Exhibit 10.1

English Translation

Convertible Bond Subscription Agreement

Signed on July 16, 2014

MoboTap Inc. (“the Company”)

Glory Loop Limited (“the Investor”)

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

Convertible Bond Subscription Agreement

Contents

 

Detailed Information      4    General Provisions      6    1   Definitions and
Interpretations      6    1.1   Definitions      6    1.2   Interpretations     
6    1.3   Headlines      7    2   Subscription of Convertible Bonds      7   
2.1   Subscription of Convertible Bonds      7    2.2   Consideration      7   
3   Conditions Precedent      7    3.1   Conditions Precedent to the Investor’s
Closing      7    3.2   Conditions Precedent to the Company’s Closing      8   
3.3   Reasonably Best Efforts      9    4   Representations and Warranties     
9    4.1   The Company’s Representations and Warranties      9    4.2   The
Investor’s Representations and Warranties      10    5   Closing      11    5.1
  Closing Time and Place      11    5.2   The Company’s Obligations to the
Closing      11    5.3   The Investor’s Obligations to the Closing      11    6
  Termination      12    6.1   Termination of the Agreement      12    6.2  
Termination Effect      12    6.3   Surviving Clauses      12    7  
Confidentiality      12    7.1   Confidentiality Obligations      12    7.2  
Allowed Disclosure      12    8   Announcement      13    9   Notice and Other
Communications      13    9.1   Form – All Communications      13    9.2   Form
– E-mail Communications      14    9.3   Delivery      14    9.4   Change of
Communication Materials      14    9.5   Effective Delivery      14    10  
General Provisions      15   

 

   

Convertible Bond Subscription Agreement

 

    

 

ii

 

  

 

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

10.1   Severability      15    10.2   Complete Agreement      15    10.3  
Transfer      15    10.4   Discretion of Exercising Rights      15    10.5  
Failure to Exercise Rights or Failure to Promptly Exercise Rights      15   
10.6   Cumulative Relief      15    10.7   Alteration and Exemption      16   
10.8   Follow-up Actions      16    10.9   Explanations      16    10.10  
Language      16    10.11   Expenses      16    10.12   Duplicates      16    11
  Governing Law and Settlement of Disputes      16    11.1   Governing Law     
16    11.2   Settlement of Disputes      16    11.3   Appointment of Agent     
17    Appendix I - Definitions      19    Appendix II – Convertible Bonds and
Terms and Conditions      24    Signature Page      35   

 

   

Convertible Bond Subscription Agreement

 

    

 

iii

 

  

 

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

Convertible Bond Subscription Agreement

Detailed Information

The Convertible Bond Subscription Agreement (hereinafter referred to as the
“Agreement”) is made by and between the following parties:

 

The Company   Name   MoboTap Inc.   Company No.   CF254908   Place of
establishment   Cayman Islands   Address   P.O. Box 613 GT, 4th Floor Harbour
Centre, George Town, Grand Cayman KY1-1107, Cayman Islands   Fax  
027-87782005-8056   E-mail   tfliu@bainainfo.com   Attn.   Tiefeng Liu The
Investor   Name   Glory Loop Limited   Company No.   1829105   Place of
establishment   British Virgin Islands   Address   P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands   Fax   +86
010-6192 0961   E-mail   legal@cyou-inc.com   Attn.   Legal Department

The Company and the Investor are referred to as “both Parties” collectively and
“either Party” severally herein.

Whereas:

 

(A) The Investor and the existing shareholders of the Company signed an
investment agreement (the “Investment Agreement”) on July 16, 2014, under which
the Investor agrees to purchase from the existing shareholders and the existing
shareholder agree to sell 138,015,466 shares of all types of the Company in
total which such shareholders hold (including ordinary shares, Series A
preferred shares and Series A-1 preferred shares), accounting for about
fifty-one percents (51%) of issued share capital of the Company (the “Equity
Transaction”).

 

   

Convertible Bond Subscription Agreement

 

    

 

4

 

  

 

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

(B) According to the terms and conditions hereof and those about convertible
bonds, the Company agrees to issue and the Investor agrees to subscribe the
convertible bonds with the principal of US$30,000,000 (the “Convertible Bonds”).
After the full conversion of such Convertible Bonds, the Investor will hold 60%
of all of outstanding shares of the Company (on the basis of full dilution,
including the equity securities issued under any existing employee stock option
plan).

 

(C) The price of the Convertible Bonds will be mainly used for the promotion of
Dolphin Browser overseas and daily business operations of target companies,
subsidiaries or affiliated companies controlled by the Company.

Therefore, based on the aforesaid conditions, in consideration of both Parties’
covenants and undertakings hereunder and their agreements upon the constraint
force of the Agreement and being subject to the terms and consideration
hereunder, both Parties reach the following agreement:

 

   

Convertible Bond Subscription Agreement

 

    

 

5

 

  

 

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

Convertible Bond Subscription Agreement

General Provisions

 

1 Definitions and Interpretations

 

1.1 Definitions

For the purpose of the Agreement, unless the context otherwise requires, the
terms shall have the meanings ascribed to them in Appendix I.

 

1.2 Interpretations

For the purpose of the Agreement, unless the context otherwise requires,

 

  (a) Any reference to the Agreement includes the appendices or attachments
hereof.

 

  (b) Any reference to any document (including the Agreement) refers to the
document as revised, incorporated, supplemented, updated or replaced from time
to time.

 

  (c) Unless otherwise explicitly stated, any reference to any clauses,
appendices or attachments refers to the appropriate clauses in the body hereof,
appendices and attachments to the Agreement.

 

  (d) “Including”, “e.g.” or any similar term refers to “including but not
limited”.

 

  (e) Any reference to any party to the Agreement, any other agreements or
documents includes the said party’s successors or replacers (including the party
after replacement procedures) or permitted assignees.

 

  (f) Any reference to any “ordinances”, “laws” or “regulations” includes all
the ordinances, laws or regulations, all instruments and texts thereunder, as
well as all of them as revised, altered, incorporated, revised or replaced in
part or in whole.

 

  (g) Any reference to “writing” or “written” includes any readable and
non-temporary copied word modes, including e-mail and fax.

 

  (h) Any pronouns about gender or figure shall be deemed as having the
attribute of masculine, feminine, singular or plural according to contents.

 

  (i) Unless the context otherwise requires, any obligations or undertakings
fulfilled or made by more than one party hereunder shall be deemed as being
fulfilled or made by such parties jointly and severally.

 

   

Convertible Bond Subscription Agreement

 

    

 

6

 

  

 

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

  (j) Any time limit explicitly specified and/or the number of days calculated
from some date or the date of any known action or matter shall exclude the
current day when calculating the said time limit and/or the number of days.

 

  (k) A day shall start from 0:00 midnight and end 24 hours later; any reference
to time or date refers to Hong Kong time or date.

 

1.3 Headlines

The headline of each clause or sub-clause is set to facilitate reference only,
and does not impact the explanations or meanings of the Agreement.

 

2 Subscription of Convertible Bonds

 

2.1 Subscription of Convertible Bonds

Subject to the terms and conditions hereof, the Investor agrees to purchase from
the Company, and the Company agrees to issue and sell to the Investor the
Convertible Bonds with the principal of US&30,000,000 and attached with terms
and conditions.

 

2.2 Consideration

The Investment agrees to pay the Company the consideration for the Convertible
Bonds of US$30,000,000 (the “Consideration”).

