PARTY RELATING TO, RESULTING FROM, ARISING OUT OF OR OTHERWISE BY VIRTUE
OF (I) ANY MISREPRESENTATION OR BREACH OF A REPRESENTATION OR WARRANTY MADE
HEREIN BY THE INVESTOR, (II) ANY NON-COMPLIANCE WITH OR BREACH BY THE INVESTOR
OR ITS AFFILIATES OF ANY OF THE COVENANTS OR AGREEMENTS CONTAINED IN THIS
AGREEMENT OR THE SHAREHOLDERS AGREEMENT TO BE PERFORMED BY THE INVESTOR OR ITS
AFFILIATES OR (III) ANY ALLEGATIONS BY A THIRD PARTY THAT IS NOT AN INDEMNIFIED
COMPANY PARTY WHICH, IF TRUE, WOULD CONSTITUTE A MISREPRESENTATION OR BREACH OF
A REPRESENTATION OR WARRANTY MADE HEREIN BY THE INVESTOR OR NON-COMPLIANCE WITH
OR BREACH BY THE INVESTOR OF ANY OF ITS COVENANTS OR AGREEMENTS CONTAINED IN
THIS AGREEMENT OR THE SHAREHOLDERS AGREEMENT TO BE PERFORMED BY THE INVESTOR OR
ITS AFFILIATES.

 

6.3          PROCEDURE FOR INDEMNIFICATION.  THE FOLLOWING PROCEDURE SHALL APPLY
TO THE FOREGOING AGREEMENTS TO INDEMNIFY AND HOLD HARMLESS:

 

(A)           THE PARTY WHO IS SEEKING INDEMNIFICATION (THE “CLAIMANT”) SHALL
GIVE WRITTEN NOTICE TO THE PARTY FROM WHOM INDEMNIFICATION IS SOUGHT (THE
“INDEMNITOR”) PROMPTLY AFTER THE CLAIMANT LEARNS OF THE CLAIM OR PROCEEDING
PROVIDED, THAT THE FAILURE TO GIVE SUCH NOTICE SHALL NOT RELIEVE THE INDEMNITOR
OF ITS OBLIGATIONS HEREUNDER EXCEPT TO THE EXTENT IT IS ACTUALLY DAMAGED
THEREBY.

 

(B)           WITH RESPECT TO ANY THIRD-PARTY CLAIMS OR PROCEEDINGS AS TO WHICH
THE CLAIMANT IS ENTITLED TO INDEMNIFICATION, THE INDEMNITOR SHALL HAVE THE RIGHT
TO SELECT AND EMPLOY COUNSEL OF ITS OWN CHOOSING TO DEFEND AGAINST ANY SUCH
CLAIM OR PROCEEDING, TO ASSUME CONTROL OF THE DEFENSE OF SUCH CLAIM OR
PROCEEDING, AND TO COMPROMISE, SETTLE OR OTHERWISE DISPOSE OF THE SAME, IF THE
INDEMNITOR DEEMS IT ADVISABLE TO DO SO, ALL AT THE EXPENSE OF THE INDEMNITOR. 
THE PARTIES WILL FULLY COOPERATE IN ANY SUCH ACTION, AND SHALL MAKE AVAILABLE TO
EACH OTHER ANY BOOKS OR RECORDS USEFUL FOR THE DEFENSE OF ANY SUCH CLAIM OR
PROCEEDING.  THE CLAIMANT MAY ELECT TO PARTICIPATE IN THE DEFENSE OF ANY SUCH
THIRD PARTY CLAIM, AND MAY, AT ITS SOLE EXPENSE, RETAIN SEPARATE COUNSEL IN
CONNECTION THEREWITH.  SUBJECT TO THE FOREGOING (I) THE CLAIMANT SHALL NOT
SETTLE OR COMPROMISE ANY SUCH THIRD PARTY CLAIM WITHOUT THE PRIOR WRITTEN
CONSENT OF THE INDEMNITOR AND (II) THE INDEMNITOR SHALL NOT SETTLE OR COMPROMISE
ANY SUCH THIRD PARTY CLAIM WITHOUT THE PRIOR WRITTEN CONSENT OF THE CLAIMANT, IN
EACH CASE OF (I) AND (II) WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.