 

3 Conditions Precedent

 

3.1 Conditions Precedent to the Investor’s Closing

The completion of closing obligations of the Investor according to Article 5
hereof shall be subject to the following conditions or the written exemption
issued by the Investor (in whole or in part, the said exemption may be subject
to the terms and conditions probably required by the Investor):

 

  (a) The Company has obtained all necessary internal approvals, including
resolutions passed by the board of directors and the board of shareholders, to
authorize and approve the conclusion of the Agreement and fulfilment of
obligations hereunder;

 

  (b) (If applicable) in terms of the Agreement and the transaction hereunder,
the Company has obtained all necessary authorizations, consents and approvals
from competent governmental agencies or relevant persons, and has properly
handled all archives and registrations necessary for the conclusion, delivery
and performance of the Agreement and met other formal requirements according to
appropriate ordinances or any agreement binding upon the Company or assets
thereof, so as to ensure that the Agreement and the transaction hereunder are
legitimate and effective and have legal force;

 

  (c) The representations and warranties made by the Company and specified in
Article 4 hereof shall be true, accurate, complete and exhaustive at the date
hereof and every day before closing, just as such representations and warranties
are just made at that time;

 

   

Convertible Bond Subscription Agreement

 

    

 

7

 

  

 

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

  (d) All documents specified in Article 5.2 hereof shall have been properly
delivered to the Investor;

 

  (e) The Company shall have fulfilled and followed all obligations and
conditions which are required hereunder to be fulfilled or followed at the time
of or before closing;

 

  (f) The written consents of the shareholders and all founders of the Company
have been obtained for the Agreement, the transaction contemplated hereunder as
well as the exemption of their rights relating to the execution and performance
of the Agreement under the shareholder agreement (including any anti-dilution
right or right of first refusal);

 

  (g) The company controlled by founders shall have signed a share pledge
agreement (the “Share Pledge Agreement”), to pledge the ordinary shares held by
it (the number thereof equals nine percents (9%) of outstanding shares of the
Company at that time, excluding Convertible Bonds issued hereunder) to the
Investor as the guarantee for the Company’s obligations under Convertible Bonds;

 

  (h) Founders have signed the individual warranty deed of founders; and

 

  (i) There are no court orders effective at that time or issued to prohibit the
transaction contemplated hereunder.

 

3.2 Conditions Precedent to the Company’s Closing

The completion of closing obligations of the Company according to Article 5
hereof shall be subject to the following conditions or the written exemption
issued by the Company (in whole or in part, the said exemption may be subject to
the terms and conditions probably required by the Company):

 

  (a) The Investor has obtained all necessary internal approvals, including
resolutions passed by the board of directors and the board of shareholders, to
authorize and approve the conclusion, delivery and performance of the Agreement
and other transaction documents;

 

  (b) (If applicable) in terms of the Agreement and the transaction hereunder,
the Investor has obtained all necessary authorizations, consents and approvals
from competent governmental agencies or relevant persons, and has properly
handled all archives and registrations necessary for the conclusion, delivery
and performance of the Agreement and met other formal requirements according to
appropriate ordinances or any agreement binding upon the Investor or assets
thereof, so as to ensure that the Agreement and the transaction hereunder are
legitimate and effective and have legal force;

 

  (c) The representations and warranties made by the Investor and specified in
Article 4 hereof shall be true and complete at the date hereof and at the time
of closing, just as such representations and warranties are just made at the
date of closing;

 

   

Convertible Bond Subscription Agreement

 

    

 

8

 

  

 

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

  (d) The Investor shall have fulfilled and followed all obligations and
conditions which are required hereunder to be fulfilled or followed at the time
of or before closing; and

 

  (e) There are no court orders effective at that time or issued to prohibit the
transaction contemplated hereunder.

 

3.3 Reasonably Best Efforts

According to the terms and conditions hereunder, either party hereto shall make
reasonably best efforts to take or cause any other entity to take all actions in
the most pragmatic way to conclude all further instruments and assist and
cooperate with the other party to complete all matters necessary for the
completion and validation of the transaction contemplated hereunder according to
applicable laws (both Parties understand that either Party is not obliged to
grant any or other exemptions because of this clause).

 

4 Representations and Warranties

 

4.1 The Company’s Representations and Warranties

The Company hereby makes the representations, warranties and undertakings to the
Investor that the following expressions are true and accurate and not misleading
in all aspects at the date hereof:

 

  (a) The Company was established and effectively subsists under laws of the
place of establishment thereof;

 

  (b) The Company has all rights to execute the Agreement, can exercise its
rights and fulfil its obligations hereunder, and has taken all corporate actions
to conclude and deliver the Agreement and fully fulfil its obligations and
complete the transaction contemplated hereunder;

 

  (c) After being formally authorized, executed and delivered by the Company,
the Agreement shall constitute an agreement effective for and bonding upon the
Company and be compulsorily enforceable for the Company according to clauses
hereof, but shall be subject to bankruptcy matters;

 

  (d) As for the execution, delivery and performance of the Agreement, the
Company does and will not (i) be required to obtain the consent or approval of
any competent governmental authority or any third party; (ii) violate any of the
following provisions in any material respect: (A) any applicable laws or
regulations or any order or decree of any governmental authority validating at
the date hereof, or (B) any constitutional document; or (C) any agreement to
which the Company is a party or which constraints the Company or any assets
thereof;

 

  (e) Convertible Bonds will obtain the legal authorization of the Company at
the time of issue, and will constitute direct, common, non-subordinated,
unconditional and unsecured debt repayment obligations of the Company at the
time of issue and delivery according to the Agreement and relevant terms and
conditions, and such obligations have the equal sequence of rights and interests
and do not have any privilege;

 

   

Convertible Bond Subscription Agreement

 

    

 

9

 

  

 

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

  (f) Converted shares will be ordinary shares with the consideration fully paid
at the time of issue and no taxes able to be levied, be allotted and issued
properly and legally, and have the equal sequence of rights and interests with
existing ordinary shares in all aspects. Save as otherwise stipulated by
applicable laws, converted shares shall not have any claim, mortgage, charge,
easement, encumbrance, lease, covenant, mortgage right, right of lien and pledge
at the time of issue; and

 

  (g) Other representations and warranties made by all warrantors (except
Forest, Matrix, Sequoia and Qualcomm) (as defined in the Investment Agreement)
specified in Appendix IV to the Investment Agreement. For the purpose of this
paragraph, such representations and warranties shall constitute a part hereof,
just as they are specified hereunder.

 

4.2 The Investor’s Representations and Warranties

The Investor hereby makes the representations, warranties and undertakings to
the Company that the following expressions are true and accurate and not
misleading in all aspects at the date hereof:

 

  (a) The Investor was established and effectively subsists under laws of the
place of establishment thereof;

 

  (b) The Investor has all rights to execute the Agreement, can exercise its
rights and fulfil its obligations hereunder, and has taken all corporate actions
to conclude and deliver the Agreement and fully fulfil its obligations and
complete the transaction contemplated hereunder;

 

  (c) After being formally authorized, executed and delivered by the Investor,
the Agreement shall constitute an agreement effective for and bonding upon the
Investor and be compulsorily enforceable for the Investor according to clauses
hereof, but shall be subject to bankruptcy matters;

 

  (d) As for the execution, delivery and performance of the Agreement, the
Investor does and will not (i) be required to obtain the consent or approval of
any competent governmental authority or any third party; (ii) violate any of the
following provisions in any material respect: (A) any applicable laws or
regulations or any order or decree of any governmental authority validating at
the date hereof, or (B) any constitutional document; or (C) any agreement to
which the Investor is a party or which constrains the Investor or any assets
thereof;

 

  (e) The Investor has enough funds to pay the Consideration necessary for the
subscription of Convertible Bonds in full.

 

   

Convertible Bond Subscription Agreement

 

    

 

10

 

  

 

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

5 Closing

 

5.1 Closing Time and Place

Closing shall be conducted in the form of virtual electronic closing within five
(5) business days after the closing of the Equity Transaction and all conditions
specified in Article 3 hereof being met or exempted from (as the case may be),
or be conducted according to other date, time, place and form agreed by both
Parties in writing, provided that all conditions specified in Article 3 hereof
are met or exempted from (as the case may be).

 

5.2 The Company’s Obligations to the Closing

At the time of or before closing, the Company shall deliver or cause other
persons to deliver the following documents to the Investor:

 

  (a) the copies of resolutions of the board of directors and shareholders of
the Company about matters such as approval of execution, performance and
delivery of the Agreement (including but not limited to the issue of the
Convertible Bonds); if any director signing the resolution of the board of
directors or any shareholder signing the resolution of shareholders is a
corporate body, then, the copies of the resolutions of the board of directors
and shareholders of the said corporate body which approve the execution,
performance and delivery of the Agreement and authorize the signature of the
resolution of the board of directors or shareholders of the Company;

 

  (b) (i) a certified copy of the Certificate of Incumbency issued by company
registration agency and (ii) a certified copy of the Certificate of Good
Standing issued by Cayman Company Registry at the closing date or three
(3) business days before;

 

  (c) an original of the Share Pledge Agreement concluded by the company
controlled by founders as well as other documents which shall be delivered
according to the said agreement;

 

  (d) an original of the certificate of Convertible Bonds attached with terms
and conditions;

 

  (e) a certified (i.e. singed by directors of the Company) copy of bonds
register issued by the Company and updated, which specifies that the Convertible
Bonds have been registered under the name of the Investor;

 

  (f) an original of the individual warranty deed signed by founders; and

 

  (g) an original of agency appointment letter issued by the Company according
to Article 11.3 hereof and properly signed by the agency to receive the said
appointment.

 

5.3 The Investor’s Obligations to the Closing

At the time of closing, the Investor shall (a) pay the Company the Consideration
to the designated bank account in US dollars and in the form of spot T/T two
(2) business days before the closing day, and the Investor shall provide the
Company with the certification of the T/T document; or (b) pay the Company in
any other form agreed by both Parties.

 

   

Convertible Bond Subscription Agreement

 

    

 

11

 

  

 

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

6 Termination

 

6.1 Termination of the Agreement

The Agreement and the transaction contemplated hereunder may be terminated or
waived by both Parties in the following circumstances:

 

  (a) Approved by the Company and the Investor in writing; or

 

  (b) If closing does not occur within 30 days after the date hereof or any
other date agreed by both Parties, the Agreement shall be terminated
automatically.

 

6.2 Termination Effect

Subject to Article 6.3 hereof, if the Agreement is terminated according to
Article 6.1 hereof or applicable laws, either party shall have no right to make
any claim against the other Party concerning expenses, damages, compensations or
other matters, except the claim made by the observant party against the
breaching party concerning the violation of any clause hereof before
termination.

 

6.3 Surviving Clauses

Articles 6 (Termination), 7 (Confidentiality), 8 (Announcement), 9 (Notice and
Other Communications), 10 (General Provisions) and 11 (Governing Law and
Settlement of Disputes) shall survive upon the termination of the Agreement.

 

7 Confidentiality

 

7.1 Confidentiality Obligations

The secrets, non-public or private information hereunder or relating to the
following matters obtained or acquired due to negotiation about and/or
conclusion of the Agreement (no matter how such information is stored and
delivered or both Parties exchange it in any way) are confidential information
(the “Confidential Information”). Either Party hereto shall strictly keep it
confidential, and shall not arbitrarily disclose or use it except in the
conditions set out in Article 7.2:

 

  (a) existence and clauses of the Agreement;

 

  (b) negotiation relating to the Agreement; and

 

  (c) business activities conducted by either Party to the Agreement, the said
Party or any related party thereof.

 

7.2 Allowed Disclosure

In spite of Article 7.1, either Party to the Agreement may disclose or use the
Confidential Information only in the following circumstances and scope:

 

  (a) The disclosure or use is required by any applicable laws, any rules of the
exchange on which shares of either Party are listed, or any governmental agency,
but the Party concerned shall notify the other Party of such requirement in time
so that the other Party has a change to raise an objection to such disclosure or
use, if any; or negotiate with the other Party about the time and contents of
such disclosure or use;

 

   

Convertible Bond Subscription Agreement

 

    

 

12

 

  

 

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

  (b) The disclosure or use is necessary because of any legal procedures arising
from the Agreement or any relevant agreement, or the disclosing Party discloses
tax matters thereof to the tax authorities;

 

  (c) Regarding the conclusion or performance of the Agreement or any
transaction hereunder, disclosure is made to the limited partner, shareholder,
manager, director, employee, lawyer, accountant, financial consultant and other
agent or representative (the “Representatives”) of either Party who need to know
the Confidential Information, provided that such Representatives shall be
subject to the constraints set out in Article 7 hereof in receiving such
information;

 

  (d) Such Confidential Information may be obtained through open channels
(except for the information disclosure incurred by the violation of
confidentiality agreement (if any) or the Agreement); or

 

  (e) The other Party approves the disclosure or use in writing in advance.

 

8 Announcement

Either Party agrees to negotiate with the other Party before any news is
released or any public statement is published with regard to the Agreement or
the transaction contemplated hereunder, and will not release any news or publish
any public statement before such negotiation, unless the release of any news or
publication of any public statement is required by any applicable laws or the
rules of the exchange on which shares of either Party are listed.

 

9 Notice and Other Communications

 

9.1 Form – All Communications

Save as otherwise explicitly stipulated hereunder, all notices, certifications,
approvals, exemptions and other communications (the “Communications”) relating
to the Agreement shall:

 

  (a) be executed in writing in Chinese or English;

 

  (b) be sent upon affixing of signature of sender (or authorized signatory
thereof); and

 

  (c) be marked with persons listed in Detailed Information, or be marked
according to the latest change notice, if the receiver has sent a change notice.

 

   

Convertible Bond Subscription Agreement

 

    

 

13

 

  

 

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

9.2 Form – E-mail Communications

 

  (a) E-mail communications do not need to meet the requirements in Article 9.1,
but shall conform to the following provisions:

 

  (i) Any e-mail shall be written in Chinese or English; and

 

  (ii) Any e-mail shall be marked with the full name of sender.

 

  (b) All e-mail communications shall be deemed as being signed by the sender at
the time of sending.

 

9.3 Delivery

All communications relating to the Agreement shall be delivered in any of the
following ways:

 

  (a) being sent to the address of the receiver listed in Detailed Information
by hand;

 

  (b) being posted to the address of the receiver listed in Detailed Information
by local ordinary mail or overseas air mail (if applicable) with postage
prepaid;

 

  (c) being faxed to the fax number of the receiver listed in Detailed
Information; or

 

  (d) being sent to the e-mail address of the receiver listed in Detailed
Information by e-mail.

 

9.4 Change of Communication Materials

If either Party needs to change communication materials thereof listed in the
Detailed Information, it may notify the other party of such a change in writing
according to Article 9. The said change notice shall take effect on next
business day after delivery or being deemed as having been delivered
effectively. Before the validation of such a change, the notice sent by the
other Party to the said Party according to the information before change shall
be legal and effective.

 

9.5 Effective Delivery

Unless otherwise specified, all communications relating to the Agreement shall
be deemed as being effectively delivered at the following time (whichever is the
later):

 

  (a) when the receiver receives such communications;

 

  (b) in any following circumstances:

 

  (i) if communications are sent by local ordinary mail, three (3) days after
being sent;

 

  (ii) if communications are sent by overseas air mail, three (7) days after
being sent;

 

   

Convertible Bond Subscription Agreement

 

    

 

14

 

  

 

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

  (iii) if communications are sent by fax, the time indicated on the sending
report after successful sending of an entire document; or

 

  (iv) if any communication is sent by e-mail and the sender does not receive
automatic information indicating that the e-mail is not sent to the designated
e-mail address, the time when the sender successfully sends the e-mail;
otherwise, the time when the receiver receives the e-mail.

 

10 General Provisions

 

10.1 Severability

If any clause hereof is identified as ineffective, illegal or enforceable in
whole or in part within a jurisdiction to some extent, the said part shall be
deemed as severable from the other part. The remaining clauses hereof shall be
valid and effective fully, and the effectiveness or enforceability of the said
part shall not be impacted within any other jurisdiction. Any non-effective,
enforceable or illegal clause hereof shall be deemed as being replaced by
another effective and enforceable clause, and the said clause shall have the
effectiveness the closest to the original meaning of the replaced clause. The
severability in this clause will not be effective, if it affects the nature of
the Agreement or violates public policies.

 

10.2 Complete Agreement

The Agreement constitutes an entire agreement between both Parties about the
subject matter hereof, and replaces all prior written or oral understandings or
agreements about the said matter.

 

10.3 Transfer

The Agreement shall be binding upon and enforceable for both Parties, successors
and permitted assignees thereof. Save as otherwise approved by the other Party
in writing in advance, either Party hereto shall not transfer any of its rights
or obligations hereunder, but the Investor shall have the right to transfer all
or part of its rights hereunder to any affiliated party, without the consent of
the other Party.

 

10.4 Discretion of Exercising Rights

Save as otherwise stipulated hereunder, either Party hereto may exercise its
rights, claim reliefs, give a consent or refuse to give a consent in any way it
deems appropriate (including imposing conditions).