 

6.4          LIMITATIONS ON INDEMNIFICATION RIGHTS.

 

(A)           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT NO CLAIM FOR RECOVERY OF
INDEMNIFIABLE DAMAGES MAY BE ASSERTED BASED ON A REPRESENTATION, WARRANTY OR
APPLICABLE PORTION THEREOF SET FORTH IN THIS AGREEMENT OR

 

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THE SHAREHOLDERS AGREEMENT AFTER SUCH REPRESENTATION, WARRANTY OR APPLICABLE
PORTION THEREOF HAS BEEN EXTINGUISHED IN ACCORDANCE WITH SECTION 7.2 HEREOF

 

(B)           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, NEITHER THE INDEMNIFIED INVESTOR PARTIES, ON THE ONE HAND, NOR THE
INDEMNIFIED COMPANY PARTIES, ON THE OTHER HAND, SHALL BE ENTITLED TO BE
INDEMNIFIED PURSUANT TO SECTION 6.1, SECTION 6.2 OR ANY OTHER PROVISION HEREOF
UNLESS AND UNTIL THE AGGREGATE OF ALL LOSSES INCURRED BY THE INDEMNIFIED
INVESTOR PARTIES OR THE INDEMNIFIED COMPANY PARTIES, AS THE CASE MAY BE, EXCEEDS
$100,000.

 

(C)           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, (I) THE INDEMNIFICATION OBLIGATIONS OF THE COMPANY UNDER SECTION 6.1
SHALL NOT EXCEED U.S.$17,500,000, (II) THE INDEMNIFICATION OBLIGATIONS OF A
SHAREHOLDER UNDER SECTION 6.1 SHALL NOT EXCEED THE AMOUNT PAYABLE BY THE COMPANY
TO THE SHAREHOLDER FOR THE PURCHASE OF SUCH SHAREHOLDER’S ORDINARY SHARES AS SET
FORTH ON SCHEDULE A HERETO AND (III) THE INDEMNIFICATION OBLIGATIONS OF THE
INVESTOR UNDER SECTION 6.2 SHALL NOT EXCEED U.S.$17,500,000.

 

6.5          WAIVER OF CLAIMS.  WITHOUT IN ANY WAY LIMITING THE OBLIGATIONS OF
THE SHAREHOLDERS UNDER THIS AGREEMENT, THE SHAREHOLDERS HEREBY EXPRESSLY AND
IRREVOCABLY WAIVE ANY RIGHTS OF CONTRIBUTION, SUBROGATION, RECOUPMENT,
COUNTERCLAIM, SET-OFF OR INDEMNIFICATION THAT THE SHAREHOLDERS MAY HAVE AGAINST
THE COMPANY.

 

6.6          SOLE REMEDY FOR DAMAGES.  THE INDEMNIFICATION OBLIGATIONS OF THE
PARTIES SET FORTH IN THIS SECTION 6 SHALL CONSTITUTE THE SOLE AND EXCLUSIVE
REMEDY OF THE PARTIES FOR THE RECOVERY OF MONEY DAMAGES WITH RESPECT TO ANY AND
ALL MATTERS ARISING OUT OF THIS AGREEMENT.  NOTWITHSTANDING THE FOREGOING, THE
TERMS OF THIS SECTION 6.6 SHALL NOT BE CONSTRUED AS LIMITING IN ANY WAY
WHATSOEVER ANY REMEDY TO WHICH ANY PARTY MAY BE ENTITLED OTHER THAN THE RECOVERY
OF MONEY DAMAGES, INCLUDING BUT NOT LIMITED TO EQUITABLE REMEDIES, SPECIFIC
PERFORMANCE, INJUNCTIVE RELIEF AND RESCISSION.

 

SECTION 7.  MISCELLANEOUS.

 

7.1          ENTIRE AGREEMENT.  THIS AGREEMENT AND THE DOCUMENTS REFERRED TO
HEREIN CONSTITUTE THE ENTIRE AGREEMENT AMONG THE PARTIES AND NO PARTY SHALL BE
LIABLE OR BOUND TO ANY OTHER PARTY IN ANY MANNER BY ANY WARRANTIES,
REPRESENTATIONS, OR COVENANTS EXCEPT AS SPECIFICALLY SET FORTH HEREIN OR
THEREIN.

 

7.2          SURVIVAL OF WARRANTIES.  THE WARRANTIES, REPRESENTATIONS, AND
COVENANTS OF THE COMPANY AND THE INVESTOR CONTAINED IN OR MADE PURSUANT TO THIS
AGREEMENT SHALL SURVIVE FOR A PERIOD OF TWO YEARS FROM THE CLOSING EXCEPT FOR
THOSE SET FORTH IN SECTION 2.23, WHICH SHALL SURVIVE UNTIL THE TERMINATION OF
THE APPLICABLE STATUTE OF LIMITATIONS, AND SECTIONS 2.5 AND 2.6, WHICH SHALL
SURVIVE INDEFINITELY.