 

10.5 Failure to Exercise Rights or Failure to Promptly Exercise Rights

Save as otherwise stipulated hereunder, either Party’s partial exercise, failure
to exercise or delay in exercising rights or reliefs conferred by the Agreement
or any applicable laws shall not be deemed as the said Party’s exemption from
such such rights or reliefs, or prevent or restrict the further exercise of such
or other rights or reliefs according to the Agreement.

 

10.6 Cumulative Relief

The rights and reliefs conferred hereunder are those in addition to other rights
and reliefs conferred by laws, and can be exercised independently.

 

   

Convertible Bond Subscription Agreement

 

    

 

15

 

  

 

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

10.7 Alteration and Exemption

Save as otherwise allowed hereunder, written documents about the amendment,
change, waiver, cancellation or termination of the Agreement and clauses hereof
shall be signed by both Parties. Clauses hereof or rights hereunder can be only
exempted from by beneficiary in writing.

 

10.8 Follow-up Actions

Either Party agrees (and agrees to cause others) to conduct further action or
behaviour (including obtaining consents, signing or concluding any agreement,
certificate and instrument, completing and signing any other instrument or
document, as well as archiving or filing any document at any competent
governmental authority) upon reasonably request by the other Party for the
following purposes:

 

  (a) so that the said Party and other relevant persons are bound by the
Agreement;

 

  (b) so that the Agreement becomes legal, valid and legally binding; or

 

  (c) in order to perform the Agreement, complete the subject matter hereunder
and the transaction contemplated hereunder.

 

10.9 Explanations

All explanation rules unfavourable to either Party for the rules are drafted by
the said Party and depend on all or part of the Agreement shall not be
applicable to the Agreement.

 

10.10 Language

The Agreement is executed in Chinese.

 

10.11 Expenses

The Company and the Investor shall undertake respective expenses and
expenditures.

 

10.12 Duplicates

Both Parties may sign one or more duplicates of the Agreement, and all signed
duplicates shall constitute an entire instrument with legal force.

 

11 Governing Laws and Settlement of Disputes

 

11.1 Governing Laws

The Agreement shall be governed and interpreted by Hong Kong laws, except
provisions about conflict of laws.

 

11.2 Settlement of Disputes

 

  (a) Any disputes incurred by or relating to the Agreement, including disputes
about its conclusion, validity or termination (the “Disputes”) shall be settled
through arbitration after either Party sends an arbitration notice (the
“Arbitration Notice”) to the other Party.

 

   

Convertible Bond Subscription Agreement

 

    

 

16

 

  

 

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

  (b) The Disputes shall be awarded by Hong Kong International Arbitration
Center (the “HKIAC”) at Hong Kong in accordance with Hong Kong International
Arbitration Center Administered Arbitration Rules (the “Rules”) valid at the
time of sending the arbitration notice. The number of arbitrators shall be three
(3), with one designated by the Company, one by the Investor, and one jointly by
the arbitrators designated by both Parties. Both Parties shall respectively
designate arbitrators within in fifteen (15) days after sending the arbitration
notice, otherwise such arbitrators will be designated by the chairman of the
HKIAC. If designated arbitrators do not designate the third arbitrator within
fifteen (15) days after the second arbitrator is designated, the third
arbitrator shall be designated by the chairman of the HKIAC and have legal
practicing qualifications in Hong Kong.

 

  (c) Arbitration procedures shall be conducted in English. If the Rules run
counter to any clause of Article 11.2, including the clause about designation of
arbitrators, the said clause of Article 11.2 shall prevail.

 

  (d) Either party of arbitration procedures shall cooperate with the other
party, and fully disclose and provide materials and documents relating to the
said arbitration procedures upon request by the other Party, unless the said
party undertakes binding confidentiality obligations.

 

  (e) The award of the arbitral tribunal shall be final and binding upon both
Parties, and the dominant party may apply to the court with jurisdiction to
execute the said award.

 

  (f) The arbitral tribunal shall award the dispute submitted by either Party
for arbitration in strict accordance with the substantive laws of Hong Kong
(except the rules of conflict of laws), and shall not apply any other
substantive laws.

 

  (g) If possible, before the constitution of the arbitral tribunal, either
Party of the dispute shall have the right to seek preliminary compulsory relief
from the court with jurisdiction.

 

  (h) In the course of the arbitral tribunal making an award for a dispute, both
Parties shall continually perform the Agreement, except the disputable part
under arbitration.

 

11.3 Appointment of Agent

 

  (a) The Investor irrevocably appoints Changyou.com HK Limited, of Room D,
26/F, Legend Tower, 7 Shing Yip St., Kwun Tong, Hong Kong, as its agent
receiving legal procedure documents or arbitration documents (the “Agent”) to
receive all legal procedure documents or arbitration documents relating to the
Agreement on behalf of the Investor.

 

  (b) If the Agent cannot continually work as the Agent of the Investor for any
reason, the Investor shall appoint any other person in Hong Kong for
substitution, and notify the Company of such a change in time.

 

   

Convertible Bond Subscription Agreement

 

    

 

17

 

  

 

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

  (c) The Investor agrees that any legal procedure documents or arbitration
documents properly delivered by the Agent are deemed as having been delivered to
the Investor fully and properly.

 

  (d) The Company irrevocably appoints Changyou.com HK Limited, with the company
No. 1596431 and of Room C, 21/F, CMA Building, No. 64 Connaught Road, Central,
Hong Kong, as its agent receiving legal procedure documents or arbitration
documents (the “Agent”) to receive all legal procedure documents or arbitration
documents relating to the Agreement on behalf of the Company.

 

  (e) If the Agent cannot continually work as the Agent of the Company for any
reason, the Company shall appoint any other person in Hong Kong for
substitution, and notify the Investor of such a change in time.

 

  (f) The Company agrees that any legal procedure documents or arbitration
documents properly delivered by the Agent are deemed as having been delivered to
the Company fully and properly.

 

   

Convertible Bond Subscription Agreement

 

    

 

18

 

  

 

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

Appendix I - Definitions

 

Term

  

Definition

Series A preferred shares    refer to Series A preferred shares of the Company,
with the book value of US$0.0001, and attached with rights and privileges
specified in the constitutional documents of the Company. Series A-1 preferred
shares    refer to Series A-1 preferred shares of the Company, with the book
value of US$0.0001, and attached with rights and privileges specified in the
constitutional documents of the Company. The Agreement    has the meaning
ascribed to it in the “Detailed Information” part of the Agreement. Founders   
refer to Yongzhi Yang, Tiefeng Liu, Na Zeng, Zhou Yu and Sen Li. Individual
warranty deed of founders    refers to the warranty deed signed by founders
about obligations of founders, Baina and all group companies for the transaction
contemplated under the warranty investment agreement as well as the obligations
about convertible bonds to be fulfilled by a Cayman company. Company controlled
by founders    Baina Inc., a company with limited liability established in
accordance with laws of the British Virgin Islands, with its registered address
at Coastal Building, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola,
British Virgin Islands. Representatives    have the meaning ascribed to them in
Article 7.2 (c) of the Agreement. Agent    has the meaning ascribed to it in
Article 11.3 (a) of the Agreement. Consideration    has the meaning ascribed to
it in Article 2.2 of the Agreement. Both Parties or either Party    have/has the
meaning ascribed to them or it in the “Detailed Information” part of the
Agreement. Company    has the meaning ascribed to it in the “Detailed
Information” part of the Agreement. Share pledge agreement    has the meaning
ascribed to it in Article 3.1 (g) of the Agreement. Equity transaction    has
the meaning ascribed to them in Paragraph (A) of recitals of the Agreement.
Confidential information    has the meaning ascribed to it in Article 7.1
hereof.

 

   

Convertible Bond Subscription Agreement

 

    

 

19

 

  

 

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

Group companies    refer to the Company and any wholly-owned or non-wholly-owned
subsidiaries (having the definition ascribed to them in the Companies Ordinance
(Chapter 622, Laws of Hong Kong) (for the avoidance of any doubt, including all
companies in China, Hong Kong subsidiaries, the US subsidiary and Japanese
subsidiary), and the “Group” refers to the collective reference of all group
companies. Closing    refers to the completion of the transaction contemplated
hereunder according to Article 5 of the Agreement. Closing date    refers to the
current day of closing. Convertible bonds    have the meaning ascribed to them
in Paragraph (B) of the “Detailed Information” part of the Agreement. The US   
refers to the United States of America. US subsidiaries    MoboTap Inc., a
company with limited liability established in accordance with Delaware laws of
the US, with the registration No. 4858587 and its address at Delaware
Corporations LLC, 800 Delaware Ave., the City of Wilmington, County of New
Castle, Delaware 19801. Bankruptcy matter    refers to the occurrence of any of
the following circumstances: (a) the Company or any group company institutes any
lawsuit, legal proceedings or other legal act: (i) to seek an award about
insolvency or bankruptcy, or seek any relief order or other order about
approving any relevant case or legal procedures according to any current
prevailing or future laws about bankruptcy, restructuring, arrangement, debt
adjustment, debt relief, dissolution, insolvency or liquidation within any
jurisdiction; or (ii) to appoint any custodian or similar person for its
properties or major properties, and the appointment is not cancelled or delayed
within sixty (60) days later; (b) there is any lawsuit or legal procedures
instituted against the Company or any group company: (i) resulting in any relief
order, or any award or appointment; or (ii) which is not cancelled within sixty
(60) days after start; (c) the Company or any group company (i) transfers all
properties for the interests of creditor; (ii) holds meetings with the creditor
to negotiate about the reorganization, adjustment or restructuring of debts; or
(iii) explicitly expresses its consent, approval or acquiescence of any of the
aforesaid matters through action or inaction, or conducts any corporate or other
action in order to make any of the aforesaid matters occur. Ordinary shares   
refer to ordinary shares of the Company, with the book value of US$0.0001, and
attached with rights and privileges specified in the constitutional documents of
the Company. Person    refers to any individual, or company, partner, limited
partner, wholly owned enterprise, business, property, trust, corporate or
incorporated body, joint venture enterprise, company with limited liability,
joint stock company, government (or the agent or branch thereof) or the entity
of any other type.

 

   

Convertible Bond Subscription Agreement

 

    

 

20

 

  

 

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

Japan    refers to Japan. Japanese subsidiary    refers to Dolphin Browser Inc.,
a company with limited liability established according to Japanese laws, with
its registration No. 011001091188 and address at 4-3-17, Toranomon, Shinjuku,
Tokyo Shinjuku. Applicable laws    refer to, for the purpose of any person, any
constitution, laws, regulations, ordinances, rules, the rule of law, by-laws,
approvals, orders, decrees, awards, guidelines, policies, requirements or other
governmental restrictions applicable to the said person, or any subsidiary or
assets thereof, or the similar binding formulations, decisions, identifications
or interpretations made by any governmental agencies for the aforesaid matters
effective at the execution date of the Agreement or thereafter. Communications
   have the meaning ascribed to them in Article 9.1 hereof.

Investment

agreement

   has the meaning ascribed to them in Paragraph (A) of recitals of the
Agreement. Investor    has the meaning ascribed to it in the “Detailed
Information” part of the Agreement. Shareholder agreement    refers to the
revised and restated shareholder agreement concluded according to the Investment
Agreement by and between the company controlled by founders, the Investor, the
Company, MoboTap Inc. Limited, Muse Entertainment Limited, MoboTap Inc., Baina
Zhiyuan (Beijing) Technology Co., Ltd., Baina Zhiyuan (Chengdu) Technology Co.,
Ltd., Beijing Baina Information Technology Co., Ltd., Baina (Wuhan) Information
Technology Co., Ltd. and all founders. Hong Kong    refers to Hong Kong Special
Administrative Region of the People’s Republic of China. Hong Kong subsidiaries
   refer to the following companies:    (a)    MoboTap Inc. Limited, a company
with limited liability (invested or controlled by a natural person) established
under the laws of Hong Kong, with its registration of 420100000199726 and
address at 3/F, Building A2, Phase 1 of Financial Harbor, No.77 Optical Valley
Avenue, East Lake High-tech Development Zone, Wuhan;    (b)    Dstore Technology
Limited, a company established under the laws of Hong Kong, with its
registration No. 2017908 and address at Flat E5, 9/F, Blk E, Wah Lok Industrial
Centre (Phase II), Nos. 31-35, Shan Mei Street, Fo Tan, Shatin, NT, Hong Kong;
and    (c)    Muses Entertainment Limited, a company with limited liability
established under the laws of Hong Kong, with its registration No. of 1756288
and address at Flat 2, 19, Henan Building, 90-92 Jaffe Road, Wanchai, Hong Kong.

 

   

Convertible Bond Subscription Agreement

 

    

 

21

 

  

 

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

HKIAC    has the meaning ascribed to them in Article 11.2 (b) of the Agreement.
Terms and conditions    refer to the terms and conditions of issue of
convertible bonds specified in Appendix II below. USD or dollar    refers to the
legitimate currency of the US. Converted shares    refer to shares converted
into ordinary shares according to terms and conditions and issued to the
Investor. Business day    refers to any calendar day other than Saturday, Sunday
or any statutory holiday of China, British Virgin Islands and Hong Kong.
Constitutional documents    refer to, for the purpose of any corporate body, its
memorandum and articles of association, or other similar organizational and
governing documents. Dispute    has the meaning ascribed to them in Article 11.2
(a) of the Agreement. Bonds register    refers to the register kept by the
Company according to terms and conditions in its registration office to record
the registration and transfer of convertible bonds. Arbitration rules    have
the meaning ascribed to them in Article 11.2 (b) of the Agreement. China   
refers to the People’s Republic of China, excluding Hong Kong Special
Administrative Region, Macau Special Administrative Region and Taiwan only for
the purpose of the Agreement. Companies in China    refer to the following
companies:    (a)   Baina Zhiyuan (Beijing) Technology Co., Ltd., a company with
limited liability (solely funded by Hong Kong, Macau or Taiwan legal person)
established under the laws of China, with its registration No. 110000450183446
and address at South 2-1-6, Block A, # 1 Plant, No.5 A Xueyuan Road, Haidian
District, Beijing;    (b)   Baina Zhiyuan (Chengdu) Technology Co., Ltd., a
company with limited liability (solely funded by Hong Kong, Macau or Taiwan
legal person) established under the laws of China, with its registration
No. 510100400043032 and address at Rooms 102-112, 1/F, Building No.1, Zone A,
Tianfu Software Park, No. 765 Middle Tianfu Avenue, Chengdu Hi-tech Zone,
Sichuan;    (c)   Beijing Baina Information Technology Co., Ltd., a company with
limited liability (invested or controlled by a natural person) established under
the laws of China, with its registration No. 110108012702434 and address at
South 2-1-7, Block A, # 1 Plant, No.5 A Xueyuan Road, Haidian District, Beijing;

 

   

Convertible Bond Subscription Agreement

 

    

 

22

 

  

 

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

   (d)   Baina (Wuhan) Information Technology Co., Ltd., a company with limited
liability (invested or controlled by a natural person) established under the
laws of China, with its registration No. 420100000199726 and address at 3/F,
Building A2, Phase 1 of Financial Harbor, No.77 Optical Valley Avenue, East Lake
High-tech Development Zone, Wuhan;    (e)   Wuhan Xingyu Science and Technology
Co., Ltd. (Company Registration No. 420100000376093), whose registered address
is located at Room 2, 5/F, Building 1, Phase 3 Guannan Fuxing Medicine Park,
No.58 Optical Valley Avenue, East Lake High-tech Development Zone, Wuhan;    (f)
  Chengdu Xingyu Science and Technology Co., Ltd. (Company Registration No.
510109000353845), whose registered address is located at No.39, 6/F, Unit 2,
Building 1, No.222 Tianren Road, Hi-tech Zone, Chengdu;    (g)   Wuhan Hualian
Chuangke Science and Technology Co., Ltd. (Company Registration
No. 40100000123236), whose registered address is located at Room 401, Block A, 3
# Building, SBI Venture Street, Dongxin Road, East Lake High-tech Development
Zone, Wuhan;    (h)   Beijing Anzhuoxing Science and Technology Co., Ltd.
(Company Registration No. 110108010360883), whose registered address is located
at Room 4037, Huaqingyuan Hotel 1A, 1B and 1C, Building 13, Huaqingjia Park,
Dongsheng Zone, Wudaokou, Haidian District, Beijing; and    (i)   Shanghai
Andepurui Network Science and Technology Co., Ltd. (Company Registration No.
310115002064099), whose registered address is located at Room 112, Building 2,
No.700 Shangfeng Road, Pudong New Area, Shanghai.