 

7.3          SUCCESSORS AND ASSIGNS.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THE
TERMS AND CONDITIONS OF THIS AGREEMENT SHALL INURE TO THE BENEFIT OF AND BE
BINDING UPON THE RESPECTIVE SUCCESSORS AND ASSIGNS OF THE PARTIES (INCLUDING
PERMITTED TRANSFEREES OF ANY SHARES).  NOTHING IN THIS AGREEMENT, EXPRESS OR
IMPLIED, IS INTENDED TO CONFER UPON ANY PARTY OTHER THAN THE PARTIES HERETO OR
THEIR RESPECTIVE SUCCESSORS AND ASSIGNS ANY RIGHTS, REMEDIES, OBLIGATIONS, OR
LIABILITIES UNDER OR BY REASON OF THIS AGREEMENT, EXCEPT AS EXPRESSLY PROVIDED
IN THIS AGREEMENT.

 

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7.4          GOVERNING LAW/VENUE.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THAT STATE’S
CONFLICTS OF LAWS PRINCIPLES.

 

7.5          COUNTERPARTS; ORIGINALS.  THIS AGREEMENT MAY BE EXECUTED IN TWO OR
MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.  THIS AGREEMENT MAY BE
EXECUTED AND DELIVERED BY TELECOPY OR FACSIMILE AND EXECUTION IN SUCH MANNER
SHALL CONSTITUTE AN ORIGINAL.

 

7.6          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.

 

7.7          NOTICES.  ALL NOTICES, REQUEST, DEMANDS, CLAIMS, CONSENTS AND OTHER
COMMUNICATIONS DELIVERED HEREUNDER (WHETHER OR NOT REQUIRED TO BE DELIVERED
HEREUNDER) SHALL BE DEEMED TO BE SUFFICIENT AND DULY GIVEN IF CONTAINED IN A
WRITTEN INSTRUMENT (A) DELIVERED BY MESSENGER, (B) SENT BY FACSIMILE OR (C) SENT
BY AN INTERNATIONALLY RECOGNIZED COURIER GUARANTEEING DELIVERY WITHIN TWO
BUSINESS DAYS, IN EACH CASE ADDRESSED AS FOLLOWS:

 

(i)

If to the Company to:

 

 

 

China HR.com Holdings Ltd.

 

4/F, CITIC Buildings #2

 

19 Jianguomenwai Dajie

 

Chaoyang District

 

Beijing, China

 

Telephone:

 

Facsimile:

 

Attention: Kathy Xu

 

 

 

With a copy to:

 

 

 

Morrison and Foerster LLP

 

Entertainment Building, 21st Floor

 

30 Queen’s Road Central

 

Hong Kong

 

Telephone: 852-2585-0888

 

Facsimile: 852-2585-0800

 

Attention: Robert Woll, Esq.

 

 

(ii)

If to the Investor, to:

 

 

 

Monster Worldwide, Inc.

 

622 Third Avenue

 

New York, New York 10017

 

Telephone: (212) 351-7000

 

Facsimile:

 

Attention: Andrew J. McKelvey

 

20

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With a copy to:

 

 

 

Monster Worldwide, Inc.

 

622 Third Avenue

 

New York, New York 10017

 

Telephone: (212) 351-7000

 

Facsimile: (917) 256-8526

 

Attention: Myron Olesnyckyj, Esq.

 

(iii)          If to a Shareholder, to the address set forth on Schedule A
hereto,

 

or to such other address as the party to whom such notice or other communication
is to be given may have furnished to each other party in writing in accordance
herewith.  Any such notice or communication shall be deemed to have been
received (i) when delivered, if delivered by messenger, (ii) when sent, if sent
by facsimile on a business day with receipt electronically confirmed (or, if not
sent on a business day, on the next business day after the date sent by
facsimile) and (iii) on the second business day after dispatch, if sent by an
internationally recognized courier guaranteeing delivery within two business
days.

 

7.8          FINDER’S FEES.  EXCEPT AS SET FORTH ON SCHEDULE 2.29, EACH PARTY
REPRESENTS THAT IT NEITHER IS NOR WILL BE OBLIGATED FOR ANY FINDER’S FEE OR
COMMISSION IN CONNECTION WITH THIS TRANSACTION.  THE COMPANY AGREES TO INDEMNIFY
AND TO HOLD HARMLESS THE INVESTOR FROM ANY LIABILITY FOR ANY COMMISSION OR
COMPENSATION IN THE NATURE OF A FINDER’S FEE (AND THE COST AND EXPENSES OF
DEFENDING AGAINST SUCH LIABILITY OR ASSERTED LIABILITY) FOR WHICH THE INVESTOR
OR ANY OF ITS OFFICERS, PARTNERS, EMPLOYEES, OR REPRESENTATIVES IS RESPONSIBLE. 
THE INVESTOR AGREES TO INDEMNIFY AND HOLD HARMLESS THE COMPANY FROM ANY
LIABILITY FOR ANY COMMISSION OR COMPENSATION IN THE NATURE OF A FINDER’S FEE
(AND THE COSTS AND EXPENSES OF DEFENDING AGAINST SUCH LIABILITY OR ASSERTED
LIABILITY) FOR WHICH THE INVESTOR OR ANY OF ITS OFFICERS, EMPLOYEES, OR
REPRESENTATIVES IS RESPONSIBLE.