 

   

Convertible Bond Subscription Agreement

 

    

 

23

 

  

 

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

Appendix II – Convertible Bonds and Terms and Conditions

No.:                 

MOBOTAP INC.

(A company with limited liability established under the laws of Cayman Islands)

Initial bond issue date:                 

Initial conversion price (subject to the adjustment hereunder): US$0.4926984 per
share

Zero-coupon convertible bonds totalling US$30,000,000 and maturing on
                    , 2019

The redeemable convertible bonds (the “Bonds”) are one type of a series of
redeemable convertible bonds formally authorized and legally issued by MoboTap
Inc. MoboTap Inc. is a company established in Cayman Islands, with its
registered office at P.O. Box 613 GT, 4th Floor Harbour Centre, George Town,
Grand Cayman KY1-1107, Cayman Islands (the “Company”). The Bonds are
interest-coupon (0%) convertible bonds and mature at the fifth (5th) anniversary
after the initial bond issue date (the Bonds and other convertible bonds of the
said series are referred to as the “Convertible Bonds” collectively).

For value received, the Company undertakes that it will pay or have been paid
the principal of US$30,000,000 specified hereunder to the holder of the Bonds or
allowed assignee thereof (the “Holder”) to redeem the Bonds at the fifth
(5th) anniversary after the initial bond issue date or the date of advance
repayment of the Bonds required or allowed hereunder (the “Maturity Date” ). The
Bonds shall be subject to the following supplementary provisions:

 

1 Definitions

For this purpose, save as otherwise agreed by the Bonds, (a) the meanings of
terms used for the Bonds are the same as those of terms used in the Subscription
Agreement; and (b) the following terms have the following meanings:

Holder has the meaning ascribed to it in the second paragraph hereof.

Initial bond issue date refers to the first date of issue of bonds, in spite of
any transfer of any bonds and the number of instruments which may be issued to
certify the said bonds.

Initial conversion price refers to the initial conversion price used at the
initial bond issue date, i.e. US$0.4926984 per ordinary share, in spite of any
future adjustment made according to Article 5.

Warranty document refers to share pledge agreement.

Maturity Date has the meaning ascribed to them in the second paragraph hereof.

 

   

Convertible Bond Subscription Agreement

 

    

 

24

 

  

 

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

Corporate securities refer to ordinary shares and shares into which other types
of securities may be reclassified or converted later.

Corporate security equivalents are the collective reference of options and
convertible securities.

Share delivery date has the meaning ascribed to it in Article 4.4 (b) hereof.

Key personnel refer to Yongzhi Yang, Tiefeng Liu, Zhou Yu, Sen Li, Huazhen Tan,
Yan Yu, Hongliang Li, Jitang Hu and Chaodong Wu.

Convertible securities refer to any shares and securities which may be
converted, exercise or exchanged into any corporate securities, except options.

Convertible Bonds have the meaning ascribed to them in the first paragraph
hereof.

Transaction documents refer to all documents relating to the subject
transactions of the Agreement or the investment agreement, including but not
limited to the Agreement, investment agreement, shareholder agreement (as
defined in the investment agreement), share pledge agreement and individual
warranty of founders (as defined in the investment agreement).

Options refer to any rights, warrants or options used to subscribe or purchase
any securities or convertible securities of the Company.

Subscription agreement refers to the convertible bond subscription agreement
signed by and between the Company and the investor on [*] [*], 2014, including
the amendment, alteration or supplementation to it from time to time.

Initial public offering refers to the initial public offering on any recognized
securities exchange (including but not limited to New York Stock Exchange, the
Stock Exchange of China and London Stock Exchange) according to applicable laws
and the listing rules of recognized securities exchange.

Event of default has the meaning ascribed to it in Article 8.1 hereof.

Reserved shares refer to the ordinary shares reserved by the Company for
employee stock option plan.

Employee stock option plan refers to the employee stock option plan adopted on
December 28, 2011 as well as the US appendix adopted on May 4, 2013.

Bonds have the meaning ascribed to them in the first paragraph hereof.

Conversion price has the meaning ascribed to it in Article 4.3 hereof.

Conversion date has the meaning ascribed to it in Article 4.1 (b) of the Bonds.

Notice of conversion has the meaning ascribed to it in Article 4.1 (b) of the
Bonds.

 

2 Interest

 

2.1 No interest

The Bonds are zero-coupon bonds subject to the conditions set out in Article 8.2
hereof and are not attached with rights of payment of interests.

 

   

Convertible Bond Subscription Agreement

 

    

 

25

 

  

 

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

3 Registration, Transfer and Replacement of the Bonds

 

3.1 Bonds register

 

  (a) The Company shall keep bonds register in its registration office, i.e. the
register used by the Company to record the registration and transfer of the
Bonds, and record the name and address of Holder and each approved assignee.
Holder shall notify the Company of any change in the name or address, if any,
and the Company shall promptly record the said information into the bonds
register after receiving the said notice.

 

  (b) The Bonds are registered bonds. Save as otherwise stipulated by applicable
laws, registered Holders shall be absolute owners of the Bonds for all purposes
(no matter whether the Bonds are outstanding or there is any notice about
ownership, trust arrangement or other rights, or any notice about any mark
(except the countersign for transfer) on the physical bonds) or the loss or
theft of the Bonds), and nobody needs to bear any legal liability for the
identification of the said Holder as actual owners.

 

3.2 Transfer

 

  (a) Holder may transfer the Bonds at its discretion at any time.

 

  (b) The transfer completed as per the following procedures shall come into
effect immediately: (i) properly filling in transfer instrument; (ii) submitting
the originals of the transfer instrument and physical bonds to the office of the
Company at the registered address; and (iii) paying all amounts payable for the
transfer (including but not limited to relevant taxes or charges levied by
competent governmental authorities).

 

  (c) The Company shall post or register the mail (with postage prepaid) of new
bonds (originals of physical bonds) within five (5) business days after
receiving the transfer instrument, or prepare the originals of physical bonds at
the office at the registered address for the demand of new holder.

 

3.3 Replacement

If any Bonds are lost, stolen, damaged, stained or destroyed, the Holder may
replace them at the office of the Company at the registered address subject to
the requirements of all applicable laws, and the Holder shall pay for all rights
relating to the replacement of the Bonds, and provide evidences, guarantee,
indemnity or other things for the replacement as reasonably required by the
Company. Destroyed and stained bonds shall be returned to the Company at the
replacement of the Bonds.

 

   

Convertible Bond Subscription Agreement

 

    

 

26

 

  

 

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

4 Conversion

 

4.1 Freewill offering

 

  (a) At any time from the initial bond issue date to the time of complete
payment of the Bonds, the Holder may choose to convert all or part of
outstanding principal of the Bonds into ordinary shares.

 

  (b) The Holder shall convert the Bonds by sending a conversion notice to the
Company, and definitely specify the principal of the Bonds to be converted as
well as the validation date of the conversion (the “Conversion Date”). The form
of the said notice is recorded in Annex A (the “Notice of Conversion”). If the
Notice of Conversion does not definitely specify the Conversion Date, the
Conversion Date shall be the date when the Notice of Conversion is deemed as
having been delivered.

 

  (c) After receiving the Notice of Conversion, the Company shall promptly
notify the Holder of the number of converted shares to be issued to the Holder
according to the Notice of Conversion by phone and fax.

 

  (d) In order to validate the conversion, the Holder shall not be required to
actually hand over the originals of the Bonds to the Company, unless all the
principal of the Bonds has been converted. According to this provision, the
effect of the provision is reducing the outstanding principal of the Bonds by
applicable conversion amount. The Holder and the Company shall make a record of
the converted principal of the Bonds as well as the Conversion Date.

 

  (e) Once receiving the Bonds, the Holder and any assignee thereof recognize
and agree that due to the conditions in Article 4.1, the outstanding and
unconverted principal may be less than the marked par value of the Bonds after
partial transfer of the Bonds.

 

4.2 Automatic transfer

Although there is any provision hereunder, at the date of initial public
offering, the outstanding principal of the Bonds shall be deemed as being
automatically converted into ordinary shares at an applicable conversion price.
When automatic conversion occurs, any conversion right conferred in Article 4
shall cease. For the purpose of automatic conversion, the Conversion Date shall
be the date of automatic conversion.