 

7.9          EXPENSES.  THE COMPANY SHALL BE RESPONSIBLE FOR ALL OF THE COSTS
AND EXPENSES IN CONNECTION WITH THE NEGOTIATION, EXECUTION, DELIVERY, AND
PERFORMANCE OF THIS AGREEMENT.

 

7.10        AMENDMENTS AND WAIVERS.  ANY TERM OF THIS AGREEMENT MAY BE AMENDED
AND THE OBSERVANCE OF ANY TERM OF THIS AGREEMENT MAY BE WAIVED (EITHER GENERALLY
OR IN A PARTICULAR INSTANCE AND EITHER RETROACTIVELY OR PROSPECTIVELY), ONLY
WITH THE WRITTEN CONSENT OF (A) THE COMPANY, AND (B) THE INVESTOR.  ANY
AMENDMENT OR WAIVER EFFECTED IN ACCORDANCE WITH THIS PARAGRAPH SHALL BE BINDING
UPON EACH HOLDER OF ANY SECURITIES PURCHASED UNDER THIS AGREEMENT AT THE TIME
OUTSTANDING, EACH FUTURE HOLDER OF ALL SUCH SECURITIES, AND THE COMPANY.  NO
DELAY OR FAILURE ON THE PART OF ANY PARTY HERETO IN EXERCISING ANY RIGHT, POWER
OR PRIVILEGE UNDER THIS AGREEMENT SHALL IMPAIR ANY SUCH RIGHT, POWER OR
PRIVILEGE OR BE CONSTRUED AS A WAIVER OF ANY DEFAULT OR ANY ACQUIESCENCE
THEREIN.  NO SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT, POWER OR PRIVILEGE
SHALL PRECLUDE THE FURTHER EXERCISE OF SUCH RIGHT, POWER OR PRIVILEGE, OR THE
EXERCISE OF ANY OTHER RIGHT, POWER OR PRIVILEGE.

 

7.11        SEVERABILITY.  IF ONE OR MORE PROVISIONS OF THIS AGREEMENT ARE HELD
TO BE UNENFORCEABLE UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE EXCLUDED FROM
THIS AGREEMENT AND THE BALANCE OF THE AGREEMENT SHALL BE INTERPRETED AS IF SUCH
PROVISION WERE SO EXCLUDED AND SHALL BE ENFORCEABLE IN ACCORDANCE WITH ITS
TERMS.

 

21

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7.12        FURTHER ASSURANCES.  THE PARTIES AGREE, FROM TIME TO TIME AND
WITHOUT FURTHER CONSIDERATION, TO EXECUTE AND DELIVER SUCH FURTHER DOCUMENTS AND
TAKE SUCH FURTHER ACTIONS AS REASONABLY MAY BE REQUIRED TO IMPLEMENT AND
EFFECTUATE THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT.

 

7.13        NO THIRD-PARTY BENEFICIARIES.  THIS AGREEMENT IS INTENDED TO INURE
TO THE BENEFIT OF THE PARTIES HERETO ONLY, AND NO OTHER PERSON SHALL HAVE ANY
RIGHTS, EXPRESS OR IMPLIED, BY REASON OF THIS AGREEMENT.

 

7.14        SPECIFIC PERFORMANCE.  THE RIGHTS OF THE PARTIES UNDER THIS
AGREEMENT ARE UNIQUE AND, ACCORDINGLY, THE PARTIES SHALL HAVE THE RIGHT, IN
ADDITION TO SUCH OTHER REMEDIES AS MAY BE AVAILABLE TO ANY OF THEM AT LAW OR IN
EQUITY, TO ENFORCE THEIR RIGHTS HEREUNDER BY ACTIONS FOR SPECIFIC PERFORMANCE IN
ADDITION TO ANY OTHER LEGAL OR EQUITABLE REMEDIES THEY MIGHT HAVE TO THE EXTENT
PERMITTED BY LAW.

 

22

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IN WITNESS WHEREOF, the parties have executed this Ordinary Shares Purchase
Agreement as of the date first above written.