 

4.3 Conversion price

Subject to the adjustment specified in Article 5, conversion price shall be as
the same as the initial conversion price (the “Conversion Price”).

 

4.4 Conversion procedures

 

  (a) The number of ordinary shares to be issued at the time of conversion
depends on a quotient, which is obtained by dividing (i) the outstanding
principal to be converted of the Bonds by (ii) currently effective Conversion
Price.

 

   

Convertible Bond Subscription Agreement

 

    

 

27

 

  

 

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

  (b) Within five (5) working days after each Conversion Date (the “Delivery
Date of Shares”), the Company shall hand over or cause others hand over one or
more certificates of converted shares to the Holder, which shall specify the
number of ordinary shares obtained by the conversion of the Bonds.

 

  (c) The Company undertakes that the aforesaid issued ordinary shares are
officially authorized, effective issued and fully paid and are not taxed at the
time of issue.

 

  (d) At the time conversion hereunder, the Company does not need to issue the
share certificates showing the number of ordinary shares. If the number of
ordinary shares finally calculated is not an integer, the Company shall increase
or lower the said number to the closest integer of ordinary shares (when the
decimal is 0.5 or above, the Company shall increase the number; otherwise, the
Company shall lower the number).

 

  (e) For the share certificates issued to the conversion of the Bonds into
ordinary shares, the Holder shall not be charged of any possible documentary
stamp taxes or similar taxes at the time of issue or delivery of such share
certificates, provided that the Company does not need to pay any taxes probably
payable for the transfer involved in the issue or delivery of such certificates
at the time of conversion, and the Company does not need to issue or deliver
such share certificates, unless and until the Company requires that the person
with the certificates issued has paid the said taxes to the Company or has
submitted a certification (satisfactory to the Company) to the Company that the
taxes have been paid.

 

  (f) When (i) all the principal of the Bonds has been paid off and received, or
(ii) all the Bonds have been converted according to clauses hereunder, all
rights under the Bonds shall be terminated.

 

5 Adjustment

 

5.1 Adjustment

The initial conversion price shall be adjusted according to the following items:

 

  (a) Dividends and share split

When the Bonds are outstanding at any time, if the Company: (i) pays dividends
by securities or security equivalents of the Company or distributes dividends in
any way (for the avoidance of any doubt, any ordinary shares issued by the
Company for the conversion of the Bonds and the reserved shares distributed
under the employee stock option plan shall be excluded); (ii) splits the
outstanding securities of the Company in order to increase the number of shares;
or (iii) incorporates outstanding securities of the Company (including the form
reverse to share split) to decrease the number of shares, the Conversion Price
shall be multiplied by a fraction, whose numerator is the number of outstanding
securities of the Company immediate before the occurrence of the matter
(excluding treasury shares but including reserved shares of the Company), and
denominator is the number of outstanding securities of the Company immediate
after the occurrence of the matter (including reserved shares). Any adjustment
made according to the aforesaid conditions shall come into effect immediately
after the record date of deciding the shareholders having rights to obtain
dividends or allocations, and for the purpose of share split, incorporation or
reclassification, shall come into effect immediate after such matters come into
effect.

 

   

Convertible Bond Subscription Agreement

 

    

 

28

 

  

 

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

  (b) Distribution of dividends in cash or allocations

When the Bonds are outstanding, if the Company distributes dividends or conducts
allocations for the holders of the securities of the Company in cash only, the
Conversion Price shall be decreased accordingly, the decreased amount shall be
obtained by multiplying the Conversion Price effective at the record date of
deciding the shareholders having rights to obtain the dividends or allocations
by a fraction, whose (i) numerator is the Conversion Price effective at the said
record date minus the cash amount to be distributed per security of the Company;
and (ii) denominator is the Conversion Price effective at the said record date.

 

  (c) Adjustment to other dividends or allocations

If the Company distributes dividends or conducts other allocations (excluding
reserved shares distributed under the employee stock option plan) by allotting
securities other than the securities of the Company at any time or from time to
time (or setting a fixed record date of deciding the Holder of securities of the
Company having rights to obtain dividends or allocations), the Company shall
make a reserve, so that when converting any Convertible Bonds, the Holder may
obtain a certain number of such other securities, except the ordinary shares to
be allotted, just as the Holder converts the Convertible Bonds into ordinary
shares immediately before the allotment of such other securities, which shall be
subject to any other adjustment hereunder.

 

  (d) Waiver

If the Company sets a record date of deciding the shareholders having rights to
obtain dividends or allocations of the securities or any security equivalents of
the Company according to conditions specified in Items (a), (b) and (c) of
Article 5.1, and thereafter and before distributing the securities or any
security equivalents of the Company to the Holder, legally waives the plan of
payment or delivery of dividends or allocations, the Conversion Price shall not
be adjusted for the reason of setting the said record date.

 

  (e) Exceptions

In spite of other provisions, the Conversion Price shall not be adjusted for the
following items:

 

  (i) the securities or security equivalents of the Company issued to the key
employees, consultants, personnel or directors of any group companies under the
employee stock option plan; or

 

   

Convertible Bond Subscription Agreement

 

    

 

29

 

  

 

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

  (ii) the amounts paid by the Company under the Bonds.

 

5.2 Calculation

All calculation results under Article 5 shall be recorded to the closest one
(1) cent or 0.001 (as the case may be). For the purpose of Article 5, the number
of securities of the Company issued and outstanding at a special date shall be
the total of securities of the Company of different types or classes issued and
outstanding (including any treasury shares but including reserved shares of the
Company).

 

5.3 Notifying the Holder

When the Conversion Price shall be adjusted according to any provision of
Article 5, the Company shall promptly send a notice to each Holder, specifying
the Conversion Price after adjustment and a brief description of facts about
necessity of the said adjustment.

 

6 Redemption

During the period when the Convertible Bonds are outstanding, the Company shall
not redeem any of the Convertible Bonds in advance.

 

7 Status

 

  (a) The Bonds at least constitute the direct, unconditional, non-subordinated
and secured debt repayment obligations of the Company, have the same sequence of
rights and interests as all existing or future outstanding secured debts of the
Company, and are not attached with any priorities or privileges (except
liabilities relating to taxation and other statutory special cases).

 

  (b) The Bonds, obligations of paying any amounts hereunder, and the Company,
founders and obligations to be fulfilled by the Company under all transaction
documents are guaranteed by guarantee documents.

 

  (c) The Bonds, existing or future certifications, other instruments about
liabilities hereunder or any clause of agreements will not: (i) for the Company
and the Holder, impair all debt repayment obligations mature and payable by the
Company to the Holder according to clauses hereof (such obligations are absolute
and unconditional); (ii) intentionally or probably affect relevant rights of the
Holder and creditors of the Company; or (iii) hinder the Holder from exercising
all rights, powers and reliefs allowed by applicable laws or otherwise allowed
due to breach or any event of default specified hereunder.

 

8 Event of Default

 

8.1 Event of default

“Event of default” refers to, for the purpose of the Bonds, any of the following
events (no matter what reason for the event is and whether the event occurs
voluntarily or involuntarily, due to the implementation of any law or according
to any judgment, award or order of any court, or any order, regulation or rule
of any administrative or governmental authority):

 

   

Convertible Bond Subscription Agreement

 

    

 

30

 

  

 

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

  (a) Any of the following: (i) the principal of any bonds; or
(ii) compensations for breach and other arrears under any bonds for the Holder,
is overdue (no matter whether it is overdue on the Conversion Date or Maturity
Date, or because of requirements of advance repayment or any otherwise
regulation). For the breach in Item (ii), the breach is not remedied within
twenty (20) business days;

 

  (b) The Company fails to comply with or perform any other covenant or
agreement under the Bonds, and if the breach can be remedied, the breach is not
remedied within twenty (20) business days after the Holder sends a notice of the
breach to the Company;

 

  (c) Existing shareholders (as defined in the investment agreement), founders,
the company controlled by founders or the Company breaches any obligation under
transaction documents (including but not limited to all undertakings,
representations and warranties);

 

  (d) The fulfilment of any obligation hereunder by the Company is or becomes
illegal;

 

  (e) There is any existing, pending or potent litigation, arbitration or
administrative or other judicial procedures against any group company, and such
procedures are not put aside or revoked within 45 days after they are
instituted;

 

  (f) Any key employee resigns during the period when the Bonds (or any part
thereof) are outstanding (except the circumstance that any key employee does not
involve in a serious breach of law and regulations, or the Holder, as a listed
company, is dismissed by the Company for any reason unacceptable for market
management), or any key employee seriously breaches the employment contract
concluded by him and the Contract (including non-competition and confidentiality
agreements); or

 

  (g) The Company or any group company is subject to bankruptcy matters.