 

 

 

COMPANY:

 

 

 

CHINA HR.COM HOLDINGS LTD.

 

 

 

 

 

By:

  /s/ Xu Xin

 

Name: (Kathy) Xu Xin

 

Title:   Chairperson of the Board

 

 

 

 

 

INVESTOR:

 

 

 

TMP WORLDWIDE LIMITED

 

 

 

 

 

By:

/s/ S.J. Cooney

 

Name: S.J. Cooney

 

Title:   Director

 

 

 

 

 

SHAREHOLDERS:

 

 

 

E-CAREER HOLDINGS LTD.

 

 

 

 

 

By:

/s/ Xu Xin

 

Name: (Kathy) Xu Xin

 

Title: Director

 

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

 

 

GOOD CONNECTION ENTERPRISES LIMITED

 

 

 

 

 

By:

/s/ Jiexian Zhang

 

Name: (James) Jiexian Zhang

 

Title: Director

 

 

 

 

 

MACINTOSH ASSOCIATES LIMITED

 

 

 

 

 

By:

  /s/ Wong Siu Kong

 

Name: Wong Siu Kong

 

Title: Director

 

 

 

 

 

SURBITON INVESTMENTS LTD.

 

 

 

 

 

By:

/s/ Adrian Fu Hau Chak

 

Name: Adrian Fu Hau Chak

 

Title: Director

 

 

 

 

 

FULL MOON RESOURCES LIMITED

 

 

 

 

 

By:

/s/ Leung Pak To

 

Name: (Francis) Leung Pak To

 

Title: Director

 

 

 

 

 

BEAUCHAMP INTERNATIONAL LIMITED

 

 

 

 

 

By:

/s/ Yip Shiu Kwong

 

Name: (James) Yip Shiu Kwong

 

Title: Director

 

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

 

SCHEDULE A

 

Shareholders

 

Name and Address of Shareholder

 

Number of Ordinary Shares Purchased at Closing

 

 

 

E-Career Holdings Ltd

 

6,480,279 Ordinary Shares

Huntlaw Building

 

 

P.O. Box 2908

 

 

George Town

 

 

Grand Cayman

 

 

Cayman Islands

 

 

 

 

 

Good Connection Enterprises Limited

 

3,471,577 Ordinary Shares

P.O. Box 957

 

 

Offshore Incorporations Centre

 

 

Road Town, Tortola

 

 

British Virgin Islands

 

 

 

 

 

Macintosh Associates Limited

 

373,770 Ordinary Shares

P.O. Box 957

 

 

Offshore Incorporations Centre

 

 

Road Town, Tortola

 

 

British Virgin Islands

 

 

 

 

 

Surbiton Investments Limited

 

3,459,616 Ordinary Shares

P.O. Box 71

 

 

Craigmuir Chambers

 

 

Road Town, Tortola

 

 

British Virgin Islands

 

 

 

 

 

Full Moon Resources Limited

 

1,916,693 Ordinary Shares

P.O. Box 957

 

 

Offshore Incorporations Centre

 

 

Road Town, Tortola

 

 

British Virgin Islands

 

 

 

 

 

Beauchamp International Limited

 

268,815 Ordinary Shares

P.O. Box 957

 

 

Offshore Incorporations Centre

 

 

Road Town, Tortola

 

 

British Virgin Islands

 

 

 

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Schedule of Exceptions of China HR.com Holdings Ltd.

 

                The Schedule of Exceptions to this Agreement have been omitted.
The omitted Schedule of Exceptions consists of:

 

Schedule 2.5

 

Capitalization and Voting Rights

 

 

 

Schedule 2.6

 

Valid Issuance of Shares

 

 

 

Schedule 2.7

 

Subsidiaries

 

 

 

Schedule 2.8

 

Contracts and Other Commitments

 

 

 

Schedule 2.9

 

Related-Party Transactions

 

 

 

Schedule 2.11

 

Permits

 

 

 

Schedule 2.13

 

Litigation

 

 

 

Schedule 2.17

 

Financial Information

 

 

 

Schedule 2.18

 

Changes

 

 

 

Schedule 2.19

 

Patents and Trademarks

 

 

 

Schedule 2.20

 

Employee; Employee Compensation

 

 

 

Schedule 2.21

 

Employee Confidentiality Agreements

 

 

 

Schedule 2.23

 

Taxes

 

 

 

Schedule 2.26

 

Customers

 

 

 

Schedule 2.29

 

Brokers

 

                The Schedule of Exceptions to this Agreement will be furnished
to the Securities and Exchange Commission supplementally upon request.

 

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