 

8.2 Relief measures for events of breach

 

  (a) If any event of breach occurs, the Holder of Convertible Bonds may select:

 

  (i) to require the Company redeeming the Bonds by the principle which are
outstanding and are not converted multiplied by one hundred and thirty-eight
percents (138%), and the Company shall redeem the Bonds in cash at the aforesaid
price; or

 

  (ii) to continually exercise other rights (including conversion rights) under
the Bonds, but the principal which are outstanding and are not converted of the
Bonds shall be deed as the amount calculated under Item (a) (i) of this
paragraph immediately, with other clauses unchanged.

 

   

Convertible Bond Subscription Agreement

 

    

 

31

 

  

 

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

  (b) The Holder of Convertible Bonds shall notify the Company of the aforesaid
matters. If the Company shall pay any amount as per Item (a) (i) of this
paragraph, the Company shall pay interests for the period from the date of
sending a notice to the time of irrevocably repayment of all amounts after the
date of occurrence of any event of breach (the said event of breach results in
the requirement of final advance repayment of the Bonds), with the interest rate
calculated by ten percents each year (10% p.a.), or the maximum value (subject
to the lower one) allowed by applicable laws. After irrevocable full payment,
the Holder shall exchange the Bonds in time or according to the instructions of
the Company.

 

  (c) The rights of the Holder of Convertible Bonds specified under this
condition are cumulative, are additional and independent rights above other
guarantees owned by the Holder at any time regarding the Convertible Bonds (in
whole or in part) and other ancillary rights, powers and reliefs, and do not
exclude general rights enjoyed by the Holder under laws.

 

9 Miscellaneous

 

9.1 Applicable clauses

Articles 1 (Definitions and Interpretations), 9 (Notice and Other
Communications), 10.1 (Severability), 10.5 (Failure to Exercise Rights or
Failure to Promptly Exercise Rights), 10.7 (Alteration and Exemption), 10.9
(Explanations), 10.10 (Language) and 11 (Governing Law and Settlement of
Disputes) of the Convertible Bond Subscription Agreement are applicable to the
Bonds, just as such clauses are all listed in the Bonds, and any reference to
“the Agreement” in such clauses shall be deemed as reference to “the Bonds” too
(unless the context otherwise requires).

 

9.2 Taxes and other charges

All amounts which the Company shall pay for the Holder under the Agreement
(including but not limited to the principal and interests) shall not include
taxes or other charges which shall be paid in Hong Kong or other jurisdiction
according to the applicable laws of the said region at present or in future, and
shall not be reduced due to withholding. If the Company shall be reduced
according to applicable laws or makes the amount paid to the Holder less than
the amount receivable originally for any reason, the Company shall increase the
amount so that the amount received by the Holder equals the amount receivable
originally.

 

9.3 Notice

All notices or other communications sent under the Agreement shall be sent by
hand, registered mail, fax or e-mail in writing. All such notices shall be
marked with senders and receivers, and be marked as notices under the Bonds. If
any notice is sent by hand, the notice shall come into effect at the time of
personal delivery; if by registered mail, the notice shall come into effect at
the time marked on receipt; if by fax, the notice shall come into effect at the
time indicated on the report about successful transmission of entire document
automatically listed on the fax (or similar machine); and, if by e-mail, the
notice shall come into effect at the time of sending (if the sender receives the
automatic information about failure of transmission, the notice shall come into
effect at the time when the receiver receives it). The notices delivered
hereunder do not hinder the delivery means allowed by applicable laws. For the
purpose of this clause, the details of delivery of notices are as below:

 

   

Convertible Bond Subscription Agreement

 

    

 

32

 

  

 

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

If notice is sent to the Company:

Address:   

P.O. Box 613 GT, 4th Floor Harbour Centre, George Town, Grand

Cayman KY1-1107, Cayman Islands

Fax:    027-87782005-8056 E-mail:    tfliu@bainainfo.com Attn:    Tiefeng Liu

If notices are sent to the Holder: refer to the materials of the Holder listed
in the register.

 

9.4 Absolute obligations

Save as otherwise definitely stipulated, all clauses hereof shall not change or
damage the Company’s obligations (if applicable) of paying the principal of
Convertible Bonds as per the time, place and interest rate specified hereunder,
compensations for breach as well as interests arising therefrom (such
obligations are absolute and unconditional). The Bonds are the direct debt
repayment obligations of the Company. The Bonds at least have the same status as
other existing or future bonds issued according to clauses hereof.

 

9.5 Successors and assignees

The Bonds shall be binding upon the successors of the Company or the Holder, and
can effective inherit interests thereof. The Holder may freely transfer the
Bonds (in whole or in part) (the “Approved Assignees”).

*********************

To witness hereof, the Bonds have been legally executed at the date first
written above in the form of covenant.

 

Executed, sealed and delivered by Yongzhi Yang in the form of covenant and on
behalf of MoboTap Inc., a company established on the Cayman Islands, handling
matters as authorized by the Company according to laws of the said region, in
the presence of the following person, and:  

)

)

)

)

)

  [Corporate seal]

 

 

)

)

)

  Signature of witness  

)

)

)

)

 

         LOGO [g813990img033.jpg]     

 

 

  )   Signature of Yongzhi Yang Name of witness (standardized form)  

)

)

)

)

)

 

 

    Address of witness    

 

   

Convertible Bond Subscription Agreement

 

    

 

33

 

  

 

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

ANNEX A – Form of Notice of Conversion

 

To    : Address    : Attn.    :

Dear Sir,

Zero-coupon convertible bonds totalling US$30,000,000 and maturing on         ,
2019 (No. [*]) (the “Bonds”)

According to the aforesaid Bonds, this text is a notice of conversion. Terms
used hereunder have the same meanings as defined in the Bonds.

The signatory hereby selects to convert the principal of the Bonds into ordinary
shares according to relevant conditions, and the amount of principal and the
conversion date are specified hereunder. If shares are issued to any
non-signatory, the signatory shall pay all relevant transfer taxes, and submit
relevant share certificate and opinions as reasonably required by the Company
according to provisions. Except the transfer taxes (if any), service fees will
not be charged from the Holder for any conversion.

 

Principal of the Bonds

     :       US$[30,000,000]

Previously converted principal

     :       US$[*]

Principal to be converted under the Bonds

     :       US$[*]

Outstanding principal immediately after conversion

     :       US$[*]

Initial conversion price

     :       US$[*] per share

Price after adjustment of initial conversion price

     :       US$[*] per share

Number of ordinary shares

     :       [*]

For and on behalf of

[ ]

 

 

Name: Position:

 

   

Convertible Bond Subscription Agreement

 

    

 

34

 

  

 

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

Signature Page

To witness hereof, both Parties conclude the Agreement at the date first written
above.

Company

 

Executed by the authorized signature on behalf of MoboTap Inc., a company
established on the Cayman Islands, handling matters as authorized by the Company
according to laws of the said region, and in the presence of the following
person,  

)

)

)

)

)

)

)

)

)

 

 

  )  

 

 

Name of authorized signatory (standardized form)

 

)

)

)

)

)

)

)

)

)

 

 

The signatory undertakes that at the time of execution, he has been fully
authorized to execute the Agreement on behalf of MoboTap Inc.

 

   

Signature Page of Convertible Bond Subscription Agreement

 

    

 

35

 

  

 

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

Investor

 

Executed by the authorized signature on behalf of Glory Loop Limited, a company
established on the British Virgin Islands, handling matters as authorized by the
Investor according to laws of the said region, and in the presence of the
following person,  

)

)

)

)

)

)

)

)

)

 

 

  )   Name of authorized signatory (standardized form)   )  

 

 

)

)

)

)

)

)

)

 

 

Execution by authorized signatory

 

   

Signature Page of Convertible Bond Subscription Agreement

 

    

 

36